TMI Tax Updates - e-Newsletter
February 3, 2025
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI Short Notes
Bills:
Summary: The Finance Bill, 2025 aims to amend the Income-tax Act, 1961, continuing reforms through tax reliefs and rationalization. For the assessment year 2025-26, income tax rates remain unchanged under sections 115BAA, 115BAB, 115BAC, 115BAD, and 115BAE. Section 115BAC outlines tax rates for individuals, Hindu undivided families, and others, with a progressive rate structure starting from nil for incomes up to Rs. 3,00,000, up to 30% for incomes above Rs. 15,00,000. Surcharges apply for incomes exceeding Rs. 50 lakh, with rates up to 25%. Marginal relief is provided, and the surcharge on certain incomes is capped at 15%.
Bills:
Summary: For the assessment year 2025-26, the income tax rates under Part I of the First Schedule are as follows: Individuals, Hindu Undivided Families (HUF), associations of persons, bodies of individuals, and artificial juridical persons are taxed at 0% for income up to Rs. 2,50,000, 5% from Rs. 2,50,001 to Rs. 5,00,000, 20% from Rs. 5,00,001 to Rs. 10,00,000, and 30% for income above Rs. 10,00,000. For residents aged 60-79 years, the nil rate extends to Rs. 3,00,000. Residents aged 80 years or more have a nil rate up to Rs. 5,00,000. These rates remain unchanged from the previous year.
Bills:
Summary: For the assessment year 2025-26, the income tax rates for co-operative societies remain unchanged as specified in the Finance Bill, 2025. The tax rates are structured as follows: 10% for income up to Rs. 10,000, 20% for income between Rs. 10,001 and Rs. 20,000, and 30% for income exceeding Rs. 20,000. These rates are outlined in Paragraph B of Part I of the First Schedule to the Bill.
Bills:
Summary: For the assessment year 2025-26, the income tax rate for firms remains unchanged at 30%, as specified in the Union Budget 2025-26 and the Finance Bill, 2025. This rate is detailed in Paragraph C of Part I of the First Schedule to the Bill.
Bills:
Summary: For the assessment year 2025-26, the Union Budget and Finance Bill 2025 specify that the income tax rate for local authorities remains unchanged at 30%, as detailed in Paragraph D of Part I of the First Schedule to the Bill.
Bills:
Summary: For the assessment year 2025-26, the income tax rates for companies remain unchanged from the previous year. Domestic companies with a turnover not exceeding 400 crore rupees are taxed at 25%, while others pay 30%. Non-domestic companies are taxed at 35%. The surcharge rates also remain the same, with exceptions for certain specified incomes. A 4% Health and Education Cess is applicable on the income tax amount, including any surcharge, with no marginal relief for this cess. Marginal relief is available where a surcharge is imposed.
Bills:
Summary: The Union Budget 2025-26 outlines the rates for deduction of income tax at source for the financial year 2025-26, excluding salaries. The Finance Bill specifies these rates under sections like 193, 194A, and 195. Notably, the tax rate on insurance commission will decrease from 5% to 2% starting April 1, 2025, due to amendments in section 194D. Other rates remain consistent with those from the Finance (No. 2) Act, 2024. The surcharge on income tax and the Health and Education Cess, at 4%, continue unchanged for non-residents and non-domestic companies.
Bills:
Summary: The Union Budget 2025-26 and Finance Bill 2025 outline the rates for income tax deduction at source from salaries and the computation of advance tax for the fiscal year 2025-26 (Assessment Year 2026-27). These rates, detailed in Part III of the First Schedule, apply to all categories of assessees and include provisions for special cases requiring accelerated assessments. Such cases include provisional assessments of non-resident shipping profits, individuals leaving India permanently, and entities formed for short durations. The specified rates ensure proper tax compliance and collection during the financial year.
Bills:
Summary: The Union Budget 2025-26 introduces new tax rates for individuals, Hindu Undivided Families (HUF), associations of persons, bodies of individuals, and artificial juridical persons. For the assessment year 2026-27, income up to Rs. 4,00,000 is tax-free, with progressive rates from 5% to 30% for higher income brackets. An alternative tax regime under section 115BAC offers different rates, with income up to Rs. 2,50,000 tax-free and higher rates for subsequent brackets. Surcharges apply to incomes exceeding Rs. 50 lakh, with rates ranging from 10% to 37%, subject to specific conditions and marginal relief provisions.
Bills:
Summary: For the fiscal year 2025-26, the income tax rates for co-operative societies remain unchanged from the previous year. A surcharge of 7% applies if a society's income exceeds one crore rupees but is under ten crore rupees, and 12% if the income exceeds ten crore rupees. Marginal relief is available for surcharge cases. Co-operative societies meeting specific conditions can opt for a 22% tax rate under section 115BAD, with a 10% surcharge on this tax.
Bills:
Summary: The Union Budget for 2025-26, along with the Finance Bill, 2025, maintains the income tax rate for firms as specified in the previous fiscal year, 2024-25. For firms with a total income exceeding one crore rupees, a 12% surcharge on the income tax is applicable. However, the total amount payable, including the surcharge, will not exceed the tax amount on a one crore rupees income by more than the excess income over one crore rupees.
Bills:
Summary: The Union Budget 2025-26 specifies that the income tax rate for local authorities will remain unchanged from the previous fiscal year, 2024-25. Additionally, a 12% surcharge will apply to local authorities with total income exceeding one crore rupees. However, the combined amount of income tax and surcharge on income over one crore rupees will not exceed the amount payable on exactly one crore rupees by more than the income exceeding that amount.
Bills:
Summary: The Union Budget 2025-26 outlines the income tax rates for companies in the fiscal year 2025-26. Domestic companies with a turnover not exceeding four hundred crore rupees in the previous year are taxed at 25%, while others are taxed at 30%. Companies can opt for a 22% rate under section 115BAA. Non-domestic companies face a 35% tax rate. Surcharges of 7% and 12% apply to domestic companies based on income thresholds, with 2% and 5% for non-domestic companies. A 4% Health and Education Cess is applicable on the total tax, including surcharges. Marginal relief is available for surcharges.
Bills:
Summary: Under section 87A of the Act, individual residents in India with total income up to Rs 5 lakh are exempt from paying income tax. The Finance Act, 2023 introduced a proviso allowing a rebate up to Rs 25,000 for incomes not exceeding Rs 7 lakh under section 115BAC, with marginal relief for incomes above Rs 7 lakh. From the assessment year 2026-27, the income limit for rebate is proposed to increase to Rs 12 lakh, with a rebate limit of Rs 60,000. This rebate does not apply to incomes taxed at special rates, such as capital gains.
Bills:
Summary: The Union Budget 2025-26 introduces measures to enhance investment and employment through incentives for the International Financial Services Centre (IFSC). The IFSC, catering to both non-residents and residents in currencies other than the Indian Rupee, aims to develop India's financial infrastructure. To bolster operations within the IFSC, the budget proposes additional tax concessions. These amendments are designed to attract more financial activities and investments, fostering a competitive financial ecosystem in India.
Bills:
Summary: The Union Budget 2025-26 proposes extending the sunset dates for various tax concessions related to International Financial Services Centres (IFSC). These include concessions for the commencement of operations of IFSC units and the relocation of funds to IFSC, as outlined in specific clauses of sections 80LA, 10, and 47 of the Finance Bill. The new deadline for these concessions is set for March 31, 2030. These amendments are scheduled to take effect from April 1, 2025.
Bills:
Summary: Clause (10D) of section 10 in the Finance Bill 2025 provides tax exemptions for sums received under life insurance policies, including bonuses, with certain conditions. These provisions apply to policies issued by IFSC Insurance Offices. Currently, exemptions are limited if premiums exceed Rs. 2.5 lakhs for unit-linked policies and Rs. 5 lakhs for other policies. The proposed amendment aims to remove these premium limits for policies issued by IFSC insurance intermediaries, ensuring parity for non-residents compared to other jurisdictions. The changes are set to take effect from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes tax exemptions for ship leasing units in the International Financial Services Centre (IFSC). Similar to existing exemptions for aircraft leasing, non-residents and IFSC units engaged in ship leasing will be exempt from capital gains tax on the transfer of equity shares of domestic companies involved in ship leasing. Additionally, dividends paid by a company within the IFSC engaged in ship leasing to another such unit will also be exempt from tax. These amendments, aimed at promoting the ship leasing industry, will take effect from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to the definition of 'dividend' under clause (22) of section 2 to address concerns about deemed dividends for treasury centers in International Financial Services Centres (IFSC). The amendment specifies that advances or loans between group entities, where one is a finance company or unit in IFSC acting as a corporate treasury center, will not be considered dividends if the parent entity is listed on a foreign stock exchange. These changes aim to facilitate treasury activities without triggering deemed dividend provisions and will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes a simplified regime for fund managers in International Financial Services Centres (IFSC). Section 9A stipulates that fund management by eligible managers on behalf of eligible funds does not create a business connection in India, provided certain conditions are met. A key condition limits Indian residents' investment in such funds to 5% of the corpus. Amendments propose rationalizing this condition by assessing fund participation on specific dates and allowing compliance within four months if unmet. Other conditions may be relaxed for fund managers commencing operations in IFSC by March 31, 2030. These changes are effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to Section 10, clause (4E) of the Income Tax Act, concerning exempt income for non-residents. Currently, non-residents' income from specific financial instruments with International Financial Services Centre (IFSC) units is exempt from inclusion in total income. The amendment aims to extend this exemption to include income from transactions with Foreign Portfolio Investors operating as IFSC units, subject to prescribed conditions. This change will be effective from April 1, 2026, applicable to the assessment year 2026-27 and onwards.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to include retail schemes and Exchange Traded Funds (ETFs) in the existing fund relocation regime under the International Financial Services Centres Authority (IFSCA). Currently, transfers of shares or units during fund relocation to an IFSC are tax-neutral. The amendment aims to extend this tax-neutral status to retail schemes and ETFs, aligning them with the definition of "resultant fund" under Section 47 of the Act. This change, effective from April 1, 2026, will apply to the assessment year 2026-27 and onwards, promoting operations from IFSC by offering tax incentives.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to extend the investment deadline for Sovereign Wealth Funds (SWFs) and Pension Funds (PFs) from March 31, 2025, to March 31, 2030, under clause (23FE) of section 10 of the Act. This extension aims to support long-term infrastructure investments in India. Additionally, the proposal seeks to ensure that long-term capital gains from investments by SWFs and PFs in India are exempt from being classified as short-term capital gains, addressing changes made by the Finance (No. 2) Act, 2024. These amendments will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 introduces a presumptive taxation regime for non-residents providing services or technology to electronics manufacturing facilities in India. This initiative aims to position India as a global hub for Electronics System Design and Manufacturing by supporting the development of semiconductors and display manufacturing. The new section 44BBD will deem 25% of the amounts received by non-residents as profits, resulting in an effective tax rate of less than 10% on gross receipts. This amendment is set to take effect from April 1, 2026, applicable to the assessment year 2026-27 and onwards.
Bills:
Summary: The Union Budget 2025-26 proposes extending the benefits of the tonnage tax scheme to inland vessels to boost the inland water transportation industry. Initially introduced in 2004 to support the Indian shipping industry, the tonnage tax scheme allows qualifying companies to opt for a favorable tax regime. Due to a shortage of inland water transport vessels and the capital-intensive nature of the sector, the scheme will now include inland vessels registered under the Inland Vessels Act, 2021. This amendment, effective from April 1, 2026, aims to attract investments and promote growth in inland water transportation.
Bills:
Summary: The Union Budget 2025-26 introduces simplifications to tax provisions for charitable trusts and institutions. Trusts or institutions registered under section 12AB of the Act are eligible for income tax exemptions, provided they meet specified conditions. Section 12A outlines the application procedure for registration, essential for claiming exemptions under sections 11 and 12. Section 12AB details the approval and cancellation processes for such registrations. Additionally, section 13 stipulates that exemptions are forfeited if the trust or institution fails to meet the specified conditions. These changes aim to streamline and rationalize the taxation process for charitable entities.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to section 12AB of the Finance Bill concerning the cancellation of registration for trusts or institutions. Currently, if the Principal Commissioner or Commissioner identifies a "specified violation," such as incomplete or false information in registration applications, they can cancel the registration. The proposed amendment clarifies that incomplete applications will no longer be considered a "specified violation," thereby preventing automatic cancellation of registration. This change aims to avoid penalizing trusts or institutions for minor defaults and will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes changes to reduce the compliance burden on smaller trusts or institutions. Currently, under Section 12AB, trusts or institutions must apply for registration every five years or obtain a three-year provisional registration if activities have not commenced. The new proposal extends the registration period from five to ten years for trusts or institutions with an income not exceeding Rs. 5 crores in the two years preceding the application. These changes aim to simplify the process for smaller entities and will be effective from April 1, 2025.
Bills:
Summary: The Finance Bill 2025 proposes amendments to sub-section (3) of section 13 concerning trusts or institutions. Currently, section 13 excludes income from tax benefits if used for the benefit of specified persons, including substantial contributors and their relatives. The amendment suggests redefining "substantial contribution" to contributions exceeding one lakh rupees in a year or ten lakh rupees in total. It also proposes excluding relatives and concerns with substantial interest from this category. These changes aim to address difficulties in reporting details and will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to the taxation regime for business trusts, including Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InVITs). Initially introduced by the Finance (No.2) Act, 2014, this regime provides a pass-through status for certain income types, taxing them at the unit holder level unless exempted. The proposed change involves amending section 115UA to include section 112A, ensuring that long-term capital gains on equity shares or units are taxed at the maximum marginal rate. This amendment will be effective from April 1, 2026, impacting the assessment year 2026-27 onwards.
Bills:
Summary: The Union Budget 2025-26 and Finance Bill, 2025 propose amendments to Section 9 of the Income Tax Act, which addresses income deemed to accrue in India. The amendment aims to harmonize the applicability of "Significant Economic Presence" with "Business Connection" by clarifying that non-resident transactions confined to purchasing goods in India for export do not establish a significant economic presence. This change aligns with existing exclusions under Explanation 1 of the same section. The amendments will be effective from April 1, 2026, impacting the assessment year 2026-27 and beyond.
Bills:
Summary: The Union Budget 2025-26 introduces clarity on income from the redemption of Unit Linked Insurance Policies (ULIPs). Amendments to clause (10D) of section 10 restrict income-tax exemptions for ULIPs issued on or after February 1, 2021, if premiums exceed Rs. 2,50,000. Such ULIPs are treated as capital assets, with profits taxed as capital gains. The amendments also redefine these ULIPs as equity-oriented funds for tax purposes. These changes, effective from April 1, 2026, aim to rationalize tax treatment and apply to assessment year 2026-27 onwards.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to the definition of "capital asset" in Section 2(14) of the Act. This change aims to clarify the classification of income from securities transactions for investment funds specified in Section 115UB. Currently, there is ambiguity in whether such income is capital gain or business income. The amendment specifies that securities held by these investment funds, in compliance with the Securities and Exchange Board of India Act, 1992, will be considered capital assets, ensuring income from their transfer is treated as capital gain. This amendment will be effective from April 1, 2026, applicable for the assessment year 2026-27 onwards.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to Section 80-IAC of the Income Tax Act, extending tax benefits for start-ups. Currently, eligible start-ups can claim a 100% deduction on profits for three consecutive years within ten years from incorporation, provided their turnover does not exceed 100 crore rupees, they hold a certification from the Inter-Ministerial Board, and are incorporated between April 1, 2016, and April 1, 2025. The amendment extends this incorporation deadline to April 1, 2030, allowing more start-ups to benefit. This change is effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to the taxation of capital gains for non-residents under Section 115AD of the Income Tax Act. Previously, long-term capital gains from securities not covered by Section 112A were taxed at 10%, while the Finance (No.2) Act, 2024, increased this rate to 12.5% for all assessees. The new proposal aims to align the tax rate for non-residents' long-term capital gains on certain securities with this 12.5% rate. These changes will be effective from April 1, 2026, impacting the assessment year 2026-27 and onwards.
Bills:
Summary: The Union Budget 2025-26 proposes changes to the Tax Deduction at Source (TDS) system to streamline rates and increase threshold limits. These adjustments aim to simplify the process for businesses and enhance taxpayer compliance. By rationalizing TDS rates and thresholds, the government seeks to improve the ease of doing business, making tax procedures more straightforward and efficient for entities subject to TDS provisions.
Bills:
Summary: The Finance Bill 2025 proposes a reduction in the Tax Deducted at Source (TDS) rates under section 194LBC of the Income Tax Act. Currently, income payable by a securitisation trust to resident investors is subject to a TDS rate of 25% for individuals or Hindu undivided families and 30% for other entities. The proposed amendment will lower these rates to 10% for all categories, reflecting the organized and regulated nature of this sector. This change is set to take effect from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes changes to the Tax Deducted at Source (TDS) thresholds across various sections. For interest on securities, a new threshold of Rs. 10,000 is introduced. Interest other than on securities sees an increase to Rs. 1,00,000 for senior citizens and Rs. 50,000 for others. Dividend income, mutual fund income, and winnings from lotteries or puzzles are raised to Rs. 10,000. Insurance commission, lottery ticket commissions, and brokerage thresholds increase to Rs. 20,000. Rent threshold changes to Rs. 50,000 monthly, professional fees to Rs. 50,000, and enhanced compensation to Rs. 5,00,000.
Bills:
Summary: Section 193 of the Act mandates tax deduction at source on interest from securities paid to residents, applicable at the time of credit or payment, whichever is earlier. Currently, there is no minimum threshold for this deduction. The proviso exempts tax deduction on interest up to Rs. 5,000 paid to individuals or Hindu undivided families on debentures from publicly interested companies. Proposed amendments will increase this threshold to Rs. 10,000, effective April 1, 2025.
Bills:
Summary: Section 194 of the Act mandates that the principal officer of an Indian company, or a company with prescribed arrangements for dividend declaration and payment in India, must deduct income tax at a rate of 10% from any dividend payment to a resident shareholder. Currently, no tax is deducted if the total dividend amount paid to an individual shareholder during a financial year does not exceed Rs. 5,000. An amendment proposes increasing this threshold to Rs. 10,000, effective April 1, 2025.
Bills:
Summary: Section 194A of the Finance Bill, 2025, outlines the tax deduction requirements for interest income other than securities. It mandates that entities, excluding individuals and Hindu undivided families, deduct income tax on such interest payments to residents. Exemptions apply when payments are below specified thresholds, which are higher for senior citizens. Proposed amendments increase these thresholds: for banks, cooperative societies, and post office deposits, the threshold rises from Rs. 40,000 to Rs. 50,000, and for senior citizens, from Rs. 50,000 to Rs. 1,00,000. Other cases see an increase from Rs. 5,000 to Rs. 10,000. These changes are effective April 1, 2025.
Bills:
Summary: Section 194B of the Finance Bill 2025 mandates that income tax must be deducted at the time of payment for winnings from lotteries, crossword puzzles, card games, or any form of gambling if the amount exceeds Rs. 10,000. The proposed amendment removes the threshold condition on the aggregate of amounts, applying it to a single transaction instead. This change is set to take effect on April 1, 2025.
Bills:
Summary: Section 194BB of the Finance Bill 2025 mandates that bookmakers or licensed individuals responsible for paying winnings from horse races must deduct income tax at the applicable rates on amounts exceeding Rs. 10,000 during the financial year. The proposed amendment seeks to change this threshold from an aggregate annual amount to a single transaction exceeding Rs. 10,000. This change is set to take effect on April 1, 2025, ensuring tax is deducted at the point of each significant transaction rather than cumulatively over the year.
Bills:
Summary: Section 194D of the Act mandates that income tax be deducted at source on payments made to residents for soliciting or procuring insurance business if the amount exceeds Rs. 15,000 in a financial year. The proposed amendment in the Finance Bill 2025 seeks to increase this threshold to Rs. 20,000, effective from April 1, 2025. This change aims to adjust the tax deduction requirements for insurance commissions, impacting the financial obligations of those involved in procuring insurance business.
Bills:
Summary: Section 194G of the Finance Bill, 2025, addresses the deduction of income tax on commissions related to lottery ticket sales. It mandates that anyone responsible for paying commissions, remuneration, or prizes exceeding Rs. 15,000 to individuals involved in stocking, distributing, purchasing, or selling lottery tickets must deduct income tax at a rate of two percent. The proposed amendment increases this threshold from Rs. 15,000 to Rs. 20,000, effective April 1, 2025.
Bills:
Summary: Section 194H of the Finance Bill 2025 outlines the requirement for tax deduction at source on commission or brokerage payments made to residents by entities other than individuals or Hindu undivided families. The existing threshold for tax deduction is set at payments exceeding Rs. 15,000 per financial year, subject to a 2% tax rate. The proposed amendment raises this threshold to Rs. 20,000, effective from April 1, 2025.
Bills:
Summary: Section 194-I of the Act mandates that entities, excluding individuals or Hindu undivided families, must deduct income tax on rent payments to residents if the annual rental income exceeds Rs. 2,40,000. The proposed amendment increases this threshold to Rs. 50,000 per month or part thereof, effective April 1, 2025. This change aims to streamline tax deductions at source for rental income, impacting the financial obligations of businesses and organizations paying rent.
Bills:
Summary: Section 194J of the Act mandates tax deduction at source on payments for professional or technical services, excluding those covered under section 192. The Union Budget 2025-26 proposes to increase the threshold for tax deduction from Rs. 30,000 to Rs. 50,000 for fees related to professional and technical services, royalties, and certain sums under clause (va) of section 28. This amendment is set to take effect on April 1, 2025, as outlined in Clause 60 of the Finance Bill, 2025.
Bills:
Summary: Section 194K of the Finance Bill 2025 proposes changes regarding tax deduction at source for income from mutual fund units. Currently, a 10% tax is deducted if the income exceeds Rs. 5,000 annually. The proposed amendment raises this threshold to Rs. 10,000, effective from April 1, 2025. This change applies to income from units of a mutual fund specified under clause 23D of section 10, units from the Administrator of the specified undertaking, or units from the specified company.
Bills:
Summary: Section 194LA of the Finance Bill 2025 outlines the requirement for deducting income tax at source on compensation paid for the compulsory acquisition of immovable property, excluding agricultural land. The current threshold for tax deduction is set at Rs. 2,50,000 in a financial year. The proposed amendment seeks to increase this threshold to Rs. 5,00,000, effective from April 1, 2025. This change aims to adjust the tax deduction requirement in line with evolving financial considerations.
Bills:
Summary: The Union Budget 2025-26 and Finance Bill propose changes to the definition and tax collection on "forest produce." Currently, a 2.5% tax is collected on timber and other forest produce. Due to ambiguity in defining "forest produce," it will now align with definitions in State Acts or the Indian Forest Act, 1927. The tax collection at source (TCS) will apply only to forest produce obtained under a forest lease, excluding timber and tendu leaves. The amended TCS rate is set at 2% for timber and other forest produce, effective April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes to reduce the compliance burden by omitting the requirement for Tax Collection at Source (TCS) on the sale of specified goods. Currently, under Section 206C(1H), sellers must collect TCS on transactions exceeding Rs 50 lakhs, while Section 194Q mandates buyers to deduct Tax Deducted at Source (TDS) on similar transactions. This dual requirement complicates compliance, as sellers struggle to verify if buyers have deducted TDS. To simplify this, the TCS provision under Section 206C(1H) will be removed effective April 1, 2025, easing business operations and taxpayer obligations.
Bills:
Summary: The proposed amendments to Chapter XIV-B of the Act, effective February 1, 2025, aim to refine the block assessment process for search and requisition cases. Key changes include defining "undisclosed income" to encompass virtual digital assets and aligning provisions for assessment abatement and revival. The amendments seek to clarify the computation of block period income, especially regarding disclosed income and international transactions. Additionally, the time limit for completing block assessments is adjusted to twelve months from the end of the quarter in which the last search authorization is executed, addressing coordination challenges in group cases.
Bills:
Summary: The Finance Bill 2025 proposes an amendment to Section 271AAB of the Act, which concerns penalties for searches initiated after December 15, 2016. This amendment clarifies that Section 271AAB will not apply to searches conducted under Section 132 on or after September 1, 2024. This change aims to eliminate any ambiguity regarding the applicability of Section 271AAB to such searches. The amendment will be effective from September 1, 2024, ensuring that the provisions of Section 271AAB do not apply to assessees subject to searches initiated from that date.
Bills:
Summary: The proposed amendments to sections 132 and 132B of the Act aim to streamline the provisions related to search and seizure. The amendment suggests changing the approval time limit for retaining seized documents to one month from the end of the quarter in which the assessment order is made, easing the burden on Assessing Officers. Additionally, the term "authorisation" in section 132 is to be updated to "authorisations" for consistency. Section 132B's references will be updated to align with the amended definition of "execution of an authorisation" in section 158B. These changes will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to streamline the time limits for imposing penalties under section 275 of the Act. Currently, multiple timelines exist depending on whether a case is under appeal with the ITAT, JCIT(Appeal), or Commissioner (Appeal), complicating tax administration. The amendment suggests a unified deadline of six months from the end of the quarter in which related proceedings conclude or an appeal order is received by the relevant authority. This change aims to enhance efficiency and will be effective from April 1, 2025, with corresponding updates to section 246A.
Bills:
Summary: The Union Budget 2025-26 and Finance Bill propose amendments to clarify the commencement and end dates of periods stayed by court orders under various sections of the Act. The proposed change aims to eliminate ambiguity by specifying that the period to be excluded starts on the date a stay is granted by the court and ends when the certified copy of the order vacating the stay is received by the jurisdictional Principal Commissioner or Commissioner. This amendment is set to take effect on April 1, 2025, impacting sections 144BA, 153, 153B, 158BE, 158BFA, 263, 264, and Rule 68B of Schedule-II.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to sections 72A and 72AA of the tax act to clarify the carry forward of losses in cases of amalgamation or business reorganization. These amendments align with section 72, limiting the carry forward of accumulated losses to eight assessment years following the year the loss was first computed for the original predecessor entity. This aims to prevent the indefinite extension of losses through successive amalgamations. The changes apply to reorganizations effective from April 1, 2025, and will be in effect from April 1, 2026.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to transfer pricing provisions to streamline the determination of arm's length prices (ALP) for international and specified domestic transactions. The changes aim to reduce repetitive compliance by allowing ALP determined for a given year to apply to similar transactions in the following two years. This involves the assessee opting for this provision, subject to validation by the Transfer Pricing Officer (TPO). The TPO will then determine and apply the ALP for these years, and the Assessing Officer will recompute the assessee's income accordingly. These amendments will be effective from April 1, 2026, for the assessment year 2026-27 onwards.
Bills:
Summary: The Union Budget 2025-26 proposes to remove Sections 206AB and 206CCA of the Income Tax Act, which mandate higher tax deduction and collection rates for non-filers of income tax returns. This change comes after stakeholders highlighted difficulties in verifying the filing status of deductees or collectees, leading to capital blockage and increased compliance burdens. The proposed amendments aim to simplify the tax process for deductors and collectors by eliminating these sections, effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to section 17 of the Finance Act, increasing the income limits for calculating employee perquisites. Currently, benefits provided by employers are not considered perquisites if the employee's salary does not exceed fifty thousand rupees, a limit set in 2001. Additionally, employer expenses for overseas medical treatment are excluded from perquisites if the employee's income does not exceed two lakh rupees, a threshold from 1993. The proposed changes aim to adjust these limits to reflect current economic conditions, effective from April 1, 2026, applicable for the 2026-27 assessment year onward.
Bills:
Summary: The NPS Vatsalya Scheme, launched on September 18, 2024, allows parents or guardians to open a National Pension Scheme account for minors, transitioning to the child's name at 18. The Union Budget 2025-26 proposes tax deductions under Section 80CCD for contributions to these accounts, up to Rs 50,000 annually. Withdrawals are taxable, except in the event of the minor's death. Partial withdrawals for education, illness, or disability are non-taxable up to 25% of contributions. These changes take effect from April 1, 2026, impacting the assessment year 2026-27 onwards.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to Section 80CCA, exempting withdrawals by individuals from the National Savings Scheme (NSS) from taxation. This applies to deposits made before April 1, 1992, for which deductions were previously claimed. The amendment addresses the cessation of interest payments on NSS balances after October 1, 2024, following a notification from the Department of Economic Affairs. This change aims to alleviate financial hardship for individuals compelled to withdraw funds due to the notification, and it will be applied retrospectively from August 29, 2024.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to Section 23 of the Act regarding the annual value of self-occupied property. The amendment simplifies the determination of the annual value by stating that it shall be considered nil if the owner occupies the property for residence or cannot occupy it due to employment, business, or other reasons. This provision applies to two properties specified by the owner, as previously allowed. The amendment will take effect from April 1, 2025, applicable for the assessment year 2025-26 onwards.
Bills:
Summary: The Union Budget 2025-26 introduces a new section 285BAA in the Income-tax Act, mandating reporting entities to furnish information on crypto-asset transactions. This section outlines obligations for reporting entities to submit transaction details, rectify defects in submitted statements, and respond to notices for missing statements. It also allows for correction of inaccuracies in submitted information. The Central Government will specify registration requirements and information maintenance protocols for identifying crypto-asset users. Additionally, the definition of virtual digital assets is expanded to include digital representations of value using cryptographic technology. These changes will be effective from April 1, 2026.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to section 115VP of the Income-tax Act, which deals with the tonnage tax scheme. Currently, the Joint Commissioner must pass an order approving or rejecting a company's application for the scheme within one month of receiving it. The amendment extends this period to three months from the end of the quarter in which the application is received, allowing more time for thorough verification and consideration. This change will apply to applications received on or after April 1, 2025.
Bills:
Summary: Sub-section (7A) of section 206C of the Act stipulates a time limit for deeming a person as an assessee in default for not collecting tax, set at six years from the end of the financial year when the tax was collectible or two years from the financial year when a correction statement is delivered, whichever is later. The proposed amendment allows for the exclusion of periods where proceedings were stayed by court orders when calculating this time limit. The amendment will align with section 153 provisions and will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to Section 276BB of the Income Tax Act, which deals with prosecution for failure to pay tax collected at source (TCS) to the Central Government. Currently, failure to pay TCS can result in imprisonment of three to seven years and a fine. The amendment will exempt individuals from prosecution if they pay the TCS before the deadline for filing the quarterly statement as per Section 206C. This change will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes amendments to sections 271C, 271CA, 271D, 271DA, 271DB, and 271E of the Act, shifting the authority to impose penalties from the Joint Commissioner to the Assessing Officer, with prior approval required if penalties exceed certain limits. Additionally, a consequential amendment is proposed for section 246A(1)(n). Section 271BB, concerning penalties for failing to subscribe to eligible capital issues, is proposed for omission due to the prior removal of its parent section 88A. These changes are set to take effect on April 1, 2025.
Bills:
Summary: The Central Government aims to modernize the Direct Tax administration by implementing electronic processes to minimize taxpayer interactions with the Department and optimize resource use. Faceless schemes under sections 92CA, 144C, 253, and 255 were introduced to facilitate this transition. Initially, deadlines for these notifications were extended due to implementation challenges, with the latest extension set to March 31, 2025. The proposed amendment seeks to remove this deadline, allowing the government to issue directions beyond March 31, 2025, if necessary. These changes will be effective from April 1, 2025, as part of the Union Budget 2025-26 and Finance Bill, 2025.
Bills:
Summary: The Finance Bill 2025 proposes an amendment to Section 270AA of the Act, which outlines the procedure for granting immunity from penalties or prosecution by the Assessing Officer. Currently, an application for immunity must be processed within one month after receipt. Stakeholders have reported difficulties in meeting this timeframe. Consequently, the proposed amendment seeks to extend the processing period to three months from the end of the month in which the application is received. This change is set to take effect on April 1, 2025, allowing applicants more time to present their cases effectively.
Bills:
Summary: The Union Budget 2025-26 proposes to extend the time limit for filing updated tax returns from 24 months to 48 months after the relevant assessment year. Updated returns filed between 24 to 36 months will incur an additional income tax of 60%, and those filed between 36 to 48 months will incur 70%. This aims to encourage voluntary compliance. However, updated returns cannot be filed if a show-cause notice under section 148A has been issued after 36 months, unless determined otherwise, allowing filing up to 48 months. These changes will be effective from April 1, 2025.
Bills:
Summary: The Union Budget 2025-26 proposes an amendment to the UTI Repeal Act, 2002, extending the income-tax exemption for the Specified Undertaking of Unit Trust of India (SUUTI) until March 31, 2027. Originally, SUUTI was exempt from income tax until March 31, 2023, which was later extended to March 31, 2025, by the Finance Act, 2023. The extension is due to ongoing obligations, such as scheme redemptions and pending litigation. The amendment ensures that no income tax will be payable by the SUUTI Administrator for income, profits, or gains during this period.
Bills:
Summary: The Finance Bill, 2025 introduces several amendments to the Customs Act, 1962. Key changes include the insertion of a new sub-section in Section 18, establishing a two-year time limit for finalizing provisional assessments, extendable by one year. A new Section 18A allows voluntary revision of entries post-clearance. Section 27 clarifies the limitation period for refund claims as one year from duty payment. New clauses and explanations are added to Sections 28, 127A, 127B, 127C, 127D, 127F, 127G, and 127H, mainly transferring powers and functions from the Settlement Commission to an Interim Board, and setting deadlines for application submissions.
Bills:
Summary: The amendments to the Customs Tariff Act, 1975, as proposed in the Union Budget 2025-26 and Finance Bill 2025, include several key changes. These involve reducing tariff rates across various categories, including a reduction from 25-40% to 20% and from 100-150% to 70%. New tariff items are introduced based on product processes and varieties, such as rice and makhana products. Additional changes include the creation of new tariff lines for waste oils, dual-use chemicals, and technical-grade pesticides, as well as adjustments to align with the World Customs Organization's Harmonized System 2022. These changes aim to rationalize the customs tariff structure and enhance goods identification.
Bills:
Summary: The Union Budget 2025-26 introduces amendments to the Customs Tariff Act, 1975, affecting duty rates on various commodities. Effective February 2, 2025, tariff rates on knitted fabrics and interactive flat panel displays will increase. From May 1, 2025, tariffs on numerous items, including marble, granite, synthetic flavoring essences, candles, and various types of footwear, will decrease. Additionally, tariffs on waste and scrap materials such as copper, tin, tungsten, and solar cells will be reduced to nil. The changes aim to adjust the duty structure to support economic policies and trade objectives.
Bills:
Summary: The Union Budget 2025-26 introduces changes in basic customs duty rates across various sectors, effective February 2, 2025. Key adjustments include reduced duties on frozen fish paste, fish hydrolysate, wet blue leather, platinum findings, and several metal scraps such as lead, zinc, and cobalt. The IT and electronics sector sees reduced duties on components for interactive flat panel displays and mobile phone parts. In the automobile sector, duties on certain motor vehicles and motorcycles are lowered. Additionally, the export duty on crust leather is eliminated. These changes aim to boost exports, support domestic manufacturing, and promote sustainable practices.
Bills:
Summary: The Union Budget 2025-26 introduces amendments to the Agriculture Infrastructure and Development Cess (AIDC) rates for various goods, effective from February 2, 2025. Key changes include a 20% cess on marble, travertine, and granite; 7.5% on candles, PVC flex products, and solar cells; 18.5% on various types of footwear; 1.4% on platinum findings; 20% on solar modules and motor vehicles for transporting goods or more than ten persons; 67.5% on used motor vehicles; 40% on certain motor cars; and 70% on laboratory chemicals. These revisions aim to enhance agricultural infrastructure funding.
Bills:
Summary: The Union Budget 2025-26 introduces amendments to the Social Welfare Surcharge (SWS) under Notification No. 11/2018 - Customs, effective from February 2, 2025. The amendment exempts various goods from the SWS levy, including candles, PVC flex films, solar cells, yachts, electricity meters, furniture, luminaries, electronic toy parts, certain footwear, and motor vehicles. Additionally, items like gold/silver articles, solar modules, laboratory chemicals, and dutiable goods imported for personal use are also exempted. These changes aim to alleviate the financial burden on the importation of these specified goods.
Bills:
Summary: The Union Budget 2025-26 includes a comprehensive review of customs duty exemptions outlined in Notification No. 50/2017-Customs, expiring by March 31, 2025. Of the 25 conditional exemptions, 24 are extended with modifications, and one is allowed to lapse. Notable extensions include exemptions for ship-breaking materials, bulk drugs, and telecommunications equipment, among others. Additionally, new exemptions are introduced for items like sea shells used in handicrafts and goods for satellite launch vehicles. Amendments to Notifications Nos. 16/2017 and 153/94-Customs expand exemptions for specific drugs and extend import-export durations for railway goods.
Bills:
Summary: The Union Budget 2025-26 introduces amendments to the IGCR Rules, 2017, specifically Rules 6 and 7. The time frame for fulfilling the end use of imported goods at a concessional rate of duty for manufacturing excisable goods is extended from six months to one year. Additionally, importers are now required to submit quarterly statements instead of monthly ones, simplifying the reporting process.
Bills:
Summary: The Union Budget 2025-26 introduces amendments to the Central Excise Act, 1944, effective April 1, 2025. Key changes include the definition of "Interim Board for Settlement" and "pending application" in Section 31, and the establishment of Interim Boards for processing pending applications through the new Section 31A. The CCESC will cease operations from April 1, 2025, as per the amendment to Section 32. Sections 32A to 32D will no longer apply, and no new applications under Section 32E will be accepted post this date. The Interim Boards will assume the powers and functions of the Settlement Commission for various sections.
Bills:
Summary: The Union Budget 2025-26 and Finance Bill, 2025 propose retrospective exemptions from service tax for reinsurance services provided by insurance companies under the Weather Based Crop Insurance Scheme (WBCIS) and the Modified National Agricultural Insurance Scheme (MNAIS). These exemptions apply to services rendered from April 1, 2011, to June 30, 2017.
Bills:
Summary: The Finance Bill, 2025 introduces several amendments to the Central Goods and Services Tax Act, 2017, effective from April 1, 2025, unless stated otherwise. Key changes include the explicit provision for the distribution of input tax credit by Input Service Distributors for inter-state supplies under reverse charge, the deletion of sub-sections related to the time of supply for vouchers, and amendments to clarify terms like "local fund" and "municipal fund." New sections introduce penalties for contraventions related to the Track and Trace Mechanism, and changes to Schedule III clarify the treatment of certain supplies in Special Economic Zones. Additionally, mandatory pre-deposits for penalty appeals have been established.
Articles
By: CSSwati Rawat
Summary: The 2025 budget introduces significant changes in customs duties. Essential medicines and certain critical minerals, including cobalt and lithium-ion battery waste, are now fully exempt from Basic Customs Duty (BCD). Shipbuilding parts enjoy a 10-year BCD exemption extension. The duty on Carrier Grade Ethernet switches is halved to 10%. Additional goods for EV and mobile battery manufacturing gain BCD exemptions. Custom duties on open-cell displays and various fish products are reduced, while wet blue leather is fully exempt. Conversely, duties on flat panel displays double to 20%, and exemptions on 82 tariff lines under the social welfare surcharge are removed.
By: CSSwati Rawat
Summary: The 2025 Budget Speech outlines significant tax reforms aimed at simplifying India's tax system under the 'Vikasith Bharat' vision. A new Income Tax Bill will streamline existing laws, reducing their complexity. Key changes include a revised tax rate structure with no tax for incomes up to 12 lakh, and adjusted tax slabs ranging from 0% to 30%. Tax rebates will ensure zero tax for incomes up to 12 lakh, excluding special income. Other proposals include TDS and TCS reforms, extended filing periods for updated returns, compliance relief for charitable trusts, and benefits for senior citizens. Digital processes and dispute resolution enhancements are also introduced.
By: CSSwati Rawat
Summary: Budget 2025 focuses on ten key areas including support for farmers, youth, and women, aiming to boost agriculture, MSMEs, and exports. The PM Dhan Dhanya Krishi Yojana targets 1.5 crore farmers to enhance agricultural productivity and credit access. A six-year mission for pulse self-sufficiency and a comprehensive program for fruits and vegetables are planned. The Makhana board in Bihar and increased loan limits for aquaculture are introduced. The cotton productivity mission and a new urea plant in Assam are announced. Enhanced credit guarantees for MSMEs and a new scheme for women and marginalized entrepreneurs are included, alongside initiatives in AI, manufacturing, and social security.
By: Kashish Gupta and Anchal Gupta
Summary: Recent amendments to the Goods and Services Tax (GST) concerning restaurant services at specified premises have redefined "specified premises" for GST purposes. Effective April 1, 2025, "specified premises" include hotels providing accommodation services valued above Rs. 7,500 per unit per day in the previous financial year, or those filing a declaration. This change eliminates the previous reliance on declared tariffs, focusing instead on actual supply values. Restaurants in hotels with such premises can opt for an 18% GST rate with input tax credit, whereas standalone restaurants are subject to a 5% rate without input tax credit. The amendments may face judicial scrutiny due to potential inconsistencies.
By: YAGAY andSUN
Summary: The Global System of Trade Preferences (GSTP) is a trade agreement designed to enhance economic cooperation among developing countries by offering preferential tariff reductions. It aims to increase trade, foster economic collaboration, and promote regional integration among nations in Africa, Asia, Latin America, and the Caribbean. Key features include preferential tariffs, rules of origin, and dispute settlement mechanisms. In India, GSTP aligns with foreign trade policies, offering export growth opportunities and market diversification. Indian Customs laws, including the Customs Tariff Act, facilitate GSTP implementation, though challenges like complex rules of origin and trade imbalances require careful management.
By: YAGAY andSUN
Summary: Importing cigarette lighters into India involves compliance with various regulations to protect domestic industries and consumer safety. Lighters are classified under HSN Code 9613, with specific codes for different types. Import is generally free if the CIF value is Rs. 20/- or above per lighter, but certain lighters and parts are restricted or prohibited. BIS certification is often required to meet safety standards. Importers must navigate customs duties, GST, and adhere to compliance procedures, including obtaining an Importer Exporter Code and filing necessary documentation. The Directorate General of Foreign Trade may impose additional restrictions to safeguard local industries.
By: Ishita Ramani
Summary: APEDA Registration is essential for businesses and individuals involved in exporting agricultural and processed food products from India. Key documents required for registration include a completed application form (Form A), proof of business registration, GST Registration Certificate, bank account details, and FSSAI registration for food businesses. Additionally, an Import Export Code (IEC) from the Directorate General of Foreign Trade is necessary, along with an affidavit confirming compliance with APEDA regulations. These documents facilitate access to government schemes, financial support, and promotional assistance, enhancing export activities.
By: DR.MARIAPPAN GOVINDARAJAN
Summary: A public limited company can raise funds through an initial public offering by issuing a prospectus, which outlines its goals and contractual obligations. Under the Companies Act, 2013, any variation in the terms or objects stated in the prospectus requires a special resolution approved by shareholders. This process involves detailed disclosures, including the original objectives, funds raised, and proposed changes. The company must publish this information in newspapers and on its website. If dissenting shareholders disagree with the changes, they must be offered an exit option. Listed companies also need regulatory approval from the Securities and Exchange Board of India (SEBI).
By: YAGAY andSUN
Summary: The Global System of Trade Preferences (GSTP) is a trade agreement designed to enhance economic cooperation and trade among developing countries through preferential tariff reductions. It aims to increase trade flows, foster regional integration, and support economic growth by offering lower tariffs for goods traded between member countries. India, as a participant, benefits from expanded export opportunities, market diversification, and enhanced competitiveness in developing nations. Indian Customs laws facilitate GSTP implementation through preferential tariffs, Rules of Origin, and compliance measures. Despite its advantages, GSTP faces challenges such as limited product coverage and complex rules of origin.
By: YAGAY andSUN
Summary: The RBI Master Direction on Export of Goods and Services, issued under the Foreign Exchange Management Act, 1999, provides a regulatory framework for export transactions in India. It mandates the repatriation of export proceeds within nine months and outlines payment methods, including restrictions on payments in Indian Rupees. Exporters can receive advance payments and avail of export incentives. The direction also covers export credit facilities, barter trade, and penalties for non-compliance. Recent updates include relaxed credit limits, electronic document filing, enhanced MSME credit facilities, new e-commerce provisions, revised advance payment rules, and guidelines for exporting gold, education, and healthcare services. Compliance with export declaration forms, exchange control regulations, and tax duties is essential.
News
Summary: Gross GST revenue collections for January 2025 reached significant levels, reflecting a robust economic activity. The net GST revenue, after accounting for refunds, also showed a strong performance, indicating efficient tax administration and compliance. This continued trend of high GST collections underscores the effectiveness of the GST system in generating revenue and supporting government finances. The figures highlight the ongoing recovery and resilience of the economy, with sectors contributing positively to the tax base.
Summary: The 2025 Budget is described as a transformative plan aimed at empowering farmers, the middle class, and MSMEs. It includes significant income tax cuts for the middle class and outlines reforms to boost a slowing economy amid global uncertainties. The Budget focuses on innovation, inclusion, and investment, emphasizing youth leadership, community participation, and women empowerment. It aims to foster entrepreneurship, digital expansion, and infrastructure development, promoting resilience and sustainable growth. The Budget is seen as a step towards India's economic leadership by 2047, reaffirming the country's commitment to self-reliance and global excellence.
Summary: The Union Budget 2025-26 announced by the BJP-led Central government includes a significant income tax relief for the middle class, exempting individuals earning up to Rs 12 lakh annually from paying income tax. This move is seen as a strategic effort to garner middle-class support in the upcoming Delhi Assembly polls on February 5. BJP leaders believe this relief will strengthen their position against the ruling Aam Aadmi Party. Despite the Election Commission's restrictions on Delhi-specific announcements, the tax relief is expected to impact voter sentiment. The BJP has been out of power in Delhi since 1998.
Summary: A Congress leader criticized the Union Budget as "underwhelming," accusing the BJP-led government of focusing on short-term electoral gains in Delhi and Bihar, rather than addressing broader economic issues like unemployment and inflation. He argued that tax benefits for individuals earning up to Rs 12 lakh annually and regional "freebies" are designed to attract votes but lack long-term vision. The leader highlighted that the budget fails to tackle fundamental economic challenges, such as youth unemployment and declining manufacturing investment, suggesting a need for a more visionary approach to steer the country out of potential economic difficulties.
Summary: The Union Budget allocated Rs 141.83 crore for the president's office, marking an increase of Rs 8.22 crore from the previous fiscal's revised estimate of Rs 133.61 crore. This budget covers salaries, allowances, household expenses, and discretionary grants for the president, with Rs 60 lakh specifically for the president's salary and allowances, unchanged from the prior budget. The allocation also includes funds for the president's secretariat, covering establishment expenses and grants for Dr. Rajendra Prasad Kendriya Vidyalaya on the president's estate, along with capital provisions.
Summary: The implementation status of the 2024-25 budget announcements across various sectors. Key initiatives include transforming agriculture through research and new crop varieties, promoting natural farming, and enhancing digital infrastructure for agriculture. Financial support is planned for shrimp production, industrial development, and infrastructure projects in Bihar and Andhra Pradesh. The budget also emphasizes women-led development, skilling programs, and MSME support. Additionally, it addresses urban housing, energy transition, and infrastructure investment. Efforts to improve ease of doing business, streamline tax systems, and enhance digital public infrastructure are also highlighted, alongside support for tourism and development projects in specific regions.
Summary: Prime Minister Narendra Modi praised the Union Budget as a "people's budget," emphasizing its role as a "force-multiplier" to boost consumption, investment, and growth. The budget aims to increase savings and make citizens active participants in India's development. Key measures include tax relief for middle-class earners, support for gig workers, and promoting the private sector in nuclear energy. It grants infrastructure status to shipbuilding and tourism, enhancing employment opportunities. The budget also focuses on agriculture, manufacturing, and MSMEs, with initiatives like increased Kisan Credit Card limits and support for startups and entrepreneurs. Modi highlighted its comprehensive approach to future readiness.
Summary: Tamil Nadu's Finance Minister expressed disappointment with the Union Budget 2025-2026, presented by the Union Finance Minister, stating that the state's development needs were overlooked. Despite Tamil Nadu's significant contributions to national growth, as highlighted in the Economic Survey 2025, the budget did not adequately address the state's requirements. The minister criticized the budget for disproportionately benefiting states with lesser contributions while neglecting Tamil Nadu's needs.
Summary: The Indian Pump Manufacturers Association (IPMA) has praised the Union Budget 2025-26 for its growth-oriented focus, particularly benefiting the pump manufacturing sector. The budget's emphasis on agriculture, water infrastructure, and indigenous industry development is expected to boost demand for agricultural pumps, aided by an increase in Kisan Credit. The extension of the Jal Jeevan Mission to 2028 is anticipated to create ongoing business opportunities, enhancing water accessibility. Additionally, the government's commitment to the Nuclear Power Mission with a focus on indigenization is set to open new opportunities for Indian industries, including pump manufacturing.
Summary: Disability rights groups have criticized the Union Budget for neglecting the needs of India's disabled population. Despite a 4% increase in funding for the Department of Empowerment of Persons with Disabilities, activists argue it's insufficient. Concerns were raised over reduced funding for the Scheme for Implementation of the Persons with Disabilities Act and underutilization of disability funds, with 93% unspent in 2023-24. Mental health funding also faced cuts. The National Platform for the Rights of the Disabled plans a protest on February 10, demanding better pensions and broader coverage. Critics highlight the lack of incentives for the assistive devices industry and call for greater inclusivity.
Summary: The Union Budget for 2025-26 highlights the Indian government's focus on economic prudence, fiscal management, and inclusive growth, according to a statement by the Goa BJP chief. The fiscal deficit has been reduced to 4.4% of GDP, reflecting improved governance and financial control. Enhanced GST compliance and direct tax collections have strengthened the fiscal position, benefiting states like Goa. The budget prioritizes Goa's tourism sector, aiming to develop it as a top destination with increased infrastructure funding. Additionally, an income tax rebate increase to Rs 12 lakh is expected to boost disposable income, spending, and economic activity.
Summary: The Deputy Chief Minister of Arunachal Pradesh praised the Union Budget 2025-26 as "historic," highlighting its benefits for the middle class, including a zero-tax slab for annual incomes up to Rs 12 lakh. This measure is expected to enhance savings and economic growth. The budget also introduces a Rs 12.75 lakh threshold for salaried taxpayers, considering standard deductions. The Arunachal Chamber of Commerce and Industries commended the budget for being "poor-friendly" and beneficial to marginalized communities. It emphasized the positive impact on the MSME sector and agriculture, crucial for the state's economy.
Summary: Karnataka Chief Minister criticized the union budget, stating it offered the state an "empty vessel," failing to meet expectations. Despite being the second-highest taxpaying state, Karnataka's key projects, including the Mekedatu reservoir and various irrigation initiatives, received no funding. The CM accused the central government of political bias, favoring Bihar and Andhra Pradesh with special grants. He expressed disappointment over the lack of financial support for Bengaluru's infrastructure needs and suggested that political motivations influenced budget allocations. Karnataka's Rural Development Minister echoed these sentiments, expressing skepticism about the fulfillment of budget promises.
Summary: The Finance Minister announced substantial income tax cuts for the middle class, raising the exemption threshold to Rs 12.75 lakh and adjusting tax slabs for higher incomes, benefiting over 80% of taxpayers. The reforms, aimed at boosting consumption and investment, will cost the government Rs 1 lakh crore. The budget also proposed raising foreign investment limits in the insurance sector, increasing infrastructure spending, and supporting social sectors. Despite these measures, the fiscal deficit is projected at 4.4% of GDP for FY26. Additional initiatives include support for farmers, a social security cover for gig workers, and a focus on nuclear energy expansion.
Summary: The Union Budget presented by Finance Minister Nirmala Sitharaman has been positively received by the UK business community, highlighting its focus on economic growth, private investment, and a trust-based governance approach. Key measures include simplifying foreign direct investment (FDI) conditions, skilling, and policy reforms. The UK India Business Council and India Global Forum praised initiatives like customs streamlining, competitive federalism, and increased FDI caps in the insurance sector. The budget's emphasis on tax reforms, SME support, and regulatory improvements is seen as enhancing India's attractiveness for global investors and fostering sustainable growth.
Summary: Karnataka industry leaders have praised the Union Budget 2025, highlighting its focus on infrastructure, consumption, and investment as beneficial for economic growth. Key measures include significant income tax relief, with no tax payable up to Rs 12 lakh, which is expected to boost domestic consumption. The budget emphasizes clean energy, technology advancement, and infrastructure, fostering innovation and investment. It also supports various sectors, including MSMEs, agriculture, and manufacturing, with tax exemptions and custom duty rationalization. The healthcare sector benefits from increased medical seats and cancer care facilities. Overall, the budget is seen as middle-class friendly and growth-oriented.
Summary: The Union Budget 2025-26 has allocated Rs 1,024.30 crore for expenses related to the Council of Ministers, Cabinet Secretariat, and Prime Minister's Office, as well as hospitality for state guests. This is slightly higher than the Rs 1,021.83 crore allocated in 2024-25. The budget includes Rs 619.04 crore for ministerial expenses, Rs 182.75 crore for the National Security Council Secretariat, and Rs 70.12 crore for the Principal Scientific Advisor's office. The Cabinet Secretariat and PMO received Rs 75.68 crore and Rs 70.91 crore, respectively. Hospitality and entertainment expenses remain at Rs 4 crore, with Rs 1.80 crore for former governors' secretariat assistance.
Summary: The ruling BJP praised the Union Budget for 2025-26, presented by the Finance Minister, as a blueprint for Prime Minister Modi's vision of a developed India. Key announcements included income tax exemptions for incomes up to Rs 12 lakh, increased FDI in the insurance sector, and enhanced fiscal support for welfare measures. The budget was lauded for its comprehensive approach, addressing various sectors such as agriculture, MSMEs, and defense, with significant allocations for modernization. Leaders emphasized its focus on inclusive growth, innovation, and self-reliance, highlighting its benefits for the middle class and the broader Indian populace.
Summary: The government has significantly increased funding for technology projects, raising the budget for production-linked incentives, semiconductor schemes, and the IndiaAI Mission by 84% to Rs 18,000 crore for the next fiscal year. The IndiaAI Mission's allocation has surged over 11 times to Rs 2,000 crore, focusing on artificial intelligence development. The Ministry of Electronics and IT's total budget has been boosted by 48% to Rs 26,026.25 crore. The production-linked incentive scheme for electronics manufacturing, particularly mobile phones, received the highest allocation of Rs 8,885 crore. Semiconductor project funding more than doubled to Rs 2,499.96 crore, with significant investment commitments received.
Summary: A Padma Shri awardee from Bihar expressed immense joy as the Finance Minister wore a saree featuring Madhubani art, gifted by her, while presenting the Union Budget. The saree, an off-white handloom silk with fish-themed embroidery, was presented to the minister two months prior at a credit outreach event. The artist, renowned for her Madhubani paintings, combines traditional and modern themes in her work. She teaches at the Mithila Art Institute and has contributed murals for government projects. Her art, including pieces on COVID-19, has been recognized internationally and featured in academic courses.
Summary: The government has increased the Ministry of Culture's budget to Rs 3,360.96 crore for 2025-26, prioritizing heritage and arts. The Archaeological Survey of India receives Rs 1,278.49 crore for monument preservation. Funding for centenary events drops from Rs 110 crore to Rs 35 crore, though key anniversaries will still be supported. International cultural collaboration funds decrease significantly. National libraries, archives, and museums receive allocations to enhance cultural preservation. The Kala Sanskriti Vikas Yojana gets Rs 198.50 crore, and the National Mission for Manuscripts receives Rs 60 crore. Autonomous cultural institutions are granted Rs 411.42 crore, and museums receive Rs 379.58 crore.
Summary: The JMM-led alliance in Jharkhand criticized the Union Budget 2025-26, claiming it neglects the state and its people. They argue that despite Jharkhand's mineral wealth and poverty issues, the budget provides no central assistance. The alliance alleges favoritism towards Bihar, which received several projects. The state BJP countered, praising the budget for addressing various societal needs and supporting national development goals. The Federation of Jharkhand Chambers of Commerce and Industries acknowledged the budget's benefits for the middle class and SMEs but expressed disappointment over the lack of specific provisions for Jharkhand.
Summary: Tamil Nadu's main opposition party, AIADMK, criticized the Union Budget, labeling it as a "Bihar Budget" due to its focus on development schemes for Bihar, coinciding with upcoming elections there. AIADMK's general secretary expressed disappointment over the lack of special schemes for Tamil Nadu, including river water interlinking, railway projects, and MetroRail plans for Coimbatore and Madurai. While the budget increased the personal income tax exemption limit, it was criticized as lacking in job creation and skill development initiatives. The Economic Survey's goal of achieving an 8% growth rate for a developed Bharat by 2047 was questioned.
Summary: The Congress president criticized the government's Union Budget, labeling it as an attempt to mislead the public amidst widespread issues of inflation and unemployment. He highlighted that despite collecting significant income tax from the middle class over the past decade, recent tax exemptions are minimal. The budget, he argues, lacks substantial measures for youth, women, farmers, and marginalized communities, and fails to address critical issues like health, education, and job creation. He also noted the unchanged budget for MGNREGA and criticized the superficial handling of economic reforms and investment incentives, calling it an exercise in false praise.
Summary: The Union Budget for 2025-26 has been praised by the Chief Minister of Chhattisgarh as a visionary document for India's future, benefiting the middle and working classes. It includes significant tax reforms, such as exempting annual incomes up to Rs 12 lakh from taxation, compared to the previous Rs 2 lakh threshold. The budget also supports farmers by raising the Kisan Credit Card loan limit to Rs 5 lakh and introduces healthcare advancements, including 200 new cancer care centers and tax exemptions on 36 life-saving drugs. The Chief Minister expressed gratitude to the Union Finance Minister and the Prime Minister for these initiatives.
Summary: The Union Budget for 2025-26 is described as visionary, focusing on empowering farmers, the middle class, women, and entrepreneurs, according to a Union Minister. It introduces economic reforms aimed at enhancing the ease of doing business, increasing financial access for MSMEs, startups, and entrepreneurs, and fostering a robust investment environment. The budget also emphasizes strengthening cooperation between the central and state governments to promote inclusive growth. It aligns with the government's commitment to a developed and self-reliant India, aiming for sustained growth and global competitiveness. The minister expressed gratitude to the Prime Minister and Finance Minister for their efforts.
Summary: The decadal census in India is unlikely to occur in 2025 due to a significantly reduced budget allocation of Rs 574.80 crore, compared to the Rs 8,754.23 crore initially approved for the 2021 census. The census, postponed due to COVID-19, remains unscheduled. The 2025-26 budget reduction suggests further delays. The census aims to be digital, allowing self-enumeration via a portal yet to be launched. The National Population Register (NPR) update is also pending, with Aadhaar or mobile numbers required for self-enumeration. The census will gather detailed household data, including amenities, resources, and demographic information.
Summary: The Gujarat Chief Minister praised the "citizen first" Union Budget for 2025-26, highlighting its focus on supporting the poor and middle class. The budget, presented by the Union Finance Minister, eliminates income tax on earnings up to Rs 12 lakh annually, benefiting many employed individuals. The Chief Minister expressed gratitude to the Prime Minister and Finance Minister for a comprehensive budget that aims to develop all states and contribute to a developed India by 2047. The budget emphasizes agriculture, MSMEs, investment, and export, supporting initiatives for the poor, youth, farmers, and women, and aims for India to become the world's third-largest economy.
Summary: The recent budget announcement introduces revised income tax slabs under a new regime, offering significant tax savings for individuals. Those earning up to Rs 12 lakh annually will be exempt from income tax, while individuals with incomes of Rs 24 lakh or more can save up to Rs 1.10 lakh. The new tax structure imposes a 5% tax on income between Rs 4-8 lakh, 10% on Rs 8-12 lakh, 15% on Rs 12-16 lakh, 20% on Rs 16-20 lakh, 25% on Rs 20-24 lakh, and 30% on incomes exceeding Rs 24 lakh. The changes aim to provide relief and incentivize higher earnings.
Summary: Benchmark indices Sensex and Nifty ended flat on Budget day amidst high volatility, with Sensex gaining marginally by 5.39 points and Nifty dipping by 26.25 points. The Union Budget presented by the Finance Minister included tax exemptions for annual incomes up to Rs 12 lakh and restructured tax slabs, benefiting consumption-related sectors. However, a modest increase in capital expenditure and limited measures for sectors like railways and defense tempered market enthusiasm. Despite mixed reactions, the budget was seen as growth-focused, aiming to boost consumption, economic growth, and support for MSMEs and exports.
Summary: The Union Budget has allocated Rs 1,500 crore to the third phase of the e-Courts project, aimed at establishing digital, online, and paperless lower courts in India. This initiative, part of the National Mission for Justice Delivery and Legal Reforms, seeks to digitize court records and implement smart systems for data-driven decision-making. The project, under the National e-Governance Plan since 2007, aims to create a unified technology platform for seamless interaction between courts and stakeholders. It also provides access to judicial services through e-Sewa kendras, promoting environmental sustainability and reducing costs through virtual court participation.
Summary: The Andhra Pradesh Chief Minister praised the 2025-26 union budget as pro-people and progressive, aligning with the vision for a developed India under the Prime Minister's leadership. The budget focuses on the welfare of women, the poor, youth, and farmers, identifying six key growth sectors. It also offers tax relief for the middle class, eliminating income tax on earnings up to Rs 12 lakh annually. A party spokesperson emphasized this as a historic relief, enhancing savings and spending power. The new income tax bill is anticipated to be more straightforward and taxpayer-friendly. The budget is seen as prioritizing the middle class.
Summary: Finance Minister presented the Union Budget for 2025-26 with an expenditure of Rs 50.65 lakh crore, marking a 7.4% increase over the previous fiscal year. The budget allocates Rs 5.41 lakh crore for Centrally Sponsored Schemes and Rs 16.29 lakh crore for central sector schemes. The rise in expenditure is attributed to increased payments for loans, defense needs, and employment schemes. Capital expenditure is set at Rs 11.22 lakh crore, with effective capital expenditure at Rs 15.48 lakh crore. Total resources transferred to states are Rs 25.01 lakh crore, increasing by Rs 4.91 lakh crore from 2023-24.
Summary: The central government has increased the budget for the Union Tribal Ministry by over 45% for 2025-26, allocating Rs 14,925.81 crore. Eklavya Model Residential Schools will receive Rs 7,088.60 crore, while the Pradhan Mantri Janjatiya Vikas Mission's budget rises to Rs 380 crore. The Pradhan Mantri Adi Adarsh Gram Yojana is allocated Rs 335.97 crore to enhance tribal areas' infrastructure. The Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan's budget is doubled to Rs 300 crore, and the Dharti Aaba Janjatiya Gram Utkarsh Abhiyan receives Rs 2,000 crore to improve infrastructure in tribal villages, benefiting over 5 crore tribals nationwide.
Summary: The Union Budget 2025 presents mixed outcomes for Gulf-based NRI businesses. While increased disposable income and focus on digital infrastructure, AI, and 5G are expected to boost marketing investments, the unchanged 18% GST on advertising services remains a concern for SMEs. The budget supports MSMEs with a Credit Guarantee Scheme, promoting Indian startups' expansion into the GCC. Agricultural productivity and middle-income tax relief are welcomed, but there is disappointment over the lack of incentives for NRI investments. Concerns remain about potential GST increases and additional charges, affecting consumers and UAE-based enterprises.
Summary: The Union Budget 2025-26 has allocated Rs 74,226 crore to the Department of Drinking Water and Sanitation, with a significant portion dedicated to the Jal Jeevan Mission (JJM) for rural tap water connections. This marks an increase from the revised Rs 29,916 crore for 2024-25 but is less than the original Rs 77,390.68 crore allocation. The Department of Water Resources received Rs 25,276.83 crore, and the Namami Gange Mission-II was allotted Rs 3,400 crore. The JJM, extended to 2028, aims for 100% rural coverage with a focus on infrastructure quality and maintenance. Other allocations include Rs 7,192 crore for the Swachh Bharat Mission (Gramin) and Rs 5,936 crore for the Polavaram project.
Summary: The Union Budget has allocated Rs 13,611 crore to the Department of Social Justice and Empowerment, marking a 35.75% increase from the previous year. The Department of Empowerment of Persons with Disabilities received Rs 1,275 crore, a 9.22% rise. Key allocations include Rs 472 crore for the SHREYAS scheme for Scheduled Castes, Rs 2,190 crore for the PM YASASVI scheme for OBCs and others, and Rs 130 crore for PM DAKSH Yojana. The Venture Capital Fund for SCs and OBCs saw a significant reduction. Funds were also allocated for disability welfare, senior citizens, and drug rehabilitation efforts.
Summary: Finance Minister Nirmala Sitharaman presented her eighth budget, wearing a silk saree featuring Madhubani art, drawing attention to Bihar-related initiatives. The budget included plans for enhancing infrastructure at IIT-Patna and promoting tourism linked to Lord Buddha, amid opposition criticism of "coalition compulsions." A significant announcement was zero income tax for individuals earning up to Rs 12 lakh annually, which was met with enthusiastic support from the ruling party. Opposition members protested over a stampede incident at the Kumbh congregation but staged a brief walkout. The budget's focus on Bihar comes ahead of state elections, aiming to bolster the ruling coalition's position.
Summary: The Union Budget 2025-26 has allocated over Rs 1,400 crore to the law ministry for expenses related to the 2024 Lok Sabha elections and the purchase of new electronic voting machines (EVMs). The budget includes Rs 500 crore for elections, Rs 300 crore for voter identity cards, and Rs 597.80 crore for other election expenses. Additionally, Rs 18.72 crore is allocated for new EVMs. The law ministry, responsible for electoral laws and the Election Commission, describes these allocations as a "bookkeeping" exercise to cover election costs. EVMs have a lifespan of 15 years, after which they are destroyed.
Summary: An opposition leader criticized the NDA government for presenting a Union Budget filled with rhetoric and repackaged past announcements. He accused the government of neglecting Bihar, contrasting it with Andhra Pradesh, which secured significant benefits. The leader also criticized the state's Chief Minister for failing to secure a better deal for Bihar, suggesting that the CM has lost the ability to advocate effectively. He highlighted the absence of special status or economic packages for Bihar and dismissed budget announcements like greenfield airports as lacking concrete budgetary allocations. He also lamented the removal of a separate Rail budget.
Summary: Bihar's Chief Minister praised the Union Budget 2025-26, describing it as beneficial for the state's development. He expressed gratitude to the Prime Minister and the Union Finance Minister. The budget includes a proposal to establish a "Makhana board," aimed at enhancing foxnut cultivation, a significant crop in Bihar. Additionally, the plan for new greenfield airports is expected to improve flight connectivity, thereby boosting the state's economic growth.
Summary: The 2025-26 Union Budget emphasizes significant advancements in India's education sector, with infrastructure expansion at five new IITs to accommodate 6,500 more students and the addition of 10,000 medical seats. The Ministry of Education received an increased allocation of over Rs 1.28 lakh crore. The budget includes Rs 11,349 crore for IITs and introduces the 'Bharatiya Bhasha Pushtak' scheme for digital Indian language books. Additional initiatives include 10,000 technology research fellowships, five national centers for skilling, and a new AI center for education. While allocations for IIMs increased, funding for IISERs and World Class Institutions decreased.
Summary: Congress leader criticized the Union Budget, describing it as a "band-aid for bullet wounds" and accusing the government of lacking innovative solutions to address the economic crisis. He emphasized the need for a paradigm shift amidst global uncertainty. The Congress party also condemned the budget for failing to address issues like stagnant wages, low mass consumption, sluggish private investment, and a complex GST system. Additionally, they accused the government of favoring Bihar, governed by an NDA ally, while neglecting Andhra Pradesh, another key ally.
Summary: The 2025-26 budget has introduced various customs and excise notifications. Amendments include changes to existing customs notifications, such as adding capital goods to the exemption list for lithium-ion battery manufacturing and altering basic customs duty rates for telecom equipment parts. Certain drugs are exempted from customs duty under a Patient Assistance Programme, and specified goods are exempt from the Social Welfare Surcharge. Adjustments to the Agriculture Infrastructure and Development Cess (AIDC) and basic customs duty rates are also made. Non-tariff changes extend timelines for importing goods at concessional rates, and excise duty implementation on unblended diesel is delayed.
Summary: The Chief Minister of Manipur expressed that the proposed changes in the Union Budget, including enhanced investment and turnover limits for MSMEs, will significantly benefit the state, which is a major contributor to MSME registrations in the North East. The budget also introduces a zero tax on incomes up to Rs 12 lakh, easing financial burdens on families. The Finance Minister announced increased limits to help MSMEs with efficiency, technology, and capital access. The CM praised the government's commitment to the middle class and highlighted improvements in regional connectivity under the UDAN scheme, enhancing travel and commerce in the region.
Summary: BJP president praised the Union Budget 2025 as a "visionary roadmap" for a developed India, aligning with Prime Minister Narendra Modi's vision of 'Viksit Bharat.' The budget, presented by Finance Minister Nirmala Sitharaman, includes significant reforms like exempting annual incomes up to Rs 12 lakh from income tax, revising tax slabs, raising the FDI limit in the insurance sector, and simplifying tax laws. It emphasizes agriculture, MSMEs, investment, and export to uplift the poor, youth, farmers, and women. The BJP chief expressed gratitude to the Prime Minister and congratulated the Finance Minister for the inclusive and growth-oriented budget.
Summary: The government has allocated Rs 300 crore for prison modernization in the 2025-26 budget, maintaining the initial allocation from the previous year before it was revised to Rs 75 crore. The Union Home Ministry emphasizes efficient prison management and correctional administration. In May 2023, a comprehensive 'Model Prisons Act' was finalized, focusing on high-security jails, legal aid, parole, vocational training, and prisoner reintegration. The Act includes welfare programs and after-care services for prisoners. The Union Home Minister highlighted the importance of efficient prison management in the criminal justice system.
Summary: The BJP in Karnataka praised the union budget presented by Finance Minister Nirmala Sitharaman, describing it as visionary and development-oriented. The budget is seen as providing relief to the middle class and agriculture sector, with measures like the Pradhan Mantri Dhan-Dhanya Krishi Yojana and increased Kisan Credit Card limits. It emphasizes youth and women's empowerment, healthcare revitalization, and aims to eliminate tuberculosis by 2025. Income tax exemptions up to Rs 12 lakh are expected to benefit the middle class. The budget aligns with the vision for a self-reliant and developed India by 2047, supporting rural economies and reducing urban migration.
Summary: The BJP in Kerala praised the Union Budget 2024-25 as transformative, highlighting the tax exemption for incomes up to Rs 12 lakh as beneficial for the middle class. In contrast, Congress and CPI(M) MPs criticized the budget as disappointing, noting a lack of specific state allocations and perceived favoritism towards Andhra Pradesh and Bihar. Congress MP expressed concerns about the budget's focus on appeasing certain states for political survival and questioned its overall benefit to the broader population. CPI(M) MP also criticized the budget for neglecting Kerala and focusing on a small percentage of taxpayers.
Summary: The ruling party in Jharkhand, JMM, criticized the Union Budget 2025-26, alleging that the state and its people were completely neglected by the central government. They highlighted that while neighboring Bihar received several projects, Jharkhand, despite its significant mineral contributions, was overlooked. The JMM expressed disappointment over the absence of a promised payment of Rs 1.36 lakh crore to the state. In contrast, the state BJP praised the budget, asserting it addressed various societal needs and aligned with the Prime Minister's development vision.
Summary: A farm activist praised the Union Budget 2025-26 for its agricultural initiatives, emphasizing the benefits of the new cotton mission and the promotion of pulses and oilseeds. The 'Pradhan Mantri Dhan Dhanya Krishi Yojana' aims to improve productivity in 100 districts with low yields. The budget includes a six-year program for self-reliance in pulses and a comprehensive plan for increasing vegetable and fruit production. Additionally, the enhancement of the Kisan Credit Card limit from Rs 3 lakh to Rs 5 lakh is expected to support the credit cycle. Reforms in taxation, urban development, mining, financial sector, power, and regulatory areas were also commended.
Summary: Punjab's Chief Minister criticized the Union Budget, presented by the Union Finance Minister, for neglecting the state. He labeled it an "election budget," claiming it favored Bihar while ignoring Punjab's needs. The Chief Minister expressed dissatisfaction over the lack of provisions for farmers, including the absence of a minimum support price for crops, and no industrial package to boost the state's economy. He accused the central government of consistently sidelining Punjab and vowed to strengthen the state's self-reliance despite this perceived neglect.
Summary: Prime Minister Narendra Modi praised the Union Budget presented by Finance Minister Nirmala Sitharaman as a "people's budget" that aims to enhance savings, investment, and growth by putting more money in citizens' hands. Modi highlighted the Budget's focus on making citizens partners in development, supporting gig workers, and boosting the manufacturing sector for global competitiveness. Tax relief measures are expected to benefit the middle class and salaried employees, while initiatives for farmers aim to transform agriculture and the rural economy. The Budget also includes significant reforms, such as encouraging private sector involvement in nuclear energy.
Summary: The Central Information Commission (CIC) and the Public Enterprises Selection Board (PESB) have been allocated Rs 42.49 crore in the Union Budget 2025-26, marking a slight increase from the previous year's revised estimate of Rs 41.51 crore. This funding is designated for their establishment-related expenses. Additionally, the government has allocated Rs 3 crore to the Department of Personnel and Training for promoting the Right to Information (RTI) Act, which is an increase from the Rs 2.60 crore allocated in the previous fiscal year's revised estimates.
Summary: The Congress criticized the Union Budget, claiming it fails to address economic challenges like stagnant wages, low consumption, private investment stagnation, and a complex GST system. While Bihar received significant attention with various development initiatives, Andhra Pradesh was overlooked, raising questions about political favoritism. The budget included announcements for nutritional support programs but omitted key demands like school breakfast and Anganwadi worker honorarium increases. The Congress also criticized the lack of focus on farmers' demands, such as MSP guarantees and loan waivers. The government's manufacturing initiatives were dismissed as ineffective rebranding.
Summary: Heritage Foods Ltd, associated with the family of Andhra Pradesh's Chief Minister, expressed approval of the Union Budget, highlighting its focus on agricultural productivity. The company praised initiatives like enhanced credit access and the increased Kisan Credit Card loan limit, viewing them as drivers of sustainable growth in agriculture and dairy sectors. As a major dairy company, Heritage Foods is optimistic about these measures fostering agricultural prosperity and supporting India's goal of becoming a global agri-food leader. The budget's emphasis on transitioning farmers to natural farming aligns with the company's commitment to sustainable practices.
Summary: Tamil Nadu's ruling party criticized the Union Budget, claiming it targets political gains in election-bound states like Bihar while neglecting others such as Tamil Nadu. A party spokesperson argued that the budget's allocations appear strategically aimed at Bihar to influence upcoming elections. Additionally, the party expressed concerns that income tax exemptions do not promote savings and accused the central government of indirectly burdening ordinary citizens by raising GST on common goods. The spokesperson suggested these measures might be attempts by the ruling party to consolidate power in Bihar.
Summary: The Union Budget 2025-26 is described as a roadmap for a self-reliant and prosperous India, reflecting Prime Minister Narendra Modi's vision, according to a Union Minister. The budget focuses on diverse areas such as farmer welfare, middle-class relief, empowerment of women and youth, support for startups, infrastructure development, and investment encouragement. The minister expressed gratitude to the Prime Minister and Finance Minister for delivering a "bold, inclusive, and forward-looking" budget, aiming to transform citizens' dreams into reality.
Summary: Bahujan Samaj Party leader criticized the BJP government's Budget, asserting it prioritizes political interests over addressing the needs of the people, similar to past Congress budgets. She highlighted issues such as inflation, poverty, unemployment, and inadequate basic amenities affecting India's vast population. The leader questioned why, under the current government, citizens continue to face hardships and emphasized that the vision of a developed India should benefit marginalized communities.
Summary: Key government initiatives in India have significantly advanced financial inclusion and entrepreneurship. The Pradhan Mantri Jan Dhan Yojana (PMJDY) has opened over 54.58 crore accounts with deposits reaching 2.46 lakh crore. The Atal Pension Yojana (APY) has enrolled 7.33 crore people, with significant growth in FY 2024-25. The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) have expanded insurance coverage. The Stand-Up India Scheme and Pradhan Mantri Mudra Yojana (PMMY) have sanctioned substantial loans, focusing on women and SC/ST entrepreneurs, promoting financial empowerment and inclusive growth.
Summary: AAP national convener expressed disappointment over the Union budget 2025-26 for ignoring his proposal to end loan waivers for billionaires and redirect funds to the middle class and farmers. He highlighted that a significant portion of public funds is allocated to these waivers. Meanwhile, the Union Finance Minister presented reforms, including increasing the FDI limit in the insurance sector and simplifying tax laws. The budget provided relief to the middle class by exempting annual incomes up to Rs 12 lakh from income tax and adjusting tax slabs.
Summary: Telangana received no funds in the Union Budget, despite electing eight MPs each from the BJP and Congress, according to an opposition BRS MLC. She criticized the allocation on social media, questioning whether it was a budget or "Budget Neglect." In the recent Lok Sabha elections, the BRS failed to secure any seats, while the BJP and Congress each won eight out of the 17 seats in Telangana. The AIMIM president retained his Hyderabad Lok Sabha constituency.
Summary: The Central Bureau of Investigation (CBI) has been allocated Rs 1,071.05 crore in the Union Budget 2025-26, marking an increase of Rs 84.12 crore from the previous fiscal year. This funding supports the CBI's operations in investigating and prosecuting corruption and serious crimes involving public servants, private individuals, and firms. The budget includes provisions for modernizing training centers, establishing technical and forensic support units, and constructing office and residential buildings. The CBI is also addressing emerging crime trends such as artificial intelligence, cryptocurrency, and darknet-related offenses, in addition to conventional crimes like bank frauds and extradition cases.
Summary: The civil aviation ministry's budget allocation for the next financial year has been reduced by nearly 10% to Rs 2,400.31 crore. The UDAN scheme will receive Rs 540 crore, a 32% decrease from the previous year. Despite the cut, the UDAN scheme will be modified to connect 120 new destinations. Allocations for the DGCA and BCAS have increased slightly, while funds for Customs Cost Recovery charges for tier II/III airports have also risen. Air India Asset Holding Ltd will receive a marginally higher allocation for loan servicing. The budget aims to enhance regional connectivity and support smaller airports.
Summary: The Union Budget 2025-26 introduces significant tax reforms, exempting income tax for monthly earnings up to 1 lakh to boost middle-class savings and consumption. It identifies agriculture, MSMEs, investment, and exports as key development drivers. Initiatives include the 'Prime Minister Dhan-Dhaanya Krishi Yojana' for low-productivity districts, increased credit for MSMEs, and a new tax regime with revised slabs. The budget also emphasizes infrastructure development, digital education, and AI in education. Fiscal measures aim to reduce the deficit to 4.4% in FY-26, while promoting domestic manufacturing and exports through tariff adjustments and incentives.
Summary: The Union Budget 2025-26, presented by the Finance Minister, outlines key fiscal measures with total receipts estimated at 34.96 lakh crore and expenditure at 50.65 lakh crore. The fiscal deficit is projected at 4.4% of GDP. Key initiatives include the Prime Minister's agricultural programs, enhanced credit for farmers, and MSME support with revised classification criteria. Investment in infrastructure is emphasized with a 1.5 lakh crore outlay for state loans. Tax reforms include no income tax for incomes up to 12 lakh and a simplified tax structure. Customs duty rationalization aims to support domestic manufacturing and exports.
Summary: The Union Budget 2025-26 introduces significant changes to income tax slabs, offering relief to taxpayers, especially the middle class. Under the new regime, no income tax is payable on annual incomes up to Rs. 12 lakh, with a limit of Rs. 12.75 lakh for salaried individuals due to a standard deduction of Rs. 75,000. The revised tax rates range from 5% to 30% for incomes above Rs. 4 lakh. These reforms aim to boost household consumption, savings, and investment, aligning with the government's commitment to good governance and addressing citizen needs.
Summary: The Union Budget 2025-26, presented in Parliament, emphasizes agriculture as a key driver of India's development. Key initiatives include establishing a Makhana Board in Bihar to enhance production and marketing, launching a National Mission on High Yielding Seeds, and setting up a second Gene Bank. A five-year Mission for Cotton Productivity aims to boost cotton farming. The Kisan Credit Card loan limit is raised from Rs. 3 lakh to Rs. 5 lakh. A new urea plant in Assam will increase production. Sustainable fisheries frameworks will focus on the Andaman & Nicobar and Lakshadweep Islands, enhancing marine sector potential.
Summary: The Union Budget 2025-26 introduces several initiatives to boost agricultural productivity and rural prosperity. The Prime Minister Dhan-Dhaanya Krishi Yojana targets 100 low-productivity districts to enhance agriculture through improved irrigation and credit access, benefiting 1.7 crore farmers. A Rural Prosperity and Resilience Programme aims to tackle under-employment with investment in skills and technology, focusing on rural women and youth. A six-year Mission for Aatmanirbharta in Pulses will enhance production and storage of key pulses. Additionally, a comprehensive program for vegetables and fruits will promote efficient production and pricing. Public sector banks will create a 'Grameen Credit Score' to meet rural credit needs.
Summary: The Union Budget 2025-26 introduces significant reforms aimed at enhancing growth and global competitiveness. Key measures include raising the foreign direct investment limit in the insurance sector from 74% to 100%, contingent on investing premiums within India. A forum for pension product development will be established, and a revamped Central KYC Registry will be launched in 2025 to simplify processes. Additionally, procedures for company mergers will be streamlined, and the model for Bilateral Investment Treaties will be revamped to attract more foreign investment. These initiatives are part of broader efforts to reform the financial sector.
Summary: Trinamool Congress leader criticized the Union Budget 2025-26, claiming it offers nothing for West Bengal and continues to deprive the state under the BJP-led NDA government. He highlighted that the budget focused on Bihar, with announcements like the establishment of a Makhana Board and financial support for local projects, likely due to upcoming elections there. The leader accused BJP MPs from Bengal of failing to advocate for the state's economic interests and called for increased funding and new projects for West Bengal, expressing dissatisfaction with the current allocation.
Summary: Maharashtra Chief Minister praised the Union Budget 2025-26 as a "dream budget" for the middle class, highlighting the increased income tax exemption from Rs 7 lakh to Rs 12 lakh. He emphasized its potential to spur economic growth and inclusivity, benefiting the salaried and middle classes, and boosting demand and MSMEs. The budget's credit enhancement scheme for MSMEs is expected to generate employment, aiding Maharashtra's goal to become India's start-up capital. Agricultural initiatives, such as the new pulses mission and increased credit limits, along with 100% FDI in insurance with domestic investment requirements, were also welcomed.
Summary: The central government has increased the Union Environment Ministry's budget by 9% to Rs 3,412.82 crore for 2025-26, up from Rs 3,125.96 crore in the previous year. This budget boost aims to enhance ecosystem conservation, wildlife protection, and forest cover expansion. The National Mission for a Green India will receive Rs 220 crore, up from Rs 160 crore. Funding for natural resource conservation has increased from Rs 30 crore to Rs 50 crore, with biodiversity conservation nearly tripled to Rs 10 crore. Project Tiger and Project Elephant funding has risen from Rs 245 crore to Rs 290 crore.
Summary: The Federation of Karnataka Chamber of Commerce and Industry (FKCCI) expressed approval of the Union Budget presented by the Finance Minister, noting that several of their demands were addressed. The budget removes Tax Collection at Source and provides tax exemptions for incomes up to Rs 12 lakh, benefiting the middle class. It emphasizes support for Micro, Small and Medium Enterprises (MSMEs) and the manufacturing sector by redefining MSME criteria and exempting certain imported materials and drugs from customs duty. Additionally, agriculture receives attention with tax exemptions on loans and equipment.
Summary: The Union Budget 2025-26 allocates Rs 26,889.69 crore to the Ministry of Women and Child Development, up from Rs 23,182.98 crore in 2024-25. Key initiatives include Saksham Anganwadi and POSHAN 2.0, receiving Rs 21,960 crore to combat malnutrition and support early childhood care. Mission Vatsalya's budget increases to Rs 1,500 crore for child protection services. Mission Shakti, aimed at women's empowerment, receives Rs 3,150 crore, with significant funding for Sambal and Samarthya schemes. Additional allocations include Rs 120 crore for tribal development and Rs 30 crore for Nirbhaya Fund schemes. Grants are also provided for Northeast and state governments to implement WCD programs.
Summary: Chitkara University hosted the National Colloquium on Union Budget 2025-26, focusing on India's economic future through discussions on digitalisation, sustainable development, and fiscal policy. The event featured sessions from experts addressing education, fiscal consolidation, and rural development. Key insights included the importance of investing in higher education, achieving GDP growth through fiscal consolidation, and adopting sustainable energy policies. The colloquium emphasized the need for balanced economic growth through strategic planning and collaboration among government, industry, and academia. Chitkara University is recognized for its industry-aligned education and commitment to fostering future leaders.
Summary: Union Minister and BJP ally criticized opposition parties for linking Bihar-focused measures in the Union Budget to upcoming state elections. He urged them to support bills for simultaneous elections to resolve such debates. The minister defended the development initiatives, including IIT and airport expansions, as beneficial for Bihar's youth, questioning the opposition's objections. He highlighted that elections are always occurring somewhere in India during the Budget period and suggested that supporting "one nation, one election" could end these disputes. He praised the Budget as comprehensive, addressing various sectors and expressing satisfaction with its focus on Bihar.
Summary: The Union Budget 2025 emphasizes new technologies, introducing a national framework for Global Capability Centres (GCCs) and a Rs 500-crore Centre of Excellence in AI for education. A new 'Fund of Funds' with an additional Rs 10,000 crore aims to support startups. The framework will guide states in promoting GCCs in Tier-2 cities, enhancing talent and infrastructure. The credit guarantee for startups will double, supporting 27 key sectors. These initiatives aim to foster a knowledge-driven economy, enhance workforce stability, and position India as a leader in digital and business services, reducing regional disparities and promoting inclusive growth.
Summary: The Union Budget 2025-26 introduced a "National Manufacturing Mission" to advance the "Make in India" initiative, targeting industries of all sizes. It will focus on improving business conditions, workforce readiness, MSME sector vitality, technology access, and product quality. The Mission will support clean technology manufacturing, enhancing domestic value in sectors like solar and EVs. A new scheme for the footwear and leather industry aims to create 22 lakh jobs and boost exports. Additionally, a National Action Plan for Toys will position India as a global toy hub. A National Institute for Food Technology in Bihar will support Eastern India's food processing sector.
Summary: The Union Budget 2025-26 introduces significant measures to support MSMEs and startups, enhancing investment and turnover limits for MSME classification to 2.5 and 2 times, respectively. Credit guarantee cover for micro and small enterprises is increased from 5 crore to 10 crore, with 10 lakh customized credit cards for micro enterprises to be issued. A new Fund of Funds of Rs. 10,000 crore for startups and a scheme offering loans up to 2 crore for women, Scheduled Castes, and Scheduled Tribes entrepreneurs are announced. An Export Promotion Mission will facilitate access to export credit and support MSMEs in tackling overseas non-tariff measures.
Summary: The Union Budget 2025-26, presented by the Finance Minister, introduces BharatTradeNet, a digital platform for international trade documentation and financing, aligning with global practices. The budget emphasizes enhancing domestic manufacturing to integrate India's economy with global supply chains, identifying sectors based on objective criteria, and forming facilitation groups. Support will be extended to the domestic electronic equipment industry to leverage Industry 4.0 opportunities for youth. Additionally, a National Framework will guide states in promoting Global Capability Centres in tier 2 cities, focusing on talent, infrastructure, and industry collaboration.
Summary: The government announced a Rs. 1 lakh crore Urban Challenge Fund to implement initiatives for 'Cities as Growth Hubs' and 'Creative Redevelopment of Cities'. The fund will cover up to 25% of project costs, with the remainder funded through bonds, bank loans, and PPPs. A National Geospatial Mission will modernize land records and infrastructure planning. Gig workers will receive identity cards and healthcare under PM Jan Arogya Yojana. The PM SVANidhi scheme will expand with UPI-linked credit cards. The SWAMIH Fund 2 will support the completion of 1 lakh housing units, aiding middle-class families.
Summary: The Union Budget 2025-26 proposes significant investments in the shipping and aviation sectors. A Maritime Development Fund of Rs 25,000 crore is suggested to support the maritime industry, with up to 49% government contribution. The Shipbuilding Financial Assistance Policy will be revamped, and shipbuilding clusters will be developed. The UDAN scheme will be modified to connect 120 new destinations and carry 4 crore passengers over the next decade. Infrastructure upgrades for air cargo and new greenfield airports in Bihar are planned, alongside financial support for the Western Koshi Canal Project to benefit local agriculture.
Summary: The Union Budget 2025-26, presented by the Finance Minister, outlines several initiatives to boost innovation and education. It includes establishing 50,000 Atal Tinkering Labs in government schools over five years to promote scientific curiosity. Broadband connectivity will be extended to rural schools and health centers. The Bharatiya Bhasha Pustak Scheme will provide digital Indian language books. Five National Centres of Excellence for skilling and a Centre of Excellence in AI for education are planned. Rs 20,000 crore is allocated for private sector-driven R&D, and 10,000 fellowships for technological research in IITs and IISc are proposed.
Summary: The Union Budget 2025-26, presented by the Finance Minister, emphasizes investments in people, economy, and innovation. Key proposals include enhancing nutritional support under the Saksham Anganwadi and Poshan 2.0 programs, benefiting over 8 crore children, pregnant women, and adolescent girls. The budget plans to establish 200 Day Care Cancer Centres in district hospitals by 2025-26 and increase medical college seats by 10,000 next year. Medical tourism will be promoted in partnership with the private sector. Additionally, 36 lifesaving drugs will be exempt from Basic Customs Duty, with further concessions on drugs for severe diseases and patient assistance programs.
Summary: The Union Finance Minister proposed significant multi-sectoral reforms in the Union Budget 2025-26, focusing on Public Private Partnerships, state support, asset monetization, mining, and domestic manufacturing. Infrastructure ministries are to develop a 3-year project pipeline for PPPs, with states encouraged to use the India Infrastructure Project Development Fund. A 1.5 lakh crore interest-free loan is proposed for state capital expenditure. The second Asset Monetisation Plan aims to reinvest 10 lakh crore in new projects. Mining sector reforms and exemptions on critical minerals like cobalt and lithium-ion battery scrap are also proposed to bolster domestic manufacturing and job creation.
Summary: The Union Finance Minister announced the Union Budget 2025-26, focusing on regulatory reforms and ease of doing business. A High-Level Committee will review non-financial sector regulations to enhance economic governance. An Investment Friendliness Index of States will be launched to promote competitive federalism. Under the Financial Stability and Development Council, a mechanism will be established to assess financial regulations' impact. The Jan Vishwas Bill 2.0 aims to decriminalize over 100 legal provisions, building on previous efforts to simplify laws. These measures aim to create a modern regulatory framework aligned with technological advancements and global policies.
Summary: The Union Budget 2025-26, presented by the Finance Minister, is focused on realizing 'Sabka Vikas' over the next five years, emphasizing balanced regional growth. The budget identifies Agriculture, MSMEs, Investment, and Exports as key growth drivers. It aims to implement transformative reforms in Taxation, Power, Urban Development, Mining, Financial Sector, and Regulatory Reforms to enhance global competitiveness. The budget targets inclusivity, focusing on the poor, youth, farmers, and women, with measures to boost agriculture, rural prosperity, manufacturing, MSMEs, employment, energy security, exports, and innovation, aiming for a developed India with zero poverty and comprehensive healthcare.
Summary: The Union Budget 2025-26 highlights tourism as a key sector for employment-led growth. Initiatives include skill-development programs, MUDRA loans for homestays, improved travel connectivity, and streamlined e-visa facilities. The government plans to develop the top 50 tourist destinations in collaboration with states, emphasizing spiritual sites and locations associated with Lord Buddha. Medical tourism and the "Heal in India" initiative will be promoted with private sector partnerships. Additionally, over 1 crore manuscripts will be documented and conserved, and a National Digital Repository of Indian knowledge systems will be established for knowledge sharing.
Summary: The Union Budget 2025-26 has increased the budget for the Jal Jeevan Mission to Rs 67,000 crore, extending the initiative until 2028. The mission aims to provide 100% coverage of potable tap water connections to rural households within the next three years. Since 2019, 15 crore households, representing 80% of India's rural population, have benefited from the program. The focus will be on infrastructure quality and operation and maintenance of rural water supply schemes through community participation. Separate agreements will be signed with states and union territories to ensure sustainable and citizen-focused water service delivery.
Summary: A Nuclear Energy Mission focusing on research and development of Small Modular Reactors (SMRs) will be established with a budget of Rs. 20,000 crore, as announced in the 2025-2026 Budget. At least five indigenously developed SMRs are expected to be operational by 2033. The initiative aims to achieve 100 GW of nuclear energy by 2047, necessitating amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act for private sector collaboration. Additionally, states will be incentivized for electricity distribution reforms, with extra borrowing of 0.5% of GSDP allowed contingent on these reforms.
Summary: India's Finance Minister announced the 2025-26 budget, highlighting plans to expand India Post's services to boost the rural economy. With 1.5 lakh rural post offices and 2.4 lakh Dak Sevaks, India Post will offer services like rural community hubs, institutional accounts, DBT, credit for micro enterprises, insurance, and digital assistance. It will also transform into a major public logistics organization to meet the needs of entrepreneurs, women, self-help groups, and MSMEs. The India Post Payment Bank's services will be further developed in rural regions to support these initiatives.
Summary: The Union Budget 2025-26, presented by the Finance Minister, proposes significant changes to customs tariffs to support domestic manufacturing, promote exports, and provide relief to the public. It suggests removing seven customs tariff rates for industrial goods, exempting 36 life-saving medicines from basic customs duty, and adding 35 capital goods for EV battery manufacturing to the exempted list. The budget also aims to boost domestic production by adjusting tariffs on technical textiles, lithium-ion battery components, and shipbuilding materials. Additionally, it includes measures to facilitate trade, promote exports, and enhance ease of doing business by setting timelines for provisional assessments and encouraging voluntary compliance.
Summary: The Odisha Chief Minister praised the Union Budget 2025-26 for its proposal to exempt annual incomes up to Rs 12 lakh from income tax, calling it a visionary move that will empower citizens and strengthen the economy. The budget aims to provide tax relief to the middle class by restructuring tax slabs. The Finance Minister announced that under the new tax regime, salaried taxpayers can benefit from a threshold of Rs 12.75 lakh, including standard deductions. This initiative is expected to enhance household consumption, savings, and investments by leaving more money in the hands of taxpayers.
Summary: The Union Budget 2025-26 has allocated Rs 44.32 crore to the anti-corruption ombudsman Lokpal for establishment and construction-related expenses, marking a 34% decrease from the previous year's Rs 67.65 crore. The Lokpal is responsible for investigating corruption allegations against public officials, including the prime minister. Meanwhile, the Central Vigilance Commission (CVC), which acts as a probity watchdog, has been allocated Rs 52.07 crore for the upcoming fiscal year, slightly up from Rs 51.31 crore in the current year.
Summary: Union Home Minister stated that the 2025-26 Union Budget reflects the government's vision for a developed nation, emphasizing the middle class's importance to the Prime Minister. The budget addresses various sectors including agriculture, health, startups, and investment. A significant highlight is the exemption of income tax for annual earnings up to Rs 12 lakh, aimed at benefiting the middle class. The Finance Minister introduced reforms such as raising the FDI limit in insurance, simplifying tax laws, and reducing duties on intermediaries, alongside increased fiscal support for welfare initiatives.
Summary: The Union Budget 2025-26 introduces significant changes, including no personal income tax for incomes up to Rs 12 lakh and a new Income-Tax Bill. The insurance sector sees an increase in FDI to 100%. Fiscal deficit is set at 4.4% of GDP, with a focus on infrastructure and agriculture. Key initiatives include the Prime Minister Dhan-Dhaanya Krishi Yojana, a new urea plant in Assam, and the establishment of a Makhana Board in Bihar. The MSME sector benefits from enhanced investment limits and new credit schemes. Investments in education, healthcare, and infrastructure are prioritized, alongside a Nuclear Energy Mission and regional connectivity enhancements.
Summary: Benchmark indices Sensex and Nifty experienced volatility following the Union Budget presentation, as investors found limited benefits for retail investors and the markets. Initially, both indices opened with gains but declined after the Finance Minister's speech, with Sensex dropping 494.1 points and Nifty falling 162.35 points. Major laggards included Bajaj Finserv and Tata Steel, while Zomato and Maruti were among the gainers. The Budget introduced income tax relief for the middle class and outlined reforms like raising FDI limits in the insurance sector. The fiscal deficit target is set at 4.4% of GDP for 2025-26.
Summary: The Tripura Chief Minister praised the Union Budget as a blueprint for a developed India, highlighting its focus on farmers, the poor, and the middle class. The Budget addresses key sectors such as education, healthcare, and innovation, aligning with the vision of self-reliant India. The state BJP commended the Budget for providing significant relief to the middle class, notably with no income tax for annual incomes up to Rs 12 lakh. The Chief Minister and other officials expressed appreciation for the efforts of the Prime Minister and Finance Minister in crafting this budget.
Summary: The Union Budget 2025-26, presented by the Finance Minister, introduces several direct tax reforms aimed at good governance. Key proposals include raising the income tax exemption for individuals to Rs. 12 lakh and Rs. 12.75 lakh for salaried taxpayers, doubling the TDS limit for senior citizens, and increasing the TDS threshold on rent. The budget also proposes easing compliance for small charitable trusts and extending the filing period for updated tax returns. Measures to boost investment and employment include tax certainty for electronics manufacturing, extending start-up incorporation benefits, and promoting the International Financial Services Centre. These reforms are expected to result in a revenue loss of Rs. 1 lakh crore in direct taxes.
Summary: The Union Budget 2025-26, presented by the Finance Minister, introduces proposed amendments to GST laws aimed at enhancing trade facilitation. Key changes include the distribution of input tax credit for inter-state supplies on a reverse charge basis starting April 1, 2025, and defining Unique Identification Marking for a Track and Trace Mechanism. The budget also proposes tax liability reduction measures, a 10% pre-deposit for penalty appeals, penalties for Track and Trace violations, and clarifies that certain warehoused goods transactions are not considered supplies. Additionally, it includes definitions for 'Local Fund' and 'Municipal Fund' and imposes conditions on return filing.
Summary: India's real and nominal GDP are projected to grow by 6.4% and 9.7% respectively in FY25, with nominal GDP expected to rise by 10.1% in FY26. Retail inflation remained within the target range, and the fiscal deficit is targeted at 4.8% of GDP for FY25, with a goal to reduce it below 4.5% by FY26. Capital expenditure for FY26 is set at Rs. 11.21 lakh crore. Merchandise exports grew by 1.6%, and services exports by 11.6% in 2024. Foreign Direct Investment increased, and foreign exchange reserves are estimated at USD 640.3 billion. The government aims for equitable and sustained growth.
Summary: For every rupee in the government's coffer, 66 paise will be sourced from direct and indirect taxes, as outlined in the Union Budget 2025-26. Direct taxes, including corporate and individual income taxes, contribute 39 paise, while GST accounts for 18 paise among indirect taxes. Borrowings and liabilities provide 24 paise, with non-tax revenue and non-debt capital receipts contributing 9 paise and 1 paise, respectively. On the expenditure side, 20 paise goes to interest payments, 22 paise to states' tax shares, 8 paise to defense, 16 paise to central sector schemes, and smaller allocations to other areas such as subsidies and pensions.
Summary: The Budget projects an 11% growth in gross tax revenues, estimating Rs 42.70 lakh crore for the next fiscal year. Current fiscal revised estimates place gross tax revenues at Rs 38.44 lakh crore, slightly above the original budget estimates. Corporate tax income is expected to fall short, while personal tax income is projected to exceed estimates, reaching Rs 12.57 lakh crore. For the 2025-26 fiscal year, personal income tax is expected to grow by 14.4% to Rs 14.38 lakh crore, and corporate tax by 10.4% to Rs 10.82 lakh crore. GST revenue is estimated to rise by 11% to Rs 11.78 lakh crore. Miscellaneous capital receipts are projected at Rs 47,000 crore.
Summary: The Union Budget presented by the Finance Minister highlighted the central government's focus on accelerating Bihar's growth, as stated by the state's Deputy Chief Minister. Key initiatives include establishing a Makhana Board, funding for the western Kosi canal, and enhancing IIT-Patna's capacity. Additional plans involve setting up a National Institute of Food Technology and facilitating greenfield airports. These measures, alongside tax relief for incomes up to Rs 12 lakh, aim to boost Bihar's economy and employment. The Deputy Chief Minister expressed gratitude to the central leadership for prioritizing Bihar, which is set to hold elections later this year.
Summary: The Odisha Chief Minister praised the Union Budget 2025-26 for its proposal to exempt annual incomes up to Rs 12 lakh from income tax, calling it a visionary move that will empower citizens and strengthen the economy. The budget aims to provide relief to the middle class by adjusting tax slabs. The Union Finance Minister announced that under the new tax regime, annual incomes up to Rs 12 lakh will be tax-exempt, with a threshold of Rs 12.75 lakh for salaried taxpayers after considering standard deductions.
Summary: The Union Budget 2025-26 has allocated over Rs 334 crore to the personnel ministry for training government employees domestically and internationally, and for enhancing training infrastructure. Rs 100 crore is designated for administrative reforms, including modernizing offices, promoting e-governance, and improving grievance redressal systems. Rs 105.99 crore will support the Training Division, ISTM, and LBSNAA, while Rs 118.46 crore is for training schemes. Mission Karmayogi, a major bureaucratic reform initiative, receives Rs 110 crore to enhance civil service capacity. Additionally, Rs 164.62 crore is allocated to the Central Administrative Tribunal, and Rs 515.15 crore to the Staff Selection Commission.
Summary: The FY26 Budget introduces significant tax reforms aimed at simplifying income tax laws and benefiting the middle class. Key changes include a new income tax law prioritizing trust, extended time for filing updated returns, and increased thresholds for tax deductions at source. The tax exemption limit for annual income has been raised to Rs 12 lakh, with revised tax slabs offering relief to various income groups. The new regime provides lower tax rates and standard deductions, enhancing disposable income for the middle class. However, no changes were made to the old tax regime, which retains its exemptions and deductions.
Summary: The government has allocated Rs 6.81 lakh crore for the defence budget for 2025-26, an increase from the previous year's Rs 6.21 lakh crore. The capital outlay stands at Rs 1,92,387 crore, with revenue expenditure at Rs 4,88,822 crore, including Rs 1,60,795 crore for pensions. For capital expenditure, Rs 48,614 crore is designated for aircraft and aero engines, Rs 24,390 crore for the naval fleet, and Rs 63,099 crore for other equipment. In the previous year, the capital outlay was Rs 1,72,000 crore.
Summary: Opposition MPs criticized the 2025 Budget, claiming it neglects the middle class and common people, focusing instead on the upcoming Bihar elections. A Trinamool Congress MP highlighted the lack of benefits for West Bengal, stating the state has been overlooked for years. Concerns were raised about the confusion in tax rebates, with a DMK MP describing the budget as a "big letdown" for the middle class. They argued the government's promises of tax exemptions are misleading, suggesting the budget primarily serves electoral interests in Bihar.
Summary: Bihar's Deputy Chief Minister praised the Union Budget as "historic," highlighting the central government's commitment to the state's accelerated growth. The budget, presented by the Finance Minister, included proposals for a Makhana Board, a food processing institute, and financial backing for the Western Kosi canal project in Mithilanchal. Additionally, there are plans to expand airports and IIT-Patna. The Deputy Chief Minister expressed gratitude to the Prime Minister and Finance Minister, emphasizing the anticipated rapid development in Bihar under their leadership.
Summary: Opposition MPs briefly walked out of the Lok Sabha during the Finance Minister's Budget speech, demanding a government statement on the recent Kumbh stampede that resulted in 30 fatalities. The protest began shortly after the session commenced, with MPs raising slogans about the January 29 incident. Despite the walkout, the Finance Minister continued her speech, and the MPs returned to their seats shortly thereafter. The Trinamool Congress MPs did not participate in the walkout. Following the speech, opposition members requested a discussion on the stampede.
Summary: The 2025-2026 budget aims to accelerate growth, secure inclusive development, and enhance the spending power of India's middle class. Key initiatives include the Prime Minister Dhan-Dhaanya Krishi Yojana to boost agricultural productivity, a comprehensive rural prosperity program, and a mission for self-sufficiency in pulses. The budget also focuses on MSMEs, investment in infrastructure, and tax reforms. Personal income tax reforms will benefit the middle class, with no tax for incomes up to Rs. 12 lakh. The budget emphasizes sustainable development, innovation, and global competitiveness, with strategic investments in education, healthcare, and technology.
Summary: Finance Minister presented a reformist Budget, offering relief to the middle class by exempting annual incomes up to Rs 12 lakh from income tax and restructuring tax slabs. The Budget also proposed raising the FDI limit in the insurance sector, simplifying tax laws, and reducing duties on intermediaries, alongside increasing fiscal support for welfare measures. Despite these reforms, the fiscal consolidation roadmap aims to reduce the fiscal deficit to 4.4% of GDP by 2025-26, with the current year's deficit at 4.8%. To address the fiscal gap, the government plans to raise Rs 11.54 lakh crore from the market.
Summary: The Congress criticized the Union Budget presented by the Finance Minister, claiming it was "completely derailed" despite the emphasis on four development engines: agriculture, MSMEs, investments, and exports. The Congress spokesperson mocked the government's approach, suggesting the multitude of engines led to confusion. Additionally, the Congress accused the BJP of undermining the Civil Liability for Nuclear Damage Act, 2010, during Arun Jaitley's tenure, and alleged that the current government plans to amend the Act to appease international interests, particularly the U.S. under Trump.
Summary: The Congress criticized the Indian government's 2025-26 Union Budget, highlighting that Bihar received significant allocations, including a Makhana Board, support for the Kosi canal, IIT Patna, a National Institute of Food Technology, and greenfield airports. This is seen as politically motivated with upcoming elections. In contrast, Andhra Pradesh, another NDA ally, was notably overlooked. Congress leader Jairam Ramesh also criticized the budget for not addressing key nutritional support enhancements, such as including breakfast in schools and increasing Anganwadi worker honorariums, despite longstanding demands from the Union Education and WCD Ministries.
Summary: Finance Minister Nirmala Sitharaman referenced Gurajada Apparao in her Union Budget speech, highlighting his impact on Telugu literature and social reform. Gurajada, born in 1862 in Andhra Pradesh, was a prominent writer known for addressing social issues through his work. His famous line, "A country is not just land, but its people," underscores his belief in human value. He authored the play 'Kanya Sulkam,' which criticized child marriage practices. This play was later adapted into a 1955 film featuring NT Rama Rao. Gurajada passed away on November 30, 1915, in Vizianagaram.
Summary: The Jal Jeevan Mission, aimed at providing tap water to all rural households in India, has been extended to 2028 with an increased budget, as announced by the Union Finance Minister. Currently, 15 crore households, covering 80% of the rural population, have access to potable tap water. The mission will focus on infrastructure quality and the maintenance of rural water supply schemes through community participation. New agreements will be signed with states and union territories to ensure sustainable and citizen-centric water service delivery. The original deadline for completion was 2024.
Summary: Benchmark indices Sensex and Nifty traded higher during the Union Budget 2025-26 presentation, with Sensex rising 350.03 points to 77,850.60 and Nifty climbing 106.15 points to 23,614.55. The government plans transformative reforms across six domains, including taxation and the financial sector, aiming for inclusive growth and global competitiveness. IndusInd Bank and UltraTech Cement were among the top gainers, while Titan and Nestle lagged. Finance Minister emphasized India's rapid economic growth and the Budget's focus on inclusive development. Foreign Institutional Investors sold equities worth Rs 1,188.99 crore, and Brent crude fell to USD 75.67 a barrel.
Summary: The Union Budget 2025-26, presented by the Finance Minister, will introduce reforms in taxation, urban development, mining, the financial sector, power, and the regulatory framework. This marks her eighth consecutive budget presentation. The government aims to achieve inclusive growth with goals of zero poverty, quality education, and comprehensive healthcare. The budget emphasizes the country's development over the past decade and its structural reforms, which have garnered global attention. The initiative aligns with the vision of creating a "Viksit Bharat," focusing on inclusive growth and development for all citizens.
Summary: The government plans to implement "transformative reforms" in six areas, including taxation and the financial sector, as part of the Union Budget 2025-26, according to the Finance Minister. These reforms aim to enhance growth potential and global competitiveness. The focus is on achieving inclusive growth with zero poverty, quality education, and affordable healthcare. The budget outlines initiatives in 10 areas, targeting youth, farmers, and women, to boost agricultural growth, productivity, and rural prosperity. The six domains targeted for reforms are taxation, power sector, urban development, mining, financial sector, and regulatory reforms.
Summary: The Finance Minister has made history by presenting her eighth consecutive budget, amid an economic slowdown and calls for middle-class tax cuts. This achievement brings her closer to the record of ten budgets set by a former Prime Minister. The Finance Minister has presented the most consecutive budgets under the current Prime Minister. She became India's first full-time female Finance Minister in 2019 and retained her position after the Prime Minister's third-term victory in 2024. The budget presentation date was changed to February 1 in 2017 to streamline the approval process and implementation timeline.
Summary: Finance Minister Nirmala Sitharaman announced that the Union Budget 2025-26 aims to accelerate growth and promote inclusive development. Presenting the 14th consecutive budget under the current government, she emphasized the Indian economy's status as the fastest-growing among developing nations. Sitharaman highlighted the next five years as a unique opportunity to stimulate growth, marking her eighth consecutive budget presentation.
Summary: The Economic Survey 2024-25 highlights several key developments and recommendations for India's economy. It notes the transformation in sanitation through the Swachh Bharat Mission and emphasizes the need for infrastructure improvements amid urbanization. The survey recognizes ISRO's contributions to government programs and calls for a strategic trade roadmap to enhance export competitiveness. It reports growth in train passenger traffic and freight revenue, a decline in school dropout rates, and increased government health expenditure. The survey underscores the importance of climate change adaptation, AI's impact on labor, and private participation in infrastructure. It also highlights the resilience of the agriculture sector and the need for deregulation in MSMEs.
Summary: The Union Cabinet, led by the Prime Minister, approved the Union Budget for 2025-26. The Finance Minister is set to present her eighth Budget in the Lok Sabha amidst an economic slowdown, with growth at a four-year low of 6.4%, and demands for tax relief due to reduced consumption. This marks the second Budget of the current BJP-led NDA government in its third term. Continuing the recent tradition, the Budget will be presented in a paperless format, following the replacement of the traditional briefcase with a 'bahi-khata' in 2019.
Summary: Finance Minister met with the President before presenting her eighth Union Budget in the Lok Sabha. Following tradition, the meeting took place at Rashtrapati Bhavan, where the President offered an auspicious gesture before the budget presentation. The Cabinet, led by the Prime Minister, approved the Budget for the fiscal year 2025-26. There is significant public demand for tax relief as the government aims to address economic slowdown concerns and outline plans to achieve 'Viksit Bharat' by 2047. The Finance Minister continues her practice of carrying the budget in a 'bahi-khata' instead of a briefcase.
Summary: The Finance Act, 2025, which received presidential assent on March 29, 2025, introduces comprehensive amendments to tax laws following the Union Budget 2025-26. The legislation includes significant changes to the Customs Act, Central Excise Act, and CGST Act, with revisions to customs duties, exemptions, and GST provisions. The budget features personal income tax reforms specifically targeting the middle class, as detailed in clarification FAQs issued on February 1 and March 25, 2025. The Finance Bill was passed with government amendments considered and adopted on March 25, 2025.
Summary: The upcoming Union Budget for 2025-26, presented by the Finance Minister, will focus on several key economic indicators. The fiscal deficit for FY25 is projected at 4.9% of GDP, with plans to reduce it to 4.5% by FY26. Capital expenditure is budgeted at Rs 11.1 lakh crore, though initial spending was delayed due to elections. The government aims to reduce the debt-to-GDP ratio from 85% towards a 60% target. Gross borrowing is set at Rs 14.01 lakh crore, and tax revenue is estimated at Rs 38.40 lakh crore. GST collections are projected to rise by 11%, and nominal GDP growth is estimated at 10.5%. Key areas of focus include dividends, disinvestment, and spending on essential sectors like health and education.
Summary: Benchmark indices Sensex and Nifty opened higher ahead of the Union Budget presentation, with Sensex rising 136.44 points to 77,637.01 and Nifty increasing by 20.2 points to 23,528.60. Major gainers included ITC Hotels and IndusInd Bank, while Titan and Kotak Mahindra Bank were among the laggards. Market expectations focus on potential personal income tax cuts to boost consumption, though fiscal constraints limit significant relief. The pre-Budget Economic Survey projects India's economy to grow by 6.3-6.8%, indicating a need for deregulation and reforms to achieve higher growth rates. Asian markets were closed, and US markets ended lower.
Summary: The Finance Minister of India presented her eighth consecutive Budget using a digital tablet enclosed in a traditional red pouch, continuing a custom she started in 2019 by moving away from the colonial-era briefcase. This marks the 14th consecutive Budget under the current government. The shift to digital documents began in 2021 due to the pandemic. The minister, dressed in a handloom saree, posed for the traditional photo outside her office before meeting the President and heading to Parliament. This practice reflects a break from colonial traditions, emphasizing a modern approach to Budget presentations.
Summary: During Parliament's Budget Session, the Congress party announced plans to address issues such as inflation, unemployment, the Maha Kumbh stampede, and an alleged insult to B R Ambedkar. The INDIA bloc is united in these efforts. The session, which began with President Droupadi Murmu's address, is expected to be contentious, with opposition parties criticizing the government's handling of the Maha Kumbh festival, where 30 pilgrims died in a stampede. They also accused the government of ignoring parliamentary procedures. Sixteen bills, including amendments to the Waqf, Banking Laws, and Railways, are listed for discussion.
Summary: The Rajasthan Assembly's Budget Session will introduce the Rajasthan Prohibition of Unlawful Conversion of Religion Bill, requiring individuals to apply to the district magistrate 60 days prior to religious conversion to ensure it is not forceful. Other legislative proposals include amendments to the Goods and Services Tax and development authority bills. Governor Haribhau Bagde emphasized the government's commitment to economic growth, farmers' welfare, and women's safety, highlighting initiatives like the Eastern Rajasthan Canal Project and Jal Jeevan Mission. The government aims to enhance transparency in recruitment and ensure law and order to make Rajasthan a secure state.
Summary: The Himachal government and its citizens have high hopes for the 2025-26 Union Budget, seeking full funding for an international-standard airport and key railway projects from the central government. Rural communities, including shepherds and weavers, are looking for increased employment opportunities and financial support for cooperative societies. The tourism sector desires expanded rail and air infrastructure, while road repair funds are needed after 2023 flood damage. Entrepreneurs propose developing skiing slopes to enhance tourism. Horticulturists demand direct subsidies and increased allocations for the Market Intervention Scheme, alongside clearing of pending dues.
Summary: Finance Minister Nirmala Sitharaman is expected to announce income tax adjustments in her eighth consecutive budget to support the middle class amid high prices and stagnant wages. The budget aims to boost consumption, maintain fiscal prudence, and address geopolitical uncertainties affecting economic growth. Analysts predict measures to enhance exports, infrastructure, and job creation, alongside tariff cuts to encourage local manufacturing. The government is likely to focus on fiscal consolidation, with a projected fiscal deficit of 4.5% for FY26. Emphasis will be on skill development, employment, and strengthening the agricultural value chain to combat inflation.
Summary: The Chief Minister of Karnataka has called on the central government to ensure fair and proportional resource distribution, highlighting the state's contributions and financial challenges. He criticized the Union government for its discriminatory approach towards Karnataka, citing shortfalls in grants and allocations for various sectors. The Chief Minister urged the release of pending funds and advocated for policy changes, including amending the Constitution to increase Professional Tax limits and revising disaster relief criteria. He also emphasized the need for central approval of key projects and requested a special grant for the Western Ghats' development.
Summary: Ahead of the Union Budget presentation, stakeholders are urging the government to prioritize urban infrastructure improvements to address increasing urbanization. The Economic Survey 2024-25 highlights initiatives for sustainable urban development, including the Climate Smart Cities Assessment Framework and DataSmart Cities strategy. Recommendations include creating a 'National Urban Transformation Blueprint' and a Human Resource Capacity Enhancement Fund to attract skilled professionals. There is also a call for significant investment in basic infrastructure in smaller cities. The focus is on decarbonizing the building sector and promoting low-carbon urban development to support India's goal of becoming a net-zero economy.
Summary: The Finance Minister is finalizing the eighth consecutive Budget for the current government, aiming to balance tax relief for the middle class with measures to boost economic growth. The Budget, to be presented on February 1, addresses challenges such as high inflation and stagnant wages while maintaining fiscal prudence. The GDP growth rate is projected to fall to a four-year low of 6.4% this year, with future growth estimated between 6.3-6.8%. The Economic Survey highlights the need for deregulation and reforms to achieve the desired growth rate for India's development goals by 2047.
Summary: India has emerged as the third-largest startup ecosystem globally, with over 1.57 lakh DPIIT-recognized startups by the end of 2024. The ecosystem is driven by over 100 unicorns and significant contributions from Tier II/III cities. Government initiatives like Startup India, SISFS, FFS, and CGSS have been instrumental in fostering growth, innovation, and job creation. Women-led startups are on the rise, and schemes like AIM and MSH further support innovation and entrepreneurship. These efforts have created over 17.28 lakh jobs, with the IT sector leading. The ecosystem's growth is set to continue, empowering future entrepreneurs.
Summary: The government has revised income tax slabs in the 2025-26 Budget, increasing the tax rebate threshold to Rs 12 lakh from Rs 7 lakh, resulting in an additional 1 crore individuals paying no income tax. The Finance Minister highlighted the substantial financial relief provided to citizens through these changes, aimed at benefiting the middle class. The new tax regime exempts income up to Rs 4 lakh, with varying rates applied to higher income brackets. The Finance Secretary noted a projected tax buoyancy of 1.42 for the next fiscal year, acknowledging revenue sacrifices due to the rebate adjustments.
Summary: India's exports reached a record USD 778.21 billion in 2023-24, a 67% increase from 2013-14, driven by strong performances in merchandise and services exports. Key sectors such as electronics, pharmaceuticals, and engineering goods contributed significantly. The export ecosystem has been bolstered by strategic policies, enhanced competitiveness, and broader market access. Leading export destinations include the USA, UAE, and the EU. Government initiatives like the Foreign Trade Policy 2023, Production-Linked Incentive schemes, and National Logistics Policy have supported this growth, positioning India as a significant player in global trade with a diversified export landscape.
Summary: The government announced the establishment of an Export Promotion Mission with a budget of Rs 2,250 crore to enhance the country's exports. This initiative will be a collaborative effort among the ministries of commerce, MSME, and finance, focusing on export credit access, cross-border support, and aiding MSMEs in overcoming non-tariff barriers. A new digital platform, BharatTradeNet, will streamline trade documentation and finance, integrating stakeholders like Customs and banks. The mission includes revising MSME classification for increased credit benefits and reducing customs duty on marine exports to boost the sector.
Summary: The government anticipates receiving a dividend income of Rs 2.56 lakh crore from the Reserve Bank of India and public sector banks in FY2025-26, according to the Budget documents. This is an increase from the current year's Rs 2.34 lakh crore. Total receipts from public sector enterprises and other investments are projected at Rs 3.25 lakh crore. Finance Minister Nirmala Sitharaman outlined total receipts, excluding borrowings, at Rs 34.96 lakh crore and total expenditure at Rs 50.65 lakh crore. The fiscal deficit is projected at 4.4% of GDP, with net market borrowings estimated at Rs 11.54 lakh crore.
Summary: The Telugu Desam Party (TDP) has praised the union budget's announcement of zero income tax for annual incomes up to Rs 12 lakh, calling it a "historic relief" for the middle class. This measure is expected to enhance savings and increase spending power. A TDP spokesperson highlighted that the forthcoming income tax bill would be simpler and more taxpayer-friendly. The Narendra Modi-led NDA government is commended for prioritizing the middle class, contrasting it with the Congress party's unfulfilled promises.
Summary: The Finance Minister announced the removal of import duties on 25 critical minerals, including lithium-ion battery scrap and cobalt products, as well as 36 drugs for cancer and rare diseases. The budget also proposes exemptions on social welfare surcharges for 82 tariff lines and encourages domestic manufacturing by adding capital goods for EV and mobile phone battery production. Exemptions on customs duties for shipbuilding materials will continue for ten years. To support patients with severe diseases, 36 life-saving drugs will be exempt from basic customs duty, with additional concessions for certain medicines and bulk drugs.
Summary: Individuals earning up to Rs 12 lakh annually will not pay income tax under the new regime announced by the Finance Minister, offering relief to the middle class by raising exemption limits and adjusting tax slabs. For salaried employees, the nil tax threshold is Rs 12.75 lakh, considering a standard deduction of Rs 75,000. The new structure aims to reduce taxes for the middle class, enhancing household consumption, savings, and investment. Tax rates for incomes above Rs 12 lakh vary, with benefits ranging from Rs 70,000 to Rs 1.10 lakh depending on income levels.
Summary: The new tax regime announced in the FY26 Budget introduces revised income tax slabs. Annual income up to Rs 4 lakh is exempt from tax. Income between Rs 4 and 8 lakh is taxed at 5%, between Rs 8 and 12 lakh at 10%, between Rs 12 and 16 lakh at 15%, between Rs 16 and 20 lakh at 20%, between Rs 20 and 24 lakh at 25%, and income above Rs 24 lakh is taxed at 30%. For salaried taxpayers, the nil tax slab extends up to Rs 12.75 lakh, considering a standard deduction of Rs 75,000.
Summary: The Finance Minister announced plans to rationalize the Tax Deduction at Source (TDS) regime to reduce compliance burdens as part of the 2025-26 Budget. The government will introduce a new Income Tax bill in Parliament, aiming for clearer and more concise legislation. Additionally, the limit for Tax Collected at Source (TCS) on remittances under the RBI's liberalized scheme will increase from Rs 7 lakh to Rs 10 lakh. The list of exempted capital goods will expand to include more items for electric vehicle and mobile phone battery production.
Summary: The government plans to introduce a new Income Tax bill in Parliament next week, promoting a "trust first, scrutinise later" approach, as announced by the Finance Minister. Additionally, Foreign Direct Investment in the insurance sector will be raised to 100% from the current 74%. The Budget for 2025-26 highlights reforms for taxpayer convenience, including faceless assessments and a taxpayers' charter. An internal committee and 22 sub-committees are reviewing the Income Tax Act to simplify it and reduce disputes. The government will also enhance air cargo warehousing for high-value perishables and expand India Post payments bank services in rural areas.
Summary: The Finance Minister announced a 10-year extension of customs duty exemption on inputs and components for ship manufacturing to boost domestic shipbuilding and international trade. Additionally, the basic customs duty on interactive flat panel displays will double to 20%. A new scheme will promote handicraft exports, and full customs duty exemption is granted on wet blue leather to enhance leather exports. The budget also includes a proposal for 10,000 fellowships under the PM Research Fellowship scheme over five years, aimed at supporting technological research in IITs and IISs.
Summary: The Financial Intelligence Unit-India (FIU-IND) imposed a penalty of Rs. 9.27 crore on Bybit Fintech Limited, a Virtual Digital Asset Service Provider, for violating obligations under the Prevention of Money Laundering Act (PMLA) and related rules. Bybit failed to secure mandatory registration with FIU-IND while expanding its services in India. This non-compliance led to the blocking of their websites. Previously, FIU-IND issued guidelines for Anti-Money Laundering and registration requirements for Virtual Digital Asset Service Providers. The Director of FIU-IND found Bybit liable for multiple violations, resulting in the monetary penalty.
Summary: The Government of India's financial report up to December 2024 shows total receipts of 23,18,005 crore, which is 72.3% of the budget estimate for FY2024-25. This includes 18,43,053 crore in net tax revenue, 4,47,657 crore in non-tax revenue, and 27,295 crore in non-debt capital receipts. 9,01,150 crore has been transferred to state governments, marking an increase of 1,53,862 crore from the previous year. Total expenditure is 32,32,094 crore, with 25,46,757 crore on revenue account and 6,85,337 crore on capital account, including 8,08,313 crore for interest payments and 3,06,994 crore for major subsidies.
Summary: India is closely monitoring the economic crisis in the Maldives, primarily caused by debt distress. The Ministry of External Affairs spokesperson stated that India is maintaining communication with Maldivian authorities as recent agreements may lead to revenue loss, affecting policy decisions. Separately, India anticipates adherence to agreements in the upcoming talks between the Border Security Force and the Border Guards Bangladesh, scheduled for February 17-20 in New Delhi. These discussions aim to uphold mutually beneficial security and trade infrastructure along the border.
Summary: The Swachh Bharat Mission has significantly transformed India's sanitation landscape, as highlighted in the Economic Survey. The initiative, launched in 2014, has advanced from Open Defecation Free (ODF) to ODF Plus status in 3.64 lakh villages, focusing on waste management and sustainability. Community-driven models in Kerala and Madhya Pradesh have successfully implemented waste management systems. The Jal Shakti Abhiyan and Jal Jeevan Mission have improved water conservation and access to safe drinking water, with eight states achieving full tap water coverage. Innovative projects across states emphasize women's roles in water conservation and sustainable practices.
Summary: ISRO's geospatial platforms are significantly aiding government programs across various sectors, as highlighted in the Economic Survey. The Bhuvan platform supports rural development by tracking projects under schemes like MGNREGA and PM Krishi Sinchayee Yojana. In Maharashtra and Telangana, it aids electrical infrastructure management. The NyayaVikas Portal, in collaboration with the Department of Justice, uses geospatial technology for judicial infrastructure monitoring. ISRO has developed urban geospatial databases for 238 AMRUT cities to assist in urban planning. India operates 56 active space assets and has launched several key projects as part of its Space Vision 2047, aiming to enhance technological capabilities and global space exploration standing.
Summary: A political leader criticized the government, citing the Chief Economic Advisor's preface to the Economic Survey as a critique of current policies. The leader highlighted the CEA's advice for deregulation and reducing government intervention in economic activities. The ruling party countered, dismissing the critique as hypocritical and defending its economic reforms. The CEA's recommendations included reducing regulatory burdens and shifting regulatory principles to support innovation and competitiveness. The government emphasized its achievements in ease of doing business and regulatory reforms, arguing that the Survey supports its ongoing agenda rather than indicting its policies.
Summary: The Economic Survey presented in Parliament highlights West Bengal as one of 12 states with significant potential for reform-led development, placing it in the fourth category based on per capita Gross State Value Added (GSVA) in services and industry. West Bengal ranks sixth in services GSVA for FY23, with 6.5 crore unincorporated sector enterprises, 72.6% in the service sector. These enterprises lack benefits like tax advantages and access to credit due to their unincorporated status. The survey recommends policy changes to ease compliance, encouraging incorporation and boosting growth in the service sector and overall development.
Summary: The Economic Survey 2024-25 advocates for a new strategic trade roadmap for India to enhance export competitiveness amid rising global protectionism. It stresses reducing trade costs and improving facilitation to strengthen India's role in global supply chains. The survey highlights India's resilience in global trade despite geopolitical tensions and increased non-tariff measures. India's global trade share was over 2% in 2023, with significant growth in services exports, particularly in IT. The survey calls for intensified domestic efforts to boost exports and attract investment, emphasizing the importance of skill development and strategic policy interventions.
Summary: The Indian Railways reported an 8% increase in passenger traffic and a 5.2% rise in freight revenue for FY24, as detailed in the Economic Survey 2024-25. The government is enhancing passenger amenities in response to growing traffic. Digitalization efforts have led to 86% e-ticketing in the reserved sector and increased digital ticketing in the unreserved sector. Refund processes have improved, with 98% completed within 24 hours. New cloud-native technologies are being implemented for the passenger reservation system. Additionally, Bharat Gaurav trains have been introduced to promote tourism, offering comprehensive tour services and covering numerous destinations.
Summary: The Economic Survey 2024-25 indicates a decline in school dropout rates but highlights ongoing challenges with retention rates across educational levels in India. Retention rates are 85.4% for primary, 78% for elementary, 63.8% for secondary, and 45.6% for higher secondary education. The survey underscores the significance of skill education in the evolving Industry 4.0 era and notes a rural-urban digital divide, especially affecting females. It also reports a 26.5% increase in higher education enrollment from 2014-15 to 2021-22 and emphasizes the need for expanded educational infrastructure to meet GER targets. Effective NEP 2020 implementation requires regulatory collaboration.
Notifications
Central Excise
1.
01/2025 - dated
1-2-2025
-
CE
Seeks to further amend notification No. 11/2017-Central Excise dated 30th June, 2017 so as to extend the date of implementation of additional duty of excise on unblended diesel.
Summary: The Government of India has issued Notification No. 01/2025-Central Excise, amending the previous notification No. 11/2017-Central Excise dated 30th June 2017. This amendment extends the implementation date for the additional duty of excise on unblended diesel from 2025 to 2026. The changes are specified in the table and annexure of the original notification. This amendment will be effective from 2nd February 2025.
Customs
2.
13/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 153/94-Customs dated 13th July, 1994. - Exemption to goods of foreign origin for repairs and return, for use on articles for export. - Extension of time for export (re-export) in certain cases
Summary: The Government of India has issued Notification No. 13/2025-Customs, amending Notification No. 153/94-Customs dated 13th July 1994. This amendment, effective from 2nd February 2025, modifies the exemption conditions for goods of foreign origin intended for repair and return, specifically for use on articles for export. The amendment involves a change in the referenced chapters in the notification, replacing "chapter 88 or 89" with "chapter 86 or chapter 88 or chapter 89" in the relevant clause. This adjustment aims to facilitate the re-export process under specified conditions.
3.
12/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 19/2019 dated 06th July 2019. - Exemption to specified defense equipment and their parts imported in India by the Ministry of Defence, Government of India or the defence forces
Summary: The Government of India has issued Notification No. 12/2025-Customs, amending Notification No. 19/2019-Customs dated 6th July 2019, to update exemptions on specified defense equipment and parts imported by the Ministry of Defence or defense forces. Changes include modifications in the TABLE against serial numbers 10, 11, 12, and 13, where "90 or 93" replaces "or 90" in column (2), and the omission of the word "Ammunition" in column (3). A new item, "Ammunitions for the goods mentioned at item (I) above," is added. This amendment takes effect on 2nd February 2025.
4.
11/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 25/2002-Customs, dated the 1st March, 2002 so as to add capital goods to the already existing list of capital goods exempted from basic
customs duty for manufacture of lithium-ion battery of mobile phones and electrically operated vehicles.
Summary: The Government of India has issued Notification No. 11/2025-Customs, amending Notification No. 25/2002-Customs to include additional capital goods exempted from basic customs duty. This amendment applies to the manufacture of lithium-ion batteries for mobile phones and electrically operated vehicles. The listed capital goods include various machines and systems such as powder dryers, automatic feeding systems, slurry transfer systems, and more, each specified under respective tariff items. This notification takes effect on February 2, 2025, and aims to support the manufacturing sector by reducing import costs on essential machinery.
5.
10/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 57/2017 dated 30th June, 2017 so as to change BCD rates on inputs/parts used for manufacture of parts of cellular mobile phones along with other
high technology telecom equipments.
Summary: The Government of India has issued Notification No. 10/2025 to amend Notification No. 57/2017, dated June 30, 2017, concerning changes to the Basic Customs Duty (BCD) rates on inputs and parts used in manufacturing cellular mobile phone components and other telecom equipment. Key amendments include omitting certain entries and changing the duty rate from 2.5% to NIL for specific serial numbers. Additionally, the entry for "Any Chapter" is substituted for a particular serial number, and new items are added under a specified category. These changes take effect on February 2, 2025.
6.
09/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 16/2017-Customs, dated the 20th April, 2017 so to exempt certain drugs for supply under Patient Assistance Programme run by specified pharmaceutical companies.
Summary: The Government of India has amended Notification No. 16/2017-Customs to exempt certain drugs from customs duties when supplied under specific Patient Assistance Programmes by designated pharmaceutical companies. Effective February 2, 2025, this amendment includes drugs such as Pembrolizumab, Lorlatinib, and others from companies like MSD Pharmaceuticals, Pfizer, Novartis, AstraZeneca, Johnson & Johnson, Merck, Takeda, GSK, Roche, and Bristol-Myers Squibb. The aim is to facilitate access to these medications for patients through these assistance programs, reflecting the government's commitment to public interest.
7.
08/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 22/2022-Customs, dated the 30th April, 2022. - To give effect to the first tranche of India UAE CEPA
Summary: The Government of India, through the Ministry of Finance, has issued Notification No. 08/2025-Customs to amend Notification No. 22/2022-Customs, dated April 30, 2022, to implement the first tranche of the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The amendments involve the omission of certain serial numbers and entries in Table I and the insertion of new serial numbers and entries in Table II, affecting various goods and their corresponding tariff rates. These changes will be effective from February 2, 2025.
8.
07/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 11/2018-Customs dated 02th February, 2018 so as to exempt specified goods from the whole of levy of Social Welfare Surcharge.
Summary: The Government of India has issued Notification No. 07/2025-Customs to amend Notification No. 11/2018-Customs, exempting specified goods from the Social Welfare Surcharge. The amendment involves changes to the tariff items listed in the notification, including the insertion of new items and the omission of certain entries. The notification introduces new serial numbers and entries, specifying goods that qualify for exemption. It also modifies existing entries for certain goods under specified headings. This amendment will take effect from February 2, 2025, and aims to align with public interest requirements under the Customs Act, 1962, and the Finance Act, 2018.
9.
06/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 11/2021-Customs dated the 01st February, 2021 to prescribe effective rates of AIDC (Agriculture Infrastructure and Development Cess) to certain goods
Summary: The Government of India has issued Notification No. 06/2025-Customs to amend Notification No. 11/2021-Customs, prescribing revised rates for the Agriculture Infrastructure and Development Cess (AIDC) on specific goods. New entries have been added to the existing notification, detailing various goods and their respective AIDC rates, ranging from 1% to 70%. This amendment is aimed at adjusting the customs tariff structure for select categories, including goods like marble slabs, candles, PVC flex films, and various vehicle parts. The changes will take effect on February 2, 2025.
10.
05/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 50/2017-Customs dated the 30th June, 2017 so as to notify BCD related changes.
Summary: The Government of India has issued Notification No. 05/2025-Customs to amend Notification No. 50/2017-Customs, introducing changes to the Basic Customs Duty (BCD) rates. The amendments include new entries for various goods such as frozen fish paste, fish hydrolysate, drugs, and diagnostic kits, with specified duty rates. Some entries have been omitted, and others have been modified, including reductions in duty rates for specific items. The notification also updates conditions and lists related to exemptions, with specific expiry dates for certain entries. These changes will take effect from February 2, 2025.
11.
04/2025 - dated
1-2-2025
-
Cus
Seeks to exempt the import duty on goods which are being rationalized in the tariff.
Summary: The Government of India, through the Ministry of Finance, has issued Notification No. 04/2025-Customs, effective February 2, 2025, under section 25 of the Customs Act, 1962. This notification exempts certain imported goods from customs duties exceeding specified rates. The goods, listed in a detailed table, include various categories such as marble slabs, PVC flex films, bicycles, and parts of electronic toys, with duty rates ranging from 0% to 70%. Specific exemptions apply to waste and scrap of metals like tin, tungsten, molybdenum, and others, which are exempt from customs duty.
12.
03/2025 - dated
1-2-2025
-
Cus
Seeks to further amend notification No. 27/2011-Customs dated 30th June, 2017 so as to reduce the export duty on crust leather
Summary: The Government of India has issued Notification No. 03/2025-Customs to amend Notification No. 27/2011-Customs, reducing the export duty on crust leather. The amendments specify changes to the entries for tanned hides and skins of various animals, excluding E.I. tanned leather, under serial numbers 25C, 25D, and 25E. Additionally, a new entry, 25J, is introduced for crust leather (hides and skins) with a nil duty rate. These amendments will take effect on February 2, 2025.
13.
07/2025 - dated
1-2-2025
-
Cus (NT)
Seeks to Amend Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 to extend certain timelines.
Summary: The Government of India has issued Notification No. 07/2025-Customs (N.T.) to amend the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022. Effective from February 2, 2025, these amendments change certain reporting timelines from monthly to quarterly and extend some durations from six months to one year. Specifically, changes are made in rules 3, 6, 7, 8, 9, and 10, as well as in Form IGCR-3, to reflect these updated timelines and definitions.
14.
06/2025 - dated
31-1-2025
-
Cus (NT)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver
Summary: The Central Board of Indirect Taxes and Customs has issued Notification No. 06/2025-CUSTOMS (N.T.) on January 31, 2025, revising tariff values for certain goods under the Customs Act, 1962. The updated tariff values, effective February 1, 2025, include crude palm oil at $1109 per metric tonne, RBD palm oil at $1158, and crude soybean oil at $1118. Brass scrap is valued at $5239 per metric tonne. Gold is set at $897 per 10 grams, and silver at $1001 per kilogram. Areca nuts remain unchanged at $6448 per metric tonne.
GST
15.
F. No. 190354/2/2025-TO (TRU-II) - G.S.R. 90(E) - dated
31-1-2025
-
IGST Rate
Corrigendum - Notification No. 05/2025-Integrated Tax (Rate), dated the 16th January, 2025
Summary: The corrigendum to Notification No. 05/2025-Integrated Tax (Rate) issued by the Ministry of Finance, Department of Revenue, on January 31, 2025, amends specific references in the original notification dated January 16, 2025. The corrections include changing "(ii)" to "(i)" on page 9, line 2, and updating references from "(See para 4(xxxvi))" to "(See para 5(xxxvi))" on page 9, lines 18 and 41, and page 10, line 13. These adjustments are intended to rectify errors in the earlier publication in the Gazette of India.
Circulars / Instructions / Orders
Income Tax
1.
FAQ - dated
1-2-2025
Personal Income-tax reforms with special focus on middle class - FAQ
Summary: The circular outlines significant reforms in personal income tax, focusing on the middle class, as per the Finance Bill, 2025. It introduces a new tax regime with revised slabs, offering concessional rates but limiting deductions. The maximum income for nil tax liability is raised to Rs. 12 lakhs, benefiting a large number of taxpayers. The circular also addresses incentives for International Financial Services Centres, changes in tax provisions for charitable trusts, and presumptive taxation for non-residents in electronics manufacturing. Additionally, it discusses amendments in TDS and TCS rates, updated return filing timelines, and rationalization of penalties and prosecution provisions, aiming to simplify compliance and enhance taxpayer convenience.
2.
F. No. 225/17/2025-ITA-II - dated
28-1-2025
Clarification regarding orders u/s 201 of the Income-tax Act, 1961 under e-Appeals Scheme, 2023
Summary: The Central Board of Direct Taxes has clarified that orders issued under Section 201 of the Income-tax Act, 1961, are not considered assessment orders and do not fall under the exceptions outlined in the Board's order dated 16th June 2023. Consequently, appeals against such orders will be handled by the Joint Commissioner (Appeals) as per the e-Appeals Scheme, 2023. This clarification aims to address queries regarding the applicability of Section 201 orders within the scope of the e-Appeals Scheme and should be communicated to all relevant parties.
GST
3.
F. No. 190341/12/2025-TRU - dated
31-1-2025
Information received from Ministry of Civil Aviation (MoCA) with respect to Gazette notification No. 08/2024 - Integrated Tax (Rate) dated 08.10.2024 notified by Department of Revenue
Summary: The Ministry of Civil Aviation (MoCA) has provided information regarding a Gazette notification concerning the Integrated Tax (Rate) dated October 8, 2024, issued by the Department of Revenue. Following the 54th GST Council meeting, it was decided that the import of services by foreign airline establishments from related entities outside India, without consideration, would be exempt from GST under certain conditions. These include payment of applicable GST on goods and passenger transport, certification by MoCA of the foreign airline's designation under bilateral agreements, and reciprocal tax exemptions for Indian airlines. MoCA has listed designated foreign airlines and shared feedback from Indian carriers.
Customs
4.
D.O.F.No.334/3/2025-TRU - dated
1-2-2025
Union Budget 2025:- Proposes substantial amendments to the Customs Act, Central Excise Act, and CGST Act, including revisions to customs duties, exemptions, and GST provisions
Summary: The Union Budget 2025 introduces significant amendments to the Customs Act, Central Excise Act, and CGST Act, with changes to customs duties, exemptions, and GST provisions. The Finance Bill, 2025, proposes these amendments, effective from February 2, 2025, unless specified otherwise. Key changes include revised duty rates on various goods, legislative amendments, and a special provision for retrospective service tax exemption. The detailed changes in customs tariff rates, legislative adjustments, and reviews of customs duty exemptions. It also highlights the introduction of new rules and amendments to existing regulations to facilitate smoother implementation and compliance.
Highlights / Catch Notes
GST
-
Foreign Airlines' Indian Units Get GST Exemption on Import of Services from Overseas Related Parties Without Consideration
Circulars : Department of Revenue issued notification exempting import of services by foreign airlines' Indian establishments from related parties/overseas establishments when made without consideration. Key conditions include: payment of applicable GST on transport services in India, MoCA certification of airline's designation under bilateral air service agreements, and reciprocal tax exemption for Indian airlines in the foreign country. MoCA provided a list of designated foreign airlines operating in Winter 2024-25 schedule and collected feedback from Indian carriers (Air India, IndiGo, Akasa Air) regarding reciprocal treatment. The notification stems from 54th GST Council recommendations and aims to establish tax parity in international aviation services while ensuring compliance with bilateral agreements.
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Input Tax Credit Claims on Mall Construction Under Section 17(5)(d) Must Consider Business Purpose of Structure
Case-Laws - HC : HC set aside tax liability determination under section 73 of CGST Act, 2017 and remanded for fresh consideration. The case involved ITC claims related to construction of shopping malls. Following Safari Retreats precedent, court held that 'plant or machinery' interpretation under section 17(5)(d) requires factual determination based on business context. Original order failed to consider Safari Retreats principles regarding classification of malls as plant. Issues regarding 8 invoices and ITC reporting discrepancies between GSTR-3B and GSTR-9 forms remain open for fresh examination. Matter remanded for de novo consideration incorporating Supreme Court's interpretative guidance.
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Tax Authority Cannot Apply 40% Turnover Rule Without Statutory Basis When Actual Transaction Data Already Submitted
Case-Laws - HC : HC set aside both assessment and rectification orders, finding no statutory basis for computing tax on 40% of total turnover as taxable transactions within Bihar state. The petitioner had already shown specific gross turnover in annual returns. Court directed petitioner to appear before Assessing Officer with supporting documentation on December 20, 2024. Assessing Officer must provide hearing opportunity and complete reassessment either on same date or subsequent date with proper acknowledgment from assessee or authorized representative. Matter requires fresh assessment based on actual turnover data rather than arbitrary percentage calculations.
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Oil Company's $80M Payment for Production Sharing Contract Breach Ruled as Damages, Not Service Consideration
Case-Laws - AAAR : ANP demanded settlement fees from appellant following breach of Production Sharing Contract (PSC). The AAAR determined that USD 80,000,000 payment constituted liquidated damages for PSC breach, not consideration for services. The payment was made to compensate losses under clause 4.5(a)(iii), with no evidence of agreement for ANP to perform, refrain from, or tolerate specific acts in exchange. Following established principles on liquidated damages, such payments represent mere flow of money without constituting consideration for supply. The AAAR overturned previous ruling which incorrectly characterized payment as service-related. Appellant not liable for GST on settlement fees as payment qualified as damages rather than consideration for supply under GST framework.
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GST Implications: High Seas Sale Goods Value Must Be Included in Works Contract Under Section 15 CGST
Case-Laws - AAR : The AAR ruled on GST implications in an EPC contract between the applicant and IOCL. The contract was determined to be a single, composite works contract rather than a divisible one, despite comprising two work orders. The high seas sale (HSS) transaction was deemed neither a supply of goods nor services under Schedule III of CGST Act. However, the value of imported goods sold on HSS basis must be included in the transaction value for GST computation on works contract services, as per Section 15 of CGST Act. The ruling established that subsequent incorporation of HSS goods into works contract constitutes a composite supply treated as service under Schedule II. The contract's taxation involves both customs duty at importation and GST on the composite works contract service.
Income Tax
-
Joint Secretary DFPD Authorized Under Section 138 to Access Tax Data for PMGKAY Beneficiary Verification
Notifications : Central Government exercised powers under s.138(1)(a)(ii) of Income Tax Act 1961 to designate Joint Secretary, DFPD as authorized official for accessing income tax information. This authorization specifically enables data sharing to identify eligible beneficiaries under PMGKAY scheme. The notification extends legal authority for inter-departmental information exchange between tax authorities and food security administration, facilitating targeted welfare distribution while maintaining statutory compliance for confidential tax data access. The designation streamlines administrative processes for beneficiary verification through official income records.
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Tax Officer Cannot Reopen Settled Share Valuation Case U/s 147 When Property Details Were Previously Examined
Case-Laws - HC : HC quashed reassessment proceedings initiated under s.147 regarding alleged undervaluation of shares of TREPL. AO's attempt to reopen assessment was based on the value of immovable property (Friends Colony) held by TREPL, an issue previously examined in earlier reassessment proceedings. Petitioner had already demonstrated through audited financial statements that TREPL owned only two floors of the property, which AO had accepted. The court found that reopening the same issue violated procedural requirements under s.148A(d), as AO failed to consider petitioner's response to s.148A(b) notice and the existing record. Since the information was previously scrutinized and no credible contradictory evidence existed, reassessment was held invalid.
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Reassessment Notice U/s 149(1) Invalid Due To Time-Bar Despite TOLA Extension And Section 148A Requirements
Case-Laws - HC : HC determined the reassessment notice issued on 30.07.2022 was time-barred under Section 149(1). While TOLA provided AO twenty-nine days limitation period from 01.06.2021, and considering the two-week response time given to assessee under Section 148A(b), the limitation period expired on 12.07.2022. The court found the notice issued on 30.07.2022 was beyond prescribed limitation. The fourth proviso to Section 149 was inapplicable as AO had sufficient time to pass order under Section 148A(d). The HC quashed both the order under Section 148A(d) and notice under Section 148, ruling in assessee's favor due to the procedural time-bar.
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Additional CIT Lacks Authority Under Section 119(2)(b) to Reject Late Tax Return Filing, Power Rests with CBDT
Case-Laws - HC : HC quashed and set aside order dated 24 January 2024 rejecting condonation application for delayed income tax return filing. Court found Additional CIT (OSD) (OT & WT) lacked authority to issue orders under s.119(2)(b) of Income Tax Act, as this power vests with CBDT. While CBDT may allocate work among members, no evidence demonstrated valid delegation to Additional CIT. Matter remanded to CBDT or authorized member for fresh consideration with directions to hear petitioner and issue reasoned order within 3 months. Ruling clarified procedural requirements for exercising powers under s.119(2)(b), emphasizing proper authority and delegation channels.
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Company Cleared of Criminal Charges Over TDS Certificate Forgery After 9-Year Delay in Filing Shows Malicious Intent
Case-Laws - HC : HC quashed criminal proceedings related to allegedly forged TDS certificates in a business dispute. Complainant initiated criminal case 9 years after losing arbitration, making allegations against company and employee regarding false TDS documentation. Court found prosecution defective for naming only company without individual officers, noting vicarious liability principles require identification of responsible individuals. HC determined complaint was prima facie malafide, motivated by unfavorable arbitration outcome. Given mandatory TDS deduction requirements, existing business agreement with arbitration clause, and significant delay in filing criminal case, court held continuation would constitute abuse of process. Proceedings terminated under inherent jurisdiction.
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Bank Accounts Qualify as Attachable Property Under Section 281B Income Tax Act for Securing Revenue Interests
Case-Laws - HC : HC ruled bank accounts constitute "property" subject to provisional attachment under Section 281B of the Income Tax Act. The term "any property" in Section 281B(1) encompasses bank deposits, as money is explicitly recognized as attachable property under Section 60(1) CPC. The court rejected arguments that absence of specific mention of bank accounts (unlike GST Act) precludes attachment. However, attachment orders must be proportionate to probable tax demand including penalties. The security requirement should be sufficient to protect revenue interests without excessive property seizure. Mere existence of security in Magistrate's Court proceedings does not automatically satisfy Act's requirements. Blanket attachment orders exceeding probable demand are impermissible.
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Income Declared Under Chapter XIX-A Before Black Money Act Implementation Cannot Face Fresh Proceedings Under BM Act
Case-Laws - HC : HC ruled that Black Money Act proceedings cannot continue where income was declared and settled under Chapter XIX-A of Income Tax Act prior to Black Money Act implementation. The assessee filed returns on 21.05.2015, before the Black Money Act came into effect on 01.07.2015. The settlement under Chapter XIX-A was deemed valid and binding, making subsequent notices under Section 10(1) of Black Money Act untenable. HC emphasized that the Black Money Act's implementation does not invalidate prior settlements under Income Tax Act, supported by CBDT Circular No.12/2015. The settlement commission's order dated 26.08.2022 was upheld as final, effectively barring parallel proceedings under Black Money Act.
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Assessment Reopening Under Section 147 Denied Due To Time Bar And Lack Of Independent Investigation
Case-Laws - AT : ITAT ruled against reopening of assessment under s.147 beyond four-year limitation period, finding no independent application of mind by AO or CIT(A). The tribunal rejected additions under s.68 regarding alleged accommodation entries, as the assessee provided sufficient evidence including ledger copies, invoices, and transport details for genuine business transactions. The revenue authorities' reliance on Investigation Unit's information without allowing cross-examination was deemed improper. The tribunal also dismissed allegations of unexplained commission payments for accommodation entries, noting the transactions were legitimate sales receipts from previous year, not undisclosed loans or share capital. Additions made purely on third-party information without corroborating evidence were set aside.
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Assessment Order Revised Under Section 263 Due to Selective Verification of Creditors and Incomplete Transaction Inquiry
Case-Laws - AT : ITAT upheld revision proceedings under s.263 concerning genuineness of sundry creditors. AO initially questioned transactions with 10 creditors but made additions under s.41(1) for only 2 parties, failing to examine remaining 8 creditors without justification. Assessee's non-compliance in furnishing requisite details during assessment and discrepancy in ledger account of AJS Impex Pvt Ltd (showing credit balance contrary to noted debit balance) demonstrated inadequate verification. Order under s.143(3) r.w.s. 144B deemed erroneous as it lacked comprehensive inquiry mandated by Explanation 2 to s.263. AO's selective treatment of similar transactions without reasoned basis constituted jurisdictional error warranting revision.
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Foreign Company's Advisory Services Payment Not Subject to TDS Under Section 195 Due to Lack of PE
Case-Laws - AT : ITAT ruled no TDS obligation existed under s.195 for payments made to Singapore-based SCPL for advisory/consultancy services. The tribunal determined SCPL lacked a Permanent Establishment in India, as both the assessee and recipient were non-residents. The payment constituted commission for financial services rather than royalty or technical services under Article 12 of India-Singapore DTAA. Key findings emphasized that temporary residence of a director doesn't establish key management decisions occurred in India. The income accrued outside India, and without a PE, was not assessable as business profit or royalty. The arbitrary 55:45 apportionment between India and Singapore by AO was rejected, upholding CIT(A)'s findings and dismissing revenue's appeal.
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Reassessment Invalid: AO Made Section 41(1) Additions Without Fresh Notice When Original Notice Was For Bank Credits
Case-Laws - AT : ITAT ruled against the validity of reassessment proceedings where additions were made under section 41(1) for remission/cessation of liability. While the original notice under section 148 pertained to unexplained bank credits, the Assessing Officer made additions regarding creditor liabilities without issuing a fresh notice. The tribunal held that the AO exceeded jurisdiction by making additions unrelated to the recorded reasons for reopening. Since the AO failed to issue a mandatory fresh notice under section 148 for the new issue of creditor liability, the addition under section 41(1) was deemed legally unsustainable. The tribunal allowed the assessee's grounds challenging the jurisdictional validity of the additions.
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Deletion of Additions Upheld for Alleged Bogus Trading Through Client Code Modification Under Section 147
Case-Laws - AT : ITAT upheld deletion of additions made regarding alleged bogus commodity trading transactions through Client Code Modification. The Special Fraud Investigation Office and DDIT Investigation reports, which formed the basis for reopening assessment under Section 147 for AY 2012-13 to 2014-15, failed to establish any wrongdoing by appellant in client code modifications or other activities. Appellant successfully demonstrated use of own funds for National Spot Exchange Limited platform transactions, with profits already declared for taxation. Tribunal found First Appellate Authority's deletion of additions justified as allegations lacked substantive evidence of illegal trading or tax evasion. Addition deleted and appeal dismissed.
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AO's Acceptance of Interest Treatment in Original Assessment Cannot be Challenged After Section 263 Order Set Aside
Case-Laws - AT : ITAT quashed the addition made under s.143(3) read with s.263, as the underlying revision order by Pr. CIT under s.263 was previously set aside. The Tribunal found that AO had conducted proper inquiry regarding interest treatment during scrutiny assessment. The difference between Form 26AS and ITR amounts was explained by interest received from banks being adjusted against project expenditure in company's financial statements. The assessee's explanation was accepted by AO during original assessment. Since the foundational s.263 revision order was invalidated, the subsequent addition made pursuant to it could not sustain. ITAT vacated the addition and set aside CIT(A)'s order upholding it.
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Capital Gains Relief Under Section 54F Granted Despite Incomplete Construction When Full Investment Made Within Time Limit
Case-Laws - AT : ITAT ruled on three key issues in a capital gains case. The Tribunal determined Rs. 10,85,28,620 as full sale consideration for land rights relinquishment, rejecting assessee's claim for net amount adjustment against outstanding loans due to absence of explicit stipulation in resolutions. On Section 54F deduction, ITAT allowed relief following Karnataka HC precedent that investment of entire consideration within stipulated period suffices, even if construction remains incomplete. However, legal charges, advance maintenance, and certain registration fees were excluded from eligible deduction amount. Regarding interest expenses under Section 57, ITAT partially allowed the appeal, directing AO to recalculate disallowance based on closing loan balances rather than opening balances, while maintaining that interest on society loans constitutes capital expenditure.
Customs
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Digital Payment System Mandated for Ship Stores and Aircraft Consumables Through Type-S Bill of Entry Filing
Circulars : The NCH Mumbai issued directives regarding digitalization of customs duty payments for ship stores, vessels, and aircraft consumables. The notice mandates filing Type-S Bill of Entry using specific IEC numbers rather than generic ones, with all items declared as no foreign exchange involved (NFEI). While E-Sanchit documentation typically requires IGM/Bill of Lading upload, this requirement is waived, requiring only importer declarations. Shipping agents/charterers must use their own IEC when filing. Duty payments on ship's stores/consumables are only permitted after Type-S Bill of Entry filing and assessment. The directive serves as a standing order for customs officers at the Commissionerate, implementing Advisory No. 26/2024 for streamlined digital customs processing.
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Customs Board Adds Kishangarh ICD as Authorized Location for Import-Export Operations Under Section 7 of Customs Act
Notifications : CBIC exercised powers under Section 7(1)(aa) and 7(2) of the Customs Act, 1962 to amend Notification No. 12/97-Customs (N.T.). The amendment adds Kishangarh as item (x) under serial number 10 (Rajasthan) in the specified table. The modification designates Kishangarh as an authorized location for unloading imported goods and loading export goods at the Inland Container Depot. This amendment expands the existing list of approved customs facilities in Rajasthan, enhancing the infrastructure for international trade operations. The notification maintains regulatory oversight while facilitating trade logistics through designated inland container facilities.
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Undeclared Dubai Gold Seizure: Absolute Confiscation Order Reversed, Option for Redemption Under Section 125 Customs Act
Case-Laws - HC : HC overturned absolute confiscation of undeclared gold jewelry seized at airport from Dubai returnee. Following precedent in N. Kaliyamoorthy case, court held that absolute confiscation under Section 125 of Customs Act 1962 was inappropriate. While undeclared goods violating import conditions qualify as "prohibited" and are subject to confiscation, complete forfeiture was deemed excessive. Court remanded case to customs authority with directions to permit redemption upon payment of appropriate fine. Jurisdictional challenge by respondents was dismissed as cause of action arose within court's jurisdiction. Original confiscation order and subsequent appellate confirmation were set aside. Petition succeeded with modified penalty approach allowing for possible recovery of goods.
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Customs Broker License Revoked Under CBLR 2018 For KYC Violations and Third-Party Document Acceptance Without Verification
Case-Laws - AT : CESTAT upheld revocation of Customs Broker License and forfeiture of security deposit due to violation of Regulations 10(d) and 10(n) of CBLR, 2018. The broker failed to properly verify KYC documents, accepting them from third parties without direct verification of exporter/importer addresses. The tribunal found that mere possession of documents without due diligence in verification constituted a serious lapse resulting in revenue loss. The Additional Commissioner's observations regarding CBLR violations were deemed without jurisdiction, however, the primary order revoking the license was confirmed after proper analysis of facts and relevant CBLR provisions. The appeal was dismissed, affirming the broker's failure to meet statutory obligations.
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Searchlight Classification Dispute: Heading 94054010 More Specific Than 85131090 Under Rule 3(a) of GRI
Case-Laws - AT : CESTAT ruled on classification dispute regarding imported searchlights. The goods were incorrectly classified under CTH 85131090 instead of CTH 94054010. Following Rule 3(a) of GRI, the tribunal held that CTH 94054010 provides more specific description for searchlights compared to the general residuary entry CTH 85131090. While appellant was liable for duty shortfall of Rs.15,89,326/- with interest, the tribunal set aside confiscation and penalty orders since mere misclassification without fraudulent intent does not warrant penal action. The classification determination was based on Headings, Section Notes, Chapter Notes, GRI and HSN Explanatory Notes. Appeal allowed partially.
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Standing Order 6/2022: Bills of Entry Exclusions Under Customs Act Sections 149 & 154 Requires Fresh Adjudication
Case-Laws - AT : CESTAT upheld Commissioner (Appeals)'s decision to remand case back to Adjudicating Authority for fresh adjudication. The original order was challenged for violating natural justice principles, particularly regarding interpretation of Standing Order 6/2022 concerning Bills of Entry exclusions under Customs Act Sections 149 and 154. The Tribunal found Commissioner (Appeals) acted within statutory powers under Section 128A(3) of Customs Act, 1962, as original adjudication failed to observe natural justice principles. The remand order was deemed proper and legally sound, despite appellant's contention about arbitrary application of standing order. Appeal dismissed, confirming Commissioner (Appeals)'s remand order for fresh adjudication.
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Fabric Importer Faces Penalties Under Sec 111(m) For Misclassifying Polyester Knitted Material As Warp Knit
Case-Laws - AT : CESTAT upheld the confiscation of goods and imposition of differential customs duty regarding misclassification of 100% Polyester Knitted Fabric. The appellant incorrectly declared goods under CTH 60059000 (warp knit fabrics). The proprietor's acceptance of test reports and subsequent duty payment constituted clear admission of misdeclaration. The Tribunal affirmed confiscation under Sec. 111(m) of Customs Act, with redemption fine. Differential duty was sustained under Sec. 28(1) proviso. Mandatory penalty under Sec. 114A was upheld due to suppression of facts leading to duty evasion. The Tribunal relied on established jurisprudence regarding admissibility of statements under Sec. 108, citing precedents that customs officers' recorded statements constitute valid evidence for penalty proceedings.
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Revenue's Appeals Dismissed: Used Clothing Valuation Under Section 111(d) Upheld with Reduced Penalties of 10% and 5%
Case-Laws - AT : CESTAT dismissed Revenue's appeals concerning valuation of imported used clothing under Tariff Item 63090000. Following precedent cases including Venus Traders and others, the Tribunal maintained that due to limited evidence for value ascertainment and non-compliance with licensing requirements, confiscation under Section 111(d) of Customs Act 1962 was justified. However, the reduced redemption fine of 10% and penalty of 5% of assessed value were deemed sufficient. The Commissioner (Appeals)'s order imposing these reduced penalties was upheld as meeting the ends of justice, with no infirmities found in the impugned order.
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Polyester Bed Sheets Classification Dispute Resolved: End-Use Prevails Over Material Composition Under CTH 6304
Case-Laws - AT : CESTAT ruled in favor of the appellant regarding classification of imported polyester bed sheets. The Tribunal determined that while the items were woven fabric of synthetic filament yarn, their specific use as bed spreads/bed sheets warranted classification under CTH 6304 rather than CTH 5407. Following precedent from Comm. of Customs case, CESTAT confirmed appellant's original classification under CTH 6304 was correct. Consequently, the confiscation of goods, duty demands, and associated penalties were deemed unsustainable. The ruling emphasizes that end-use and specific product characteristics take precedence over basic material composition in customs classification. Appeal allowed with all charges and penalties set aside.
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Customs Broker License Revocation Reversed After Insufficient Evidence of Forged Rent Agreement Under Regulation 10(k)
Case-Laws - AT : CESTAT overturned the Commissioner's decision to revoke a Customs Broker License and forfeit security deposit. The dispute centered on an allegedly forged rent agreement for the broker's business premises. While the Commissioner relied heavily on landlord's denial of signing the agreement, CESTAT found insufficient grounds for license revocation under Regulation 10(k) of Customs Brokers Licensing Regulations 2018. The Tribunal noted the premises had been registered since 1991 with regular license renewals, and the Commissioner failed to conduct physical verification before concluding document forgery. The revocation of license, security deposit forfeiture, and Rs. 50,000 penalty were set aside. CESTAT clarified that Regulation 10(k) pertains to record-keeping violations, not premises verification issues.
DGFT
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Drug Authentication System for Export Formulations Shifts from DGFT to Health Ministry Under Drug Rules 1945
Circulars : DGFT has withdrawn Para 2.76 of Handbook of Procedures 2023 (formerly Para 2.90A of HBP 2015-2020) regarding Track and Trace system for export of drug formulations, exercising powers under Paragraphs 1.03 and 2.04 of Foreign Trade Policy 2023. The responsibility for implementing authentication systems for exported drug formulations now transfers to Ministry of Health and Family Welfare, to be administered under Drug Rules 1945. The withdrawal takes immediate effect, marking a significant shift in regulatory oversight of pharmaceutical exports from trade authorities to healthcare regulators.
FEMA
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Show Cause Notices Under FEMA Sections 19(1) and 35 Valid Despite Delay, Statutory Appeals Must Be Exhausted First
Case-Laws - HC : HC dismissed writ petitions challenging show cause notices under FEMA, upholding preliminary objection regarding maintainability due to available statutory remedies. Court determined that existence of appellate mechanisms under Sections 19(1) and 35 of FEMA provided adequate alternative remedies. Allegations of bias and natural justice violations were rejected, as subordinate officer's affidavit did not indicate prejudgment by adjudicating authority. Regarding limitation period, Court held that five-year timeline cannot be universally applied, as reasonable delay depends on case-specific circumstances. Omission of Section 6(3)(b) FEMA did not invalidate show cause notices as provision remains applicable to past actions. Petitioners directed to pursue statutory appeals rather than invoke writ jurisdiction.
Corporate Law
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Foreign Investors Win Exit Formula Battle as Share Capital Reduction Challenge Gets Rejected Under Companies Act
Case-Laws - HC : HC dismissed petition challenging implementation of CLB's exit formula for foreign investors in joint venture. Court held that attempts to recharacterize share capital reduction as share buyback were improper. CLB's order explicitly directed payment to foreign investors as consideration for capital reduction, not share purchase. Sale of VML property to investor's nominee was valid, having received RBI approval and surviving legal scrutiny. Court found petitioner's strategy aimed at avoiding compliance with CLB directives while manipulating regulatory processes through RBI and PMO channels rather than seeking proper judicial clarification. Share valuation proposed by petitioner at less than 1% of required payment amount demonstrated bad faith.
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Failure to File Board Reports with ROC Despite Shareholder Circulation Results in Modified Penalty Under Section 220
Case-Laws - AT : NCLAT determined that failure to file Board Reports for FY 2010-11 and 2013-14 constituted continuing offences under s.220 of Companies Act, 1956. While appellants admitted default in filing with ROC, evidence showed reports were circulated to shareholders timely with no prejudice to stakeholders. Considering the inadvertent nature of omission, self-disclosure by appellant, and comparable precedents, NCLAT modified the penalty structure. The tribunal reduced compounding fees to Rs.50 per day of continuing default for both company and directors, finding original penalty excessive. The appeal succeeded with modified penalties applied under s.220 read with s.162 of Companies Act, 1956.
Budget
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Finance Bill 2025 to Amend Tax Laws and Customs Regulations Awaits Parliamentary Introduction and Implementation
News : The Finance Bill 2025, presented as part of Union Budget 2025-26. The proposed legislation will contain amendments to various fiscal laws including taxation, customs, and financial regulations. While the complete bill and associated documents including explanatory notes, budget speech. The Economic Survey highlights and customs notifications will provide additional context once released. This represents a continuation of the annual budgetary process under India's fiscal governance framework.
IBC
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Liquidators Must File New Forms LIQ 1-4 Under IBBI Rules With Revised Auction Process And Penalties
Notifications : IBBI amended the Liquidation Process Regulations introducing new filing requirements and auction procedures. The amendments mandate liquidators to file four new Forms (LIQ 1-4) on an electronic platform with specific timelines and penalties for delays. Key changes include revised auction procedures requiring due diligence of highest bidders, consultation committee involvement in bid acceptance, and forfeiture of earnest money for ineligible bidders. The regulations also modify provisions for Corporate Liquidation Account maintenance and introduce new requirements for documenting unclaimed dividends. A late filing fee of Rs.500 per Form per month applies, with potential sanctions including refusal of Authorization for Assignment for non-compliance or inaccurate submissions. The amendments took effect upon official gazette publication.
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Liquidators Must Submit New VL1-VL4 Forms Under IBBI's Amended Voluntary Liquidation Process With Rs.500 Monthly Penalty
Notifications : IBBI amended the Voluntary Liquidation Process Regulations introducing significant procedural changes. The amendment establishes a Corporate Voluntary Liquidation Account with a scheduled bank and implements a new structured filing system requiring liquidators to submit four distinct forms (VL1-VL4) with specific timelines. Liquidators must ensure accurate and complete filing, with penalties of Rs.500 per form per month for delays. The Board may refuse Authorization for Assignment for non-compliance, inaccurate filing, or delays. The amendment also revises Form G's table B format for tracking unclaimed dividends and undistributed proceeds, requiring detailed stakeholder information including tax implications. These changes enhance transparency and accountability in voluntary liquidation processes, effective from the gazette publication date.
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IBC Section 31(4): CCI Approval Must Come Before Committee of Creditors' Resolution Plan Decision
Case-Laws - SC : The SC delivered a split verdict regarding the interpretation of Section 31(4) proviso of IBC concerning CCI approval timing for resolution plans. The majority opinion (Roy and Dhulia, JJ.) held that obtaining CCI approval prior to Committee of Creditors' approval is mandatory, based on literal interpretation of the statute. They found the resolution plan unsustainable without prior CCI clearance and directed reconsideration of plans with existing CCI approvals. The dissenting opinion (Bhatti, J.) interpreted the provision as directory rather than mandatory, emphasizing CoC's commercial wisdom and arguing that CCI approval could be obtained before NCLT's final approval. The majority also identified procedural lapses in CCI's approval process, including failure to issue notice to the target company and discrepancies in operational data disclosures. The matter requires further jurisprudential development due to conflicting interpretations.
PMLA
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Money Laundering Case: Bail Denied Under Section 45 PMLA for Counterfeit Cancer Drug Racket Through Banking Channels
Case-Laws - HC : HC denied bail in a money laundering case involving illegal procurement and sale of counterfeit anti-cancer drugs through firms Delhi Medicine Hub and Cancer Medicine Agency. The court found that twin conditions under Section 45 PMLA were not satisfied based on statements recorded under Section 50 PMLA and documentary evidence showing involvement in laundering proceeds through banking and hawala channels. Despite the principle "bail is rule, jail exception," the court emphasized that Section 50 PMLA statements hold evidentiary value as judicial proceedings, not subject to Article 20(3) and 21 restrictions. Given the ongoing investigation, supplementary prosecution complaint, and financial records indicating active participation in the crime proceeds laundering, bail application was rejected to maintain investigative integrity.
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Money Laundering Case: Bail Denied in Cancer Medicine Fraud Scheme Under Section 45 PMLA Despite Rs.1 Crore Threshold Claim
Case-Laws - HC : HC denied bail in money laundering case involving spurious anti-cancer medicine manufacturing scheme. Despite applicant's claim for exemption under Rs. 1 crore threshold per Section 45 PMLA proviso, court found scheme's total value exceeded this limit. Court applied twin conditions under Section 45 PMLA and statutory presumption under Section 24. Evidentiary materials including Section 50 PMLA statements, financial records, and WhatsApp communications demonstrated applicant's involvement in proceeds of crime. Applicant failed to rebut presumption of guilt or satisfy bail conditions. Court emphasized admissibility of Section 50 statements as judicial proceedings, rejecting constitutional challenge. Given ongoing investigation and supplementary prosecution complaint, bail application dismissed.
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Enforcement Directorate's Summons Under PMLA Section 50(2) Valid Even for Pre-Amendment Cases, Investigation Must Continue Unhindered
Case-Laws - HC : HC affirmed the validity of summons issued by Enforcement Directorate under Section 50(2) of PMLA. The subsequent summons for further investigation was permissible under Section 44(1)(d) Explanation (ii), despite the alleged offense predating the amendment. The court emphasized that judicial interference at summons stage could prejudice money laundering investigations. The ruling stressed that investigating agencies must be allowed to function freely to collect evidence and statements following PMLA procedures. Courts should avoid granting unwarranted leniency that could hamper investigations or allow evasion of PMLA proceedings. Petitioners were directed to comply with summons and provide required documents and explanations. Petition dismissed.
SEBI
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Stock Brokers Must Follow New Tech-Based System Audit Rules With Standardized Templates And Auditor Rotation From 2025
Circulars : SEBI introduced a technology-based framework for monitoring system audits of stock brokers, effective FY 2025-26. The framework mandates stock exchanges to develop web portals for supervising the audit lifecycle, including geo-location tracking of auditor visits. Key requirements include standardized audit templates, empanelment criteria for auditors, and enhanced verification of technical compliance. Auditors must conduct physical premises visits, verify critical IT infrastructure, and submit comprehensive reports through the portal. A cooling-off period of 2 years is required after three consecutive years of audit. Stock exchanges must implement financial disincentives for non-compliance and submit half-yearly audit summaries to SEBI. The framework aims to strengthen supervision and minimize technology risks in securities trading.
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Market Infrastructure Institutions Must Undergo External Committee Evaluations Based on Three Performance Criteria Starting 2024-25
Circulars : SEBI mandates external performance evaluation of Market Infrastructure Institutions' (MIIs) statutory committees every three years, establishing a standardized framework with three key criteria: Roles & Responsibilities (40%), Meeting Effectiveness (30%), and Governance (30%). Independent external agencies must obtain SEBI's NOC before appointment and demonstrate relevant expertise without conflicts of interest. Initial evaluation covers FY 2024-25 with reporting by September 2025, followed by three-year evaluation blocks. MIIs must also conduct annual internal evaluations of their performance and statutory committees, with first reports due for FY 2024-25. Implementation required within 30 days of issuance, with necessary amendments to bylaws and regulations for compliance.
Service Tax
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Service Tax on After-Sales Support to Foreign Company's Indian Customers Upheld Under Place of Provision Rules 2012
Case-Laws - AT : CESTAT rejected appellant's challenge against service tax classification of after-sales and promotional services provided to foreign company's Indian customers during July 2012-September 2014. Court held these constituted intermediary services under Place of Provision Rules 2012, not export of services, as appellant facilitated services between foreign company and Indian buyers. The 2014 amendment merely expanded scope to include goods-related intermediary services. Services were taxable even before amendment as they involved arranging/facilitating services in India. Extended limitation period upheld due to appellant's non-disclosure of relevant information. Appeal dismissed, confirming service tax liability and extended recovery period.
Central Excise
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Pre-deposit Refund Interest Rate Set at 6% Under Section 11BB for Clandestine Manufacturing Case
Case-Laws - AT : CESTAT ruled on interest rate calculation for pre-deposit refunds in a clandestine manufacturing case. The deposited amount, once appropriated against demand, acquired character of duty subject to Section 11B refund provisions. Following Mafatlal Industries precedent, all refund claims must be processed under Central Excise Act framework. The Tribunal affirmed that Section 11BB governs interest payments on refunds, with specific exception under Section 35FF for appeal-related deposits. Interest calculation from deposit date applies only to Section 35F deposits. The adjudicating authority's decision granting 6% interest rate was upheld as compliant with statutory provisions. Appeal dismissed.
Case Laws:
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GST
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2025 (2) TMI 70
Recovery of outstanding dues in cases wherein first appeal has been disposed of, till Appellate Tribunal comes into operation - Circular No.224/18/2024-GST dated 11th July, 2024 issued by the Ministry of Finance - HELD THAT:- Having considered the materials on record as also taking note of the fact that the Appellate Tribunal is yet to be constituted, the petition should be heard. Since, the petitioner has been able to make out a prima facie case, there shall be an unconditional stay of the demand of the Appellate order dated 14th June, 2023, for a period of two weeks from date. In the event, the petitioner makes payment of 10% of the balance amount of tax in dispute, in addition to the amount already deposited in terms of Section 107(6) of the said Act, within two weeks from date, the interim order passed herein, shall continue till the disposal of the writ petition or until further order, whichever is earlier. Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date, reply, if any, be filed within one week thereafter.
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2025 (2) TMI 69
Violation of principles of natural justice - no opportunity of hearing was granted while passing order under Section 73 of GST Act which is mandatory in terms of Section 75(4) of GST Act - challenge to order passed under Section 73 of GST Act - HELD THAT:- Considering the fact, prima-facie, the impugned order is without following the mandate of Section 75(4) of GST Act and is also in violation of principles of natural justice, thus, both the impugned orders i.e. 25.04.2024 10.12.2024 are quashed. Considering the said fact, prima-facie, the impugned order is without following the mandate of Section 75(4) of GST Act and is also in violation of principles of natural justice, thus, both the impugned orders i.e. 25.04.2024 10.12.2024 are quashed - Petition allowed by way of remand.
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2025 (2) TMI 68
Challenge to order passed u/s 129(3) of the U.P.G.S.T. Act, 2017 - detention of goods - violation of principles of natural justice - HELD THAT:- It is apparent that the notice, Annexure-10, has been issued to the petitioner on 19.12.2024 giving seven days time to respond to the said show cause notice, however, the order dated 19.12.2024, Annexure-1, determining the same as is reflected from summary of rectification of order, the order passed earlier on 13.12.2024 in the name of the driver, has been rectified in the name of the petitioner. The very fact that a fresh show cause was issued to the petitioner, it was incumbent on the respondents to have waited for the response to the show cause notice and thereafter, even if the rectification order was required to be passed, the same could only be passed after receipt of the reply - Passing of the order on the same day without waiting for response to the show cause notice by the petitioner was in gross violation of principle of natural justice and therefore, the order impugned passed on 19.12.2024, Annexure-1, cannot be sustained. Petition allowed.
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2025 (2) TMI 67
Determination of tax and other liabilities relating to the petitioner as per the provisions of section 73 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Petitioner is engaged in the business of trading, leasing apart from construction of shopping malls. In the decision in Chief Commissioner of Central Goods and Service Tax Ors. v. M/s Safari Retreats Private Ltd. Ors [ 2024 (10) TMI 286 - SUPREME COURT ], the Supreme Court had considered the scope and purport of section 17(5) of the CGST Act and held that the expression plant or machinery used in section 17(5)(d) of the CGST Act cannot be given the same meaning as the expression plant and machinery as defined in the explanation to section 17. It was further observed that the question whether a mall, warehouse or any building other than a hotel or a cinema theatre can be classified as a plant within the meaning of the expression plant or machinery used in section 17(5)(d) is a factual question which has to be determined keeping in mind the business of the registered person and the role that building has in the said business. As the impugned order has not taken into consideration the impact of the principles of law laid down in Safari Retreat s case, this Court is of the view that the impugned order is liable to be set aside and a de novo reconsideration should be directed. The question relating to the 8 invoices and the inconsistency in the ITC reported in Table 4D(1) of Form GSTR-3B and Table 7E of Form GSTR-9 and all other contentions raised by the petitioner are left open for consideration again. Hence Ext.P3 order dated 30.08.2024 is hereby set aside and the respondent is directed to reconsider the matter afresh - Petition allowed by way of remand.
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2025 (2) TMI 66
Requirement to deposit 10% of the disputed amount of tax on filing the appeal and further 20% of remaining disputed tax, for the impugned order to be stayed - HELD THAT:- There was notification dated 16th August, 2024 made by Central revenue reducing latter deposit to 10%. Now, State revenue has correspondingly notified on 29th October, 2024. In the circumstances, the writ petition be disposed of as covered by order dated 16th February, 2024 with modification for deposit of 10% of remaining disputed tax for impugned order to remain stayed. The submission made on behalf of petitioner accepted, regarding corresponding notification reducing requirement of the deposit to 10% of disputed tax for impugned first appellate order to remain stayed. The deposit be made accordingly. Petition disposed off.
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2025 (2) TMI 65
Maintainability of petition - availability of alternative remedy - Challenge to SCN - requirement to issue separate show cause notice for two separate years as they constitute difference cause of action - HELD THAT:- It is seen that the petitioner is having an alternative and efficacious remedy under Section 107 of the Central Goods and Services Tax Act, 2017. However, it is seen that single notice has been issued to the petitioner in respect of short payment of GST in respect of two financial years, which is erroneous. The writ petition is hereby dismissed reserving liberty to the petitioner to approach appropriate appellate authority in the manner known to law, and if an appeal were to be filed, the petitioner would be entitled to the benefit of Section 14 of the Limitation Act, 1963.
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2025 (2) TMI 64
Refund of the differential tax amount under the GST regime for a works contract awarded by the opposite party - HELD THAT:- The refund be made to petitioner, as said it will be in the counter. Opposite party no.2 is do all things required to ensure that the refund is disbursed within six weeks from date. For the purpose opposite party has liberty of producing certified copy of this order to concerned authority. Petition disposed off.
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2025 (2) TMI 63
Rejection of rectification application - petitioner s specific contention is that there can be no computation of 40% of the actual turnover, since his gross turnover within the State of Bihar has been specifically shown in the annual return - HELD THAT:- It is found that no statutory sanction for an assessment made of the 40% of the total turnover, which is taken as the taxable transaction within the State of Bihar. In that circumstance, we find absolutely no reason to sustain the order dated 20.08.2024 itself. On the above finding, the order of assessment (Annexure P/6) and order of rectification (Annexure- P/10) set aside. The petitioner is directed to appear before the Assessing Officer with all substantiating documents on 20th of December 2024. The Assessing Officer on the same date or on an adjourned date, the acknowledgment of which will be taken from the assessee or the authorized representative who appears on the 20th of December 2024, afford opportunity for hearing and finalize the assessment. Petition disposed off.
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2025 (2) TMI 62
Violation of principles of natural justice - service of SCN - no opportunity of personal hearing granted - HELD THAT:- Considering the facts and circumstances of the present case and the provisions of Section 73 read with Section 75(4) of the WBGST/CGST Act, 2017, this Court is of the view that proper officer is bound to afford an opportunity of hearing, where either a request in writing is received by him from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. To afford opportunity of hearing is a statutory mandate which cannot be violated by proper officer and in the event such of violation, the order passed by the proper officer cannot be sustained. Under the circumstances, the impugned order dated 29th August, 2023 passed by the proper officer for the period 2022-2023 cannot be sustained and deserves to be quashed and the matter deserves to be remanded to the concerned authority to pass an order afresh in accordance with law after affording reasonable opportunity of hearing to the petitioner. Petition disposed off by way of remand.
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2025 (2) TMI 61
Vires of the provisions of Section 16(2)(c) of the State Goods and Services Tax Act, 2017 (SGST Act) identical to the Central Goods and Services Tax Act, 2017 - seeking entitlement for Input Tax Credit - It was submitted that the purchaser will be required to show that the seller has in respect of all past transaction made by him in relation to goods supplied by him, had utilized the input tax credit, which was in respect of such supplies. HELD THAT:- Issue Rule returnable on 04.12.2024. By way of ad-interim relief, no coercive steps shall be taken by the respondent authorities during the pendency of this petition.
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2025 (2) TMI 60
Supply or not - levy of GST - payment of settlement fees against demand made by ANP - HELD THAT:- The payment by the appellant of USD 80,00,000/- to ANP, is a consequence of breach of PSC and not in pursuance of the deed of settlement release agreement between the appellant and ANP and certainly not related to ANP s obligation to supply services to GSPC viz ANP performing certain obligations towards GSPC such as release of its performance guarantee. The liquidated damages are paid only to compensate for loss due to breach of PSC in terms of clause 4.5(a)(iii). There is no position to pinpoint any agreement, express or implied between ANP and the six concessionaire that on receiving the liquidated damages, ANP will refrain from or tolerate an act or do an act for the concessionaires [including the appellant] paying the liquidated damages. This being the factual matrix, the liquidated damages, in terms of the aforementioned circular are merely a flow of money and such payments do not constitute consideration for a supply and hence, are not taxable. On going through the documents produced, it is difficult to establish that the impugned payments constitute consideration for another independent contract envisaging tolerating an act or situation or refraining from doing any act or situation or simply doing an act. Nonetheless, we also find that the impugned ruling dated 6.9.2021 erred in holding that the settlement amount [liquidated damages] is not due to breach in PSC but due to ANPs obligation to supply services to the appellant. Conclusion - GSPC (JPDA) Ltd. is not liable to pay GST on the settlement fees demanded by ANP.
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2025 (2) TMI 59
Levy of GST - contract between the Applicant and IOCL is a divisible contract or a single and composite contract? - whether the component imported goods will be taxable as a supply of goods at the time of importation or as a service at the time of incorporation in the works contract i,e. when the erection, commission and installation of goods takes place? - supply of goods at the time of importation in the hands of the recipient / importer and a second time as a component of supply of service in the hands of the supplier of EPC contract service at the time of incorporation of the imported goods in a works contract by way of erection, commission and installation - value of goods sold on a high seas can be added to the value of a works contract merely because such duty and IGST paid goods are incorporated in the works contract by way of erection, commission and installation or not. Whether the contract is a divisible contract or single and a composite contract? - HELD THAT:- The contract entered into by the applicant with IOCL is not a divisible contract, notwithstanding the fact that the turnkey contract, constitutes two different work orders, the performance of which is interconnected and interdependent. Whether the component of imported goods will be taxable at the time of supply at the time of importation or as a service at the time of incorporation in the works contract ie when the erection, commission and installation of goods takes place? - HELD THAT:- In terms of Schedule III, read with section 7 (2) of the CGST Act, 2017, supply on HSS basis, is treated as neither a supply of goods nor a supply of services. Thus, the question of levy of GST on such supply, does not arise. Now the taxation of goods post HSS sale to IOCL, at the time of importation, is not within the jurisdiction of this Authority as it is a matter to be decided by the jurisdictional Customs Authority in terms of Customs Act, 1962 and Customs Tariff Act, 1975. It is not required to entertain the question it being beyond the jurisdiction of this Authority. What will be included and excluded in the value of supply, is governed by sub-sections 15 (2) (3) of the CGST Act, 2017. In terms of sub-section 15 (2), ibid, the value of supply shall include any amount that the supplier is liable to pay in relation to such supply which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both. The EPC contract encompasses both the supply of goods and services. The applicant, in terms of the contract, is liable to provide the goods [supplied on HSS basis to IOCL] and thereafter in terms of the work order these goods are supplied back by to the applicant as Free Issue Materials - the submission that this value is not to be included in the transaction value in respect of works contract service is legally not tenable more so since the applicant is contractually bound/liable to supply both the goods and the services. Therefore, in terms of section 15, ibid, the value of such imported goods would form a part of the transaction value for payment of GST. Whether the supply of goods can be subjected to GST twice, first as supply of goods at the time of importation and secondly as component of supply of service in the hands of the supplier of EPC contract, in this case, the time of supply in respect of imported goods is when the goods land in the customs frontier? - HELD THAT:- The contract entered into by the applicant with IOCL, is a turnkey EPC contract, which is a composite works contract in terms of section 2 (119), ibid. In terms of Sr. No. 6 of Schedule II, such composite works contracts, involving transfer of property in goods (whether as goods or in some other form) involved in the execution of the said project is a composite supply in terms of Schedule II, would be treated as supply of service and leviable to GST accordingly. Even otherwise, there is no bar in adding the value of goods sold on HSS, if subsequently, the supply undertaken is a composite works contract in view of the findings above. In-fact, in view of section 15 of the CGST Act, 2017, it is found that the law mandates addition of such value to compute the transaction value. Conclusion - i) The contract between the Applicant and IOCL is a not a divisible contract but a single and composite contract. ii) The component of imported goods will form part of the transaction value for computation of value of works contract service. iii) The value of imported goods will form the part of transaction value for computation of value of works contract service. iv) The value of goods sold on a HSS basis will have to be added to the transaction value for computation of the value of a works contract.
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Income Tax
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2025 (2) TMI 58
Reopening of assessment - threshold limit for initiating proceedings against an assessee - Under invoicing of exports of iron ores - addition on the basis of the report of Inquiry Commission of Justice M.B. Shah Revenue points out the SLP [ 2020 (12) TMI 1403 - SC ORDER (LB)] was dismissed on the ground of low tax effect. But the contention is that the present should be treated as an exception under the relevant Circular issued by the Ministry of Finance. It is also contended that the issue here is the threshold limit for proceeding un/s 147 of the Income Tax Act but this is only the trigger point for initiating necessary proceedings against the assessee, in due course. To receive further instruction, the counsel for the petitioner and also for the assessee jointly pray for and are granted three weeks time.
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2025 (2) TMI 57
Validity of Revision u/s 263 - computation of book profit u/s 115J - whether the order u/s 263 gives a conclusive finding on issue relating to Section 115J so as to permit the Appellant-Assessee to agitate the issue on merits? - HELD THAT:- Admittedly and undisputedly there is no examination of computation of book profit by the assessing officer at the time of assessment, thus there is no infirmity in the exercise of revisional jurisdiction by the CIT and upheld by the Tribunal. Appellant-Assessee cannot pick up one sentence of the operative order and contend that the Commissioner has given a definite finding on the merits of the case. There has to be a holistic reading of whole of the operative parts of the order and if one reads holistically the whole of the operative parts, it can be safely concluded that for coming to the satisfaction of twin conditions mandated by Section 263 of the Act, the CIT had to make some observations on the merits of the case moreso because the issue was not examined during the course of the assessment proceedings. The CIT having said so has directed the assessing officer to recompute the book profit afresh by applying the correct provision of law, and after providing an opportunity to the assessee. In our view on a complete reading of the operative paragraphs of order under Section 263, it cannot be said that the observations made by the Commissioner on computation of book profit was definite and conclusive, but he had to make these observations for satisfaction of the twin conditions mentioned in Section 263 for assumption of jurisdiction. If he had not made such observation, then the order under Section 263 would have fallen foul of the mandatory conditions required for exercising jurisdiction under Section 263. Therefore, on a holistic and complete reading of the operative paragraphs, we cannot accept the submission made by the Appellant-Assessee that the observation made by the CIT on computation of book profit is definite and therefore he is entitled to challenge the same on merits before the Tribunal and before this Court. Decided in favour of the Respondent-revenue.
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2025 (2) TMI 56
Reopening of assessment u/s 147 - reason to believe - as argued assessment cannot be opened twice for the same reason - value of the immovable property held by TREPL (Friends Colony property). HELD THAT:- Information on the basis of which the impugned order has been passed was subject matter of examination in the earlier round of reassessment u/s 147 - AO s reason to believe that the petitioner s income had escaped assessment, which had led to the issuance of notice dated 31.03.2021, was founded on an assumption that the petitioner had sold the shares of TREPL at a price below its correct value. The notice issued u/s 143 (2) during the said proceedings and the petitioner s response dated 24.03.2022 issued to the said notice clearly establishes that the examination revolved around the value of the immovable property held by TREPL (Friends Colony property). The petitioner s response dated 24.03.2022 indicates that the petitioner had forwarded the audited balance sheet and the profit and loss account of TREPL and had also explained that TREPL owned only two floors of the Friends Colony property. AO had examined the said response and accepted the same. Clearly, the impugned order has been passed in respect of the same issue that was subject matter of examination in the earlier round. The question whether the TREPL owned the entire Friends Colony property is one that is easily verifiable by the AO. As noted above, the AO has completely ignored the petitioner s response to the notice issued u/s 148A(b) in this regard in the impugned order. Similar approach has also been adopted in the counter affidavit as well. Section 148A (d) of the Act mandates that the AO is required to pass an order on the basis of record and considering the response to the notice u/s 148A(b). In this case, the record indicates that the information on the basis of which the assessment is sought to be reopened was fully examined in the earlier round of reassessment under Section 147 read with Section 144B of the Act. Petitioner s response clearly stated that TREPL owned only two floors of the Friends Colony property and there is nothing credible on record that controverts it. The impugned order does not even advert to the said issue. Decided in favour of assessee.
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2025 (2) TMI 55
Validity of reopening of assessment beyond period of limitation - applicability of the TOLA in the context of provisos to Section 149 (1) of the Act - whether the impugned order and the impugned notice was issued beyond the period as prescribed u/s 149 (1)? - HELD THAT:- The time granted to the petitioner to respond to the notice dated 30.05.2022 the period of two weeks is also required to be excluded by virtue of the third proviso to Section 149 (1) of the Act. The petitioner had furnished its response to the notice under Section 148A (b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date. As noted above, by virtue of TOLA, the AO had period of twenty-nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice u/s 148 - The said notice was required to be accompanied by an order u/s 148A (d) - AO was required to pass an order under Section 148A (d) within the said twenty-nine days notwithstanding the time stipulated u/s 148A (d) of the Act. This period expired on 12.07.2022. Since the period of limitation, as provided u/s 149 (1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation. Time available to the AO to pass an order under Section 148A (d) of the Act was necessarily truncated and the same was required to be passed on or before 12.07.2022. The fourth proviso to Section 149 of the Act did not come into play as the time period available for the AO to pass an order u/s 148A (d) of the Act was in excess of the seven days. Thus, we find merit in assessee contention that the impugned notice dated 30.07.2022 has been issued beyond the period of limitation. Petition is allowed and the impugned order passed un/s 148A (d) and impugned notice issued u/s 148 quashed - Decided in favour of assessee.
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2025 (2) TMI 54
Dismissal of application for condonation of a delay of around 10 months in filing the return of income - Authority and procedure for issuing orders u/s 119 (2) (b) - HELD THAT:- Section 119 (2) (b) empowers the CBDT to decide such applications. The CBDT, as a part of its functioning, may have allocated the work amongst its members. Nothing was shown to us regarding any further allocation or delegation to the Additional CIT (OSD) (OT WT). We do not make any observations on the permissibility of any such further delegation. Similarly, there is nothing in the Central Boards of Revenue Act, 1963 or at least nothing was shown to us based upon which the making of the order by the Additional CIT (OSD) (OT WT) could be held as valid or validated. Therefore, we quash and set aside the impugned order dated 24 January 2024 and remand the matter to the CBDT or its duly allocated member to pass an order on the Petitioner s application for condonation of delay. Needless to add the Petitioner / its representatives must be heard before such an order is made. A reasoned order must be communicated to the Petitioner. This exercise must be completed within 3 months of uploading this order.
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2025 (2) TMI 53
Duty of the party making the payment, to deduct TDS and deposit the same with the income tax authority - complainant s case is that TDS certificate is false and fake documents manufactured by the accused no. 1 (employee of the complainant) in collusion and connivance with the accused no. 1 - complainant company alleged that the TDS certificates used in the arbitration were forged - remedy for cheque being dishonoured - individuals responsible for the alleged crime within the company, like directors or key decision-makers - prosecution of only the company as the sole accused (of the company) or it employees is required to be done - complainant had participated in the arbitration process and only initiated criminal proceedings after an unfavorable award was passed HELD THAT:- When a company is accused of a crime, the individuals responsible for the actions that led to the offense, usually those in senior management positions, can be held vicariously liable. As such the prosecution of only the company as the sole accused (of the company) is prima facie bad in law. Admittedly, there is existence of an agreement between the parties for the business transaction which included an arbitration clause and by invoking the said clause the reference was made to the Arbitrator by the petitioner herein who has been made the accused no. 2 in the proceedings before the trial Court. In the present case the arbitral award has been passed on 4th March, 2014. The complainant having initially participated in the arbitral proceeding has initiated the present criminal proceeding on 29th March, 2023. The arbitral award was granted in favour of the petitioner company herein on the basis of documents and evidence before the learned arbitrator. There is no whisper of the said arbitral proceedings nor its award in the petition of complaint. The complainant having suffered an arbitral award, initiated the criminal proceedings after 9 long years, which prima facie appears to be malafide and motivated. Having admitted, making payment by way of cheque to the petitioner herein (later dishonoured), the income tax rules requires mandatory deduction of TDS by the complainant. Thus considering the said facts and circumstances the materials on record prima facie do not contain the ingredients required to constitute the offences alleged and as such, continuation of the said proceeding in the present case shall be an abuse of the process of law/court.
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2025 (2) TMI 52
Bank account property liable to attachment u/s 281B - HELD THAT:- Section 281B (1) provides for provisional attachment of any property . The prefix any to the word property has much significance. It indicates that the word property occurring therein, is not to be comprehended in a restricted sense. Therefore, any property mentioned in Section 281B (1) would take within its sweep, money lying in Bank account also. Section 281B (1) provides for provisional attachment of any property belonging to the assessee in the manner provided in the Second Schedule to the Act. The Second Schedule to the Act is titled, Procedure for Recovery of Tax . It provides the mode for recovery of Tax. Evidently, except for the property exempted from attachment under the Code of Civil Procedure, 1908(CPC), other properties are liable to attachment. Section 60 CPC provides the property liable to attachment. Noticeably, Section 60(1) CPC specifically states that money is an attachable property. Properties which are not liable to attachment have been specified in the proviso to the section. Therefore, money in Bank account is property liable to attachment. There could be instances where the assessee does not own immovable property sufficient enough to secure the likely demand, but there are sufficient funds in the bank account. The power for provisional attachment is provided to protect the interest of the revenue. There is no warrant to hold that money lying in a Bank account is not liable to attachment. The mere fact that Bank account is not explicitly provided under Section 281B unlike the GST Act, 2017 which specifically mentions the same, cannot lead to the conclusion that Bank account is not liable to be attached under Section 281B of the Act. We hold that money in Bank accounts is a property liable for provisional attachment under Section 281B of the Act. We are unable to concur with the finding of the learned Single Judge to the contrary. Whether the security furnished before the Judicial First Class Magistrate s Court could be considered as sufficient security for the purposes of the Act - Evidently, the authorities need to form an opinion with regard to the probable demand, which of course could not be stated with exactitude at that stage. However, the extent of the property attached, including attachment of the money in the Bank accounts, should be commensurate with the probable demand including the penalty. The proviso to Section 281B (3) indicates that the security required need only be to the extent sufficient to protect the interest of the revenue. Therefore, orders of provisional attachment u/s 281B should be commensurate with the probable demand including penalty, and should not be blanket orders attaching properties, the value of which would be much higher than the probable demand. WP allowed.
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2025 (2) TMI 51
Reopening of assessment u/s 147 - requirement to separately dispose of objections before proceeding with the assessment - consolidated order/combined order disposing of the Petitioner s objections to reopening the assessment and assessing the Petitioner s income - HELD THAT:- There being no infirmity in the impugned consolidated order. Petitioner has, no doubt, instituted an Appeal after the filling of this Petition. As clarified that this was only to protect from the bar of limitation. He further pointed out that the factum of the institution of this Petition and the reason for the institution of the Appeal were clarified in the appeal memo. Since the impugned consolidated order warrants interference due to noncompliance with jurisdictional parameters, relegating the Petitioner to the alternate remedy would not be appropriate. As noted earlier, this Court has interfered with consolidated orders in almost identical circumstances, making assessments and disposing of objections. Therefore, Mr Suresh Kumar s objection based on exhaustion of alternate remedy cannot be sustained in the facts of the present case. WP Allowed.
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2025 (2) TMI 50
Validity of reopening of assessment - validity of a notice issued u/s 148A(b) - issuance of a fresh notice under the amended provisions of the Income Tax Act - HELD THAT:- The reasons for issuance of notice on 28.06.2021 u/s 148 as communicated to the petitioner vide notice dated 23.02.2022 issued u/s 143(2) and the reasons stated in the notice issued u/s 148A(b) of the Income Tax Act, 1961 on 1.06.2022 read almost identically. As decision of the Hon ble Supreme Court in Ashish Agarwal s case[ 2022 (5) TMI 240 - SUPREME COURT] has been passed under Article 142 of the Constitution of India in view of the peculiar circumstances arising out of the amendment to the Income Tax Act, 1961 vide Finance Act, 2021. In order to put the issue at rest, the Hon ble Supreme Court had given the above direction. Hon ble Supreme Court has not given a direction to the Assessing Officer to reopen the assessment even when the assessment was completed earlier by treating the notice issued u/s 148 as the notice issued u/s 148A(b) as amended with effect from 01.04.2021. This is also the view in Anindita Sengupta s case [ 2024 (4) TMI 96 - DELHI HIGH COURT] . Therefore, we are inclined to allow this Writ Petition. This reassessment order dismissed.
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2025 (2) TMI 49
Benefit of Direct Tax Vivad Se Vishwas scheme - petitioner has challenged Form-3 issued by the respondent u/s 5(1) - scope of tax arrear as defined in Section 2(o) of the said Act on the disputed tax Whether for the purpose of determining the amount payable by the petitioner under the Direct Tax Vivad Se Vishwas Act, 2020 would include the amount that was refunded back to the petitioner u/s 244A? - HELD THAT:- The definition of the expression Disputed Tax in Section 2(1)(j) of the said Act will be the amount of tax that is payable by an assessee, if an appeal or writ petition or a special leave petition is pending was to be decided against the assessee. Therefore, the interest paid to the petitioner under Section 244-A of the Income Tax Act, 1961 will be recoverable, if the appeal filed by the Income Tax Department before the Tribunal (ITAT) [ 2021 (8) TMI 1434 - ITAT CHENNAI] is decided against the petitioner. In this case, if the Department s appeal before the Tribunal is accepted, the petitioner will not only be liable to pay the amount of differential tax but also the interest paid to the petitioner under Section 244-A. Hence, there is no merit in the submission of the petitioner. WP dismissed.
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2025 (2) TMI 48
Black Money proceedings continue despite the settlement of the petitioners income - Assessee s statement that it has already been offered to tax under the Income Tax Act, 1961 - scope of income liable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 settlement under Chapter XIX-A (19-A) of the Income Tax Act, 1961 - HELD THAT:- In this case admittedly, the Return of Income was filed by the respective petitioners on 21.05.2015 which is prior to the implementation of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 with effect from 01.07.2015. Therefore, continuance of the proceedings under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 cannot be countenanced. Court taking note of the above by its Order [ 2016 (7) TMI 402 - MADRAS HIGH COURT ] has clearly held that merely because the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 came into force would not be a bar on the respective petitioners to settle the dispute under Chapter XIX-A of the Income Tax Act, 1961. Court also took note of the Explanatory Note in Circular No.12 of 2015 dated 02.07.2015 of the Central Board of Direct Taxes to substantiate the Order dated 10.07.2015 of the Settlement Commission. Thus, the continuance of the proceedings under the Impugned Notices dated 27.02.2018 cannot be countenanced. It would defeat from the purpose of Chapter XIX-A of the Income Tax Act, 1961. It would have been different if the petitioner had not filed Return of Income and had also operate to settle the dispute under Chapter XIX-A of the Income Tax Act, 1961. Since the dispute has been settled under Chapter XIX-A of the Income Tax Act, 1961, the continuance of the proceedings under the Impugned Notices dated 27.02.2018 issued under Section 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 cannot be allowed to continue. The Order of the Interim Board of Settlement-II dated 26.08.2022 is a fait accompli .
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2025 (2) TMI 47
Non issuance of show cause notice before making huge additions and adequate opportunity was not provided - addition on Deposits in bank account - whether the assessment was conducted without providing adequate opportunity for the appellant to explain the transactions and present evidence? - HELD THAT:- AO failed to issue a show cause notice before making huge additions and adequate opportunity was not provided. No reply on the remand report was filed before the CIT(A) as well. Therefore, in the interest of justice and fair play it is considered to imperative to set aside the order of the Ld. CIT(A) and restore the appeal to the CIT(A) who shall allow one more opportunity of being heard to the assessee and after considering the reply of the assessee, decide the appeal on the additions upheld by him. The assessee shall file evidence in his possession to substantiate the claim that the transactions related to the business and also for the relief claimed and the Ld. CIT(A) shall also provide an opportunity of being heard to the Ld. AO as per Rule 46A of the Income Tax Rules, 1962. Appeal filed by the assessee is allowed for statistical purposes.
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2025 (2) TMI 46
Reopening of assessment u/s 147 - notice issued beyond period of four years - Addition u/s 69C - unexplained expenditure on presumption that assessee had paid commission @ 2.5% for obtaining such accommodation entry - HELD THAT:- In case of Haryana Acrylic Manufacturing Co.[ 2008 (11) TMI 2 - DELHI HIGH COURT ] it was held that notice u/s 148, giving reason that it had come to his notice that assessee had taken accommodation entries from H during relevant year when assessee, in course of original assessment proceedings, had supplied all relevant details; in assessment order which were verified and moreover, in reasons supplied to assessee there was no allegation that it had failed to disclose fully and truly all material facts necessary for assessment and because of its failure there had been an escapement of income chargeable to tax, reopening of assessment after expiry of four years from end of relevant assessment year was without jurisdiction. Hence it is felt that since there was no independent application of mind neither by AO while initiation of reassessment proceedings by issue of notice u/s 148 nor by CIT(A) 4, Jaipur while deciding the issue under consideration. They simply proceeded on borrowed satisfaction reached by some other officials and even without making any enquiry before reaching to the conclusion of escapement of income, which is apparent from the perusal of the reasons where no specific transaction with any of the company alleged as paper companies is specifically mentioned and on general observations that no such transaction was shown by the assessee and no tax was paid on such transaction, the case was reopened. Hence, in this view of the matter, we do not concur with the findings of the ld CIT(A) and this issue raised by the ld. AR of the assessee is allowed. Addition u/s 68 - assessee had paid cash and in turn received accommodation entry - As during the course of reassessment proceedings as well as in the present submission that the amounts received from these two companies is against the sales made to them in preceding years and AO while recording the reasons has alleged the same as the assessee s own money routed through RTGS in the shape of accommodation entries and while completing the assessment changed his stand from unsecured loan to share application money without any basis or material brought on record to allege the same more particularly when no amount whatsoever was received by the assessee as share application money in the year under appeal as is clearly evident from the perusal of the financial statements of the assessee company available with the AO. We also noticed that AO has further alleged that assessee could not provide evidences regarding transportation of goods from its place to the destination companies. As submitted that assessee not only furnished ledger copies of both the parties but also furnished copies of invoices, which contained the necessary details of transporters and details of vehicle through which goods were transported, but the AO brushed aside the same without any cogent reason. We find that it is a matter of fact that the AO made addition by relying upon the information received from Investigation Unit and some enquiries made, without even providing assessee an opportunity to cross examine. CIT(A) has confirmed the additions so made by AO by solely relying upon the information of Investigation wing. Hence, the bench noticed that addition confirmed by ld. CIT(A) is contrary to the facts on record and is against the principle of taxation, whereas assessee has substantiated its claim by furnishing all the necessary documentary evidences, therefore, the Bench does not concur with the findings of the ld. CIT(A) and addition so sustained is directed to be deleted. Thus ground of the assessee is allowed. Unsecured loan / share application money - Uncontroverted fact that the sales were made to these two parties in preceding year and assessee has received outstanding amount in the year under appeal. It was also submitted that sale made by assessee in F.Y. 2011-12 is completely genuine as has been stated in ground of appeal No. 2 above, and assessee has not taken any loan/share capital as has been alleged. Thus, no question of any commission payment. Secondly, the ld. AR submitted that this addition also is solely based upon the information received from third party absolutely uncorroborated in much as there is no material available on record to rebut the documentary evidences furnished by assessee. It is therefore submitted that the addition so confirmed by CIT(A) are on the basis of assumptions and presumptions deserves to be deleted.
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2025 (2) TMI 45
Revision u/s 263 - assessee has under reported sale consideration as per section 50C the same is not considered by assessing officer during the assessment proceedings - HELD THAT:- We find that the assessee entered into registered agreement to sell on 27/12/2007 for transfer of land in fixing the sale consideration and part payment thereof by way of cheque is clearly mentioned on the registered agreement to sell. Thus. we find that the assessment order is not erroneous. AO has taken a legally sustainable view on the issue on which the assessment was reopened. Once the AO has taken a legally sustainable view, the revision on the same issue by ld. Pr.CIT is nothing but a change of opinion. Thus, we find that the revision order passed by ld. Pr.CIT does not fulfill the requirement of twin condition of Section 263 of the Act. Hence, the same is quashed. AO has not verified the record before passing the assessment order in said case. However, in the present case, the Assessing Officer has specifically examined the issue by issuing specific show cause notice dated 12/03/2022 which was duly responded by assessee and on consideration thereof, no further addition was made. In the result, ground of appeal raised by the assessee are allowed
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2025 (2) TMI 44
Revision u/s 263 - failure to make necessary inquiries or verifications regarding the genuineness of certain sundry creditors - HELD THAT:- As evident from the record that even the assessee also failed to furnish the details as sought during the assessment proceedings. Accordingly, the AO concluded that the initial onus upon the assessee to prove the genuineness of the transaction was not discharged by the assessee From the perusal of the assessment order, we find that even though the AO doubted the genuineness of the transaction with 10 parties, as noted in the foregoing paragraph, however, proceeded to make the addition u/s 41(1) in respect of only two sundry creditors. We find that as regards the remaining 8 parties shown as sundry creditors by the assessee, there is no examination by the AO nor any addition was made. During the hearing, AR furnished a copy of the ledger account of AJS Impex Pvt. Ltd. in the books of the assessee. From the perusal of the same, we find that there is a credit balance as against the debit balance noted of the assessment order. Thus, it is ostensible that even despite coming to the conclusion that the genuineness of the transaction in respect of afore-noted 10 parties is not proved, the addition was only made in respect of two parties on the basis that liability has ceased to exist under section 41(1) without giving any reasoning as to why the same conclusion cannot be reached in respect of remaining 8 parties. Thus, assessment order passed under section 143(3) r.w.s. 144B of the Act has been passed without making inquiries or verification which should have been made, and therefore, the present case clearly falls within the ambit of provisions of Explanation 2 to Section 263 of the Act. Decided against assessee.
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2025 (2) TMI 43
TDS u/s 195 - payment was in the nature of consultancy/advisory services - PE in India or not? - payment made to the Star Consortium Pvt. Ltd., Singapore as Fees for Technical Services u/s 9(1)(vii) and Article 12 of the India Singapore-DTAA, as the services provided by foreign entity was consultancy in nature - HELD THAT:- During the year both the assessee as well as the recipient were non-resident. The assessee was a Director with 50% share holding in SCPL of Singapore. However, SCPL was a company registered in Singapore, a non-resident and the director was also a non-resident. Merely because for some period the director may have been resident in India, it cannot be said that the key management decisions took place in India so as to hold that M/s. SCPL had a PE in India and the assessee was required to deduct TDS on the payment made to it. Assessee was rendering advisory services to DOTEPL through The Safe Consortium and was working as Investment Banker and Strategic Management Consultant and The Safe Consortium was appointed as advisors and facilitators for raising funds for DOTEPL. TSC had further appointed SCPL Singapore as its advisor for raising funds for DOTEPL and advisory fee of 0.75% of the amount of fund raised for DOTEPL was to be paid to the advisor SCPL by the mandator TSC. Thus, by no stretch of imagination the payment of advisory fee could be termed as a royalty or fee for technical services as it was in the nature of commission for the financial services rendered. It has been stated that no disallowance u/s 40(a)(i) was made in the initial assessment order and the subsequent proceedings initiated in response to the notice u/s 263 of the Act were quashed by the Tribunal, thereby rendering the consequential assessment order made to give effect to the finding in order u/s 263 of the Act as non-est. The income of the non-resident accrued outside India. It is not comprehensible as to on what basis the Ld. AO has apportioned the income in the ratio of 55% to 45% between India and Singapore and allowed 10% as expenses. Thus, in the absence of a PE, the income was neither liable to be assessed as business profit of the payee nor as royalty as per the finding of the Ld. CIT(A) and therefore, the finding of the Ld. CIT(A) in this regard is upheld and the appeal of the revenue is dismissed.
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2025 (2) TMI 42
Penalty proceedings u/s. 271(1)(c) - Defective notice - Non specification of clear charge - AO held that the assessee had offered incorrect amount of short term capital gains on the transactions in securities in the return of income and added a sum as short term capital gains which were not offered to tax by the assessee - HELD THAT:- From the contents of the notice initiating penalty proceedings as well as order levying penalty u/s. 271(1)(c) of the Act on assessee, we observe that the AO has not given clear cut classification as to whether the penalty has been levied for concealment of income or furnishing inaccurate particulars of income . It is a well settled principle that the AO has to give an absolute and categorical findings while levying the penalty u/s. 271(1)(c) of the Act, whether the same is being levied for concealment of income or furnishing inaccurate particulars of income . Thus, in the absence of specific findings whether the penalty has been levied for concealment of income or furnishing inaccurate particulars of income the penalty order is liable to be set-aside. Appeal of the assessee is allowed.
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2025 (2) TMI 41
Levy of penalty u/s. 270A - under-reporting of income which is in consequences of mis-reporting of income - Assessee argued AO is not sure as to whether the penalty have been levied for under-reporting of income or mis-reporting of income - HELD THAT:- It is a well settled law that penalty cannot be sustained u/s. 270A of the Act, without specifying any specific limbs of the section 270A of the Act under which the penalty is being levied. From the contents of the notice for initiating penalty proceedings as well as appellate order u/s. 270A AO has no clarity under which specific limb of section 270A the AO is proceeding to levy penalty. Therefore, in view of the well settled Judicial precedents on the subject as cited above and in the absence of any clarity on specific limb u/s. 270A of the Act, where the penalty have been levied on the assessee, in our considered view penalty u/s. 270A of the Act is not liable to be sustained. Also AO has not specified which specific offence under section 270A(9) of the Act has been committed by the assessee. Addition made on account of late payment of Employees Contribution to PF ESI - As observe from the record that disallowance regarding late deposits of Employees Contribution towards PF ESI were adequately disclosed in Form No.3CD(Tax Audit Report). In the instant case, the return of income for the impugned year i.e AY 2017-18 was filed on 30.11.2017 and Assessment Order was passed on 28.11.2019, therefore, at the time of passing of the Assessment Order, issue of delayed payment towards PF ESI was debatable issue and issue got settled fully after passing of order in the case of Checkmate Services private limited [ 2022 (10) TMI 617 - SUPREME COURT] Therefore, in our considered view, the case of the assessee does not fall under any of the provisions of section 270A (9) of the Act viz. (a) misrepresentation of suppression of facts and (c) claim of expenditure not substantiated by any evidence. Disallowance of non-deduction of TDS interest on car loan payable - The details regarding non-deduction of tax from the interest were furnished in Form 3CD (Tax Audit Report) at the time of filing of return of income and the Ld. Counsel for the assessee submitted before us that the assessee had not made disallowance in anticipation of submission of certificate u/s. 201 of the Act from the deductee. Accordingly, even with respect to second disallowance made by the AO provision of section 270A(9)(a) or 270A(a)(c) of the Act are not attracted. Decided in favour of assessee.
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2025 (2) TMI 40
Validity of reassessment proceedings - reason to believe to have escaped assessment - addition u/s 41(1) v/s credits in bank account are unexplained - as argued AO exceeded his jurisdiction by making additions unrelated to the reasons for reopening the assessment - HELD THAT:- There is material substance advanced on behalf of the assessee that notice u/s 148 of the Act was related with credits in bank account are unexplained as its source is unascertainable whereas addition made u/s 41(1) of the Act on account of remission / cessation of liability in form of creditors was never been an issue forming part of reasons recorded u/s 148 (2) of the Act and addition in question made on an issue which is quite different from the issue on which case was re-opened u/s 148 of the Act. Thus, for every new issue coming before the Ld. AO during the proceedings of assessment or re-assessment of escaped income and which he intends to take into account, it is required to issue fresh notice u/s 148 but in this case fresh notice u/s 148 of the Act as aforesaid containing fact regarding remission/ cessation of liability does not appears to be issued and if it is crystal clear that the Ld. AO without issuance of fresh notice required by law, on issue made alleged addition u/s 41(1) of the Act, which was not included in the reasons to believe as recorded for initiation of proceedings and the notice, is quite unwarranted by law and against the mandatory provisions and consequently addition in question is not sustainable in the eye of law. In conclusion ground no. 4 and 5 deserve to be allowed.
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2025 (2) TMI 39
Addition on account of unexplained investments u/s 69 - HELD THAT:- All payments were made through banking channel right from the F.Y. 2012-13 to A.Y. 2018-19. Therefore, conclusion drawn by the ld. AO is against the facts on record available in the assessment folder as all the materials were before the AO. CIT (A) has not appreciated these facts correctly and simply confirmed the addition made by the ld. AO. We note that the AO has wrongly made the addition and similar ld. CIT (A) affirmed the same. Addition u/s 56(2)(x) - difference between the stamp valuation and set forth value - HELD THAT:- The first payment of the flat was made on 12th June, 2012 and all the payments were completed till the F.Y. 2018-19. So far as the observation of the AO is concerned that the difference between the purchase consideration and the value as per stamp valuation authority is to be taxed at 56(2)(x), we note that the provisions of clause (x) of sub section (2) of sub section 56 were inserted by Finance Act 2017, with effect from 01.04.2017 and was not applicable because this flat was brought prior to that. As per the first proviso to section 56(2)(x), it is stated that when the date of agreement fixing the amount for transfer of immovable property and the date of registration are not same. The stamp valuation on the date of registration may be taken for the purpose of this sub clause but in any case, the insertion of this clause was made by the Finance Act, 2017 and was not applicable when the flat was bought. So far as the provisions of Section 56(2)(vii)(b) of the Act are concerned, the clause b was inserted by finance act 2015 with effect from 01.04.2014, which provides that in case consideration which is less than the stamp value of the property by an amount exceeding 50,000/- than the stamp value of such property as exceeded amount shall be added to the income of the assessee. The proviso provides that the stamp value of the property on the date of agreement may be taken for the purpose of this consideration. Even this clause does not apply to the assessee as this is applicable for A.Y. 2014-15 and therefore, these provisions are not applicable to the present transaction which was agreed to in A.Y. 2013-14. We also note that this new charging section brought under statute book is applicable prospectively not retrospectively.Decided in favour of assessee.
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2025 (2) TMI 38
Disallowance u/s 14A r.w.r. 8D - expenditure incurred for the purposes of earning exempt income - HELD THAT:- We noted that this issue is covered by the decision of Joint Investment India Private Limited [ 2015 (3) TMI 155 - DELHI HIGH COURT] wherein it is held that disallowance is be restricted to the extent of exempt income earned by assessee. Even this view is held in the case of State Bank of Patiala[ 2018 (11) TMI 1565 - SC ORDER] - Hence, we direct the AO to restrict the addition at Rs. 5,631/- only. This issue of assessee s appeal is partly allowed. TDS u/s 194A - Disallowance u/s 40(a)(ia) - disallowance of expenses made representing interest paid by assessee without deduction of TDS - HELD THAT:- We are of the view that assessee has to file the prescribed certificate as prescribed in the proviso to section 40(a)(ia) of the Act and also will file the details whether the recipient parties have disclosed the interest income in their respective returns of income earned in term of law. Accordingly, we restore this issue back to the file of the AO. Accordingly, this issue of this appeal is allowed for statistical purposes. Unexplained cash credit u/s 68 - bogus share capital - HELD THAT:- We are of the view that assessee is unable to prove the identity, genuineness of transaction and creditworthiness of First Hi Fin Ltd. Hence, we confirm the order of Ld CIT(A) and dismissed this issue of assessee s appeal.
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2025 (2) TMI 37
Revision u/s 263 - CIT directing the AO to tax the interest on enhanced compensation u/s 56(2)(viii) and 57(iv) - Addition being interest on enhanced compensation on acquisition of agriculture land u/s 28 of Land Acquisition Act, 1894 claimed as exempt in return filled - AO also held that a further amount received by the assessee as enhanced compensation for land acquired under LAA, was exempt from tax u/s 10(37) HELD THAT:- The language in section 56(2)(viii) and 145B(1) are plain, simple and unambiguous and that the correct legal position is that the interest received during the year on enhanced compensation under section 28 of the Land Acquisition Act, 1894 is exigible to tax u/s 56(2)(viii) r.w.s 145B(1). Assessee s claim of the same as exempt u/s 10(37) of the Act is unsustainable as the provisions of section 10(37) deals with compensation only and not interest on compensation or enhanced compensation . Respectfully following the High Court s decisions of Inderjit Sodhi [ 2024 (4) TMI 408 - DELHI HIGH COURT] and Mahender Pal Narang [ 2020 (3) TMI 1115 - PUNJAB AND HARYANA HIGH COURT] we hold that the ld. PCIT order to recompute the interest on enhanced compensation in accordance with section 56(2)(viii) r.w.s. 145B(1) and allowing deduction u/s 57(iv) needs no interference. Grounds 1 and 2 raised by the assessee are, accordingly, dismissed.
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2025 (2) TMI 36
Exemption u/s 11 - accumulation and application out of accumulations - addition and disallowance of unspent accumulation u/s 11(2) treated as deemed income u/s 11(3) - HELD THAT:- As in the facts of the present case the provisions contained in Section 11(3)(a) read with Section 11(3)(i) of the Act would get attracted since the accumulated amounts were utilised for the mains objects [during the preceding previous years]. INR.23,62,687/- and INR.30,64,418/- were accumulated during the Assessment Year 2007-08 and 2008-09, respectively. On the other hand accumulation of INR.31,68,250/- and INR.21,60,433/- were applied during the Assessment Year 2009-10 and 2011-12, respectively and therefore, the aforesaid amounts could have been brought to tax in the hands of the Appellant during the Assessment Year 2009-10 and 2011-12, respectively, as per the provisions contained in Section 11(3)(a) read with Section 11(3)(i) of the Act as interpreted in Escorts Heart Institute Research Centre[ 2012 (12) TMI 611 - DELHI HIGH COURT] We set aside the order passed by the CIT(A) and direct the Assessing Officer to reduce the addition by the aggregate amount of accumulated income utilized in the Assessment Years 2009-2010 and 2011-2012 after carrying out necessary verification of the assessment records for the Assessment Years 2009-10 and 2011-12.
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2025 (2) TMI 35
Allegation of Bogus transactions through commodity trading - Addition on account of Client Code Modification relating to commodity trading - CIT(A) deleted addition - HELD THAT:- Report of the SFIO and DDIT (Inv.), which are the cornerstone of reopening of assessment u/s. 147 of the Act for all the three years, which viz, A.Ys 2012-13, 2013-14 and 2014-15 do not in any manner establish or refer to any wrong doing or illegal activity of the assessee either through client code modification or in any other mode or manner. AO has further observed that through cogent evidence, the assessee was able to establish that its own funds were utilized to conduct transactions on NSEL platform and the profits from such transactions have already been offered to tax. Thus, no valid reason to interfere with the decision of FAA qua the deletion of additions made on account of Client Code Modification. Grounds are dismissed.
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2025 (2) TMI 34
Revision u/s 263 - addition u/s 68 - HELD THAT:- Tribunal, thereafter, vide its order passed in [ 2022 (10) TMI 1131 - ITAT RAIPUR] allowed the appeal of the assessee company and set-aside the order passed by the Pr. CIT u/s. 263 and restored the order passed by the A.O u/s. 143(3) of the Act wherein as difficult to agree with the DR that there was no enquiry conducted by the AO by putting any specific question to the assessee as to the treatment given to the interest. As a matter of fact, the reason for the difference in the amount as per Form 26AS and ITR was due to the interest received from the banks that was duly accounted and considered in the financial statements of the company and was adjusted against the project expenditure. The very fact that pursuant to the scrutiny when the AO proposed charging the interest amount received to tax, the very same explanation was offered by the assessee and was accepted by the AO. We are, therefore, of the considered opinion that it is not a case of no enquiry and as a matter of fact, it was specifically brought to the notice of the AO that the interest earned was adjusted against the project expenditure We find substance in the claim of the AR that now when the very genesis of the impugned addition made by the A.O u/s. 143(3) r.w.s. 263 of the Act, dated 28.12.2018 i.e. the order passed by the Pr. CIT u/s. 263 of the Act, dated 30.03.2018 had been quashed and does no more survive, therefore, the impugned order passed by the A.O u/s. 143(3) r.w.s. 263 has to meet the same fate and is liable to be quashed. We, thus, in terms of the aforesaid observations, set-aside the order of the CIT(Appeals) and vacate the addition made by the A.O vide his order passed u/s. 143(3) r.w.s. 263.
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2025 (2) TMI 33
Denial of Foreign Tax Credit (FTC) u/s 90/90A - required form no. 67 was not filed along with the ITR within the time allowed as per provision of section 139(1) - HELD THAT:- As relying on Rajesh Kumar Lakhran [ 2024 (2) TMI 1426 - ITAT JAIPUR ] and Juan Miguel Guerrero Ferrer [ 2023 (9) TMI 1401 - ITAT JAIPUR ] assessee is entitled for the credit of FTC under section 90 of the Act as claim of the assessee is duly supported by the ITR filed and the Form no. 67 though late. Appeal filed by the assessee is allowed.
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2025 (2) TMI 32
Capital gain computation - Consideration received for relinquishment of its right - Determination of sale consideration determined by AO - HELD THAT:- There was no mention in the resolutions that the payments as agreed upon will be made after adjusting the outstanding loan advanced by the members to the society. In the ansence of any stipulation in the resolutions that the outstanding loan of the members would be adjusted from the payments as agreed upon, the contention of the assessee that only the net amount (after adjusting the outstanding loan) should be considered as the sale consideration, can t be accepted. The resolutions made it explicitly clear that the total amount of Rs. 10,85,28,620/- was the consideration received by the assessee for relinquishment of its rights in the lands in favour of the societies. Accordingly, the AO is directed to take the amount of Rs. 10,85,28,620/- as the sale consideration for computation of capital gains on the relinquishment of its right in lands, in favour of the societies. The ground taken by the assessee is parly allowed. Deduction u/s.54F - AO had disallowed the claim of the assessee for the reason that the purchase of the new asset was not completed within two years from the date of transfer to the original asset and neither the construction of the new asset was completed within 3 years from the date of transfer, which was upheld by the Ld. CIT(A) - HELD THAT:- Hon ble Karnataka High Court in the case of Smt. B. S. Shanthakumari [ 2015 (8) TMI 274 - KARNATAKA HIGH COURT] held that once it was established that the assessee had invested entire net consideration in construction of residential house within the stipulated period, it would meet the requirement of Section 54F of the Act and the assessee would be entitled to get benefit of Section 54F Revenue was not correct in disallowing the claim for deduction u/s.54F of the Actonly on the ground that the construction of the house was not completed within the stipulated period of 3 years from the date of transfer of the original asset. Claim for deduction u/s.54F also included legal charges which was not eligible for deduction - We find that other payments were on account of stamp paper and registration fee, extra work, legal charges etc. For the extra work payment a separate agreement dated 26th October, 2018 was entered into by the assessee. For the payment in respect of legal charges no agreement has been brought on record. The advance maintenance charges deposited by the assessee are recurring in nature for the period post occupation of the property and can t be included in the cost of acquisition of the property. Payment for stamp and registration charges is required to be made to the Govt. Authority at the time of registration of the property. No payment for stamp duty and registration charge could have been made when the flat had not yet been constructed and property not yet registered. AO is directed to verify the correctness of the deduction u/s.54F as claimed by the assessee. The ground taken by the assessee is partly allowed. Disallowance of interest expenses u/s.57 - As explained by the assessee, this amount was advanced to the societies for purchase of land. Therefore, the interest in respect of these loans to the societies has to be treated as capital expenditure, which was not eligible for deduction u/s.57 - Revenue was correct in disallowing the proportionate interest expenditure. However, certain amount of loan taken from Kothari Finance was repaid during the year. Therefore, the AO was not correct in disallowing the interest on the basis of opening balance. The AO is directed to rework the disallowance by taking into account the closing balance of loan taken from Kothari Finance as well as the closing balance of the loans utilized for earning of interest income. Ground taken by the assessee is partly allowed for statistical purposes.
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2025 (2) TMI 31
Unexplained Credit taxable u/s 68 - Bogus LTCG - Characterization of the long-term capital gain from the sale of shares as unexplained cash credit - HELD THAT:- The transfer of shares has been recorded by the Company from Mr. Vijay Pamnani to assessee and assessee to Mr. Suresh Galani . This is evident from the photocopy of share certificates placed before us . Therefore, it cannot also be the case that Capital gain of Mr. Vijay Pamnani is transferred in the name of the assessee without transfer of assets by the son of the assessee. It is the finding of the lower authorities that Gift deed is executed by the son of the assessee in favour of assessee a on a stamp paper of Rs 100/- purchased from same stamp vendor. This finding is in total ignorance of the fact that on Gift of shares assessee has paid stamp duty of Rs 75,000/- which is also claimed by the assessee as cost . In these facts , purchase of stamp paper from same stamp vendor does not have any relevance. Thus, assessee has shown how shares are acquired by her i.e., by gift from his son, to whom she has sold those shares to Mr. Suresh Galani, details of transfers also shown endorsed on the share certificates, consideration has also passed through, the share price of the company at which those shares are sold is also fair. No reason to sustain the appellate of the ld. CIT (A) that long term capital gain earned by the assessee is unexplained credit chargeable to tax u/s 68 - Assessee has correctly offered long term capital on the sale of shares to Mr. Suresh Galani. Accordingly Ground no 1 of appeal is allowed. Deduction u/s 54F - In case of PCIT V Vembu Vaidyanathan [ 2019 (1) TMI 1361 - BOMBAY HIGH COURT] has held that even letter of allotment also satisfies the requirement of section 54F is allowable The assessee has acquired 60 % of the existing property. The decision of Honourable Supreme court in the case of Suraj Lamp Industries [ 2011 (10) TMI 8 - SUPREME COURT] also cannot apply to the fact of the case as assessee has not entered into any sale deed and has not registered it. Assessee deserves the benefit of section 54F of The Act. Deduction of stamp duty on sale of shares while computing capital gains - We have not been explained why the Transferor assessee would pay stamp duty when the buyer is Mr. Suresh Galani . If it is so, under which section this deduction is allowable. If the stamp duty is paid by the assessee on the Gift of shares received, then obviously it become the cost of acquisition of those shares and assessee is eligible for deduction of the same. On verification of the form of stamp duty paid of Rs 75,000/- , it is paid on 5/2/2015 where the shares are transferred by the assessee on 06/02/2015. As there is no clarity on which transaction assessee has paid stamp duty of Rs 75,000/-, we restore Ground no 3 back to the file of the ld. AO with direction to the assessee to substantiate this claim before ld. AO.
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Customs
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2025 (2) TMI 30
Absolute Confiscation of gold jewelry carried by a petitioner, who was intercepted at the airport upon returning from Dubai - HELD THAT:- While dealing with an identical situation, this Court has passed a detailed order in N. KALIYAMOORTHY [ 2025 (1) TMI 1465 - MADRAS HIGH COURT ] where it was held that Absolute confiscation of the imported quantity of gold in the hands of each of these petitioners cannot be ordered to be absolutely confiscated under Section 125 of the Customs Act, 1962. The Impugned Order passed by the fourth respondent affirming the Orders of the lower Authority is liable to be interfered with. The objection with the Order passed by the fourth respondent sitting at Mumbai also cannot be countenanced as the Order-in-Original No.356/2015-2016-AIRPORT made in F.No.O.S.No.793/2015-AIR dated 23.11.2015 passed by the second respondent was the subject matter of the Appeal before the third respondent, whereby, the third respondent vide Order-in-Appeal C.Cus-I Nos.263 to 265 of 2016 dated 27.06.2016 confirmed the view of the second respondent. The cause of action has arisen within the jurisdiction of this Court. Therefore, the objection of the respondents before this Court has to be overruled. Conclusion - i) The goods not declared at customs and not complying with import conditions can be treated as prohibited and subject to confiscation. ii) The impugned order of absolute confiscation set aside and case remitted back to the customs authority to allow for the redemption of the gold upon payment of a redemption fine. Petition allowed.
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2025 (2) TMI 29
Revocation of the Customs Broker License - forefeiture of security deposit - levy of penalty - failure to comply with the obligations under Regulation 10(d) and Regulation 10(n) of the Customs Brokers Licensing Regulations (CBLR), 2018 - HELD THAT:- In the impugned order at page 525 it has been observed that it is expected of a man of prudence to know the exporter or importer and rely on undisputed Government documents available in public domain. However, it does not imply that in the stated facts of present case, a CB can take such documents from a third party and also aver that compliance under Regulation 10 (d) (n) be taken as complete. If the action of CB in taking documents KYC from third party is justified then it will be contrary to the purpose of CBLR, 2018 and also Section 146 and 147 of Customs Act, 1962. After taking into consideration the inquiry report, the officer concerned while passing the impugned order came to the conclusion that mere reference to documents handed over by Shri Lokesh Bansal and Mr. Tarun Jain without knowing the exporters does not constitute diligence which was required for verification of KYC documents. The officer concerned in the impugned order came to the conclusion that it is evident that Customs Broker failed to act in accordance with their obligation as mentioned in Regulation 10(d) 10 (n) of the Customs Broker Licensing Regulations, 2018 as they did not verify the address, or verified it and found it to be non-existing but did not report the same. It has been a serious lapse on part of the Customs brokers, which resulted in loss of revenue. Inquiry Officer has confirmed the contravention of said regulation by the CB. Thus, the CB has contravened the provisions of Regulations 10 (d) and 10 (n) of CBLR, 2018. Therefore, it is clear that the Additional Commissioner of Customs Nhava Sheva of Order-In-Original dated 29.11.2023 was not having jurisdiction to pass any order regarding violation of relevant provisions of CBLR, 2018 by the appellant. Therefore, if any observation was made by the Additional Commissioner of Customs Nhava Sheva of Order-In-Original dated 29.11.2023 regarding violation or non-violation of relevant provisions of CBLR it has no effect what so ever being without jurisdiction. Conclusion - It is evident that Customs Broker failed to act in accordance with their obligation as mentioned in Regulation 10(d) 10(n) of the Customs Broker Licensing Regulations, 2018 as they did not verify the address, or verified it and found it to be non-existing but did not report the same. The impugned order has been passed by the officer concerned after proper analysis of the facts of the present case and after proper appreciation of the relevant provisions of CBLR and therefore, the impugned order is liable to be confirmed and the appeal appears to be without any merit and therefore, it is liable to be dismissed. Appeal dismissed.
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2025 (2) TMI 28
Classification of imported goods - Search Lights - to be classified under CTH 85131090 or under CTH 94054010? - mis-declaration of goods leading to short payment of duty - invocation of the extended period of limitation - Confiscation - penalty - HELD THAT:- The Searchlights are specifically mentioned under CTH 94054010, whereas CTH 85131090 covers portable lamps designed to function by their own source of energy such as dry batteries accumulator magnetos. As per the basic principle, the most specific description has to be preferred to a heading providing a mere general description. The classification as claimed by the appellant under CTH 85131090 is a residuary entry as compared to CTH 94054010, which is a specific entryand hence, the imported goods i.e. searchlights have been rightly classified under the latter heading. It is a settled principle of law that classification has to be determined according to the terms of the Headings, Section Notes, Chapter Notes and General Rules of Interpretation and the HSN Explanatory Notes. Reference is invited to the provisions of Rule 3 of GRI providing that when the goods are prima facie classifiable under two or more headings, classification shall be affected by referring to the heading, which provides the most specific description than the heading providing mere general description. In that view of the matter, the Authorities below rightly classified the goods in terms of Rule 3(a) of GRI under CTH 94054010. In the present case, show cause notice was issued on the ground that the goods were more appropriately classifiable under CTH 94054010. The issue, therefore, basically pertains to classification of the impugned goods, and it is a settled principle of law that mis-classification of a product is no ground to confiscate the goods or to impose penalty. The justification for penal action is maintainable only when element of fraud collusion, willfull statement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of duty is present, which in the present case is not so. The imported Searchlights were mis-classified under CTH 85131090 and, therefore, the appellant is liable to pay short levy of duty amounting to Rs.15,89,326/- with interest. The order of confiscation and penalty is set aside. Appeal allowed.
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2025 (2) TMI 27
Jurisdiction - exercise of proper discretion by Commissioner (Appeals) u/s 128A(3) of the Customs Act, 1962, in remanding the case to the Adjudicating Authority for fresh adjudication - violation of principles of natural justice - HELD THAT:- The impugned order has been passed in accordance with the provisions of Section 128A (3) of the Customs Act, 1962 and no illegality or irregularity has been committed by the Commissioner (Appeals) in passing the impugned order as the Order-In-Original was passed by the Adjudicating Authority without following the principles of natural justice. The Commissioner (Appeals) was duty bound under Section 128A (3) of the Customs Act to refer the matter back to the Adjudicating Authority, with direction for fresh adjudication. The learned Counsel for the appellant has vehemently argued that the Order-In-Original passed by the Adjudicating Authority in which reliance was placed on the Standing Order No. 6/2022 dated 04.07.2022 but such action was manifestly arbitrary, illegal and baseless in as much as the Adjudicating Authority had ignored the fact that the standing order in para 4 had excluded certain category of Bills of Entry including Bills of Entry where the importer is invoking Section 149 or Section 154 of the Customs Act. In this context we are of the view that in this appeal the order dated 19.09.2023 is not under challenge. This appeal is directed against the order of Commissioner (Appeals) dated 16.07.2024 which seems to be proper and in accordance with law. Conclusion - The Commissioner (Appeals) has exercised his discretion in accordance with the relevant provisions of Customs Act and no interference is required in the impugned order. There is no merit in the Appeal and same is liable to be dismissed and impugned order is liable to be confirmed. Appeal dismissed.
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2025 (2) TMI 26
Demand of duty - appellants who imported/cleared goods without payment of duty by using DEPB scrips which were later found to be obtained by fraudulent means - time limitation - penalty u/s 114A of the Customs Act, 1962. HELD THAT:- It is an admitted fact that the DEPB licenses used by the appellants were obtained fraudulently by M/s. Bilwa Labs by mis-declaring Potassium Chloride (Muriate of Potash) as Industrial Salt. In similar set of facts this Tribunal in M/S. ITC FILTRONA LIMITED (PRESENTLY KNOWN AS M/S. ITC ESSENTRA LIMITED) VERSUS THE COMMISSIONER OF CUSTOMS, BANGALORE [ 2024 (10) TMI 577 - CESTAT BANGALORE] has held that There are no reason to interfere with the impugned order as far as the demand of duty is concerned. However, since the appellants were not aware of the fact that the goods imported by them were based on the fraudulently obtained DEPB scrips, the question of imposing penalty on them does not arise. Penalty - HELD THAT:- The demand of duty along with interest is upheld and for the reasons that at the time of import, the appellant was not aware of the fraudulently obtained DEPB licenses, the question of imposing penalty does not arise, hence penalty set aside. Appeal allowed in part.
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2025 (2) TMI 25
Re-classification of the goods - levy of differential customs duty along with confiscation, redemption fine and penalty - non-levy of mandatory penalty u/s 114A of the Customs Act, 1962 - misdeclaration of imported 100% Polyester Knitted Fabric - to be classified under CTH 60059000 or under CTI 60019200? - admissibility of statements - HELD THAT:- The law on the admissibility of the statements recorded under Section 108 of the Act has been well established over the years. Reference is invited to the decision of the Apex Court in Surjeet Singh Chhabra versus Union of India, [ 1996 (10) TMI 106 - SUPREME COURT] , holding that the customs officers are not police officers and therefore the confession is an admission and binds the petitioner. Similar view was taken by the Apex Court in Assistant Collector of Central Excise, Rajamundri Versus Duncan Agro Industries Ltd. [ 2000 (8) TMI 87 - SUPREME COURT] observing that a statement made by a witness or a party under Section 14 of Central Excise Act, 1944 or section 108 of Customs Act, 1962 is ex-facie admissible in evidence to sustain penalty. The proprietor of the firm having categorically accepted the test report and paid the entire duty amount is a clear admission on his part - there is no iota of doubt that the appellant had mis-declared the classification of the goods in question as 100% Polyester Knitted Fabric and classified the same under chapter heading 6005 9000, which actually covers warp knit fabrics . The matter was listed on 7.01.2025, when the applicant had once again chosen not to appear. Considering that the appeal is of the year 2010, we heard the learned Authorized Representative and after perusing the record had reserved the order, granting two weeks time to file written submissions, if any. Conclusion - Since there is apparent mis-declaration in the description of the goods as well as the value thereof, the goods are liable to be confiscated under section 111(m) of the Act along with redemption fine. On the same reasoning and analogy duty is recoverable under the proviso to subsection (1) of section 28 of the Act. Consequently, the differential customs duty calculated by the adjudicating authority in respect of the two bills of entry is affirmed. With regard to imposition of penalty under section 114A of the Act, the same needs to be upheld as the appellant had resorted to suppression of facts resulting in evasion of duty. Appeal disposed off.
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2025 (2) TMI 24
Valuation of imported goods - enhancement of the declared value of the imported goods - old and used worn clothing articles classifiable under Tariff Item No.63090000 of the First Schedule of the Act - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI] , wherein this Tribunal has observed the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. In the light of the admitted failure to comply with the licensing requirements, we uphold the confiscation of the goods under Section 111(d) of Customs Act, 1962. However, it is our opinion that the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5%. Conclusion - The redemption fine and penalty imposed on the respondent to the tune of 10% 5% respectively on the assessed value is sufficient. Therefore, the redemption fine and penalty confirmed by the ld.Commissioner (Appeals) are sufficient to meet the end of justice. There are no infirmity in the impugned order and the same is upheld - appeals filed by the Revenue are dismissed.
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2025 (2) TMI 23
Rejection of classification of the goods declared by the importer - Polyester bed sheet - classifiable under CTH 5407 or not - confiscation of the goods imported - levy of penalty - HELD THAT:- An identical issue had come up for consideration before this Tribunal in the case of COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS M/S. SILPHA FINVEST P. LIMITED [ 2024 (3) TMI 246 - CESTAT KOLKATA] , wherein it has been observed that We admit that the articles which have been imported by the respondent are woven fabric of synthetic filament yarn, but they are Bed spreads / Bed sheets and quantity of the goods in numbers has been described by the respondent. In the circumstances, the merit classification of the impugned goods is under CTH 6304 of the Customs Tariff Act. Therefore, we classify the impugned goods as Bed spreads (Bed sheets) classifiable under CTH 6304 of the Customs Tariff Act. Conclusion - The appellant had correctly classified the goods under CTH 6304, making the confiscation and duty demands unsustainable. The demands confirmed against the appellant are not sustainable. Consequently, no penalty is imposable on the appellants - Appeal allowed.
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2025 (2) TMI 22
Revocation of Customs Broker License of the appellant - forfeiture of the whole amount of security deposit - levy of penalty - rent agreement submitted by the appellant was forged - violation of regulation 10 (k) of the Customs Brokers Licensing Regulations 2018 - HELD THAT:- A perusal of the impugned order shows that much emphasis has been placed by the Commissioner on the rent agreement submitted by the appellant and more importantly the fact that the appellant even requested the department not to provide copies of the documents to the landlord. This, according to the Commissioner, raises questions about the conduct of a customs broker. According to the Commissioner, a customs broker should not shift the blame on the landlord, when the customs broker himself is a party to the rent agreement. The Commissioner has presumed that the rent agreement is a forged document and on that basis has recorded this finding. The appellant had been repeatedly informing the department that he has a serious dispute with the landlord, but the Commissioner has treated this rent agreement as a forged document only for the reason that the landlord denied having signed it. The Commissioner failed to appreciate that the premises from where the customs broker was operating were mentioned in the application submitted for grant of the license in the year 1991 and the Customs Broker License of the appellant had been renewed from time to time. The Commissioner could have caused a physical verification of the place of business of the appellant instead of merely relying upon the version of the landlord that he had not signed the rent agreement. The Customs Broker License of the appellant, therefore, could not have been revoked taking aid of the provisions of regulation 10(k)of the 2018 Regulations. The forfeiture of the security amount and imposition of penalty of Rs. 50,000/- also cannot be sustained. Conclusion - Regulation 10(k) should not be used to address issues unrelated to record-keeping, such as the authenticity of a business address or rent agreement. Appeal allowed.
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Corporate Laws
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2025 (2) TMI 21
Execution and compliance with the exit formula devised by the Company Law Board (CLB) for foreign investors ORE Holdings and Nandakumar Athappan to exit from a joint venture with Indian company CEPL - HELD THAT:- It was very obvious from the strategy of KCP and his group of companies who have been litigating since CLB took cognizance of the controversy, that they were keen to knock off the money invested by ORE and Athappan, but when KCP strategies were halted by the CLB vide its Order dated 13.08.2008, he appeared to have entertained a belief that by reading the exit-formula the way he and his group of companies had since chosen to read, they could deflect the focus from their need to abide by the directions of the CLB and bypass the exit-route prescribed for the self- preservation of both. This perhaps might have been the reason why the team-petitioner have chosen not to challenge the Order prescribing the exit- route for the foreign investors of the CEPL to quit from the company. The CLB contemplated on reduction in the share capital when it pronounced its set of directions. Does not KCP, the captain of team-petitioner know it? He does. He knew it. His team s think-tank knew it. But he came to the wicket not to play cricket, a game considered as synonymous with fairness associated with the gentlemen who played it. Did KCP shrewdly tried to manipulate an argument to equate the surrender of shares for achieving reduction of share capital as buy-back of shares? Indeed, the CLB in the operative portion of its Order dated 13.08.2008 has underscored that its direction to CEPL to pay ORE and Athappan in cash or in kind will be the consideration for reduction of share capital, and has not described it as consideration for the purchase of shares from its foreign investors. If the present petition is keenly observed KCP finds himself on an unplayable and slippery wicket. He even struggles for a cause of action. Therefore, he has laid his hands on a clarificatory note of the RBI, dated 28.08.2020, which decides nothing but only affirms its earlier decision dated 08.06.2015, permitting sale of 17.15 acres of VML land to the nominee of ORE. And, when VML chose to withdraw petition which it had laid before the Delhi High Court, challenging the proceedings of the RBI dated 08.06.2015, this Order became final. And necessarily what has been done pursuant to it has also attained finality, thanks to the Order of the Supreme Court in the batch of SLP filed against the Order of this Court in C.A 5 to 10 of 2016. What remains to be done is the repatriation of sale proceeds from India, for which permission has been sought from the RBI. When KCP valued the shares of ORE and Athappan, it was not even 1% of the value which CEPL was under an obligation to pay them. KCP and his team s game-plan is very evident, to unravel which not even the IQ required to solve a beginners sudoku is necessary. If he had gone to the CLB or the Court to seek clarification on the point, he knew what to expect. It is hence he tried to circumnavigate the CLB and the Court and approached RBI and even the PMO, faking a grievance where there is none, and avoided seeking clarification whether share-pricing could be telescoped into the clause in the Order of the CLB directing payment of money invested by ORE and Athappan. Conclusion - The CLB s exit formula did not constitute a buy-back of shares, as it aimed to return the invested sums and reduce share capital. The legality of the sale of VML property to ORE s nominee affirmed, as it complied with FEMA regulations and was executed with necessary permissions. Petition dismissed.
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2025 (2) TMI 20
Levy of penalty u/s 162 of the Companies Act, 1956 - failure to file the Board s Report for the financial years 2010-11 and 2013-14 - continuing offence or not - Compounding of offences under Section 441 of the Companies Act, 2013 for the offences made under Section 217 read with Section 220 of the Companies Act, 1956 - HELD THAT:- It is an admitted fact that the Appellants 1, 2 3 have failed to file Board Report with the financial statement for the financial years 2010-11 and 2013-14 respectively within the stipulated time and hence the offences have been committed. They have to be taken as a continuing offence. Penalty for Non-filing of Board Report for financial year ending on 31.03.2011 will be determined as per the provisions of Section 220 r/w Section 162 of the Companies Act, 1956 which is not disputed by either party. The Appellant has contended that the mistake is inadvertent, that he himself has found out the mistake and has sought to rectify it by seeking composition of the offence, that he has failed to file the Board Report with ROC only, and that it has been circulated to shareholders within the due date, that the omission is not prejudicial to the interest of members, creditors, regulators or other stakeholders and that the content of the Board Reports was such that there is nothing to hide - In view of absence of any assertion to the contrary by the Respondent, the above contention is acceptable. Conclusion - The offences were committed for the financial year 2010-11 and financial year 2013-14 under Section 220 of the Companies Act, 1956 only and that penalty levied for compounding appears excessive in view of orders issued by the same Ld. Tribunal and other Tribunals in similar cases and therefore penalty should be levied at the rate of Rs.50 per day for every day during which the default continued, both for the company and for the directors. Appeal allowed.
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Insolvency & Bankruptcy
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2025 (2) TMI 71
Admission of section 7 application - Validity of the amended default date cited by the respondent and the applicability of Section 10A of IBC - change of date of default after filing the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) - determination of date of default. Whether the date of default can be changed after filing the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC)? - HELD THAT:- The Corporate Debtor had availed various credit facilities from Bharat Cooperative Bank through successive sanction letters dated 21.03.2017, 14.08.2018, and 11.03.2020. Despite these agreements and restructuring efforts, the CD failed to meet payment deadlines, resulting in the debt claimed by ASREC - ASREC (India) Limited/R-1 initially filed its Section 7 petition stating a default date of 31.10.2020, which was later amended to 02.08.2019. The tribunal permitted this amendment on 13.10.2023. The revised date is crucial as it aims to establish that the default occurred outside the Section 10A exemption period (introduced to protect defaults during the COVID-19 pandemic). In Dena Bank v. C. Shivakumar Reddy and Another [ 2021 (8) TMI 315 - SUPREME COURT] Dena Bank sought to initiate insolvency proceedings against a corporate debtor by filing a Section 7 application with the NCLT. The bank s petition was based on the default date related to a Non- Performing Asset (NPA) declared years earlier. Dena Bank later sought to rely on new documents and amendments. Hon ble Supreme Court vide judgement ruled that amendments to the application or submission of additional documents could be made before the final order admitting or rejecting the petition under Section 7. The Court clarified that the law does not explicitly bar such amendments, as they support the IBC s goal of comprehensive debt recovery. However, the Court noted that such amendments should not manipulate the limitation period, but may reflect new acknowledgments of debt or judgments creating a fresh cause of action. In the present case, Unlike Plus Corporate Ventures [ 2022 (10) TMI 1273 - NCLAT ], where the default date clearly fell within the Section 10A period, there is dispute in the current case, over whether the default indeed occurred during this period. The respondent asserts that the default date was August 2, 2019, which predates the Section 10A moratorium period. This amended default date, places the present case outside the protective scope of Section 10A. As such, the ratio of Plus Corporate Ventures to this case does not apply. As per the provisions of the Code, the NCLT is empowered to allow the parties to amend the pleadings before the final orders in CIRP proceedings are passed. This would however be subject to the procedure laid down in the code, as confirmed by Dena Bank (Supra). We have observed that the Adjudication Authority in this case has correctly followed the laid down process and the judgement of Dena bank is applicable squarely in this case. The amendment of date of default has been correctly allowed by AA. Whether the date of default has been correctly identified in this case? - HELD THAT:- It is seen that RBI as the regulatory authority during the inspection of the bank found that compliance with the conditions laid down in the sanction letters were not met and hence the CD was ineligible for restructuring. Accordingly, due to noncompliance the extent sanction letter dated 17.03.2020 became void ab-initio and the same was not tenable in the eyes of law. Banks have to mandatorily comply with the guidelines of the RBI in this regard. Therefore, the date of NPA became 01.11.2019 and the original date of default would be 02.08.2019 i.e., 90 days prior the date of NPA as per RBI IRAC Guidelines. The amended date of 02.08.2019 is also supported by records from the National EGovernance Services Limited (NESL) database, which confirms the occurrence of a default prior to the COVID-19 moratorium period. Section 10A of the IBC was introduced to provide relief to businesses affected by the economic impact of the COVID-19 pandemic by precluding insolvency proceedings for defaults occurring between 25.03.2020 and 25.03.2021. The appellant s reliance on Section 10A is premised on the initial default date of 31.10.2020, which falls within this protected period. However, the respondent s assertion of a default on 02.08.2019 predates the moratorium period, rendering Section 10A inapplicable - The respondent s actions in initiating CIRP are consistent with the objectives of the IBC, which prioritize the resolution of insolvency cases in a time-bound manner to maximize asset value and ensure the equitable treatment of creditors. The evidence presented demonstrates the corporate debtor s prolonged financial incapacity and failure to fulfill its debt obligations despite multiple opportunities to restructure and repay. The respondent, as a financial creditor, is entitled to seek relief under the IBC when defaults are established and substantiated by documentary evidence. Conclusion - The amendment of the default date was correctly allowed and that the default date of 02.08.2019 was valid, rendering the protections under Section 10A inapplicable. There are no infirmity in the impugned order of the Adjudicating Authority - appeal dismissed.
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2025 (2) TMI 19
Interpretation and application of the proviso to Section 31(4) of the Insolvency and Bankruptcy Code (IBC) - whether the requirement for obtaining the Competition Commission of India (CCI) approval prior to the approval of a resolution plan by the Committee of Creditors (CoC) is mandatory or directory? - Locus standi of the appellants - adequacy of data presented for regulatory approvals. As per Hrishikesh Roy, J. and Sudhanshu Dhulia, J. Locus standi - HELD THAT:- Once the CIRP is initiated, the nature of proceedings are no longer in personam but rather become in rem. In light of the same, the expression any person aggrieved in the context of the IBC has been held to be indicative of there being no rigid locus requirements to institute an appeal challenging an order of the NCLT before the NCLAT or an order of the NCLAT before this Court - In the present case, the Appellant as an unsuccessful resolution applicant whose Resolution Plan could have otherwise been approved by the CoC, satisfies the requirement of being aggrieved. This preliminary locus standi objection vis- -vis the Appellant, therefore, does not merit acceptance. Proviso to Section 31(4) IBC - HELD THAT:- The introduction of a proviso, specifically addressing those Resolution Plans with provisions for combination, and the use of the term prior therein, makes it starkly clear that the intent of the legislature was to create an exception. This ensures that in cases containing combination proposals, the approval of the CCI i.e., the regulatory body designated to ensure fair competition in markets and preventing anti-competitive practices, should first be obtained before the same is approved by the CoC. No other provision of the IBC has been pointed out that might suggest otherwise or cause disharmony between the scheme and intent of the IBC or the said proviso to Section 31(4) of the IBC - The above provision makes it abundantly clear that the proviso herein creates an exception for those Resolution Plans that contain provisions for combination. The language used therein appears to be clear, precise straightforward. As such, to understand the legislative intent, the Rule of Plain Reading or literal interpretation should find favour rather than the rule of purposive interpretation as is suggested by the other side. Undertaking Interpretation: Why Literal and not Purposive? - HELD THAT:- The so-called spirit of the law is an indeterminate construct, whose nature renders it subjective and susceptible to varied interpretations depending on the personal predilections of those tasked with interpreting it. Therefore, it is almost unattainable as a definitive guide, especially in the face of or when put in opposition to the unambiguous, clear and plain language used in a particular provision, as is presently the case - Therefore, it is almost necessary for the courts to interpret the provision in its natural sense, as it is through the words used in a provision that legislature expresses its intention. When the language is unambiguous, as in the present matter, the courts must respect its ordinary and natural meaning instead of wandering into the realm of speculation and unintended overreach invoking the so-called spirit of the law . Principle of Plain Meaning - HELD THAT:- In the present case, the use of the word prior at the appropriate place in the proviso besides being direct, clear and unambiguous also does not lead to any absurd consequences. The proviso to Section 31(4) of IBC mentions that the approval to the Resolution Plan from CCI shall be obtained prior to its approval by the CoC - to interpret the specific word to mean that such an approval can be obtained even after and not necessarily prior to the approval by the CoC would amount to reconstructing a statutory provision, which is not permissible. Different Threshold for Combinations - HELD THAT:- The statute provided a different threshold for the CCI s approval as compared to approvals to be received from other statutory and regulatory bodies. Such arrangement appears to be deliberate as the Competition Act contains both specific restrictions with respect to combinations that may lead to an Appreciable Adverse Effect on Competition (AAEC) in the relevant market as well as a detailed procedure of enquiry and scrutiny of such combinations, to prevent such AAEC. Based on the same, the CCI is empowered to either approve, reject or modify such a combination or to mould it in a manner that is in consonance with the scheme of the Competition Act. Harmony between Stipulated Timelines - HELD THAT:- In the present case, even though dilatory tactics are said to have been adopted in the submission of notice under the Combination Regulations, with Form II submitted on 03.11.2022, the combination was approved on 15.03.2023 i.e., within 132 days. The recent Competition (Amendment) Act, 2023 which reduced the timeline for approving combination proposal from 210 days to 150 days and requiring the CCI to give a prima facie opinion on the likelihood of a combination causing an Appreciable Adverse Effect on Competition (AAEC) from 30 days to 15 days, is indicative of the more realistic and shorter timelines that the CCI ordinarily requires for its analysis and decision-making, pertaining to such combination proposals - it is difficult to interpret the provisions disjunctively, as has been done by the NCLAT, in the impugned order dated 18.09.2023. Procedural Lapses under the Competition Act - HELD THAT:- The failure to issue a SCN under Section 29(1) to the Target Company/Corporate Debtor, constitutes a major procedural lapse with significant consequence. The statutory scheme of the Competition Act, as well as the synergistic framework of the IBC, demands that all parties to the combination are afforded a fair opportunity to participate in the decision - making process, particularly when the proposed measures bear a direct and material impact on their interests. The absence of such notice undermines the procedural sanctity of the modification process and renders the resultant approval susceptible to bona fide challenge - The issuance of SCN to both the acquirer and the target under Section 29(1) of the Competition Act in our opinion, is a non negotiable procedural imperative. The interplay between the provisions of the Competition Act and the IBC necessitates a careful balancing of competing interests, underscoring the indispensability of procedural compliance. The lack of participation by the Target in the voluntary modification process, especially where the modification entails the divestment of their assets, vitiates the approval granted by the CCI and warrants remedial intervention by this Court. Discrepancies in Data - HELD THAT:- Transparent and accurate data disclosures are fundamental to the regulatory mechanism. The identified discrepancies compromise the very basis of the CCI s decision-making process. It is imperative to therefore underscore that discrepancies in operational capacity data would strike at the very root of the regulatory mechanism. While we do not intend to embark on a fact-finding expedition afresh, the prima facie inconsistencies in the submitted data ought to have been examined with greater care by the NCLAT. But this was not done. Consequently, the conditional approval should have been revoked, especially in light of the CCI s express mention in its order (dated 15.03.2023) that the order may be revoked if the information provided by the acquirer is found to be incorrect at any particular time. The CoC shall reconsider the Appellant s Resolution Plan and any other Resolution Plans which possessed the requisite CCI approval as on 28.10.2022 i.e., the date on which the CoC voted upon the submitted Resolution Plans. As per S.V.N. Bhatti J. Since it is the commercial wisdom of the CoC that is to decide on whether or not to rehabilitate the corporate debtor by means of acceptance of a particular resolution plan, the provisions of the Code and the Regulations outline in detail the importance of setting-up of such Committee and leaving decisions to be made by the requisite majority of the members of the aforesaid Committee in its discretion. Thus, section 21(2) of the IBC mandates that the CoC shall comprise of financial creditors of the corporate debtor - The CoC consists of financial creditors who are in the business of money lending, and the commercial angle of CIRP is within the domain of the CoC. Thus, when the CoC exercises its commercial wisdom, the adjudicating authority cannot interfere on merits with the commercial decisions taken by the CoC. This Court also held that there is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and the feasibility of the proposed resolution plan. They act on the basis of a thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject matter expressed by them after due deliberations in the CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the adjudicating authority and is made nonjusticiable. The jurisdiction bestowed upon NCLAT is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in section 61(3) of the IBC, which is limited to matters other than enquiry into the autonomy or commercial wisdom of the dissenting financial creditors. Thus, the prescribed authorities (the Adjudicating Authority/NCLAT) have been endowed with clearly demarcated jurisdiction as specified in the IBC and are not to act as a court of equity or exercise plenary powers. The proviso to sub-section (4) of section 31 is directory and would be compliant with IBC and the Competition Act. Hence, the combination approval of CCI at the stage of consideration of the resolution plan by the Adjudicating Authority under section 31(1) would be proper and legal. Such interpretation keeps the operations of the successful resolution applicant as a going concern, without deviating from the rigour of the Competition Act, and simultaneously, a one-year window is granted to obtain licenses, permissions, consents and other regulatory approvals envisaged by a host of laws. Therefore, the proviso is interpreted purposively and held that the approval of a combination of CCI at the stage of consideration by CoC is directory and not mandatory. By operation of section 31(2) of the IBC, to avoid rejection of a fully compliant and voted resolution plan, the Adjudicating Authority confirms that the approval of the combination is available before implementing the resolution plan. At best, the use of the words prior to is a temporal expression whose mandatory or directory nature is to be determined from the context surrounding section 31. The view taken by the NCLAT on the question of whether the requirement of proviso to sub-section (4) of section 31 of IBC is mandatory or directory is correct. Thus, the appeals fail. Conclusion:- As per HRISHIKESH ROY, SUDHANSHU DHULIA i) The AGI Greenpac s Resolution Plan is unsustainable as it failed to secure prior approval from the CCI, as mandated under the proviso to Section 31(4) of the IBC. Consequently, the approval granted by the CoC to the Resolution Plan dated 28.10.2022 without the requisite CCI approval, cannot be sustained and is hereby set aside and quashed. ii) the CoC shall reconsider the Appellant s Resolution Plan and any other Resolution Plans which possessed the requisite CCI approval as on 28.10.2022 i.e., the date on which the CoC voted upon the submitted Resolution Plans. As per S.V.N. BHATTI i) The object of IBC is to provide the institutional framework for theoretical resolution without considering liquidation as the first option. The buoyant economy needs absorption mechanisms to prevent collateral and cascading impact on the investors, depositors and financial creditors. Therefore, the idea of the IBC is to let the financial markets work. ii) The view taken by the NCLAT on the question of whether the requirement of proviso to sub-section (4) of section 31 of IBC is mandatory or directory is correct. Thus, the appeals fail. A common conclusion cound not be reached. Such differences must be understood as useful steps towards the evolution of jurisprudence in the field of Insolvency and Bankruptcy Code, 2016 and the Competition Act, 2002.
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2025 (2) TMI 18
Dissolution of the Corporate Debtor - whether the Appellant herein, being determined as to be a successful bidder in the liquidation proceedings and having apparently defaulted in the remittance of the amount which was the settled due to be paid under the terms and conditions of the tender document, could be granted any leverage by way of an extension of time period to pay the amount, beyond the time period stipulated under the tender document? - HELD THAT:- Because the entire auctioning process was being conducted during the COVID-19 situation, the Appellant, despite his best efforts to mobilize the required amount and to deposit the same as stipulated under the award by attracting foreign investors, was unable to do so because of the inordinate time taken by the Financial Investment Unit (FIU) of RBI to process the case as per their regulations in relation to investment in India by foreign investors. The Appellant had made all genuine efforts to deposit the amount, but he could not do so despite of extensions granted, because of the factors outside his control. Hence, he should not be saddled with the forfeiture of the entire EMD amount, which has been deposited by him as part of contract. As such taking a pragmatic view, and particularly in the light of the Judgment, of Alisha Khan, of [ 2021 (12) TMI 1483 - SUPREME COURT ] it is apt and fair that, in order to balance the equities without adversely affecting the interest of any of the parties to the appeal, 25% of the Rs. 5 Crores of EMD deposited by the Appellant, i.e. Rs. 1,25,00,000/- is to be retained and the balance 75% of the EMD amount i.e. Rs. 3,75,00,000/- is to be refunded back to the Appellant, within one month from the date of service of the certified copy of this Judgment. Conclusion - The Appellant s request for an extension of time to pay the balance amount denied but a partial refund of the EMD granted, acknowledging the unique challenges posed by the pandemic. Appeal allowed in part.
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FEMA
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2025 (2) TMI 17
Maintainability of the writ petition due to the availability of appeal remedy under Section 19 (1) and Section 35 of FEMA - Delay in issuance of SCN - Violation of Foreign Exchange Management Act (FEMA) and Transfer or Issue of Security by a Person Resident Outside India, Regulations 2000 - contravention of provisions of Section 6 (3) (b) r/w Section 47 of the Foreign Exchange Management Act, 1999 r/w Regulations 3, 4 and 5 and para-3 and para 9(1) (B) (i) of Schedule 1 of TISPRO Regulations 2000 and annexure B to para 2 of schedule 1 of TISPRO Regulations 2000 r/w consolidated FDI Policies dated 01.04.2010 and 01.10.2010 - violation of principles of natural justice. HELD THAT:- Merely, because a Subordinate Officer of 3rd respondent has sworn affidavit and filed it on behalf of the second respondent also in some of the writ petitions, it cannot be concluded that the second respondent has made up his mind. Further under the scheme of the Act, the order passed by the second respondent is not final and the same is subject to the appeal before the Appellate Tribunal under Section 19(1) and also subject to further appeal before this Court under Section 35 of FEMA. In view of the appellate remedy available before Tribunal as well as before this Court, it cannot be said that relegating the party to submit his explanation before the second respondent would violate natural justice principles. First of all, the second respondent has not signed the counter affidavit and in some of the cases, counter affidavit was filed only for respondents 1 and 3 and no counter affidavit was filed on behalf of the second respondent. In some of the writ petitions, the counter affidavit was sworn by one of the Subordinate Officers in the Cadre of Assistant Director working in the office of the third respondent and the same is not binding on the Superior Officer namely the second respondent. Therefore, the arguments advanced on behalf of the petitioners is not impressive that the second respondent has already made up his mind regarding the delay in issuing show cause notice and the contravention of provisions of FEMA and accordingly, the arguments regarding violation of natural justice principles is also rejected. The impugned show cause notice has been issued to petitioners by directing them to offer an explanation why adjudicatory proceedings shall not be initiated against them. After considering the explanation offered by the petitioner, the second respondent will decide whether to initiate the adjudicatory proceedings under Section 16 or not. In case he decides to go ahead with adjudication process, the petitioner shall be given reasonable opportunity to put forth his case. Any final order passed by the adjudicating authority under Section 16 is liable to be questioned by filing an appeal under Section 19 of FEMA - the petitioners are not only entitled to file one appeal, the petitioners are also entitled to file further appeal or second appeal before this Court under Section 35 of FEMA, if the petitioners are able to make out a question of law out of the order passed by the Appellate Tribunal. The preliminary objection raised by the learned Additional Solicitor General regarding maintainability of the writ petitions upheld. Delay in issuance of SCN - HELD THAT:- The maximum period of five years of limitation for the revisional authority to exercise its jurisdiction was fixed by taking into consideration the scheme of the said Act. Therefore, the maximum period of five years fixed as a reasonable period in the said case law cannot be made applicable as a general rule to all the cases - the reasonable necessary delay in issuing show cause notice depends on facts and circumstances of the case and the said factual aspect can also be raised by the petitioners before the second respondent. Conclusion - i) The omission of Section 6(3)(b) of FEMA does not invalidate the show cause notice, as the omission is considered a repeal, preserving the provision s applicability to past actions. ii) The delay in initiating proceedings is a factual issue to be addressed by the adjudicating authority, not in writ jurisdiction. iii) The writ petitions were dismissed due to the availability of effective alternative remedies, with the Court emphasizing the importance of exhausting statutory appeals. Petition dismissed.
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PMLA
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2025 (2) TMI 16
Money Laundering - seeking grant of bail - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - twin conditions prescribed under Section 45 of the PMLA satisfied or not - entire case of the respondent is based on mere conjectures and surmises, and no concrete evidence has been placed on record to substantiate the allegations leveled against the applicant - HELD THAT:- It is a settled position of law that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon ble Supreme Court, while emphasizing the legal sanctity of such statements, has time and again observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA. In a recent judgment, the Hon ble Supreme Court in Abhishek Banerjee v. Enforcement Directorate [ 2024 (9) TMI 508 - SUPREME COURT ], has held that It has been specifically laid down in the said decision that the statements recorded by the authorities under Section 50 PMLA are not hit by Article 20 (3) or Article 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the judicial proceedings in terms of Section 50 (4), and are admissible in evidence, whereas the statements made by any person to a police officer in the course of an investigation under Ch. XII of the Code could not be used for any purpose, except for the purpose stated in the proviso to Section 162 of the Code. In view of such glaring inconsistencies between Section 50 PMLA and Sections 160/161CrPC, the provisions of Section 50 PMLA would prevail in terms of Section 71 read with Section 65 thereof. In the aforesaid judgment, the Hon ble Court further underscored that such statements, being recorded in the course of an inquiry rather than an investigation, are not subject to the restrictions under Article 20 (3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50 (4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA. It is well settled, as reiterated by the Hon ble Supreme Court in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT (LB)] ] and Manish Sisodia v. Enforcement Directorate [ 2024 (8) TMI 614 - SUPREME COURT ], that while the stringent twin conditions under Section 45 of the PMLA restrict the right to bail, they do not impose an absolute bar. The discretion of the court in granting bail remains judicial and must be exercised in accordance with the settled legal principles. The governing principle that bail is the rule, and jail is the exception must be harmonized with the legislative mandate that requires satisfaction of the conditions laid down under Section 45 of the PMLA before bail can be granted. In the present case, the respondent has placed on record material indicating the applicant s active involvement in the procurement and sale of spurious anti-cancer medicines, the proceeds of which were funneled through various channels, including formal banking and hawala transactions. The applicant s role in the laundering of illicit proceeds through his firms namely, M/s Delhi Medicine Hub and M/s Cancer Medicine Agency, stands corroborated by the investigative findings, including statements under Section 50 of the PMLA and independent documentary evidence. The twin conditions prescribed under Section 45 of the PMLA have not been satisfied. The evidence on record, the ongoing nature of the investigation, and the applicant s alleged role in the broader financial syndicate indicate that the rigors of Section 45 of the PMLA continue to apply. Conclusion - This Court is of the view that considering the filing of the supplementary prosecution complaint and the ongoing nature of the investigation, this Court is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further judicial scrutiny, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further evaluation at trial. In view of the seriousness of the allegations and the need to ensure the integrity of the investigation, this Court is not inclined to enlarge the applicant on bail - bail application rejected.
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2025 (2) TMI 15
Seeking grant of regular bail - Money Laundering - involvement of several accused persons in the procurement, manufacturing and sale of spurious anti-cancer medicines - amount involved falls below Rs. 1 Crore, making the applicant eligible for the benefit of the statutory proviso - twin mandatory conditions under Section 45 of the PMLA - reasonable grounds to believe for guilty of the offence - applicability of statutory presumption of guilt under Section 24 of the PMLA - admissible evidences or not - offences punishable under Sections 274, 275, 276, 420, 468, 471 read with 120B and 34 of the Indian Penal Code, 1860. HELD THAT:- It is a settled position of law that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon ble Supreme Court, while emphasizing the legal sanctity of such statements, has time and again observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA. In a recent judgment, the Hon ble Supreme Court in Abhishek Banerjee v. Enforcement Directorate [ 2024 (9) TMI 508 - SUPREME COURT] held that It has been specifically laid down in the said decision that the statements recorded by the authorities under Section 50 PMLA are not hit by Article 20 (3) or Article 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the judicial proceedings in terms of Section 50 (4), and are admissible in evidence, whereas the statements made by any person to a police officer in the course of an investigation under Ch. XII of the Code could not be used for any purpose, except for the purpose stated in the proviso to Section 162 of the Code. The Hon ble Supreme Court in the aforementioned judgment underscored that such statements, being recorded in the course of an inquiry rather than an investigation, are not subject to the restrictions under Article 20 (3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50(4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA. Whether the applicant is exempted from the rigors of the twin conditions of bail, if not, then whether the applicant has satisfied the twin mandatory conditions under Section 45 of the PMLA? - HELD THAT:- The Hon ble Supreme Court in Nikesh Tarachand Shah v. Union of India, [ 2017 (11) TMI 1336 - SUPREME COURT] struck down the twin conditions as unconstitutional. However, the legislature subsequently amended the provision to cure the defects, and it has since been upheld in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT (LB)] , reaffirming the strict nature of bail conditions under the PMLA. In Prem Prakash [ 2024 (8) TMI 1412 - SUPREME COURT] , the Hon ble Supreme Court has also delved into the principles pertaining to bail in PMLA matters. This Court holds that the applicant cannot claim the benefit of the monetary threshold exemption under the proviso to Section 45 of the PMLA. The entire scheme of laundering illicit funds, as uncovered by the investigation, extends far beyond the threshold of one crore rupees, and the applicant s role must be assessed in the broader context of the criminal conspiracy in which he actively participated. This Court finds that the twin conditions prescribed under Section 45 of the PMLA have not been satisfied and the applicant s contention regarding his bail in the predicate offence holds no weight in the present case. The evidence on record, the ongoing nature of the investigation, and the applicant s alleged role in the broader financial syndicate indicate that the applicant has failed to satisfy the rigors of Section 45 of the PMLA - this Court does not find any merit in the contention of the applicant that he is exempted from the twin conditions under the proviso to Section 45 of the PMLA or that he satisfies the twin conditions under Section 45 of the PMLA. Whether the statutory presumption of guilt under Section 24 of the PMLA applies in the present case and whether the applicant has successfully rebutted this presumption? - HELD THAT:- From the bare perusal of Section 24 of the PMLA, it is evident that once a person is charged with the offence of money laundering under Section 3, the law presumes that the proceeds of crime are involved in money laundering unless the contrary is proven by the accused - In the present case, the investigating agency has relied not only on the statement of co-accused under Section 50 of the PMLA but also on financial records, WhatsApp communications, and transactional data, which indicate the applicant s active role in the alleged money laundering activities. By virtue of Section 24 of the PMLA, the respondent is not required to conclusively establish the applicant s guilt at the pre-trial stage, rather, the applicant must demonstrate that the proceeds of crime attributed to him are not linked to money laundering. In the absence of any rebuttal by the applicant, the presumption under Section 24 of the PMLA stands in favor of the respondent, thereby justifying his continued detention. In the present case, the respondent has placed on record material indicating that the applicant actively participated in procurement and sale of spurious anti-cancer medicines. The investigation has revealed that the applicant engaged in financial transactions involving the proceeds of crime, including payments made through banking channels and hawala transactions - Applying the legal presumption under Section 24(a) of the PMLA, once the respondent has demonstrated these foundational facts, the onus shifts to the applicant to rebut the presumption that the proceeds of crime were not involved in money laundering. The applicant, however, has failed to provide any credible evidence to rebut this presumption. Mere denial of involvement or assertion of being an investor in the firm without day-to-day operational control is insufficient to discharge the burden imposed by the statute. Conclusion - i) This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, it is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. ii) The applicant has been unable to put forth any propositions before this Court that are sufficient for grant of bail and thus, the same are rejected. Application dismissed.
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2025 (2) TMI 14
Money Laundering - challenge to summons issued by the Enforcement Directorate to the petitioners under Section 50(2) of the Prevention of Money Laundering Act, 2002 - petitioners challenge the summons on the ground that they had responded to the earlier summons issued by the Enforcement Directorate, the Enforcement Directorate ought not to have issued the impugned summons. HELD THAT:- Section 44(1)(d) Explanation (ii) enumerates that the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not . Although the alleged offence occurred prior to the amendment, impugned summons were issued after insertion of Explanation Clause under Section 44(1)(d)(ii). Therefore, there is no impediment for the authorities to issue summons for the purpose of collecting further information, documents, etc. Courts at no circumstances shall dilute the rigor of investigation in money laundering cases instituted under the provisions of PMLA. Any judicial interference at the summons issuance stage may cause prejudice to an effective investigation. Therefore, the Courts should allow Investigating Agencies to function fairly and freely, enabling them to cull out the truth by collecting all necessary evidence, obtaining statements from the concerned individuals, and initiate all appropriate actions by following the due procedures as contemplated under the provisions of PMLA - Therefore, granting any leniency regarding appearance or otherwise, by the Courts based on misplaced sympathy or taking a lenient view, would undoubtedly hamper the investigation process. This would inevitably result in allowing individuals to escape from the clutches of PMLA proceedings, which is undesirable. Conclusion - The validity of the summons issued by the Enforcement Directorate affirmed. The petitioners must comply with the summons and provide any additional explanations or documents required. Petition dismissed.
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Service Tax
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2025 (2) TMI 13
Failure to pay service tax for certain courses conducted by them on payment for certain assessment years - whether the Joint Commissioner had the jurisdiction to pass the final order without issuing a fresh show cause notice after the case was transferred from the Commissioner of Central Excise? - HELD THAT:- On perusal of the show cause notice, we find that the show cause notice was issued by the Commissioner while the final order was passed by the Joint Commissioner. On that ground, the impugned order was set aside and the matter was remitted back to the Joint Commissioner for fresh consideration. On perusal of the original impugned order passed by the Joint Commissioner, it is found that the very same point was agitated by the respondent herein (writ petitioner) and in the original impugned demand order was confirmed under Section 73(2) of the Finance Act, 1994 and appropriate interest was levied under Sections 75, 78, 77(1)(c) and 77(2) of the Finance Act, 1994. As against that order, the appeal lies to the Commissioner of Central Excise (Appeals), Coimbatore at Madurai. When a show cause notice has been issued by the higher officer and after entering the appearance and after commencing the enquiry, in the middle of the enquiry, the matter has been made over to the lower officer, who had passed an order, here in this case, the Joint Commissioner. As against that order, appeal lies to the Commissioner of Central Excise (Appeals), Coimbatore at Madurai. As submitted by the learned Senior Standing Counsel, that the officer is also below the rank of the officer had issued the show cause notice, which is impermissible both under the administrative law as well as under the Finance Act. Conclusion - Since the impugned order was set aside only on the technicalities, it is not proposed to delving into details as to whether the alleged service is said to have been rendered by the respondent to attract the GST or not, which is left open to be decided by the competent authority and hence, there is no positive reason to interfere with the order passed by the learned Single Judge. Appeal dismissed.
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2025 (2) TMI 12
Levy of service tax on the entirety of income as consideration for having rendered management, maintenance or repair service under the authority of section 65(105)(zzg) of Finance Act, 1994 and as consideration for service as defined in section 65B(64) of Finance Act, 1994 for the respective periods - exclusion of amount received as sub-contractor - HELD THAT:- It is noticed that partial disaggregation resorted to for taxing of works contract service and security services , while excluding taxability for non-conformity of some with definition in section 65(64) of Finance Act, 1994, is tantamount to adoption of inconsistent ascertainment of leviability. There is no doubt that the provisioning of roads, facilities and infrastructure for residents of designated areas devolves statutorily upon local authorities as defined in the Constitution and the respective statutes. These are not commercial ventures of the local authority and, consequently, should be covered in the exemptions or exclusions that are available to such authorities under law. As pointed out by the Learned Counsel for the appellant, the decisions of the Hon ble Supreme Court, in COLLECTOR OF C. EX., VADODARA VERSUS DHIREN CHEMICAL INDUSTRIES [ 2001 (12) TMI 3 - SUPREME COURT] and in COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS M/S RATAN MELTING WIRE INDUSTRIES [ 2008 (10) TMI 5 - SUPREME COURT] , bind subordinate officers to the confines of circulars of Central Board of Excise Customs (CBEC) and the contextual reference to these in the submissions of the appellant-assessee have not been considered by the adjudicating authority. The appellant-Commissioner, while not touching upon the exclusion of multi-functional belts , has assailed inclusion of consideration received from the principal contractor by reference to entries in the books of accounts. Conclusion - The tax liability would have to be adjudged strictly in conformity with the proposal for taxing the consideration as management, maintenance or repair service for the period prior to July 2012 and, to the extent that the impugned order has not, the matter requires a fresh appraisal. The matter remanded back to the adjudicating authority for a fresh decision strictly on conformity of the proposals made in the show cause notice with the provisions of law as existed prior to 1st July 2012 and for the period thereafter - appeal allowed by way of remand.
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2025 (2) TMI 11
Refund of payment made on advance receipt prior to 30.06.2017 under Finance Act, 1994 - tax paid twice - rejection of refund on the ground that tax was appropriately paid under the provisions of Finance Act, 1994 as it then existed - HELD THAT:- After considering the merits of the matter and concluding that the double taxation was avoidable even under the two tax regimes the matter was remitted by the Learned Single Member Bench, in that case, due to the natural justice not having been followed. This court finds that the observations made on the aspect of double taxation under two different tax regime are relevant and deserves to be followed. Due to the special features available in GST Regime, the Learned Member of Single Member Bench of Chennai in M/S. THIRUMAL FA ADE SOLUTIONS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2023 (2) TMI 1252 - CESTAT CHENNAI] has correctly held that there cannot be a double taxation. It is for department to choose whether it would like to refund tax or give credit under GST regume. Since in this case tax on the same transaction has been suffered twice, therefore, as per the provision of Finance Act, 1994 including provisions of refund as have been borrowed from Central Excise Act, 1944, the refund is permissible and deserves to be allowed. Conclusion - The appellant is entitled to a refund of the service tax paid under the Finance Act, 1994, due to the subsequent taxation of the same transaction under the GST regime. Appeal allowed.
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2025 (2) TMI 10
Classification of services - intermediary services or not - after sales services and promotion of goods - period involved is from July 2012 to September 2014 - extended period of limitation - HELD THAT:- In view of statutory provision the services having been provided in India to the customer of Koch Membrane, USA through the intermediary which in this case was the appellant, same as discussed by the Commissioner in order, cited above, cannot be treated as Export of Services . Secondly, this court is also not impressed by the argument advanced by the appellants that they having provided technical services and technical promotional quality design installation, commissioning and testing services to clients of Koch Membrane Systems, USA in India, such services were not covered as intermediary services prior to amendment of 2014 in Section 2(f) as they prior to the period of Notification 14/2014 dated 01.10.2014 were only dealing with the goods and prior to amendment vide above notification for the impugned period i.e. July 2012 to September 2014 they were not providing service in relation to services but only in relation to the goods. The appellants were facilitating and arranging for the services between the buyers of Koch Membrane, and Koch Membrane Systems, USA who was otherwise required to provide such services in India. Such services were very much within the ambit of Notification No. 28/2012-ST dated 20.06.2012 even prior to the amendment carried out by Notification No. 14/2014-ST dated 11.07.2014 which only widened the scope to include even those intermediaries which arrange for supply of goods between two or more persons which term would include importing of goods on behalf of the main producer or client or between two or more persons and therefore, would include those intermediaries or brokers or agents who act from the point of importation to the point of consumption and supply of goods which is not the case in this instance as only installation and designing and such other services in India were provided were being provided in relation to and for Koch Membrane Systems, USA,which they would have been required to provide in India. Therefore, considering the scope of the contract, it becomes abundantly clear from the object clause itself that they were provisioning for services and arranging and facilitating provision of service in India which as per statutory provisions was always covered under the ambit of Place of Provisions Rules, 2012. The extended period for demand was justified due to non-disclosure of relevant information by the appellant. Concluion - i) The services provided by the appellant were intermediary services and subject to service tax. ii) The appellant s argument regarding the retrospective application of the amendment was rejected. iii) The services did not qualify as export of services and were not exempt from service tax. iv) The extended period for demand was justified due to non-disclosure of relevant information by the appellant. Appeal rejected.
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2025 (2) TMI 9
Disallowance of CENVAT Credit - scope of SCN - the grounds on which the impugned order was passed in confirming such demand was not the subject matter of the dispute in the SCN issued by the Department - HELD THAT:- The allegations levelled therein against the appellants was in context with mis-match of figures in ST-3 returns prepared for the period between October, 2009 to March, 2010 and April, 2010 to September, 2010. The said show-cause notice had not proposed for disallowance of CENVAT Credit on the ground that the disputed services were not confirming to the definition of input service . Such ground was considered for the first time by the Department in third adjudication order (impugned herein). Since the showcause notice is a primary document based on which the entire proceedings were initiated against the appellants for confirmation of the CENVAT demand, no new ground can be taken subsequently at the time of adjudication stage, inasmuch as it is only the allegation levelled in the show-cause notice, which can be addressed to or acted upon by the adjudicating authority, while passing the adjudication order. The issue with regard to taking of new ground/plea in the adjudication order, which was not being alleged in the show-cause notice, the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S BALLARPUR INDUSTRIES LTD [ 2007 (8) TMI 10 - SUPREME COURT] have held that the show-cause notice is a foundation in the matter to levy and recover of duty and if certain provisions have not been quoted or discussed therein, the adjudicating authority cannot invoke such statutory provisions to confirm the demand on the assessee. The Hon ble Supreme Court in the case of COMMISSIONER OF CUSTOMS, MUMBAI VERSUS TOYO ENGINEERING INDIA LIMITED [ 2006 (8) TMI 184 - SUPREME COURT] have also dealt with the identical issue, holding that the grounds did not find mention in the show-cause notice, then the Department cannot travel beyond such notice and the demand confirmed entirely on new grounds is liable to be set aside. Conclusion - The demands confirmed in the impugned order was not dealt with or considered in the show-cause notice dated 16.07.2013 issued by the Department, such demand confirmed against the appellants cannot be sustained for judicial scrutiny, in view of the settled position of law. Appeal allowed.
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Central Excise
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2025 (2) TMI 8
100% EOU - Cenvat credit on various input services under the Cenvat Credit Rules, 2004 - applicability of time limitation - appellant could not make oral submissions and make effective representation before the authority - violation of principles of natural justice - HELD THAT:- From the facts of this appeal, it appears that input services viz., Rent a cab, Personal insurance, Air Travel Agent s services, Business Auxiliary Services, Commercial or Industrial Construction Services, Information Technology Software Services, etc. were not allowed by the Revenue for availment of Cenvat credit of the service tax paid on the ground that these were not related to the manufacture of their final products. These services appear to be activities forming part of the Appellant s manufacturing business. However, the Appellant has not furnished any reply to the Show Cause Notice dated 04.09.2014 issued and not attended the personal hearing granted by the Original Adjudicating Authority. The Appellant has reversed the credit voluntarily in respect of Rent-a-Cab service and also on personal insurance service which is not interfered with. Conclusion - i) The definition of input service prior to 01.04.2011 included activities related to business, requiring examination of eligibility based on this definition. ii) The burden of proof regarding Cenvat credit eligibility lies with the claimant. iii) Interest and penalties are not applicable if Cenvat credit is merely taken and not utilized, subject to verification. The impugned Order-in-Original passed by the Commissioner of Central Excise, Puducherry cannot be sustained and so ordered to be set aside by way of remand. The Appellant is directed to produce all the relevant documents on the basis of which they have taken the Cenvat credit on various input services. It need not be reiterated that while adjudicating the issue of eligibility of the Cenvat credit on various input services as above strict observance of the principles of natural justice have to be complied with - appeal allowed by way of remand.
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2025 (2) TMI 7
CENVAT Credit - disallowance of credit towards transportation and difference in the amount received from the insurance company - credit on labour cost - time limitation - Penalty imposed under section 11AC of the Act. Credit towards transportation and difference in the amount received from the insurance company - HELD THAT:- There is no reason to interfere with the findings that the ingredients to avail credit of duty of goods brought back to the factory, as contemplated under Rule 16(1) were not satisfied. The appellant having wrongly availed the benefit of the credit on the service tax paid on transportation charges is liable to reverse the said amount along with interest. The loss due to damaged goods was valued at Rs. 4,83,825/- and against the same appellant received the insurance claim of Rs. 5,60,555/-, however, they reversed the credit on the amount of Rs. 4,83,825/- and failed to reverse the balance amount of credit of Rs. 11,793/- on the differential amount of Rs. 76,730/-. Therefore, the appellant was liable to reverse the credit of Rs. 11,793/- wrongly retained by them. In fact, the appellant had agreed and actually paid the Cenvat credit of Rs. 3,067/- along with interest and penalty, but failed to pay the balance amount of Rs.8,726/-. There seems to be no error in the demand raised and confirmed in this regard. Reversal of the Cenvat credit in respect of labour cost - HELD THAT:- The appellant in their synopsis had submitted that they received a sum of Rs. 5,60,555/- towards the insurance claim which consisted cost of material of Rs. 4,83,825/- and the cost of labour of Rs. 1,56,717/-. From their own submissions, it is apparent that the amount received from the insurance company included the cost of labour and consequently, they were required to reverse the same. Time limitation - HELD THAT:- The allegation of wilful suppression to evade payment of duty has been made out and therefore, the invocation of the extended period of limitation is justified in the facts of the present case. Penalty imposed under section 11AC of the Act - HELD THAT:- The penalty imposed under section 11AC of the Act on account of suppression of facts so as to evade duty liability is mandatory and there is no reason to interfere with the same - The action/inaction on the part of the assessee points to the intent to evade duty and the same is writ large in the present case as though ER-1 Returns were filed by the appellant, however, the fact of availing the Cenvat credit on transportation charges was missing deliberately as the appellant knew that the activity carried out by them and did not amount to manufacture which is further evident by not availing the Cenvat credit in terms of Rule 16(1). Conclusion - i) The appellant having wrongly availed the benefit of the credit on the service tax paid on transportation charges is liable to reverse the said amount along with interest. ii) The amount received from the insurance company included the cost of labour and consequently, they were required to reverse the same. iii) The allegation of wilful suppression to evade payment of duty has been made out and therefore, the invocation of the extended period of limitation is justified in the facts of the present case. iv) The penalty imposed under section 11AC of the Act on account of suppression of facts so as to evade duty liability, the same is upheld. Appeal allowed in part.
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2025 (2) TMI 6
CENVAT credit - whether the appellant was required to reverse the credit taken on the capital goods or pay duty on the transaction value at the time of clearance? - HELD THAT:- From the worksheet enclosed along with the show- cause notice, it is seen that the capital goods were purchased in the year 1994-1995, 1995-1996, 1996-1997, 2002-2001, 2001-2002, 2002-2003, 2003-2004, 2004-2005, 2005-2006, 2006-2007 and were cleared to M/s. Volvo India Pvt. Ltd. under the Invoice No .236 dated 04.05.2007 on payment of duty of Rs.80,53,153/- on the transaction value of Rs.7,76,47,919/-, but the credit availed on these capital goods was Rs.1,14,06,152/-. The claim of the appellant is that these capital goods were put to use and were not cleared as such , hence, question of reversal of credit does not arise. In the present case, since the Department does not dispute the fact that the goods were cleared after being put to use, the question of considering the capital goods cleared as such for the purpose of reversal of credit cannot be sustained. Moreover, the Commissioner (Appeals) in the impugned order clearly notes that Notification No.39/2007 Central Excise (NT) dated 13.11.2007, the benefit of payment of amount equal to the cenvat credit taken on the said capital goods reduced by 2.5% for each quarter of a year or part thereof from the date of taking the credit has been provided for on removal of the capital goods being used, but holds that this benefit is available only from 13.11.2007 onwards. Conclusion - There are no reason to deny the benefit of depreciation to the used capital goods for discharging the duty on the reduced value at the time of clearance. The impugned order is set aside and the appeal stands allowed.
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2025 (2) TMI 5
Valuation of Excise duty - inclusion of amortized value of the moulds to the assessable value of the goods manufactured and cleared by the Appellant using the moulds - HELD THAT:- Larger Bench decision relied by the Revenue in the matter of M/s Mutual Industries Ltd. [ 2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI] , though the issue was amortization of mould, it was specific to the issue that whether the proportion of such inclusion need to be made even when after successive income tax depreciation, cost of the mould became zero. On that issue, it is held that cost of such mould has to be included in such value. However, the Larger Bench decision is not relevant considering the facts and circumstances of present case. As regards reliance on the M/s Bhor Industries Ltd., the customer of the appellant supplied Dies and tools to the job worker without amortizing the cost of the same. However, in Appellant s case, adjudication authority admits that the original equipment manufacturers (OEMs) being the customers of the Appellant have amortized the cost of the mould supplied by them and hence the above judgment cannot be applied to the facts of the present case. As regarding the reliance on the decisions of the Larger Bench in the matter of M/s. Mutual Industries Ltd. Vs. Collector of Central Excise, Mumbai [ 2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI] , the movement of mould were neither undertaken under the job work challan nor the job worker amortize the value of the free issue material. However, in the present case, movement of mould from OEMs to the appellant was under job work challan and further the value of the mould in the present case is amortized, while clearing the final product, which includes the intermediate product manufactured and supplied by the appellant. The impugned order confirming the demand along with the interest and imposition of penalty is unsustainable. Conclusion - The intermediate product manufacturers are not liable for duty on free supply inputs when the final product manufacturer avails credit under the MODVAT Scheme. Appeal allowed.
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2025 (2) TMI 4
Determination of the appropriate rate of interest on the refund of a pre-deposit made by the appellant during an investigation - Clandestine manufacture and removal - HELD THAT:- In the present case impugned order clearly observes that the amount that was deposited by the appellant at the time of visit of officers to their premises was appropriated by the Original Authority. The amount so appropriated acquired the character of duty, the moment it is appropriated against the demand made. In case of Mafatlal Industries [ 1996 (12) TMI 50 - SUPREME COURT ], Hon ble Supreme Court has observed Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court. Even if the amount is considered to be refund of deposit then also the same has to be refunded under section 11B as the said section has provided for the refund of deposit lying in account current. All the refunds which are filed under the Central Excise Act, 1944 in terms of the decision of Hon ble Supreme Court in case of Mafatalal Industries and the above provisions whether of the duty, interest or any deposit made are governed by the provision of Section 11B of the Act. The interest thus gets governed by the provisions of Section 11BB as has been held by Hon ble Supreme Court in case of Ranbaxy, [ 2011 (10) TMI 16 - SUPREME COURT ]. There has been exception carved out only for determination of relevant date for determining the period for which interest is to be paid in respect of deposit made as per Section 35F for filing the appeal before an appellate authority. Section 35FF provides that interest would be paid from the date of deposit made under Section 35F. Conclusion - Statutory provisions must be adhered to when determining interest rates on refunds. The interest rate of 6% as granted by the adjudicating authority upheld. Appeal dismissed.
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CST, VAT & Sales Tax
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2025 (2) TMI 3
Rejection of application filed by the petitioner to rectify the Assessment Orders that were earlier passed on 17.12.2019 for the Assessment Years 2016-2017 and 2017-2018 - writ petition was earlier dismissed for default due to non prosecution - HELD THAT:- It is noticed that even as per the respondent, the correct method for determination of the classification would be either before the Appellate Commissioner or before the Advance Ruling Authority. Prima facie, it appears that the issue stands now covered in favour of the petitioner as the Appellate Commissioner has accepted the contentions of the petitioner that product manufactured and dealt by the petitioner was indeed animal supplement and was exempted in terms of Item No.5, Commodity Code No.705 of IV Schedule appended to TNVAT Act, 2006 in terms of the above mentioned orders of the Appellate Deputy Commissioner. The impugned orders are set aside and the cases are remitted back to the respondent to pass a fresh order on merits and in accordance with the aforesaid order of the Deputy Appellate Commissioner (ST FAC). Needless to state, the Department is entitled to take up the issue before the Appellate Forum as has been done against the order of the Appellate Deputy Commissioner dated 17.03.2023. Petition allowed by way of remand.
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2025 (2) TMI 2
Revision of assessment - escaped turnover - specific case of the petitioner is that the petitioner was deemed to have been assessed in terms of Section 22(2) of TNVAT Act, 2006 on 31.10.2014 - HELD THAT:- A reading of the impugned order indicates that barring discussion on the limitation and a conclusion that there was a escaped turnover there is no clear discussion as to how the proposal contained in the revised notice dated 04.12.2020 was sustained. It is however made clear that equitable principles of estoppal will not apply on tax and equity are strangers like chalk and cheese. Therefore, merely the first revised notice dated 28.11.2017 proposed a sum of Rs. 3,15,489/- ipso facto would not mean the respondent was precluded for issuing a revised notice dated 04.12.2020 proposing to revised escaped turnover of Rs. 17,12,472/-. The order has to clearly discuss the same. Therefore, to balance the interest of the parties, Court is inclined to set aside the impugned order and the remits the case back to re-do the adjudication on merits within a period of three months from the date of receipt of a copy of this order. Conclusion - The impugned order was deficient in addressing the merits and thus set it aside, remitting the case for re-adjudication on the merits within three months. Petition disposed off.
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2025 (2) TMI 1
Dismissal of appeal - appeal dismissed on the ground that the appellant had opted for composition under section 6 of the Delhi Sales Tax on Works Contract Act and so there was no need to examine whether the transaction of Rs. 2,59,19,818/- was in connection with inter-State sale or not - HELD THAT:- The preliminary objection raised by learned counsel for the State of Delhi is that this appeal is not maintainable since an appeal shall lie only against an order passed by the highest Appellate Authority of a State under the CST Act determining issues relating to stock transfers or consignment of goods, in so far as it involves a dispute of inter-State nature. The preliminary objection has merits. An appeal would lie to this Tribunal only against any order passed by the highest Appellate Authority of the State under the CST Act. Authority has been defined under section 19 of the CST Act. Prior to 31.03.2023 an appeal would lie to the Central Sales Tax Appellate Authority, but after the amendment made by Finance Act No. 08 of 2023 w.e.f. 31.03.2023, appeal would lie to this Tribunal, namely, The Customs, Excise Service Tax Appellate Tribunal. The assessment order was passed under the provisions of the Delhi Sales Tax on Works Contract Act, against which the appellant filed an appeal under section 43(1) of the Delhi Sales Tax Act before the Deputy Commissioner (Appeal) as the provisions of section 16(1) of the Delhi Sales Tax on Works Contract Act make applicable the provisions of appeals under the Delhi Sales Tax Act. A further appeal was filed by the appellant before the Appellate Tribunal under section 43(2) the Delhi Sales Tax Act. The said appeal was dismissed by order dated 30.06.2014. The order dated 30.06.2014 was certainly not passed by the Appellate Tribunal under the provisions of the CST Act - the appellant did have a remedy against the order dated 30.06.2014 of the Appellate Tribunal under section 45 of the Delhi Sales Tax Act by requiring the Appellate Tribunal to refer the matter to the High Court on any question of law arising out of such order, but that remedy was not exercised by the appellant and instead this appeal was filed under section 20 of the CST Act, which appeal is clearly not maintainable. Conclusion - i) The appeal was dismissed as not maintainable under Section 20 of the CST Act. ii) The appellant was held liable to pay tax under the composition scheme without deductions for inter-State sales. This appeal would, therefore, have to be dismissed as not maintainable and is, accordingly, dismissed.
9911796707
