TMI Tax Updates - e-Newsletter
February 7, 2025

Case Laws in this Newsletter:

GST Income Tax PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. BUDGETARY AMENDMENTS ON CHAPTER XXI OF INCOME TAX ACT, 1961 DEALING WITH PENALTIES IMPOSABLE

   By: DR.MARIAPPAN GOVINDARAJAN

2. Adherence with Regulatory & Statutory Compliances while filing of Bill of Entry (BOE) with Customs Department

   By: YAGAY andSUN

3. Significance of Shipping Sector in Development & evolvement of International Trade vis-a-vis increased Carbon Foot Prints to worsen climate change.

   By: YAGAY andSUN

4. Safari Retreats- Impact of Amendment proposed in the Finance Bill 2025

   By: K Balasubramanian

5. Checklist of Food License Documents Required for Different Business Types

   By: Ishita Ramani

6. Export of Software and IT Services from India: Procedure, SCOMET, EPC, Challenges, and Way Forward.

   By: YAGAY andSUN

7. Logistic Performance Index (LPI) in context with the Growth in International Trade vis-a-vis to Climate Change.

   By: YAGAY andSUN

8. Whether reciprocal MFN Status serve any purpose in the arena of International Trade vis-a-vis to Geopolitical Issues.

   By: YAGAY andSUN

9. Challenges being faced by the Indian Exporters of Chemical Sector

   By: YAGAY andSUN

News

1. Adani Wilmar faces Rs 42 lakh penalty from Uttar Pradesh GST department

2. Indian Youth Congress protests against 'anti-youth' Union Budget

3. France's government survives no-confidence vote, budget is finally adopted

4. Budget will not be confined to government offices: J&K CM Omar Abdullah

5. World shifting to new energy system, India stuck in outdated economic thinking: Rahul

6. New I-T bill not to have provisos, explanations; may come up in Cabinet on Friday

7. Delhi International Leather Expo (DILEX) 2025 to be held on 20-21st February at Yashobhoomi

8. Sensex, Nifty fall for 2nd day on profit taking in bluechips ahead of RBI policy decision

9. Stock markets fall for 2nd day ahead of RBI policy decision; Airtel, ITC major drag

10. Markets trade lower after initial optimism ahead of RBI policy decision

11. IICA and CMAI Sign MoU to Enhance Capacity for Decarbonisation

12. Govt extends export ban on de-oiled rice bran till Sep

Notifications

DGFT

1. 57/2024-25 - dated 6-2-2025 - FTP

Export of Broken Rice to Senegal through National Cooperative Exports Limited (NCEL)

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/0000013 - dated 4-2-2025

Safer participation of retail investors in Algorithmic trading

Income Tax

2. F. No. Pr. CCIT/KNP/JCIT(T&.J)/17(2)(vill)(ii)(b)/2(4)/2023-24/5484 - dated 17-12-2024

Approval of hospital for the purpose of sub clause (b) of clause (ii) of the proviso to sub clause (viii) of clause (2) of Section 17 of the Income Tax Act, 1961 in the case of M/S. The Panacea Multi Super Specialty Hospital, 117/473, L Block, Rakadeo, Kanpur, PAN- AAJFT5887D

DGFT

3. 46/2024-25 - dated 6-2-2025

Amendments in Standard Input Output Norms (SION) A-222 for export of Erythromycin Stearate Tablet

Customs

4. Public Notice. 02 / 2025 - dated 5-2-2025

Extension of Time Limit to 15.02.2025 for submission of e-BRCs by the Exporters - Public Notice No. 21/2024 dated: 31.12.2024 issued by Air Cargo Commissionerate (Chennai – VII)- Reg.

5. PUBLIC NOTICE NO. 08/2025 - dated 30-1-2025

CBIC's clarification - Fee for application to grant extension of time for submission of Applications for Fixation of Brand Rate of Duty Drawback under Rule 6(1) (a) and Rule 7(1) of the Customs and Central Excise Duties Drawback Rules, 2017-Reg.

Highlights / Catch Notes

GST

• Pre-deposit Requirement Cannot Be Waived for Loss-making Unit; Review Petition Dismissed with Rs.10,000 Costs

  Case-Laws - HC : HC dismissed the review petition challenging pre-deposit requirements with Rs.10,000/- costs. The petition failed on procedural and substantive grounds. The Advocate's certificate accompanying the review petition did not comply with Rule 23(iii) of Chapter IV of the Bombay HC Rules. The court rejected petitioner's argument that being a loss-making unit warranted waiver of 10% pre-deposit requirement. The court emphasized that extraordinary jurisdiction cannot be invoked merely to circumvent pre-deposit conditions. The review jurisdiction being limited in scope, and the petition essentially attempting to re-argue the matter, no grounds were established for exercising review powers.
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• GST Assessment Order Quashed: Improper Service of Show Cause Notice Through Portal Violates Natural Justice

  Case-Laws - HC : HC set aside the impugned assessment order due to improper service of show cause notices through GST portal instead of tender or RPAD, violating natural justice principles. While disposing of the petition, court directed petitioner to deposit 25% of disputed taxes within four weeks, with adjustments for any prior recoveries or pre-deposits. Assessing authority must calculate and intimate remaining balance within one week, which petitioner must pay within three weeks of intimation. The impugned order dated 20.08.2024 was set aside, emphasizing procedural compliance in tax assessment notices.
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• GST Registration Can Be Restored After Filing Returns and Paying Tax, Interest, Late Fees Under Rule 22(4)

  Case-Laws - HC : HC ruled that GST registration cancellation proceedings can be dropped if the registered person files pending returns and makes full tax payment with interest and late fees as per Rule 22(4) of CGST Rules 2017. The petitioner was granted two months to approach the authority for registration restoration. Upon submission of application and compliance with Rule 22(4) requirements, the authority must expeditiously consider restoration of petitioner's GST registration in accordance with law. The ruling emphasizes administrative discretion to restore registration when statutory compliance is achieved.
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• GST Compensation Cess Refund Claim on Exports Denied Due to Two-Year Filing Limitation Under Section 54

  Case-Laws - HC : HC dismissed petition challenging denial of compensation cess refund on exported goods. Court held refund claims must be filed within two years from relevant date as per Section 54 and Explanation 2 of GST Act. For exported goods, relevant date is when goods are loaded for shipping, not date of filing returns. Petitioner's claim was time-barred as application was filed beyond two-year limitation period calculated from shipping date. Exception for extended limitation through writ petition applies only when underlying tax provision is challenged as unconstitutional, which wasn't applicable here. Authority correctly rejected refund claim as time-barred under Section 54(1) of GST Act.
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• Interest Liability on GST Short Payment Overturned as Petitioner Gets Chance to Show Electronic Cash Ledger Balance

  Case-Laws - HC : HC set aside the order regarding interest liability on GST short payment. The petitioner claimed sufficient balance existed in their electronic cash ledger during the relevant period and sought opportunity to present evidence. Court permitted treating the impugned order as a show cause notice, allowing petitioner to submit objections with supporting documentation within two weeks of receiving the order copy. This ruling provides procedural fairness by giving petitioner another chance to demonstrate their compliance with GST payment obligations through documentary evidence of electronic cash ledger balances.
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Income Tax

• Mandatory Aadhaar-PAN Linking for Tax Refunds Under Section 139AA Remains Valid Despite Constitutional Challenge

  Case-Laws - HC : HC upheld circular requiring Aadhaar-PAN linkage for tax refunds under Section 139AA. Petition challenging constitutional validity denied interim relief as Section 139AA's validity was previously established. Earlier identical petition under Article 32 dismissed by SC without leave for fresh filing. Partial resolution achieved regarding demat account operations, with matter disposed of for specific respondents (SEBI and stockbroking firm) after account defreeze confirmation. Court maintained implementation of Section 139AA requirements for tax administration purposes, reinforcing mandatory compliance for refund processing.
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• License Fee Paid for Using Law Firm's Goodwill and Name Upheld as Valid Business Deduction Under Section 37

  Case-Laws - HC : HC upheld deductions claimed under section 37 for license fee paid to use the goodwill and name "Remfry & Sagar." The court determined that payment for using goodwill cannot be viewed as illegal or prohibited by law. The arrangement linking consideration to firm revenue was merely a basis for computing goodwill usage fees, not a prohibited sharing of legal fees under Bar Council rules. The court emphasized that goodwill represents a legitimate transferable asset, and its monetization through license fees constitutes valid business expenditure. The primary purpose was to derive benefit from an established reputation in legal services, not to circumvent professional regulations or engage in tax avoidance. The expenditure was therefore allowable as a legitimate business deduction.
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• Corporate Guarantee Transfer Pricing: TPO Must First Verify International Transaction Status Under Section 92B Before Adjustments

  Case-Laws - HC : HC determined that the Transfer Pricing Officer (TPO) must first evaluate whether a corporate guarantee constitutes an international transaction under Section 92B before proceeding with transfer pricing adjustments. The Tribunal's broad remittance order lacked specificity on this crucial preliminary issue. The HC remanded the matter to the Assessing Officer (AO) with explicit instructions to first determine if the obligation undertaken through the guarantee qualifies as an international transaction. Only upon affirmative determination should subsequent transfer pricing implications be considered. The scope of examination was narrowed to focus specifically on the characterization of the guarantee obligation within the international transaction framework.
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• Income Tax Reassessment Under Section 147 Quashed As Cash Deposit Data Was Previously Examined During Regular Assessment

  Case-Laws - HC : HC determined the reopening assessment under s.147 was invalid as it constituted mere change of opinion. The AO's reliance on cash deposit information from Insight Portal did not qualify as fresh material since this data was previously examined during regular assessment. The court found no legitimate basis for the AO's "reason to believe" income had escaped assessment, as the information lacked new elements establishing a live nexus. Consequently, the s.148 notice for AY 2017-18 was quashed for lack of jurisdiction. The ruling emphasizes that reassessment cannot be initiated based on reexamination of existing material already considered during original assessment proceedings.
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• Commissioner's Revision Powers Under Section 263 Upheld Due To AO's Failure To Verify WhatsApp Evidence In Rental Expenses

  Case-Laws - AT : ITAT upheld revision under s.263 where AO failed to conduct proper inquiry regarding rental expenses despite having incriminating WhatsApp chat evidence showing circular transactions. AO's acceptance of mere ledger entries without verifying supporting documents like rent agreements or investigating the pattern of cheque payments and cash returns demonstrated non-application of mind. The routine questionnaire was deemed insufficient for proper scrutiny. ITAT found the assessment order both erroneous and prejudicial to revenue interests due to complete lack of verification of available material evidence. PCIT's jurisdiction under s.263 was held valid as the case involved absence of effective inquiry rather than difference of opinion between two possible views. Decision affirmed against assessee.
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• Tax Tribunal Reviews IT Company's Corporate Guarantees, TDS Compliance, and Salary Payments Under Section 192

  Case-Laws - AT : ITAT addressed multiple issues regarding an IT company's tax assessment. The Tribunal left open the determination of whether the assessee operates as a KPO or software developer, citing insufficient reasoning from TPO/DRP. On corporate guarantee fees, ITAT directed benchmarking at 0.53% limited to actual guarantee periods. Regarding TDS under s.192, the matter of salary expense disallowance was remanded to AO for fresh verification of additional evidence submitted by assessee. The Tribunal set aside the 30% disallowance under s.40(a)(ia), directing AO to examine documentation supporting non-deduction of TDS where employee incomes fell below taxable threshold. Case remanded for limited review of salary payments and TDS compliance under s.192.
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• Tax Additions Deleted: Tribunal Rejects Claims of Unaccounted Money Lending, Jewellery and Chit Fund Transactions

  Case-Laws - AT : ITAT upheld CIT(A)'s deletion of multiple additions made against the assessee regarding unaccounted money lending, payments, jewellery, and chit fund transactions. The tribunal found that substantive additions were correctly made in M/s Bulland Buildtech Pvt. Ltd.'s hands, not the assessee's. Ancestral jewellery was within CBDT prescribed limits. Personal expenditure was justified from own funds without evidence of undisclosed income. Cash balance of Rs. 1,62,000 was properly declared. Payments related to M/s Bulland Leasing and Finance Ltd. for AY 2007-08 couldn't be added in AY 2011-12. Revenue's appeals were dismissed due to tax effects below monetary limits per CBDT Circular No.17/2019. All grounds raised by revenue were rejected, ruling in assessee's favor.
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• Tax Appeals Dismissed After DTVSV Form-1 Applications Lapse Due To Non-Processing Within Section 92(1) Timeline

  Case-Laws - AT : ITAT dismissed revenue's appeals for AY 2017-18 and 2018-19 regarding tax assessment on principal damages and interest additions. While assessee filed Form-1 under DTVSV for both years, the designated authority failed to process them within statutory timeline under Section 92(1). The disputed interest amounts were already declared and taxed in AY 2019-20, evidenced by Form-2. Since tax payment was completed in AY 2019-20 and Form-1 applications for earlier years lapsed due to non-processing within prescribed period, ITAT held revenue's appeals infructuous. The tribunal emphasized that revenue did not controvert assessee's evidence of tax payment or the expiry of Form-1 processing deadline.
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• Share Trading Profits Upheld Despite Broker's Suspension; No Evidence of Bogus Purchases Justifies Income Addition

  Case-Laws - AT : ITAT found AO's calculation of undisclosed income from alleged bogus share purchases to be incorrect. While the broker's contract note was suspended by NSE, no allegations were made against sale transactions or declared profits. The CIT(A)'s deletion of excess addition was upheld. Following precedent from jurisdictional HC in similar cases where 12.5% of bogus purchases was deemed reasonable, ITAT determined the addition confirmed by CIT(A) was unwarranted. The assessee's appeal was allowed, resulting in complete deletion of the disputed addition. The tribunal emphasized that when sales and profits are accepted, merely questioning purchase transactions without substantial evidence is insufficient for sustaining additions.
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• Penalty Under Section 270A Quashed As AO Failed To Specify Misreporting Clause In Notice And Assessment Order

  Case-Laws - AT : AO imposed penalty under s.270A for unsubstantiated business expenses including advertising, development, land, and excavation charges, which were disallowed from capital work-in-progress. While CIT(A) reduced penalty from 200% to 50%, ITAT found the penalty proceedings fundamentally flawed. AO failed to specify which clause under s.270A formed basis for penalty initiation, either in assessment order or penalty notice. Following precedent, ITAT held penalty invalid due to procedural non-compliance. Penalty order vacated in favor of taxpayer due to AO's failure to meet statutory requirements for penalty imposition under s.270A. Essential requirement of identifying specific misreporting clause was not fulfilled.
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Customs

• Duty Drawback Time Extension Applications Under Rules 6 & 7 Require Single Fee Regardless of Shipping Bills Count

  Circulars : CBIC has clarified fee requirements for time extension applications under Rules 6 and 7 of Customs and Central Excise Duties Drawback Rules, 2017. The Board addressed inconsistent practices across ports regarding application fees for duty drawback rate determinations. The clarification establishes that application fees for time extensions should be charged per application basis, not per shipping bill, even when multiple shipping bills are included in a single application. This resolves the divergent practices where some ports were charging fees per shipping bill while others charged per application. The ruling streamlines the fee structure for exporters seeking time extensions for duty drawback rate fixation applications.
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• Air Cargo extends e-BRC submission deadline to February 15 for exporters under Public Notice 21/2024

  Circulars : The Air Cargo Commissionerate has extended the deadline for exporters to submit electronic Bank Realization Certificates (e-BRCs) from January 31, 2025, to February 15, 2025. This extension was granted following requests from various stakeholders and serves as a facilitation measure. A dedicated BRC Cell has been established to handle pending cases on priority basis. Exporters must comply with documentation requirements outlined in Public Notice 21/2024. The extension applies to proof of realization of sale proceeds against exported goods. The Commissionerate has established a dedicated team of officers to assist stakeholders with submissions and queries through both electronic and in-person channels at the Air Cargo Complex, Chennai.
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IBC

• Real Estate Projects Get New Rules Under CIRP: 66% Committee Approval Needed for Property Transfer and Facilitator Appointments

  Notifications : IBBI amended Corporate Insolvency Resolution Process regulations introducing key changes for real estate projects and large creditor classes. Resolution professionals must now facilitate possession transfer of real estate properties with 66% committee approval. For creditor classes exceeding 1000, up to five facilitators can be appointed to improve communication. Real estate projects require status reports on development rights within 60 days. Committee can invite real estate regulatory authorities to meetings. Monitoring committees must submit quarterly implementation reports to AA. Changes also include MSME registration disclosure requirements and relaxed eligibility criteria for allottee associations representing 10% or 100 creditors in real estate projects.
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Indian Laws

• Subsequent Section 482 Petitions Allowed When Law Changes; 'May' vs 'Shall' Interpretation Clarified in Cheque Cases

  Case-Laws - SC : SC held that successive petitions under Section 482 Cr.PC are maintainable when there is a change in circumstances, particularly changes in law. The Court overturned HC's dismissal of a subsequent petition related to cheque dishonor, finding it unjustified to reject solely because the earlier petition was withdrawn without leave to file afresh. The Court clarified that Section 148 of N.I. Act preserves appellate courts' discretion regarding deposit conditions, emphasizing that 'may' and 'shall' in the statute must be interpreted literally. The matter was remanded to Sessions Court for re-examination of the deposit issue, with both the HC and Sessions Court's previous orders being set aside.
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• Police Failed to Immediately Inform Arrest Grounds to Accused Under Section 50 CrPC, Making Detention Unlawful

  Case-Laws - HC : HC determined the arrest unlawful due to failure to comply with Section 50 CrPC's mandate of "forthwith" communication of arrest grounds. The court distinguished between 'grounds of arrest' and 'reasons for arrest', emphasizing that grounds must convey specific facts enabling defense against custodial remand and bail application. While formal arrest occurred at 6:30 PM via arrest memo, the investigating officer's failure to simultaneously serve arrest grounds violated both Section 50 CrPC and Article 22(1) of the Constitution. The court established that "forthwith" requires immediate and concurrent communication of arrest grounds to protect against arbitrary liberty deprivation. The petition challenging the arrest's validity was consequently allowed.
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PMLA

• Food Delivery Contract Fraud Accused Gets Bail After One Year Under PMLA As No Chargesheet Filed

  Case-Laws - HC : HC granted bail in a money laundering case where the accused was charged with misappropriating funds through fraudulent food packet delivery contracts. The accused, incarcerated for over one year, was granted relief considering: no chargesheet filed in predicate offense, trial unlikely to commence soon in both scheduled and PMLA offenses, and full cooperation during investigation. Court applied recent SC precedent in Manish Sisodia case regarding Section 45 PMLA rigors being inapplicable in cases of trial delay. Bail granted with conditions, noting that continued detention would infringe Article 21 rights to speedy trial and personal liberty, particularly as the accused's previous influential position no longer poses risk of evidence tampering.
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VAT

• Firm Wins Refund with 9% Interest After Tax Revision Challenge Under AVAT Act and CST Act

  Case-Laws - HC : HC dismissed writ petitions challenging revisional orders under AVAT Act and CST Act. The court found Circular No. 15/2010 inapplicable to Revisional Authority's powers. The revisional orders were based on proper enquiries including Excise Documents, interstate certificates, and dealer verification. Finding no evidence of fraud, collusion, or perversity in the orders dated 26.02.2020, the court upheld them. The petitioner firm was granted refund of pre-deposits with 9% interest from 08.05.2021. Tax authorities were directed to issue fresh assessment orders within six weeks and process refunds within four weeks thereafter. The court emphasized that pre-deposits for revision admission are not duty payments and must be refunded upon successful revision.
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Case Laws:

• GST

• 2025 (2) TMI 206
  Maintainability of petition - availability of alternative remedy - requirement to fulfill pre-deposit conditions - whether the review petition filed by the Petitioner should be entertained, specifically challenging the previous order that directed the Petitioner to avail an alternate remedy by fulfilling pre-deposit conditions? - HELD THAT:- In this case, the review is filed by the Advocate or through the Advocate. Therefore, the certificate in the above-prescribed form had to accompany the review petition. It is evident that the certificate is not in terms of the certificate contemplated by Rule 23(iii) of Chapter IV of the Bombay High Court Rules. Such a certificate is required so that the Advocate who files the review petition must take responsibility for the grounds raised therein - Even if the above defect is ignored, it is satisfied that no case is made out for the exercise of review jurisdiction. The Petitioner has instituted this review petition to once again argue the matter. In any event, based upon the same, no case is made out for the exercise of review jurisdiction. The contention that the Petitioner is a loss-making unit and, therefore, there ought to be no insistence for 10% pre-deposit is entirely misconceived. No case is made out for waiver, even assuming such waiver was permissible. The extraordinary jurisdiction cannot be invoked only to avoid pre-deposit requirements. All these contentions were duly considered. Conclusion - i) The extraordinary jurisdiction cannot be invoked only to avoid pre-deposit requirements. ii) The contentions now sought to be advanced cannot be entertained in this review petition. Even considering such contentions, no case is made out for the exercise of review jurisdiction. The review jurisdiction is minimal. This petition is dismissed with token costs of Rs.10,000/-.

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• 2025 (2) TMI 205
  Violation of principles of natural justice - Seeking to quash and set aside the ex-parte Order - no hearing at all was given to the Petitioner before adjudication of the Show Cause Notice and passing of the impugned Order - HELD THAT:- Considering the fair stand taken by the State, the impugned Order is quashed and set aside. The Show Cause Notice dated 30th September, 2023 shall be adjudicated afresh after giving a hearing to the Petitioner. It is informed that a Reply to the Show Cause Notice has already been filed by the Petitioner and which is dated 27th October, 2023. If Petitioner wants to file any Additional Reply, they are free to do so within a period of two weeks from today, failing which no further reply shall be filed by the Petitioner. The Deputy Commissioner of State Tax, Bandra West, 501 GST, shall thereafter fixed a date for hearing and only thereafter shall pass any order on the Show Cause Notice. Petition disposed off.

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• 2025 (2) TMI 204
  Challenge to impugned order passed by the first respondent on the premise that the petitioner had not submitted its reply - the petitioner had submitted its reply in fact - non-application of mind to the material on record - principles of natural justice - HELD THAT:- The respondents would submit that they would redo the assessment after affording the petitioner a reasonable opportunity of hearing. The impugned order dated 16.08.2024 is set aside. The petitioner, in addition to the reply already filed, may submit its objections within a period of two weeks from the date of receipt of a copy of this order. If any representation/reply is filed within the stipulated period, the same shall be considered by the respondents and orders shall be passed in accordance with law, after affording the petitioner a reasonable opportunity of hearing. Petition disposed off.

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• 2025 (2) TMI 203
  Challenge to impugned order passed by the first respondent - service of SCN - neither the show cause notices nor the impugned order of assessment has been served on the petitioner by tender or sending it by RPAD, instead it had been uploaded in the GST Portal - violation of principles of natural justice - HELD THAT:- The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondents, within a period of four weeks from the date of receipt of a copy of this order. If any amount has been recovered or paid out of the disputed taxes, including by way of pre-deposit in appeal, the same would be reduced/adjusted, from/towards the 25% of disputed taxes directed to be paid. The assessing authority shall then intimate the balance amount out of 25 % of disputed taxes to be paid, if any, within a period of one week from the date of receipt of a copy of this order. The petitioner shall deposit such remaining sum within a period of three weeks from such intimation. The impugned order dated 20.08.2024 is set aside - Petition disposed off.

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• 2025 (2) TMI 202
  Cancellation of petitioner s GST registration - non-furnishing of returns for a continuous period of six months - HELD THAT:- It is discernible from a reading of the proviso to sub-rule [4] of Rule 22 of the CGST Rules 2017 that if a person who has been served with a show cause notice under Section 29 [2] [c] of the CGST Act, 2017 is ready and willing to furnish all the pending returns and to make full payment of the tax itself along with applicable interest and late fee, the officer, duly empowered, can drop the proceedings and pass an order in the prescribed Form i.e. Form GST REG-20. This writ petition is disposed of by providing that the petitioner shall approach the concerned authority within a period of 2 [two] months from today seeking restoration of his GST registration. If the petitioner submits such an application and complies with all the requirements as provided in the proviso to sub-rule [4] of Rule 22 of the CGST Rules, 2017, the concerned authority shall consider the application of the petitioner for restoration of his GST registration in accordance with law and shall take necessary steps for restoration of GST registration of the petitioner as expeditiously as possible.

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• 2025 (2) TMI 201
  Refund of the compensation cess paid on exported goods - time limitation - refund application filed beyond the relevant period as per Explanation (2) to section 54 of the GST Act - HELD THAT:- The contention raised on behalf of the petitioner to apply the provisions of section 54 (1) for extending the relevant date upto the date of filing of the return cannot be accepted. On conjoint reading of Explanation 2 with Section 54 (1), it is clear that any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, has to make application before the expiry of two years from the relevant date and as per Explanation 2, relevant date means in the case of goods exported out of India is the date on which such goods are loaded either in Ship or aircraft, leaves India is the relevant date. Therefore, in the facts of the case relevant date for the goods exported by the petitioner would be from the date of shipping mentioned in the shipping bills. Therefore, period of two years is required to be calculated from the date of shipping. In view of decision of IOC Limited [ 2012 (10) TMI 690 - GUJARAT HIGH COURT ] wherein decision of Hon ble Apex Court in case of Mafatlal Industries Ltv. v. Union of India [ 1996 (12) TMI 50 - SUPREME COURT ] has been followed with respect to the delayed claim of refund of custom and excise wherein it is held that where the refund application is on the ground of provisions of Central Excise and Customs Act whereunder duty is levied is held to be unconstitutional, only in such cases suit or writ petition would be maintainable. Therefore, in facts of the case, refund claim of the petitioner was required to be filed as per the provisions of section 54 (1) of the GST act only. Conclusion - The contention raised on behalf of the petitioner that as per the provisions of section 54 (3), relevant date would be the date of filing the return under the provisions of GST Act cannot be accepted in view of Explanation 2 to section 54 of the GST Act. As the petitioner has failed to file the refund claim within the prescribed period of two years from the relevant date, the respondent authority has rightly rejected such refund claim as being time barred. Petition dismissed.

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• 2025 (2) TMI 200
  Liability to pay interest on the short payment of GST - petitioner would submit that if they are given an opportunity, they would be able to demonstrate that there was adequate balance in the electronic cash ledger during the relevant period and would thus request one final opportunity to put forth their case before the respondent authority - HELD THAT:- The impugned Order is set aside. It is open to the petitioner to treat the impugned order as a Show Cause Notice and submit its objections along with supporting documents/material within a period of two (2) weeks from the date of receipt of a copy of this order. Petition disposed off.

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• Income Tax

• 2025 (2) TMI 199
  Validity of reassessment proceedings in name of a non-existing company - notice issued after scheme of amalgamation as approved by the High Court - As decided by HC [ 2023 (3) TMI 1483 - BOMBAY HIGH COURT] stand of the Revenue that the reassessment proceedings could be initiated for a period prior to the specified date as per the scheme of amalgamation even against a non-existent entity, is an argument which is clearly untenable. HELD THAT:- As we are not inclined to interfere with the impugned order, we are not issuing notice on the application for condonation of delay. Accordingly, the application for condonation of delay as well as the special leave petition are dismissed.

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• 2025 (2) TMI 198
  Validity of reopening of assessment - notice issued after expiry of four years - change of opinion - applicability of section 73 - HC [ 2024 (3) TMI 40 - BOMBAY HIGH COURT] reasons recorded to believe that there is escapement of income from assessment does not even make an allegation that there was failure to truly and fully disclose material fact. reopening of assessment is merely based on the basis of change of opinion as applicability of Section 73 of the Act was a subject of consideration during the assessment proceedings HELD THAT:- We do not find any good ground and reason to interfere with the impugned judgment and, hence, the special leave petition is dismissed.

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• 2025 (2) TMI 197
  Maintainability of appeal on low tax effect - As in HC [ 2015 (7) TMI 1346 - BOMBAY HIGH COURT] admission of appeal of substantial questions of law[Question Nos. 1, 2, 3, 4 and 6] HELD THAT:- In view of the low tax effect, the present appeals are disposed of without answering the question raised or examining the merits of the case. However, liberty is granted to the Revenue to ask for recall of the present order in case the tax effect is found to be more or if the case(s) fall under any of the exceptions.

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• 2025 (2) TMI 196
  Exemption u/s 11 - Registration u/s 12AA denied - charitable activities u/s 2(15) - activity of preservation of environment by providing pollution control treatment for disposal of the liquid and solid industrial waste - as decided by HC [ 2019 (10) TMI 150 - GUJARAT HIGH COURT] CIT (A) and the Income Tax Appellate Tribunal have concurrently held that taking an overall view, the dominant objects of the assessee are charitable as the dominant object is not only preservation of environment, but one of general public utility and, therefore, the assessee is entitled to seek exemption u/s 11 - Tribunal is the last fact finding body. As a principle, this Court should not disturb the findings of fact in an appeal u/s 260A HELD THAT:- In view of the low tax effect, the present appeals are disposed of without answering the question raised or examining the merits of the case. However, liberty is granted to the Revenue to ask for recall of the present order, in case the tax effect is found to be more or if the cases fall under any of the exceptions.

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• 2025 (2) TMI 195
  Circular sought to withhold refunds due to taxpayer - applicability and interpretation of Section 139AA - HELD THAT:-Considering that the vires of Section 139AA of the said Act is already upheld and the impugned Circular only seeks to implement Section 139AA, we decline any interim relief as prayed for by the Petitioner. Petitioner had instituted a petition under Article 32 of the Constitution of India before the Hon ble Supreme Court, raising issues identical to those raised in the present petition. The Hon ble Supreme Court dismissed this petition by order dated 10 November 2023. The order does not grant the Petitioner any liberty to file a fresh petition. Petitioner, based on instructions from the Petitioner who is present in Court, states that the Rule may be disposed of regarding the Securities Exchange Board of India (Respondent No. 2) and Wellworth Share Stock Broking Ltd. (Respondent No. 5) as the Petitioner s demat account has been defrozen. The Petitioner is now permitted to operate it. Accordingly, at the request of the learned counsel for the Petitioner, we dispose of the Rule qua Respondent Nos. 2 and 5.

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• 2025 (2) TMI 194
  Deductions in respect of license fee - deductions claimed u/s 37 - legitimacy of the license fee paid for the use of goodwill - whether the arrangement constituted a sharing of remuneration prohibited by the Bar Council of India Rules? HELD THAT:- Disallowance which is contemplated u/s 37 is expenditure incurred for any purpose which is an offense or a purpose prohibited by law. It is thus manifest that it is principally the purpose for which the expenditure is incurred which would be decisive of whether it is liable to be disallowed. Regard must also be had to the fact that the expression prohibited by law is coupled to the commission of an offense. We would, therefore, have to consider whether consideration parted for use of goodwill would fall within the scope of that expression as well as whether the asserted violation of the Bar Council of India Rules would have justified the disallowance. It is not the case of the appellants that an offense, as generally understood, was committed. According to them, a violation of the Bar Council of India rules amounted to the respondent acting in violation of a statutory prohibition and thus the expenditure liable to be disallowed. As was rightly contended the primary, nay, sole purpose for incurring expenditure towards license fee was to use the words Remfry Sagar and derive benefit of the goodwill attached to it. The appellant do not dispute that Dr. Sagar had validly acquired the goodwill and that the same constituted a valuable asset which was transferable. The execution of the gift deed is also not questioned. What the appellant seeks to contend is that the gift to RSCPL was a ruse. Validity of the gift deed was clearly an unwarranted digression since the primary question which arose for consideration was the validity of the expenditure incurred. The solitary transaction which arose for scrutiny was the payment of license fee. We fail to appreciate how the appellants could have meandered down the path of questioning the validity of the gift or doubting the motive, purpose and intent underlying the same. Whether the same was a measure adopted for the purpose of monetising the goodwill or a part of legacy planning were clearly not issues germane to the question whether the expenditure was liable to be disallowed. We, in this regard, also bear in consideration the undisputed fact that four unrelated parties joined the partnership and unanimously decided to make use of the goodwill and the name of the firm which had earned a considerable reputation. The appellants thus, and in our considered opinion, clearly committed an error in seeking to question the motive underlying the gift made by Dr. Sagar. Whether the payment of license fee could be regarded as an expenditure incurred for a purpose prohibited by law ? - A payment made for use of goodwill cannot possibly be viewed as being an illegal purpose or one prohibited by law. A person would be obliged to part with consideration for the use of goodwill if it seeks to derive benefit and advantage therefrom. Undisputedly, Remfry Sagar had acquired a reputation and goodwill in the field of legal services. What the respondent assessee thus sought to do was to derive advantage and benefit of association as also the use of a name which carried a reputation in the legal arena. The agreement to utilise and derive benefits of goodwill cannot therefore be viewed as a ruse or one aimed at tax avoidance. It was permissible for Dr. Sagar to monetise the goodwill acquired and earned. The goodwill thus represented an asset held by Dr. Sagar and which could have been validly gifted to his children. It was the resultant firm which sought to derive benefit from the goodwill attached to that name. The consideration paid for the use of the same, thus, can neither be said to be for an unlawful purpose or one motivated by the intent to overcome a prohibition raised by law. Insofar as the Bar Council of India Rules are concerned, they are concerned with a sharing of revenue and fee. What those rules proscribe is the sharing of remuneration earned by a firm of lawyers with one who is not a member of the legal profession. The use of the word sharing in that Rule is clearly intended to deal with a situation where a lawyer intends to part with or enter into an arrangement with another to claim a part or portion of the fee that may be earned. What the said Rule envisages is an arrangement where a lawyer agrees to share the fee earned from a practise with someone who is not a lawyer. It prohibits a split, divide, dividend or equity in the revenue that may be generated by a law practise. We find that the reference to a percentage of the revenue earned by the law practise was intended to principally provide for a basis to compute the consideration liable to be paid for use of goodwill and the utilisation of the name. The primary purpose of referring to the total billing of the law firm was to provide a firm, definite and fixed basis to compute the consideration liable to be paid for use of goodwill. The consideration so paid is thus clearly not liable to be characterised as a sharing of revenue derived from the practise but fundamentally for the exercise of the right to exploit and derive advantage from goodwill. The linking of the consideration for the aforesaid purpose to the revenue earned by the firm only constituted a basis and a measure to determine the consideration that was to be paid. The arrangement was clearly not driven by a motive to share revenues earned by the legal firm. It was purely consideration paid for use of the goodwill attached to the name Remfry Sagar . We thus find ourselves unable to accept the argument of the appellant that the Bar Council of India Rules were violated. Decided in favour of assessee.

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• 2025 (2) TMI 193
  Corporate guarantee - international transaction or not? - whether the AO could have independently examined the issue of whether the alleged guarantee was an international transaction and consequential transfer pricing adjustments could have been made? - HELD THAT:- Whether the incurring of an obligation by giving an undertaking would amount to an international transaction, as envisaged under Section 92B is an issue which would necessarily have to be examined and evaluated by the TPO. However, and as we view order of the Tribunal, we find that the same does not render any clarity on this aspect. A bare reading of order indicates that the Tribunal s terms of remit are couched in extremely broad terms and evidently fail to clarify that the solitary question which remained for consideration was whether the obligation incurred by giving an undertaking would amount to an international transaction and if the answer to the above be in the affirmative the consequential transfer pricing adjustments that may be warranted. In our considered opinion, therefore, the end of justice would merit that the matter being remanded to the AO with the clarification that the remit shall be confined to examining whether the undertaking of the obligation in question amounts to an international transaction, to be answered first and at the outset.

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• 2025 (2) TMI 192
  Reopening of assessment u/s 147 - change of opinion - information received on Insight Portal pertaining to the cash deposit - HELD THAT:- Information received on Insight Portal pertaining to the cash deposit which was duly considered during the regular course of assessment. Therefore, it cannot be said that there is any fresh material in possession of the respondent AO so as to assume the jurisdiction which has a live nexus with the material on record to form a reason to believe that the income has escaped the assessment. We are of the opinion that the impugned notice issued by the respondent AO u/s 148 for reopening of the AY 2017-18 is liable to be quashed and set-aside, being without jurisdiction and as such, the same is hereby quashed and set-aside - Decided in favour of assessee.

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• 2025 (2) TMI 191
  Revision u/s 263 - incriminating material existed but was not utilized by the AO - proper enquiry v/s inadequate enquiry - non verification of rental expenses claimed by the company - HELD THAT:- AO did not make any enquiry at all with regard to the rent payment especially in the light of information available with him. The AO never asked for any supporting documents like rent agreement, bills/invoices or any query on the whatsapp chat showing Sh. Kamal Kapoor receiving rental payments in cheque from the assessee and Sh. Amit Katyal receiving cash from Sh Kamal Kapoor against those cheques of rental payment made. We therefore hold that the AO neither examined the issue of rental expenses for the AY 2015-16 nor applied his mind on the issue in light of information available with him. In the instant case the PCIT has clearly demonstrated that the AO did not conduct inquiries or verification which should have been done. This is not a case where the AO has applied his mind and had arrived at a plausible view whereas the PCIT had different view from that of the AO. We are of the considered view that the instant case is one where the AO has not conducted any effective enquiry and has not applied his mind at all which is discernible from the fact that the AO never confronted the assessee with the whatsapp chat and was simply satisfied with the ledger account of Kamal Kapoor in the assessee s book as explaining the genuineness of the rental payment made. The routine questionnaire issued by the AO cannot be considered as an inquiry required to be conducted by the AO. We therefore, hold that it is writ large on the facts and circumstances of the case that there is absence of any effective inquiry and there is a total non-application of mind by the AO on the incriminating documents available with him. The order passed by the AO would therefore, clearly fall within the meaning of an erroneous order . The order is also, undisputedly, prejudicial to the interests of the Revenue inasmuch as it results in loss of the Revenue in the form of tax. We therefore, hold that the assumption of jurisdiction by the PCIT under Section 263 of the Act is valid - Decided against assessee.

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• 2025 (2) TMI 190
  Nature of expenses - Disallowance of royalty payment paid for grant of franchisee rights and use of brand name - HELD THAT:- By respectfully following the order for Assessment Year 2014-15 in Assessee s own case [ 2024 (5) TMI 1513 - ITAT DELHI] we hold that the royalty payment made by the Assessee which is recurring in nature, therefore, we direct the A.O. to treat the same as revenue expenditure, accordingly, we allow Grounds of appeal of the Assessee.

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• 2025 (2) TMI 189
  Characterization of Profile of assessee - Whether the assessee is KPO or software developer? - HELD THAT:- As following the decision of the ITAT Hyderabad Bench in assessee s own case for A.Y. 2020-21 2025 (2) TMI 154 - ITAT HYDERABAD] as held non-availability of the reasons for treating the assessee as KPO by TPO / DRP, we are of the considered opinion that the finding given by the DRP/TPO will not be as binding and issue of whether the assessee is KPO or software developer is left open to be decided based on the facts and circumstances arising in the subsequent year - ground no.2 of the assessee is treated as allowed for statistical purpose. Benchmark the Corporate Guarantee Fee - As in assessee s own case for A.Y. 2020-21 2025 (2) TMI 154 - ITAT HYDERABAD] wherein the Tribunal directed the TPO / Assessing Officer to benchmark the Corporate Guarantee Fee @ 0.53% on total corporate guarantee given by the assessee and also restrict the commission / fees to the period of actual guarantee given by the assessee. TDS u/s 192 - assessee has failed to deduct TDS on salaries and wages paid to employees - as argued assessee is required to deduct TDS on estimated income of the employee and in case, the estimated income of the employee, including income from salary is less than the taxable income, then there is no requirement of deducting TDS - HELD THAT:- Since the assessee claims that in many of the employees cases, the income does not exceed the taxable net, the assessee has not deducted TDS. AO and the DRP completely erred in disallowance of 30% of salary expenses u/s 40(a)(ia) of the Act without verifying the evidence filed by the assessee. Since the assessee has filed various evidences to justify its case and the DRP has not considered additional evidence filed by the assessee and further, these evidences were not filed before the AO during the assessment proceedings, in our considered view, the matter needs to be set aside to the file of AO for further verification. Thus, we set aside the order passed by the AO on this issue and restore the issue back to the file of JAO for the limited purpose of verification of additional evidence filed by the assessee with reference to salaries and wages paid to the employees without deducting TDS as per Section 192 of the Act in light of various averments of the learned counsel for the assessee. Ground is allowed for statistical purposes.

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• 2025 (2) TMI 188
  Addition on account of capital subsidy credited to the assessee - as per DR impugned subsidy in fact deserves to be treated as a revenue receipt on accrual basis - HELD THAT:- Since the issue herein is very much pending before their lordships for final adjudication, it would indeed be pre mature for us to apply accrual principle at this stage for lack of any reasonable certainty in recognition of revenue as per Chainrup Sampatram [ 1953 (10) TMI 2 - SUPREME COURT] Their lordships have categorically held that a revenue receipt could be recognized as an income only in case there arise a reasonable certainty thereof. We reiterate that the Revenue s clear cut case is that the same has indeed been not actually received all along as the dispute is pending before hon ble apex court. Thus, issue between the parties is required to be re-adjudicated by AO after it is decided in the hon ble supreme court so as to avoid multiplicity of proceedings. Disallowing after sales expenses etc . - Both the parties reiterate their respective stands against and in support of the impugned after sales expenditure disallowance claim as a provision which stands treated as a mere contingent liability by the learned lower authorities - HELD THAT:- We find merit in the assessee s arguments as CIT(A) has simply brushed aside it s impugned provision for after sales expenditure etc. by observing, The ground taken by the appellant in its appeal memo settles the issue . Meaning thereby that the assessee s scientific computation herein has nowhere been specifically dealt with or rejected as the learned lower authorities have declined it s provision of the impugned expenditure raised for meeting future anticipated liabilities as per Bharat Earth Movers [ 2000 (8) TMI 4 - SUPREME COURT] Coupled with this, the assessee has already succeeded on the very issue before hon ble jurisdiction high court hereinabove. We, thus see no substance in the Revenue s vehement contentions supporting the impugned disallowance, which stands deleted therefore. Disallowance u/s 14A related to exempt income - HELD THAT:- In absence of any other material to the contrary, we make it clear that although the assessee has claimed not to have incurred any expenditure; but, the same cannot be accepted as at least some indirect expenditure in such an instance could not be altogether ruled out. Faced with this situation, we conclude that the learned CIT(A) has fairly estimated the impugned disallowance @ 5% of the assessee s exempt income. Deduction u/s 80G - HELD THAT:- We deem it appropriate to accept the assessee s instant claim of section 80G deduction in principle and indeed leave to open for the learned Assessing Officer to frame his consequential computation afresh after verification of the necessary relevant facts, as per law. Exemption of dividend income u/s 10(34) - jurisdiction of the appellate authorities under the provisions of the Act in entertaining such a new claim for the first time - HELD THAT:- We accept the assessee s instant 5th substantive ground in principle and direct the learned assessing authority to frame its consequential computation as per law subject to a rider that it shall be the tax payer s risk and responsibility only to plead and prove the corresponding claim u/s 10(34) of the Act within three effective opportunities. Deduction of expenditure relatable to the relevant assessment year but debited in the P L a/c of the succeeding assessment year i.e. in the nature of prior period expenditure - HELD THAT:- Revenue s stand seeking to reject the assessee s impugned expenditure claim both on accrual as well as that of crystallization (supra), could not be upheld going by the principle of consistency and in view of the fact that this is an instance of revenue s neutral expenditure only as per CIT vs. Modipon Ltd. [ 2011 (1) TMI 323 - DELHI HIGH COURT] The fact also remains that we have already rejected the Revenue s stand based on Goetz India Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] in preceding paras. It further fails to rebut the fact that the very expenditure stands declined in the succeeding assessment year of crystallization as well. We accordingly direct the learned Assessing Officer to accept the assessee s impugned claim after verification of all the necessary facts as per law. Validity of assessment u/s 153A - HELD THAT:- Once there is no addition made by the learned Assessing Officer specifically based on the seized material, we quote PCIT v. Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] to conclude that such an assessment itself is not sustainable in law. We order accordingly. Learned Assessing Officer s impugned assessment herein stands quashed. Unexplained expenditure - Loose sheets of paper found in a premises not under the control of the appellant relied upon - HELD THAT:- We quote hon ble jurisdictional high court decision in CIT v. Girish Choudhry [ 2007 (5) TMI 176 - DELHI HIGH COURT] that such a dumb document could not lead to an addition in assessment proceedings. Addition of excess stock of bagasse - HELD THAT:- Assessee herein has already been held entitled for claiming section 80IA deduction. And also that the relevant item i.e. baggage herein is indeed derived from the eligible business activity of producing power and, therefore, the same is also in the nature of business income only, which would fall u/s 80IA deduction.

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• 2025 (2) TMI 187
  Addition on account of unaccounted money lending business - CIT(A) deleted addition - substantive addition in the hands of assessee - HELD THAT:- No infirmity in the order of the Ld. CIT(A) in deleting the addition in dispute as addition made in the hands of the assessee was deleted by the CIT (A). We further noted that as per the said order, the same addition was made in the hands of M/s Bulland Buildtech Pvt. Ltd. on substantive basis. Further, in the case of M/s Bulland Buildtech Pvt. Ltd. for AY 2007-08 [ 2019 (9) TMI 760 - ITAT DELHI ] has dismissed the appeal of the Revenue on the ground that the amount of tax effect in the case is below the monetary limit fixed for filing of appeals by Revenue. Decided in favour of assessee. Addition on account of unaccounted payment of money to different parties - CIT(A) deleted addition - HELD THAT:- CIT(A) deleted the addition on the ground that the transactions were held belongs to Bulland Leasing and Finance P. Ltd. and not to the assessee. Revenue had filed an appeal before the ITAT against the order of ld.CIT(A) on the deletion of said addition in the case of Bulland Leasing Finance for AY 2007-08 and the ITAT [ 2019 (10) TMI 1604 - ITAT DELHI] has dismissed the appeal of the Revenue on the ground that the amount of tax effect is less than the monetary limits fixed for filing of appeals by Revenue as per CBDT Circular No.17/2019 dated 08th Aug 2019. Decided in favour of assessee. Unexplained income - CIT(A) deleted addition - HELD THAT:- We find that this addition was deleted by the ld. CIT (A) as this amount of personal expenditure might have met out of his own funds and there is no evidence to suggest that the expenditure has been met out of undisclosed income. Thus no infirmity in the order of the Ld. CIT(A) in deleting the addition. Unaccounted cash - CIT(A) deleted addition - HELD THAT:- We find that in the remand report, the AO has confirmed that Statement of Affairs filed by the assessee has declared cash balance of Rs. 1,62,000/- as on 31.3.2011. The cash was not seized, thus implying that the AO is satisfied with cash in hand. Hence, ld. CIT(A) has rightly deleted this addition, which does not need any interference on our part, therefore, we uphold the same and accordingly, reject the ground raised by the revenue. Addition on account of unaccounted jewellery - assessee has not furnished member-wise details of jewellery owned by them nor have furnished any documentary evidence to prove it pertains to all the family members and source of acquisition of the same - CIT(A) deleted addition - HELD THAT:- We find that ld. CIT(A) noted that ancestral jewellery was found and the amount was within the limit prescribed in the CBDT instruction vide instruction No. 1916 dated 11.5.1994. Therefore, it will not fall under the category of undisclosed income/assets of the assessee. Hence, CIT(A) has rightly deleted this addition, which does not need any interference on our part - reject the ground raised by the revenue. Unaccounted receipt from Chit Fund Business - CIT(A) deleted addition - HELD THAT:- We find that this issue is covered by the decision of the ITAT in the case of Rajneesh Nagar. We observed that Mr. Nagar is the Co- Director in Bulland Group and the addition was deleted ACIT, Central Circle-25, New Delhi Versus Rajneesh Nagar [ 2017 (1) TMI 1250 - ITAT DELHI ]. - Decided against revenue. Unaccounted payment to different parties - CIT(A) deleted addition - HELD THAT:- We find that the payments relates to M/s Bulland Leasing and Finance Ltd. and all payments pertains to AY 2007-08, therefore, the same cannot be added in the hands of the assessee in AY 2011-12 and thus was rightly deleted by the Ld. CIT(A). Unaccounted money transaction - CIT(A) deleted addition - HELD THAT:- Addition was made on a protective basis in the hands of M/s Bulland Buildtech Pvt. Ltd. and decided in favour of the assessee by CIT(A). Thus, the addition was rightly deleted in the hands of assessee. He further submitted that since the amount was found to be cash balance of M/s Bulland Automobiles, the action is not sustainable. It is noted that ld. CIT(A) observed that the above transactions pertain to some other entities and in other assessment years, hence, the same was rightly deleted by the Ld. CIT(A).

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• 2025 (2) TMI 186
  Determining the tax payable on the amount declared by the assessee under DTVSV - Addition made by the AO Principal damages plus pre-award interest and interest - CIT(A) deleted the addition made towards Principal damages plus pre-award interest and held that the entire interest is taxable in the year 2019-20 - HELD THAT:- DR though did not dispute the factual position submitted that the assessee has filed Form 1 for these two AYs and Form-2 has not yet been issued. Accordingly the ld DR submitted that the appeals cannot become infructuous since Form-1 filed by the assessee is pending disposal. AR to counter the said arguments submitted that the time line for determining the tax payable by the authorities has expired as per section 92(1) of DTVSV and therefore the Form-1 filed is automatically become not accepted. Undisputed fact that the interest additions made by the AO in AYs 2017-18 and 2018-19 are already included in the interest amount declared under Form 1 for AY 2019-20 and that the assessee has also paid the tax on the said amount as evidenced by the Form-2 as extracted in the earlier part of this order. Further the facts that Form-1 filed by the assessee for AYs 2017-18 2018-19 have not been processed by the designated authority within the time limit and that the tax on the amount declared is already paid in AY 2019-20 have not been controverted by the revenue before us. Therefore, there is merit in the submission of the AR that the appeal filed by the revenue for AYs 2017-18 and 2018-19 do not survive and have become infructuous.

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• 2025 (2) TMI 185
  Estimation of income - bogus purchase of shares as undisclosed income - HELD THAT:- AO s observation regarding the calculation of the purchase value was found to be incorrect and was duly rectified by the CIT(A), who deleted the excess addition. As noted that no allegations were made against the sale transactions, or the profits declared by the assessee. AO s focus was solely on the purchase of shares for the purpose of making the addition. Upon verification through notice issued u/s 133(6) of the Act, it was observed that the contract note issued by the broker had been suspended by the National Stock Exchange (NSE). Nonetheless, the sales transactions and the corresponding profits were duly accepted, and only the purchase aspect was disallowed. We respectfully rely on S.V. Jiwani,[ 2022 (10) TMI 173 - BOMBAY HIGH COURT] which involved a similar set of facts and circumstances. In that case, the Hon ble Jurisdictional High Court upheld the decision holding that restricting the addition to 12.5% of the bogus purchases was fair and reasonable. We hold that the addition confirmed by the Ld. CIT(A) is unwarranted and deserves to be deleted. Appeal of assessee allowed.

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• 2025 (2) TMI 184
  Levy of penalty u/sec.270A - mis-reporting of income - assessee has debited advertisement expenses, development charges, land expenses and excavation charges and in absence of justifying the said expenses with details and documents AO held the same to be un-proved and pretentious for which he reduced the same from the capital work-in-progress - CIT(A) held that the penalty @ 200% is highly excessive therefor reduced the same to 50% - HELD THAT:- Since admittedly the Assessing Officer in the instant case neither in the assessment order nor in the penalty notice has mentioned the specific clause/limb under which the penalty proceedings have been initiated u/sec.270A of the Act, therefore, following the decision of Smita Virendra Lodha, Ahmednagar [ 2024 (11) TMI 686 - ITAT PUNE] we hold that such penalty levied by the AO u/sec.270A of the Act is not in accordance with law. Decided in favour of assessee.

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• PMLA

• 2025 (2) TMI 183
  Money Laundering - seeking grant of bail - Primary allegation is that contractual obligation under the Work orders was to supply 300 gram packet of food (khichdi) but M/s. Force One Multi Services supplied food packet weighing 100 grams and thus unjustly enriched itself - illegal misappropriation of money - no specific mechanism framed by MCGM to check the actual quantity delivered - proceeds of crime - whether the rigours of Section 45 would apply to the facts of the present case as made out by the Applicant? - HELD THAT:- In the predicate offence Chargesheet has not been filed as yet. Applicant is not made accused either in the predicate offence or in the ECIR offence, trial is not likely to start in the predicate offence and hence trial in PMLA offence cannot be commenced and most importantly Applicant is incarcerated for 1 year and 18 days after duly cooperating with the investigation. The existence of the Scheduled Offence is a sine qua non for alleging the existence of proceeds of crime. Property derived or obtained, directly or indirectly, by a person as a result of criminal activity relating to a Scheduled Offence constitutes proceeds of crime. Thus existence of proceeds of crime at the time of trial of the offence under Section 3 of the PMLA can be proved only if the Scheduled Offence is established in prosecution of the Scheduled Offence. This clearly envisages that even if trial of the case under the PMLA proceeds it cannot be officially tested unless the trial of the Scheduled Offence concludes. In the present case before me in the Scheduled Offence, Chargesheet has not been filed and trial is not likely to start in the near foreseeable future. Therefore prima facie, there are no possibility of both trials concluding in the foreseeable future. Applicant is in judicial custody pending trail for more than one year. Attention invited to the decision of the Supreme Court in the case of Manish Sisodia Vs. Directorate of Enforcement [ 2024 (8) TMI 614 - SUPREME COURT] with respect to application of rigours of Section 45 of the PMLA especially in cases where there is delay in trial. The Supreme Court has held that if there is delay in trial, rigours of Section 45 would be inapplicable. It is seen that Applicant was arrested 17.01.2024. Thus he is in custody for the last more than 1 year, except from taking cognizance there is no other progress of the trial and the charges are yet to be framed and considered by the Special Court. There are 20 prosecution witnesses cited by the ED in their complaint and it would therefore be difficult to comprehend that trial is likely to be completed in the foreseeable future, rather there seems to be no possibility that trial would be concluded in a reasonable time. Applicant has fully cooperated with the prosecution Agency and made all disclosures. Hence his further incarceration shall not serve any useful purpose rather it would amount to punishing him before guilt is proved. Conclusion - The Applicant having been incarcerated for more than one year, in the prima facie facts of the present case, trial of the Scheduled Offence and consequently PMLA offences not likely to be completed in the foreseeable future, if Applicant s detention is further continued, it would amount to infringement of his fundamental right under Article 21 of the Constitution of India of a speedy trial and guarantee of personal liberty. Principal allegation that Applicant being in an influential position in the State at the then time may have been related in the so called alleged situation as put forth by the prosecution but the said situation no longer prevails in the current dispensation. Therefore any apprehension of prosecution regarding tampering with the evidence can be redressed by imposing appropriate conditions. Applicant is granted bail subject to the fulfilment of terms and conditions as imposed - bail application allowed.

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• Service Tax

• 2025 (2) TMI 182
  Recovery of service tax with interest and penalty - amounts recorded as license fees, documentation fees, and computer software expenses in the appellant s books of account - applicability of service tax on transactions involving the transfer of technology and related documentation from foreign vendors to the appellant - Extended period of limitation - HELD THAT:- The issue is no more res integra and this Bench of the Tribunal in Appellant s own case being Service Tax Appeal No.70058 of 2019 having Final Order No.70784 of 2024 dated 02.12.2024 [ 2024 (12) TMI 281 - CESTAT ALLAHABAD] has decided the dispute in favour of the Appellant-Assessee. Extended period of limitation - HELD THAT:- The invocation of the extended period of limitation was deemed inapplicable. Conclusion - i) The demand for service tax based on accounting entries was set aside. ii) The classification of transactions as Intellectual Property Services was rejected. iii) The invocation of the extended period of limitation was deemed inapplicable. Appeal allowed.

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• Central Excise

• 2025 (2) TMI 181
  CENVAT Credit on capital goods - gas plant located at Duliajan belonging to the appellant, which supplies gas for manufacturing polymers at Lepetkata forms part of the manufacturing unit at Lepetkata so as to enable appellant to claim Cenvat Credit on capital goods installed at Duliajan or not - HELD THAT:- The present case is not a case of transportation of final product but transfer of raw material to the main unit by an ancillary unit for the purpose of manufacturing the final product. The substantial question of law framed in this excise appeal is required to be answered in the affirmative and it is, accordingly, held that the appellant Company is entitled to avail CENVAT Credit on capital goods (both domestic and imported) installed at Duliajan Unit. Appeal disposed off.

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• 2025 (2) TMI 180
  Appropriation of excess paid duty amount towards the short payment of excise duty along with interest amount - duty incidence has already been passed on to their buyers or not - principles of unjust enrichment - lack of personal hearing - principles of natural justice - HELD THAT:- The present appeal stands squarely covered against them as decided by the First Appellate Authority following the decision of the Apex Court in their own case COMMISSIONER OF CENTRAL EXCISE, MADRAS VERSUS M/S ADDISON CO. LTD. [ 2016 (8) TMI 1071 - SUPREME COURT ] where the claim was rejected. The finalization of the provisional assessment did not violate the principles of natural justice. Conclusion - The Apex Court s decision applied to the present facts, finding no grounds to deviate from the established precedent. The appellant contended a lack of personal hearing, which is a critical component of natural justice, but the appellant s claims were not sufficient to overturn the findings of the Original Authority. Appeal dismissed.

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• 2025 (2) TMI 179
  Applicability of section 11B of the Central Excise Act, 1944 relating to claim for refund of duty - applicable in a matter where adjustment is claimed by an assessee of excess amount of duty paid against future duty liability in terms of rule 96ZO of the Central Excise Rules 2002 [Rules] or not - HELD THAT:- The adjustment made of the excise duty made in the month of March 2000 was denied to the appellant by the order dated 25.09.2001 for the reason that the appellant should have applied for refund of the excess amount of duty paid under section 11B of the Central Excise Act as the excess duty was paid by the appellant under section 3 of the Central Excise Act. In the present appeal, the scheme framed under section 3A of the Central Excise Act and rule 96ZO of the Central Excise Rules is also a compounded levy scheme. It provides for a mechanism where duty liability can be adjusted - The law laid down by the Supreme Court in Hans Steel Rolling [ 2011 (3) TMI 2 - SUPREME COURT] for applicability of section 11A of the Central Excise Act would also be applicable to the provisions of section 11B of the Central Excise Act. It has, therefore, to be held that the provisions of section 11B of the Central Excise Act would not be applicable to cases where excess duty paid is adjusted against future duty liability in terms of the provisions of the compounded levy scheme contained in the notification dated 01.08.1997 issued under section 3A of the Central Excise Act and rule 96ZO of the Central Excise Rules. The appellant had not paid duty under section 3 of the Central Excise Act for the month of August 1997, as admittedly the duty of Rs. 750 per metric tonne was paid under rule 96ZO of the Central Excise Rules and it is only because subsequently the said rule was made applicable from 01.09.1997 and not 01.08.1997 that the appellant became entitled to adjustment of excess central excise duty paid for the month of August 1997. Conclusion - Section 11B of the Central Excise Act would not be applicable to matters covered by section 3A of the Central Excise Act as the provisions of the said section and the rules framed thereunder are self-contained and do not admit of applicability of section 11B of the Central Excise Act. The appeal may now be placed before the Division Bench of the Tribunal for deciding the appeal on merits.

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• CST, VAT & Sales Tax

• 2025 (2) TMI 178
  Assessment and refund of taxes under the Assam Value Added Tax Act, 2003 (AVAT Act) and the Central Sales Tax Act, 1956 - non-compliance to the Circular No. 15/2010 - HELD THAT:- This Court had duly perused the Circular No. 15/2010 dated 23.08.2010. The said Circular is in respect to carrying out VAT Audit Assessment and do not prescribe any instructions or directions in so far as the Revisional Authority is concerned. Under such circumstances, the question of challenging the revisional order dated 26.02.2020 on the basis of the Circular No.15/2020 is totally misconceived. This Court had perused the impugned orders dated 26.02.2020. It is seen that the Revisional Authority while deciding the said revision applications filed by the petitioner firm had made necessary enquiries as is apparent from a perusal of the contents of the revisional orders. The necessary enquiries were made on the basis of the Excise Documents, Certificates from officers of receiving States of Arunachal Pradesh and Nagaland, proof of the existence of the purchasing dealers, the facts of sales and facts of goods reaching other States proved by excise documents - There is nothing on record to show that the impugned orders dated 26.02.2020 are result of fraud or is on account of collusion. This Court has also duly taken note of the impugned orders dated 26.02.2020 and there is nothing to show that the impugned orders suffers from any perversity. Under such circumstances, the question of issuance of a writ in the nature of certiorari to set aside the impugned orders dated 26.02.2020 do not arise. This Court therefore finds no merits in the instant batch of writ petitions so filed by the Assistant Commissioner of Taxes, Tinsukia challenging the impugned orders dated 26.02.2020 passed in respect to the Act of 2003 and Central Sales Tax Act, 1956 for which the same stands dismissed. Conclusion - i) The pre-deposits for revision admission are not duty payments and must be refunded upon successful revision. ii) The tax authorities are directed to issue fresh assessment orders within six weeks and process refunds within four weeks thereafter. iii) The petitioner firm was entitled to a refund of pre-deposits with interest at 9% per annum from 08.05.2021. Petition dismissed.

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• Indian Laws

• 2025 (2) TMI 177
  Modification of Award - Order regarding the amount of 50,00,000 deposited with the Registrar, High Court of Judicature at Madras - HELD THAT:- This Court will first hear arguments of the counsel seeking reconsideration of the ratio expressed in PROJECT DIRECTOR, NATIONAL HIGHWAYS NO. 45 E AND 220 NATIONAL HIGHWAYS AUTHORITY OF INDIA VERSUS M. HAKEEM ANR. [ 2021 (7) TMI 1343 - SUPREME COURT] that is, the Court has the power to modify an award under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. Thereafter, this Court will hear the counsel who support the view that the Court does not have the power to modify an Award under Sections 34 and 37 of the 1996 Act. While examining the aforesaid question, the Court will also examine the contours and scope of the power of the Court under Sections 34 and 37 of the 1996 Act and if the power of modification exists, to what extent the same can be exercised. The question of severability will also be addressed and examined.

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• 2025 (2) TMI 176
  Interpretation of statute - analysis of the precise definition of the word forthwith as used in section 50 of the Code of Criminal Procedure Code, 1973 - scope of the legal obligation it imposes on the State to supply the grounds of arrest to an arrestee. HELD THAT:- The requirement of serving upon an arrestee the grounds of arrest (or grounds for arrest as it is alternatively phrased) as distinct from citing the reasons for arrest for seeking remand has gained much significance in light of the recent decisions of the Supreme Court. In its verdict in Prabir Purkayastha [ 2024 (5) TMI 1104 - SUPREME COURT] , the Supreme Court has drawn a clear distinction between the grounds of arrest and reasons for arrest , observing the grounds of arrest informed in writing must convey to the arrested accused all basic facts on which he was being arrested so as to provide him an opportunity of defending himself against custodial remand and to seek bail. Thus, the grounds of arrest would invariably be personal to the accused and cannot be equated with the reasons of arrest which are general in nature. An I.O. can therefore no longer treat the matter of serving the grounds of arrest upon an arrestee with any levity. It is in this context that this court has carefully analysed the submissions made on behalf of the petitioner and the State in the present case; and the following position has emerged from the analysis - The phrase grounds for such arrest appears both in section 50 Cr.P.C. as well as in section 19 of the PMLA. However, there is a significant difference between the words that precede the phrase grounds for such arrest in the said two provisions. Without addressing the controversy as to whether the petitioner stood deprived of his liberty once he reached the police station at 11:30 a.m. on 17.05.2024, there can be no contest that the petitioner was formally arrested when the arrest memo was issued to him i.e., at 06:30 p.m. on 17.05.2024. In compliance of section 50 of the Cr.P.C., as interpreted above, the I.O. was required to serve the grounds of arrest upon the petitioner simultaneously with the issuance of the arrest memo. This was admittedly not done - the arrest of the petitioner is vitiated for non-compliance with the mandate of section 50 of the Cr.P.C. and Article 22 (1) of the Constitution. Conclusion - i) The term forthwith in Section 50 Cr.P.C. requires immediate and simultaneous communication of arrest grounds at the time of arrest. This interpretation is essential to uphold the constitutional right against arbitrary deprivation of liberty. ii) The petitioner s arrest was unlawful due to non-compliance with the requirement to communicate the grounds of arrest forthwith. Petition allowed.

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