TMI Tax Updates - e-Newsletter
March 17, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Full value of consideration / Stamp Duty Valuation with Safe Harbor - Computation of Capital Gains: Clause 78 of the Income Tax Bill, 2025 vs. Section 50C of the Income-tax Act, 1961

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2. Capital Gains Taxation in Slump Sales: Clause 77 of the Income Tax Bill, 2025 vs. Section 50B of the Income Tax Act, 1961

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3. Computation of capital gains in case of Market Linked Debenture: Clause 76 of the Income Tax Bill, 2025 vs. Section 50AA of the Income Tax Act, 1961

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4. Cost of acquisition in case of depreciable asset: Clause 75 of the Income Tax Bill, 2025 vs. Section 50A of the Income Tax Act, 1961

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Articles

1. Agency or Principal-to-Principal Basis? The Taxing Dilemma in Business Transactions

   By: Somesh Jain

2. FTWZ vs Customs Bonded Warehouse: Which One’s Right for Your Imports?

   By: Pradeep Reddy

3. 🚛 Can GTA service providers use both 5% and 12% GST under forward charge?

   By: Pradeep Reddy

4. Difference Between ROC Filing for Pvt. Ltd and LLP

   By: Ishita Ramani

5. LEGAL TERMINOLOGY IN GST LAW (PART 12)

   By: Dr. Sanjiv Agarwal

6. LIMITATION FOR FILING AN APPLICATION FOR CHALLENGING AN ARBITRAL AWARD UNDER SECTIO 34 OF THE ARBITRATION AND CONCILITION ACT, 1996

   By: DR.MARIAPPAN GOVINDARAJAN

7. Greenwashing by Sugary Soda Producers: The Deceptive Marketing Tactics in the Beverage Industry.

   By: YAGAY andSUN

8. Flue Gas: MOEFCC, CPCB,  and SPCB - Roles and Responsibilities in Mitigating Emissions.

   By: YAGAY andSUN

9. Flue Gas - The Hidden Devil (Environmental Laws)

   By: YAGAY andSUN

10. Flue Gas – An Introduction (Environmental Laws)

   By: YAGAY andSUN

11. Guide to Exporting of Restricted Goods and Chemicals from India

   By: YAGAY andSUN

12. DGFT Issues SOP for Voluntary Disclosure of SCOMET Export Violations

   By: YAGAY andSUN

13. What is Advance Ruling?

   By: YAGAY andSUN

News

1. After popcorn, now turn of donuts to get afflicted by 'GSTitis': Congress

2. Senate approves funding bill hours before shutdown deadline, sending to Trump for signature

3. DMK Budget eyes 2026 polls, no solutions for people's problems, says AIADMK gen secy

4. DMK govt presents budget, AIADMK asks govt to resign over TASMAC 'scam'

5. DMK regime presents Budget 2025-26 in Tamil Nadu Assembly

6. Keynote Address by Shri Sanjay Malhotra, Governor, Reserve Bank of India at the Policy Seminar on Climate Change Risks and Finance organised by Reserve Bank of India, March 13, 2025, New Delhi

7. Govt to assist exporters overcome global challenges: Shri Piyush Goyal

8. Creators are India’s digital ambassadors, should take India story to the world: Shri Piyush Goyal

9. 89th Meeting of Network Planning Group under PM GatiShakti evaluates key infrastructure projects

10. State’s Own Tax Revenue set to grow at 14.60 percent, says FM Thangam Thennarasu

11. ED summons CPI(M) MP Radhakrishnan in Karuvannur in PMLA case

Notifications

Customs

1. 13/2025 - dated 13-3-2025 - Cus (NT)

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

GST

2. 10/2025 - dated 13-3-2025 - CGST

Seeks to amend Notification No. 02/2017-Central Tax, dated the 19th June, 2017

SEBI

3. SEBI/LAD-NRO/GN/2025/235 - dated 11-3-2025 - SEBI

Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2025.

Highlights / Catch Notes

GST

• Anticipatory Bail Granted in GST Fraud Case Involving Fake Input Tax Credit to Multiple Taxpayers

  Case-Laws - HC : The HC granted anticipatory bail to the applicant implicated in a case involving fake input tax credit allegedly passed to 14 taxpayers including the applicant's firm. The court applied established principles for bail consideration, including: nature and gravity of accusations, applicant's antecedents, flight risk, and potential malicious intent behind the accusation. While acknowledging that detailed examination of evidence should be avoided at this stage, the court allowed the application. The applicant, upon arrest or appearance in connection with the FIR registered with DCB Police Station, Rajkot City, shall be released on bail upon furnishing a personal bond with one surety of like amount, subject to fulfillment of imposed conditions.
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• GST Registration Cannot Be Retrospectively Canceled Without Proper Notice and Evidence Under Section 29 of CGST Act

  Case-Laws - HC : The HC quashed the retrospective cancellation of GST registration under SS29 of CGST Act, 2017, finding procedural violations. Neither the SCN nor final order provided material evidence supporting the allegation under SS29(2)(e), nor did they notify the petitioner of intended retrospective cancellation. This procedural defect alone invalidated the action. The court clarified that authorities may continue proceedings regarding alleged fraudulent registration, provided the petitioner receives proper notice with supporting evidence. On time limitation, the court referenced Addichem Speciality LLP, confirming that condonation of delay depends on statutory provisions governing the remedy. The March 20, 2024 order was quashed insofar as it retrospectively canceled registration.
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• Court Sets Aside Order on Excess Input Tax Credit Claims, Directs 25% Deposit of Disputed Taxes Within Four Weeks

  Case-Laws - HC : The HC set aside the impugned order dated 07.03.2024 concerning excess Input Tax Credit (ITC) claimed due to non-reconciliation of information, including ITC from cancelled dealers, return defaulters, and tax non-payers. The Court directed the petitioner to deposit 25% of the disputed taxes determined in the impugned order within four weeks from receipt of the Court's order, as the petitioner had expressed willingness to pay this amount. Upon this condition being fulfilled, the impugned order was set aside and the petition was disposed of.
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• Stipend Payments Through Training Program Coordinator Qualify as "Pure Agent" Transactions Under Rule 33, Exempt from GST

  Case-Laws - AAR : The AAR ruled that the applicant, who coordinates on-the-job training programs between universities and industry partners, acts as a "pure agent" under Rule 33 regarding stipend payments to trainees. The applicant functions merely as a conduit, receiving stipend amounts from industry partners and disbursing them in full to trainees without deductions. The AAR determined that the applicant satisfies all conditions of a pure agent, as it merely facilitates the payment process while the actual service is supplied by trainees to the industry partners. Consequently, the stipend amounts received by the applicant from industry partners and paid in full to trainees do not attract GST liability.
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• Fish Finders Not Eligible for 5% Tax Rate as They Don't Qualify as Essential Vessel Parts Under N/N. 1/2017

  Case-Laws - AAR : The AAR ruled that fish finders cannot be classified as parts of vessels under Chapter headings 8901, 8902, 8904, 8905, 8906, or 8907, and therefore are not eligible for the reduced 5% tax rate under Sr.No.252 of N/N. 1/2017 Central Tax (Rate). The authority determined that while fish finders are manufactured for use on fishing vessels and other watercraft, vessels remain complete and functional without them. Unlike essential components integral to a vessel's operation, fish finders are auxiliary equipment. The AAR distinguished between classification cases under Central Excise Tariff and the present matter, which concerned whether the product constituted a vessel part for tax rate determination purposes.
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Income Tax

• Assessment Order Quashed: AO Improperly Consulted Superiors and Violated Natural Justice Under Section 143(3)

  Case-Laws - HC : The HC quashed an undated assessment order under s.143(3) of the Income Tax Act, finding multiple legal deficiencies. The AO improperly abdicated discretionary authority by consulting with superior officers who actively participated in drafting the assessment order rather than merely approving it as required by CBDT Circular. The court determined that principles of natural justice were violated as the petitioner was not afforded reasonable opportunity to present a defense. Additionally, the assessment order was deemed time-barred, as evidence showed it was not actually made by March 31, 2024, despite revenue authorities' claims. The HC rejected the revenue's "flimsy attempt" to retroactively establish timely issuance, declaring the order non est and legally unsustainable.
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• Banks Must Deduct TDS Under Section 194N on Government Subsidy Payments Despite Source of Funds

  Case-Laws - HC : The HC upheld the bank's obligation to deduct TDS under Section 194N on government subsidy payments made to the petitioners. The court determined that the bank must comply with mandatory tax deduction requirements regardless of the source of funds being government subsidies. While acknowledging that petitioners could receive refunds after assessment if no tax was ultimately payable, the court emphasized that Section 194N creates a mandatory obligation that cannot be circumvented. The HC referenced its previous ruling in a similar case which established that Section 194N mandates 2% deduction on cash withdrawals to promote a cashless economy, and notably cannot be avoided through the lower/nil deduction mechanism available under Section 197 for other provisions.
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• Double Deduction Claim Justifies Assessment Reopening Beyond Four-Year Limitation Under Section 147

  Case-Laws - HC : The HC upheld the reopening of assessment beyond the four-year limitation period, finding the appellant had claimed a deduction twice and failed to make full and true disclosure of material facts during original assessment proceedings. The AO correctly exercised jurisdiction under s. 147 after discovering the false claim. The court dismissed the writ appeal, noting that the appellant had already pursued alternate remedy by filing an appeal before the CIT(A) on the same issues after the writ petition's dismissal. The HC confirmed the appellant could address the merits of reopening before the CIT(A), rejecting the appellant's contention that no double claim existed.
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• Income Tax Reassessment Invalid When Disputed Amounts Were Already Reviewed During Original Assessment Under Section 143(1)

  Case-Laws - HC : The HC upheld the Appellate Tribunal's decision that reassessment under Section 147 was invalid. Although Explanation 1 to Section 147 states that mere production of evidence before the AO does not constitute disclosure under the first proviso, the disputed amounts (Rs. 594.33 lakhs and 438.96 lakhs) had been available and reviewed by the AO during the original assessment under Section 143(1). Therefore, invoking Section 148 for reassessment under Section 143(3) read with Section 147 lacked jurisdiction. The Court noted that while the assessee should have properly written off non-performing assets under Section 36(1)(vii), the substantial questions of law were resolved in the assessee's favor.
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• Agricultural Land Sale Proceeds: Section 148 Reassessment Notice Quashed as Mere Change of Opinion on Section 54B Deduction

  Case-Laws - HC : The HC quashed the reassessment notice issued under section 148, finding it impermissible as a mere change of opinion rather than based on new information. The authorities sought to reopen assessment regarding the taxpayer's section 54B deduction claim, despite having previously considered this issue during the original section 143(3) assessment. The court held that reopening requires "reasons to believe" with direct nexus to new tangible material, not merely alleging inadequate inquiry by the previous Assessing Officer. Since the taxpayer had fully disclosed all relevant documents during the original assessment, the reopening was invalid in law. Judgment favored the assessee.
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• Interest on GST, Late Filing Fees Allowed as Deduction Under Section 37; Higher Depreciation Rates Upheld for Mining Vehicles

  Case-Laws - AT : The ITAT ruled in favor of the assessee on multiple issues. Interest on GST and late filing fees was held to be allowable as a deduction under section 37, following Supreme Court precedent in Mahalakshmi Sugar Mills that interest paid to government for delayed payments cannot be characterized as a penalty. The Tribunal upheld higher depreciation rates of 30% on dumpers and tippers used for transportation in mining operations, finding the assessee had fulfilled necessary conditions for the enhanced rate. Similarly, the ITAT confirmed the CIT(A)'s decision allowing 40% depreciation on certain motor vehicles used for hire. Finally, the Tribunal deleted an addition under section 69C for alleged unexplained expenditure, as it was based solely on an unsigned Excel sheet recovered from a third party without corroborative evidence.
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• Assessment Order Void as Time-Barred Under Section 144C(13) When Issued Seven Months After DRP Directions

  Case-Laws - AT : The ITAT held that the final assessment order passed on 28.02.2023 was barred by limitation and therefore void. Per Section 144C(13), the Assessing Officer must pass the final order within one month from the end of the month in which DRP directions are received. In this case, DRP directions were received on 07.06.2022, making the deadline 31.07.2022. The TPO's effect order dated 14.07.2022 did not extend this limitation period. Additionally, the ITAT noted procedural irregularity as the draft assessment order was issued by the Faceless Assessment Centre while the final order was passed by the jurisdictional Assessing Officer, deviating from the faceless assessment system. Appeal decided in assessee's favor.
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• Penalty Under Section 271D Quashed as Time Limit Expired Despite TOLA Extension for Cash Loans Violating Section 269SS

  Case-Laws - AT : The ITAT quashed penalty proceedings under section 271D imposed on the assessee for accepting cash loans of Rs. 61,50,000/- in violation of section 269SS. The Tribunal held that the show cause notice dated 30.03.2021 required penalty order completion by 30.09.2021, which fell outside the Taxation and Other Laws Act (TOLA) period (20.03.2020 to 31.03.2021). Consequently, the CBDT notification dated 17.09.2021 did not extend the due date for passing the penalty order in this case. Following precedents in Mahesh Wood Products Pvt. Ltd. and Shri Subramaniam Thanu, the ITAT upheld the CIT(A)'s decision to quash the penalty order due to limitation issues.
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• PCIT Cannot Direct Penalty Under Section 270A Without AO's Finding of Under-Reported Income

  Case-Laws - AT : The ITAT quashed a revision order under s263 issued by the PCIT directing initiation of penalty proceedings under s270A for under-reported income. Following Chennai Metro Rail Ltd., the Tribunal held that the PCIT cannot invoke s263 without the AO first recording a finding regarding under-reporting of income under s270A(2). While the AO had initiated penalties under s271B and s271F, no determination of under-reported income was made. The PCIT improperly substituted his judgment for the AO's discretion, as the AO had deliberately chosen not to initiate s270A proceedings. The revision order was therefore invalid and the assessee's appeal was allowed.
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• Tribunal Eliminates Transfer Pricing Adjustments After Excluding Non-Comparable Companies Under Section 92C

  Case-Laws - AT : The ITAT ruled in favor of the assessee on multiple transfer pricing issues. The Tribunal excluded comparables Tata Elexi and Sasken Technologies, bringing the appellant's margin (9.44%) within acceptable range (11.66% +/-3%), eliminating TP adjustment. Similarly, ADTL and TCG were excluded as comparables for CRDS services. The ITAT deleted TP adjustments for intra-group services and advertisement/marketing expenses, finding the latter not to be international transactions. Additional favorable rulings included: no SS14A disallowance where no exempt income was earned; deletion of duplicative SS41(1) addition for trading liability cessation; allowance of lease rental expenses for assets on financial lease; and confirmation that SS80G deduction for CSR contributions remains available despite Explanation 2 to SS37(1).
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• Fixed Deposits Linked to Shipping Operations: Interest Income Qualifies Under Tonnage Tax Scheme

  Case-Laws - AT : ITAT ruled that interest income from fixed deposits marked as lien, conditional deposits from public offerings, deposits placed to comply with facility agreements, and deposits for working capital requirements should be treated as part of profits from core shipping activities under the Tonnage Tax Scheme. The Tribunal determined these deposits were inextricably linked to the assessee's sole business of operating qualifying ships, making the interest business income rather than separate income. ITAT directed the AO to treat all interest income as part of profits from core shipping activities. Additionally, the Tribunal upheld CIT(A)'s deletion of disallowances under section 14A r.w. Rule 8D and administrative expenditure incurred toward earning income from incidental activities, following precedents from earlier decisions.
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• Payments to Foreign Entities: Technical Services or Reimbursements? AO Directed to Re-examine Taxability Under FTS Rules

  Case-Laws - AT : The ITAT remanded the case to the Assessing Officer for fresh examination on multiple issues. Regarding payments to foreign entities, the Tribunal held that further factual examination was necessary to determine whether the foreign entity made technical knowledge available to the assessee, qualifying as Fees for Technical Services/Included Services. The ITAT directed clarification on whether expenses constituted subcontracting or testing charges, as these terms carry different legal implications. The taxability of management fees was also remanded, with the assessee permitted to file documentary evidence supporting its alternative plea that payments were reimbursements of global costs. The Tribunal allowed the assessee's appeals for statistical purposes only, requiring the AO to conduct a comprehensive reassessment in accordance with law.
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• Title: Business Support Services Cost Allocations Without Profit Markup Not Taxable as Royalty Under India-UK DTAA

  Case-Laws - AT : The ITAT ruled that receipts from Business Support Services (BSS) should be deleted from the assessee's taxable income, following binding precedent established in the SIMPL case. The Tribunal determined that cost allocation for SUN Maintenance Software and GSAP maintenance charges cannot be treated as royalty under the India-UK DTAA, as these payments represented mere cost allocations without income elements. Similarly, expenses related to GSAP Go-Live and software access licenses were not royalties since they granted only the right to use copyrighted software, not rights to the copyright itself. The cost-to-cost basis of allocation across the group without profit markup further supported the non-taxable nature of these receipts in India.
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• Excel Sheet Found at Third Party's Premises Cannot Alone Justify Addition Under Section 69 for Unexplained Investments

  Case-Laws - AT : ITAT reversed the addition made by AO under section 69 for unexplained investment. The addition was based solely on an excel sheet found at a third party's premises, which allegedly showed cash loans advanced by the appellant. The Tribunal held that the excel sheet alone was insufficient evidence as it was neither authored by nor found in possession of the appellant. Without corroborative evidence establishing the appellant's connection to the alleged transactions, the addition was unsustainable. Following precedents in Appu Direct Pvt Ltd and Sant Lal, ITAT affirmed that liability cannot be fastened based solely on third-party materials without supporting evidence. The CIT(A)'s deletion of the addition was upheld.
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• Foreign Asset Disclosed in Revised Return by British Tax Resident: Penalty Under Black Money Act Section 43 Deleted

  Case-Laws - AT : The ITAT allowed the appellant's appeal, deleting the Rs. 10,00,000/- penalty imposed under Section 43 of the Black Money Act. The Tribunal found that the appellant, a British citizen who was only a tax resident in India for the relevant assessment year, had disclosed the foreign asset in a timely filed revised return. The revenue authorities failed to establish that the appellant was previously an Indian citizen or that the foreign investment involved undisclosed income from India. Relying on K Mohammad Haris and Rohit Krishna precedents, the ITAT concluded that the legislative intent of the Black Money Act was not applicable in this case, as there was proper disclosure within the prescribed time limit.
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Customs

• Tribunal Lacks Jurisdiction in Drawback Recovery Cases Under Section 129A(1) of Customs Act

  Case-Laws - AT : The CESTAT dismissed the appeal for lack of jurisdiction, holding that Section 129A(1) of the Customs Act, 1962, explicitly excludes the Tribunal's jurisdiction over matters relating to drawback under Chapter X. The statutory language contains a clear prohibition, twice emphasized in negative terms, that ousts the Tribunal's authority when Commissioner (Appeals) orders relate to drawback payments. The CESTAT followed binding precedent from the jurisdictional High Court which confirmed that "payment of drawback" in the proviso to Section 129A prevents the Tribunal from hearing cases involving drawback recovery. The concurrent jurisdiction between Revisionary Authority and the Tribunal in drawback matters was acknowledged as potentially perplexing for litigants.
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• Wind Operated Electricity Generator Towers Classified as WOEG Parts Under CTH 8503, Not General Structures

  Case-Laws - AT : CESTAT held that imported towers are parts of Wind Operated Electricity Generators (WOEG) properly classifiable under CTH 8503, not under CTI 7308 as general/civil structures. The Tribunal determined the Commissioner erred in mischaracterizing the towers as non-parts of Wind Energy Generators. CESTAT relied on precedent from CC Chennai v. Suzlon Towers and Structures Limited, where tower flanges were similarly classified under 8503 as WOEG parts. The Tribunal emphasized that the towers' specific function in wind energy generation qualified them for the tariff classification under 8503 and corresponding exemption benefits under Notification No.12/2012. The impugned order was set aside and the appeal allowed.
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• Lithium-ion batteries correctly classified under Schedule III, S. No. 376AA, attracting 18% IGST instead of 12%

  Case-Laws - AT : The CESTAT ruled that lithium-ion batteries are correctly classified under S. No. 376AA of Schedule III to Notification No. 01/2017-IT (Rate), as amended by Notification No. 19/2018-IT (Rate), attracting 18% IGST rather than 12%. The Tribunal applied the cardinal principle that when statutory language is plain and unambiguous, courts must give effect to the words as written without implication or intendment. However, the demand for interest was set aside following Bombay HC precedent in Mahindra & Mahindra Ltd. v. Union of India, which held that absent specific statutory provisions for interest levy under Section 3 of Customs Tariff Act, 1975 (prior to its amendment on August 16, 2024), such interest cannot be charged.
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• Customs Broker's License Revocation Modified: Penalty Upheld for Regulatory Violations Under Regulations 10(a) and 10(q)

  Case-Laws - AT : CESTAT partly allowed the appeal concerning a Customs Broker's license revocation. The Tribunal held that the appellant violated Regulations 10(a) by failing to produce client authorization when requested and 10(q) by not cooperating with investigations. However, the appellant did not violate Regulations 10(d) and 10(n), as customs brokers cannot be expected to verify the physical existence of exporters when government-issued documents are presumed genuine. Applying the doctrine of proportionality, CESTAT modified the order by setting aside the license revocation and security deposit forfeiture while upholding the Rs. 50,000 penalty, finding this sufficient to meet the ends of justice.
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• Confiscation of Gold Overturned: Revenue Failed to Prove Smuggling While Appellants Showed Melted Jewelry Evidence

  Case-Laws - AT : The CESTAT allowed an appeal against confiscation of 850.39 grams of gold seized from a person in a town seizure case. The tribunal held that Section 113 of the Customs Act was inapplicable as there were no allegations of attempted export. While statements recorded under Section 108 are admissible evidence, they cannot be treated as conclusive proof without scrutiny. The tribunal found that the Revenue failed to establish reasonable belief that the gold was smuggled, while the appellants successfully demonstrated that the irregular gold pieces were produced by melting old jewelry. The tribunal determined that absolute confiscation and penalties were unjustified under these circumstances.
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FEMA

• Denial of Cross-Examination Not a Natural Justice Violation When No Prejudice Demonstrated in FERA Proceedings

  Case-Laws - AT : The AT rejected appellant's contention that denial of cross-examination of departmental officers violated natural justice principles. The tribunal distinguished between proceedings under Customs Act and FERA, noting that appellants failed to demonstrate how cross-examination would have altered the case outcome or how its denial caused prejudice during adjudication. The AT determined that absence of cross-examination was not fatal to the proceedings and did not prejudice appellants' case. Consequently, the tribunal upheld the impugned interlocutory orders as maintainable and sustainable, finding no violation of natural justice principles in the Special Director's refusal to permit cross-examination of officers who recorded statements.
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Corporate Law

• Landlord Succeeds in Reclaiming Premises from Company in Liquidation Under Section 446 of Companies Act

  Case-Laws - HC : The HC granted the landlord's application under Section 446 of the Companies Act, directing the official liquidator to surrender premises leased to a company in liquidation. The Court determined it had jurisdiction to entertain such claims against companies in liquidation, rejecting the liquidator's argument that the landlord should pursue separate eviction proceedings. The Court found the liquidator's claim that the premises were needed for storing company records was disingenuous, as an Official Liquidator's Report had confirmed no books or records were present. The ex-directors' perfunctory applications for company revival were dismissed, with the Court concluding that continued rental payments were unjustified given the premises' disuse.
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• Bank's Loan Assignment to Ineligible Transferee Violates RBI Directives, Court Recalls Compromise Order

  Case-Laws - HC : The HC recalled its order approving a compromise between a bank and Savannah regarding the assignment of Shaila Clubs' loan. The Court determined the compromise was unlawful as it violated RBI Directives of 2021, which prohibit transfer of loan accounts to ineligible transferees. Savannah, not being a recognized transferee under RBI guidelines, could not legally acquire the loan. The Court rejected arguments regarding delay in filing the application for recall, holding that when a compromise is unlawful, technical grounds cannot prevent the Court from exercising its inherent power to recall orders. The Court restored the original petition, finding that allowing the unlawful compromise would frustrate RBI's regulatory objectives and improperly affect Shaila Clubs' rights without their consent.
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• SEBI's Relaxation of Reverse Book Building Valid in ICICI Securities Scheme of Arrangement Under Regulation 42

  Case-Laws - AT : The NCLAT dismissed an appeal challenging a scheme of arrangement between ICICI Bank and ICICI Securities. The Tribunal found that SEBI's relaxation from reverse book building requirements was within its regulatory powers under Regulation 42 of the Delisting Regulations. The valuation complied with Regulation 37(2)(j), meeting the minimum 60-day VWAP requirement. The court affirmed that valuation determinations should be left to accounting experts. ICICI Bank's shareholder outreach did not constitute undue influence, and disclosures in the explanatory statement were deemed sufficient. The appellant lacked standing to object under Section 230(4) of the Companies Act, 2013, and failed to demonstrate any procedural illegality or prejudice to public shareholders.
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IBC

• Operational Creditor's CIRP Application Rejected Due to Pre-existing Dispute Over Accounts Reconciliation

  Case-Laws - AT : NCLAT set aside the NCLT's order admitting the Corporate Debtor into CIRP. Though the application was filed within the limitation period (within three years of the last payment on 19.10.2016), the Tribunal found a pre-existing dispute evidenced by email exchanges regarding accounting differences. The Corporate Debtor had clearly stated in emails that no amount was payable to the Operational Creditor. Following precedents from the Supreme Court in S.S. Engineers and Sabarmati Gas Limited cases, which established that failure of reconciliation of accounts qualifies as a pre-existing dispute, the NCLAT concluded that NCLT erred in ignoring this dispute when admitting the Corporate Debtor into CIRP.
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• Appeal Dismissed: Challenging Liquidator Fee Determination Procedure Without Contesting SCC's Actual Decision Deemed Premature

  Case-Laws - AT : The NCLAT dismissed an appeal challenging procedural aspects of liquidator fee determination without contesting the Stakeholders' Consultation Committee's (SCC) actual decision on the matter. The Tribunal held that challenging the procedure without challenging the consequential decision rendered the appeal premature and untenable. The appellant had questioned the Adjudicating Authority's directive for the SCC to determine liquidator remuneration and incidental charges, but failed to challenge the SCC's subsequent decision dated 09.01.2025. The NCLAT concluded that no cause survived regarding the impugned order's directions, as the unchallenged SCC determination had already addressed the liquidator's fees and liquidation costs.
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• Delay in Re-filing Appeals Condoned but Recall Application Rejected After Resolution Plan Attained Finality Under IBC

  Case-Laws - AT : The NCLAT condoned the delay in re-filing appeals but ultimately dismissed the appellant's case. The Tribunal held that the appellant could not file a recall application alleging fraud after the resolution plan approval order dated 30.05.2022 had already been affirmed by the Appellate Court on 28.09.2022 and finalized by the Supreme Court on 11.03.2024 when the appellant withdrew their appeal under Section 62 of IBC. The NCLAT emphasized that once an order is affirmed through the appellate process, it attains finality, precluding subsequent recall applications regardless of when knowledge of alleged fraud was acquired. The dismissal of applications by the impugned order was found free from apparent error and did not warrant appellate interference.
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Indian Laws

• RBI's Failure to Exercise Regulatory Powers Under Chapter IIIB Can Be Challenged Through Writ of Mandamus

  Case-Laws - HC : The HC dismissed a letters patent appeal challenging maintainability of a writ petition against the RBI for failing to exercise regulatory powers under Chapter IIIB of the RBI Act regarding alleged fund misappropriation in ECL. The court affirmed that a writ of mandamus is maintainable where a public authority fails to exercise statutory powers, following CAG v. K.S. Jagannathan. The HC noted that despite RBI identifying violations by ECL in an email dated May 24, 2024, no action was taken. The court rejected arguments that NCLT proceedings barred the writ petition, clarifying that NCLT lacks jurisdiction to issue prerogative writs directing RBI to exercise powers under the RBI Act.
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PMLA

• Bail Denied in Money Laundering Case Under Section 3 of PMLA for Involvement in Mahadev Online Book Proceeds

  Case-Laws - HC : HC dismissed the bail application in a money laundering case related to proceeds from Mahadev online book. The court found sufficient prima facie evidence of the applicant's involvement in money laundering under Section 3 of PMLA, 2002. Rejecting the applicant's denial of knowledge about transactions, the court determined there were reasonable grounds to believe the accused was involved in an organized crime with complex facets. Under Section 45 of PMLA, the court concluded the applicant would likely commit further offenses if released. Given the nature of allegations, gravity of the offense, and investigation materials, bail was denied.
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VAT

• Taxpayer's Petition Dismissed for Concealing Material Facts About Revisional Proceedings in VAT Reassessment Challenge Under Section 36(1)

  Case-Laws - HC : The HC dismissed the writ petition on the principle of suppressio veri; suggestio falsi, as the petitioner failed to disclose material facts regarding suo-moto revisional proceedings while challenging a reassessment notice as time-barred under Section 36(1) of the TVAT Act, 2004. The petitioner neither mentioned the revisional proceedings nor challenged the revisional authority's order dated October 27, 2022, though it was referenced in the impugned notice. The court held that extraordinary relief under Article 226 cannot be granted to parties who suppress material facts, emphasizing that petitioners must approach writ courts with clean hands and full disclosure of all relevant information.
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Service Tax

• Notice Pay and Booking Cancellation Charges Not Subject to Service Tax Under Finance Act, 1994

  Case-Laws - AT : The CESTAT ruled that "notice pay" collected from employees for not serving agreed notice periods does not constitute consideration for service and is therefore not subject to service tax. Following precedents established in M/S Balaji Medical & Diagnostic Research Centre and Shiv Vilas Resort cases, the Tribunal determined that such amounts represent compensation related to employment rather than taxable services. Similarly, amounts retained by the appellant due to booking cancellations or customer no-shows were held not to constitute a "declared service" under Section 66E(e) of the Finance Act, 1994. The adjudicating authorities failed to follow judicial protocol by disregarding established precedents. Appeal allowed.
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Case Laws:

• GST

• 2025 (3) TMI 734
  Seeking grant of anticipatory bail - passing on fake input tax credit to 14 taxpayers including the present applicant s firm - HELD THAT:- It is equally incumbent upon the Court to exercise its discretion judiciously, cautiously and strictly in compliance with the basic principles laid down in a plethora of decisions of the Hon ble Apex Court on the point. It is well settled that, among other circumstances, the factors to be borne in mind while considering an application for bail are (i) the nature and gravity of the accusation; (ii) the antecedents of the applicant including the fact as to whether he has previously undergone imprisonment on conviction by a Court in respect of any cognizable offence; (iii) the possibility of the applicant to flee from justice; and (iv) where the accusation has been made with the object of injuring or humiliating the applicant by having him so arrested. Though at the stage of granting bail an elaborate examination of evidence and detailed reasons touching the merit of the case, which may prejudice the accused, should be avoided. The present application is allowed by directing that in the event of arrest / appearance of the applicant in connection with FIR registered with DCB Police Station, Rajkot City, the applicant shall be released on bail on furnishing a personal bond with one surety of like amount and subject to fulfilment of conditions imposed.

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• 2025 (3) TMI 733
  Cancellation of GST Registration under 29 of the Central Goods and Service Tax Act, 2017 - no proper reasons assigned in the SCN - Violation of principles of natural justice - HELD THAT:- Neither the SCN nor the final order alludes to or rests upon any material on the basis of which the respondent would have formed the opinion that Section 29(2)(e) of the Central GST Act, 2017, was violated nor did it embody an intent of a proposed retrospective cancellation of the GST registration of the petitioner. In the absence of reasons having been assigned in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action. The writ petition is entitled to succeed on this short ground alone. This, however, would be without prejudice to the right of the respondent to continue the SCN proceedings on the allegation of the initial registration having been obtained by practise of fraud or misrepresentation subject to the condition that the petitioner shall be duly apprised of the material on the basis of which that opinion has been formed. Time limitation - HELD THAT:- The said issue already stands answered against the writ petitioner in light of decision in M/s Addichem Speciality LLP v. Special Commissioner, Department of Trade and Taxes [ 2025 (2) TMI 366 - DELHI HIGH COURT] where it was held that The power to condone delay caused in pursuing a statutory remedy would always be dependent upon the statutory provision that governs. The right to seek condonation of delay and invoke the discretionary power inhering in an appellate authority would depend upon whether the statute creates a special and independent regime with respect to limitation or leaves an avenue open for the appellant to invoke the general provisions of the Limitation Act to seek condonation of delay. Conclusion - Retrospective cancellation of GST registration requires a reasoned order, reflecting due application of mind and adherence to procedural fairness. The order of 20 March 2024 insofar as it proceeds to cancel the registration of the petitioner from a retrospective date is quashed - petition allowed.

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• 2025 (3) TMI 732
  Rejection of petitioner s appeal due to non-compliance with the pre-deposit requirement under Section 107(6) of the Central Goods and Services Tax Act, 2017 - refund claim - appropriation of refunds against non-existent dues - failure to generate the DRC-03 form - HELD THAT:- This Court finds merit in the submission of the learned counsel for the petitioner inasmuch as the condition of payment of 10% of disputed tax as pre-deposit was complied with in terms of Section 107 of the Act, though DRC-03 may not have been generated within the stipulated period. The infraction/ non-compliance if any is only technical. In view thereof, the Appeal shall be taken on record duly numbered and heard on merits. At this stage, the learned counsel for the petitioner seeks liberty of the Court to file a representation seeking refund of the erroneous appropriation of the refund due in terms of Section 107 of the Act - the petitioner is granted liberty to submit a representation to the Respondents. If any such representation is filed, the Respondents shall pass orders on merits and in accordance with law within a period of 4 weeks from the date of receipt of a copy of this order after affording a reasonable opportunity of hearing. Petition disposed off.

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• 2025 (3) TMI 731
  Excess Input Tax Credit (ITC) claimed on account of non-reconciliation of information - Input Tax Credit claimed from cancelled dealers, return defaulters and tax non payers - petitioner is ready and willing to pay 25% of the disputed tax - HELD THAT:- The petitioner shall deposit 25% of the disputed taxes arrived at vide impugned order dated 07.03.2024, 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. The impugned order dated 07.03.2024 is set aside - Petition disposed of.

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• 2025 (3) TMI 730
  Seeking withdrawal of petition - Challenge to constitutional validity of Section 16(4) of Central Goods and Service Tax Act, 2017 - HELD THAT:- The present writ petition is dismissed as withdrawn.

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• 2025 (3) TMI 729
  Levy of GST - reimbursement of the expenses incurred by the applicant, in respect of stipend paid to students/trainees as a pure agent under GST Laws - HELD THAT:- The main object of the Applicant is to enhance the skill of students and enhancing their chances of getting employment by providing practical training to them and an opportunity to also earn for their education. In pursuance of this objections it has entered into agreements with the Savitribai Phule Pune University, Pune and Lamrin Tech Skill University, Punjab, Maharashtra State Board for Technical Education for conducting their on the job training courses in various industries and for providing the students an opportunity of working as trainees/interns in the various industries. The applicant has also entered into agreements with the Industry Partners to coordinate and liaison with them for providing on-the-job practical training and theoretical training for training of youth/students of the above-mentioned Universities/MSBTE. The Applicant is getting reimbursed exactly the same amount from the industry partners which is paid/payable to the trainees as stipend. Hence, it is imperative to analyse if the Applicant acts as pure agent as far as this transaction is concerned - While learning, students help or contribute to completing jobs and responsibilities of skilled manpower of Industrial Training Partners. Since these trainees enrolled with Universities are on the roll of Industrial Partner and are providing service to Industrial Partner, In the entire process, they are eligible for stipends from the industry partners. YSL is only supporting them to get students enrolled with University deploy them with Industrial training partners and doing compliances which are charged separately in the invoices raised to the industrial partners. Hence, the Applicant satisfies all the conditions of pure agent under Rule 33. Thus, it is seen that M/s YSL acts as pure agent of the Industry partners for payment of stipend to the trainees. The applicant is only acting as agent in collecting the stipend from the industry partners and then disbursing the same to the trainees in full since the applicant is not allowed to make any deductions from the stipend before disbursing the same to the trainees. The applicant is only a conduit for the payment of stipend and the actual service is supplied by the trainees to the trainer companies (industry partners) against which stipend is payable. In view of the above discussions, we hold that applicant is acting as pure agent . Conclusion - The amount of stipend received by the applicant from the industry partners and paid in full to the trainees does not attract GST.

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• 2025 (3) TMI 728
  Classification of fish finders - whether the product Fish Finder sold by them, which are used by the fishermen to locate fish in the water forms parts of vessels falling under Chapter 8901, 8902, 8904, 8905, 8906 or 8907 and therefore chargeable to reduced tax @ 5% under Sr.No.252 of N/N. 1/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The Hon ble Supreme Court in the case of COMMISSIONER OF INCOME-TAX VERSUS VENKATESWARA HATCHERIES (P.) LTD. AND OTHERS [ 1999 (3) TMI 12 - SUPREME COURT] has held that when the word is so defined in the Act, it may be permissible to refer to dictionary to find out the meaning of that word, as it is understood in common parlance . Explanatory Notes to Section XVII at General (III) Parts and accessories provides that Chapter 89 make no provisions for parts (other than hulls) or accessories of ships, boats or floating structures. Such parts and accessories, even if identifiable as being for ships etc., are therefore classified in other chapter in their respective headings. Whether the product Fish finder can be considered as a part of the vessels falling under Chapter heading 8901, 8902, 8904, 8905, 8906 or 8907? - HELD THAT:- The items that are discussed as essential parts of a ship/vessel are such essential components of a vessel/ship without which the vessel would not be complete and would not exist. These are very integral for the functioning of the ship and can also be separated from the ship for repair/replacement. Refering to the definition of the word part , it is found that part is a separate piece of something or a piece that combines with other pieces to form the whole of something. Similarly, the second definition of part also defines part as one of the pieces that together form a machine or some type of equipment. It is a fact that Fish Finders are manufactured for use on fishing vessels, yachts and other vessels. However, the vessels are complete, even without the Fish Finders affixed on them. The case laws cited by the applicant in the case of GS Auto International Vs. CCE [ 2003 (1) TMI 700 - SUPREME COURT] , Hallmark Industries Vs. CCE [ 2000 (6) TMI 802 - CEGAT, CALCUTTA] , Elgi Ultra Appliances Vs. CCE [ 1999 (7) TMI 422 - CEGAT, CHENNAI] , were in respect of classification of the said goods under the Central Excise Tariff and to decide whether they should be classified as parts of the main goods for which they were designed or in their individual capacity. In the present case, the issue involved is not the classification of Fish Finders but to decide the whether the Fish Finder is a part of vessels of Chapter headings 8901, 8902, 8904, 8905, 8906 or 8907. Conclusion - Fish Finders cannot be considered as a part of a vessel falling under headings 8901, 8902, 8904, 8905, 8906 or 8907.

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• Income Tax

• 2025 (3) TMI 727
  Writ petition quashing of undated assessment order passed u/s 143(3) - Penalty u/s 270A and 271AAC - HELD THAT:- AO would have to exercise its own discretion to reach a conclusion and would not be influenced by any other officer. We find force in the contention raised by petitioner that the concerned AO was influenced by the consultation and discussion with his superior officers. In fact the order passed by the AO appears to have been already prepared even before the reply was received as the consultations have been conducted on 26.10.2023, 11.01.2024 and 14.03.2024 by the AO as mentioned by him in the order itself. Again after the reply was received and the order was passed by the AO, the same has been approved by the Joint Commissioner. As such, we find that the Joint Commissioner has in fact comprehensively and actively participated in the making of the assessment order while his role was only limited to the approval of the assessment order in terms of the CBDT Circular. Thus, we find the order to be vitiated in law. The assessment order cannot be result of an independent application of mind and exercise of discretionary power by the AO in terms of Section 143(3) of the Act and but is an order passed under the influence and directions of the superior officers. As noticed that the consultation with a superior officer would be akin to directions of the superior. There is no room available for discretion where consultation is sought from a superior officer while if a superior officer consults his subordinates, the discretion continues to stay with him. He may choose not to follow the advice of his subordinate but the opposite would be untrue. We are, thus, of firm view that the order has been passed whereby the AO has abdicated his authority and, therefore, the order has become vitiated in law. Non-compliance of principles of natural justice - A presumption cannot be drawn that after a demand is made, the person would have to himself appear without being provided any particular date. In our opinion, the submissions advanced by the respondents, therefore, are misconceived and we are unable to accept the contentions of the respondents that it was the duty of the petitioner s company to appear before the concerned AO after having filed its reply. We, therefore, held that the AO has failed to follow the basic principles of natural justice while passing the impugned order and the petitioner was not provided fair and reasonable opportunity to put up its defence and the order passed is, therefore, liable to be struck down as illegal and arbitrary. Order of assessment being time barred - While the assessment order is reflected on portal on 04.04.024 in order to further verify, we ask the counsel for the revenue to place on record the email sent by them to the petitioner on 31.03.2024, relating to having passed the assessment order but the revenue filed evasive application, wherein details of dates when emails were sent have been shown but from the chart placed before us along with the application, it is apparent that no email was sent to the assessee containing the assessment order on 31.03.2024. A flimsy attempt has been made to cover up the mistake. It is a fact that for covering one mistake you make more mistakes one after the other. However, we are satisfied after examining all the documents placed before us that there has actually been no order made on 31.03.2024 and, therefore, the judgment passed in the case of Mohammed Meeran Shahul Hameed case [ 2021 (10) TMI 363 - SUPREME COURT] would have no application and would not save the time barred order of assessment. We also find that so far as the party who is effected by the order or decision would only consider the limitation from the date it acquires the knowledge and for him the limitation would start from the said date. Be that as it may, since we have reached to the conclusion that order passed was not made upto 31.03.2024, the period in terms of proviso added vide Finance Act, 2022 w.e.f. 01.04.2022, will apply to the facts of the case and the order is to be termed as time barred and beyond the period of limitation prescribed therein. The order of assessment is found to be non est and not sustainable in the eyes of law. Accordingly, order of assessment is quashed and set aside.

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• 2025 (3) TMI 726
  Deduction of TDS u/s 194N - petitioner submitted that the amounts deposited into the 2nd respondent Bank is the subsidy granted by the Government to the petitioners, for sale of various items - HELD THAT:- A reading of the provision makes it clear that the 2nd respondent Bank is duty bounded to deduct tax on payments to be made to the petitioners. Even if tax was deducted on sources by the 2nd respondent Bank, if no tax was payable by the petitioners, the amount will have to be refunded back to the petitioners after assessments are completed pursuant to returns filed u/s 139 of the IT Act. Therefore, there is no merits in the case of petitioners. It is pertinent to state that under similar circumstances, this Court in Molasi Primary Agricultural Cooperative Credit Society Ltd. [ 2022 (11) TMI 1213 - MADRAS HIGH COURT ] as held provisions of Section 194 N provide for a mandatory deduction of 2% of cash withdrawals and the object is to discourage, and drive the move toward a cashless or cash-free economy. The scheme of tax deduction also allows, by way of an application under Section 197, for a payee to seek the remedy of deduction at nil/lower rate under various provisions of the Act. However, Section 194N is conspicuous by its absence therein, and does not figure in the list of such provisions.

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• 2025 (3) TMI 725
  Reopening of assessment - appellant has claimed the deduction twice, thus such double deduction is impermissible - HELD THAT:- The appellant/assessee has made a wrong claim and has also not furnished full and true disclosure at the time of original assessment proceedings. Even though the proceedings taken are beyond the period, the AO satisfied that there was a double deduction and the failure on the part of the assessee to make a proper return and disclose fully and truly all material facts necessary for reopening of the assessment. In the present case, it is the duty of the assessee to place all the materials fully and truly which are necessary for the purpose of grant of relief. In the event of failure on the part of the assessee to disclose fully and truly all material facts by placing necessary account books and other evidence, it is open to the AO to assume jurisdiction to initiate assessment proceedings. AO found that it was false claim and in such view, after the completion of four years from the end of the assessment year, in which the assessment was made u/s 143(3) earlier, AO has correctly reopened the assessment and the learned Single Judge has correctly upheld the action of the AO. Further, assessee filed appeal before the CIT Tax (Appeals) as against the impugned assessment proceedings. As such, the appellant who filed writ petition under Article 226 and having exercised such remedy and faced dismissal order, filed alternate remedy, on the self same issues. The appellant can very well go into the matter in depth before the CIT (A) on the merits of reopening u/s 147. Therefore, no force in the contention of appellant that it is not a double claim. Assessee having furnished incomplete details and which has been comes to notice of the AO the Assessee has no case, therefore, we have no hesitation in dismissing the present writ appeal.

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• 2025 (3) TMI 724
  Reopening of assessment u/s 147 - schedule to the accounts contained the fact of nonrecognition of certain income - Whether income from non-performing assets can be offered only on cash basis, even though the assessee is following a mercantile system of accounting? - HELD THAT:- Although Explanation 1 to Section 147 of the Income Tax Act, 1961 as it stood till 31.03.2021 stipulated that mere production of Books of Account or other evidence before the AO from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure within the meaning of 1st Proviso to Section 147, the fact remains that both the amount of Rs. 594.33 lakhs and 438.96 lakhs were available and were seen by the AO while processing the return u/s 143(1) of the Income Tax Act, 1961 and while passing the order on 01.07.1998. Therefore, the invocation of machinery u/s 148 for passing reassessment order u/s 143(3) r.w.s.147 was without any jurisdiction and has therefore been rightly interfered by the Appellate Tribunal. Although for the purpose of claiming deductions, the respondent / assessee should have written off such income under Section 36(1)(vii) of the Income Tax Act, 1961. In the light of the above discussion, we answer the substantial questions of law in favour of the respondent / assessee.

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• 2025 (3) TMI 723
  Rejection of stay demand - case of the petitioner is that while the appeal is pending, the respondent issued a demand notice requesting the petitioner to furnish the details of 20% of the tax paid in total arrears as per the notification of the Central Board of Direct Taxes HELD THAT:- Upon reviewing the order of this Court in Queen Agencies [ 2021 (4) TMI 609 - MADRAS HIGH COURT] it is found that this Court had elaborately discussed the powers to be exercised by the Assessing Officer that Principal Commissioner of Income Tax is only the reviewing authority. It is only when the assessing officer makes a reference or if the assessee is aggrieved by the order passed by the assessing officer, by virtue of Circular dated 29.02.2016, the Principal Commissioner of Income Tax will get the jurisdiction to exercise his power under Section 220(6) of the Act and not otherwise. The impugned order in the writ petition is set aside and the matter is remitted back to the respondent for fresh consideration.

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• 2025 (3) TMI 722
  Validity of order passed denying principles of natural justice petitioner has not been provided with sufficient opportunity of personal hearing before passing the impugned order - HELD THAT:- It is settled law that violation of principles of natural justice is a failure of due process. If any order is passed against the petitioner with demand, that order has to be passed after giving an opportunity of personal hearing to the petitioner otherwise, it will amount to depriving the interest of the petitioner and the same amounts to violation of principles of natural justice. In the case on hand, the impugned order was passed without giving opportunity of personal hearing to the Petitioner and therefore the same is liable to be set aside.

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• 2025 (3) TMI 721
  Reopening of assessment - reasons to believe - claim of deduction u/s 54B - HELD THAT:- Reasons so recorded for reopening, in our considered opinion, it cannot be said that the respondent authorities have come into possession of any information and/or any tangible material which suggests escapement of income. On the contrary, the reopening sought by the revenue authorities broadly based on the material already available on record and thereby, it cannot be said that the petitioner failed to disclose fully and truly all the material in respect to his assessment. Thus, the reopening based on the material already on record, is nothing but, in our considered, a mere change of opinion. The same is, therefore, not permissible in eye of law. The revenue authorities at the time of framing assessment order u/s 143(3) of the Act has already considered the aspect of allowability of claim of deduction under Sections 54B. Thus, the respondent authorities cannot reopen the reassessment on the ground that the then AO has not inquired properly and/or adopted casual approach. In our view, issuance of notice u/s 148 should be based on the reasons to believe which should have direct nexus with any new information and/or tangible material which has come to the knowledge of the respondent authorities based on assessment proceedings. The revenue authorities, cannot under the guise of reasons to believe permit to reopen the case on the ground that the then Assessing Officer has not properly inquired in the proceedings. The impugned notice seeking reopening of assessment year falls within the category of change of opinion, as at the relevant point of time, in the original inquiry, the petitioner has already made available all the documents and evidence so as to claim the deduction u/s 54B - Decided in favour of assesee.

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• 2025 (3) TMI 720
  Notice u/s 143(2) for scrutiny assessment and AO subsequently processed the return u/s 143(1) making adjustment of income -Two proceedings initiated simultaneously HELD THAT:- We find that the assessee company filed its return on 29.11.2018. AO issued notice on 22.09.2019 u/s 143(2) of the Act to verify the issue under CASS with regard to claim of amounts allowable as deduction in Schedule BP and defaults in TDS as well as duty draw back. DCIT, CPC-Bangalore, subsequent to the issue of notice u/s 143(2), has processed the return of income and has issued intimation u/s 143(1)(a) of the Act dated 25.12.2019. The issue for adjudication is whether once the scrutiny assessment u/s 143(3) has commenced vide notice u/s 143(2), can the AO conduct processing of the return u/s We find that in the case of Gujarat Electricity Board [ 2002 (10) TMI 5 - SUPREME COURT] has decided this issue in favour of the assessee

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• 2025 (3) TMI 719
  Addition of sundry creditors treated as bogus - HELD THAT:-Notice issued was received back unserved from the postal authorities, which is against the facts of the case as both the units are proprietary concerns of the assessee and the income from both the units had been disclosed by the assessee. Further, initially the addition was made as the notices issued were returned unserved, for which some details/replies were received subsequently and partial relief was allowed. Both during the course of the assessment proceeding as well as during the remand proceeding, some confirmations were received in response to the notice issued. Hence, on the principle of preponderance of probability, which governs the assessment proceedings and the assessment of income, the sundry creditors earlier treated as unverifiable only for the reason of non-compliance on the part of the assessee/creditors is not wholly correct and only on this ground the liability claim could not be disallowed. As on appreciation of the submission made, the outstanding liability on account of Sarada Trading are directed to be deleted on furnishing of the required evidence before the AO as the same was not filed earlier before the Ld. AO and is additional evidence. That leaves a sum for which the assessee has submitted that he is not able to connect with those suppliers for getting their confirmations and, therefore, has submitted the certificate from the Chartered Accountant regarding the outstanding balances for the impugned. However, the certificate is regarding the outstanding balance being Nil as on 31/03/2023 but the same does not state anything regarding when these amounts have been repaid. Since the assessee himself is not able to furnish any confirmation in this regard from the creditors even before the Bench but claims that the amount was repaid, but the certificate is relating to March 2023, i.e. 10 years after the impugned A.Y., this issue relating to remaining sundry creditors of Rs. 14,51,991/- is set-aside before the Ld. AO who shall verify the mode of payment or any other evidence in possession of the assessee, and in case the payment has been made by cheque or satisfactory evidence is filed, delete the addition. Appeal filed by the assessee is partly allowed.

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• 2025 (3) TMI 718
  Disallowance of interest on GST and GST late filing fees - whether expenses claimed by the assessee are penal in nature therefore, no allowable u/s 37? - HELD THAT:- In the case of Mahalakshmi Sugar Mills Co [ 1980 (4) TMI 1 - SUPREME COURT] the Hon ble Supreme Court held that interest paid to Government for delay in payment of cess cannot be described as a penalty paid for an infringement of law. Following this decision of Central Stores (P.) Ltd [ 1984 (2) TMI 20 - RAJASTHAN HIGH COURT] held that interest paid on account of the delay in remitting to the Government sales tax, is permissible deduction. Thus, we are of the considered view that Ld. CIT(Appeals) has correctly held that the above interest on GST and GST late filing fee was not towards violation of any law and hence is allowable as a deduction under section 37 of the Act. Decided in favour of assessee. Higher depreciation claimed by the assessee or plant and machinery @30% instead of 15% - HELD THAT:- As in the assessee s own case in which this issue was decided in favour of the assessee wherein held orders passed by the authorities below which had not been able to be controverted by DR that the assessee engaged in the activities of excavation of over burden, mining of minerals, transportation of such excavated over burden material, excavation of minerals, transportation of minerals from mines to Pit head and transportation of minerals from Pit head to Lignite handling system/power plant, where the motor lorries used for the transportation of goods on hire. The condition under the zone of consideration for claiming higher rate of depreciation at 30% on dumpers and tippers have been fulfilled by the assessee and, therefore, having regard to the entire aspect of the matter i.e. the business activities of the assessee qua the claim of the assessee, particularly, when the fact of composite contract awarded to the assessee of mining and transportation has not been able to be controverted by the DR. We do not find any reason to interfere with the order passed by the Ld. CIT(A) in granting relief by deleting the addition made by the Ld. AO by restricting the depreciation at 15% against the claim of depreciation at 30% on the dumpers and tippers used by the assessee. The same is found to be just and proper and therefore, upheld. - Decided against revenue. Higher depreciation claimed by the assessee on plant and machinery (dumper/tipper) @40% instead of 15% - CIT(A) deleted addition - HELD THAT:- We observe that for this purpose, the assessee has placed reliance on notification number GSR 679 (E) dated 20-09-2019, which allows for higher rate of depreciation @45% (later revised downwards to 40% by Ld. CIT(Appeals) since the assessee had opted for being taxed u/s 115BAA of the Act) on block of assets consisting of motor buses, motor lorries and taxis used in the business of running them on hire. The assessing officer on the basis of reasoning given in ground number 2 above, restricted the claim of depreciation to 15%, whereas Ld. CIT(Appeals) allowed the appeal of the assessee on this issue. On going through the facts of the instant case, we find no infirmity in the order of Ld. CIT(Appeals) so as to call for any interference. Reopening of assessment u/s 147 - addition u/s 69C as unexplained expenditure - allegation of cash receipt of loan and cash payment of interest - addition is an unsigned Excel sheet recovered from the premises of a third party - HELD THAT:- Apart from the unsigned excel sheet recovered from third party premises, there is no corroborative evidence to sustain the addition in the hands of the assessee. Accordingly, we hereby allow the assessee s appeal on merits.

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• 2025 (3) TMI 717
  TDS credit claimed based on discrepancies between the turnover reported in the books and Form 26AS - revenue proportionately reducing the TDS claim to match the turnover reported in the books - assessee contends that the difference between turnover as per books and turnover as per Form 26AS is solely due to the inclusion of GST in Form 26AS, whereas, in its books of accounts, GST is excluded as it is merely a statutory liability and not part of income - CIT(A) dismissed the appeal on the ground that the assessee itself admitted that the tender amount always included GST and did not provide a bifurcation, thus concluded that the deduction of TDS on the gross invoice amount was in line with the contractual terms HELD THAT:- We find merit in the assessee s contention that GST cannot be considered as part of income, as it is a tax collected on behalf of the government and does not accrue to the assessee as revenue. The CBDT Circular No. 23/2017 dated 19-07-2017 explicitly clarifies that TDS should not be deducted on the GST component if it is separately indicated in the invoice. In the present case, it is evident that government departments, who are customers of the assessee, deducted TDS on the gross invoice amount, including GST, leading to a mismatch between the turnover reflected in Form 26AS and the turnover recorded in the assessee s books. CPC, while processing the return u/s 143(1), proportionately restricted the TDS credit based on turnover as per books, thereby creating a tax demand instead of granting the refund claimed by the assessee. Upon reviewing the data, we observe that while the assessee claims the entire difference arises due to GST at 18%, in certain cases, the percentage difference does not exactly match the GST rate. We find that the CPC acted beyond its jurisdiction by making such an adjustment u/s 143(1), as the verification of TDS credit requires detailed examination, which falls within the scope of scrutiny assessment under section 143(3) rather than summary processing under section 143(1). The CIT(A) also failed to appreciate this jurisdictional issue and did not independently verify whether the amounts reflected in Form 26AS were duly accounted for in the assessee s books. Assessee s claim regarding GST is prima facie correct, but further verification is necessary in cases where the percentage difference does not match 18% exactly. Accordingly, we direct the AO to verify whether the amounts on which TDS was deducted have been duly included in the total income of the assessee. If it is established that the income corresponding to the TDS credit has been fully accounted for in the books, the AO shall grant full TDS credit as per Form 26AS. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (3) TMI 716
  Levy of penalty u/s 271(1)(b) - non-compliance of notice issued u/s 142(1) - HELD THAT:- As evident from the record that the AO had sent the notice dated 19.07.2018 issued u/s 142(1) through the e-mail. Assessee did not see his e-mail before the compliance date; therefore, the same remained un-complied with. The assessee ensured compliance later on, which resulted completion of the assessment u/s 143(3) of the Act. Hon ble Supreme Court, in the case of Hindustan steel Ltd. [ 1969 (8) TMI 31 - SUPREME COURT] has held that an order-imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. We have taken note of the fact that the assessee has ensured regular compliance of the statutory notices after August, 2018. Thus, it appears that the provisions of Section 271(1)(b) have been used by the AO as a deterrent to ensure timely compliance. We are satisfied with the reasons of non-compliance of the notice dated 19.07.2018 issued u/s 142(1) as there is no deliberate defiance of law or is guilty of conduct contumacious or dishonest or act in conscious disregard of the legal obligation. We therefore, hereby set aside the impugned order and delete the penalty of Rs. 10,000/-. Aappeal of the assessee allowed.

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• 2025 (3) TMI 715
  Validity of assessment u/s 144C beyond period of limitation - HELD THAT:- From the perusal of sub-section (13) of section 144C it is clear that the final assessment order has to be passed by the Assessing officer within a period of one month from the end of the month in which the directions from the DRP are received. Further as per clause (xxviii) and (xxix) of sub-section 1 to section 144B provides that the Faceless Assessment Centre after receiving the directions of the DRP, sent them to the Assessment unit who shall pass the final assessment order in accordance with section 144C(13). Thus in any case whether the assessment is completed by Jurisdictional Assessing officer or by Faceless assessing officer, the final order should be passed within the time prescribed u/s 144C(13) of the Act. In the instant case one more facts is relevant to state that, the draft assessment order was passed by the Faceless Assessment Centre and the Final assessment order was passed by the jurisdictional Assessing officer thus the department itself has deviated from the faceless assessment system. In the instant case the directions were given by Ld. DRP on 03/06/2022 which were received by AO/TPO on 07.06.2022 as is evident from the effect order passed by TPO dt. 14.07.2022. Further, the TPO s effect order was also passed on 14.07.2022 and uploaded on ITBA portal. Thus for the AO for passing the final order, the limitation expired on 31.07.2022. It is also relevant to state here that when DRP issued directions, TPO has no power to resume jurisdiction and the TPO could only pass the effect order which in no case extended the time limit for passing the Final Assessment Order available to Assessing Officer in terms of section 144C(13) of the Act. Accordingly, in the present case, the limitation for passing final order by AO expired on 31.07.2022, thus the final assessment order passed on 28.02.2023 is barred by limitations and is void and invalid order. Decided in favour of assessee.

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• 2025 (3) TMI 714
  Assessment u/s 153A - Addition u/s 69 - HELD THAT:- It is an undisputed fact of the case that the addition has been made in respect of a document seized during search from the premises of Aerens Groups and not of the assessee. It is a settled principle of law enunciated by Hon ble Apex Court that mere confession of accused cannot be a ground for conviction unless, the same is supported by credible evidence on records. Accordingly, and respectful compliance to the decision of Subhash Khattar [ 2017 (7) TMI 1091 - DELHI HIGH COURT] and of Pilot Industries Ltd [ 2022 (10) TMI 1060 - DELHI HIGH COURT] we are of the considered view, that no addition is required to be made in the present case. Appeal of assesee allowed.

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• 2025 (3) TMI 713
  Penalty proceedings u/sec. 271D beyond period of limitation - as alleged assessee has taken loans in cash from various persons to the tune of Rs. 61,50,000/-, there is a clear violation of provisions of sec.269SS - HELD THAT:- In the present case, going by the show cause notice issued by the AO, imposing penalty u/sec.271D was dated 30.03.2021. Therefore, in our considered view, the completion of action relates to passing of any order for imposing of penalty under Chapter- XXI of the Act falls on or before 30.09.2021 and in our considered view, the said due date is beyond the period specified under the provisions of TOLA i.e., between 20.03.2020 and 31.03.2021 and, therefore, the Notification issued by the CBDT dated 17.09.2021 does not extend the due date for passing the order imposing penalty u/sec.271D of the Act in the present case up-to 30.09.2021. Therefore, arguments advanced by Revenue in light of CBDT s Notification dated 17.09.2021 does not hold good and, therefore, rejected. Considering the facts of the case and also by following the Judgment of Mahesh Wood Products Pvt. Ltd.[ 2017 (5) TMI 433 - DELHI HIGH COURT] and Shri Subramaniam Thanu [ 2024 (3) TMI 879 - ITAT CHENNAI] we are of the considered view that there is no error in the reasons given by CIT(A) to quash the penalty order passed by the AO u/sec.271D - Decided in favour of assessee.

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• 2025 (3) TMI 712
  Adjustment u/s 50C(1) u/s 143(1)(a) - HELD THAT:- As following the reasoning given in the case of Inder Jeet Malik [ 2022 (7) TMI 1583 - ITAT DELHI] hold that the no adjustment/addition u/s 50C can be made while processing the ITR u/s 143(1) - Appeal of the assessee is allowed.

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• 2025 (3) TMI 711
  Revision u/s 263 - non-initiation of penalty proceedings under section 270A on the basis that the assessee has under-reported its income as per the definition of the term contained in section 270A(2)(b) - HELD THAT:- As in Chennai Metro Rail Ltd. [ 2018 (3) TMI 1586 - MADRAS HIGH COURT] held that unless and until there is a finding of the AO with regard to concealment of income or with regard to furnishing of inaccurate particulars of income, PCIT cannot hold that omission to record satisfaction to initiate penalty proceedings is erroneous or prejudicial to the interest of the Revenue. In the present case, it is evident from the record that though the AO has directed initiation of penalty proceedings under section 271B and section 271F of the Act, however, there is no recording of any finding that there was under-reporting of income by the assessee under section 270A(2) of the Act. PCIT erred in invoking the provisions of section 263 of the Act, and directing the AO to initiate penalty proceedings under section 270A of the Act, as the AO has chosen not to initiate the penalty proceedings. Therefore, such being the facts, the learned PCIT cannot substitute his views and observe that the AO has passed erroneous order which is prejudicial to the interest of the Revenue. Thus, the impugned revision order passed by PCIT u/s 263 is quashed. Assessee appeal allowed.

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• 2025 (3) TMI 710
  Reopening of assessment u/s 147 - addition made u/s 56(2)(vii)(b) on difference between the registered value and the set forth value of Flat - HELD THAT:- Assessee entered into an agreement, and the allotment letter was duly issued by the promoter. The payment was made through banking channels. Therefore, the stamp duty valuation of the property should be taken as on the date of allotment, i.e., F.Y. 2009-10. Upon perusal of the valuation report, it is noted that the valuation of the property, as determined by the registered valuer. There is no discrepancy in the purchase value declared by the assessee. Consequently, the addition representing the difference between the set forth value and the stamp duty value, cannot be sustained in the impugned assessment year. Accordingly, the said addition is quashed. Further, we remit the matter to the file of the Ld. AO with a direction to consider the stamp duty valuation as per the financial year of the agreement, i.e., F.Y. 2009-10, and to recompute the assessment accordingly. Assessee should get reasonable opportunity of hearing in set aside assessment proceeding. The impugned appeal order is set aside, and the matter is remanded to the Ld. AO for this limited purpose.

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• 2025 (3) TMI 709
  Addition as Capital gains u/s. 45 - Assessee was the joint owner of the property along with his brother - exemption u/s 54F - beneficial owner of property - CIT(A) directed the AO to consider the cost of acquisition and cost of improvement, if any, and allow the deduction accordingly HELD THAT:- Once the assessee s brother has paid the entire purchase consideration for the purchase of the property and was in actual possession and had 100% rights over the said property, in such circumstances, even though assessee s name was mentioned in the purchase deed as one of the joint owner, the consideration received on the sale of the said property cannot be added in the hands of the assessee once his brother has declared the entire consideration in his return of income for the year under consideration. Therefore, no basis in making the addition on account of Long-Term Capital Gains in the hands of the assessee in the facts and circumstances of the present case, when assessee s brother was the sole owner of the property for all practical purposes and assessee s name appears to have been added only out of natural love and affection. Therefore, assessee is not a beneficial owner of the said property. Accordingly, the addition under section 54 of the Act made in the hands of the assessee is deleted - Appeal by the assessee is allowed.

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• 2025 (3) TMI 708
  TP adjustment - comparables namely Tata Elexi Limited, which has the Profit Level Indicator of 28.02% and Sasken Technologies Ltd., which have profit level indicator at 17.20% - HELD THAT:- We note that in case both the above comparables are excluded out of the comparable companies, the average mean of the comparable companies will work out to 11.66%, whereas the margin of the appellant is 9.44% which falls within 3% and therefore, no TP adjustment is required to be made. Accordingly, we direct the ld. Transfer Pricing Officer/ AO to exclude these two companies. The ground no.2 is allowed. TP adjustment on account of Intra Group Services ( IGS ) received by the assessee - HELD THAT:- We note that this is a recurring issue in the case of the assessee which has been decided by the co-ordinate Bench in favour of the assessee in [ 2022 (9) TMI 1658 - ITAT KOLKATA] find that the issue is squarely covered in favour of the assessee. TP adjustment on account of advertisement, marketing and promotion expenses - HELD THAT:- As relying on assessee own case we hold that the advertisement, marketing and promotion expenses do not an international transaction and accordingly, the TP adjustment made by the ld. Transfer Pricing Officer/ AO is directed to be deleted. The ground is accordingly allowed. Determination of arms length price in respect of the provisions of Contract, Research Development Services (CRDS) to the Associated Enterprises (AE) - Comparable selection - HELD THAT:- Both ADTL and TCG cannot be taken as a comparable while computing the transfer pricing adjustment in regard to the contract, research and development services. The said two companies are excluded. Admittedly, the average comes to only 10.52% which is well within the 3% margin which is permissible. Consequently, the addition made on account of the said transfer pricing adjustment stands deleted. Disallowance of expenses u/s 14A in relation to earning of exempt income - HELD THAT:- We note that there is no exempt income during the year and therefore, no disallowance is called for u/s 14A of the Act read with Rule 8D of the Rules. The case of the assessee was squarely covered by the decision of the co-ordinate bench in assessee s own case in [ 2022 (9) TMI 1658 - ITAT KOLKATA] wherein held that no disallowance is required to be made where the assessee has not earned any exempt income. Addition in the draft assessment order u/s 41(1) - HELD THAT:- We note that the amount as shown by the assessee in the profit and loss account included an amount pertaining to cessation of trading liabilities. The ld. AO once again added the amount u/s 41(1) of the Act, which was confirmed by the ld. Dispute Resolution Panel resulting into double addition of the same amount. Consequently, we set aside the order of the ld. Dispute Resolution Panel / AO and direct the ld. AO to delete the addition. The ground is allowed. Disallowance of lease rental of the assets taken on financial lease - HELD THAT:- We find that the issue is squarely covered by the decision of the co-ordinate Bench in assessee s own case from AO 200-10 to 2016-17. Accordingly, we set aside the ld. Dispute Resolution Panel direction and direct the ld. AO to delete the addition. Accordingly, the ground is allowed. Disallowance of deduction u/s 80G - We find that the issue is squarely covered in favour of the assessee by the decision of JMS Mining (P.) Ltd [ 2021 (7) TMI 907 - ITAT KOLKATA] wherein it was held that explanation 2 to section 37(1) which denies deduction for CSR expenses by way of business expenditure is applicable only to the extent of computing business income under Chapter IV-D. The said Explanation cannot be extended or imported to CSR contributions which is otherwise eligible for deduction under any other provision or Chapter i.e. under section 80G. Thus, we direct the ld. AO to allow the deduction u/s 80G - Decided in favour of assessee.

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• 2025 (3) TMI 707
  Considering interest income as income from shipping activity - Lien Marked Fixed Deposits - Income from core shipping activities under the Tonnage Tax Scheme - HELD THAT:- As per the assessee, the fixed deposits were placed with the banks out of commercial expediency with a view to advance its business interest in the sole business carried out on by it of operating qualifying ships. Thus, the assessee claims that interest earned on such deposits should be regarded as profits and gains on business. As in the present case, it is undisputed that the only business activity pursued by the assessee relates to shipping. Thus, there cannot be any dispute regarding the fact that the various facilities availed by the assessee from the banks, with respect to which it has placed fixed deposits as a lien, are also for the purpose of effectively and efficiently running its business of operating qualifying ships. Therefore, we are of the considered view that the interest earned by the assessee from such fixed deposits maintained with the banks, which are marked as lien, is inextricably linked with the business of operating qualifying ships and therefore, should be treated as an item of receipt from core activity of a tonnage ship company. Conditional Fixed Deposits out of funds raised by way of Public Offering - The funds generated by the assessee from the public offering were also for the purpose of part-financing of capital expenditure on ship building projects, and since some of the contracts were rescinded, the refund received was agreed to be redeployed, vide shareholders resolution towards various other ship building projects, including acquisition of vessels. From the details, as noted audited financial statements, it is evident that out of the amount of Rs. 330.65 crore, an amount of Rs. 196.80 crore was utilized for acquiring the equity portion of various ships and vessels. The amount pending utilization for the said purpose has been placed by the assessee as fixed deposits with the banks on which the assessee has earned interest income. Therefore, we are of the considered view that the interest arising on the said fixed deposits is in the nature of business income, since the only business carried out by the assessee is that of operation of qualifying ships. Fixed Deposits placed to comply Facility Agreement - In the present case, there is no dispute regarding the fact that the fixed deposits were placed with the bank in view of the agreement entered into by it with the lender, from whom the loan was received by the assessee for the purpose of acquiring ships and vessels. Thus, we are of the considered view that the fixed deposits maintained with the bank are inextricably linked with the business of the assessee of operating qualifying ships, and the interest earned by the assessee on fixed deposits placed with the banks, complying with the covenants in the loan agreement entered for the purpose of acquiring ships and vessels, is in the nature of business income of the assessee and relates to core shipping activity. Fixed Deposits placed for meeting Working Capital Requirement - We find that the interest income earned from fixed deposits of funds which are required for meeting the working capital requirement and repayment of loans was held to be in the nature of business income since the funds are nothing but the funds required for running the shipping business, by the Co-ordinate Bench of the Tribunal in assessee s own case for the assessment year 2008-09. Therefore, respectfully following the decision rendered in assessee s own case, the interest income earned from fixed deposits placed with the banks for meeting working capital requirement in the year under consideration is held to be in the nature of business income and relates to the core shipping activity. Therefore, AO is directed to treat the interest income as part of the profits from core shipping activities carried on by the assessee. Accordingly, Ground No. 1 raised in assessee s appeal is allowed. Disallowance made u/s 14A r.w. Rule 8D - HELD THAT:- We find that the CIT(A) deleted the disallowance made under section 14A r.w. Rule 8D of the Rules by placing reliance upon the decision of the Co-ordinate Bench of the Tribunal in M/s Varun Shipping Company Ltd. [ 2011 (11) TMI 370 - ITAT MUMBAI ] In the absence of any contrary decision being brought on record, we find no infirmity in the findings of the learned CIT(A) on this issue, which are based on the judicial pronouncement by the Coordinate Bench of the Tribunal. Accordingly, the same is upheld and Grounds No. 1 and 2 raised in Revenue s appeal are dismissed. Disallowance of administrative expenditure incurred towards earning income from incidental activities - HELD THAT:- We find that while considering a similar issue of disallowance of administrative expenses against income from incidental shipping activities, the Co-ordinate Bench of the Tribunal in assessee s own case in The Shipping Corporation of India Ltd. [ 2024 (10) TMI 736 - ITAT MUMBAI ] DR could not show us any reason to deviate from the aforesaid decision rendered in assessee s own case and no change in facts and law was alleged in the relevant assessment order. Therefore, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue.

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• 2025 (3) TMI 706
  TDS u/s 195 - payments made by the assessee to its parent company and other related entities - Fees for Technical Services (FTS) or Fees for Included Services (FIS) - payment made towards management fee charges would be in the nature of FTS and hence chargeable to tax in India - HELD THAT:- Some facts in the light of documentary evidences are required to be examined to look into this aspect, only then a conclusion can be drawn as to whether the foreign entity has made available the knowledge to the assessee or not. It is also not coming out clearly as to whether the expenses are subcontracting charges or testing charges from the orders of authorities below. Because the legal meaning of both these terms (subcontracting charges or testing charges) carries out different meaning therefore a clarity is must on this aspect also. Therefore, we restore the matter to the file of the AO for examining a fresh in accordance with law, with a liberty to assessee to file documentary evidences in support of this issue. So far as the reliance placed by the assessee on the certificate 195 is concerned it is observed that the same is not relevant for the impugned year. Whether subcontracting charges/ testing charges are in the nature of royalty? - We observe that the CIT(A) in its order has held that though appellant has paid separate royalty for the use of trade mark to its other AE, yet the testing charges are also in the nature of royalty. We are of the view that this aspect also would be examined afresh by the AO. It is the contention of the assessee that it has paid royalty charges to UL Switzerland after deducting the TDS. However, the assessee failed to elaborate as to why the testing is done by UL USA and trademark uses charges are paid to Switzerland. We observe that the customers are entitled for using the trademark charges only after the process of testing from UL USA. All these facts require fresh consideration at the end of AO. Taxability of management fee - As assessee has not raised the alternate plea that is reimbursement of global cost before the AO and the CIT(A) has not dealt the alternative plea in a judicious manner. Therefore, in the interest of justice we restore this issue also to the file of AO for examining a fresh. Assessee is also at liberty to file documentary evidence before the AO vis- -vis alternate plea. Appeals filed by the assessee are allowed for statistical purposes.

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• 2025 (3) TMI 705
  Accrual of income in India - Receipts from General Business Support Services ( BSS ) constitute income or not? - treatment of BSS as FTS - HELD THAT:- Since the BSS rendered by the assessee is arising out of the same CCA as in the case of SIMPL [ 2012 (2) TMI 98 - AUTHORITY FOR ADVANCE RULINGS ], we are of the view that the decision of the Hon ble High Court has a binding precedence in assessee s case also. Further the facts for the year under consideration are identical to AY 2009-10 and the revenue did not bring anything on record to controvert the same. Accordingly, we direct the AO to delete the addition made towards BSS in the hands of the assessee. Treatment of cost allocation SUN and GSAP maintenance charges as Royalty - whether the amount received by the assessee on account of cost allocation of SUN Maintenance Software application and GSAP maintenance charges is royalty under the DTAA between India and UK? - In assessee s case the payments are made towards cost allocation of of SUN Maintenance Software and GSAP maintenance charges therefore we hold that the amount received towards cost allocation of SUN Maintenance Software and GSAP maintenance charges cannot be treated as royalty and the addition made in this regard is not sustainable. Treatment of cost allocation pertaining to GSAP Go-Live and access of GSAP application as Royalty - HELD THAT:- The assessee during the year under consideration has migrated to GSAP Software and has incurred expenses towards procurement of licence to use the Software also expenses towards customization of the Software for Go-live. These expenses have been allocated across the group on a cost to cost basis based on the number of users. Only when the payment is made towards the right to use the copy right the same would fall within the definition of Royalty under the DTAA. In assessee s case the amount received towards cost allocation of expenses incurred towards acquiring the licence to access GSAP Software and the cost incurred towards modification for Go-live does not result any right to use the copy right, but only the right to use the copy righted software of GSAP. Therefore in our considered view, the amount paid cannot be treated as Royalty under Article 13 of the DTAA between India and UK. Further the amount received by the assessee is on a cost to cost basis without any income element in it and on that count also, the amount received cannot be treated as taxable in India. Thus, we hold that the receipt towards cost allocation of GSAP licence and Go-live of GSAP application cannot be treated as Royalty.

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• 2025 (3) TMI 704
  Deduction u/s. 80IB(10) - profits derived from a housing project approved by the Slum Rehabilitation Authority (SRA) of Maharashtra - HELD THAT:- As not disputed that in the instant case, the scheme for slum development has been prepared by the Maharashtra Government (SRA). Assessee s housing project is carried out in accordance with scheme of reconstruction or redevelopment of slum area. The scheme has been notified by CBDT. According to the settled legal position, the circulars or directions cannot be permitted to curtail the substantive provisions of the Act. The circular cannot therefore curtail the benefit conferred on assessee or be contradictory to the Act. CIT(A) has failed to rationally appreciate and diligently apply the law applicable to the facts of the present case. The impugned order is thus set aside. The facts of the present case are almost similar to the facts of Ramesh Gunshi Dedhai [ 2014 (9) TMI 653 - ITAT MUMBAI ] We, therefore respectfully agree with the findings arrived at by the coordinate bench of this Tribunal. Accordingly hold that the appellant assessee is entitled to the claim of deduction u/s. 80IB(10) of the Act. Assessee appeal allowed.

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• 2025 (3) TMI 703
  Unexplained investment u/s. 69 - AO made an addition in the hands of the assessee on the basis of excel sheet noting maintained by Shri S.Seetharaman but in his sworn statement, Shri S.Seetharaman has clearly stated that the assessee has arranged loan through his father - CIT(A) deleted addition HELD THAT:- AO has made an addition on the basis of excel sheet found at the premises of third party. Assessee has denied advancing loan to Shri S.Seetharaman. AO has not brought any other corroborative evidence on record to prove that the assessee has advanced cash loan to Shri S.Seetharaman. The excel sheet was neither authored by the assessee nor found from the premises of the assessee. The name of the assessee in the excel sheet found can trigger the enquiry and that itself is not sufficient to establish the ownership of investment as unexplained. The mere fact that there were certain entries found from the records of third party is not sufficient to make addition on the ground that assessee had made unexplained investments. CIT(A) has rightly relied upon the decision of Appu Direct Pvt Ltd [ 2024 (1) TMI 1447 - ITAT CHENNAI] for the proposition that cash transactions recorded in excel sheets found during the course of search proceedings cannot be added in the absence of corroborative evidence. Also decided in the case of Sant Lal [ 2020 (3) TMI 692 - DELHI HIGH COURT] wherein the Hon ble Court has held that the assessee cannot be fasten with the liability on the basis of third-party material in the absence of any cogent material. In the case of the assessee the AO neither conducted proper enquiry to identify the actual lender nor made an effort to gather or corroborate evidence to establish that the assessee has actually advanced cash loan to Shri S.Seetharaman - Decided in favour of assessee.

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• 2025 (3) TMI 702
  Dismissal of application filed u/s 80G(5)(iv)(B) - inadvertent error occurred in form 10AB, where the incorrect provision, 80G(5)(iv)(B), was cited instead of the correct one, 80G(5)(iii)(B) HELD THAT:- As considering inadvertent mistake of the Assessee and the peculiar facts and circumstances in totality, the impugned order is set aside and consequently the case is remanded to the file of the Commissioner for decision afresh by considering the application filed by the Assessee in form no.10AB as u/s 80G(5)(iii)(B) of the Act instead of u/s 80G(5)(iv)(B) of the Act. In the result, the appeal filed by the Assessee is allowed for statistical purposes.

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• 2025 (3) TMI 701
  Denial of approval u/s. 80G(5) - assessee is carrying a valid registration certificate u/s. 12AB(1)(ii)(B) - Whether the cancellation of the provisional registration granted under section 80G(5) was lawful and in accordance with the principles of natural justice? HELD THAT:- As far as status of application filed on 30.09.2023 is concerned, same can t be treated as delayed, the assessee was already enjoying approval on provisional basis vide order dated: 10.03.2022 and the only issue in the assessee s case was regularization of the same. This application of regularization was filed well in time but the same was rejected on a wrong notion by the CIT (E), Jaipur by applying wrong principles of law as the same can be observed through his order under challenge. Rather, the provisions as contained in section 12AB and 80G of the Act are overlapping in nature and section 12AB of the Act is the main driving and guiding provision. Once an assessee fulfilled the technical requirements of section 12AB, it has to be assumed that the technical compliances of section 80G(5) are also fulfilled, to that extent the order of the Ld. CIT (E), Jaipur is absurd. As the same is being passed with a preconceived notion, i.e. keeping in mind the provisions of section 12AB whereas the present matter is not for registration u/s. 12AB of the Act. Appeal of the assessee is allowed.

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• 2025 (3) TMI 700
  Penalty levied u/s 43 of the Black Money Act - non-disclosure of foreign assets in the Schedule-FA of the Return of Income - HELD THAT:- We find that the assessee is a British citizen and was only a tax resident in India for the impugned assessment year. We respectfully rely on the judgment of K Mohammad Haris [ 2021 (9) TMI 1444 - KARNATAKA HIGH COURT] and the order of Rohit Krishna [ 2024 (11) TMI 1437 - ITAT MUMBAI] It is evident that the assessee disclosed the foreign asset in the revised return, which was filed within the prescribed time limit. Therefore, there is no basis for rejecting the return, nor have the revenue authorities identified any discrepancies in the declaration made by the assessee. The legislative intent behind the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is to address the issue of undisclosed foreign income and assets. In the present case, the assessee is a British citizen, and the revenue authorities have failed to establish that the assessee was previously an Indian citizen or that the foreign investment was made using undisclosed income (black money) from India. Furthermore, the authorities relied upon by the Ld. DR and the Ld. CIT(A) are factually distinguishable from the present case. Accordingly, the penalty of Rs. 10,00,000/- imposed under Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is deleted. Appeal of the assessee is allowed.

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• Customs

• 2025 (3) TMI 699
  Rejection of the petitioner s refund claims by the respondent authority, based on the pendency of an appeal - bone of contention of the learned counsel for the petitioner is that the claim of the petitioner for refund is turned down by the impugned order - HELD THAT:- A Division Bench of this Court in PRINCIPAL COMMISSIONER OF CUSTOMS VERSUS M/S. GRANULES INDIA LIMITED has held that the assessee had been held to be entitled to refund of central value added tax credit of Rs. 3,28,75,733/-. The aforesaid finding is in consonance with law and the same cannot be termed as perverse. - Thus, as on date, there exists no reason for not following the previous order of the CESTAT. In the impugned Order-in-Original dated 30.10.2024, the petitioner s claim was not allowed by taking shelter of pendency of CEA No.26 of 2024, which was, admittedly, dismissed. It is deemed proper to set aside the impugned Order-in-Original dated 30.10.2024 and restore the matter on the file of respondent No. 1 - petition disposed off.

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• 2025 (3) TMI 698
  Seeking provisional release of seized goods under Section 110A of the Customs Act, 1962 - appropriateness of the bank guarantee and bond requirements imposed by the Commissioner of Customs for the provisional release of goods - applicability of Board Circular No. 35/2017-Cus dated 16.08.2017 - HELD THAT:- It is found that exports to be undertaken by the party must not be hinded through the supporting manufacturer i.e. Vasundhra as of now in the view of new authorisation dated 16.04.2024. The bond condition as laid down by the Commissioner will prevail till the time the duty, penalty, interest redemption fine, etc. are paid by the party as may be adjudicated. As far as protection of revenue is concerned, it is directed that an undertaking may be taken from the supporting manufacturer to the effect that (a) he has machinery and other infrastructure to process these imported goods (b) he will carry out processing of the remaining seized goods and will hand over the same to the appellant for its exportation. While the bank guarantee condition is quite onerous and deserves to be reduced. The interest of Revenue ad-interim, may need protection. Conclusion - The impugned order modified by reducing the bank guarantee requirement and allowing the appellant to offer immovable property as security. The provisional release of the goods are released. Appeal is partly allowed.

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• 2025 (3) TMI 697
  Maintainability of the appeal - whether or not there exists jurisdiction for this Tribunal to decide the matter on merits? - HELD THAT:- Honourable High Court of Delhi has in its decision in Principal Commissioner of C.Ex. Delhi-I v. Space Telelink Ltd, [ 2017 (3) TMI 1599 - DELHI HIGH COURT] considered the effect of stay of proceedings by the Honourable Supreme Court and has held that We are, therefore, of the opinion that the passing of the interim order dated February 21, 1991 by the Delhi High Court staying the operation of the order of the appellate authority dated January 7, 1991 does not have the effect of reviving the appeal which had been dismissed by the appellate authority by its order dated January 7, 1991 and it cannot be said that after February 21, 1991, the said appeal stood revived and was pending before the appellate authority. On a plain reading of Section 129A(1) and the applicable first proviso along with its clause (c), to our mind, the legislative intent is emphatically made clear by the language of the statute couched in prohibitive terms, twice over. Moreover, unlike the wordings of Section 130(1), the legislature having consciously omitted the phrase among other things , coupled with the doubly emphasised prohibition in the negative, clearly conveys the legislative intent that an order related to simpliciter, payment of drawback as provided in Chapter X, and the rules made thereunder, is sufficient to oust the jurisdiction of this Tribunal from entertaining the appeal - if the order passed by the Commissioner (Appeals) under Section 128A relates to any of the aforesaid aspects, then by virtue of clause (c) to proviso to Section 128A (1), the jurisdiction of this Tribunal stands statutorily excluded and the appeal shall not lie to this Appellate forum. The concurrent jurisdiction of the Revisionary Authority as well as of this Tribunal to deal with orders relating to drawback, albeit arising from different hierarchical adjudicatory levels, at times, perplexes the party as to the forum before which they are to pursue their remedy, when aspects relating to valuation and classification also get intertwined. Occasionally, while pursuing such remedy before the revisionary authority, it may result in foreclosing the otherwise available appellate remedy before constitutional courts even for some deserving litigants - There is always a presumption in favour of constitutionality of such provisions legislated. Therefore, such litany of travails are not ones that the Tribunal, a creature of statute, can address by usurping a jurisdiction under any misconceived notion of that being its responsibility while functioning as sentinel on the qui vive for rendering justice. Jurisdictional High Court holding that Section 129A of the Customs Act, 1962 has explicitly stated about the exclusion of Chapter X, and further since the Honourable High Court has also granted its imprimatur to the decision in PREMIUM INTERTRADE PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [ 2000 (10) TMI 661 - CEGAT, MUMBAI] that the phrase payment of drawback used in the proviso to Section 129A would prevent the Appellate Tribunal from dealing with cases involving recovery of drawback, in adherence to such binding precedents, it is held that the jurisdiction of the Tribunal is ousted in the present matters and the defect raised by the Registry is in order. Conclusion - The Tribunal did not have jurisdiction to entertain the appeal concerning the recovery of drawback, as it was related to the payment of drawback under Chapter X and the rules made thereunder. The appeal filed is not maintainable and cannot be entertained and is dismissed for want of jurisdiction.

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• 2025 (3) TMI 696
  Classification of imported goods - imported towers - to be classified under Customs Tariff Item (CTI) 7308 or under Customs Tariff Heading (CTH) 8503 - whether the towers are parts of Wind Operated Electricity Generators (WOEG) and thus eligible for specific tariff classification and exemption benefits? - HELD THAT:- The tower in question, as understood by the Board is clearly a part of the Wind Electric Generator and not a General/Civil Structure as understood by the Commissioner in the impugned order. The Commissioner is clearly in error in misunderstanding that the tower in question is not a part of Wind Energy Generator, nor do we see any justification for generalizing the tower in question. The conclusion drawn is therefore bereft of any merits and hence, the said finding cannot sustain, which was aside. In one of the cases, viz. CC Chennai Vs Suzlon Towers and Structures Limited, Chennai Bench [ 2024 (1) TMI 1171 - CESTAT CHENNAI] has even considered the classification of tower flanges against rival tariffs vis- -vis the eligibility for exemption benefit of Notification No.12/2012. The Bench has after a detailed analysis, concluded that the tower flanges are clearly parts of WOEG classifiable under 8503. Further, the other orders of the Benches are on the same line. Conclusion - The towers imported by the appellant were indeed parts of WOEG and thus should be classified under CTH 8503. The impugned order set aside - appeal allowed.

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• 2025 (3) TMI 695
  Rate of IGST - lithium-ion batteries - whether the rate of IGST payable on the import of lithium-ion batteries is at 12% as per S. No. 203 of Schedule II to Notification No. 01/2017 IT (Rate) or at 18% as per S. No. 376AA of Schedule III to Notification No. 01/2017 IT (Rate), as inserted by Notification No. 19/2018-IT (Rate) dated 26.7.2018, which specifically covered lithium-ion batteries ? - levy of interest or penalty - HELD THAT:- The Hon ble Supreme Court in Bengal Immunity Co. Ltd. v. State of Bihar Ors. [ 1955 (9) TMI 37 - SUPREME COURT ], stated that a legal enactment must be interpreted in its plain and literal sense, as that is the first principle of interpretation. Again, in Union of India Vs Hansoli Devi [ 2002 (9) TMI 799 - SUPREME COURT] , wherein the Apex Court held that it is a cardinal principle of construction of a statute that when the language of the statute is plain and unambiguous, the court must give effect to the words used in the statute. Besides, in a taxing Act one has to look merely at what is clearly said and there is no room for any intendment. In a taxing statute nothing is to be read in, nothing is to be implied, one can only look fairly at the language used. It is found that based on the first principle of interpretation, the impugned goods were found covered under a specific heading which conveys only one meaning and were correctly determined to discharge IGST @ 18% as per S. No. 376AA of Schedule III of Notification No. 19/2018-IT (Rate) dated 26.07.2018, during the relevant period, by the Original Authority. Due to a lack of ambiguity in the rate notification and in the light of the judgment of the Hon ble Apex Court in Simplex Mills Co. Ltd. [ 2005 (3) TMI 117 - SUPREME COURT] , there is no necessity here, to examine the claim of the goods at S. No. 203 of Schedule II to N/N. 01/2017 IT (Rate) and muddy the clear water. An aid to interpretation of the terms used in a statute or notification is resorted to only when there is some ambiguity in the words or expression used, which is not so the case here. No Interest or Penalty is leviable in the absence of machinery provision - HELD THAT:- The Hon ble Bombay High Court in Mahindra Mahindra Ltd. v. Union of India, [ 2022 (10) TMI 212 - BOMBAY HIGH COURT] , has examined an identical issue regarding interest. It was held that there is no substantive provision in Section 3 of Customs Tariff Act, 1975 requiring payment of interest and in the absence of specific provisions for levy of interest, same cannot be levied or charged. It is also noticed that Section 3(12) of the Customs Tariff Act has been substituted, vide Finance (No 2) Act 2024 which was notified on 16th August 2024, specifically including interest among others measures - The legislature having now incorporated interest into the Customs Tariff Act, 1975, the same can be demanded for non-payment of IGST only after the substitution of the said sub-section as above, from 16.08.2024 and not on the impugned goods which were imported before that date. The appellants prayer hence succeeds on this issue. Conclusion - i) The demand for IGST on lithium-ion batteries @ 18% as per S. No. 376AA of Schedule III to Notification No. 01/2017 IT (Rate), is upheld. ii) The demand for interest is set aside. Appeal disposed off.

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• 2025 (3) TMI 694
  Revocation of Customs Broker license - forfeiture of its security deposit - imposition of penalty - violation of Regulations 10(a), 10(d), 10(n) and 10(q) of the CBLR. Violation of Regulation 10 (a) - HELD THAT:- Regulation 10(a) requires the Customs Broker to obtain an authorisation and to produce it to the Assistant Commissioner or Deputy Commissioner when called for. It is not a task requiring any extraordinary effort since the Customs Broker is usually present on a daily basis or at least visits the custom house frequently because it is his place of work. The existence of the exporter or otherwise is not relevant to Regulation 10(a). The only thing relevant is if the authorisation had been obtained and produced when called for - If an enquiry is being conducted into any consignment and if the Customs Broker is called and if he had obtained an authorisation from the exporter before filing the Shipping Bill, we find no reason for the Customs broker to not produce it. In this case, as per the records, the appellant had not even responded to several summons issued to it. It is only during the personal hearing while passing the impugned order, the appellant stated that it had an authorisation and would be able to produce it. The Commissioner has correctly rejected this submission because Regulation 10(a) not only requires obtaining an authorisation but also producing it before the Assistant Commissioner or Deputy Commissioner when called for. Violation of Regulation 10 (d) - HELD THAT:- The presumption is that DGFT has not issued benami IECs to non-existent exporters. If DGFT is issuing benami IECs and the Customs ICES system is allowing export on the basis of such benami IECs to exporters who do not exist at all or exist only on paper, the problem is not of the appellant or any other Customs Broker but it is a deep rooted systemic problem where neither DGFT nor Customs checks the existence of the exporter/importer while allowing exports and giving out export benefits. Even a ration card which gives the poor families subsidised rations worth a few thousand rupees is not issued without verifying the existence of the persons and their family size. Likewise, even a passport, which gives one nothing but a right to leave the country and return to it is not issued without police verification- prior to or after the issue - the appellant had not violated Regulation 10(d). Violation of Regulation 10 (n) - HELD THAT:- Regulation 10(n) requires the Customs Broker to verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. This responsibility does not extend to physically going to the premises of each of the exporters to ensure that they are functioning at the premises. When a Government officer issues a certificate or registration with an address to an exporter, the Customs Broker cannot be faulted for trusting the certificates so issued. Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by the Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine. The GSTIN issued by the officers of CBIC itself shows the address of the client and the authenticity of the GSTIN is not in doubt. In fact, the entire verification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and there are no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent - the appellant had not violated Regulation 10(n). Violation of Regulation 10(q) - HELD THAT:- After carefully considering the sequence of events as narrated in the SCN and the impugned order, there are no iota of doubt that the appellant had not cooperated at all with the investigation. The appellant s submission that it had not received the several summons issued by post and that it had received only one summon delivered by hand to Shri Ajay Dogra but the statement could not be recorded are nothing but lame excuses - the appellant had not cooperated with the investigation and thereby violated regulation 10(q) of CBLR, 2018. Conclusion - The appellant violated Regulations 10(a) and 10(q) but had not violated Regulations 10(d) and 10(n). Applying the doctrine of proportionality, the ends of justice will meet, if the penalty of Rs. 50,000/- imposed on the appellant is upheld and the revocation of its licence and forfeiture of security deposit are set aside. The appeal is partly allowed and the impugned order is modified to the extent that the revocation of licence and forfeiture of security deposit of the appellant are set aside but the penalty of Rs. 50,000/- imposed on the appellant is upheld.

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• 2025 (3) TMI 693
  Smuggling of Gold - Town seizure - Confiscation - statements recorded un/s 108 of the Customs Act can be considered as conclusive evidence of smuggling or not - burden to prove - whether impugned order is based on assumption and presumptions? - applicability of Section 113 of the Customs Act - HELD THAT:- No any allegations that seized gold were trying to export from India. Therefore, Section 113 of the Customs Act is not applicable. It is a case of town seizure, in which Customs Officers intercepted a person Shri Burri Yedukondalu and seized 850.39 grams gold in 10 pieces of irregular shape. The Customs Officer recorded statement of Shri Burri Yedukondalu under Section 108 of the Customs Act in which he stated that He is working as part time worker in M/s Dattatreya Associates in Durgi, owner is Shri Kapalavai Naga Samba Siva Rao. As per the directions of his Associates in Durgi. His owner is Shri Kapalvai Naga Samba Siva Rao. His owner is paying him Rs. 20,000/- per month excluding travel and food expenses. As per the directions of his owner i.e Shri Kapalavai Naga Samba Siva Rao (owner of M/s Dattatreya Associates in Durgi), on 17.10.2022, he started from Durgi to Nellore along with cash of Rs. 43,50,000/- given by owner and reached Nellore. Statement recorded under Section 108 of The Customs Act is admissible in evidence but such statement may be scrutinised in facts and circumstances of the case. It cannot be presumed that statement recorded by Customs Officer will be treated as gospel truth. Learned Counsel for the appellants argued that Department prepared a concocted story and witnesses are habitual/pocket witness. He produced a copy of Panchanama dated 20.03.2023 at 19.45 hrs onwards relating to place Prakasam District, Andhra Pradesh in which a witness named Shri Gedela Nageswara Rao with same address. How it is possible a person will be available as a witness in so many places. It creates doubt on panchanama as well as statement as recorded. Conclusion - Revenue failed to prove reasonable belief that the seized gold is smuggled whereas appellants successfully proved that seized gold was not smuggled but prepared bars after melting old jewellery. Therefore, absolute confiscation as well as imposing penalties are not justified. Appeal allowed.

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• Corporate Laws

• 2025 (3) TMI 692
  Seeking direction from this Court to the official liquidator to handover vacant and peaceful possession of the said premises, which were taken on monthly tenancy basis by the company in liquidation - HELD THAT:- The instant application has been filed under Section 446 of the Companies Act. The said provision indeed provides wide powers to the Company Court to pass appropriate orders. The Court has jurisdiction to even entertain and dispose of any suit or proceeding by or against the company, as also any claim made by or against the company in liquidation. In the case of Patel Engineering Co. Ltd. v/s. Official Liquidator [ 2004 (2) TMI 383 - HIGH COURT OF BOMBAY] , even when eviction proceedings were initiated by the landlord in respect of the premises in question, this Court held that such an application by the landlord, seeking possession of the premises, could not be dismissed because, by approaching the Company Court, the landlord had invoked an independent and special remedy available to the landlord under the Companies Act. There is substance in the contention raised on behalf of the applicant that under Section 446 of the Companies Act, this Court has wide powers, with the focus being on examining issues and passing orders with the object of carrying on the winding up proceeding and in that process, examining whether the premises are required for the purposes of winding up of the company in liquidation. In the case of Metal Tubes and Rolling Mills v/s. Official Liquidator [ 2020 (8) TMI 584 - BOMBAY HIGH COURT] , after referring to a number of judgments of the Supreme Court in this context, it was held that the Company Court under Section 446 of the Companies Act, has very wide powers to decide all questions that may relate to or arise in the course of winding up of the company. This Court is unable to agree with the learned counsel for the official liquidator that the present application ought not to be entertained, as the landlord can institute eviction proceedings. There is substance in the contention raised on behalf of the applicants that in Official Liquidator s Report No. 77 of 2022, the official liquidator has specifically stated that a search of flat Nos. 4 and 5 revealed that there were no books of accounts or records belonging to the company in liquidation. In the face of such material, this Court is of the opinion that the bald statement made on behalf of the official liquidator in the affidavit in reply, that the premises in question are required for storing books and records of the company in liquidation, is nothing but an attempt to somehow cling on to the said premises, despite the fact that the premises have been in disuse. The contention raised on behalf of the ex-directors is only stated to be rejected, for the reason that perfunctory applications have been filed in these proceedings, claiming that the company can be revived. No genuine efforts appear to have been made on behalf of the ex-directors in that direction. In any case, as noted herein above, the continued burden of rentals is wholly unjustified and in the facts and circumstances of the present case, the prayer made on behalf of the applicants deserves to be granted. Conclusion - The official liquidator s claim of needing the premises was not genuine and that the premises were not required for the winding up and liquidation process. Therefore, the issue decided in favor of the applicants, directing the official liquidator to hand over possession of the premises. Application disposed off.

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• 2025 (3) TMI 691
  Seeking recall or review of order - legality of compromise under Order XXIII Rule 3 of the Code of Civil Procedure, 1908 - legality of assignment of Shaila Clubs loan to Savannah - Savannah s contention is that the transaction involved in the present case is not governed by 2021 - delay in filing of Interim Application - HELD THAT:- It is failed to understand as to how reliance on Clause 11 of the RBI directives assists the case of Savannah. All that Clause 11 provides is that loan transfer would result in transfer of economic interest without being accompanied by any change in underlying terms and conditions of the loan contract and in all cases where there are any modifications in the terms and conditions of the loan contract during or after transfer, the same shall be evaluated against the definition of the term restructuring provided in Paragraph No.1 of the Annexure to Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 dated 7 June 2019. Dr. Tulzapurkar has placed on record copy of the said Prudential Directions, 2019 which again does not assist the case of Savannah in any manner. All that Clause 11 provides is that there would be no change in the terms and conditions of loan contract upon transfer of loan and whenever such terms or conditions are modified, the same shall be evaluated against definition of the term restructuring in Prudential Directions. Thus, Prudential Directions apply for limited purpose of definition of the term restructuring that too when there are modification of terms and conditions in loan agreement. The transaction of assignment of loan of Shaila Clubs by the Bank in favour of Savannah is specifically prohibited under the 2021 RBI Directives as Savannah is not an eligible transferee. One of the objectives behind the RBI Directives is to ensure that the Banks do not transfer loan accounts to ineligible transferees. Otherwise, Banks would transfer loan accounts to private money lenders. Since Savannah is not one of the recognized transferees under the 2021 RBI guidelines, transfer of loan account of Shaila Clubs in favour of Savannah would clearly be unlawful - the compromise entered into between the Bank and Savannah is something which this Court could not have accepted for the purpose of disposal of Writ Petition No. 11610 of 2022. On the basis of assignment of loan of Shaila Clubs in its favour, Savannah has instituted CIRP against Shaila Clubs and would ultimately realise the outstanding loan amount alienating the property of Shaila Clubs. Thus, the Minutes of Order directly affect the rights of Shaila Clubs. The objective behind RBI Directives of not permitting ineligible lender to purchase NPA is totally frustrated in the present case, where Savannah is actually eyeing to secure ownership of property under its management as mere Conductor by paying sum of Rs.3.37 crores in Shaila Clubs loan account. The compromise effected between Bank and Savannah actually affects the interest of Shaila Clubs, who is not the signatory to the compromise. Mere presence of Advocate of Shaila Clubs before the Court on 21 October 2022 or failure on the part of the Advocate to raise any objection to disposal of the petition in view of the Minutes of Order would not convert unlawful compromise into lawful one. Judgment of the Apex Court in Suleman Noormohamed [ 1978 (2) TMI 222 - SUPREME COURT] is relied upon in support of contention of unlawful compromise. The Apex Court has dealt with the issue of eviction for the tenant on the basis of compromise where the tenant opposed execution of the decree on the ground that the decree was nullity as the compromise, in absence of making out the ground for eviction under rent control legislation, was itself unlawful. The Apex Court held If the agreement or compromise for the eviction of the tenant is found, on the facts of a particular case, to be in violation of a particular Rent Restriction or Control Act, the Court would refuse to record the compromise as it will not be a lawful agreement. If on the other hand, the Court is satisfied on consideration of the terms of the compromise and, if necessary, by considering them in the context of the pleadings and other materials in the case, that the agreement is lawful, as in any other suit, so in an eviction suit, the Court is bound to record the compromise and pass a decree in accordance therewith. Passing a decree for eviction on adjudication of the requisite facts or on their admission in a compromise, either express or implied, is not different. The Minutes of Order dated 20 October 2022 has a seal of this Court in the form of order dated 21 October 2022. If the compromise is itself unlawful, the seal of this Court put on such compromise must be removed so that no party is permitted to rely on the same in any collateral proceedings by contending that that the compromise has been accepted by the High Court and that the same is therefore valid - the review petition filed by the Shaila Clubs cannot be dismissed by relegating it to remedy of raising objection in CIRP before NCLT which does not have the jurisdiction to declare that the compromise effected through the Minutes of Order accepted by this Court is unlawful. NCLT would always treat the Minutes of Order, with seal of this Court, to be lawful. It is therefore necessary that the order dated 21 October 2022 is recalled. The real issue involved in the present case is whether the compromise is lawful and whether the order dated 21 October 2022 deserves to be recalled and /or reviewed. After having arrived at the conclusion that compromise is unlawful and the order passed by this Court on 21 October 2022 deserves to be recalled, it is not inclined to entertain the technical plea sought to be raised by Savannah about Liquidator s locus to file Interim Application for recall, especially in the light of the fact that the order is otherwise reviewable on application filed by Shaila Clubs and its suspended director. On the issue of delay in filing of Interim Application No.13400 of 2024 and in filing the two Review Petitions, it is well settled position of law that mere delay, not involving latches, acquiescence or estoppel, would not prevent this Court from exercising inherent power of recalling its order. The inherent power of this Court in recalling an order is not circumscribed by considerations of delay. Once this Court arrives at a conclusion the compromise is unlawful and could not have been acted upon by this Court, mere delay would not be a hurdle for this Court to recall and/review the recording of unlawful compromise - Once this Court arrives at a conclusion that the compromise itself is unlawful, mere delay in filing applications for recall or review cannot be a reason for shutting the doors of this Court on technical ground of delay. The order passed by this Court on 21 October 2022 on the basis of Minutes of Order dated 20 October 2022 deserves to be recalled both in application filed by the Bank as well as in the Review Petitions filed by Shaila Clubs and its suspended director. Conclusion - i) The compromise recorded in the Minutes of Order was unlawful as it violated the RBI Directives, which prohibit the transfer of loan accounts to ineligible transferees like Savannah. ii) The RBI Directives have statutory force and are binding on banks, thus rendering the assignment of the loan to Savannah impermissible. iii) The order is recalled. Interim Application filed for seeking condonation of delay in filing Review Petition is allowed - Order dated 21 October 2022 passed in Writ Petition No. 11610 of 2022 in view of Minutes of Order dated 20 October 2022 is recalled - petition restored.

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• 2025 (3) TMI 690
  Challenge to scheme of arrangement - right to reverse book building - unfair valuation and swap ratio - validity of relaxation granted by SEBI - undue influence caused by the company over its shareholders - non-disclosure of the relaxation granted by SEBI - participation of employees and mutual funds of ICICI group in the voting as public shareholders. Unfair valuation - reverse book building process (RBB) may have yielded a better price or not - HELD THAT:- Regulation 37 was introduced after detailed deliberations as an alternate mode of delisting by way of an amendment. As part of the process, SEBI had issued a board memorandum dated 29 September 2020 which specifically deliberated upon the merits of providing an alternative mode of delisting and the safeguards to be built in when opting for this route. The Board memorandum specifically discussed three key safeguards for protecting the interest of public shareholders. viz a) regarding the valuation of shares being not less than 60-days volume weighted average price (VWAP) of the companies; b) the voting threshold being 66% of the public shareholders of the listed subsidiary in addition to the usual requirement of 75% amongst all shareholders of the listed subsidiary in terms of Section 230 of the Act; c) the shares of the holding company (in this case ICICI Bank) are frequently traded which ensures the shareholders have the ability to freely exit the holding company at any time by selling the shares in the stock market - The Appellants claim reverse book building RBB would have guaranteed a better price is mere speculative as is held valuation is not an exact science and is subject to professional judgment and can vary from one valuer to another and as long as recognized methods are adhered to, valuation cannot be faulted as held in Indiabulls Real Estate Limited v. Department of Income Tax [ 2025 (1) TMI 555 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ]. Whether RBB mechanism requires 90% of public shareholders to tender their shares is completely baseless as the said regulation only says the total shareholding of the acquirer should become more than 90% for the delisting to take place? - HELD THAT:- SEBI has after thoughtful consideration introduced the alternate mechanism of delisting through a scheme of arrangement under Reg. 37. More so the Ld. NCLT also noted the argument on RBB is entirely speculative, since stock exchange trading platform is considered to be the best price discovery mechanism. Further, the Ld. NCLT per order dated 21.08.2024 observed the shareholders of ICICI Securities would also benefit indirectly by receiving shares of ICICI Bank and merger will lead to an increase in the intrinsic value of ICICI Bank, which would reflect in the traded price consequent upon implementation of Scheme. Thus it is entirely baseless to argue that any prejudice is being caused to the public shareholders. Joint valuation report has been prepared by 2 (two) independent and registered valuers - HELD THAT:- The valuation of ICICI Securities is in accordance with the minimum requirement prescribed under Reg. 37(2)(j) of the Delisting Regulations i.e., the per share valuation of the listed subsidiary shall be at least equal to 60-day VWAP. It is settled law the courts should not enquire into the issue of valuation of shares as the same is a question of fact which is based on technical and complex considerations and should be left to the experts in the field of accountancy as is held in G.L. Sultania Anr. v. Securities and Exchange Board of India [ 2007 (5) TMI 334 - SUPREME COURT ] and Miheer H. Mafatlal v. Mafatlal Industries Ltd. [ 1996 (9) TMI 488 - SUPREME COURT ]. Relaxation granted by SEBI in exercise of its regulatory powers - HELD THAT:- Regulation 42 of the Delisting Regulations specifically empowers SEBI to grant relaxation from strict compliance of the Delisting Regulations. The fact of such relaxation being granted is undisputed. It is beyond the scope of the present proceedings to sit in appeal over the relaxation granted by SEBI, which is an expert regulatory body. The Ld. NCLT has rightly noted this aspect and held that with the relaxation in place, the Companies were entitled to propose the Scheme in terms of Reg. 37. In Sahara India Real Estate Corporation Limited Ors. v. Securities and Exchange Board of India, [ 2012 (9) TMI 559 - SUPREME COURT ] the Hon ble Supreme Court has held that on the subject of protecting the interests of investors, the SEBI Act, 1992 is a standalone legislation, and SEBI s powers thereunder are not fettered by any other law, including the Companies Act. Breach of legal provisions by ICICI Bank in the course of the outreach initiative - HELD THAT:- The Administrative Warning Letter dated 6 June 2024 does not in any manner suggest ICICI Bank has resorted to any illegal methods or has interfered with or attempted to influence the voting process or the free will of the shareholders of ICICI Securities. There is nothing in the administrative warning which can be said to be connected to the voting process or the outcome of the voting. Further SEBI has nowhere stated the voting would stand invalidated on account of the outreach initiative, nor has SEBI referred to any circumstance that would invalidate the votes cast by the shareholders of ICICI Securities. At best, the SEBI may have taken exception to the mode of carrying out a outreach and not the outreach per se nor even the objective of such outreach. Failure to disclose the relaxation granted by SEBI - HELD THAT:- The disclosure made in the Explanatory Statement informs the shareholder the Scheme in the present case will be in terms of the requirements stipulated in Reg. 37(2) of the Delisting Regulations. In fact, the Explanatory Statement provides a detailed chart of provisions of Reg. 37(2) showing how each of the provisions thereof are met. Thus the shareholders had all information necessary for voting on the Scheme. All requisite details required for the shareholders to make an informed decision in respect of the Scheme were available in the explanatory statement, the Scheme itself and the joint valuation report, each of which were accessible to the public shareholders at the time of voting. Whether the participation of ICICI group employees and mutual funds in voting as public shareholders was appropriate? - HELD THAT:- Only those funds of ICICI Prudential which held 21,675 shares as on the record date have cast their votes. This constitutes 0.0067% of the paid-up capital of ICICI Securities, and therefore, their participation had negligible impact on the overall voting. The definition of public shareholding under Rule 2(e) of the Securities Contract (Regulation) Rules, 1957, does not exclude employees holding ESOP shares, nor does Rule 2(d) classify them as promoters or part of the promoter group. Since no such exclusion exists, the argument that employee shareholders should not be considered public shareholders does not hold good. Whether the appellant is entitled to object to the scheme under Section 230(4) of the Companies Act, 2013? - HELD THAT:- Not only is the Appellant not entitled in terms of the proviso to Section 230(4) to object to the Scheme, but the Appellant has also failed to demonstrate any illegality in either the process followed for sanctioning of the Scheme or in the terms of the Scheme itself. The Impugned Order is a detailed, well-reasoned order which has effectively dealt with all the contentions raised by the Appellant whilst noting that the Appellant is not entitled to object to the Scheme. Conclusion - i) The scheme s safeguards under Regulation 37 of the Delisting Regulations adequately protect public shareholders, and the removal of RBB does not prejudice them. ii) The valuation is a complex issue best left to experts, and the joint valuation report met regulatory requirements. iii) The relaxation granted by SEBI was within its regulatory powers, and the Court cannot sit in appeal over SEBI s decisions. iv) No evidence of undue influence found from ICICI Bank s outreach initiative, and SEBI s administrative warning did not suggest any legal breach. v) The disclosure of SEBI s relaxation was deemed sufficient, and the shareholders had all necessary information for informed voting. vi) The participation of ICICI group employees and mutual funds in voting was appropriate and had a negligible impact on the outcome. vii) The appellant s lack of entitlement to object under Section 230(4) was upheld, and the scheme s approval by the majority of shareholders was emphasized. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 689
  Admission of Corporate Debtor into Corporate Insolvency Resolution Professional (CIRP) on an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - application filed within time limitation or not - existence of pre-existing dispute or not. Time Limitation - HELD THAT:- Since the last payment was made on 19.10.2016, and the application was filed within three years, we hold that application under Section 9 of the IBC, 2016 is within limitation. On the issue of pre-existing dispute , it is found that in email dated 25.05.2018, the Corporate Debtor had clearly stated that as per their books of account and bank statement nothing is payable to M/s Satkar Logistics Pvt. Ltd., the Operational Creditor. Existence of pre-existing dispute or not - HELD THAT:- There is continuous exchange of e-mails between the Operational Creditor and the Corporate Debtor regarding the differences in the accounting entries and the final email exchanged is dated 25.05.2018, wherein the Corporate Debtor had clearly stated no amount is payable to M/s Satkar Logistics Pvt. Ltd. - On perusal of the reply to Section 8 notice, we find that Corporate Debtor had clearly stated no amount is due to the Operational Creditor. This Tribunal in [LAINA POWER ENGINEERING VERSUS SOKEO POWER PRIVATE LIMITED] [ 2018 (9) TMI 1044 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] had relied upon the emails exchanged between the parties prior to issue of demand notice under Section 8 of the IBC, 2016 as evidence of pre-existing dispute. The Hon ble Supreme Court in M/s S.S. Engineers Ors. v. Hindustan Petroleum Corporation Ltd. [ 2022 (9) TMI 377 - SUPREME COURT ] has held that the application under Section 9 was rightly rejected on the grounds of preexisting dispute. The Hon ble Supreme Court in the case of Sabarmati Gas Limited v. Shah Alloys Limited, [ 2023 (1) TMI 195 - SUPREME COURT ] has held that failure of reconciliation of accounts qualifies as a pre-existing dispute. The rejection of Section 9 application on the grounds of such pre-existing dispute was upheld. Conclusion - i) The application was deemed to be within the limitation period. ii) There existed a dispute between the Operational Creditor and the Corporate Debtor prior to the issuance of notice under Section 8 of the IBC, 2016, which is evidenced by the emails exchanged between the parties. The Ld. NCLT has erred in ignoring the pre-existing dispute and admitting the Corporate Debtor into CIRP. The impugned order of the Ld. NCLT is set aside and the appeal is allowed.

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• 2025 (3) TMI 688
  Determination and approval of the liquidation costs and fees payable to the Liquidator of the Corporate Debtor - contribution of funds towards the Liquidation costs to meet incidental costs till filing the Liquidation Closure Application and Facilitate completion of the distribution without any further delay and to enable the Liquidator Closure Application - directions for filing for the dissolution of the Corporate Debtor immediately after the completion of the distribution of funds, under Section 54 of the Insolvency and Bankruptcy Code, 2016 along with Final Report and Form H for closure of Liquidation Process - HELD THAT:- In that eventuality, the Appeal in its present form, would be pre-matured and particularly in the absence of a challenge given to the decision taken by the SCC, the Appeal would not be tenable and the same deserves rejection. The Counsel for the Appellant has submitted that the Appeal would still to tenable because he is questioning the very procedure adopted by the Learned Adjudicating Authority while directing the matter to be decided by the SCC in relation to the aspect of remuneration and other incidental charges. As far as questioning of the procedure in the absence of putting challenge to the consequential result arrived at after following the procedure is concerned, the same cannot be permitted to be put to challenge, in the absence of the actual challenge being given to the decision taken on 09.01.2025. Thus, the Company Appeal owing to the directives given in the Impugned Order as contained in Para 13, and owing to the fact as admitted and informed by the Counsel for the Appellant, that the decision has already been taken by SCC on 09.01.2025 and that the said decision is not under challenge, no cause as such survives as of now, in relation to the directions which have been given by the Impugned Order dated 29.11.2024. Conclusion - The Liquidator fees must be reasonable and reflect the actual work done. Thus, Company Appeal is misconceived and the same is accordingly dismissed.

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• 2025 (3) TMI 687
  Condonation of delay in filing appeal - Resolution Plan stood approved by an Order of 30.05.2022, as it was passed by the Liquidator, which was subjected challenge to an Appeal before NCLAT, which was dismissed on 28.09.2022 - HELD THAT:- The delay in re-filing the appeals was satisfactorily explained and thus condoned. The Appellant cannot take a leverage while pressing upon these Appeals against the rejection of the Interlocutory Applications preferred by him before the learned NCLT, contending thereof that, since there was an element of fraud, he can still file a Recall Application before the learned NCLT despite the Judgment by Appellate Court itself, because, that would have been the primary Court where the question of fraud could have been gone into. This contention of the learned counsel for the Appellant is not acceptable for the reason being that, even if the Appellant later on has acquired the knowledge of commission of fraud either at the stage of passing of an Order of the Resolution Plan on 30.05.2022 or even at the stage of passing of the Appellate Court s order on 28.09.2022 or even at the stage of passing of the Order by the Hon ble Apex Court on 11.03.2024, that in itself will not make the Application IA No. 317 / 2024, to be maintainable, owing to the fact that rightly or wrongly the Judgment of approval of the Resolution Plan by the learned Adjudicatory Authority dated 30.05.2022 has already been affirmed and that affirmation stands stamped and finalised by the Hon ble Apex Court with the withdrawal sought by the Appellant of the Appeal which was filed under Section 62 of I B Code, 2016. Conclusion - i) The delay in re-filing the appeals was satisfactorily explained and thus condoned. ii) Once an order is affirmed by an appellate body and the appeal process is concluded, the order attains finality, precluding subsequent recall applications. iii) The dismissal of the applications by the Impugned Order did not suffer from any apparent error and did not warrant interference under the appellate jurisdiction. Appeal dismissed.

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• FEMA

• 2025 (3) TMI 686
  Denial of principles of natural justice - absence of cross-examination of the Departmental Officers - Special Director, Enforcement Directorate had denied the request to seek the cross-examination of Officer who recorded the statement of the Appellant under the provision of Custom Act, 1962 and Officer who recorded the statement of co-noticees under the provisions of FERA. HELD THAT:- We are unable to accept the contentions of the Appellant as the proceedings under Customs Act are factually different from the present proceedings under FERA. Appellants have been unable to prove how the cross-examination of theDepartmental Officials would have changed the outcome of the case, or by being denied the opportunity to cross-examine, they were adversely impacted during the Adjudication proceedings. We further observe that the Appellants have been unable to prove how the denial of the opportunity to cross-examine the Department Officers had caused prejudice to the Appellants in the presentcase. Absence of cross-examination of the Departmental Officers has not caused any prejudice to the Appellants in the present matter and not allowing the cross-examination was not fatal to the adjudication proceedings. We therefore find the impugned Interlocutory Orders to be maintainable and sustainable.

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• PMLA

• 2025 (3) TMI 685
  Seeking grant of regular bail - Money Laundering - proceeds of crime - prima facie evidence indicating the applicant s involvement in money laundering activities - applicability of Section 45 of the PMLA, 2002 - HELD THAT:- The Hon ble Supreme Court in the matter of Vijay Madanlal Choudhary case [ 2022 (7) TMI 1316 - SUPREME COURT (LB) ] has held that The Court is only required to place its view based on probability on the basis of reasonable material collected during the investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. In the case of Satish Jaggi Vs. State of Chhattisgarh, [ 2007 (4) TMI 775 - SUPREME COURT ], the Hon ble Supreme Court has held that at the stage of granting of bail, the Court can only go into the question of prima facie case established for granting bail, it cannot go into the question of credibility and reliability of witnesses put up by the prosecution. The question of credibility and reliability of prosecution witnesses can only be tested during trial. It is not acceptable that the present applicant did not know about the transactions that the amount utilized by him not comes from Mahadev online book. Denial by the accused itself is not sufficient to consider prima facie that there is no mens rea of the applicant for the said offence under the PMLA-2002. Considering the nature of allegation against the present applicant and also the material collected during the investigation and further the gravity of the offence, the benefit of the judgments cited by the learned counsel for the applicant cannot be extended to him for releasing him on bail at this stage, as the facts and circumstances of the present case and the allegation against the applicant is different than the facts and circumstances of the cases cited by learned counsel for the applicant. Conclusion - Considering the role of the applicant in the ensuing money laundering case of proceeds of crime in the Mahadev Book App, it is found that there is sufficient evidence collected by the ED/respondent to prima facie show the involvement of the applicant in the offence of money laundering as defined under Section 3 of the PMLA, 2002. It is an organized crime having various facets of its complexion, therefore, further considering the provisions of Section 45 of the PMLA, 2002 this Court is satisfied that there is reasonable ground for believing that the applicant is involved in the offence and he is likely to commit any other offence while on bail, it is not inclined to release the applicant on bail. The bail application is dismissed.

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• Service Tax

• 2025 (3) TMI 684
  Demand for service tax raised against the appellant based on income tax returns and the application of the best judgment method - entire case of Revenue is based upon the Income Tax Returns filed by the appellant with the Income Tax Department - Invocation of extended period of limitation - HELD THAT:- From the records it is not coming out whether before issuing the show cause notice any independent enquiry had been conducted by the department to ascertain the receipt of amount in issue towards rendering any taxable service. In the absence of any specific allegation about the nature of service provided or the service recipient, it is not justified to held appellant liable for service tax. In order to fasten any duty liability on the appellant the department, in the first place, has to identify the nature of taxable service and the recipient of such service as well. Section 72 ibid cannot be applied merely on the basis of income-tax return without identifying the specific taxable service and the service recipients. By way of various decisions, it is settled legal position that a show cause notice issued on the basis of presumption and third-party information without examining the books of account and records of an assessee is not sustainable. Extended period of limitation - HELD THAT:- There was no malafide intention on the part of the appellant to evade payment of service tax. Information derived from the income-tax returns solely cannot be made the basis to confirm the demand of service tax herein by invoking the extended period of limitation as the department has failed to bring on record any positive act or malafide intention on the part of the appellant to evade the service tax. Therefore the demand cannot sustain on the ground of extended period of limitation also. Conclusion - i) The demand based on income tax returns and best judgment was unjustified. ii) The extended period of limitation was not applicable as there was no suppression of facts with intent to evade tax. Appeal allowed.

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• 2025 (3) TMI 683
  Short payment of service tax - construction of complex service on reverse charge basis - period April, 2017 to June, 2017 - Extended period of limitation - penalty. HELD THAT:- Hon ble High Court in SURESH KUMAR BANSAL ANUJ GOYAL ORS. VERSUS UNION OF INDIA ORS. [ 2016 (6) TMI 192 - DELHI HIGH COURT] has held that there was no statutory mechanism to ascertain the value of service component and that service tax could not be levied on value of undivided share of land. Neither Service Tax (Valuation Rules, 2006) nor Finance Act, 1994 have any provisions for determining value of service covered under Section 65(105)(zzzh) - the aforesaid decision of Hon ble Delhi High Court, even though had been passed in the context of service tax provisions as applicable prior to 01.07.2012, is equally applicable to the period after 01.07.2012. Hon ble Telangana High Court in the case of VASUDHA BOMMIREDDY, HYD ANOTHER VERSUS ASSISTANT COMMISSIONER OF SERVICE TAX, HYD -3- OT [ 2020 (2) TMI 632 - TELANGANA HIGH COURT] ] held as the gross consideration charged by a builder/promoter of a project from a buyer would not only include an element of goods and services but also the value of undivided share of land which would be acquired by the buyer and since neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components from ascertaining the measure of service tax, the same cannot be levied. Thus, the Appellant was not liable for payment of service tax on construction of residential complex service during April, 2017 to June, 2017 and the appeal is liable to be allowed on merits. Extended period of limitation - HELD THAT:- For demanding service tax for the period April, 2017 to June, 2017, SCN had been issued on 05.08.2020, by invoking extended period of limitation. The Commissioner (Appeals) has upheld the invocation of extended period by holding that the decision in the case of Suresh Kumar Bansal was for the period prior to 01.07.2012 and that the Appellant has been holding service tax registration for a long period, they were under legal obligation to file ST-3 Return and pay the service tax. The decision of the Tribunal in the case of M/S SHERVANI INDUSTRIAL SYNDICATE VERSUS CCE, C SERVICE TAX, ALLAHABAD [ 2009 (1) TMI 44 - CESTAT, NEW DELHI] , is applicable to the facts of the present case. In the above case it has been held that extended period of limitation is not invocable when there is scope of difference in interpretation - the demand of Rs.27,83,531/- is liable to be set aside on merits as well as on limitation. Penalties - HELD THAT:- As the demand itself is being set aside, penalties under 78(1) as well as under Section 77(2) are also liable to be set aside. Conclusion - The Appellant was not liable for payment of service tax on construction of residential complex service during April, 2017 to June, 2017 and the appeal is liable to be allowed on merits. The demand of Rs.27,83,531/- is liable to be set aside on merits as well as on limitation. The appeal filed by the Appellant is allowed on merits as well as on limitation.

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• 2025 (3) TMI 682
  Principles of natural justice - validity of SCN issued - impugned order is silent on the non-provision of relied upon documents in support of the allegations in the SCN - no opportunity of hearing provided - HELD THAT:- The SCN does not contain any document / contract supporting the allegations made in the SCN, that would substantiate the charges and help quantify the duty being demanded service wise. This is determinantal to the appellant as he would not be able to effectively reply to the SCN and is a gross violation of the principles of natural justice making the issue of SCN an empty formality. As stated by the Apex Court in COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S BALLARPUR INDUSTRIES LTD [ 2007 (8) TMI 10 - SUPREME COURT] , it is well settled that the show cause notice is the foundation in the matter of levy and recovery of duty, penalty and interest and that all allegations to be met by the respondent have to be clearly spelt out in it, so that the respondent can make a proper defense of his case. Further as stated by the appellant for the earlier period too this Tribunal had found deficiencies in the SCN similar to the one noted above and had dismissed the department s appeal. Conclusion - SCN has been defective and cannot be repaired at this stage without a further investigation, which is not permissible at this stage. Hence no purpose would be served in remanding this matter back to the Original Authority. The impugned order should have considered the violation of natural justice and the improperly issued show cause notice and set aside the order instead of confirming it. There are no merits in the appeal - appeal dismissed.

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• 2025 (3) TMI 681
  Levy of service tax on the amount of penalty/liquidated damages (LD) collected by the appellant - declared service in terms of Section 66E(e) of the Finance Act with effect from 01.07.2012 - HELD THAT:- The Department s case is that the same would be covered within the ambit of declared service under Section 66E(e) of the Finance Act with effect from 01.07.2012. It is further found that the case laws cited cover the same issue and in some cases also relied on some other judgments including the judgment of South Eastern Coal Fields [ 2020 (12) TMI 912 - CESTAT NEW DELHI] to come to the conclusion that no service tax can be charged on the Liquidated Damages amount received by the appellant. Therefore, the issue is fairly covered in the favour of the appellant in the cited judgments and the matter is, therefore no longer res-integra. In view of the same, the impugned order is set aside. Conclusion - No service tax is chargeable on the liquidated damages collected by BHEL. Appeal allowed.

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• 2025 (3) TMI 680
  Levy of service tax - amounts collected as notice pay from employees for non-observance of the agreed notice period - retention of advance amounts by the appellant, due to cancellation of bookings or no-show by customers = declared service or not. HELD THAT:- Reliance placed in the case of M/S BALAJI MEDICAL DIAGNOSTIC RESEARCH CENTRE VERSUS PRINCIPAL COMMISSIONER, CENTRAL GOODS SERVICE TAX (EAST DELHI) , NEW DELHI [ 2023 (12) TMI 748 - CESTAT NEW DELHI] where it was held that Such amounts paid by the employer to the employee for premature termination of a contract of employment are treatable as amounts paid in relation to services provided by the employee to the employer in the course of employment. Hence, amounts so paid would not be chargeable to service tax. However any amount paid for not joining a competing business would be liable to be taxed being paid for providing the service of forbearance to act. Tribunal in Shiv Vilas Resort [ 2023 (12) TMI 1006 - CESTAT NEW DELHI] it was held that the adjudicating authority below has wrongly held the no show charges as a consideration for providing declared service. There are no reason to differ from these findings. Since the issue stands already decided in favour of assessee and has attained finality, it is no more res-integra. The adjudicating authorities are held to have failed to follow the judicial protocol while going against the said decisions. Conclusion - i) The notice pay collected from employees for not serving the agreed notice period is not a consideration for any service and therefore not subject to service tax. ii) The amounts retained by the appellant due to cancellation of bookings do not constitute a declared service under Section 66E(e) of the Finance Act, 1994, and are not taxable. Appeal allowed.

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• 2025 (3) TMI 679
  Taxability - activity of renting of immovable property by the panchayat - whether such activities fall within the scope of sovereign functions, thereby exempting them from service tax? - HELD THAT:- A Coordinate Bench of this Tribunal examined an identical issue in, The Commissioner, Allinagaram Municipality Theni Vs Commissioner of GST Service Tax, Madurai [ 2024 (12) TMI 1241 - CESTAT CHENNAI] , and held as It is to be seen that some of the amounts falling within the demand pertain to fees and charges collected for carrying out functions specifically listed in 12th schedule. Further, services are carried out as per the provisions of Panchayat Act, Municipalities Act etc. by which State has bestowed the local authority to carry out such functions and services. These issues are required to be examined. If the appellant is held to be performing sovereign functions, the levy of tax cannot be attracted. Conclusion - The impugned order should be set aside, following the decision in The Commissioner, Allinagaram Municipality Theni and the matter remanded to the original authority for a fresh decision. Appeal disposed off by way of remand.

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• 2025 (3) TMI 678
  Classification of services - Works Contract Service or not - rights in property in goods has already been transferred - payment of VAT on said transaction - HELD THAT:- The Adjudicating Authority has discussed various classifications and other aspects, he has not considered the submissions made by the appellant that these were in the nature of WCS. He has gone strictly by certain definitions and non-production of evidence by the appellant in the course of hearing to substantiate that this was in the nature of WCS. Infact, he has also noted that there is no evidence for payment of VAT on these things, whereas, we find that there are certain documents submitted by the appellant which show that certain amount of VAT has been paid during the period for which show cause notice has been issued. It is however, not clear whether this VAT is in relation to transactions which are now covered in the appeal or in relation to some other transactions. There is also some doubt about the kind of material that might have been used in execution of works contract as the only evidence adduced is that some materials have been purchased by the appellant, which are apparent from the Profit and Loss Account, but the details of use of such materials are not available. Therefore, it is obvious that there is a need to re-examine the whole contracts in the light of certain developments post issuance of show cause notice to understand whether the nature of the transaction is in the nature of WCS or otherwise. It is obvious that as far as period beyond 01.07.2010 is concerned, any service provided within the port will be covered within a single definition of port service irrespective of classification under different service, either claimed by the appellant or by the Department. Similarly, there is also merit in the claim by the appellant that they have provided road services in relation to VPT also. They have also provided certain services in relation to railways within the VPT, which are clearly excluded and exempted, which has been otherwise also allowed in relation to other recipient of services or in relation to other contracts. Period 01.06.2007 to 30.06.2010 - HELD THAT:- If based on material evidence the Adjudicating Authority comes to the conclusion that it is in the nature of WCS then the demand cannot be confirmed on the simple ground that the show cause notice was not issued classifying the services provided as WCS nor it was confirmed under the category of WCS. Therefore, on this ground alone, demand may not sustain for the period prior to 01.06.2007 as well as for the period post 01.06.2007 upto 30.06.2010. However, no view expressed on any law present at this juncture and keeping all options open for Adjudicating Authority to decide on merit and as per settled law in this regard. Appellant will adduce all evidence and other grounds in support of their claim at the earliest so that Adjudicating Authority can conclude their proceedings within 3 months. Conclusion - The classification of services must be based on clear evidence, particularly concerning VAT applicability for WCS. Case remanded back to the Adjudicating Authority for re-examination of the contracts and evidence in light of the developments post-issuance of the show cause notice. The matter is remanded back to the Adjudicating Authority to decide the issues in respect of which the appellants are in appeal before CESTAT - Appeal is partly allowed by way of remand.

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• Central Excise

• 2025 (3) TMI 677
  Levy of excise duty - clearance of zinc scrap - clearance of structural grills - reversal of Cenvat credit on inputs cleared as such - invocation of the extended period of limitation. Whether the demand for excise duty on the clearance of zinc scrap is justified? - HELD THAT:- The appellant has purchased zinc ingots for the manufacture of their final product namely galvanized steel structural. These zinc ingots were used for the purpose of galvanization and the appellant has availed Cenvat credit on the zinc ingots. The appellant has cleared the final product namely galvanized steel structure on payment of duty. However, they have not paid the Excise Duty on the zinc scarp emerged during the course of manufacture - the zinc scrap emerged during the course of manufacture are chargeable to Central Excise Duty. However, it is observed that the appellant has cleared the zinc scrap on the delivery challan and as not discharged Central Excise Duty on the same. Accordingly, the Lower Authorities have rightly confirmed the demand of Excise duty of Rs.8,25,921/- along with interest on the zinc scrap cleared without payment of duty. Whether the demand for excise duty on the clearance of structural grills is sustainable? - HELD THAT:- The appellant has not raised any invoice for the clearance of steel structural to their civil division. The steel structural were cleared without payment of duty. They have issued non-returnable delivery challan and cleared the goods without payment of duty. Thus, it is observed that the appellant is liable to pay duty on the steel structural cleared to their Fabrication Division - the appellant has cleared the steel structural grill to their own Fabrication Division under a delivery challan without payment of duty. Thus, the appellant is liable to pay duty for the clearance to the structural grills made to their fabrication division - the Lower Authorities have rightly confirmed the demand of Rs.1,68,936/- on the clearance of steel structural. Whether the demand for reversal of Cenvat credit on inputs cleared as such is valid? - HELD THAT:- The appellant has cleared inputs as such without reversal of the Cenvat credit availed on the same, on 27.11.2009. The appellant has given the explanation that non-reversal has happened due to change in personnel, due to the amalgamation of the Appellant s company with M/s.Crown Fabricators (P) Ltd., the explanation of the Appellant not acceptable. The appellant is liable to reverse the Cenvat credit availed on the inputs when the same are cleared as such . As the appellant has not reversed the credit availed on the inputs, the Lower Authorities have righty confirmed the demand. Invocation of the extended period of limitation - HELD THAT:- The entire issue has come to the light only on the basis of the investigation conducted by the Headquarters preventive unit. The appellant has not disclosed these details in any of the returns filed by them. Thus, the suppression of facts with an intention to evade payment of duty has been established in this case and hence the extended period has been rightly invoked. Conclusion - i) The Lower Authorities have rightly confirmed the demand of Excise duty of Rs.8,25,921/- along with interest on the zinc scrap cleared without payment of duty. ii) The Lower Authorities have rightly confirmed the demand of Rs.1,68,936/- on the clearance of steel structural. iii) The appellant is liable to reverse the Cenvat credit availed on the inputs when the same are cleared as such . As the appellant has not reversed the credit availed on the inputs, the Lower Authorities have righty confirmed the demand. iv) The suppression of facts with an intention to evade payment of duty has been established in this case and hence the extended period has been rightly invoked. The impugned order is upheld and the appeal filed by the appellant is rejected.

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• 2025 (3) TMI 676
  CENVAT Credit - inputs - MS Angles, Channels, HR Coils, and Flange Beams used in the fabrication of an Electric Overhead Travelling (EOT) Crane - HELD THAT:- The appellant has availed Cenvat credit in respect of MS Angles, Channels, HR Coils, Flange Beams etc. used as inputs in the EOT Crane which were used within the factory of production. These items are components, spares and accessories of the capital goods of the EOT crane and hence they are eligible as inputs under Rule 2(K) used for the fabrication of the capital goods. Accordingly, these items MS Angles, Channels, HR Coils, Flange Beams etc. are eligible inputs under Rule 2(K) of Cenvat credit Rules and accordingly, the appellant is eligible to avail input credit. Hon ble Madras High Court in the case of M/S. THIRU AROORAN SUGARS, M/S. DALMIA CEMENTS (BHARAT) LTD. VERSUS CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [ 2017 (7) TMI 524 - MADRAS HIGH COURT] where it was held that whether the user test is applied, or the test that they are the integral part of the capital goods is applied, the assessees, in these cases, should get the benefit of Cenvat credit, as they fall within the scope and ambit of both Rule 2(a)(A) and 2(k) of the 2004 Rules. Conclusion - The appellant is eligible for the inputs credit availed on MS Angles, Channels, HR Coils, Flange Beams etc. and the impugned order denies the credit cannot be suitable. Appeal allowed.

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• 2025 (3) TMI 675
  CENVAT Credit - nexus of input service with output on which duty liability was, admittedly, discharged under Central Excise Act, 1944 - HELD THAT:- On a perusal of the facts, as well as submissions, it is seen that the decision of the Tribunal in M/S HINDUSTAN COCA-COLA BEVERAGES PVT. LTD. VERSUS PRINCIPAL COMMISSIONER, CGST, NOIDA [ 2024 (7) TMI 1599 - CESTAT ALLAHABAD] has, in identical circumstances, held that the taking of credit under rule 7 of CENVAT Credit Rules, 2004 is not be ascertained for eligibility in the hands of the manufacturing unit. The impugned order is set aside to allow the appeal.

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• CST, VAT & Sales Tax

• 2025 (3) TMI 674
  Utilisation of goods purchased under Form-C for purposes other than generation of electricity, namely, transformation and transmission - penalties for alleged misuse of registration certificates and misrepresentation in purchasing goods. Utilisation of goods purchased under Form-C for purposes other than generation of electricity, namely, transformation and transmission - HELD THAT:- In Ipitata Sponge Iron Ltd. [ 1990 (10) TMI 350 - ORISSA HIGH COURT ] the registration certificate issued to appellant therein did not include refractory . Revenue had moved against appellant therein. In that context coordinate Bench had considered mitigation following finding on conduct of revenue as had not been free from blame. The view does not come to aid of revenue. Cement, petitioner says, was used for purpose of constructing the plant, in which there has been generation of electricity. Inter alia, plant was separated from machinery as an item in the rule by GSR no.1059 dated 29th October, 1958. Plant became an independent item. It is to be seen whether, for purpose of generation of electricity there is necessity of a plant and if so, construction of it by use of, inter alia, cement. Petitioner s contention is, the plant was constructed after the registration certificate was obtained, on goods purchased by declaration on Form-C. There does not appear to be any dispute that petitioner did construct a plant, from where it commenced its generation of electricity - There is also no indication from materials on record that after construction of the plant, cement had been purchased by declaration in Form-C. Cement was an item subsequently added in the registration certificate. It is absurd to expect cement will be directly used for purpose of generation or distribution of electricity. Penalties for alleged misuse of registration certificates and misrepresentation in purchasing goods - HELD THAT:- Where there is a finding of guilt to impose penalty, the authority is obliged to show that if the items purchased on declaration by C-Form , are present in the premises where petitioner is generating electricity for distribution, there is also some collateral purpose of business for which the items were or are being used. There is clear absence of finding on fact but interpretation of the provision and view taken for imposition of penalty. Conclusion - i) The interpretation of Rule 13 should not be unduly restrictive, and materials used in constructing a plant for electricity generation can be considered within its scope. ii) Penalties under sections 8 and 10 require clear evidence of misuse or misrepresentation, which was lacking in this case. The impugned revision order dated 16 th June, 1994 cannot be sustained. It is set aside and quashed - petition allowed.

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• 2025 (3) TMI 673
  Reopening of assessment beyond a period of three years from the date of the judgment or order - applicability of time limitation - suppression of facts - HELD THAT:- It is apparent from the narration of facts recorded in the foregoing paragraphs that the writ petitioner approached this Court without making any mention or reference of the suo-moto revisional proceedings by raising a plea of time bar under Section 36 (1) of the TVAT Act, 2004 for reopening of assessment vide notice dated 18th October, 2024. This Court being persuaded by the legal plea also passed an interim order staying further proceedings pursuant to the impugned show-cause notice. The petitioner did not even care to challenge the order of the revisional authority dated 27th October, 2022 though it was specifically mentioned in the impugned notice dated 18th October, 2024. Therefore, petitioner has not come with clean hands before this Court. The writ petition is, therefore, fit to be dismissed only on the basis of the principles suppressio veri; suggestio falsi. The proceedings under writ jurisdiction of such nature cannot be entertained at the behest of a party who has indulged in suppression of fact. Reliance is placed on the opinion of the Apex Court in K Jayaram and Others Vs. Bangalore Development Authority and Ors., [ 2021 (12) TMI 1439 - SUPREME COURT ], paragraphs 10, 11, 13 14 which are quoted hereunder. The Hon ble Supreme Court has categorically held that the petitioner approaching the writ court must come with clean hands and put forward all facts before the court without concealing or suppressing anything while invoking the extraordinary, equitable and discretionary remedy of the High Court under Article 226 of the Constitution. Conclusion - A petitioner seeking relief under Article 226 must disclose all material facts and come with clean hands. Suppression of material facts is a ground for dismissal of a writ petition. The writ petition is dismissed on the ground of suppressio veri; suggestio falsi, as the petitioner had not disclosed the revisional proceedings and the order directing reassessment. The writ petition is accordingly dismissed.

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• Indian Laws

• 2025 (3) TMI 672
  Seeking grant of bail - prolonged pretrial detention - right to speedy trial - HELD THAT:- The trial is in progress. Till this date the prosecution has been able to examine 42 witnesses. The prosecution intends to examine as many as 100 witnesses. We are conscious of the Order passed by us taking the view that once the trial commences and the witnesses are being examined then in serious crimes like murder, dacoity, rape, etc, the Court ordinarily should not exercise its discretion for the purpose of grant of bail, more particularly, looking into the evidence which has come on record. However, this is a case in which the appellant is in custody as an under trial prisoner since 24th March, 2020. He has no other antecedents. The panch witnesses to the recovery panchnama have also turned hostile - It s been now 5 years that he is in judicial custody. The learned counsel appearing for the State has no idea as regards the time likely to be consumed to complete the recording of the oral evidence. The Special Judge should inquire with the Special Public Prosecutor why he intends to examine a particular witness if such witness is going to depose the very same thing that any other witness might have deposed earlier. We may sound as if laying some guidelines, but time has come to consider this issue of delay and bail in its true and proper perspective. If an accused is to get a final verdict after incarceration of six to seven years in jail as an undertrial prisoner, then, definitely, it could be said that his right to have a speedy trial under Article 21 of the Constitution has been infringed. The stress of long trials on accused persons who remain innocent until proven guilty can also be significant. The impugned order passed by the High Court is set aside. The appellant is ordered to be released on bail forthwith subject to terms and conditions as may be imposed by the trial court. Conclusion - Howsoever serious a crime may be the accused has a fundamental right of speedy trial as enshrined in Article 21 of the Constitution. The appellant is granted release on bail, subject to fulfilment of conditions imposed. Appeal allowed.

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• 2025 (3) TMI 671
  Maintainability of writ petition filed under Article 226 of the Constitution of India against the Reserve Bank of India (RBI) for failing to exercise its powers under the RBI Act - alleged siphoning of funds and misappropriation in the ECL - HELD THAT:- The Coordinate Bench of this Court vide order dated 9th August, 2024 [ 2024 (8) TMI 1466 - DELHI HIGH COURT ] found the abovementioned appeal to be premature as the order assailed was only with regards to the issuance of notice and held that the matter requires examination. It was also observed by the Coordinate Bench of this Court that the parties may take all their arguments on the maintainability as well as merits of the writ petition before the learned Single Judge. The respondent no. 1, in the writ petition, has sought for a direction to the RBI to exercise its power under Chapter IIIB of the RBI Act governing NBFCs. It has been contended therein that the RBI has the power under Section 45IE of the RBI Act to supersede the Board of Directors of an NBFC and to conduct a special audit under Section 45MA of the RBI Act. The main grievance of the respondent no. 1 (writ petitioner) is that there is a failure to exercise the power by the RBI in relation to the affairs of ECL - This Court has taken notice of an email dated 24th May, 2024 issued by the RBI to ECL noting the violations committed by the ECL. Despite taking note of all the irregularities committed by the ECL, the RBI has not taken any action against ECL till date. In the case of CAG vs. K. S. Jagannathan Anr. [ 1986 (4) TMI 344 - SUPREME COURT ], the Hon ble Supreme Court held that a writ of mandamus can be issued where there is a failure to exercise power vested with a public authority. Thus, it is crystal clear that a duty is implied by the vesting of statutory power upon a public authority. Further, the performance of such duty can be secured by proceedings under Article 226 of the Constitution of India. The respondent no. 1 has sought for the interference of the learned Single Judge considering the failure of RBI to act in exercise of its power under Chapter-III-B and more particularly Section 45-IE and Section 45MA of the RBI Act. Such reliefs claimed are, therefore, clearly maintainable in proceedings under Article 226 of the Constitution of India. Issuance of writ of mandamus to the RBI to exercise its jurisdiction is not and could not have been the subject matter of the NCLT proceedings - HELD THAT:- The learned NCLT has no jurisdiction to issue prerogative writs to RBI to exercise such powers under the RBI Act. Therefore, this fact has no bearing on the merits of the dispute or such that is determinative of the outcome of these proceedings since the existence of the NCLT proceedings is duly disclosed and considered by the learned Single Judge while passing the impugned order. This Court has also taken note of the report of the learned Observer, in which it has been clearly observed that despite repeated reminders, the management of ECL has not shared several details regarding the nature of organizational structure of ECL, list of secretarial records, statutory compliances, detailed particulars of all the managerial personnel (current and former), scope of their respective roles/responsibilities along with the details of their remuneration/perks and benefits. It is also observed that non-compliance of another direction of the learned Observer in the light of the order of learned NCLAT, and such non-compliances assumes significance that the affairs of the ECL are not being managed rightly by the present management. Conclusion - i) A writ of mandamus can be issued to compel a public authority to exercise its statutory powers when there is a failure to act. ii) The RBI, as a regulatory authority, has a duty to act upon discovering regulatory breaches by an entity under its supervision. Failure to do so can warrant judicial intervention under Article 226. iii) The existence of proceedings before specialized tribunals like the NCLT and NCLAT does not preclude the High Court s jurisdiction to issue writs of mandamus when the relief sought pertains to the exercise of statutory powers by a regulatory authority. iv) The principles of natural justice are upheld when parties are given a fair opportunity to present their case, and the Court found that such opportunity was provided in this instance. The instant letters patent appeal is dismissed being devoid of any merits.

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