TMI Tax Updates - e-Newsletter
March 26, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Securities / SEBI Insolvency & Bankruptcy FEMA Service Tax Central Excise

TMI Short Notes

1. Supplementary FAQs for the Finance Bill, 2025: As passed by Lok Sabha

  Indian Laws:

2. Capital Gains Tax Relief for Agricultural Land: Clause 83 of the Income Tax Bill, 2025 vs. Section 54B of the Income Tax Act, 1961

  Bill:

Articles

1. What is Online Trademark Lookup and Why is It Important?

   By: Ishita Ramani

2. PENALTY FOR NON-FINALISATION OF PROVISIONALLY ASSESSED BILLS OF ENTRY

   By: DR.MARIAPPAN GOVINDARAJAN

3. GST Fake Invoicing Scams: Legal Loopholes, Crackdowns, and the Way Forward

   By: Aratrik Banerjee

4. Goods & Service Tax (GST) – emerging factors in “RISK MANAGEMENT” vis-à-vis accountability of Directors.

   By: Ketaan Mehta

5. 🚛 GST Detention of Goods & Provisional Release Process under Section 129

   By: Tushar Malik

6. Using Drones in Agriculture and Agroforestry to Increase Produce and India’s Share in Global Trade Through Exports.

   By: YAGAY andSUN

7. Mandatorily Displaying of Statutory Certificates and Abstracts of Laws under Indian Laws - Adherence with the Compliances

   By: YAGAY andSUN

8. How India Can Become a Change Maker in Global Trade?

   By: YAGAY andSUN

9. Export Through E-Commerce and Export Refund Pendency Due to Technical Glitches: Addressing Challenges and Solutions.

   By: YAGAY andSUN

10. Export of Flywheels and Pulleys, Including Pulley Blocks from India.HS Code 848350

   By: YAGAY andSUN

11. Export Bill Regularization & Special Rupee Vostro Accounts (SRVAs) Write-Off

   By: YAGAY andSUN

12. DGFT Public Notice No.50/2024-2025; 10th March 2025 Summary of the Amendment to Para 10.12(D) of the Handbook of Procedures 2023 Revised Procedure for General Authorization for Export After Repair (GAER).

   By: YAGAY andSUN

News

1. Goa CM Sawant appointed convenor of GoM on GST revenue analysis

2. Opposition leaders press for simplification, reduction of GST

3. Congress MP Hibi Eden flags north-south divide in GST on food

4. Traders body welcomes new industrial policy

5. Delhi CM announces new policy measures to boost industry, businesses in national capital

6. Delhi Budget 2025-26: MCD gets Rs 6,897 cr as CM promises fair share for city's cleanliness

7. Delhi CM allocates Rs 900 crore for slum development; takes 'Sheesh Mahal' jibe at Kejriwal, AAP

8. J&K Assembly passes annual budget, GST amendment bill

9. Delhi govt budget proposes emergency centre for disaster management

10. Budget session of Assam assembly concludes

11. BJP-led Delhi govt presents Rs 1-lakh-cr budget with focus on Yamuna cleaning, women empowerment

12. Delhi govt allocates Rs 10,047 crores for social security in Budget

13. Delhi govt allocates Rs 150 cr for remodelling of city drains

14. Delhi govt to set up modern gaushala; allocates Rs 40 cr in FY26 Budget

15. Delhi govt to shift Tihar jail, allocates Rs 10 cr for survey

16. Delhi govt earmarks Rs 12,893 cr for health; proposes 2 new medical colleges, over 16K beds

17. Govt working with agenda of causing 'disturbance' in Budget Session: Priyanka Gandhi

18. Delhi govt allocates Rs 139 crore to boost tourism, plans International Film Festival

19. Delhi to hold global investor summit, bring new industrial policy to spur trade and biz: CM Gupta

20. Rs 9,000 crore boost for clean drinking water, modernise water infra in Delhi

21. With focus on 'Viksit Delhi', BJP-led govt nearly doubles capital expenditure in next fiscal

22. Delhi to replace pink tickets with digital cards for women's free bus rides

23. Delhi govt unveils Rs 1,500-cr plan for Yamuna cleaning, sewage management

24. Delhi govt to set up centre for real-time monitoring of air quality, water pollution

25. Finance Bill 2025 offers unprecedented tax relief; collection target realistic: Sitharaman

26. Israeli legislators pass state budget in move that shores up Netanyahu's government

27. AAP calls Delhi budget 'hawa hawai', baseless and unrealistic

28. Lok Sabha passes Finance Bill 2025 with 35 govt amendments

29. Delhi govt to relocate Tihar jail, allocates Rs 10 cr for survey

30. Delhi govt to introduce travel cards for women; allocates Rs 12,952 cr for transport sector

31. Delhi CM presents Rs 1 lakh cr 'historic budget'; women empowerment, infrastructure key focus areas

32. BNMC approves Rs 1,097.49 cr budget for 2025-26; focus on infrastructure

33. Delhi CM presents Rs 1 lakh cr 'historic budget'; health, water, connectivity key focus areas

34. Delhi CM Rekha Gupta presents Rs one lakh crore 'historic budget' for 2025-26

35. Delhi CM prays at Hanuman temple in Connaught Place before presenting Budget

36. BJP govt to present maiden Budget in Delhi Assembly on Tuesday, focus on infra development

37. TTD board approves Rs 5,259 cr budget for fiscal year 2025-26

38. Assam assembly passes state budget for FY'26

39. Complex housing shops sealed by revenue dept over non-payment of tax dues; reopened day later

40. ED raids PACL promoter Nirmal Bhangoo's daughter in PMLA case linked to Ponzi scheme

41. Tourism serves as catalyst for economic development, says Rajasthan Governor Bagde

42. Supplementary FAQs for the Finance Bill, 2025

43. Government Strengthens Startup Ecosystem with Robust Initiatives and Funding Support

44. Government Implements Comprehensive Measures to Boost Exports and Strengthen Trade Competitiveness

45. Boilers Bill, 2024 introduced in Lok Sabha

46. Vi partners with Bengal govt's export body to boost MSME digital transformation

47. NSO, India and IIMA Join hands to Strengthen Data-Driven Policy and Innovation

48. New Income Tax Bill to be taken up for discussion in monsoon session: Sitharaman

49. Afcons Infrastructure MD takes over as Chairman of Project Export Promotion Council

Notifications

Customs

1. 06/2025 - dated 24-3-2025 - ADD

Seeks to impose provisional ADD on Roller Chains from China PR

2. 15/2025 - dated 24-3-2025 - Cus (NT)

Seeks to amend Notification No. 61/94-Customs (N.T.) dated the 21st November, 1994

GST - States

3. 09/2025-State Tax - dated 5-3-2025 - Gujarat SGST

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

4. S.O. 6 - File. No. Va.Kar/Sansodhan/04/2023 (Part-1) - dated 22-3-2025 - Jharkhand SGST

Qualification of the officers of Jharkhand of appointment as a technical member (State) in the State Benches of Goods and Services Tax Appellate Tribunal

5. F NO.CT/LEG/GST-NT/12-17/154  -06/2025 - dated 10-1-2025 - Nagaland SGST

Seeks to extend the due date for furnishing FORM GSTR-8 for the month of December, 2024

6. F NO.CT/LEG/GST-NT/12-17/153-05/2025 - dated 10-1-2025 - Nagaland SGST

Seeks to extend the due date for furnishing FORM GSTR-7 for the month of December, 2024

7. F NO.CT/LEG/GST-NT/12-17/152-04/2025 - dated 10-1-2025 - Nagaland SGST

Seeks to extend the due date for furnishing FORM GSTR-6 for the month of December, 2024

8. F NO.CT/LEG/GST-NT/12-17/151-03/2025 - dated 10-1-2025 - Nagaland SGST

Seeks to extend the due date for furnishing FORM GSTR-5 for the month of December, 2024

9. F NO.CT/LEG/GST-NT/12-17/150-02/2025 - dated 10-1-2025 - Nagaland SGST

Seeks to extend the due date for furnishing FORM GSTR-3B for the month of December, 2024

10. F NO.CT/LEG/GST-NT/12-17/149-01/2025 - dated 10-1-2025 - Nagaland SGST

Seeks to extend the due date for furnishing FORM GSTR-1 for the month of December, 2024

Circulars / Instructions / Orders

DGFT

1. Trade Notice No. 35/2024-25 - dated 25-3-2025

Seeking comments on proposal to make GST E-Invoices received through GSTN to DGFT BO portal mandatory for claiming Deemed Export Benefits under FTP pursuant to the provisions of Para 1.07A and B of FTP 2023

Customs

2. 08/2025 - dated 24-3-2025

Clarification on the scope of the Camera Module of Cellular Mobile Phones

3. Public Notice No. 28/2025 - dated 18-3-2025

Institutionalizing Exporter Grievance Redressal through NIRYAT SAMVAAD.

Highlights / Catch Notes

GST

• GST Order Quashed to Allow Petitioner to Seek Benefits Under Section 128(A) Amnesty Scheme for 2017-20

  Case-Laws - HC : The HC quashed the impugned Order-in-Original covering tax periods from 2017-18 through July 2023, remanding the matter to the third respondent for fresh consideration. This decision was predicated on the petitioner's expressed intention to avail benefits under the Amnesty Scheme provided in Section 128(A) of the CGST Act, which specifically applies to financial years 2017-18, 2018-19, and 2019-20. The court determined that remittal was the appropriate remedy to allow proper consideration of the Amnesty Scheme's applicability to the relevant portion of the assessment periods, directing the third respondent to reconsider the matter in accordance with law.
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• Tax Adjudication Order Quashed: Company Gets Fresh Chance to Respond to Show Cause Notice Under Section 73 of KGST Act

  Case-Laws - HC : The HC quashed an ex-parte adjudication order requiring the petitioner-company to pay Rs. 2,20,75,208/- in tax, interest, and penalty under Section 73 of the KGST Act. Despite the petitioner's failure to respond to both the intimation dated 28.11.2023 and the show cause notice dated 08.12.2023, or to participate in the proceedings, the Court adopted a justice-oriented approach. The matter was remanded to respondent No. 3, providing the petitioner one more opportunity to submit a reply to the show cause notice and contest the proceedings. The Court made no determination on the merits of the case, directing further proceedings in accordance with law.
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• Late Fee Waiver Under Amnesty Scheme Must Apply to All GSTR-1 and GSTR-9 Filers Regardless of Filing Date

  Case-Laws - HC : The HC ruled that the petitioner is entitled to the benefit of the Amnesty Scheme for waiver of late fees for filing GSTR-1 and GSTR-9 returns beyond Rs. 10,000/-. The Court found it improper to create differential treatment between taxpayers who filed returns before the amnesty notifications (No. 7/2023 and 25/2023) were issued and those who filed within the period prescribed by the notifications. Following precedents from HP HC in RT Pharma and Kerala HC in Anishia Chandrakanth, the Court held that the spirit of the notifications was to encourage return filing, and taxpayers should not be prejudiced merely because they filed returns prior to the notification date. Petition disposed of accordingly.
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Income Tax

• Exemption Under Sections 11 and 12 Upheld: Funds Deployed for Regulatory Obligations Not Considered "Investment" Under Section 11(5)

  Case-Laws - HC : The HC upheld the ITAT's order allowing the assessee's claim for exemption under sections 11 and 12. Following its earlier decision in Indian Broadcasting Foundation [2025 (3) TMI 1124], the Court held that the application of funds in BARC did not qualify as "investment" under section 11(5) read with section 13(1)(d) of the Act. The Court determined that the deployment of funds was not intended to yield income, profit, or return, but was made pursuant to a statutory and regulatory obligation to further the assessee's charitable objectives. The questions of law were answered in favor of the assessee and against the Revenue, with the HC finding no infirmity in the ITAT's order.
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• Commissioner's Order Under Section 263 Constituted Open Remand, Tribunal Should Have Addressed Substantive Issues Rather Than Dismissing Appeal

  Case-Laws - HC : The HC held that the Commissioner's order under Section 263 of the IT Act constituted an open remand, not a closed remand, as it set aside the assessment order and directed fresh consideration on merits. The Tribunal erred in ruling that the assessee should have separately challenged the Section 263 order. Since the CIT(A) had decided the appeal against the revised assessment on merits, the Tribunal should have addressed substantive issues rather than dismissing the appeal as "not maintainable." The Court interfered with the Tribunal's order, restoring the appeal for fresh consideration on merits, ultimately deciding in favor of the assessee.
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• Income Tax Authorities Should Take Liberal Approach When Considering Pandemic-Related Delays Under Section 119(2)(b)

  Case-Laws - HC : The HC set aside the order rejecting the petitioner's application under s.119(2)(b) of the Income Tax Act, 1961 for condonation of delay in filing returns. The Court held that authorities should adopt a liberal approach when considering pandemic-related hardships. The petitioner, a private limited company, had cited relocation to their native place during the pandemic and medical issues as reasons for delay. The Court emphasized that delay may be condoned where genuine hardship would result from refusal. The matter was remanded to the second respondent for fresh consideration, with the petitioner permitted to submit supporting documentation.
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• Reopening Assessment Valid Under Section 147 When Return Only Processed Under Section 143(1); Cartage Expense Disallowance Limited to 15%

  Case-Laws - AT : ITAT upheld the validity of reopening assessment under Section 147, rejecting the assessee's challenge to the Section 148 notice. The Tribunal found that since no regular assessment under Section 143(3) had previously been conducted, with the return only processed under Section 143(1), the notice issued with JCIT's authority after four years was procedurally valid per Section 151(2). However, regarding cartage expenses, the ITAT partially allowed the appeal by restricting the disallowance to 15% of the expenses, consistent with the CIT(A)'s order for A.Y. 2011-12 which involved identical factual circumstances.
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• Addition Under Section 68 Reversed: Bank Deposits Not Unexplained When Business Transactions Are Genuine

  Case-Laws - AT : ITAT ruled in favor of the appellant, reversing the addition made under s. 68 for unexplained cash credits. The Tribunal found that since the Department had not disputed the genuineness of the assessee's business transactions or books of account, there was no justification for treating bank deposits as unexplained. The CIT(A)'s order was deemed cryptic, arbitrary and legally deficient for failing to provide a speaking order as required under ss. 250(4) and 250(6). The Tribunal noted the assessment order's self-contradictory nature in rejecting the return while determining income. The addition was directed to be deleted as no undisclosed sources of income had been established.
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• Provision for Claim Pay Out allowed as deduction based on actuarial report showing ascertained liability with minimal difference from actual payouts.

  Case-Laws - AT : ITAT overturned the CIT(A)'s finding that the Provision for Claim Pay Out was created on an adhoc basis. The Tribunal determined that the assessee had established an ascertained liability based on an independent actuarial report, considering the Trust Deed, Scheme, and applicable agreement provisions. The provision created for AY 2019-2020 was less than the actual pay out, with only a 2.21% aggregate difference between provisions and actual payouts from AY 2016-2017 to AY 2022-2023. The assessee has since been granted tax exemption under s.10(46B) by the Finance Act, 2023. The ITAT directed the AO to grant deduction for the Provision for Claim Pay Out created during the relevant previous year. Appeal allowed.
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• Tax Addition Under Non-Existent Section 56(2)(vii)(b)(ii) Invalidated; Agricultural Income and Land Purchase Assessment Errors Corrected

  Case-Laws - AT : The ITAT allowed the assessee's appeal, ruling that the addition made under Section 56(2)(vii)(b)(ii) was invalid as this provision did not exist during the relevant assessment year. The Tribunal determined this constituted a substantive error rather than mere misquotation of law. Regarding agricultural land purchase, the ITAT held that the AO erroneously disbelieved the assessee's source of investment without contrary evidence or proper investigation, particularly considering the family's substantial landholdings. The Tribunal also found that the CIT(A) incorrectly sustained a partial addition to agricultural income despite acknowledging the assessee owned six acres at the beginning of the financial year plus additional land acquired early in the year, which should have resulted in full allowance of the claimed agricultural income.
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• Tribunal Rejects TPO's Adjustment on AE Receivables as No Unreasonable Credit Period Existed

  Case-Laws - AT : ITAT ruled against the TPO's adjustment regarding interest on outstanding receivables from associated enterprises. The Tribunal determined the transactions were not "international transactions" under transfer pricing regulations as the assessee was properly compensated by its AE, maintained a debt-free status, and had no actual finance costs related to borrowings. The average credit period of 92 days fell below the industry average of 105 days, indicating no excessive delay in remittances that would suggest the AE was enjoying unreasonable credit facilities. Following Bechtel India precedent, ITAT concluded the revenue failed to demonstrate any benefit transfer to the AE and directed deletion of the proposed additions.
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• Depreciation Claims on Bogus Purchases Disallowed as Taxpayer Failed to Prove Transaction Authenticity

  Case-Laws - AT : The ITAT upheld disallowance of depreciation and additional depreciation claimed on alleged bogus purchases, as well as VAT-related additions. The Tribunal affirmed that the primary onus to establish return correctness rests with the taxpayer, citing precedent from Gauhati HC. The appellant merely provided invoices from B.N. Trading Company, which investigation confirmed were bogus. The taxpayer failed to demonstrate the supplier's location, and GST Department verification revealed no correlation between B.N. Trading's product line and goods allegedly purchased by the appellant. The Tribunal distinguished the case from SVD Resins & Plastics, finding the precedent inapplicable due to factual differences, and dismissed the appeals.
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• Assessment Order Invalid When Different ITO Issues Notices Without Proper Transfer Under Section 127

  Case-Laws - AT : The ITAT held that the assessment order under section 143(3) was invalid due to jurisdictional defects. The initial notice under section 143(2) was issued by ITO, Ward-4(5), Raipur, while the subsequent notice under section 142(1) and final assessment were made by ITO, Ward-3(1), Raipur without any transfer order under section 127 from the Pr. CIT. The Tribunal emphasized that notice, derived from Latin "notitia," requires proper time, place, nature of hearing, legal authority, and specific charges. Since the assessment proceedings suffered from lack of jurisdiction with no valid transfer order and improper notice issuance, the entire proceedings were declared non-est in law. The assessee's appeal was allowed and the assessment order quashed.
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• Weighted deduction denial under Section 35(2AB) doesn't prevent claiming normal R&D deductions under Section 35(1).

  Case-Laws - AT : The ITAT ruled that denial of weighted deduction under s.35(2AB) does not prevent the assessee from claiming normal deduction for R&D expenditure under s.35(1)(i) and s.35(1)(iv). The Tribunal directed the AO to allow normal deduction for capital R&D expenditure under s.35(1)(iv) and delete the corresponding disallowance. Regarding s.80IC deduction for the Pantnagar plant, the ITAT held that profits reported in stand-alone audited financials were based on sound accounting principles, rejecting the AO's allegation of artificial profit creation. The Tribunal confirmed additional depreciation under s.32(1)(iia) for pollution control and energy-saving equipment as these qualified as "plant & machinery." Finally, following Sobha Developers Ltd., the ITAT held that s.14A disallowances cannot be added to book profit under s.115JB.
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• Long-Term Capital Gains from Pine Animation Shares Ruled Genuine; WhatsApp Chats Rejected as Evidence Without Section 65B Certification

  Case-Laws - AT : The ITAT allowed the assessee's appeal, reversing additions made by the AO. The Tribunal held that the LTCG from Pine Animation Ltd shares was genuine, as the assessee was a regular investor who purchased shares on broker advice, with no contradictory evidence found during examination under s.132(4). Consequently, the 5% estimated commission expense addition was also deleted as unnecessary. Regarding WhatsApp chat evidence, the ITAT ruled that additions cannot be sustained based on digital evidence without proper certification under s.65B. Without corroborative evidence, the alleged chat was merely a third-party document insufficient to establish unexplained cash credits under s.68.
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Customs

• New Import Declaration Requirements for Coal: Ash Content and GCV Qualifiers Mandated from December 15

  Circulars : CBIC has mandated additional qualifiers for coking and non-coking coal import declarations effective December 15, 2024, through Public Notice No. 03/2025. For coking coal (HS codes 27011210, 27011910), importers must specify ash content percentage using designated codes (ACSG15 through ACWG00). For non-coking coal (HS codes 27011100, 27011290, 27011920, 27012010), declarations must include Gross Calorific Value (GCV) using codes ranging from GC0000 to GC2500. This requirement aims to reduce assessment queries, improve clearance efficiency, and enhance data quality for policy development. The notice applies to all coal imports under CTH 2701, with implementation overseen by the Commissioner of Customs, Cochin.
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• Government Removes 20% Export Duty on Onions Under Section 25(1) of Customs Act, Effective April 2025

  Notifications : The Central Government exercised powers under section 25(1) of the Customs Act, 1962 to amend Notification No. 27/2011-Customs dated March 1, 2011. The amendment substitutes the export duty entry for onions (HS 0703 10) from 20% to "nil" in the TABLE against S. No. 1, column (4). This effectively removes the export duty previously imposed on onions. The notification will take effect from April 1, 2025. The amendment was deemed necessary in the public interest and was issued under the authority of the Ministry of Finance (Department of Revenue).
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• Shipping Authority's Communications Invalidated for Imposing Unauthorized Conditions Beyond Public Notice Terms

  Case-Laws - HC : The HC determined that the communications (Exts.P2 to P5) issued by the 3rd respondent contradicted the express terms of the Public Notice (Ext.P1) by imposing conditions not originally contemplated. The Court found that respondents failed to identify any regulatory authority that would permit interference with contractual terms between shipping lines and shippers/recipients through such notices. The Court emphasized that in the absence of explicit statutory or contractual authorization, administrative powers cannot be inferred that would restrict freedom of contract between parties. Consequently, the Court set aside the impugned communications as legally flawed and contrary to the Public Notice, ruling that administrative notices cannot be interpreted to interfere with private contractual relationships. Appeal allowed.
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• DRI Show Cause Notice Under Section 28 of Customs Act Restored to Proper Adjudicating Authority Following Canon-II Precedent

  Case-Laws - HC : The HC addressed a petition challenging a show cause notice (SCN) issued by DRI Mumbai Zonal Unit on May 1, 2019, regarding jurisdiction under Section 28 of the Customs Act, 1962. Following the Supreme Court's Canon-II judgment, the HC ruled that adjudication of the challenged SCN should be restored to the appropriate adjudicating authority as per paragraph 168(vi)(a) of that decision. The Court ordered that proceedings related to the May 1, 2019 SCN shall continue before the proper adjudicating authority in accordance with law. The petition was accordingly disposed of.
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• Customs Valuation Rejection Upheld: Relationship Suppression, Misclassification of Dredger Parts Under CTH 84314990 and 84137097

  Case-Laws - AT : The CESTAT upheld the Commissioner's rejection of the declared transaction value under Rule 12(2) of Customs Valuation Rules, 2007, finding the appellant had suppressed their relationship with the overseas seller and misdeclared value. The Tribunal confirmed the classification of additional cutter head ladder under CTH 84314990 and jet pump system under CTH 84137097, rather than under CTH 89051000 as dredger parts. The denial of benefit under N/N.01/2011-CE was sustained. The demand under Section 28(4) was upheld, with penalties under Section 114A against the appellant company (modified to exclude interest) and Section 114AA against the Managing Director maintained, while penalties under Section 112(a) were set aside. The addendum to show-cause notice was deemed valid with no violation of natural justice principles.
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• Customs Department Failed to Prove Foreign Origin of Seized Areca Nuts Under Section 123, Compensation Ordered

  Case-Laws - AT : CESTAT set aside the confiscation of 34,400 kgs of areca nuts, finding the Department failed to discharge its burden of proof under Section 123 of Customs Act that the goods were of foreign origin or smuggled. The Tribunal noted the goods were seized from godowns far from international borders, and appellant's claim of local purchase from Nagaland and Assam markets remained unrefuted. Consequently, redemption fine and penalties were also set aside. CESTAT ordered compensation of Rs.20 lakhs to appellant against seizure value of Rs.32.68 lakhs, payable within three months with 12% interest applicable thereafter, applying the ratio from a similar High Court decision.
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• Failure to Issue Show-Cause Notice Within Extended Period Under Section 110(2) Invalidates Customs Seizure of Mulberry Raw Silk

  Case-Laws - AT : CESTAT dismissed Revenue's appeal regarding detained Mulberry Raw Silk. The goods were seized in 2016 on grounds that documentation was unavailable with premises caretaker. Revenue failed to issue show-cause notice within the extended six-month period under Section 110(2) of Customs Act as existed at seizure time. The tribunal rejected Revenue's reliance on 2018 amendments to justify actions taken in 2016. Consequently, no proceedings could be sustained against the respondent, who was entitled to unconditional release of the detained goods, return of personal bond, and bank guarantee.
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FEMA

• Former Directors Penalized for Export Proceeds Non-Repatriation Under FEMA Despite Resignation from Company

  Case-Laws - AT : The AT held that appellants could not escape liability for failing to realize and repatriate export proceeds totaling USD 3,93,094.63 related to seven GRs. Despite their resignation from M/s Rosecut Diamonds effective 01.09.2000, the statutory period for repatriation had expired between 02.05.2000 and 13.08.2000, prior to their departure. The tribunal rejected appellants' claims of making reasonable efforts to contact buyers, noting lack of corroborating evidence of effective steps taken to recover foreign exchange dues. The AT found appellants had contravened Sections 7 and 8 of FEMA 1999 read with Regulations 8, 9 and 13 of FEMA Regulations 2000. The penalty was reduced to Rs. 10,00,000 each, with pre-deposits of Rs. 5,00,000 to be adjusted against the reduced amounts.
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• Foreign Exchange Management Act Penalties Set Aside as Custom Clearance Agent's Commission Not a FEMA Violation

  Case-Laws - AT : The AT set aside penalties of Rs.4,00,000/- and Rs.6,00,000/- imposed on the appellant under FEMA. Despite allegations that the appellant assisted in preparing forged documents for M/s Prominent Exim's exports, the Tribunal found insufficient evidence to establish contravention of Sections 3(b) and 3(d) of FEMA 1999. The appellant, working as a Custom Clearance Agent, merely processed export documentation and received commission (15% of the 40% DEPB received by Vinod Chitalia). The Tribunal concluded that receiving payment for processing export documents did not constitute a violation of the specified FEMA provisions, and accordingly allowed the appeal.
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Budget

• Finance Bill 2025 Passes Lok Sabha with 35 Amendments, Abolishes 6% Digital Tax on Online Advertisements

  News : The Lok Sabha passed the Finance Bill 2025 with 35 government amendments, including the abolition of a 6% digital tax on online advertisements. This completes the lower house's portion of the budgetary approval process, with the bill now proceeding to the Rajya Sabha for consideration. The Union Budget 2025-26 establishes a total expenditure of Rs 50.65 lakh crore (7.4% increase), capital expenditure of Rs 11.22 lakh crore, gross tax revenue collection of Rs 42.70 lakh crore, and projects a fiscal deficit of 4.4% (down from 4.8%). The budget increases allocations for Centrally Sponsored Schemes to Rs 5,41,850.21 crore and central sector schemes to Rs 16.29 lakh crore, with total resources transferred to states amounting to Rs 25,01,284 crore.
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• Finance Bill 2025 increases income tax rebate to Rs 12 lakh, offers marginal relief, and streamlines customs tariffs to boost production.

  News : Finance Bill 2025 provides "unprecedented tax relief" with income tax rebate increased to Rs 12 lakh per annum (Rs 12.75 lakh for salaried class after standard deduction), resulting in Rs 1 lakh crore tax foregone in FY26. Finance Minister confirmed the 13.14% projected growth in personal income tax collection is "realistic" and "based on solid data." The Bill also includes "marginal relief" for taxpayers whose income slightly exceeds Rs 12 lakh. Additionally, the Budget rationalizes customs tariff structure, reducing industrial goods tariff rates from 21 to 8, aiming to boost domestic production and export competitiveness by lowering duties on raw materials and inputs. The government has also restored the March 2008 position on pension fixing as recommended by the Sixth Central Pay Commission.
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IBC

• Insolvency Petition Upheld Against Debtor for Rs. 1049.72 Crore Default as Settlement Attempts Fail Despite Multiple Opportunities

  Case-Laws - AT : The NCLAT dismissed an appeal against admission of a Section 7 application filed by SBI for a default of 1049.72 Crore. The Tribunal found that debt and default were established facts, with the corporate debtor's accounts declared NPA on 26.07.2017 and a loan recall notice issued on 11.01.2019 demanding payment of 2078.04 Crore from consortium lenders. Despite multiple opportunities and interim orders that delayed the CIRP, the appellant failed to produce any accepted one-time settlement proposal. The Tribunal concluded that the corporate debtor was demonstrably unable to clear its debt, making this an appropriate case for insolvency proceedings to continue. The appellant's dilatory tactics and failure to reach settlement justified dismissal of the appeal.
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• Lease termination during moratorium violates Section 14(1) of IBC; NCLT has jurisdiction under Section 60(5)(c)

  Case-Laws - AT : The NCLAT held that GIDC's termination of lease during the moratorium period was clearly prohibited under Section 14(1) of the IBC. The Tribunal ruled that NCLT had jurisdiction under Section 60(5)(c) to entertain the Resolution Professional's application challenging such termination, and erred in directing the RP to approach GIDC's Appellate Authority instead. Additionally, NCLAT determined that the Adjudicating Authority improperly remanded the Resolution Plan to the Committee of Creditors without identifying any non-compliance with Section 30(2) of the IBC. The Supreme Court precedent allows remand only when specific violations of Section 30(2) are found. The appeal was allowed, reversing both the jurisdictional finding and the improper remand of the Resolution Plan.
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Indian Laws

• The Finance Bill 2025 Proposes Key Amendments to Income Tax Act Including Changes to Section 9A and Presumptive Taxation

  News : The Finance Bill, 2025 proposes several amendments to the Income-tax Act, 1961, including modifications to Section 9A to remove indirect participation requirements for eligible investment funds, restoring the Central Government's power to modify conditions under Section 9A(8A), and clarifying Section 44BBD's presumptive taxation scheme for non-residents. Additional amendments include replacing "IFSC insurance intermediary" with "IFSC insurance offices" in Section 10(10D), expanding the definition of "resultant fund" to include Retail Schemes and ETFs, extending tax exemptions under Section 10(4E) to OTC derivatives, and broadening the definition of "capital asset" to include securities held by Category I and II AIFs. Chapter XIV-B has been revised to focus on assessing undisclosed income rather than total income in search cases.
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SEBI

• Investment Advisory Firm's Penalty Reduced to 70 Lakhs After Tribunal Confirms Nine Regulatory Violations Under SEBI IA Regulations

  Case-Laws - AT : The AT partially upheld penalties against a registered investment advisory firm for multiple regulatory violations under SEBI's IA Regulations. The Tribunal rejected appellant's procedural objections regarding delay in proceedings, double jeopardy claims, and alleged denial of natural justice. Of thirteen alleged violations, the AT affirmed nine, including failures in KYC procedures, risk profiling, suitability assessments, disclosure requirements, fee charging practices, and compliance obligations. The Tribunal found insufficient evidence for four allegations related to execution services, client complaints, solicitation through websites, and qualification requirements. Considering the repeated violations of multiple nature that could have seriously impacted market integrity and investor interests, the AT reduced the penalty from 1 crore to 70 lakhs.
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Service Tax

• Exemption for Aircraft Maintenance Engineering Training from Service Tax: Following Precedents and Doctrine of Mutuality

  Case-Laws - AT : The CESTAT allowed the appeal, holding that training provided by the appellant in Aircraft Maintenance Engineering is exempt from service tax. The Tribunal followed precedents established by the Delhi HC in Indian Institute of Aircraft Engineering, CESTAT decisions in Hindustan Institute of Aeronautics and Star Aviation Academy, and the Allahabad HC in Garg Aviations Ltd. The certificates issued by the appellant qualify as "certificates issued in accordance to law," falling under the exception clause for commercial and educational training. Additionally, the Tribunal recognized that under the doctrine of mutuality, services provided by a club to its members are exempt from service tax as there is no taxable transaction between the club and its members.
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• Lease Agreements for Fitouts Qualify as "Deemed Sale" Under Article 366(29A), Not Taxable Service

  Case-Laws - AT : CESTAT held that lease agreements for fitouts constituted a "deemed sale" under Article 366(29A) of the Constitution rather than a taxable service. The tribunal affirmed the Commissioner's findings that the goods were identifiable, available for delivery, and leased to the respondents for exclusive use. The Commissioner properly applied the Supreme Court's Bharat Sanchar Nigam Ltd test in determining that VAT had been correctly paid on these transactions. The tribunal rejected the Revenue's argument regarding dominant nature of the transaction, concluding that once a transaction qualifies as a deemed sale, service tax liability does not arise. The department's appeal was accordingly dismissed.
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Case Laws:

• GST

• 2025 (3) TMI 1176
  Seeking to quash impugned order - applicability of the Amnesty Scheme under Section 128(A) of the CGST Act for certain financial years - HELD THAT:- The impugned Order-in-Original comprises of and encompasses the periods2017-18, 2018-19, 2019-20, 2020-21, 2021-22, 2022-23 and April 2023 - July 2023. In this context, it is relevant to state that the Amnesty Scheme passed under Section 128(A) of the CGST Act is for the years 2017-18, 2018-19 and 2019-20. Under these circumstances, in view of the specific submission made on behalf of the petitioner that they would intend to avail the benefit of Amnesty Scheme, it is deemed just and appropriate to set aside the impugned order passed by the 3rd respondent and remit the matter back to the 3rd respondent for reconsideration of the matter afresh, by issuing certain directions, in accordance with law. The matter is remitted back to the 3rd respondent for reconsideration afresh - petition allowed by way of remand.

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• 2025 (3) TMI 1175
  Validity of simultaneous or parallel proceedings initiated by respondent Nos. 5 and 6 under Section 73 of the KGST Act for the same financial year - HELD THAT:- The respondent No. 6 Assistant Commissioner and respondent No. 5 Deputy Commissioner have ventured to initiate simultaneous / dual / parallel proceedings in relation to the same year 2019-20 by putting forth the very same contentions against the petitioner, which is clearly impermissible in law and consequently, the impugned orders passed by respondent Nos.5 and 6 deserve to be quashed by reserving liberty in favour of respondent No. 5 Deputy Commissioner to proceed further in accordance with law. Matter is remitted back to respondent No. 5 for reconsideration afresh in accordance with law to the stage of replying to Show Cause Notice dated 30.05.2024 issued by respondent No. 5 to the petitioner - Petition allowed by way of remand.

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• 2025 (3) TMI 1174
  Seeking to quash the adjudication order along with the summary of order passed under Section 73 of the KGST Act - reasonable opportunity provided to petitioner to file reply to the SCN or not - removal of attachment of the input tax credit ledger of petitioner - HELD THAT:- A perusal of the material on record will indicate that, it is an undisputed fact that the petitioner-company did not submit any reply either to the intimation dated 28.11.2023 (Annexure-D) or to the show cause notice dated 08.12.2023 (Annexure-E) issued by the respondent No. 3. So also, the petitioner-company did not participate in the impugned proceedings, which culminated in the impugned order, which is undisputedly an ex-parte adjudication order, calling upon the petitioner-company to pay a sum of Rs. 2,20,75,208/- towards tax, interest and penalty. However, by adopting justice oriented approach and in order to provide one more opportunity to the petitioner-company to submit its reply to the show cause notice and contest the proceedings, without expressing any opinion on merits/demerits of the rival contentions, it is deemed just and appropriate to set-aside the impugned order and remit the matter back to the respondent No. 3 to the stage of petitioner-company submitting its reply to the show cause notice and to proceed further in accordance with law. Petition allowed by way of remand.

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• 2025 (3) TMI 1173
  Entitlement for benefit of the Amnesty Scheme to the petitioner for the waiver of late fees for filing GSTR-1 and GSTR-9 returns - HELD THAT:- Concededly, petitioner had filed its returns before the date prescribed in notification number 7/2023 and 25/2023. Those taxpayers who had filed within the period prescribed in aforesaid notifications were given the benefit of waiver of late fee beyond Rs. 10,000/-. Petitioner who had filed his its returns even before the notification came in, not being given the benefit of waiver of late fee as mentioned above. Such a differential treatment between persons who filed their returns, belatedly but before the notification came in, and those who filed within the period prescribed by the notification, is according to me, improper. In the decision of the Himachal Pradesh High Court in M/s. RT Pharma v. Union of India Others [ 2024 (12) TMI 1228 - HIMACHAL PRADESH HIGH COURT] , in a similar set of facts, it was observed that it will be unjust to deny the benefit of the Amnesty Notification to those who have filed the returns prior to the date prescribed under the said Notification. It is further observed that the intention of the Government in issuing the notification was to encourage the filing of the returns. A learned single Judge of this court had, in Anishia Chandrakanth v. The Superintendent [ 2024 (4) TMI 993 - KERALA HIGH COURT] , observed that when the government itself had waived late fee under the aforesaid two notifications in excess of Rs. 10,000/-, in case of non-filers, there appears to be no justification in continuing with the notices for non-payment of late fee for belated GSTR-9C, that too filed by the taxpayers before 01-04-2023, the date on which the amnesty commenced. Since the intention behind the two notifications is to encourage the taxpayers to file their returns, a person cannot be put to prejudice merely because he filed the returns prior to the date fixed in the Notification. It is in fact, the spirit of the Notifications that has to be taken into consideration. Viewed in that light, petitioner having filed its returns before the date prescribed in the Notification should also be given the benefit of the waiver of late fee beyond Rs. 10,000/-. Petition disposed off.

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• Income Tax

• 2025 (3) TMI 1178
  Validity of reopening of assessment - reasons to believe - survey conducted in Jammu Kashmir Bank u/s. 133A and only because the petitioner assessee has transacted with the said bank made a total of transaction of inward and outward remittance, thus concluded that the income has escaped the assessment - as decided by HC [ 2024 (5) TMI 227 - GUJARAT HIGH COURT] impugned notice issued u/s.148 is nothing but amounts to change of opinion on the part of the respondent assessing officer and he has issued the impugned notice only on the borrowed satisfaction without there being any fresh tangible material to come to the prima facie conclusion that the income has escaped assessment. Thus the impugned show cause notices u/s. 148 of the Act are hereby quashed and set aside. Assessee appeal allowed. HELD THAT:- There is a gross delay of 181 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner. Even otherwise, we see no good reason to interfere with the impugned order passed by the High Court. Special Leave Petition is, accordingly, dismissed on the ground of delay as well as merits.

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• 2025 (3) TMI 1177
  Reopening of assessment u/s 147 - reasons to believe - notice issued beyond a period of four years - long term capital gain on penny stocks - HELD THAT:- Since the assessment year involved is assessment year 2011-12 where the original assessment was completed u/s 143(3) of the Act and the reasons so recorded do not contain a whisper of any failure on the part of assessee to disclose fully and truly all material facts necessary for completion of the assessment and such reopening is beyond a period of four years from the end of the relevant assessment year, therefore, in view of the proviso to section 147, re-opening of the assessment u/s 147 of the I T Act, 1961 is not in accordance with law and is liable to be quashed. We, therefore, quash the re-assessment proceedings. Decided in favour of assessee. Revision u/s 263 - AO in the order passed u/s 143(3) / 147 has made addition being the net amount of accommodation entries - commission @ 2% of such accommodation entries and which the assessee would have incurred for obtaining the accommodation entries was not added by the Assessing Officer u/s 69C - Since we have already quashed the re-assessment proceedings in the preceding paragraphs, therefore, the order passed u/s 263 of the Act by the PCIT becomes infructuous and therefore, the same is liable to be dismissed. We, therefore, hold that the order passed by Ld. PCIT u/s 263 has become infructuous. Accordingly, the grounds raised by the assessee are allowed.

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• 2025 (3) TMI 1172
  Exemption u/s 11 and 12 denied - transactions of purchasing shares and investment by way of Share Application Money - AO concluded that the Assessee had violated Section 13 (1) (d) by making an investment in equity shares - income of the Assessee was assessed which was held as taxable at Maximum Marginal Rate in accordance with provisions of Section 164(2) - ITAT allowed assessee claim. HELD THAT:- The present appeal was heard along with Indian Broadcasting Foundation [ 2025 (3) TMI 1124 - DELHI HIGH COURT] filed by the Revenue against the same Assessee in respect of AY 2014-15, assailing a similar order passed by the learned ITAT. These appeals were admitted on the same questions of law by this Court. By way of judgment [ 2025 (3) TMI 1124 - DELHI HIGH COURT] we have answered the question of law in favour of the Assessee and against the Revenue, and held that the application of funds by the Assessee in BARC does not qualify as investment under Section 11 (5) read with Section 13 (1) (d) of the Act, inasmuch as the said deployment was not intended to yield income, profit, or return, but was made pursuant to a statutory and regulatory obligation to further the Assessee s charitable objectives. We are of the opinion that the order of the learned ITAT does not suffer from any infirmity or error and, is, therefore upheld. Decided against revenue.

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• 2025 (3) TMI 1171
  Revision u/s 264 - shortage of stock found during a survey by the Central Excise Authority - HELD THAT:- Admittedly, the petitioner has not filed proper income tax return for the Assessment Year 2009-10 and shown the total loss - AO while passing the order u/s 143 (3) on the basis of survey conducted by the Excise Authority found that the valuation of the stock has not been mentioned in the books of account of the petitioner. So the AO has added the said income and the petitioner has also admitted the same before the Excise Authority. So the petitioner Company has not mentioned the difference of stock in their books of accounts. In spite of issuance of notice by the Department of the Assessment proceedings the petitioner failed to offer any satisfactory explanation. The petitioner has also not preferred any appeal against the assessment order and only preferred revision petition u/s 264. While dismissing the revision, the Revisional Authority has noted that the petitioner/Company has not submitted any satisfactory explanation regarding the discrepancy at the time of assessment proceedings or at the time of penalty proceedings. It was found that discrepancy of stock found at the time of Central Excise survey was accepted by the petitioner Company as the sales outside books of accounts and the petitioner has also paid excise duty on that amount. Entire sale done outside books of accounts is income to be added, as the raw material cost has been accounted for in the regular books of accounts. Thus the petitioner s contention that only GP should be added to income could not be accepted. It is settled that penalty proceedings are separate from assessment proceedings and, therefore, filing of revision petition under Section 264 against quantum addition would not be of any help to the petitioner in the Appellate proceedings against the penalty under Section 271 (1) (c). Considering the scope of writ jurisdiction and the fact that the petitioner has failed to establish any violation of natural justice or competency of jurisdiction, this Court is not inclined to interfere with the aforesaid findings recorded by the Revisional Authority. WP dismissed.

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• 2025 (3) TMI 1170
  Writ of Mandamus sought to the ITAT that it should admit the additional evidence tendered by the Petitioner and consider the same - HELD THAT:- The record shows that by order ITAT permitted documents from Serial Nos.1 to 7 to be produced, thereby, by implication reject the production of the other documents. This order is no where challenged in this petition. Still, it is almost urged that we should ignore the order dated 29th January, 2025 and still issue a Mandamus to ITAT to admit and consider the remaining documents. This according to us, is not permissible in absence of any challenge to the order dated 29th January, 2025. In any event, if the Petitioner is ultimately aggrieved by the orders that ITAT will make in the appeal, including, the non-consideration of any relevant or any crucial documents, the Petitioner, has alternate and efficacious remedy against such order, if and when made. However, based upon the allegations in the petition or the kind of reliefs applied for, we are afraid we would not be justified in entertaining this petition and stopping the further proceedings before the ITAT. WP dismissed.

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• 2025 (3) TMI 1169
  Validity of order passed by the Commissioner of Appeals u/s 263 - closed remand or open remand - correctness of findings that the assessee ought to have questioned the order u/s 263 in a separate proceedings - HELD THAT:- We find from the records that the order passed by the Commissioner of Appeals under Section 263 of the IT Act cannot be under any circumstances construed as a closed remand. While exercising the suo moto power of revision under Section 263 of the IT Act, the Commissioner had found that the order of assessment is erroneous and prejudicial to the interest of the revenue and, therefore, set aside the order of assessment and remanded the matter back to the assessing authority for a fresh consideration on merits. That be so, it is beyond one s comprehension as to how the tribunal could hold that the order of remand under Section 263 of the IT Act passed by the Commissioner of Appeals is a closed remand. Thus, we are of the view that the assessee need not have questioned the order under Section 263 in a separate proceeding. In as much as the Commissioner of Income Tax (Appeals) had decided the appeal preferred by the assessee against the revised assessment order on merits, it was incumbent upon the tribunal to have decided the appeal on merits rather than finding that the assessee ought to have questioned the order under Section 263 in a separate proceedings. Therefore, we are of the considered view that the tribunal erred egregiously in dismissing the appeal preferred by the assessee as not maintainable . Therefore, we are of the view that the order of the tribunal requires to be interfered with - appeal will stand restored to the files for fresh consideration. Decided in favour of assessee.

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• 2025 (3) TMI 1168
  Rejecting petitioner s application filed u/s 119 (2) (b) refusing to condone the delay in filing Income Tax Returns - HELD THAT:-Under Section 119 the delay could be condoned if the assessee makes out that the condonation of delay sought is in respect of genuine claim and if condonation of delay is refused, the assessee would suffer genuine hardship. In the instant case, the reasons stated by the petitioner-Private Limited Company is that they had moved to their native place due to pandemic and they were also suffering from medical problems. During pandemic, every person has suffered and when the hardship during pandemic period is pleaded, the Authorities shall be liberal in considering such grounds. As deem it appropriate to set aside the order at Annexure-A, rejecting the application filed by the petitioner u/s 119 (2) (b) of 1961 Act, remanding the matter to the second respondent to consider afresh, with liberty to the petitioner to place on record the documents if any, in support of its contention.

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• 2025 (3) TMI 1167
  Reopening of assessment u/s 147 - AO did not take mandatory permission of PCIT/CIT at the time of issuance of notice under Section 148 - HELD THAT:- We observe that the case of assessee falls u/s 151(2) which provides that in case a regular assessment under Section 143(3) has not taken place, then notice can be issued with the authority of JCIT, after expiry of four years from the end of the relevant assessment years. In the instant case, admittedly the return of the assessee was processed u/s 143(1) of the Act and no regular assessment of the assessee was carried out under Section 143(3) of the Act, prior to the present proceedings. Accordingly, we find no infirmity in the notice issued under Section 148 of the Act and the legal challenge to the issuance of 148 notice raised by the Counsel for the assessee is hereby rejected. Restricted the disallowance to 15% of the cartage expenses - On going through the order passed by CIT(A) for A.Y. 2011-12, and considering the arguments placed by the assessee to the effect that since identical facts are involved for the impugned assessment year as well, in the interest of justice, the disallowance with respect to cartage expenses paid are hereby directed to be restricted to 15%. Appeal of the assessee is partly allowed.

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• 2025 (3) TMI 1166
  Revision u/s 263 by CIT - PCIT observed that the deduction claimed u/s 54 was allowed by AO as the assessee has sold the land and has not invested the entire amount of sale consideration in the acquisition of the house property, only proportionate deduction should be allowed - PCIT further observed that assessee has declared the sale consideration on the basis of the agreement of sale/registered sale deed whereas the sale price as per provisions of section 50C being higher. Thus, the provisions of section 50C are to be invoked. This fact has not been examined by the AO Allowability of deduction claimed u/s 54 or 54F and determination of amount of deduction - HELD THAT:- We find that the AO himself while passing the order in compliance to the directions given in the order u/s 263 has allowed the deduction u/s 54 of the Act at Rs. 5,00,00,000/- as claimed by the assessee, and, therefore, their remained no question to hold to assessment order as erroneous and prejudicial to the interest of Revenue on this point. It is also seen from the effect order dated 21.03.2024 that the deduction claimed/s 54 of the Act at Rs. 5,00,00,000/- was offered for the tax after expiry of three years in AY 2021-22 when the assessee has failed to make investment as per law, therefore, if any further addition/disallowance is made in the year under appeal it would be double taxation. Thus, this issue does not service for consideration at this stage. Application of section 50C and re-computation of sale consideration - CBDT has issued instruction No.20/2015 wherein it is clearly stated that it is not open for AO to travel beyond the reason of limited scrutiny except in the event where the AO during his examination found certain facts which requires further investigation. In that case, the AO should take necessary approval from the higher authorities to convert the assessment from limited scrutiny to complete scrutiny and then can examine such other issues. Since, in the instant case, no such procedure was followed nor such satisfaction was recorded, therefore, it is not a case where the AO could examine the application of provision of section 50C which otherwise is beyond his jurisdiction. This view is supported by the decision of P H High Court in the case of PCIT vs. Rakesh Kumar AO has no jurisdiction to examine the issue which is beyond his jurisdiction, therefore, there is no error in the assessment order of the AO for which the same could be held as erroneous and prejudicial to the interest of Revenue. Thus, the order passed u/s 263 is set aside. Accordingly, all the grounds of appeal of the assesse are allowed.

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• 2025 (3) TMI 1165
  Legality of order passed u/s. 144 - addition towards unexplained cash credit u/s. 68 - HELD THAT:- There is no dispute by the department regarding the purchase and sales as appearing in the books of account which had also been accepted by the department, therefore, there is no possibility for the CIT(A) to hold that these deposits were outside the normal course of business of the assessee. The addition has been made by the AO because he was not convinced with the source of the cash deposits in the bank which was confirmed by the CIT(A). On a perusal of the order of the Ld. CIT(Appeals), it is noticed that the CIT(Appeals) has not passed a speaking order in terms of Sections 250(4) and (6) of the Act. In that regard, the order of the Ld. CIT(Appeals) becomes a cryptic, arbitrary and bad in law. The basic fact is that when the genuineness of the assessee s business is not disputed or any undisclosed sources has not been unearthed by the department and nothing is there on record which shows that the assessee had earned income from other sources other than from its business. Separate addition on a perusal of the assessment order, it is noticed that the AO had rejected the return of income filed by the assessee as the same was filed belatedly - AO while making computation has determined income which suggests that the assessment order is self-contradictory. On a perusal of the order of the CIT(Appeals), it is noticed that the CIT(Appeals) has not passed speaking order in terms of Sections 250(4) and 250(6) of the Act and summarily sustained the addition made by the Assessing Officer. In that regard, the order of the Ld. CIT(Appeals) becomes a cryptic, arbitrary and bad in law When the business of the assessee had not been disputed by the department and books of account has been accepted, then there is no justification for the lower authorities in making/sustaining the addition - direct the AO to delete the addition from the hands of the assessee. Assessee appeal allowed.

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• 2025 (3) TMI 1164
  Denial of Foreign Tax Credit (FTC) - Form No.67 which was required to be filed in support of the claim of FTC was filed beyond the due date of filing the return of income - HELD THAT:- The issue under consideration is no longer res integra and we considering the decision in the case of Ashish Agrawal [ 2023 (10) TMI 86 - ITAT HYDERABAD ] who is another employee of the very same company of which the assessee is employee, i.e. Emerson Electric Company (India) Private Limited and the Tribunal held that filing of Form No.67 is only directory since Double Taxation Avoidance Agreement overrides the Act and Rules and therefore if the assessee has paid the taxes abroad and is duly supported by evidence, then the claim of the assessee needs to be allowed. Claim of FTC by the assessee is denied only for delay in filing of Form No.67 and no discrepancy has been noticed in the contents of Form No.67 and therefore considering that Form No.67 is directory is nature, we direct the AO to accept the claim of the assessee made through Form No.67 - Appeal of the assessee is allowed.

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• 2025 (3) TMI 1163
  Income deemed to accrue or arise in India - Royalty as per the section 9(1)(vi) of the Income tax Act and Article 13 of the DTAA between India UK - payments proposed to be made for Global technology/Knowledge management, Global Communication and Global Brand - HELD THAT:- As relying on case of Deloittee Haskins Sells LLP and Deloitte Touche Tohmatsu India LLP [ 2022 (7) TMI 1586 - ITAT MUMBAI] we hold that the payments made to DGSHL do not fall within the scope and ambit of royalty under Article 13 of India UK DTAA and consequently, assessee was not required to deduct TDS while making the payment. Accordingly, the appeals of the Revenue are dismissed.

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• 2025 (3) TMI 1162
  Allowability of Provision for Claim Pay Out created - HELD THAT:- CIT(A) had allowed deduction for actual Claim Pay Out. On perusal of the above details, it can be seen that the Provision for Claim Payout created for AY 2019-2020 was less than the actual Claim Pay Out. Further, on an overall basis (i.e. from A.Y. 2016-2017 till A.Y. 2022-2023), the aggregate difference between the Provisions for Claims Pay Out and actual Claim Payout was only 2.21% only. Further, the Assessee has been granted exemption from income tax u/s 10(46B) of the Act by the Finance Act, 2023. We overturn the finding returned by the CIT(A) that the Provision for Claim Pay Out has been created on adhoc basis. In our view, the Assessee has created provisions for the liability to make payment towards Claim Pay Out on the basis of actuarial report furnished by an independent actuary after application of mind to the attendant facts and circumstances. The Provision for Claims Pay Out so created is an ascertained liability keeping in view the provisions of the Trust Deed, the Scheme and the applicable agreement. Therefore the order passed by the AO and the CIT(A) in relation to Provision for Claim for Pay Out is set aside and the AO is directed to grant deduction for Provisions for Claim Pay Out created during the relevant previous year. Our above view draws strength form the following decision of Credit Guarantee Fund for Micro and Small Enterprises [ 2023 (11) TMI 1107 - ITAT MUMBAI] and Credit Guarantee Fund for Micro and Small Enterprises [ 2024 (12) TMI 1477 - ITAT MUMBAI] Appeal of assessee allowed.

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• 2025 (3) TMI 1161
  Computation of income from assessed income as per intimation u/s 143(1) when the scrutiny assessment was initiated before passing intimation order - HELD THAT:- In view of the finding made in the case of MSTC Ltd. [ 2024 (10) TMI 1642 - ITAT KOLKATA] since the adjustment made in the intimation u/s 143(1) of the Act have neither been reversed by the Ld. AO nor any adjudication has been made in the assessment order therefore, the CIT(A) was justified in dismissing the appeal of the assessee on the ground that the impugned intimation was not contested in appeal. Hence, we find no error in the order of the Ld. CIT(A) which is hereby upheld in view of the order of the Hon ble Jurisdictional High Court and the doctrine of merger discussed in the case of MSTC Ltd. (supra). Hence, ground nos. 1, 2 3 are dismissed.

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• 2025 (3) TMI 1160
  Addition u/s 56(2)(vii) - Immovable property has been purchased by the Assessee below the Circle rate and considered the applicable circle rate as sale consideration - HELD THAT:- In the present case, it is not the case of wrong mentioning of provision of Section, it is crystal clear that the AO has proceeded to make addition u/s 56(2)(vii)(b)(ii) of the Act and accordingly made addition under the very same provision. Even the CIT(A) has also confirmed the very same addition made u/s 56(2)(vii)(b)(ii). Such a blatant error of invocation of a Provision against the Assessee, which was not even applicable/exist in the year under consideration, which has been confirmed by the First Appellate Authority, cannot be construed as mere wrong mentioning of provision of law. Therefore, the Judgment relied by DR in the case of Namev Arora [ 2016 (8) TMI 219 - PUNJAB AND HARYANA HIGH COURT ] is not applicable to the case in hand. Proving the source of investment for purchase of Agriculture Land - AO disbelieved the claim of the Assessee without their being any contrary evidence or without making any investigation or examination of the parties. Considering the land holdings of the Assessee and his family members, AO should have accepted the claim of the Assessee in the absence of any contrary evidence brought on record. AO has committed error in making the addition and the CIT(A) has also erroneously upheld the same. Addition made by the A.O. which has been upheld by the CIT(A) it hereby deleted. Accordingly, we allow the Ground No. 5 to 7 of the Assessee. CIT(A) confirmed part addition of agricultural income - It is the case of the Assessee that the Assessee was owing six acres of the land from the beginning of the Financial Year which yielded him the income. The said fact that the Assessee was owning additional six acres of land which has been acquired during the starting of the Financial Year has not been considered by the A.O. However, though the CIT(A) has granted substantial relief after considering the holdings of the land of the Assessee, no reason or justification has been given for sustaining addition. CIT(A) ought to have allowed the entire claim of the Assessee as agriculture income in view of 18 acres of land holdings of the Assessee and his family member. Appeal of the Assessee is allowed.

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• 2025 (3) TMI 1159
  Penalty u/s 271(1)(c) - defective notice - non specification of clear charge - Non mentioning under which limb of section 271(1)(c) the penalty is being initiated - HELD THAT:- We are of the opinion that the assessee has not been called upon to explain if he has concealed the particulars of income or furnished inaccurate particulars of such income. In such a situation the decision of Manjunatha Cotton and Ginning Factory Ors. [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT ] is illuminating. We find ourselves as having a considered view that when the assessee has not been specifically made aware of the charges leveled against him as to whether there is a concealment of income or furnishing of inaccurate particulars of income on his part, the penalty u/s 271(1)(c) is not sustainable. Decided in favour of assessee.

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• 2025 (3) TMI 1158
  Levy of interest on the outstanding receivables from its AE treated by the TPO as international transactions - HELD THAT:- In case it is proved that the assessee has transferred the benefit to its AE then certainly this transaction will fall in the International transaction. No such findings were brought on record by the tax authorities. Assessee was properly compensated by its AE, this is also fact on record that the DRP has deleted the adjustment proposed by the TPO on the provision of services to its AE. It clearly shows that the assessee is being compensated properly. Now the issue before us is whether the assessee incurs financial cost in India and allows extended period of credit to its AE, so that the AE enjoys the benefit out of funds borrowed in India. The revenue must bring on record how the benefit is exported without claiming any compensation for the same. In the given case, the company is debt free and able to survive based on the compensation from its AE. We noticed that the assessee has actually incurred finance cost and majority of the finance cost consist of penal interest paid to revenue u/s 234B/C of the Act. Technically there is no finance cost of employment for any debt or borrowings. If that is the case, the passing of benefit to its AE is ruled out. We cannot apply the provisions of the Act blindly without show casing how it is falling under the short term loan or financial transaction. Even though Ld DRP tried to distinguish the Bechtel India case, however, unless it is brought on record that this particular transaction falls within the framework of financial transaction, you cannot invoke the provisions mechanically. The term of settlement is subjective and depends upon the mutual agreement and industry practice. We noticed that the average credit period of the assessee is 92 days against the average credit period in the case of comparable companies determined at 105 days. Since the assessee is debt free company and has recovered the remittances within the terms agreed between them and there is no red flag of excessive delay in remittance which gives the impression that the AE is enjoying the credit facility beyond reasonable period. Therefore, revenue has failed to bring any material to suggest that the assessee has passed on the benefit to its AE by borrowing or extension of remittance beyond the industry average. In the regular business transactions even in the case of non AE, the credit period extension within the industry average is accepted norms. In our view the findings of Bechtel India [ 2016 (9) TMI 196 - DELHI HIGH COURT ] is applicable in this particular case. Therefore, we are inclined to allow the grounds raised by the assessee and direct the AO to delete the additions proposed by TPO. Appeal filed by the assessee is allowed.

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• 2025 (3) TMI 1157
  Disallowance of the claim of depreciation and additional depreciation claimed on alleged bogus purchases and addition on account of VAT incurred on the impugned bogus purchase HELD THAT:- It is trite law that the primary onus is on the assessee and the correctness of the return is a matter to be established by the assessee on whom the burden lies. For this proposition, we draw support from the decision of Smt. Jasvinder Kaur [ 2013 (10) TMI 837 - GAUHATI HIGH COURT] The assessee has only furnished copy of the invoices of M/s. B.N. Trading Company, which on verification has been found to be bogus. No further details have been furnished by the assessee demonstrating the exact location of the said company. Even the verification from the Good Services Tax Department, Govt. of Maharashtra, mentioned elsewhere, revealed that the products in which M/s. B.N. Trading Company dealt with had no co-relation with the goods purchased by the assessee. The decision of SVD Resins Plastics Pvt. Ltd [ 2024 (8) TMI 564 - BOMBAY HIGH COURT] relied upon by the ld. Counsel is entirely on different set of facts. Once the facts are distinguishable, the decision cannot be relied upon. Appeals of the assessee are dismissed.

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• 2025 (3) TMI 1156
  Validity of Notice issued u/s. 143(2) by the ITO, Ward-4(5), Raipur as without jurisdiction - HELD THAT:- Derived from the Latin word notitia , which means being known, notice is the starting of any hearing. Unless a person knows the issues of the case in which he is involved, he cannot defend himself. For a notice to be adequate it must contain- (a) Time, place and nature of hearing; (b) Legal authority under which hearing has to be held; and (c) The specific charges, grounds and proposed actions the accused has to meet. In this case as per the documents on record that the first notice u/s. 143(2) was issued by the ITO, Ward-4(5), Raipur and thereafter, another notice u/s. 142(1) was issued by the ITO, Ward-3(1), Raipur who had framed the assessment without any order of transfer as required u/s. 127 by the Ld. Pr. CIT. Similarly, if it is to be accepted that the actual jurisdiction is with the ITO, Ward-3(1), Raipur then first notice u/s. 143(2) of the Act, dated 18.09.2017 which had been issued for initiating the scrutiny proceedings by the ITO, Ward- 4(5), Raipur is definitely without a valid jurisdiction over the assessee. When the issuance of notice and framing of assessment order suffers from lack of jurisdiction as enshrined in the statute then all subsequent proceedings becomes non-est in the eyes of law. Thus the assessment framed by the ITO-3(1) Raipur vide his order passed u/s. 143(3) in absence of an order of transfer u/s. 127 of the Act having been passed by CIT and without any issuance of notice by him u/s. 143(2) to the assessee, is held to be without jurisdiction, invalid and bad in law and thus, the same is quashed. Appeal of the assessee is allowed.

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• 2025 (3) TMI 1155
  Entitlement to benefits of the Vivad Se Vishwas Scheme, 2020 - technical glitches and procedural errors that prevented the issuance of Form 5 under the scheme - HELD THAT:- Assessee should not be suffered from such technical glitches that prevail at the side of revenue. As is clear that there were technical glitches and considering that aspect of the matter the assessee has deposited the part payment of tax dispute even though the form no. 3 was not issued and served to the assessee. The bench noted that though the Form no. 3 placed on record has date 31.12.2020 but the same was served on 23.03.21 i.e. almost a year[ based on the copy of the form no. 3 filed by the ld. DR]. As bench appreciate the effort of the revenue but at the same time the assessee alternatively argued that the present scheme of VSVS 2024is extended arms of that scheme of 2020 and therefore, if the revenue could not resolve that dispute in the scheme of 2020 then the benefit of the present scheme be given to the assessee by the concerned PCIT by passing a order in that 2020 scheme and thereby the assessee may avail the scheme 2024 for which the assessee is also alternatively eligible. Based on these discussion we hold that the assessee be given the benefit of resolving the dispute of Vivad se Vishwas scheme either in 2020 or 2024. Since this matter is time barring the copy of the order be placed before the PCIT s office immediately so as to the assessee be given benefit as discussed herein above. Since the appeal was dismissed by ld. CIT(A) in incorrect appreciation of facts, the same is also directed to restore to the file of the CIT(A) so as to avail the benefit of the new Scheme by the assessee. Assessee appeal allowed.

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• 2025 (3) TMI 1154
  Legality of reassessment order passed on non-existent entity - HELD THAT:- Admittedly the notice u/s 148 was issued when the company was seized to exist i.e. when it is its name was struck off from the Register of Companies. It is also a matter of fact that the company had applied for winding up under the scheme declared by the Ministry of Corporate Affairs wherein after obtaining the approval from the jurisdictional Assessing Officer of Income Tax Department and other stake holders, the name of the company was struck off. Once the notice was issued when company was not in existent such notice is bad in law. The Hon ble Supreme Court in the case of PCIT vs. Maruti Suzuki [ 2019 (7) TMI 1449 - SUPREME COURT] has held that initiation of assessment proceedings against an entity which had ceased to exist was void ab initio and participation of the company cannot be operate as an estoppel against law. Also decided in Marut Nandan Co [ 2025 (2) TMI 829 - ITAT DELHI] re-assessment noticed issued u/s 148 of the Act in the name of the non-existent entity is clearly vitiated and rendered nonest in law. Decided in favour of assessee.

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• 2025 (3) TMI 1153
  Disallowance made of the deduction claimed in respect of the Research Development expenditure incurred at the approved in-house R D facility u/s 35(2AB) - HELD THAT:- Denial of weighted deduction u/s 35(2AB) will not disable the assessee from claiming normal deduction for the said R D expenditure, both revenue capital, u/s 35(1)(i) and 35(1)(iv) of the Act respectively. R D expenditure, including expenditure of capital nature, consolidated claim statement, details of disclosure of R D expenditure in the notes to audited financial statements along with a reconciliation statement between the amount certified in Form 3CLA and the figures reported in notes to audited financial statements. Details evidencing incurrence of capital expenditure at the approved in-house R D facility was duly disclosed in the notes to the audited financial statements and further the statutory auditor had verified and certified the same being relatable to scientific research in Form 3CLA. According to us therefore, these contemporaneous evidences sufficiently establish that the capital expenditure was incurred in relation to scientific research and was therefore eligible for deduction u/s 35(1)(iv) . Hence, the order of the lower authorities to that extent stands reversed. We direct the AO to further allow normal deduction for the capital R D expenditure u/s 35(1)(iv) and resultantly delete disallowance accordingly. This ground therefore stands partly allowed. Denial of deduction u/s 80IC for its plant/unit at Pantnagar - AO observed that the books of accounts were maintained against the principles of accounting standards and was being prepared in a manner to create artificial profits with the intention of claiming increased deduction u/s 80-IC - AR contended that the lower authorities were unable to pin-point any specific defect or infirmity in the audited stand-alone accounts of the eligible unit and rather had made sweeping remarks which did not have any cogent basis - HELD THAT:- We find that the revenue of the eligible unit was booked on prudent accounting principles and in accordance with provisions of Section 80-IA(8). It is noted that, there is no dispute regarding the direct costs debited in the audited stand-alone accounts of the eligible unit. The assessee has further demonstrated that the common/indirect costs have been allocated on sound and reasonable parameters. According to us therefore, the resultant profits relatable to the manufacturing unit as reported in the audited financial statements did not suffer from any infirmity, as wrongly alleged by the lower authorities in as much as there was no excess or higher profits reported by the assessee in its eligible unit at Pantnagar. AO had not pin-pointed any defect in the working of the profit of the eligible Unit and had instead estimated the margin of the eligible at 10% of cost basis. Thus, the action of the lower authorities in assuming that the profits of the eligible unit was artificially higher because the other units or company as a whole had a lower profitability without any relevant evidence or material, was baseless and unjustified. It is not in dispute that the assessee had indeed invested and set-up a manufacturing facility in industrially designated backward area in Pantnagar, Uttarakhand, in which it has investment more than Rs. 2250 crores. The said unit has been in operation for more than nine years and in none of the prior years the authorities are noted to have doubted its existence. It is also not the Revenue s case that the assessee has not fulfilled the conditions precedent in Section 80-IC to avail deduction in respect of profits derived by this eligible unit. We are in agreement with assessee that the assessee is free and entitled to arrange its affairs within the four corners of law to avail tax benefits, which the law permits it to claim. According to us therefore, the AO grossly erred in alleging tax evasion in the present case. Thus, we thus hold that the profits reported in the stand-alone audited financials of the eligible unit as certified in Form 10CCB issued by the auditor was based on sound accounting principles which does not warrant any interference. Accordingly AO is directed to allow the deduction u/s 80-IC as claimed by the assessee in the return of income and therefore delete the disallowance - Decided against revenue. Disallowance of additional depreciation claimed u/s 32(1)(iia) in relation to pollution control and energy saving equipment s - HELD THAT:- As the energy saving devices were specifically mentioned at Sl. No. III(8)(ix), renewable energy devices were mentioned at Sl. No. III (8)(xiii) and pollution control devices were mentioned at Sl. No. III(3)(vii) (ix). We are therefore in agreement with the Ld. CIT(A) that these fixed assets were in the nature of plant machinery and hence the assessee had rightly claimed additional depreciation u/s 32(1)(iia) on the same. CIT, DR appearing before us are was unable to controvert the same. We therefore do not see any reason to interfere with the order of Ld. CIT(A) in this regard and accordingly dismiss this ground of the Revenue. Disallowance made u/s 14A while computing the book profit u/s 115JB - HELD THAT:- This issue stands settled by the decision of Sobha Developers Ltd. [ 2021 (1) TMI 378 - KARNATAKA HIGH COURT ] wherein on similar facts and circumstances it was held that, the disallowance made u/s 14A cannot be added to book profit u/s 115JB.

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• 2025 (3) TMI 1152
  Bogus LTCG - addition relating to estimated commission expense - assessee and his sister has been exonerated by the SEBI - AO assessed 5% of the long term capital gains as estimated commission expenses incurred by the assessee - HELD THAT:-CIT(A) has given a finding that the assessee is a regular investor in shares. We also notice that a statement was taken from the assessee u/s 132(4) of the Act, wherein the AO did not find anything wrong. In the statement, the assessee had stated that he had purchased shares of Pine Animation Ltd on the advice of his Share broker Shri Bhavesh Shah and he had also confirmed that he only has advised the assessee to buy shares of M/s Pine Animation Ltd. None of these statements were found to be false. It has to be held that the assessee has purchased the shares of M/s.Pine Animation Ltd in the normal course of his investment activities. Hence the long term capital gain earned by the assessee on sale of shares of above said company cannot be considered to be an accommodation entry. Accordingly, CIT(A) was justified in deleting the addition of long term capital gains made by the AO. Since the long term capital gains earned by the assessee is held to be genuine one, the question of paying any commission expenses does not arise in the facts of the present case. Accordingly, we are of the view that the CIT(A) was justified in deleting the estimated commission expenses. Addition on the basis of whatsapp chat - HELD THAT:- As decided in case of Designers Point (India) P Ltd [ 2023 (9) TMI 1664 - ITAT DELHI ] has held that the addition cannot be made on the basis of whatsapp chat without bringing any material to corroborate the same. AO has not brought any E-certificate as required u/s 65B of the Act before placing reliance on the digital evidence. Hence, the AO could not have placed reliance on the said document which is alleged to be print out of whatsapp chat. In the absence of e-certificate, the same shall become a third party document and it cannot be relied upon by the AO without bringing any corroborative evidence to show that the assessee has received/paid the money mentioned therein in cash. We are of the view that the CIT(A) was not justified in confirming the addition made by the AO as unexplained cash credit u/s 68 of the Act. Accordingly, we set aside the order passed by the CIT(A) and direct the AO to delete this addition. Assessee appeal allowed.

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• Customs

• 2025 (3) TMI 1151
  Challenge to Public Notice No.5/2020 dated 03.02.2020, as well as Exts.P3 toP5 communications issued - jurisdiction to issue public notice - HELD THAT:- Exts.P2 to P5 communications issued to them by the 3rd respondent runs contrary to the express terms of Ext.P1 Public Notice, and virtually reads-in conditions thereto that were not contained in, or contemplated through, Ext.P1 Public Notice. As a matter of fact, the respondents have not been able to point to any regulatory power on the basis of which a notice in the nature of Ext.P1 Public Notice could be issued, if it had the effect of interfering with the terms of a contract entered into between the shipping lines and the shipper/recipient of the goods under carriage. In the absence of such a regulatory power, traceable to the provisions of any statute or contract, such a power, that has the potential to interfere with the freedom of contract between parties, cannot be inferred from the terms of a Public Notice. Ext.P2 to P5 communications are legally flawed and contrary to Ext.P1 Public Notice. Conclusion - The Court set aside the communications (Exts.P2 to P5) as legally flawed and contrary to the Public Notice. It held that the Public Notice should not be interpreted in a manner that interferes with private contracts. Appeal allowed.

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• 2025 (3) TMI 1150
  Jurisdiction of Directorate of Revenue Intelligence (DRI) officials under Section 28 of the Customs Act, 1962 to issue SCN - proper officer or not - HELD THAT:- In the present petition, the show cause notice which is under challenge is dated 1st May, 2019 issued by the DRI, Mumbai Zonal Unit. This would be covered by directions given in paragraph 168 (vi) (a) of the Canon-II [ 2024 (11) TMI 391 - SUPREME COURT (LB)] , wherein the adjudication of the show cause notice is to be restored to the adjudicating authority. The proceedings in the show cause notice under challenge dated 1st May, 2019 shall now proceed before the appropriate adjudicating authority in accordance with law. Petition disposed off.

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• 2025 (3) TMI 1149
  Maintainability of petition - diversion of imported walnuts into the domestic market, by not re-exporting - no opportunity was afforded for personal hearing - violation of principles of natural justice - HELD THAT:- The Court is of the view that the Petitioners ought to be relegated to avail of the remedy against the impugned Order-in-Original before the CESTAT. This Court has not examined any of the grounds which have been raised by the Petitioners. All objections are kept open. The Petitioners are free to raise all their grounds of challenge to the impugned order before CESTAT. Considering the nature of the matter and the submissions made today, in the unique facts and circumstances of these cases, the pre-deposit for filing the appeal is reduced to 3.75%. This order shall not be treated as a precedent. Petition disposed off.

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• 2025 (3) TMI 1148
  Challenge to validity of the addendum to the show-cause notice alleging that relevant documents relied upon in the issuance of the addendum was not given to them - Redetermination of the assessable value of the imported dredger as declared by the appellant - classification of the additional length of cutter head ladder and jet pump set is under CTH 89051000 or under respective heading? - admissibility of benefit of N/N.01/2011-CE dated 01.03.2011 - Penalty - Confiscation. Challenge to validity of the addendum to the show-cause notice alleging that relevant documents relied upon in the issuance of the addendum was not given to them - HELD THAT:- The addendum to the show-cause notice was communicated to the appellant and appellant has submitted a detailed reply rebutting each and every allegation both in response to the initial show-cause notice as well as in the addendum to the show-cause notice. In these circumstances, there is no violation of principles of natural justice and the addendum is valid and issued within the frame of law laid down under various judgments referred by the learned Commissioner. Redetermination of the assessable value of the imported dredger - HELD THAT:- The Managing Director has never retracted the statement nor disputed to the acceptance of appointment of independent Chartered Engineer to ascertain the correct value nor contested this at any point of time. Also while rejecting the said discount, the learned Commissioner has recorded that no discount was given by the overseas party to the appellant in its previous imports vide Bill of Entry No.4898940 dated 12.10.2011 which clearly indicates that the discount was not ordinarily given by the overseas supplier to the appellant but was given to the appellant only as a favoured buyer. There are no discrepancy in the Commissioner s observation that the transaction value declared by the appellant is liable to be rejected under Rule 12(2) of the Customs Valuation Rules, 2007. Classification of additional length of cutter head ladder and jet pump system - to be classified under Chapter sub-heading 89051000 or under 84314990 and 84137097 respectively? - HELD THAT:- The learned Commissioner referring to the dictionary meaning of the parts held that part means an element of a sub-assembly or assembly, not normally useful by itself and not amenable to further disassembly for maintenance purposes; also referring to various judgments on the scope of parts and accessories, he has observed that these are two different things and not the same. In this backdrop, analysing the facts of the case and requirement of the additional length of cutter head ladder and also the jet pump system - Further negating the argument of the appellant that since the dredger imported being huge item could not be imported in its complete form and imported in CKD condition of the item and all the parts imported are integral parts of the dredger, learned Commissioner has held that because the dredger was dispatched in 48 pieces in CKD condition, it cannot be itself make all the parts as integral parts of the dredger. Analysing the observation of the learned Commissioner in arriving at the classification of the additional length of cutter head ladder under CTH 84314990 and jet pump system under CTH 84137097, there are no apparent error in the reasoning of the Commissioner; hence, the observation relating to classification of the said products are upheld. Admissibility of N/N.01/2011-CE dated 01/03/2011 - HELD THAT:- The learned Commissioner has held that the benefit of 1% Excise duty without cenvat credit facility cannot be extended to them. This issue is no more res integra and covered by the judgment of the Hon ble Madras High Court in the case of CC(Exports), Chennai Vs. Prashray Overseas Pvt. Ltd. [ 2016 (5) TMI 1106 - MADRAS HIGH COURT ] - there are no error in the order of the learned Commissioner in denying the benefit of N/N.01/2011-CE dated 01.03.2011 to the appellant. Penalty - Confiscation - HELD THAT:- The appellant had misdeclared the value and suppressed their relationship with the overseas seller, the initial survey report from the knowledge of the Department which has been candidly admitted by the Managing Director of the appellant company, resulting to short payment of duty of Rs.54, 67, 041/-. Hence, confirmation of demand under Section 28(4) of the Customs Act, 1962 is justified and upheld. Consequently, imposition of penalty under Section 114A on the appellant company and penalty on the Managing Director under Section 114AA is justified. However, in calculating the penalty amount under Section 114A of the Customs Act, 1962 against the appellant company, the learned Commissioner has added interest amount to the differential duty, which is erroneous in view of series of judgments of this Tribunal. Therefore, the penalty imposed be restricted only to the extent of differential duty confirmed. Since the imposition of penalty under Section 114AA on the Managing Director is upheld, further penalty under Section 112(a) of the Customs Act in the circumstances is not warranted and accordingly set aside. Conclusion - i) The transaction value declared by the appellant is liable to be rejected under Rule 12(2) of the Customs Valuation Rules, 2007. ii) Classification of the additional length of cutter head ladder under CTH 84314990 and jet pump system under CTH 84137097 upheld. iii) The denial of the exemption under N/N.01/2011-CE. upheld. Appeal disposed off.

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• 2025 (3) TMI 1147
  Confiscation of 34,400 kgs of areca nuts - smuggling of foreign origin goods - notified item or not - confiscation was done solely on the basis of suspicions without any substantive proof to indicate that the goods were of foreign origin - HELD THAT:- The Department has not brought in any evidence to substantiate their allegation that the impugned goods are smuggled in nature. In this regard, the appellant has stated that the goods were lawfully purchased from local markets in Nagaland and Assam, and the confiscation was done solely on the basis of suspicion without any substantive proof to establish foreign origin of the goods in question. It is observed that the appellant s claim of purchase of the Betel Nuts/Areca Nuts from local market/mandi on payment of Cess has not been negated by the department. The goods were seized from the godowns in Indian territory far away from an international border. Since the goods were not seized within the Customs area, we observe that as per the provisions of Section 123 of Customs Act, 1962, the burden to prove that the seized goods were of foreign origin or smuggled in nature lies on Department. The confiscation of the impugned goods is not sustainable and accordingly, the same is set aside. Since, the order of confiscation is not sustained, the demand of redemption fine in lieu of confiscation is not sustainable and accordingly the same is set aside. As the confiscation itself is not sustained, there is no question of imposing penalty on the appellant and hence the same is set aside. The appellant needs to be compensated for the destruction of the impugned goods. Further, from the decision cited above, we observe that when goods valued Rs.88 lakhs was seized and destroyed at the pre-trial stage, the Hon ble High Court has allowed the refund of Rs.60 lakhs. By adopting the same ratio, we are of the view that the appellant is liable to be refunded Rs.20 lakhs in lieu of the seizure value of Rs.32.68 lakhs. The refund is to be paid within a period of three months from the date of communication of this order and if the Department fails to comply, interest on the expiry of the said three months shall be payable on the refund amount at the rate of 12% per annum. Confiscation - i) The appellant is eligible for refund of Rs.20 lakhs in lieu of the seizure value of Rs.32.68 lakhs. The refund is to be paid within a period of three months from the date of communication of this order and if the Department fails to comply, interest shall be payable on the refund amount at the rate of 12% per annum on the expiry of the said three months. ii) The impugned goods are not liable for confiscation. Accordingly, the order of confiscation is set aside. iii) The penalty imposed on the appellant is set aside. Appeal disposed off.

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• 2025 (3) TMI 1146
  Seeking provisional release of detained imported goods - Mulberry Raw Silk - detention on the ground that the documents pertaining to said goods were not available with the caretaker of the premises - HELD THAT:- The provisions of Section 110(2) of the Customs Act, 1962 came into effect on 29.03.2018 and at the seizure of the goods in question and release thereof, the said provisions were not in force. In that circumstances, the Revenue cannot rely on the amended provisions in 2018 for the release of the goods in 2016 provisionally. Therefore, the Revenue is duty bound to issue the show-cause notice within extended period of six months by the ld.Commissioner (Port), which they failed to do so. The observations made by the ld.Commissioner (Appeals) in the impugned order not agrred upon and no show-cause notice was issued to the respondent within extended period of six months in terms of Section 110(2) of the Customs Act, 1962 as existed at the time of seizure of the goods - no proceeding is sustainable against the respondent and they are entitled to release of the goods, the personal Bond and Bank guarantee. Conclusion - The respondent is entitled to the unconditional release of the goods and the return of the Bank Guarantee due to the Revenue s failure to issue a Show Cause Notice within the stipulated period. The appeal filed by the Revenue is dismissed.

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• Securities / SEBI

• 2025 (3) TMI 1145
  Penalty u/s 15HB of the SEBI Act - delay in commencing the adjudication proceedings against the appellant - HELD THAT:- A common SCN was issued on September 28, 2021. Since all these complaints are with regard to investment advices given by the appellant, we do not find any error in issuing a common show cause notice, which reduces multiplicity of proceedings. It is settled that where no limitation is prescribed, proceedings have to initiated in a reasonable period. Further, as rightly urged by Mr. Sancheti, appellants have failed to demonstrate any prejudice caused due to the delay. Considering the avowed object of IA Regulations, we find no merit in ground of delay taken by the appellant. Double jeopardy , SEBI is right in contending that the proceedings before WTM and the AO are completely different under different provisions of the SEBI Act. Therefore, is no merit in this ground. Denial of natural justice in rejecting the settlement application , as rightly contended by Mr. Sancheti, an appeal against rejection of application for settlement is barred under Section 15JB(4) of the SEBI Act. Hence this ground is also untenable. Notice for inspection was served on the day of the inspection - We note that the impugned proceedings were started following several complaints received against the appellants. The appellant being a registered Investment advisory firm, was required to abide by the IA Regulations but on inspection in 2015 and later in 2017, it was found to be lacking on several counts. We are persuaded to accept SEBI s contention that Appellants have not demonstrated any prejudice caused to them. Moreover, during proceedings, appellants were given opportunity to defend their cause. Hence, this ground is also baseless. Violation-1 - Whether appellant has violated Regulation 15(8) of the IA Regulations (KYC Procedure) ? - We are of the vies that the appellant has not complied with the conditions laid down by the SEBI while granting Certificate of Registration as an investment adviser conveyed vide letter dated May 19, 2014. Further, even prior to coming into operation of the IA Regulation 2013, appellant was covered by the SEBI circular dated December 23, 2011, which was addressed to SEBI registered intermediaries, even though the same did not specifically use the nomenclature investment adviser . Further, SEBI s Circular (dated December 23, 2011) contains guidelines in pursuance of the SEBI KYC Registration Agency (KRA) Regulations, 2011 which required the appellant to upload the KYC data in conformity with details sought in the uniform KYC Form prescribed in the SEBI Circular dated October 5, 2011. It is clear that the appellant has failed to comply with the same. Appellant vide letter dated July 7, 2015 has admitted that prior to April 1, 2015, it was not downloading KYC Forms from KRA. Therefore, we find no merit in appellant s ground and hold this point in the affirmative. Violation-2 - Whether appellant failed to carry out Risk profiling (RP) and violated Regulation 16? - We note that at the time of inspection, the SEBI found the appellant lacking in carrying out complete risk profiling. While some fields were found to be empty in the questionnaire to its clients, important details such as investment objectives were not even captured. The appellant shared details of one party but the SEBI s findings are based on the evidence recorded at the time of inspection, which remained uncontested. In view of this, we don t find no merit in appellant s contention and this point is also held in the affirmative. Violation-3 - Whether appellant has violated Regulation 17 requiring Suitability assessment to be made for the client before advising any product? - Appellant s contention that product details were available on the website is not refuted by the SEBI. However, appellant did not carry out specific Suitability Assessment for individual clients before advising any product. This could have exposed the clients to serious risk. Moreover, admittedly the complete product details were not disclosed by the appellant until a client made a specific request for the same, which is a clear violation of Regulation 17 of IA Regulations. Hence we hold this point also in the affirmative. Violation-4 - Whether appellant has violated Regulation 18 read with clause 5 of Code Of Conduct under Schedule III of IA Regulations, 2013? - On careful consideration, we find that the appellant did not make full disclosure in respect of all material information about all terms and conditions on which services are offered. We find that the appellant s explanation with regard to the finding of the inspection that the method of calculation used by the appellant for assessing performance track record did not take into account advices provided on all the calls, but covered only such calls which were profit-making is not satisfactory as it does not give correct picture to the clients about the products offered. Therefore, we find no merit in appellant s contention and hold this point also in the affirmative. Violation-5 - Whether appellant has violated Regulation 22 of IA Regulations? - We find that the appellant is not a broker and hence execution activities cannot be carried out by it. The appellant has provided execution services to brokers of some of their clients and it was brokers who used to provide execution services and not the appellant. The appellant s claim that it has not charged any fee for such execution business for client through the brokers, has not been rebutted. Hence, appellant is right in its contention. Accordingly, we hold this point in the negative. Violation-6 - Whether appellant has violated Regulations 15(1) and 15(9) of IA Regulations read with clauses 2 and 4 of Code of conduct? - Admittedly, Appellant has not contested the complaint and refunded made by the refund only after complaint was filed. We are unable to persuade ourselves to accept appellant s contention that appellants non-contest and refund of money should not be construed as admission of violation. Such violations cause serious prejudice and loss to the clients in Securities market. Hence, in view of appellant s such conduct, we hold this point also in the affirmative. Violation-7 - Whether appellant has violated Regulation 19? - Though the Investment advisor Regulations were notified in 2014, Investment advisors are certainly Intermediaries to covered within the broad definition of Intermediaries even prior to issuance of Regulations. Accordingly, this point is also held in the affirmative. Violation-8 - Whether appellant has violated clause 2 of Code Of Conduct with respect to the complaint of Mr. Mahadeo Sadafule? - We also find that no evidence has been brought on record by the SEBI to corroborate that services were offered without risk profiling. No evidences is placed before us also to demonstrate that assured returns were offered by the appellants and it also not specific case of the complainant. Therefore, we find force in appellant s argument and find no material in support of SEBI s allegation that appellant had failed to act with due skill, care and diligence in the best interest of its clients. Accordingly, we hold this point in the negative. Violation-9 - Whether appellant has charged excess fee in violation of Clause 6 of Code Of Conduct, under Schedule III of IA Regulations, 2013? - Risk Profile document shows that Mr. Sadafule wanted to invest Rs. 6-10 lakhs, but he was charged Rs. 25 lakh as advisory fee, which is unreasonably high even if it is for a period of two and half years as claimed by the appellant. No prudent client would make an advance payment for two and half year, which is much more than the amount of investment made. The appellant s contention that Mr. Sadafule actually wanted to invest more than Rs. 6-10 lakhs, is not supported by any evidence. Appellant was bound by the Clause 6 of the COC of the IA Regulations to charge fair and reasonable fee from its client. In view of undisputed fact that appellant has charged Rs. 25 Lakhs as fee and seeks to justify without any material that it was for two and half years, we hold this appoint also in the affirmative. Violation-10 - Whether appellant is guilty of soliciting of clients through different websites, in violation of Clause 5 of COC under Schedule III of IA Regulations? - Records do not disclose any evidence to substantiate the allegation that the appellant was using various websites to solicit clients. We find merit in appellant s contention that various websites, some of which had the domain name capitalvia.com, were for lead generation and no business is done through them and these are only landing pages. These websites were used to track any prospective client. Hence, in our view, in the absence of any material against the appellant, the allegation is baseless. Accordingly, we answer this point in the negative. Violation-11- Whether appellant has violated Regulation 7(2) of IA Regulations relating to Qualification of IA? - We find that no findings were recorded by the SEBI with regard to dates of joining of individual employees, in order to prove the charge. Further, appellant s submission that the notification dated June 19, 2013 and January 27, 2014 have to be read with Regulation 3(1) and 3(2) of the SEBI (Certification of Associated Persons in the Securities Market) Regulations, 2007 is not refuted. Therefore, in our view, this allegation is not substantiated. Accordingly, we hold this point in the negative. Violation-12 - Whether appellant has violated Regulation 13(c)? - As submitted that the compliance of the regulation post- inspection will not absolve the appellants for the violation committed during the inspection period. Our attention was drawn to the decision of Chairman, SEBI vs. Shriram Mutual Fund [ 2006 (5) TMI 191 - SUPREME COURT ] in which it was held that penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and Regulation is established. Appellant s contention that the words were added after inspection do not merit any consideration in the light of settled position of law laid down in Shriram Mutual Fund (supra). Accordingly, we answer this point in the affirmative. Violation-13 - Whether appellant has failed to make disclosure in terms of Clause 1 of COC? - We note that the appellant has admitted that it had construed all the staff as under the category of Investment Advisor . Incorrect disclosure on the website is misleading to any one and particularly the potential clients. We find no substance in appellant s contention and accordingly hold this point in the affirmative. Determination of quantum of the penalty - We note that there were repeated violations of multiple nature. Further, large number of complaints were received by the respondent against the appellant investment advisory firm which could have had serious impact on the integrity of the securities market and adversely affected the interest of the investors. In view of this, keeping in view the criteria indicated in Section 15-J, levy of penalty is justified. However, since we found merit in the plea of the appellant on some of the grounds, and we have answered 4 out of 13 violations in the negative. Therefore, levying maximum amount of penalty of Rs. 1 Crore is unsustainable. In our view, ends of justice would be met by reducing the penalty to Rs. 70 lakhs.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 1144
  Admission of Section 7 application - existence of debt and default or not - appellant has taken various opportunities and has prolonged the hearing of the appeal after obtaining an interim order due to which the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor could not proceed any further - HELD THAT:- There is no dispute between the parties regarding financial facilities extended by the SBI. The amount disbursed by the SBI to the corporate debtor. The accounts were declared NPA by the financial creditor on 26.07.2017. Loan recall notice was issued by the SBI on 11.01.2019 and on behalf of the all the consortium lenders demanding a payment of amounts of Rs.2078.04 Crore. Section 7 application was filed by the SBI for a default of Rs.1049.72 Crore. Before the Adjudicating Authority itself, the corporate debtor pleaded that corporate debtor has submitted one-time proposal before the lenders. Before this Tribunal the appellant pleaded that they have given OTS proposal to the financial creditors. In order dated 25.10.2024, it is noticed the submissions of the counsel for the SBI that SBI has not accepted the proposal. Even after 25.10.2024, appellant took time to bring settlement on record in which appellant miserably failed. The sequence of the event in the appeal as noted above clearly proves that debt and default is an admitted fact. From the facts brought on the record, it is clear that corporate debtor is unable to clear its debt and it is fit case where insolvency resolution process against the corporate debtor be proceeded. Conclusion - The debt and default were established, arbitration proceedings did not impact the insolvency process, and the lack of an accepted OTS did not justify halting the proceedings. Appeal dismissed.

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• 2025 (3) TMI 1143
  Termination of lease during the moratorium period imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC) - jurisdiction of NCLT to entertain the application filed by the Resolution Professional (RP) against the termination of the lease by GIDC - HELD THAT:- There is no dispute between the parties that Resolution Plan came to be approved by the CoC with requisite majority in 17th CoC Meeting held on 10.02.2020 and Letter of Intent was issued to SRA, who has also submitted Performance Bank Guarantee. An IA was filed by the RP for approval of Resolution Plan being IA No.159 of 2020 immediately after approval of the Resolution Plan, which remained pending. The Resolution Plan could not be considered at an earlier point of time on account of certain litigations with respect to eligibility of SRA. The Adjudicating Authority has also extended the time for completion of CIRP. In IA No.461 of 2022 filed by the RP challenging the order dated 07.04.2022 issued by GIDC, by which lease was terminated and further Show Cause Notice was issued for eviction of the CD. Both these orders were challenged in IA No. 461 of 2022. There is no dispute between the parties that moratorium which commenced on admission of Section 7 Application in the year 2019, continued to operate. The Resolution Plan, which was approved, for which IA No.159 of 2020 was filed, remained pending before the Adjudicating Authority. Thus, order dated 07.04.2022 was passed during continuance of the moratorium. The Hon ble Supreme Court in Embassy Property Developments Pvt. Ltd. vs. State of Karnataka and Ors. [ 2019 (12) TMI 188 - SUPREME COURT ] recorded its conclusion that NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute supplemental lease deeds for the extension of the mining lease. The application for approval of Resolution Plan was pending consideration during which period GIDC had issued an order, terminating the lease and issuing Show Cause Notice for eviction of the CD. We are of the view that action of the GIDC by issuing Show Cause Notice of terminating the lease dated 07.04.2022 was clearly hit by Section 14 of the IBC and the Adjudicating Authority committed error in not allowing the IA, which was filed by the RP being IA No.461 of 2022. Although, interim order was passed by Adjudicating Authority for maintaining the status quo, but Adjudicating Authority directed the RP to approach the Appellate Authority of GIDC. When order passed by GIDC is clearly hit by Section 14(1), it was well within the jurisdiction of NCLT within the meaning of Section 60, sub- section (5) (c) of the IBC to entertain the application. Conclusion - When order passed by GIDC is clearly hit by Section 14(1), it was well within the jurisdiction of NCLT within the meaning of Section 60, sub-section (5) (c) of the IBC to entertain the application. Challenge to order of the Adjudicating Authority remanding the Resolution Plan to the CoC - HELD THAT:- Learned Counsel for the Financial Creditor is correct in its submission that Adjudicating Authority has not returned any finding that Resolution Plan submitted by SRA was not in compliance of sub- section (2) of Section 30. No such shortcomings in the Resolution Plan has been pointed out, due to which the Resolution Plan suffers from any infirmity as required by Section 30, sub-section (2). The law is well settled, the Adjudicating Authority in paragraph-17 has already noticed the judgment of the Hon ble Supreme Court K. Sashidhar vs. Indian Overseas Bank and Ors. [ 2019 (2) TMI 1043 - SUPREME COURT ], where it was observed that Adjudicating Authority has ample power to remit the Resolution Plan for reconsideration by the CoC when there is violation of Section 30, sub-section (2) of the IBC. There can be no quarrel to the above proposition that Resolution Plan can be sent back for reconsideration of the CoC, if there is violation of Section 30, sub-section (2). Any violation of Section 30, sub-section (2) gives ample jurisdiction to NCLT to interfere with the decision of CoC approving the Resolution Plan or remit the Plan for making it compliant with Section 30, sub-section (2). But in the present case, there is no finding by the Adjudicating Authority with regard to non-complaint of Resolution Plan as per Section 30, sub-section (2). Conclusion - Without recording a finding of non- compliant of Section 30, sub-section (2), the Resolution Plan could not have been returned back to the CoC for reconsideration. Appeal allowed.

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• 2025 (3) TMI 1142
  Maintainability of petition - operational debt of a sum exceeding rupees one crore due and payable by the respondent to the petitioner exists as on the date of filing of this petition or not - pre-existing dispute as to the subject debt between the parties or not - initiation of Corporation Insolvency Resolution Process (CIRP) against the respondent is barred under section 10A of the Insolvency Bankruptcy Code, 2016 or not. Whether an operational debt of a sum exceeding rupees one crore due and payable by the respondent to the petitioner exists as on the date of filing of this petition? - If so, whether the respondent defaulted in repayment of the same? - HELD THAT:- The answer is unequivocally yes because admittedly by as per the statement of account of the financial year 2020-2021 and financial year 20212022, the due at the end of respective financial year is shown as Rs.1,00,49,270/- (Rupees One Crore Forty Nine Thousand and Two Hundred and Seventy only). Further, it is seen that the debt due is not hit by limitation as the date of default being 14.03.2020, as claimed by the Operational Creditor, or, 15.12.2020 as the demand notice falls within 3 years of the filing of application. Whether there is a pre-existing dispute as to the subject debt between the parties? If so, whether the petition is maintainable? - HELD THAT:- The issue has also been dealt with correctly by the Ld. Adjudicating Authority by holding that the Corporate Debtor has accepted the supplies made by the Operational Creditor without any goods being returned and without raising any issues, that since the payment for supplies are to be made within 30 days from the date of invoice, he should have raised disputes if any for each supply within such or reasonable period, that no record have been placed by the Appellant before the Ld. Adjudicating Authority to show that he has raised quality complaints as per the general practice in the business and therefore the claim of a pre-existing dispute with respect to the debt cannot be accepted for the purpose of rejecting the Section 9 application of the Operational Creditor. Whether the initiation of Corporation Insolvency Resolution Process (CIRP) against the respondent is barred under section 10A of the Insolvency Bankruptcy Code, 2016? If so, whether the Company Petition is maintainable? - HELD THAT:- In the present case, the debt which due remained to be paid on 11.11.2022 was Rs.1,00,49,270/-, consisting of the amounts relation to in 28 invoices that were raised by the Operational Creditor and were not paid by the Corporate Debtor within the period of 30 days of raising of each invoice till the date of filing of the Section 9 application. Out of these 28 invoices, 27 invoices fell due for payment and were defaulted on, in the period 25.03.2020 to 25.03.2021, that is Section 10 A period, if 30 days added to the date of raising of each invoice. Thus, clearly the debt due on these 27 invoices will attract the provision of Section 10 A of the Code. It is to be seen that this is a running account of goods received and payments made by the Corporate Debtor and though the payments have not been made invoice-wise it is clear that the Corporate Debtor has cleared about Rs. 74.95 lakhs out of Rs.1,05,08,583/- being the opening balance of the dues to be paid as on 01.04.2020 and that the amounts pending to be paid pertain to invoices that were raised during Section 10 A period, that is during the period 25.03.2020 to 25.03.2021. In the instant case, each unpaid invoice gives rise to a distinct separate default. Further, only Rs.2,86,762/- is the amount that is in default from the pre-section 10A period. Even though the Corporate Debtor has acknowledged the debt that has accumulated in the period 25.03.2020 to 16.09.2020, it cannot be taken as a continuation of the default claimed to have been committed on 14.03.2020, for the reason being that the Corporate Debtor had repaid a total of Rs.79,54,973/- of the amount due as on 01.04.2020 during the period of 01.04.2020-31.03.2021. Thus there will be a bar on including the amount involved in the 27 invoices that fell due during the Section 10 A period to the total debt due for the purpose of initiating CIRP as per the proviso to Section 10 A of the Code. Accordingly, the threshold limit of Rs. 1 crore as stipulated in Section 4 will not be met and as a result, the order of the Ld. Adjudicating Authority admitting the Corporate Debtor into CIRP will have to be set aside. There are no hesitation in saying following the decision of the Hon ble Apex Court in the matter of Ramesh Kymal [ 2021 (2) TMI 394 - SUPREME COURT ], that the amount represented by these 28 invoices will remain a debt due and that they will not be extinguished but they cannot be used as a basis to initiate CIRP proceedings. The Respondent will continue to have the right to recover the said dues by all the means available to him including approaching commercial courts except resorting to proceedings under the I B Code. Conclusion - i) The operational debt claimed exceeded Rs. 1 crore, but the inclusion of invoices that fell due during the Section 10A period was barred, reducing the debt below the threshold required for CIRP initiation. ii) The alleged pre-existing dispute was not substantiated, and thus did not bar the CIRP initiation. iii) The application of Section 10A barred the inclusion of debts that arose during the specified period, and the remaining debt from the pre-Section 10A period did not meet the threshold limit under Section 4 of the Code. Appeal allowed.

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• FEMA

• 2025 (3) TMI 1141
  Offence under FEMA - appellant was involved and played vital role in preparing the forged documents submitted in the bank and was assisting the exporter in supplementing the goods in the consignments of M/s Prominent Exim - HELD THAT:- The facts on record does not show any material to implicate and prove a case for contravention of the provisions quoted above by the appellant Manoj Arjun Gore. He was Custom Clearance Agent and used to process papers for export of the materials. The commission for it was to be received by Vinod Chitalia to the extent of 40% of DEPB and was passing it to the appellant to the extent of 15%. The amount received for process of the export documents cannot make out a case for contravention of Section 3(b) and 3(d) of the Act of 1999. Respondents could not refer to the evidence to show that appellant made contravention to Section 3(b) and 3(d) of the Act of 1999. The penalty of Rs.4,00,000/- and Rs.6,00,000/- has been imposed on the appellant but finding no material to prove contravention of Section 3(b) and 3(d) of the Act of 1999 by the appellant, we cause interference in the impugned order and is set aside qua the appellant. Appeal is allowed with aforesaid.

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• 2025 (3) TMI 1140
  Contraventions of FEMA provisions - liability for the failure to realize and repatriate export proceeds under Section 7 and 8 of FEMA - Whether the appellants can be absolved of liability for the contraventions due to their retirement and the provisions of the Family Arrangement cum Compromise Deed and Indemnity? HELD THAT:- The Appellants therefore cannot escape the rigours of law with respect to their failure in realization of the pending export proceeds with respect to the 07 GRs totaling USD 3,93,094.63 as mentioned above. We observe that with respect to the 07 GRs for amount of USD 3,93,094.63, the statutory period of six months for realization and repatriation of the full export value of the goods exported had expired between 02.05.2000 to 13.08.2000, that is much before the date of resignation of the two Appellants w.e.f. 01.09.2000. The pleadings made with respect to the efforts of contacting the buyers through letters, faxes and telephones etc. to be regarded as reasonable steps cannot be accepted as observed in the preceding paragraphs of this Order. Appellants too have failed to produce material available to corroborate that they had taken effective steps to recover /repatriate the foreign exchange dues. We therefore, find that the resignation of the two Appellants from M/s Rosecut Diamonds would not absolve them from the charge of contraventions of FEMA r/w Section 42 of FEMA with respect to the 07 GRs totaling USD 3,93,094.63. Thus, we find that the two Appellants, have contravened Section 7 and 8 of the FEMA, 1999 read with Regulations 8, 9 and 13 of the FEMA Regulations, 2000 read with Section 42(1) of FEMA, 1999 with respect to the 07 GRs of the amount USD 3,93,094.63.] Penalty imposed for failure to realize and repatriate US $ 10,24,967.32 with respect to 19 GRs - Adjudicating Authority has imposed penalty of Rs, 1,00,00,000/- on Shri Ketan A Shah who was the Partner of the Export Firm throughout the relevant period for the aforementioned contraventions in terms of Section 42 (1) of FEMA. In view of these circumstances and factors, we reduce the penalty imposed on the two Appellants to Rs 10,00,000/- (Rs Ten Lakhs Only) each. Since, Sh. Mehul R Shah and Sh. Ashwin H Shah in Appeals have paid Rs. 5,00,000/- as pre-deposit of the penalty amounts, the amount of pre-deposit made by the two Appellants are to be adjusted against the aforementioned reduced penalty amounts.

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• Service Tax

• 2025 (3) TMI 1139
  Classification of services - Commercial Coaching and Training Services or not - training provided by M/s. Bombay Flying Club in Aircraft Maintenance Engineering - Doctrine of mutuality - HELD THAT:- There is a clear cut distinction is made out between acquirement of qualification to be declared eligible in completing certain course and the requirement of issue of licence to practice on the basis of the said qualification to enable a person to take up the profession accordingly. On the basis of said finding of the Hon ble Delhi High Court in M/S INDIAN INSTITUTE OF AIRCRAFT ENGINEERING VERSUS UNION OF INDIA ORS [ 2013 (5) TMI 592 - DELHI HIGH COURT] that has struck down the said clarification Circular of the CBEC issued on dated 11.05.2011, and this Tribunal has rendered consistent decisions on the issue which is also referred in the written submission filed by learned Counsel for the Appellant, as noted below, we are of the considered view that judicial precedent as set by Hon ble Delhi High Court and by this Tribunal with several decisions as passed in the case of Hindustan Institute of Aeronautics [ 2015 (2) TMI 140 - CESTAT NEW DELHI] , Star Aviation Academy [ 2016 (1) TMI 1376 - CESTAT NEW DELHI] and also by Hon ble Allahabad High Court in the case of Garg Aviations Ltd. [ 2014 (5) TMI 955 - ALLAHABAD HIGH COURT] on the issue has to be followed by parallel or subordinate judicial forums. The certificate issued by Appellant can be treated as certificate issued in accordance to law so as to cover it under exception clause of imparting commercial and educational training. The portion of statute regarding issue of certificate that was deleted from Section 65(27) with effect from 01/05/2011 was brought into force by way of its introduction through Notification No. 33/2011-ST, that covers the period of the order passed by the Commissioner (Appeals), also would meet the same result. Conclusion - i) Training provided by institutions issuing certificates recognized by law is exempt from Service Tax under Section 65(27) of the Finance Act, 1994. ii) The doctrine of mutuality exempts services provided by a club to its members from Service Tax, as there is no taxable transaction. Appeal allowed.

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• 2025 (3) TMI 1138
  Dismissal of appeal on the ground of being time barred - scope of definition of service as per Section 65B(44) of the Finance Act, 1994 - HELD THAT:- The order in original dated 04.09.2020 was apparently and admittedly received by the appellant on 10.09.2020. Hence the appeal would have been filed by 10.11.2020 (within two months of receiving order) by 10.12.2020 (within further period of 30 days of proviso to Section 85). But the appeal before Commissioner (Appeals) was filed on 22.08.2022. No doubt, Hon ble Supreme Court in suo moto writ petition No. 3 of 2020 decided on 10.01.2022 had ordered exclusion of time i.e. from 01.03.2020 to 28.02.2022) while calculating the period of limitation. But from the dates as mentioned above, it is clear that appeal filed before Commissioner (Appeals) on 28.02.2022 was still beyond the said excluded period as it was filed beyond a period of six months of expiry of said period. Hence, the appeal was filed even beyond the condonable period. Commissioner (Appeals) statutorily couldn t condone the delay of over a month beyond two months from date of receipt of order-in-original - It has held by Hon ble Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur [ 2007 (12) TMI 11 - SUPREME COURT] it is held that there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period. There is an apparent delay in filing the appeal before Commissioner (Appeals) - appeal dismissed.

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• 2025 (3) TMI 1137
  Reduction of penalty imposed u/s 78 of FA - Disallowance of CENVAT Credit - extended period of limitation - HELD THAT:- Once it was admitted by the learned counsel for the appellant during the course of hearing of the appeal before the Commissioner (Appeals) that the appellant was not disputing the confirmation of demand of service tax amounting to Rs. 1,07,52,629/-, it is not open to the appellant to contend in this appeal that confirmation should be set aside as the extended period of limitation could not have been invoked in the facts and circumstances of the case. It is clear from the order passed by the Commissioner (Appeals) that the only submission that was made was that the penalty should be reduced to 50% in view of the provisions of section 78 of the Finance Act. The Commissioner (Appeals) has recorded a categorical finding that the Books of Accounts did not reveal the transactions, and it is only the Tally software that was recovered from the premises of the appellant that mentioned the aforesaid amount. There is, therefore, no error in the finding recorded by the Commissioner (Appeals). Regarding the recovery of CENVAT credit, the contention raised on behalf of the appellant that the credit could not have been disallowed under the provisions of the CENVAT Credit Rules, 2002, as the CENVAT Credit Rules, 2004 were applicable has not been accepted by the Commissioner (Appeals) for the reason that the show cause notice clearly mentions the invocation of rule 14 of the CENVAT Credit Rules, 2004 and a mere mention of a wrong rule in the impugned order would have no effect. There is no error in the finding passed by the Commissioner (Appeals). Conclusion - The appellant have not been able to establish that the transactions in respect of which service tax was evaded was duly reflected in the specified books of account such as audited financial statements. The Tally software cannot be considered as a specified record for the purpose of attracting the proviso to Section 78. Appeal dismissed.

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• 2025 (3) TMI 1136
  Levy of service tax - lease agreements for fitouts constituted a deemed sale or service - renting of immovable property service or not - HELD THAT:- The Commissioner examined all the relevant factors required be examined for determining whether a deemed sale had taken place or not in the light of the decision of the Supreme Court in Bharat Sanchar Nigam Ltd [ 2006 (3) TMI 1 - SUPREME COURT] . The Commissioner noted that the goods were available for delivery and that the goods were also identifiable. The Commissioner also noted that the fitouts and equipments were leased out to TATA Consultancy Service and CMC Limited for the use and enjoyment to the exclusion of the right of ASF Buildcon. The Commissioner also noted that these fitments and equipments were essential to the use/occupation/ enjoyment of the leased premises. Conclusion - The lease agreement under consideration for fitouts would amount to a deemed sale contemplated under article 366(29A) of the Constitution and indeed ASF Buildcon had also paid VAT on this amount. Once a deemed sale took place, the issue of dominant nature as raised by learned authorized representative appearing for the department would not arise, and this fact has also been examined by the Commissioner in the impugned order. There is, therefore, no infirmity in the impugned order - The appeal filed by the department deserves to be dismissed and is dismissed.

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• 2025 (3) TMI 1135
  Classification of services - Erection, Commissioning and Installation Service or Works Contract service - suppression of facts or not - extended period of limitation - HELD THAT:- There has been a substantial litigation on the applicability of the various tax entries and in case of composite works contract the position got clarified only after the decision of the Supreme Court in Larsen Toubro [ 2015 (8) TMI 749 - SUPREME COURT] . Hence the non-payment/partial payment was due to prevalent confession about nature of such services where the transfer of goods is agreed for rendering service i.e. in case of Composite Contracts. In such cases the non-payment of tax cannot be called as intentional evasion nor suppression of facts. In view of this, demand of the period up to 31.03.2009 is hit by limitation. The SCN dated 21.10.2010 proposing the demand for the period 2005-2006 to 2009-2010 is held barred by time. No demand arising out of such show cause notice can be confirmed. Conclusion - Composite works contracts cannot be taxed under service categories meant for service contracts simpliciter. The impugned order confirming demand even for the abated amount is not sustainable also for the reason that demand is confirmed under ECIS whereas the service rendered was WCS - Appeal allowed.

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• Central Excise

• 2025 (3) TMI 1134
  Refund of unutilized CENVAT credit - closure of factory - rejection of refund on the ground that there was no export clearance made by the appellant - HELD THAT:- Since the appellant does not export the goods refund of CENVAT credit shall be allowed as he does not fullfill the conditions above. Further due to the absence of exports the ratio of export turnover to the total turnover cannot be determined. The Honorable Supreme Court UNION OF INDIA ORS. VERSUS VKC FOOTSTEPS INDIA PVT LTD. [ 2021 (9) TMI 626 - SUPREME COURT] held that, refund is not a constitutional right but a statutory right and therefore, the legislature, in its wisdom, and through statute, can decide how the refund is to be granted. The judgment of the Hon ble Bombay High court in GAURI PLASTICULTURE [ 2019 (6) TMI 820 - BOMBAY HIGH COURT ], discusses the legal issues and the judgments cited by the appellant, comprehensively. It thus merits to be followed. Thus, it is concluded that rule 5 of CCR read with N/N. 05/2006-CE(N.T.), as it then stood, i.e. prior to 01.04.2011, does not permit the refund of credit which is not on account of the export of goods. Section 11B(2)(c) of CEA is to be read with the rules or notification issued under the Act, and would hence necessarily involve Rule 5 of CCR and N/N. 05/2006-CE(N.T.). The refund claim of the appellant has thus been correctly rejected in the impugned order. Conclusion - The legal framework, as interpreted by the relevant precedents, did not support the appellant s claim for a refund of unutilized CENVAT credit in the absence of export activities. Appeal dismissed.

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• 2025 (3) TMI 1133
  Process amounting to manufacure or not - activities of cutting / slitting of H.R. Coils, etc. - applicability of C.B.E.C. Circular No. 811/08/2005-CX. dated 02.03.2005 - procedure laid down in Rule 3(4) (b) of the CENVAT Credit Rules, 2004 followed or not - non-imposition of penalty under the provisions of Rule 15(1) of CENVAT Credit Rules, 2004 - Extended period of limitation - suppression of facts or not. Process amounting to manufacture - HELD THAT:- The Respondent are engaged in cutting/slitting of H.R.Coils and conversion of the same to M.S. Plates. The said process does not amount to manufacture. Since the process does not amount to manufacture, the Respondent took recourse of Rule 16 of the Central Excise Rules, 2002, i.e. they used to bring the H.R. Coils under Rule 16(1) of the said rules and availed CENVAT Credit in terms of the said rules. After the conversion i.e., cutting/slitting of the goods, the resultant products, i.e. M.S. Plates were removed by debiting an amount as prescribed under Rule 16(2) of the said rules. This procedure adopted by them was known to the Department as the said procedure was advised by the jurisdictional Assistant Commissioner. Extended period of limitation - suppression of facts or not - HELD THAT:- There is no suppression of facts with intention to evade the duty established against the Respondent in this case. Hence, the ld. adjudicating authority has rightly held that the extended period is not invocable in this case and dropped the demand raised in the notices by invoking extended period of limitation. Non-imposition of penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 - HELD THAT:- In the instant case, the Respondent has paid an amount equal to the credit taken while clearing the goods after processing. The Department has accepted the equal amount of credit paid by the Respondent under Rule 16(2) of the Central Excise Rules, 2002. In a catena of decisions it has been held that though the process does not amount to manufacture, credit on inputs cannot be denied as the manufacturer paid duty on the final products. The Respondent has rightly availed credit on the inputs and paid an amount equal to the credit taken at the time of clearance of the goods as provided under Rule 16(2) of the Central Excise Rules, 2002. Thus, we observe that the allegation of irregular availment of credit against the Respondent does not survive. Once, the credit availed by the Respondent is found to be regular, there is no irregularity in utilising the same to discharge the payment as per Rule 16(2) of the Central Excise Rules. Since the availment of credit and subsequent utilisation of the same for paying the amount as per Rule 16(2) of the Central Excise Rules,2002 are found to be regular, no penalty imposable on the Respondent. Consequently, there are no infirmity in the impugned order passed by the Ld. adjudicating authority. Conclusion - The duty paid by the appellants has been accepted by the department which is admittedly more than the CENVAT credit availed by the appellants. The appellants are not required to reverse the credit. Appeal of Revenue dismissed.

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