TMI Tax Updates - e-Newsletter
March 27, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Evaluating the 2025 Finance Bill: Key Changes and Their Impact

  Indian Laws:

Articles

1. Rule 86B of CGST Rules, 2017 – Restriction on ITC Utilization

   By: Tushar Malik

2. SCOMET GAER – ONLY FOR RELATED PARTIES AND TRUSTED ENTITIES!!

   By: Shilpi Jain and Vinay Kumar

3. PROVISIONS ON OFFENCES UNDER GST LAW (PART-3)

   By: Dr. Sanjiv Agarwal

4. Understanding the Forms Required for Pvt. Ltd Annual Filing: AOC-4, MGT-7

   By: Ishita Ramani

5. REJECTION OF APPLICATION FOR LISTING OF SHARES

   By: DR.MARIAPPAN GOVINDARAJAN

6. Roof Top and Vertical Gardening: Solving Hunger and Climate Change Simultaneously.[Nurture Nature and Environment through Roof Top and Vertical Gardening]

   By: YAGAY andSUN

7. Augmented Reality (AR) and Virtual Reality (VR): Enhancing Safety in Chemical Sector Plant and Machinery Design in India

   By: YAGAY andSUN

8. Industry 4.0: How It Will Enhance Productivity, GDP, and Exports of India.

   By: YAGAY andSUN

9. Interplay Between Smart Factories and Export Growth.[Advance Technologies can rewrite India's Dominance in Manufacturing Sector].

   By: YAGAY andSUN

10. Industry 4.0: How It Will Enhance Productivity, GDP, and Exports of India

   By: YAGAY andSUN

11. How Big Data and Data Science Can Augment India’s Foreign Trade. [Using Advance Technologies for the Growth of Exports].

   By: YAGAY andSUN

12. Types of CIF[INCOTEMRS 2020]

   By: YAGAY andSUN

13. Types of FOB [INCOTERM 2020]

   By: YAGAY andSUN

News

1. Stubble burning a national concern, committed to address it, says FM Cheema

2. Punjab launches scheme to install 2.50 lakh street lights

3. AAP, BJP trade barbs over Delhi budget

4. Goa budget announces SGST reimbursement for industries investing over Rs 5,000 crore

5. Stormy Maharashtra budget session ends

6. Parliamentary panel voices concern over budget cuts for NASA-ISRO mission to ISS

7. Punjab FM announces Rs 10 lakh health cover for all in Rs 2.46 lakh cr budget for FY26

8. Himachal assembly passes state budget for 2025-26

9. SC directs FRI to relook at budget for action plan for enhancing Delhi green cover

10. Sikkim CM presents Rs 16,196 cr budget for 2025-26

11. At Rs 64,008 crore, Maharashtra's gender budget provision constitutes 8.45 per cent of total outlay

12. Punjab Budget FY26: Rs 5,598 cr for health sector, drug problem in focus

13. Atishi accuses Delhi govt of curtailing budget debate, demands extended discussion

14. Punjab govt's Rs 2.36 lakh cr budget focuses on drug menace, health sector

15. Ulhasnagar civic body approves Rs 988.72 cr budget; infra, environment key focus areas

16. UDF, CPI(M) slam ED over clean chit to BJP in Kodakara black money case

17. 3rd Session of India-Uganda Joint Trade Committee held in New Delhi

18. UP juice seller shocked after receiving Rs 7.79 crore income tax notice

19. Address by Shri Sanjay Malhotra, Governor, Reserve Bank of India at the Private Sector Collaborative Forum of the Financial Action Task Force (FATF), March 26, 2025, Mumbai

20. Last Few Days to Avail Tax Benefits

21. RBI announces MPC schedule for FY26; first rates decision on April 9

22. US adds Chinese tech firms to its export control list, says they sought US knowhow for military use

23. Ministry of Corporate Affairs to Host Another Dynamic Candidate Open House for PM Internship Scheme

24. Maharashtra govt has shelved proposal to levy 6 per cent tax on high-end EVs: CM

25. List of Government Amendments to Finance Bill, 2025 were considered and adopted while Passing the Bill as on 25-3-2025

26. CBDT notifies amendments in Income-tax Rules, 1962 to expand the scope of safe harbour rules

27. Medium Term and Long Term Government Deposit (MLTGD) components of Gold Monetisation Scheme (GMS) discontinued w.e.f. 26th March, 2025, based on performance of GMS and evolving market conditions

28. RRBs achieve a record ₹7,571 crore profit in FY 2023-24; key financial indicators like CRAR, deposits, NPAs CD Ratio show steady improvement

29. Government Strengthens financial assistance for Loan Schemes for Entrepreneurs, Farmers, Small Businesses and startups

30. CCI approves acquisition of Athaang Devanahalli Tollway Private Limited, Athaang Jammu Udhampur Highway Private Limited and Quazigund Expressway Private Limited by Cube Highways Trust and Cube Highways and Infrastructure V Pte. Ltd.

31. CCI approves the proposed combination involving, inter alia, Maple Infrastructure Trust (MIT); CDPQ Infrastructures Asia III Inc. (CDPQ Asia); Maple Highways Pte. Ltd.; 360 ONE Private Equity Fund and certain road assets of the Ashoka Buildcon group

32. Competition Commission of India (CCI) approves the acquisition of 100% equity shareholding in 11 road special purpose vehicles owned by Ashoka Concessions Limited and Ashoka Buildcon Limited by Epic Concesiones 2 Private Limited

33. Government has Launched Multiple Digital Initiatives for Transparency and Efficiency, Reducing compliance burden in corporate filings

Notifications

Customs

1. 07/2025 - dated 25-3-2025 - ADD

Seeks to levy anti-dumping duty on imports of 'Acrylic Solid Surfaces' imported from China PR for a period of 5 years, on the recommendations of DGTR

GST - States

2. 09/2024 – State Tax (Rate) - dated 22-3-2025 - Jharkhand SGST

Amendment in Notification No. 13/2017- State Tax (Rate), dated the 29th June, 2017

3. 08/2024 – State Tax (Rate) - dated 22-3-2025 - Jharkhand SGST

Amendment in Notification No. 12/2017- State Tax (Rate), dated the 29th June, 2017

4. 07/2024 – State Tax (Rate) - dated 22-3-2025 - Jharkhand SGST

Amendment in Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017

5. 06/2024 – State Tax (Rate) - dated 22-3-2025 - Jharkhand SGST

Amendment in Notification No. 4/2017- State Tax (Rate), dated the 29th June, 2017

6. 05/2024 – State Tax(Rate) - dated 22-3-2025 - Jharkhand SGST

Amendment in Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017

Income Tax

7. 21/2025 - dated 25-3-2025 - IT

Income-tax (Sixth Amendment) Rules, 2025 - Safe Harbour Rules for International Transactions - Meaning of "core auto components" u/r 10TA, Limit of Eligible International Transaction u/r 10TD extended from 2 crore or 3 three crores, and U/s 10E regarding procedure; amended.

Circulars / Instructions / Orders

GST - States

1. F.17 ( ) ACCT/GST/20/286 - dated 20-2-2025

Regarding guidelines for virtual hearing

Highlights / Catch Notes

GST

• Assignment of MIDC Land Leasehold Rights to Third Party for Lump Sum Payment Not Subject to GST

  Case-Laws - HC : The HC ruled that assignment of leasehold rights in MIDC land along with buildings to a third party for lump sum consideration is not subject to GST. Following Gujarat HC's precedent in Gujarat Chambers of Commerce case, the court determined that such transactions constitute transfer of benefits arising from "immovable property," with the assignee becoming the new lessee in place of the original allottee. The court held that Section 7(1)(a) of the GST Act read with clause 5(b) of Schedule II and clause 5 of Schedule III does not apply to such transactions, exempting them from GST under Section 9. The HC stayed adjudication of the Show Cause Notice dated November 13, 2024.
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• Refund Claims Cannot Be Stalled Through Invalid Show Cause Notices Lacking Specific Fraud Allegations Under Section 74

  Case-Laws - HC : The HC held that the Show Cause Notice (SCN) was invalidly issued as it merely alleged wrongful refund claims without substantiating fraud or misrepresentation. Following precedents in Parity Infotech and HCL Infotech Ltd., the Court determined that invoking the extended limitation period under Section 74 requires specific allegations of fraud, misstatement, or suppression of facts, not merely mechanical reproduction of statutory language. The Court found the SCN was issued as a circuitous means to avoid consequences from previous litigation between the parties, and that refund claims cannot be legitimately stalled through such tactics. The petition was accordingly disposed of in the petitioner's favor.
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• GST Registration Cancellation Reversed: Taxpayer Given 45 Days to File Returns and Pay Outstanding Amounts

  Case-Laws - HC : The HC disposed of the petition regarding cancellation of the petitioner's GST registration due to non-filing of statutory returns for six continuous months. Following precedent established in Tvl.Suguna Cutpiece Center's case, the court permitted the petitioner to restore their registration by filing outstanding returns within 45 days, along with payment of defaulted tax, applicable interest, late fees, and fines. The petitioner had expressed willingness to fulfill these obligations as required under the GST Act. The court consistently applies this remedy in similar cases, allowing taxpayers an opportunity to rectify compliance failures rather than maintaining registration cancellations.
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• Petition for loan release and challenge to alleged illegal seizure withdrawn with liberty to pursue other remedies

  Case-Laws - HC : The HC dismissed a petition as withdrawn upon petitioner's request, with liberty as prayed for. The petition had sought release of a sanctioned loan and alleged illegal seizure without providing an opportunity to be heard, claiming violation of principles of natural justice. Respondent No.2 contended the petition constituted misuse of legal process and argued that the prayer for directions to the GST-Department lacked merit. Though the respondent advocated for dismissal on substantive grounds, they did not object when petitioner's counsel made an uncontested request to withdraw rather than pursue the matter on its merits.
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Income Tax

• Penalty Under Section 271(1)(c) Invalidated Due to Ambiguous Show Cause Notice Lacking Specific Charge Details

  Case-Laws - HC : The HC held that the penalty imposed under section 271(1)(c) was invalid due to a defective show cause notice issued under section 274. Following precedents established in CIT v. SSA's Emerald Meadows and CIT v. Manjunatha Cotton & Ginning Factory, the court determined that the notice failed to specify whether the charge against the assessee was for concealment of income particulars or furnishing inaccurate particulars. As the notice contained blank columns without furnishing any particulars, the court concluded that the notice was bad in law, rendering the entire penalty proceedings vitiated. The ruling was decided in favor of the assessee.
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• Income Tax Reassessment Notices Quashed as Jurisdictional Officers Lack Authority Under Section 151A

  Case-Laws - HC : The HC quashed reassessment notices issued by Jurisdictional Assessing Officers (JAOs), ruling they lacked jurisdiction under Section 151A of the Income Tax Act. The court held that Faceless Assessing Officers (FAOs) have exclusive jurisdiction for notices under Sections 147 and 148, as mandated by the CBDT Notification dated 29.03.2022. The court emphasized that concurrent jurisdiction between JAOs and FAOs would defeat the statutory purpose of Sections 151A and 144B. The algorithmic random allocation system must be strictly followed to maintain the integrity of the faceless assessment regime. Liberty was granted to respondents to issue fresh notices through proper FAO channels in compliance with the notification.
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• Income Tax Reassessment Notice Quashed: No Valid Grounds to Reopen Case After Four Years Under Section 148

  Case-Laws - HC : The HC quashed the reassessment notice issued under section 148 after expiry of four years, finding no valid "reason to believe" to reopen the assessment. The Court noted that the assessee had properly paid taxes under section 115JB, disclosed book profits, and had previously provided all requested information regarding cash credits and sundry creditors during the original assessment proceedings. The AO had examined these specific issues and completed assessment under section 143(3) after being satisfied with the information furnished. Having already scrutinized these matters during regular assessment, the AO lacked jurisdiction to reopen the same issues, rendering the impugned notice and subsequent proceedings unsustainable.
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• Improper Case Transfer Without Section 127 Notice and Denial of Video Hearing Leads to Assessment Order Quashed

  Case-Laws - HC : HC quashed the assessment order where the case was transferred from NFAC to ACIT Cent-1, Rajkot without proper notice under s.127. The petitioner was not informed about the transfer except through a mention in the show-cause notice, and was denied personal hearing through video conferencing. The court rejected the respondent's contention that video conferencing was unavailable after transfer to Central Circle, finding this violated principles of natural justice. The matter was remanded to the AO for a fresh de-novo assessment after providing proper hearing opportunity to the petitioner.
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• Revisional Powers Under Section 264 Cannot Be Limited to Correcting Mistakes in Assessment Orders

  Case-Laws - HC : The HC quashed and set aside an order passed under s.264 of the Income Tax Act, remanding the matter for fresh determination. The Court held that notice under s.148 was never served upon the petitioner's late husband, preventing the Assessing Officer from validly assuming jurisdiction. The Court found that the Commissioner had incorrectly limited the scope of revisional powers under s.264 to mere correction of mistakes in the assessment order. The HC clarified that s.264 confers wide powers on the Commissioner to consider the entire assessment proceedings, conduct inquiries, and pass appropriate non-prejudicial orders. The Commissioner's truncated interpretation of s.264 was deemed contrary to the statutory provision itself.
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• Assessment Under Section 153A Requires Incriminating Evidence Only for Unabated Returns, Third-Party Statements Need Cross-Examination

  Case-Laws - AT : ITAT allowed Revenue's appeal, setting aside CIT(A)'s order that had deleted additions made by AO under s.153A. The Tribunal clarified that for assessment years abated as of the search date (02.05.2018), the AO could assess total income based on any material, not just incriminating evidence found during search. CIT(A) had erroneously treated the assessments as unabated. However, ITAT directed deletion of additions related to depreciation on plant/machinery and sub-contract payments, as these were based on third-party statements without allowing cross-examination or providing adequate opportunity for rebuttal to the assessee. The principle that third-party statements require corroborative evidence and opportunity for cross-examination was upheld.
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• Assessment Order Quashed: Section 153C Proceedings Required Instead of Section 143(3) for Years Within Search Block Period

  Case-Laws - AT : The ITAT quashed the assessment order passed under section 143(3) dated 27/03/2015. The Tribunal held that since the satisfaction note for initiating proceedings under section 153C was recorded on 10/10/2024, the assessment year relevant to the search was AY 2015-16, with the preceding six years being AY 2009-10 to 2014-15. As the impugned AY 2013-14 fell within this block period, the assessment should have been completed under section 153C rather than section 143(3). Following the precedent established in Jasjit Singh (affirmed by Delhi HC), the ITAT allowed the assessee's appeal and quashed the improperly framed assessment.
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• Payments to Deloitte Global for Brand and Technology Services Not Royalty Under India-UK DTAA Article 13(3)

  Case-Laws - AT : The ITAT dismissed the Revenue's appeal, holding that payments made by the assessee to Deloitte Global Services Pvt. Ltd. for Global brand, Global Communications, and Global technology/Knowledge Management services do not constitute royalty under Article 13(3) of the India-UK DTAA. Following precedent established in the assessee's own case for A.Y. 2018-19 and 2019-20, the Tribunal determined that these payments fall outside the scope and definition of 'royalty' under Article 13(1) of the DTAA. Consequently, the assessee was not required to deduct tax at source under section 195 while making these payments to DGSHL.
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• Expenses for Aborted IPO Deductible Under Section 37, Following Nimbus Communication Precedent

  Case-Laws - AT : The ITAT ruled that expenses related to an aborted Initial Public Offering (IPO) are deductible under s.37 of the Income Tax Act, following the precedent set in Nimbus Communication Ltd. While share issue expenses are generally capital in nature and non-deductible under s.37 (except as permitted under s.35D), the Tribunal distinguished between completed and abandoned capital projects. The ITAT held that aborted share issue expenses qualify for business deduction, setting aside the CIT(A)'s finding and directing the Assessing Officer to delete the addition to the extent related to the assessee's equity base increase, excluding expenses pertaining to the Offer For Sale (OFS) by promoters. The assessee's appeal was allowed.
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• CIT's Revision Order Quashed: PCIT Failed to Independently Examine Records Beyond Audit Objections Under Section 263

  Case-Laws - AT : The ITAT quashed the CIT's revision order under section 263, finding it was improperly based solely on audit objections without independent examination of records. The Tribunal determined that the PCIT failed to establish how the AO's view was erroneous or prejudicial to revenue interests. The ITAT ruled on multiple grounds in the assessee's favor: (1) ESI/PF disallowance was improper as the AO had verified the issue was merely a grouping error; (2) excess stock was correctly treated as business income, not under section 69 read with 115BBE; (3) section 14A disallowance was invalid as the 2022 amendment was prospective; and (4) section 10AA deduction was proper as the AO had examined and verified the claim. The Tribunal emphasized that section 263 does not confer unlimited revisionary powers to the PCIT.
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Customs

• Customs Authority Launches NIRYAT SAMVAAD Monthly Forum for Personalized Exporter Grievance Resolution Through Direct Dialogue

  Circulars : JNCH has established NIRYAT SAMVAAD, a specialized monthly forum for addressing individual exporter grievances, supplementing its existing e-SAMADHAAN framework. Unlike PTFC and CCFC which handle industry-wide issues, this initiative provides a dedicated platform for personalized grievance redressal through direct dialogue with exporters. Sessions will be held on the second Wednesday of each month in hybrid mode, with grievances to be submitted via email to apmainexp@jawaharcustoms.gov.in by the 5th of each month. The Appraising Main (Export) section will serve as the nodal administrative unit. This mechanism aims to enhance trade facilitation and ease of doing business for the export community.
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• Camera Modules for Mobile Phones: CBIC Clarifies 10% BCD Eligibility Under Notification No. 57/2017-Customs

  Circulars : CBIC has clarified the scope of camera modules for cellular mobile phones eligible for concessional 10% BCD under Notification No. 57/2017-Customs. Camera modules may include multiple cameras, lens, sensor, FPCB Assembly, bracket/holder, connectors, and mechanical parts that provide structural stability and protection. The essential character test under GRI Rule 3(b) applies - components that do not add functionality beyond a camera's primary purpose but merely provide strength or protection are considered part of the camera module when imported as a complete assembly. Individual components imported separately remain subject to applicable BCD rates. This clarification addresses DRI's concerns about classification of camera modules with chassis brackets.
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• Anti-Dumping Duty Imposed on Chinese Roller Chains at 6.34% of CIF Value with Specific Manufacturer Exemptions

  Notifications : Following a DGTR investigation that found dumping of Roller Chains from China PR causing material injury to domestic industry, the MoF has imposed anti-dumping duty on these products falling under tariff item 7315 11 00. The duty structure exempts specified manufacturers (Zhejiang Bakord Machinery Co. Ltd and Jiangxi Hengjiu Chain group companies) while imposing 6.34% duty on CIF value for all other Chinese manufacturers. The duty will remain effective for five years from publication date unless revoked, superseded or amended earlier. The applicable exchange rate for duty calculation will be determined as per section 14 of the Customs Act, 1962.
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• Customs Notification Designates Navi Mumbai and Noida International (Jewar) as New Customs Airports Under Section 7 of Customs Act

  Notifications : CBIC amended Notification No. 61/94-Customs (N.T.) dated November 21, 1994, exercising powers under s.7(1)(a) read with s.7(2) of the Customs Act, 1962. The amendment designates two additional customs airports: Navi Mumbai in Maharashtra (serial no. 11(g)) and Noida International (Jewar) in Uttar Pradesh (serial no. 16(h)). Both locations are appointed for "unloading of imported goods and the loading of export goods or any class of such goods." This expands the network of customs-designated airports to facilitate international trade operations in these regions.
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• Customs Must Release Personal Jewelry Seized at Airport After Unjustified Detention Without Show Cause Notice

  Case-Laws - HC : HC ordered the release of personal jewelry (318g and 597g) seized from Petitioners at IGI Airport upon their return from the USA. The court determined the items were personal effects of Indian citizens returning after attending a family event abroad. Despite the detention occurring in July 2024, no show cause notice had been issued by customs authorities. The court found no justification for continued detention and directed release of the jewelry within four weeks to Petitioners or their authorized representative, subject to verification, with no storage charges to be collected by Customs. Petition disposed of.
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• Customs officials must return seized devices after copying data and provide list of relied upon documents in smuggling cases

  Case-Laws - HC : The HC directed the return of electronic devices seized from Petitioners in a gold smuggling case, after the Respondent copies all data. If any downloaded documents are used in show cause proceedings or prosecution complaints, these Relied Upon Documents must be listed and provided to Petitioners. In exchange, Petitioners agreed not to raise objections regarding non-fulfillment of requirements under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023 and Section 138C of the Customs Act, 1962. The Court recommended this approach be adopted by all Customs Commissionerates to avoid prolonged retention of devices which may become outdated, while ensuring data remains accessible to investigation officers through proper copying and server storage.
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• License Revocation for Customs Broker Overturned as Technical Irregularity Didn't Warrant Severe Penalties Under Regulations 10(d) and 10(e)

  Case-Laws - AT : CESTAT held that the revocation of the appellant's Customs Broker License and forfeiture of security deposit were unjustified. The Tribunal found that the alleged breaches of regulations 10(d) and 10(e) of Customs Broker Licensing Regulations, 2018 were not established by the facts presented. The failure to file declarations regarding drawback claims was deemed a technical irregularity, particularly as customs authorities had not noticed it themselves. The magnitude of potentially ineligible drawback claims across seven shipping bills did not warrant the severe penalties imposed. The Tribunal set aside the license revocation and security deposit forfeiture while maintaining the penalty under regulation 18, disposing of the appeal accordingly.
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• Customs Valuation: Rejection of Declared Value Must Be Followed by Proper Substitute Value Determination Under Rules 5-8

  Case-Laws - AT : CESTAT set aside the order rejecting the declared value of imported cloves from Indonesia/Tanzania. While the importer failed to furnish evidence supporting lower valuation, necessitating assessment under rule 10A of Customs Valuation Rules, 1988, the tribunal found that authorities failed to establish a proper substitute value within the framework of rules 5-8. The rejection of declared value must be followed by determination of an acceptable substitute value according to the prescribed methodology. Without establishing such substitute value, the revision of the declared value lacked legal authority. The tribunal determined that rule 8's flexibility was improperly applied, as the 19 bills of entry referenced did not conform to the "surrogate value" scheme in rule 5. Appeal allowed.
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• Customs Broker's License Revocation Overturned: Single Regulatory Breach Under Regulation 10(n) Doesn't Warrant Complete License Cancellation

  Case-Laws - AT : CESTAT upheld a customs broker's appeal against license revocation, finding the licensing authority incorrectly applied regulations 10(d) and 10(e) of Customs Brokers Licensing Regulations, 2018. The Tribunal confirmed violation of regulation 10(n) as the broker failed to properly verify the exporter's premises, conducting only cursory document checks while the declared address showed no business operations. The Tribunal determined that complete revocation of license and security deposit forfeiture was disproportionate to the single regulatory breach. The penalty of Rs. 50,000 was maintained as sufficient sanction, while the license revocation and security deposit forfeiture were set aside.
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• Rectification Under Section 154 Required for Error in Finalizing Shipping Bills Based on DMT Instead of WMT

  Case-Laws - AT : CESTAT allowed the appeal against denial of rectification under Section 154 of the Customs Act, 1962, holding that the accidental omission by the assessing officer in finalizing shipping bills by determining "Fe" content on DMT instead of WMT basis constituted an error requiring rectification. Following precedents in Sesa Goa Limited and Vedanta Limited cases, the Tribunal ruled that "omission" should not be interpreted restrictively but should encompass errors arising from such omissions. The adjudicating authority was directed to rectify the finalization of provisional assessment for calculation of "Fe" content on WMT basis per the Supreme Court's decision in Gangadhar Narsingdas Aggarwal and pass a speaking order within one month.
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• Failure to Consider Judicial Precedents When Finalizing Shipping Bills Constitutes Rectifiable Clerical Error Under Section 154

  Case-Laws - AT : The CESTAT set aside the impugned order, ruling that the failure to consider relevant judicial pronouncements and circulars while finalizing Shipping Bills constituted a clerical mistake/omission rectifiable under Section 154 of the Customs Act, 1962. Following precedent in Sesa Goa Limited [2010], the Tribunal held that the adjudicating authority's failure to take cognizance of the Supreme Court decision and Circular dated 17.02.2012 when determining 'Fe' content on DMT instead of WMT basis was an error arising from accidental omission. The authority must rectify this error under Section 154 and provide consequential benefits to the appellant by determining 'Fe' content on WMT basis in accordance with law.
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DGFT

• GST E-Invoices May Become Mandatory for Claiming Deemed Export Benefits Under Foreign Trade Policy 2023

  Circulars : DGFT proposes mandatory use of GST e-invoices received through GSTN-DGFT integration for claiming deemed export benefits under FTP 2023. The initiative aims to enhance transparency, streamline processes, and improve regulatory compliance through automated data exchange between GSTN and DGFT BO portal. This would facilitate validation of eBRCs and verification of deemed export transactions. Stakeholders are requested to submit comments by April 2, 2025, for consideration under Para 1.07A and 1.07B of FTP 2023. The proposal is part of broader efforts to digitize and integrate trade-related documentation systems.
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IBC

• Slum Rehabilitation Authority's Developer Termination Upheld Despite Insolvency Protection Under Section 238

  Case-Laws - HC : The HC upheld SRA's termination of petitioner's appointment as developer of a slum rehabilitation project due to failure to pay transit rent arrears and complete the project within stipulated time. While IBC provisions generally have overriding effect under Section 238, the court determined that Slum Act's mandate for timely rehabilitation is not inconsistent with IBC objectives but furthers them. The obligation to pay transit rent was deemed a statutory duty, not merely contractual. The court found SRA's invocation of Section 13(2) lawful and justified, though noted a procedural deficiency in not granting the revived petitioner a final opportunity to clear dues. The resolution plan under IBC does not override obligations under the Slum Act except for financial claims arising before insolvency commencement.
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• Operational Creditor's Section 9 Application Rejected as Pre-Existing Dispute Evidenced Through Prior Correspondence Under Section 9(5)(d)

  Case-Laws - AT : The NCLAT allowed the appeal against admission of a Section 9 application, finding a clear pre-existing dispute between the parties. The Tribunal held that the corporate debtor's reply dated 28.01.2020 to the demand notice constituted a valid notice of dispute under Section 9(5)(d). The Adjudicating Authority erred by dismissing this reply despite evidence of disputes predating the demand notice, including correspondence and the corporate debtor's 21.08.2019 response to a legal notice. Following Mobilox Innovations precedent, the NCLAT concluded that the Section 9 application should not have been admitted as the dispute was not moonshine but substantiated by relevant materials on record.
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• Debenture Holders' IBC Section 7 Petition Rejected: Lacked Majority Resolution, Time-Barred, and Violated Debenture Trust Deed

  Case-Laws - AT : The NCLAT rejected Section 7 proceedings initiated by debenture holders against a corporate debtor on multiple grounds. The Tribunal determined that the proceedings were procedurally defective as they failed to comply with conditions in the Debenture Trust Deed, which required authorization by majority resolution of debenture holders before the Debenture Trustee could initiate insolvency proceedings. Additionally, the application was time-barred as it was filed on September 7, 2023, well beyond the limitation period that expired on September 30, 2022, even after accounting for COVID-19 extensions granted by the SC. The NCLAT also found the proceedings were initiated without valid authority and potentially malicious, violating Section 65 of the IBC.
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Indian Laws

• Homebuyer Not a "Consumer" Under Consumer Protection Act Due to Lack of Contract Privity

  Case-Laws - SC : The SC held that the respondent did not qualify as a "consumer" under the Consumer Protection Act, 1986, due to lack of privity of contract with the appellant. The appellant's liability, if any existed, was limited to what was stipulated in the Home Loan Agreement with the borrower, and specifically to satisfying the complainant-respondent's dues with ICICI Bank (quantified at Rs.17,87,763/- and not exceeding Rs.23,40,000/-). The NCDRC erred in holding the appellant liable for Rs.31,00,000/-. Additionally, the NCDRC failed to properly address the significant delay in filing the complaint (filed in 2018 for a cause of action from 2008) by neither providing reasons nor issuing a formal order condoning the delay. Appeal allowed.
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PMLA

• Property Attachment Exceeding Seized Gold's Value Under PMLA Deemed Unjustified Under Sections 135(1)(a)(i)(A) and 135(1)(b)(i)(A)

  Case-Laws - AT : The AT ruled that the ED's attachment of properties beyond the value of seized gold was unjustified. The scheduled offences under Customs Act Sections 135(1)(a)(i)(A) and 135(1)(b)(i)(A) related solely to foreign gold valued at 13.56 crores, which was already seized by DRI and subsequently attached by ED. Following Vijay Madanlal Choudhary, the ED could not presume additional scheduled offences without evidence, nor attach property exceeding the value of identified proceeds of crime. While unexplained investments might warrant action under tax laws, PMLA proceedings cannot be initiated based on mere assumptions that assets exceeding known income sources derived from scheduled offences. The appeal was disposed of accordingly.
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Service Tax

• Appeal Dismissed After 30-Month Delay Exceeding Statutory Time Limit Under Section 35 of Central Excise Act

  Case-Laws - AT : The CESTAT dismissed the appeal as it was filed after more than 30 months from receipt of the Order-In-Original, far exceeding the statutory time limit. Even considering the benefit of the Supreme Court's order dated 10.01.2022 in Suo Motto Writ Petition, the appeal remained significantly delayed. The Commissioner (Appeals) lacked authority to condone delays beyond 30 days as per Section 35 of the Central Excise Act, following the Supreme Court's precedent in Singh Enterprises. The Tribunal rejected the appellant's explanation for delay, finding insufficient cause shown for the extraordinary delay, and upheld the Commissioner (Appeals)' decision to dismiss the appeal for being time-barred under Section 85(3A) of the Finance Act, 1994.
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• Service Tax Demand Set Aside: Software Royalty Payments Not Taxable as Business Consultancy Services Under Reverse Charge Mechanism

  Case-Laws - AT : CESTAT set aside the service tax demand against the appellant, finding that transactions with UCT constituted sales rather than Business Auxiliary Services and were not taxable under the Reverse Charge Mechanism. The Tribunal determined that using third-party software with royalty payments did not constitute importation of Management or Business Consultancy Services. Additionally, the adjudication order was invalidated for being issued beyond the statutory time limit without justification for the delay, following precedents established in Kopertek Metals and IDFC First Bank Ltd. The CESTAT emphasized that when the adjudicating authority fails to provide reasons why an order could not be passed within the mandatory timeframe specified in Section 73(4B) of the Finance Act 1994, such delay is fatal to the order's legality. Appeal allowed.
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• Assignment of Loan Income Not Taxable as Recovery Service Under Service Tax Rules

  Case-Laws - AT : CESTAT dismissed the Revenue's appeal, ruling that the respondent's "income from assignment of loan" (excess interest spread between borrower payments and assignee yield) is not taxable as a recovery service. The Tribunal determined that when the respondent sold/assigned loan portfolios to banks/financial institutions, they continued collecting payments from borrowers as the original lender, not as a recovery agent. While the respondent paid service tax on nominal fees received under separate collection agency agreements, the interest income retained was properly exempt under Rule 6(2)(iv) of the Service Tax (Determination of Value) Rules, 2006. The Tribunal cited its previous ruling in Sundaram Finance Ltd., confirming these transactions were principal-to-principal with no service element.
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Central Excise

• Almanac and Teacher Planner Classified Under Chapter 48 as Writing Materials Despite School-Specific Content

  Case-Laws - AT : CESTAT upheld that Student Almanac and Teacher Planner are properly classifiable under Chapter 48 (Articles of Paper/Paperboard) rather than Chapter 49, as they primarily serve as writing materials with 90% blank space despite containing school-specific information. The Tribunal confirmed denial of exemption for waste and scrap under N/N. 27/2011-CE. However, CESTAT ruled in favor of the assessee regarding limitation period, finding no evidence of intentional duty evasion or fact suppression, thus setting aside demands for the extended period. Penalties under Section 11AC were correctly removed, and the penalty imposed on the Director under Rule 26 was appropriately set aside as there was neither goods confiscation nor wrongful Cenvat credit claims. Appeal dismissed.
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Case Laws:

• GST

• 2025 (3) TMI 1238
  Dismissal of appeal preferred by the petitioner, dismissed as being beyond the limitation - case of petitioner is that while passing the order under section 73 of the GST Act, no hearing was granted - HELD THAT:- Standing Counsel, based upon the instructions, does not deny the fact that any date for hearing was fixed. The order impugned also does not reflect any hearing being granted to the petitioner. Finding the same to be violative to Section 75(4) of the GST Act as well as in violation of Article 14 of the Constitution of India, the orders impugned cannot be sustained and are quashed. The matter is remanded to pass fresh order in accordance with law after giving an opportunity of hearing to the petitioner. Petition allowed by way of remand.

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• 2025 (3) TMI 1237
  Levy of GST - assignment of leasehold rights to a third party of a plot of land allotted by the Maharashtra Industrial Development Corporation (MIDC) to the original lessee (i.e. the assignor) along with the buildings constructed thereon, on payment of a lump sum consideration by the assignee to the assignor - HELD THAT:- The Division Bench of the Gujarat High Court in Gujarat Chambers of Commerce and Industry Others V/S Union of India Others [ 2025 (1) TMI 516 - GUJARAT HIGH COURT] has taken a view that the assignment by sale or transfer of leasehold rights of the plot of land allotted by the Gujarat Industrial Development Corporation (GIDC) to the lessee or its successor (assignor) in favour of a 3rd party (assignee) for consideration, shall be an assignment/ sale/ transfer of benefits arising out of immovable property by the lessee-assignor in favour of a 3rd party who would then become a lessee of GIDC in place of the original allottee-lessee. In such circumstances, the Gujarat High Court held that the provisions of Section 7 (1) (a) of the GST Act providing for scope of supply read with clause 5 (b) of Schedule II and clause 5 of Schedule III would not be applicable to such a transaction and the same would not be subject to levy of GST as provided under Section 9 of the GST Act. In this Petition also the adjudication of the Show Cause Notice dated 13th November 2024 shall remain stayed.

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• 2025 (3) TMI 1236
  Valid issuance of SCN or not - suppression of facts or not - refund for the tax period of October 2017 to March 2018 - HELD THAT:- As is manifest from a reading of the impugned SCN, it merely observes that the petitioner wrongfully claimed a refund by misrepresenting that the transactions in question would constitute an export of services. The Department asserts in the SCN that the services provided by the petitioner were intermediary services with the place of supply being in India and thus disentitling it from claiming a refund. The Court in Parity Infotech [ 2023 (3) TMI 489 - DELHI HIGH COURT] had found that the SCN merely reproduced the statutory language of Section 74 without any tangible material or independent reasoning to support the allegation of fraud or misstatement. Consequently, the SCN was held to have been issued mechanically and thus the invocation of Section 74 being wholly unwarranted. The Allahabad High Court has, in HCL Infotech Ltd. v. CCT [ 2024 (9) TMI 1644 - ALLAHABAD HIGH COURT] , further clarified that in order to invoke the extended time period of five years under Section 74 of the Act, the SCN must clearly set out the specific acts of commission or omission on the basis of which an opinion may be formed that benefits had been claimed by reason of fraud, misstatement or suppression of facts. Conclusion - The SCN appears to have been issued solely to avoid the inevitable consequences which flow from our decision rendered inter partes in the earlier round of litigation. It is opined that a claim for refund cannot be legally or justifiably stalled by the adoption of circuitous means as the present. Petition disposed off.

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• 2025 (3) TMI 1235
  Cancellation of the registration of the petitioner - statutory returns has not been filed for a continuous period of six months - petitioner is ready to pay any further taxes that may be due, along with late fee and interest, as required under GST Act - HELD THAT:- This Court has been consistently following the directions issued in Tvl.Suguna Cutpiece Center s case [ 2022 (2) TMI 933 - MADRAS HIGH COURT] , where it was held that The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid. The benefit extended by this Court vide its earlier order in Suguna Cutpiece Center s case, may be extended to the petitioner. Petition disposed off.

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• 2025 (3) TMI 1234
  Withdrawal of petition - Seeking release of sanctioned loan - illegal seizure without affording the Petitioner a chance to be heard - violation of principles of natural justice - HELD THAT:- The respondent No.2 appearing on advance notice submitted that the instant petition is nothing but a gross misuse of process of law and the prayer no. d of the instant petition which is made by petitioner for issuance of directions to the GST-Department is baseless and does not have any grounds. Accordingly, the instant petition may be dismissed, however, since the learned counsel appearing on behalf of the petitioners made an innocuous prayer to withdraw the instant petition and has not pressed the matter on merits, he has no objection for withdrawal of the instant petition. The instant petition is dismissed as withdrawn with liberty as prayed for.

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• Income Tax

• 2025 (3) TMI 1233
  Treating the return filed as defective return u/s 139 (9) - petitioner has not filed the tax audit report as required u/s 44AB - HELD THAT:- If the petitioner can access the system of the respondents to download the impugned order, we fail to understand why the respondents cannot access the said order and reject the rectification application on the ground that the base order is not available. This requires a serious investigation into the IT system of the respondents because the said incompetency would be against the efforts of the Government for transmission to electronic mode of adjudication of the disputes under the Act. Without going into the larger controversy, we direct the petitioner of the petition which is the order treating the return as invalid with respondent no.2 within one week from the date of uploading the present order. The petitioner is also directed to file a copy of ITR Form uploaded with the system of the respondents and the return which respondent no.1 has treated as defective. On receipt of the petitioner filing above documents, respondent no.2 will dispose of the rectification petition filed by the petitioner vide letter dated 25 November 2024. The said rectification petition should be disposed of after giving petitioner an opportunity of hearing. The rectification order should be passed on or before 30 April 2025.

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• 2025 (3) TMI 1232
  Addition of cash found during the search - whether Tribunal misdirected itself by sustaining the addition without giving a clear finding that the said amount was separate different from the amount(s) declared by the Appellant in his returns for A.Y. 2005-06 and 2006-07? - HELD THAT:- Three authorities concluded that the Assessee could not co-relate the amount of cash seized with the amount noted in the documents. ITAT also referred the Assessee s statement about using code figures regarding his consultancy fees . Assessee accepted all these documents. In these circumstances, we cannot find fault with the concurrent findings recorded by the AO CIT (Appeals) and ITAT. Addition was made on a substantive basis in the hands of Bharati Vidyapeeth and on a protective basis in the hands of the Appellant-Assessee. Since the addition in the hands of Bharati Vidyapeeth has been deleted, the addition in the hands of the Appellant-Assessee has been confirmed. This is not disputed by the Appellant-Assessee. ITAT,has discussed the issue regarding this addition in great detail and quite correctly, has held that no case was made out to disturb the concurrent findings of fact recorded by the AO and CIT (Appeals). The questions now proposed do not arise. In any event, the questions give rise to no substantial question of law.

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• 2025 (3) TMI 1231
  Application for restoration of Income Tax Appeal which was allowed to be withdrawn or disposed - HELD THAT:- This appeal was instituted in 2013. At that time, instructions dated 9th February 2011 were in force. The exceptions in clause (8) of this Instruction did not include appeals on TDS issues. The exception regarding TDS issues was introduced only under Circular No. 5 of 2024, dated 15th March, 2024. In V. M. Salgaocar and Brothers (P) Limited [ 2024 (12) TMI 717 - BOMBAY HIGH COURT ] this Court has held that the exception in Circular No. 5 of 2024, dated 15th March 2024, cannot be applied retrospectively. The increased tax effect ceiling would apply even to pending appeals. Therefore, by following the reason in V. M. Salgaocar and Brothers (P) Limited [ 2024 (12) TMI 717 - BOMBAY HIGH COURT ] this appeal was correctly withdrawn or disposed of as recorded in the order dated 25th October 2024. Incidentally, the decision in V. M. Salgaocar and Brothers (P) Limited [ 2024 (12) TMI 717 - BOMBAY HIGH COURT ] was followed in the context of the issue very similar to the one now raised in the case of The Principal Commissioner of Income Tax-23, Mumbai Versus M/s IPL Loan Trust [ 2025 (2) TMI 453 - BOMBAY HIGH COURT ] We decline restoration and maintain our earlier orders.

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• 2025 (3) TMI 1230
  Validity of the notice issued u/s 274 r/w 271 - HELD THAT:- In CIT v. SSA S Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] the High Court of Karnataka following the decision in CIT v. Manjunatha Cotton Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] held that the imposition of penalty u/s 271 (1) (c) of the Act is bad in law and invalid for the reasons where the show cause notice u/s 274 of the Act did not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income As show cause notice issued u/s 274 read with Section 271 of the Act did not furnish any particulars and all the relevant columns have been left blank. Thus, by applying the legal position in the aforementioned decision, this court has no hesitation to hold that the show cause notice was bad in law consequently the initiation of penalty proceedings is vitiated. Decided in favour of assessee.

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• 2025 (3) TMI 1229
  Validity of reassessment proceedings - concurrent jurisdiction of JAO and the Faceless Assessing Officer (FAO) for issuance of the notices - whether the notices issued by Jurisdictional Assessing Officer (JAO) are to be declared invalid bad in law, being in contravention of Section 151A read with Notification dated 29.03.2022? - HELD THAT:- FAO has been assigned specific jurisdiction and the Scheme dated 29.03.2022 also clearly indicates that the FAO has to be the jurisdictional authority. The opening of will not only lead to confusion, but will also result into a failure on the part of the Revenue, to give a concrete opportunity to the assessee. The concurrent jurisdiction of FAO and the JAO, if accepted, would defeat the very purpose of statutory provisions i.e. Sections 151A 144B of the Act of 1961. The words carefully chosen by CBDT, include automated allocation , and the baseline for the same being algorithm for randomized allocation , clearly show that the technology was supposed to be used for the purpose of allocating jurisdiction to a random officer. This Court is of the opinion that Section 151A of the Act of 1961 deals with the assessment, reassessment and re-computation provided in Sections 147 148 of the Act of 1961, and therefore, the same has to be faceless and the FAO has to have an exclusive jurisdiction to issue the notices. The Scheme to the extent of Section 144B of the Act of 1961 for issuance of notice cannot be said to be relevant for the purpose of issuing notices under Section 147 148 of the Act of 1961. Sections 147 148 have been kept separately. The restrictions provided for the purpose of Section 144B shall be relevant The legislative intention, legislative vision and legislative wisdom has to be given full meaning in terms of technology and progressiveness, and thus, once an effective and strong step has been taken towards faceless regime, then maintaining the strings of local control to the prejudice of a common man would not only undermine the legislative wisdom but the gains in terms of such a progressive and pragmatic step would stand to reduce. Once the gear of progress has been applied in a democratic set up, the same has to be strongly supported and sustained. The CBDT Circular read with Section 151A of the Act of 1961 has to be given full meaning and any ways means to defeat the technology or to manually try to control the same would go against the legislative purpose. Thus, this Court holds that the mandate of Section 151A of the Act of 1961 has to be strictly followed as there cannot be a way out of doing the same. This Court also holds that the JAO shall not have the jurisdiction to issue notices under Section 148 of the Act of 1961, as it would not only render Section 151A weak, but may also lead to its diminishing activation. For the purpose of assessment and reassessment under Sections 147, 148 148A and in light of the sanction under Section 151A, adherence has to be made to algorithm based random assessing system, and therefore, the impugned notices deserve to be quashed. Consequently, the present writ petitions are allowed. Accordingly, the impugned Notices are quashed and set aside, as far as the jurisdiction of JAOs for the purpose of Sections 148 148A of the Act of 1961 to issue the same is concerned. The question raised herein stands answered in the terms indicated above, with liberty to the respondents to issue fresh notices in compliance of the CBDT Notification dated 29.03.2022, by keeping the FAO as assessing officer.

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• 2025 (3) TMI 1228
  Stay on the recovery proceedings - requirement of paying 20% of the disputed demand - HELD THAT:- Department has followed the prescribed procedure in accordance with the provisions of the Income Tax Act, 1961 and the relevant CBDT instructions. The assessee has failed to comply with the mandatory requirement of paying 20% of the disputed demand, as stipulated under CBDT Instruction No.1914, dated 21.03.1996 and the Office Memorandum dated 31.07.2017. The documentary evidence produced by the assessee does not substantiate the claim of financial hardship to the extent required to justify non-payment of the disputed demand. This Court is of the opinion that the Department has acted within its authority and the refusal to grant a stay on recovery proceedings is justified. The mere filing of an appeal before the Commissioner of Income Tax (Appeals) does not automatically entitle the assessee to a stay of the collection of the demand without fulfilling the pre-conditions as prescribed. Writ Petition is dismissed. The assessee is directed to comply with the requirement of paying 20% of the disputed demand for the Assessment Year 2019-2020, in accordance with the relevant CBDT instructions and Office Memorandums.

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• 2025 (3) TMI 1227
  Reopening of assessment u/s 147 - valid reason to believe - notice issued after expiry of four years - HELD THAT:- Assessee has paid taxes u/s 115JB of the Act in the return of income and has shown book profit u/s 115JB. Even the AO has assessed total income in the case of assessee as per the provision of section 115JB. Furthermore, the petitioner was asked specific questions regarding cash credit received as well as sundry creditors along with Name, PAN, address, Copy of ITR and their confirmations. The petitioner had provided all the necessary details vide replies dated 15.12.2016 and 20.12.2016. The respondent thereafter being satisfied with the information supplied by the petitioner framed assessment under section 143 (3). AO therefore, could not have assumed the jurisdiction to issue impugned notice u/s 148 of the Act and the impugned notice and the proceedings pursuant thereto cannot be sustained. Decided in favour of assessee.

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• 2025 (3) TMI 1226
  Validity of assessment - change in jurisdiction in as much as earlier it was Faceless proceedings with NFAC but this time it was a notice from ACIT Cent-1, Rajkot without any prior notice or intimation of the order passed under Section 127 - petitioner was denied the principles of natural justice due to the lack of opportunity for a personal hearing through video conferencing. HELD THAT:- As petitioner was never put to notice about the transfer of the case from NFAC to the Central Circle except stating the said fact in the show-cause notice dated 10th March, 2022 and it was left open for the petitioner to imagine that the case of the petitioner was transferred to Central Circle. We are of the opinion that the contention raised on behalf of the respondent that as the case of the petitioner is transferred to the Central Circle, the provision of video conferencing/personal hearing is not available is contrary to the basic requirement of providing opportunity of hearing which would be in violation of the principles of natural justice. The provisions of Section 144B of the Act applicable to the proceedings before NFAC provide for video conferencing and in view of such provision, the assessee would be left without any opportunity of hearing if the case of the petitioner is transferred to the Central Circle u/s 127 (2) of the Act. The petition succeeds and is partly allowed. The impugned Assessment Order is hereby, quashed and set aside and the matter is remanded back to the AO to pass a fresh de-novo order after providing opportunity of hearing to the petitioner in compliance of the principles of natural justice.

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• 2025 (3) TMI 1225
  Order passed u/s 264 - Whether the notice u/s 148 was validly served upon the late husband of the petitioner? - HELD THAT:- As on perusal of the impugned order passed under section 264 of the Act as well as the orders u/s 7 (1) of the RTI Act, it is not in dispute that notice under section 148 was never served upon late husband of the petitioner. Even notices under section 142 (1) of the Act was also not served and the petitioner came to know about the passing of the assessment order only when the bank accounts were put under lien for recovery proceedings. In view of above undisputed facts when the notice under section 148 of the Act was never served upon the petitioner, the Assessing Officer could not have assumed the jurisdiction. On bare perusal of section 264 of the Act, the respondent Commissioner of Income Tax has wide powers of considering the assessment order under revision as he may think fit or may make any such inquiry or cause such inquiry to be made subject to the provisions of the Act and pass such order thereon, not being an order prejudicial to the assessee as he thinks fit, meaning thereby that Commissioner while exercising the jurisdiction under section 264 of the Act, can look into the entire matter and after calling for record of the assessment proceedings under the Act, can make an inquiry or cause such inquiry to be made and thereafter subject to the provisions of the Act, pass an order which is not prejudicial to the assessee as he thinks fit. The interpretation of section 264 of the Act by the respondent is contrary to the provision itself and the impugned order could not have been passed by resorting to such truncated interpretation of section 264 to limit the powers of the Commissioner to revise the order only on the ground of mistake or correction, if any, in the assessment order. Petition succeeds and is accordingly allowed. The impugned order passed u/s 264 of the Act is hereby quashed and set aside and the matter is remanded to the respondent to pass a fresh denovo order under section 264 of the Act.

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• 2025 (3) TMI 1224
  Deduction u/s. 80P(2)(d) - interest income earned out of the Fixed deposits/Investments made with Cooperative Banks treating the same as Income from Other Source - HELD THAT:- Section 80P(2)(d) provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s. 80P of the Act. We find that this issue is no more res integra as the Coordinate Benches of this Tribunal has been consistently holding that the interest income earned out of the FDs/Investments kept with Cooperative Banks is allowable u/s. 80P(2)(d) of the Act. We find that this Tribunal in case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd. [ 2024 (6) TMI 791 - ITAT PUNE] dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society [ 2021 (11) TMI 1117 - ITAT PANAJI] has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction u/s. 80P(2)(d) of the Act as Cooperative Banks are basically Cooperative Societies only but have turned into Bank on getting necessary banking license. Where the assessee made investment with the Cooperative Banks we hold that the assessee is eligible for deduction u/s. 80P(2)(d) of the Act for the interest income earned from Cooperative Banks. Findings of the CIT(A) is set-aside and the AO is directed to allow the claim made by the assessee. Effective grounds of appeal raised by the assessee are allowed.

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• 2025 (3) TMI 1223
  Unexplained cash deposits - assessee failed to satisfactorily explain the source of cash deposits - HELD THT:- It is a fact that the assessee is a retired Government servant and earned income from pension. Since the assessee had earns regular income from pension, the claim of the assessee that the deposits were from past savings, ought to have been believed in absence of any evidence to the contrary. AO has not brought on record anything to disprove the claim of the assessee that the deposit of was from his past savings or has made any allegation about undisclosed expenditure/investment. AO must have concrete reasons based on evidence to reject the assessee s explanation. If the assessee has provided a reasonable explanation, mere disbelief or suspicion is not sufficient to make an addition under the Income Tax Act. Once the assessee explains the source of deposits, the onus shifts to the AO to prove that such explanation is incorrect or unsatisfactory. If the AO has not brought any contrary evidence to disprove the claim, the addition is unwarranted. There are several judicial rulings where Hon ble Courts have held that past savings can be a valid source of deposits unless proven otherwise by the Department.Appeal of the assessee stands allowed.

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• 2025 (3) TMI 1222
  Assessment u/s 153A - absence of any incriminating material found as a result of search - disallowance of depreciation on machinery - HELD THAT:- As in respect of completed-unabated assessment, no addition can be made by the AO in absence of any incriminating material found during the course of search u/sec.132 or requisition u/sec.132A. However, in the assessment is abated as on the date of search, the AO shall assess or re-assess the total income taking into consideration the incriminating material and any other material including books of accounts. In the present case, going by the date of search in the case of assessee i.e., on 02.05.2018, the assessment for the assessment year 2017-2018 is abated. Therefore, in our considered view, the AO can assess the total income on the basis of any other material, but, not only on the basis of the incriminating material found as a result of search. CIT(A) without considering the relevant facts and further on wrong assumption of facts that the assessment year is unabated as on the date of search, by following the decision of Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] has deleted the additions made by the Assessing Officer. Thus, we set aside the order passed by the learned CIT(A) and allow the appeal filed by the Revenue. Disallowance of payment made to two sub-contractors on the basis of survey operation conducted u/sec.133A of the Act and material found during the course of survey operation coupled with the statement recorded from Chief Financial Officer and Managing Director of the assessee company - In case the assessment is abated as on the date of search, the AO shall assess or re-assess the total income taking into consideration the incriminating material and any other material. In the present case, going by the date of search in the case of assessee i.e., on 02.05.2018, the assessment for the assessment year 2018-2019 is abated. Therefore, in our considered view, the AO can assess the total income on the basis of any other material, but, not only on the basis of the incriminating material found as a result of search. CIT(A) without considering the relevant facts and further on wrong assessment of facts that the assessment year is unabated as on the date of search and by following the decision of Abhisar Buildwell P. Ltd.[ 2023 (4) TMI 1056 - SUPREME COURT] has deleted the additions made by the AO. Thus, we set aside the order passed by the CIT(A) and allow the appeal filed by the Revenue. Additions only on the basis of third party statement unless corroborative evidences are brought on record to substantiate the contents of statement recorded from third party - Once the third party statement is relied upon by the Assessing Officer, he is duty bound to provide the statement to the assessee for his comments and cross-examination. In the present case, AO without providing the statement recorded from Shri Kewalchand Jain to the assessee for his comments and cross-examination, made the additions. Therefore, additions made by the AO on the basis of statement of third party cannot be sustained. Thus, we direct the Assessing Officer to delete the additions made towards disallowance of depreciation on plant and machinery. Additions made towards sub-contract payments - Once addition is made on the basis of enquiries conducted by the AO in our considered view, the findings of the enquiry should be given to the assessee for his comments and rebuttal. In the present case, the AO has made addition only on the basis of enquiry conducted on the sub-contract coupled with statement recorded from the employee of the assessee, but, the fact remains that nowhere in the statement of the employees is there any adverse inference against payment made to these sub-contracts. Therefore, the addition made by the AO on the basis of enquiry conducted on two sub-contractors coupled with the statement recorded from employee of the assessee company, cannot be sustained. Thus, we direct the AO to delete the additions made towards sub-contract payments made to Rayon Infrastructure Pvt. Ltd., and Sunil Hitech Engineers Ltd.

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• 2025 (3) TMI 1221
  Addition u/s. 68 - unexplained cash deposits in the absence of maintained books of accounts - HELD THAT:- Here in the present case, it is clear that the AO himself is satisfied that no books of account was maintained by the assessee and therefore addition cannot be made u/s. 68. The coordinate bench of ITAT has explained the books of accounts in the case of DCIT vs GSNR Rice Industries S(P.) LTD REPORTED [ 2021 (6) TMI 696 - ITAT CHENNAI] held that if there is no books of account maintained, no addition can be made u/s. 68 of the Act. The above judgment is squarely applicable in the present case on hand. Addition made by the AO towards interest payment u/s. 37 - In this case, the very purpose of reopening of the case is not sustainable, then subsequent addition made by the AO which are not part of the very basis for reopening or part of the reasons recorded, therefore during the course of reassessment proceedings any further addition is made by AO is also not sustainable. See Asha Kansal [ 2014 (4) TMI 931 - ITAT AGRA] . Thus we delete the addition u/s. 37. Decided in favour of assessee.

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• 2025 (3) TMI 1220
  Reopening of assessment u/s 147 - deposit of cash in bank accounts - HELD THAT:- AO reopened the assessment on account of deposit of cash in HDFC Bank and IDBI Bank, however, the AO ultimately made addition on the basis of credits in the Indus Bank. We are of the considered view that it is not legally permissible for the AO to reopen the case based on one reason and make additions on reasons other than what was recorded for reopening the case. See ATS INFRASTRUCTURE LIMITED [ 2024 (7) TMI 1441 - DELHI HIGH COURT] affirming RANBAXY LABORATORIES LIMITED decision [ 2011 (6) TMI 4 - DELHI HIGH COURT] held that while it is true that the AO would have to establish that reassessment is warranted on account of information in its possession which appears to indicate that income chargeable to tax had escaped assessment, once the assessment itself is reopened it would not be confined to those subjects only - Decided in favour of assessee.

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• 2025 (3) TMI 1219
  Disallowance u/s 14A - suo moto disallowance made by assessee - assessee had not debited any expenses incurred in respect of dividend received from M/s Dabur India Limited which was 97% of the total dividend income received by the assessee - HELD THAT:- As in this case, the assessee has itself revised the disallowance u/s 14A made in its return of income in the revised computation of income filed by the assessee before the AO during the assessment proceedings as discussed by the AO. Therefore, in the present case, the assessee itself agrees that the suo moto disallowance made u/s 14A was not correct and therefore this itself is a sufficient ground to support the satisfaction recorded by him which justifies the satisfaction recorded by the AO for not accepting the suo moto disallowance made by the assessee in its return of income. Therefore, the additional ground filed by the assessee is dismissed. Disallowance made u/s 14A r.w.r. 8D(2)(iii) can be made only in respect of the average monthly value of the investment of the shares/investments which yielded the dividend income - As per revised computation, the assessee further stated that since it has already disallowed a sum in its original return of income and therefore further proposed disallowance u/s 14A of the Act was Rs. 25,34,784/- whereas as per the statement noted by AO in the assessment order (para -6.3), such disallowance comes to Rs. 23,34,064/-. Therefore, the AO is directed to reconcile the same and make disallowance after necessary verification as per law restricting the disallowance @ 1% of the annual average of the monthly average opening and closing balance of the value of the investments in respect of the shares from which dividend income being exempt was earned. Disallowance of PMS expenses - On perusal of the order of the Assessing Officer and the CIT(A), the facts regarding the specific purpose for which PMS expenses amounting was utilized has not been examined by both the lower authorities before making the disallowance and its confirmation by the CIT(A). The assessee has also not explained the same before us and the utilization of the PMS expenses requires factual verification before its allowance or otherwise can be decided. Therefore, this issue is set-aside to the file of the Assessing Officer to decide the matter de novo after giving reasonable opportunity of being heard to the assessee and in accordance with law. Ground no.1 of the appeal is partly allowed.

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• 2025 (3) TMI 1218
  Rejection of the application for permanent registration u/s 12A - assessee had not chosen the correct provision and therefore he has rejected the application filed in form 10AB - HELD THAT:- The assessee had properly audited their books of accounts and all the financial statements were also furnished before the CIT(E) on which there is no dispute raised by any of the authorities. But the Ld.CIT(E) had rejected the said application in form 10AB on technical grounds i.e. quoting the wrong provision in form 10AB application and on that score the CIT(E) had rejected the said application even though the assessee had submitted that the correct provision may be taken up while deciding the application in form 10AB. CIT(E) without pointing out any other defects and violations had rejected the said application on technical ground that too without passing a speaking order. As decided in People for Animals [ 2024 (6) TMI 1050 - ITAT KOLKATA ] as revised Form 10AB filed for the final registration CIT (Exemption) failed to take note of the same and failed to provide opportunity to the assessee - restore this issue of final registration to the file of ld. CIT (Exemption) - final registration should be granted as per the revised application filed by the assessee incorporating the correct Section code. Thus, we set aside the order of the Ld.CIT(E) with a direction to the Ld.CIT(E) to consider the application filed by the assessee in the correct provision or allow the assessee to amend the said form 10AB filed on 23/11/2023 and decide the same on merits. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (3) TMI 1217
  Assessment u/s 153A - assessment order as passed without the valid approval u/s 153D - HELD THAT:- As assessment order was framed by the AO u/s 153A(1)(b) of the Act with the prior approval of the Joint commissioner. The joint commissioner of Income Tax has granted the single approval for the seven years A.Y. i.e 2010-11 to 2016-17 by the letter no F. No. JCIT(CR)/GGN/2017-18/951 in a mechanical manner without due application of mind. Thus, no hesitation in holding that the approval u/s 153D of the Act, granted by JCIT in the instant case was mechanical manner and without due application of mind. We declared the assessment as bad in law. Accordingly, the ground raised by the assessee is allowed.

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• 2025 (3) TMI 1216
  Assessment u/s 153C OR 143(3) - assessment u/s 143(3) wherein additions have been made on the basis of the documents seized from the possession of the persons search in whose case no satisfaction is recorded that those papers belong to the assessee - HELD THAT:-The satisfaction note for initiating the proceedings u/s 153C was recorded by the AO of the assessee on 10/10/2024 thus Assessment Year relevant for previous year in which search was conducted in the case of the assessee should be the AY 2015-16 and the six assessment years immediately preceding the assessment year relevant for the previous year in which search was conducted for initiating proceeding u/s 153C of the Act will be AY 2009-10 to 2014-15 and the impugned year i.e. AY 2013-14 is fallen in such block period thus the assessment should have been completed u/s 153C and not u/s 143(3) as has been done in the present case. In view of this discussion and by respectfully following the judgement of Jasjit Singh [ 2014 (11) TMI 1012 - ITAT DELHI ] which has been affirmed by high court as reported [ 2015 (8) TMI 982 - DELHI HIGH COURT ] on similar facts, the assessment order passed u/s 143(3) dt. 27/03/2015 is hereby quashed. Appeal of the assessee is allowed.

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• 2025 (3) TMI 1215
  Registration u/s 80G - revenue rejected the application filed by the assessee on the basis that the application is filed under wrong section - HELD THAT:- We find merits in the submissions of the assessee, as the application filed by the assessee in Form No.10AB under clause (ii) of first proviso to section 80G(5) of the Act was for renewal of the registration already available with the assessee. In the present case, since the assessee was already an approved trust, we are of the considered view that the application was rightly made by the assessee under clause (ii) of first proviso to section 80G(5) of the Act, and grant of provisional approval cannot be sole basis for rejecting the same. Accordingly, in the interest of justice and fair play, we restore the application filed by the assessee for renewal of regular approval u/s 80G(5) of the Act to the file of the learned CIT(E) for de novo adjudication - Assessee ground allowed for statistical purposes.

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• 2025 (3) TMI 1214
  Assessment u/s 153C r.w.s. 153A - addition on account of disallowance of Long Term Capital Gain held as bogus and sham transaction - HELD THAT:- The entire exercise of the AO is based on the regular return filed and no material found and seized during the course of search was referred. This being so in our opinion, no addition could be made in the order passed u/s 153C r.w.s. 153A of the Act. This view is duly supported by the judgment of Hon ble Supreme Court in the case of Abhisar Buildwell [ 2023 (4) TMI 1056 - SUPREME COURT ] in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search u/s 132 or requisition u/s 132A - the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. Thus, no addition could be made de-hors seized material, therefore, the addition made is herby deleted. Decided in favour of assessee. Legality of assessment completed u/s 143(3) - The assessment order under appeal i.e., A.Y. 2015-16 notice u/s 143(2) was issued on 24.11.2016 i.e., after the date of recording of satisfaction note u/s 153C in the case of the assessee. Since, satisfaction note for initiation of proceedings u/s 153C was recorded on 10.11.2016 in the case of the assessee, in view of the proviso of 153C(1) the date of search would be the date when the seized material was handed over to the AO of assessee satisfaction note is recorded i.e., on 10.11.2016, thus, the search year would be A.Y.2017-18 and six years for which proceedings 153C could be initiated were AY 2011-12 to AY 2016-17. AY 2015-16 i.e., year before us also fallen within the block period of six years, therefore, the assessment for AY 2015-16 must be completed u/s 153C and not u/s 143(3) of the Act, therefore, the orders so passed u/s 143(3) is bad in law. As in the case of Jasjit Singh [ 2015 (8) TMI 982 - DELHI HIGH COURT ] has expressed the similar view and the said order is affirmed by the Hon ble Supreme Court also. ITAT, Delhi in the case of Raja Varshney [ 2024 (9) TMI 1625 - ITAT DELHI ] and Akansha Gupta [ 2024 (7) TMI 1133 - ITAT DELHI ] also expressed the same view - As the assessment completed u/s 143(3) for A.Y.2015-16 is bad in law and, therefore, is quashed.

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• 2025 (3) TMI 1213
  Rejection of application for renewal of registration u/s.12AB - Charitable purpose u/s 2(15) - HELD THAT:- The undisputed fact that the main object of the trust is to provide medical relief to patients suffering from diabetes. On facts on record, we find that the assessee trust maintains separate accounts for funds mobilised from various sources and such funds are utilised for purchase of insulin etc for supplying to the poor patients free of cost. We find that Charitable purpose includes relief of the poor, education, medical relief and any other object of public utility. These activities are tax exempt. In the present case, the assessee trust primary objective is to provide the medical relief to poor, which falls within first three limbs of section 2(15) and hence the proviso to section 2(15) does not attract to the appellant trust. The MDTC, a unit of assessee trust is carrying on incidental activities to the main objective of the trust and further, on facts on record assessee trust maintain separate books of account for such incidental activity. CIT(E) had rejected the application seeking registration u/s 12AB and cancelled the existing registration citing that the percentage of receipts from commercial activity is determined to 36.94% based on assumption and treating 50% of voluntary contributions from general public as receipts from MDTC and also citing that no separate books of accounts were maintained for MDTC. However, the assessee trust had maintained separate books of account for Trust and MDTC (two separate tally accounts were maintained). CIT(E) has grossly erred in making presumption that 50% of amount received from general public as receipts from the diabetic clinic without any evidence and arriving at mentioned 36.94%. Moreover, as mentioned the proviso to section 2(15) is applicable only to the entities whose purpose is advancement of any other object of general public utility and as per the circular 11 of 2008 and judicial pronouncements, the said proviso would not applicable to the assessee trust as the main objective is medical relief to poor. We hold that the CIT [Exemption] has wrongly cancelled the registration granted to the assessee trust under section 12AB - Appeal filed by assessee trust is allowed.

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• 2025 (3) TMI 1212
  TDS u/s 195 - payments made in the nature of royalty under Article 13(3) of the India-UK Double Taxation Avoidance Agreement (DTAA) - payments made towards Global brand, Global Communications and Global technology/Knowledge Management - HELD THAT:- Tribunal in assessee s own case for A.Y.2018-19 and 2019-20 [ 2022 (7) TMI 1586 - ITAT MUMBAI] held that payments made to Deloitte Global Services Pvt. Ltd., do not fall in the scope and definition of royalty under Article 13(1) of India UK DTAA and consequently, assessee was not required to deduct tax while making the payment to DGSHL. Thus, 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. Appeal of the Revenue is dismissed.

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• 2025 (3) TMI 1211
  Disallowance of Aborted IPO Expenditure u/sec 37 - whether the expenditure incurred by the assessee for raising fresh capital of Rs. 1000/- crores pertained completely to the proposed equity share capital of Rs. 400 crores for the assessee or was partly related to offer for sale by promoters of Rs. 600 crores also? - HELD THAT:-Section 37 of the Act explicitly excludes capital expenditure from the ambit of deductible business expenditure. Therefore, as a general principle, share issue expenses, being in the nature of capital expenditure, are not admissible for deduction u/s 37 of the Act. The legislature has carved out a specific provision u/s 35D of the Act, permitting the deduction of share issue expenses in a proportionate manner over a period of five years, subject to the fulfillment of stipulated conditions. Similarly, in the case of expenditure incurred for raising loan capital, the statutory framework provides an express allowance under section 36(1)(iii). It is also pertinent to distinguish between capital expenditure incurred for creation of a capital asset or project of enduring benefit to the company and expenditure on an abandoned project. In the latter scenario, provided such expenditure is directly linked to the business of the assessee, it may qualify for deduction under section 37 of the Act. However, in the case of share issue expenses, which serve the primary purpose of capital augmentation, the statutory scheme expressly treats them as capital in nature, thereby precluding their deduction under section 37, save as permitted under section 35D. We find that in the instant case also the part of the expenses out of Rs. 10.22 crores pertains for raising share capital, although the plan of the assessee for raising such capital could not go through and the assessee aborted the entire process, still the intended application of the expenses was toward increase in share capital. Hon ble Bombay High Court in the case of Nimbus Communication Ltd.[ 2011 (12) TMI 696 - BOMBAY HIGH COURT] has categorically held that expenses incurred towards aborted share issue expenditure falls u/s 37 of the Act. Thus, we set aside the finding of the CIT(A) on the issue in dispute and direct the AO to delete the addition, subject to quantum related to increase of equity base of assessee, other than expenses pertaining to OFS related to promoters. Appeal of the assessee is stands allowed.

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• 2025 (3) TMI 1210
  Addition u/s 68 - unexplained cash deposits in bank accounts - HELD THAT:- AO disallowed the claim without examining the submitted documents, making the disallowance arbitrary and baseless. The requirement for a remand report did not arise, as the CIT(A) adjudicated the appeal based on documents already on record during the assessment stage. AO s procedural lapse in passing the assessment order just nine days after issuing the show-cause notice, despite having more time, deprived the assessee of a fair opportunity to present her case, violating the principles of natural justice. Revenue has failed to bring forth any substantial grounds to contradict the detailed findings of the CIT(A) or demonstrate how the CIT(A) s reliance on the statutory audit and evidence was incorrect. Accordingly, we find that the CIT(A) was justified in deleting the additions made by the AO. Appeal of the Revenue is dismissed.

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• 2025 (3) TMI 1209
  Revision u/s 263 by CIT - Revision based merely based on the audit objections raised - Excess stock applying the provisions of section 69 read with section 115BBE - HELD THAT:- The proceeding initiated in this case by ld. PCIT emanates from the recommendation of the ld. AO so as to take remedial action on the audit objection and there is no independent examination of the records by the ld. PCIT. As regards the judicial precedent on the issue of initiating the provision of section 263 merely based on the audit objection invalidate the jurisdiction of the PCIT, various judicial precedents were cited including the latest decision [ 2024 (12) TMI 805 - ITAT JAIPUR] as held since the ld. PCIT based on the borrowed information and has not established as to how the view taken by the ld. AO is not correct when the issue raised has already been form part of the proceeding before the ld. AO. Based on the discussion so recorded we are of the considered view that the proceeding initiated u/s. 263 is merely based on the audit objection, PCIT is not agreement with the ld. AO and the observation on the stock, in the audit reportalready filed by the assessee. Thus, there is clear absence of his satisfaction and there is no independent view of the ld. PCIT even on merits. Thus, we quash the order passed by ld. PCIT u/s 263 of the Act. On being consistent with the findings so recorded in the order referred to herein above, we quash the order passed by ld. PCIT u/s 263 of the Act. At the time of hearing the appeal ld DR did not cite any contrary judgment and therefore, having regard to the findings recorded by this co-ordinate bench in the case of Mahendra Kumar Sharma [ 2024 (12) TMI 805 - ITAT JAIPUR] there is merit in the ground no. 1 raised by the assessee. Disallow ESI/PF for the month of February 2018 to March 2018 on account of delay in depositing the same based on the provision of section 36(1)(va) - The assessee-appellant submitted to the Assessing Officer had clarified that issue and AO after due verification of books of accounts other relevant records was satisfied that there was some mismatch in the figures of salary as per Audit Report and as per Income Tax Return as the same was merely a grouping error, while filing the income tax return, however, overall salary remained same and he thus chose not to disallow. When the issue raised by the ld. PCIT is neither erroneous nor prejudicial to the interest of the revenue the same could not be subjected to revision merely based on the making the enquiry a fresh. Thus, ground no. 2 raised by the assessee stands allowed. Variance in stock as found which was offered for tax as business income by the assessee-appellant - When there was proper application of mind on the part of the AO after having examined during the course of assessment proceedings, it is not a case where necessary inquiries have not been carried out by the ld. AO. When two views are possible ld. AO after considering the submission accepted the view of the assessee-appellant, and said approach does not automatically hold the assessment order erroneous or prejudicial to the interest of the revenue. AO accepted the plea that assessee appellant has no other income other than business income. As in Bajargan Traders [ 2017 (11) TMI 388 - RAJASTHAN HIGH COURT] has held that the investment in the excess stock has to be brought to tax under the head business income and not under the head income from other sources. This view has also been taken in PCIT v. Dharti Estate [ 2024 (1) TMI 1197 - GUJARAT HIGH COURT] Gayatri Devi [ 2023 (10) TMI 23 - ITAT JAIPUR] , Ravinder Kumar Bansal [ 2023 (12) TMI 716 - ITAT CHANDIGARH] , Vaidya Realities [ 2024 (1) TMI 970 - ITAT RAJKOT] Thus, ground no. 3 raised by the assessee-appellant has also merit. Disallow interest expenses u/s. 14A r.w.r. 8D - Amendment made by Finance Act, 2022 whereby the Explanation was inserted is prospective in nature and would not apply retrospectively. In this regard, reference may be made to decision of Avantha Realty Ltd. [ 2024 (6) TMI 987 - CALCUTTA HIGH COURT] and Era Infrastructure Ltd [ 2022 (7) TMI 1093 - DELHI HIGH COURT] which had taken note of the decision in the case of Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] wherein it was held that amendment by the Finance Act, 2022 of Section 14A of the Act by inserting a non-obstante clause and explanation was to take effect from 01.04.22 and cannot be presumed to have retrospective effect and, therefore, on facts the amendment cannot be applied to the assessment year under consideration. Based on these observations, ground no. 4 raised by the assessee is also allowed. Disallow the claim of deduction u/s. 10AA made in the return of income so filed - AO verified the claim of the assessee after the survey and also made variation on account of price variation between the SEZ unit and that of the DTA unit - Amendment [i.eExpl. 2(a)] does not confer blind powers. It is held that despite there being an amendment, enlarging the scope of the revisionary power of the ld. PCIT u/s 263 to some extent, it cannot justify the invoking of the Expl. 2(a) in the facts of the present case. Before referring to that Explanation, one has to understand what the true meaning of the Explanation in the context of application of mind by a quasi-judicial authority was. In Narayan Tatu Rane Vs. ITO [ 2016 (5) TMI 1162 - ITAT MUMBAI] it was held that newly inserted Explanation 2(a) to Sec. 263 does not authorize or give unfettered powers to Commissioner to revise each and every order, if in his (subjective) opinion, same has been passed without making enquiries or verification which should have been made. Here, AO had examined the issue of allowability of section 10AA in hands of the assessee. In the case of Parashuram Pottery Works Co. Ltd. [ 1976 (11) TMI 1 - SUPREME COURT] held At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity . Assessee appeal allowed.

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• Customs

• 2025 (3) TMI 1208
  Seeking release of the two detained gold items on the ground that the same are personal jewellery of the Petitioner - Time limitation - HELD THAT:- Once the goods are detained, it is mandatory to issue a show cause notice and afford a hearing to the Petitioner. The time prescribed under Section 110 of The Customs Act, 1962, is a period of six months and subject to complying with the formalities, a further extension for a period of six months can be taken by the Department for issuing the show cause notice. Since the outer period of one year has also elapsed in the present case, the goods of the Petitioner deserve to be released. Moreover, they were personal jewellery of the Petitioner which could not have been detained in the first place. Let both the gold items be released to the Petitioner without payment of any storage charges within four weeks - Petition disposed off.

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• 2025 (3) TMI 1207
  Seeking issuance of an appropriate writ setting aside the seizure of goods (personal jewellery) detained by the Customs Department of the Petitioners - HELD THAT:- When the Petitioners landed at the Indira Gandhi International Airport, New Delhi on 29th July, 2024, the personal jewellery of Petitioner No. 1, containing of one gold kangan, four gold rings, one gold necklace along with also personal jewellery of Petitioner No. 2 containing of one gold chain with pendant, one gold kada and three gold rings were seized by the customs officers. The detention receipt was issued on 29th July, 2024. The total weight of the products seized was 318 grams and 597 grams. The Court has perused the documents placed. Clearly, the Petitioners are Indian citizens who were coming back after attending a social family event in the USA and the jewellery which was owned by them were their personal effects - The detention took place in July 2024 and show cause notice has also not been issued. There can be no justification for detaining the said goods. The same shall accordingly be released within four weeks to the Petitioners in person or through an authorized representative subject to verification - no storage charges shall be collected by the Customs Department. Conclusion - There are no justification for the detention of the goods, particularly as no show cause notice had been issued since the seizure. The goods are ordered to be released. Petition disposed off.

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• 2025 (3) TMI 1206
  Classification of goods - PVC Resin Grade SP 660 (Suspension Grade) - CESTAT, Chennai refused to entertain the matter and had disposed it on the ground of monetary value - HELD THAT:- Considering the fact that the same product is involved even in the order passed by CESTAT, Chennai and the classification of this product for the period prior to 2017 has not been settled, this Court deems it appropriate to remand the matter to CESTAT, Principal Bench, New Delhi for a fresh adjudication on the classification issue itself and not to dispose of the matter on merely the monetary limit. Petition disposed off by way of remand.

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• 2025 (3) TMI 1205
  Seeking issuance of an appropriate writ directing the Respondent to release the electronic devices of the Petitioners - smuggling of substantial quantity of foreign origin gold in a completely concealed manner through triangular valves - HELD THAT:- If any particular document, which is downloaded from the devices of the Petitioners is also relied upon by the Respondent either in the show cause notice proceedings or in the prosecution complaint, the said Relied Upon Documents (RUDs) shall be listed and copies shall be provided to the Petitioners. In light of the above, the Petitioner would not raise any objections as to non-fulfilment of any requirement under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023 and Section 138C of the Customs Act, 1962. This process could be adopted by the Commissioner of Customs in all the Commissionerates, so that persons from whom devices are seized can be returned the same, after the data is copied. The retention of the devices throughout the Show Cause Notice (SCN) proceedings and the prosecutions, unless essential, could then be avoided, as the devices themselves may become completely out-dated and retrieval of data from the same after a few years also becomes difficult. The proper copying of the data and retention of the same on Servers in the Customs Department would also make it accessible to the investigation officers as also other personnel. Conclusion - The return of electronic devices ordered, after data copying, with the Petitioners agreeing not to object to the data s mode of proof. A standard procedure for data retrieval and preservation was recommended. Petition disposed off.

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• 2025 (3) TMI 1204
  Seeking issuance of an appropriate writ directing return of the goods seized by the Respondent- Customs Department - Possession of 4 old and used iPhone - tiem limitation for issuance of SCN - Petitioner submits that the six-month period has already lapsed and, therefore, the show cause notice is belated in terms of Section 110 of the Customs Act, 1962 - HELD THAT:- The date of the show cause notice is 17th January, 2025. The time prescribed under Section 110 of the Customs Act, 1962, is a period of six months subject to complying with the formalities. The Department is entitled to obtain a further extension of six months in terms of Section 110 (5) of the Customs Act, if needed. The show cause notice is dated 17th January, 2025 and is, therefore, within the six months period. The question as to whether the same was delivered to the Petitioner within the prescribed period or not or whether the extension was obtained or not, would be a question of fact. The Petitioner is free to approach the Adjudicating Authority for provisional release of goods, in accordance with law - Petition disposed off.

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• 2025 (3) TMI 1203
  Maintainability of petition - availability of alternative remedy - Diversion of imported goods - walnut kernels - allegation in the said Show Cause Notice was that the goods which were imported were not exported back and were in fact, diverted to the domestic market - 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, as done in the connected case. In Nitin Nagpal v. Union of India Anr. [ 2025 (3) TMI 1149 - DELHI HIGH COURT] , this Court had directed 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. Accordingly, the Petitioners are relegated to avail of their appellate remedy before CESTAT. The Petitioners are free to raise all their grounds of challenge to the impugned order before CESTAT. This Court has not examined any of the grounds which have been raised by the Petitioners. All objections are kept open. If the CESTAT finds it relevant, the cross-examination of the ICAR scientists before the Principal Commissioner in the connected matters may be taken into consideration for adjudication of the appeals. Considering the nature of the matter and the submissions made today, in the unique facts and circumstances of these cases, following the order passed in the similar matter involving the same petitioners, 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 1202
  Delay in adjudicating the show cause notice issued in 2014 - proceedings against other co-noticees, when the settlement of duty and interest done by the main firm - HELD THAT:- This case would be clearly covered by the previous decisions of this Court in M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General Anr. [ 2024 (12) TMI 624 - DELHI HIGH COURT] where it was held that The flexibility which the statute confers is not liable to be construed as sanctioning lethargy or indolence. Ultimately it is incumbent upon the authority to establish that it was genuinely hindered and impeded in resolving the dispute with reasonable speed and dispatch. A statutory authority when faced with such a challenge would be obligated to prove that it was either impracticable to proceed or it was constricted by factors beyond its control which prevented it from moving with reasonable expedition. This principle would apply equally to cases falling either under the Customs Act, the 1994 Act or the CGST Act. In terms of the settled legal position, the Order-in-Original dated 30th March, 2024 was passed pursuant to the show cause notice dated 30th December, 2014, which is almost a ten year old notice. In the opinion of this Court, the same cannot be sustained. Accordingly the said Order-in-Original dated 30th March, 2024 is set aside and the proceedings against the Petitioners shall stand quashed. Petition disposed off.

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• 2025 (3) TMI 1201
  Seeking for deletion of penalty and redemption fine imposed against the Appellant - Appellant had availed the benefit of Amnesty Scheme by making payment of the entire Customs duty - HELD THAT:- Snce Appellant had sought for deletion of penalty and redemption fine imposed against the Appellant, the part component of which is addressed in the above para and the other part concerning confiscation would no more be valid as the Act or its omission had been regularised through the Amnesty Scheme launched by the Government of India, the order passed by the Commissioner (Appeals) against which appeal has been pending before this Tribunal at the time of availment of such Amnesty Scheme, becomes unenforceable after irregularity, if any, has been remediated and therefore, the same is required to be set aside. Hence the order. The order passed by the Commissioner of Customs (Appeals), Mumbai-II is hereby set aside - Appeal allowed.

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• 2025 (3) TMI 1200
  Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - breach of regulation 10(d), 10(e) and 10(f) of Customs Broker Licensing Regulations, 2018 - drawback allegedly claimed in excess of eligibility by several exporters - appellant had failed to brief the exporter on the significance of the declarations owing to which the three regulations were breached. HELD THAT:- The alleged conspiracy is mere narration of events and episodes leading to the eventual decision to proceed against the appellant, and others, under the Customs Broker Licensing Regulations, 2018. It was necessary for the licensing authority to depict the elements of this conspiracy in terms of the stipulations in Customs Act, 1962 that were breached thereof and attributable, in part at least, to failure in advising the client to comply with the statutory requirements, failure to ascertain information supplied to client owing to which the client had strayed and the failure to communicate the instructions in circulars and public notices. The second of the foundations of the proceedings, viz., the circular [no. 16/2009-Cus dated 25th May 2009] having been overlooked, has no bearing on the first and amenable to being invoked on its own as a factual base for the third charge. There appears to be an implicit assumption in initiation of the proceedings that each, and every, obligation of customs brokers has been designed to be fulfilled vis- -vis customs authorities and, therefore, perceivable as inferences that the licencing authority, who is neither the customs authority in the connected incident nor the client of the customs broker, may choose. That breach of obligations is to be visited with proceedings prescribed in Customs Broker Licensing Regulations, 2018 is no ground for such presumption - Some obligations would, therefore, stem from that owed to clients and, hence, the determination of time lines with reference to offence report which may originate with client. That perception of cause and effect has to be appreciated and comprehended for proper exercise of authority to punish brokers. From a reading of the charges, the imputation of misconduct and the findings in the impugned order, none of the facts and circumstances advance the proposition that regulation 10(d) and regulation 10(e) of Customs Broker Licensing Regulations, 2018 had been breached. Conclusion - The failure to file the declaration may at best, be considered a technical irregularity inasmuch as it was not noticed by the customs authorities either. In any case, the drawback claims in the seven shipping bills, even if ineligible, is not of such magnitude as to warrant imposition of all the penalties and detriments available in the empowerment of the licensing authority. The interest of justice would be met by setting aside the revocation and forfeiture of security deposit under regulation 14 of Customs Broker Licensing Regulations, 2018 while upholding the penalty under regulation 18 of Customs Broker Licensing Regulations, 2018. Appeal disposed off.

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• 2025 (3) TMI 1199
  Applicability of rule 8 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 to the circumstances of import for revision of declared value of imports of cloves originating from Indonesia/Tanzania - provisional assessment under section 18 of Customs Act, 1962 - HELD THAT:- It is on record that the importer had failed to furnish any evidence of value being likely to be lower than the prices of contemporary transactions, through preceding invoices, or, through preceding test reports, of quality of the cloves, leaving no option, consequent upon the direction of the Tribunal, but to finalize the assessment on available documents and declaration. In the circumstances, recourse to rule 10A of Valuation (Determination of Price of Imported Goods) Rules, 1988 for discard of the declared value is not exceptionable as upheld in the impugned order. There are no reason to concur with the Learned Counsel that the declared value should not have been rejected in the circumstances. There is no doubt that rule 8 of the said Rules afforded a flexibility, not available now under the extant Rules notified in terms of section 14 of Customs Act, 1962, but was, yet, subject to conformity with the general principle of value espoused in rule 3 therein and specific exclusions. The impugned order is not reticent in referring to 19 bills of entry which, admittedly, are not in conformity with scheme of surrogate value set out in rule 5 of the said Rules - Recourse to rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 is required to be brought to a logical conclusion within the signification of rule 5 to rule 8 of the said Rules. Failure to do so, by non-availability of substitute value, rescinds the finding of non - acceptance of the declared value. Conclusion - The revision in value is without authority of law and on facts which do not find acceptance of substituted value within the framework of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The impugned order is set aside - appeal allowed.

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• 2025 (3) TMI 1198
  Scope for re-determination of value under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and consequential penalty under section 112 of Customs Act, 1962 - no differential duty to be levied - HELD THAT:- The issue decided in Prakash Sancheti [ 2013 (8) TMI 506 - CESTAT AHMEDABAD ] where it was held that The extent of over-invoicing is so high that the actual value of the goods was found to be 3.56% of the actual. In fact the learned advocate on behalf of the Hong Kong exporters submitted that the Commissioner has discussed the earlier import and export but since she has not based her conclusions on those transactions, he did not contest those findings nor made any submissions thereon. It would not be fair on our part also to consider the past activity for the purpose of deciding whether goods have to be absolutely confiscated or not. The only issue before the Tribunal then was the exercise of discretion by the adjudicating authority insofar as offer of redemption on payment of fine under section 125 of Customs Act, 1962 is concerned. Furthermore, the matter of certification under Kimberley Process Certificate (KPC) was not an issue adjudged by the Tribunal and it was solely on the ground of mis-declaration of value that the confiscation had been upheld. In re Dinesh Dhola and others, the Tribunal took note of failure to have Kimberley Process Certificate (KPC) verified on which was premised the prescription claimed to warrant absolute confiscation. In circumstances of the taint attached to handling of allegedly conflict diamonds that the importer assumed responsibility to re-export, the confiscation of the goods without offer of redemption is held to be inappropriate. The manner in which the value has been determined in accordance with the provisions of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 bears further evaluation to comply with section 2(41) of Customs Act, 1962. Such was not the requirement under section 17 of Customs Act, 1962 on every shipping filed under section 50 of Customs Act, 1962 but also wherever value find reference insofar as the handling of the imported goods is concerned. Conclusion - i) Absolute confiscation of the rough diamonds was inappropriate due to the lack of a valid ground based on the Kimberley Process Certificate mismatch. The goods should have been allowed for re-export. ii) The re-determination of value under the Customs Valuation Rules was flawed and required re-evaluation in accordance with the proper legal framework. iii) The imposition of penalties was contingent upon the re-determination of value and thus required reconsideration. iv) There is a need for proper verification of the Kimberley Process Certificate and cautioned against hasty actions leading to absolute confiscation. The matter remanded back to the original authority for a fresh decision - Appeal allowed by way of remand.

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• 2025 (3) TMI 1197
  Breach of regulation 10(d), 10(e), and 10(m) of Customs Brokers Licensing Regulations, 2018 for compromising customs clearance by obtaining out of charge on the strength of examination of only three containers - HELD THAT:- The inquiry report found the appellant to have breached regulation 10(d) and 10(e) of Customs Brokers Licensing Regulations, 2018 and, thereafter, Principal Commissioner of Customs (General), Mumbai, the licensing authority, revoked the customs broker licence and forfeiting the security deposit under the authority of regulation 14 of Customs Brokers Licensing Regulations, 2018 while further imposing penalty of Rs. 50,000 under regulation 18 of Customs Brokers Licensing Regulations, 2018 by order impugned here. The licensing authority held breach of regulation 10(d) of Customs Brokers Licensing Regulations, 2018 to be proved for non-compliance with the direction to submit the entire consignment for examination, as evidenced by payment of service fee of only Rs. 3,750 (Rs. 1,250 each TEU) and confirmation thereof from closed circuit television cameras installed at the examination area, and thus establishing failure to advise the client to comply with the provisions of the Act, allied Acts and Rules and Regulations and failure, upon non-compliance thereof, to bring the matter to the notice of the Deputy Commissioner/Assistant Commissioner as the case may be. There is no doubt that examination as set out in the handwritten directions were not carried out. There is, however, no ascertainment of disinclination on the part of customs official, having granted out of charge while cognizant of the directions, to carry out such examination and availability of contingent option to report to higher authorities. The drawal of samples which was sufficient to establish misdeclaration as well presentation of three containers make it abundantly clear that appellant was either not aware of the contents or that there was no intent to conceal the offending goods from action under Customs Act, 1962. The failure to produce the remaining containers or to guide the client in that direction is, at best, a technical violation. There are no evidence to charge the customs broker with not advising the client on requirement to comply with the statues; nor of participation in compelling customs officials not to carry out examination. There is, thus, no evidence to hold that regulation 10(d) of Customs Brokers Licensing Regulations, 2018 had been breached. The licensing authority has mis-applied regulation 10(e) of Customs Brokers Licensing Regulations, 2018 which may be invoked only upon complaint from client of having been so misguided by customs broker. The requirements of examination was, admittedly, endorsed on the bill of entry and, in granting out-of- charge , the customs officials cannot but have been privy to such instruction. Failure of such customs officials to act on the instruction cannot be attributed to the customs broker inasmuch as the latter does not have the authority to enforce compliance on the part of the customs officials - There is passing reference to alleged collusion of employee of the customs broker with customs officials that does not fall within the purview of regulation 10(e) of Customs Brokers Licensing Regulations, 2018. Consequently, the facts alleged has no bearing on this particular obligation or breach thereof. Conclusion - There is no defence from the appellant about the cause of non-compliance with inspection requirements in full and, in absence thereof, responsibility is to be presumed, at least partially, even if of no serious consequence. Consequently revocation of licence with forfeiting of security deposit is set aside. Imposition of penalty of Rs. 50,000 is sustained. Appeal allowed.

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• 2025 (3) TMI 1196
  Breach of regulation 10(d), 10(e), 10(n) and 13(2) of Customs Brokers Licensing Regulations, 2018 - entire case of the licensing authority appears to have been built upon the conclusion that the exporter on record were a mere fronts and that the beneficiary of the admitted over-valuation were those who controlled the transactions behind the scenes - HELD THAT:- In the impugned order, there is neither hint nor whisper of such grievance on the part of the client and yet that did not deter the licensing authority from holding that the customs broker had deviated from the obligations set out in regulation 10(e) of Customs Brokers Licensing Regulations, 2018 which only the client could be concerned with. The facts relied upon, as well as the conclusion thereupon, in the impugned order are far from that contemplated under regulation 10(e) of Customs Brokers Licensing Regulations, 2018. There are no hesitant in holding that the licensing authority has erred to hold that to be proved. There is, of course, a fundamental stipulation that it is the responsibility of the customs broker to advice client to comply with all the statutory provisions that applicable to clearance of the goods belonging to the client. It is, however not necessary that every single provision in the several statutes would have to be intricted to the client. Neither is it necessary that it is the owners/officials of the importer/export entity who should be subjected to such education. That well may be impossible and it clearly not the intent of the Regulation that the customs broker should conduct a teachimg course on procedural and legal stipulations pertaining to clearance of the goods. The breach of such obligation would have to be inferred from facts which demonstrate negligence on part of customs broker to advice contextually - There is no evidence to conclude that the licensing authority was correct in determining breach of regulation 10(d) of Customs Brokers Licensing Regulations, 2018. There is no doubt that the antecedents of the client need verification and, to the extent that the specifics of such verification are set out in the said Regulation, existence of documentation would suffice as compliance. There is no allegation that the client was not in possession of genuine importer-exporter code (IEC) or, for that matter, of GST registration. Nonetheless, the records do show that no operations appeared to have been carried out at the declared address of the exporter. Whether verification of the premises would have prevented overvaluation of goods is moot; however, that the exporter did not operate at the declared address indicates that the verification carried out by the customs broker was but cursory or non-existent. Licences issued to customs brokers is not merely an entry into practice of a trade or profession but is contingent upon expectation on the part of licensing authority that antecedents of importer/exporter are not doubtful - It would, therefore, appear that the appellant had restricted itself to verification of documents to the extent of availability in the public domain. Clearly, undertaking of work on behalf of the exporter without proper knowledge about the activities of the exporter is in breach of the obligation devolving on the customs broker under regulation 10(n) of Customs Brokers Licensing Regulations, 2018. To the extent that the licensing authority has held that the customs broker to be in breach thereof, we find no reason to disagree thereupon. The charge of violation of regulation 10(n) of Customs Brokers Licensing Regulations, 2018, is therefore, upheld. Conclusion - Only regulation 10(n) of Customs Brokers Licensing Regulations, 2018 stands affirmed, fastening of all the detriments available in the Regulation is clearly disproportionate. The imposition of penalty under regulation 18 of Customs Brokers Licensing Regulations, 2018 suffices to meet the ends of justice. Accordingly, while setting aside the revocation of licence and forfeiture of security deposit, the imposition of penalty of Rs. 50,000/- upheld. Appeal disposed off.

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• 2025 (3) TMI 1195
  Denial of rectification of error for finalization of assessment of Shipping Bill under Section 154 of the Customs Act, 1962 - rejection solely on the ground that no arithmetical or clerical errors/mistakes have been noticed in the Final Assessment Order - HELD THAT:- It is an error arose from the accidental omissions on the part of the assessing officer while finalizing the Shipping Bills under Section 154 of the Customs Act, 1962 as held by this Tribunal in the case of M/s Sesa Goa Limited [ 2010 (9) TMI 948 - CESTAT MUMBAI] . Consequently, finalization of the assessment done by the adjudicating authority for determining of the Fe content on DMT instead of WMT basis, is bad in law. Therefore, the said omission is required to be rectified by the adjudicating authority and the consequential benefit is to be given to the appellant by rectifying the omission under Section 154 of the Customs Act, 1962. Further, in the case of M/s Vedanta Limited [ 2023 (8) TMI 364 - CALCUTTA HIGH COURT ], it is held that the error is perceived from the omission or the accidental slip and therefore, the word omission should not be given a restrictive meaning but should be expanded to imbibe within itself an error occurred because of such omission and the same is required to be rectified. The adjudicating authority is directed to rectify the finalization of provisional assessment of shipping bills for the purposes of calculation of Fe content on WMT basis in terms of the order of the Hon ble Supreme Court in the case of Gangadhar Narsingdas Aggarwal [ 1995 (8) TMI 73 - SUPREME COURT] and thereafter, to pass a speaking order within a period of one month from the date of receipt of this order. Conclusion - The assessment should be corrected to reflect the Fe content on a WMT basis, and the adjudicating authority was directed to pass a speaking order within one month, providing the appellant with the appropriate relief under the applicable notification. Appeal allowed.

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• 2025 (3) TMI 1194
  Denial of rectification of error for finalization of assessment of Shipping Bill under Section 154 of the Customs Act, 1962 - while finalizing the Shipping Bills, no consideration of judicial pronouncements and the circulars cited hereinabove is clerical mistakes/omissions in terms of Section 154 of the Customs Act, 1962, on the part of the proper officer or not? - HELD THAT:- What is the clerical error/mistake apparent on record has been examined by this Tribunal in the case of Sesa Goa Limited [ 2010 (9) TMI 948 - CESTAT MUMBAI] , wherein this Tribunal has observed As per the law dictionary omission means neglect or failure to perform what the law requires and in this case law requires to assess the Bill of Entry after taking note of the decision of TISCO which was omitted by the proper officer. If for such omissions or errors committed by the proper officer, the same is to be corrected while dealing with refund claims filed by appellant, the same will tantamount to be done under Section 154 of the Customs Act, 1962. That is why the legislature incorporated the Section 154 of the Customs Act into the statute book to rectify such omission or error without challenging the assessment. As in the case, the decision the Hon ble Apex Court and the Circular dated 17.02.2012 was in public domain, in that circumstances, it is the duty of the adjudicating authority to take cognizance all the judicial pronouncements and the Circulars and thereafter, to pass the proper order, which the adjudicating authority has failed to do so in the case in hand while finalizing the Shipping Bills. Conclusion - It is held that it is an error arose from accidental omissions on the part of the assessing officer under Section 154 of the Customs Act, 1962 as held by this Tribunal in the case of M/s Sesa Goa Limited. Consequently, finalization of the assessment done by the adjudicating authority for determining of the Fe content on DMT instead of WMT basis, is bad in law. Therefore, the said omission is required to be rectified by the adjudicating authority and the consequential benefit is to be given to the appellant by rectifying the omission under Section 154 of the Customs Act, 1962 and thereafter, to determine the Fe content on the basis of WMT basis and pass an appropriate order in accordance with law. The impugned order is set aside - appeal allowed.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 1193
  Termination of petitioner s appointment as developer of a slum rehabilitation project - petitioner s failure to pay transit rent arrears and to complete the project within the stipulated time - overriding effect of Section 31 of the IBC over Section 13 (2) of the Slum Act. Does the approval of the petitioner s resolution plan by the NCLT under Section 31 of the IBC override or nullify the petitioner s obligations and liabilities arising under the Slum Act and the Slum Rehabilitation Scheme? In particular, is the SRA barred or restricted by the IBC from taking action under Section 13 (2) of the Slum Act due to the resolution plan s binding effect? - HELD THAT:- Undoubtedly, Section 238 of the IBC gives it overriding effect over inconsistent provisions of other laws. But in the present scenario, the Slum Act s mandate of ensuring timely rehabilitation of slum dwellers is not inconsistent with the objectives of the IBC. Rather, it furthers the very aim of keeping the corporate debtor as a going concern by facilitating the completion of the project that forms the basis of the company s revival. It must be noted that the IBC is not merely a tool for liquidation or asset-stripping, but a mechanism for holistic revival of viable companies. In a slum redevelopment project, the success and viability of the corporate debtor hinges on cooperation from slum dwellers and compliance with SRA guidelines. If the developer fails to honour its obligations such as payment of transit rent or timely completion of rehabilitation buildings the project collapses not only financially but also socially. In such a situation, the SRA stepping in to rescue the project is a necessary regulatory response and a sovereign function exercised in public interest. The principle of public interest penetrates insolvency law. Certain non-monetary consequences which arise under welfare legislations like the Slum Act cannot be lightly brushed aside merely because insolvency proceedings under the IBC have commenced or concluded. The removal of a developer under Section 13 (2) of the Slum Act is one such consequence. Another example arising in the present case is the proposed acquisition of the project land by the SRA. As per the Slum Act, once a developer is removed due to non-performance, the SRA has the power to acquire the land belonging to the outgoing developer, so that the same land can be handed over to the incoming developer for completing the rehabilitation scheme - the corporate debtor is not being dispossessed without remedy; rather, it is being divested of an asset which it was unable to utilise for the public good, and that too, in accordance with legal process. In the present case, the SRA s action of removing the petitioner as developer is a regulatory decision made in furtherance of the statutory scheme under the Slum Act. This decision is not rendered invalid merely because the developer has undergone insolvency or that a resolution plan has been approved. The two statutes operate in distinct spheres the IBC deals with debt resolution and revival of the corporate debtor, while the Slum Act is aimed at protecting the interests of slum dwellers and ensuring timely completion of rehabilitation projects - The IBC is not a refuge for those who have failed in their public responsibilities. The approval of a resolution plan does not and cannot bind independent statutory authorities like the SRA from discharging their duties under law. The welfare of slum dwellers, the progress of redevelopment schemes, and the broader public interest cannot be made subservient to the financial restructuring of one defaulting entity. In conclusion, therefore, it must be held that the removal of the petitioner as developer and the consequent acquisition of the land by the SRA are lawful, justified, and not inconsistent with the IBC. The resolution plan approved by the NCLT under the IBC does not override the petitioner s obligations under the Slum Act except to the limited extent that financial claims arising before the insolvency commencement date and duly dealt with in the plan cannot be enforced separately. Is the obligation to pay transit rent to slum dwellers a statutory obligation imposed by the Slum Act/regulations (and thus part of the public law framework), or merely a contractual term of the development agreement between the petitioner and the slum society? - HELD THAT:- The nature and character of the obligation to pay transit rent has been debated before this Court. The petitioner suggests that this obligation is rooted in private agreements, and therefore, like any other contractual obligation, may be modified, waived, or extinguished through insolvency proceedings. On the other hand, the respondents have taken a firm stand that this is not a matter of private negotiation but a statutory duty arising from the scheme sanctioned under the Slum Act. When a slum rehabilitation scheme is sanctioned under the Slum Act, it is not a mere private arrangement between a builder and slum dwellers. It is a public welfare scheme governed by statutory provisions, detailed guidelines of the Slum Rehabilitation Authority (SRA), and formal conditions set out in the Letter of Intent (LoI) and other regulatory documents such as Annexure II and Regulation 33(10) of the Development Control Regulations (DCR) applicable in Maharashtra. A critical condition of such schemes is that the developer must provide either alternate transit accommodation or monthly transit rent to every eligible slum dweller from the date of vacating their hutments until permanent rehabilitation units are handed over. This is not an optional or negotiable term that can be bargained away. If the obligation to pay transit rent were viewed as a purely private or contractual liability, it would open the door for each slum dweller to individually file a claim in the corporate insolvency process as an operational creditor. However, this is both impractical and unfair, considering the socio-economic background of the slum dwellers. The insolvency framework was not designed to handle such public welfare claims in this fragmented manner. More importantly, transit rent is not a one-time debt. It is a continuing performance obligation, which accrues monthly until the permanent housing is delivered. It is true that the petitioner entered into formal agreements with individual slum dwellers or the co-operative housing society to implement the project. These are usually in the form of tri- partite agreements involving the developer, the slum dweller, and the SRA or society - The developer cannot ignore or belittle this obligation merely because it appears in a contract. It is a duty owed not just to an individual, but to a class of beneficiaries protected by a welfare law. Accordingly, even if unpaid transit rent qualifies as an operational debt under the IBC for accounting purposes, this classification does not dilute the developer s continuing obligation to ensure that transit rent is regularly paid going forward. Breach of this obligation is not merely a civil wrong it is a breach of the statutory framework, attracting regulatory consequences including removal from the project. The obligation to pay transit rent is essentially a statutory obligation, even though it is implemented through formal agreements. Was the SRA justified in law in invoking Section 13 (2) and issuing the impugned order terminating the petitioner s appointment as developer? - HELD THAT:- In the present case, it is evident that the SRA considered all relevant factors. Notably, the authority took into account the petitioner s defence, including the approval of the resolution plan under IBC, the alleged improvement in financial capacity, and the fresh LoIs issued in 2024. However, the SRA ultimately found that on-ground progress remained unsatisfactory, and more importantly, that transit rent dues remained unpaid, thereby causing hardship to slum dwellers. 103. In such a situation, the authority was justified in taking a pragmatic decision to protect the welfare of slum dwellers, which is the central objective of the Slum Act. The decision to allow the society to appoint a new developer is not punitive, but rather remedial, to break the stagnation and ensure that the scheme is taken to its logical conclusion. This Court finds no perversity, irrationality, or illegality in the impugned order. It cannot be said that the action of the SRA was arbitrary or in breach of procedural fairness. On the contrary, the process followed appears fair, thorough, and in alignment with the statutory scheme s objective of timely and effective rehabilitation of slum dwellers. The action initiated by the SRA under Section 13 (2) of the Slum Act is lawful, reasonable, and justified, having regard to the petitioner s long-standing failure to pay transit rent, the resulting hardship to slum dwellers. Was the decision-making process of Respondent No. 6 (CEO, SRA) in issuing the impugned order fair and in accordance with law? - HELD THAT:- The petitioner is not merely an implementing agency or contractor, but also the owner of the land on which the slum rehabilitation scheme is being implemented. This dual role brings with it a greater degree of responsibility and accountability. The burden of compliance is higher, especially when the land has been granted for a public welfare scheme under beneficial terms. In such a situation, the SRA was duty-bound to afford the petitioner a conclusive and time-bound opportunity to clear the dues particularly after revival under the IBC before proceeding to cancel development rights. The record indicates that the AGRC did not extend such a final opportunity to the petitioner before concurring with the CEO s decision to terminate the petitioner s rights. In the respectful view of this Court, this constitutes a procedural lapse not one that invalidates the SRA s substantive powers or its overall assessment, but a deficiency in natural justice that warrants correction. This Court finds no infirmity in the SRA s decision to invoke Section 13 (2) of the Slum Act. The decision is well-reasoned, supported by facts, and aligned with the objectives of the Act. However, the limited procedural deficiency, namely the failure to grant a final opportunity to the revived petitioner to clear its dues and demonstrate intent, is one that must be remedied to uphold fairness. Conclusion - i) The resolution plan approved by the NCLT under the IBC does not override the petitioner s obligations under the Slum Act except to the limited extent that financial claims arising before the insolvency commencement date and duly dealt with in the plan cannot be enforced separately. ii) The obligation to pay transit rent is essentially a statutory obligation, even though it is implemented through formal agreements. iii) The action initiated by the SRA under Section 13 (2) of the Slum Act is lawful, reasonable, and justified, having regard to the petitioner s long-standing failure to pay transit rent, the resulting hardship to slum dwellers. iv) This Court finds no infirmity in the SRA s decision to invoke Section 13 (2) of the Slum Act. The decision is well-reasoned, supported by facts, and aligned with the objectives of the Act. However, the limited procedural deficiency, namely the failure to grant a final opportunity to the revived petitioner to clear its dues and demonstrate intent, is one that must be remedied to uphold fairness. Petition disposed off.

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• 2025 (3) TMI 1192
  Seeking to recall order passed by the Adjudicating Authority - whether HUDCO is a related party of the Corporate Debtor or not? - HELD THAT:- Appellant and HUDCO entered into Joint Venture Agreement on 02.05.2006 incorporating Srishti Urban Infrastructure Development Ltd. The shareholding as per the Joint Venture Agreement between the Appellant and the Respondent No. 1 for SUIDL was in the proportion of 60:40. Corporate Debtor was promoted by Appellant and SUIDL. The Corporate Debtor entered into a loan agreement with HUDCO for an amount of Rs.6907.92 Lakhs. Under the loan agreement HUDCO was empowered to appoint a Nominee Director. HUDCO exercised its right and appointed a Nominee Director in the Board of the Corporate Debtor. The submission which has been pressed by learned counsel for the Appellant is that the Application filed by the Appellant was fully covered on the ground that there was suppression on the part of HUDCO which lead to issuance of order dated 30.08.2023 which was obtained by HUDCO by playing fraud on the Court. The submission is pressed on the ground that Annual Report of the HUDCO was not placed by HUDCO when earlier application was decided on 30.08.2023. Admittedly, the Appellant is related party of the Corporate Debtor which is an undisputed fact. All aspects of the matter including HUDCO having promoted JV with Appellant where HUDCO has 40% shareholding and Appellant has 60% shareholding has been noticed and examined by the Adjudicating Authority in order dated 30.08.2023. In the present case suppression of relevant document cannot be accepted since all the document which were relevant for determination of issues raised in I.A. No.514/KB/2022 were filed and relied by both the parties i.e., HUDCO and Resolution Professional. It is not the case of the Appellant that HUDCO was asked to file Annual Report in which it failed to file. 51st Annual Report of HUDCO on which reliance has been placed by the Appellant was filed with the ROC and is matter of public record. When the report is filed with the ROC, there is no question of suppression of the report and submission of the Appellant tat there was any suppression on part of HUDCO is baseless. Conclusion - HUDCO is not a related party and that the order dated 30.08.2023 was not obtained by fraud or suppression. Appeal dismissed.

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• 2025 (3) TMI 1191
  Admission of section 9 application - existence of pre-existing disputes between the parties or not - demand notice validly contested or not - HELD THAT:- Present is a case where demand notice issued under Section 8 was replied and reply notice issued by the corporate debtor dated 28.01.2020 is clearly notice of dispute within the meaning of Section 9(5)(d). The Adjudicating Authority in the impugned order although has noticed the reply dated 28.12.2019 as well as earlier reply sent by the corporate debtor to the legal notice but has brushed aside the said reply relying on reconciliation meeting held on 16.10.2019. The reconciliation meeting is claimed on 16.10.2019 whereas the facility termination was effected on 26.12.2019 and demand notice was issued only on 03.01.2020 which was replied by notice of dispute dated 28.01.2020. The issue raised by the corporate debtor in reply to the demand notice cannot be held to be moonshine defence. In view of the judgment of the Hon ble Supreme Court in Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd. [ 2017 (9) TMI 1270 - SUPREME COURT] ], the Adjudicating Authority ought not to have admitted Section 9 application. There being pre- existing dispute which existed much prior to issuance of demand notice which is reflected from correspondences between the parties, legal notice issued by the operational creditor dated 01.07.2019 and reply to the legal notice sent by the corporate debtor on 21.08.2019. In the reply submitted by the corporate debtor, relevant materials are brought on the record which clearly reflected a pre-existing dispute between the parties prior to issuance of demand notice. Conclusion - The Adjudicating Authority ought not to have admitted Section 9 application, there being pre-existing dispute which existed much prior to issuance of demand notice which is reflected from correspondences between the parties. Appeal allowed.

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• 2025 (3) TMI 1190
  Effect of Debenture Trust Deed and Non-compliance of its condition, over the proceedings - existence of any validly executed Power of Attorney to initiate Section 7 Proceedings - proceedings would be barred by limitation or not - date of default and its determination - bar of Section 10A of I B Code could be read in conjunction to the aspect of limitation or not - implications of Section 65 of the I B Code, 2016 on the proceedings. What would be the effect of Debenture Trust Deed and Non-compliance of its condition, over the proceedings? - HELD THAT:- On reading of Schedule VIII, it stipulates under its Clause 2 (a), that the event described in para (a) that is the details of the default, which would necessitate the issuance of notice, has had to be as per the events of default contemplated under Clause 7 of the deed and that too in pursuance to the security document which is shown to have become enforceable under the eyes of law. In the absence of satisfaction of any of the conditions as given therein, it is opined that, the entire inception of the proceedings, under Section 7 of the I B Code, 2016, would be bad because there has been a flagrant and intentional disregard to the content and directives contained in the Debenture Trust Deed, which could have otherwise conferred the powers on the Debenture Trustee only to initiate proceedings under Section 7 of the I B Code, 2016, when there is a proved and established default or an event of default and in the absence of the same and adoption of procedure under Clause 10.1 (iv) of Debenture Trust Deed, the notices issued on 28.07.2020, alleging that there has chanced a default, that cannot be sustained in the eyes of law, in the absence of established authority. Whether there was any validly executed Power of Attorney? - HELD THAT:- When the nature of default as given under the Debenture Trust Deed and the debt too as defined therein are almost akin in its reflection. An intention of the legislature as that given under the statutory definition, the term coupon which has been sought to be argued by the Ld. Senior Counsel for the Respondent otherwise cannot be read as to be an alternative to determine a debt or a default, so as to exclude the applicability of Clause 7, which would be the act falling under the domain of exercise of powers by the Debenture Trustee. Once it comes to determining an aspect of a procedure for the purposes of initiation of proceedings under Section 7 of the I B Code, 2016, we have had to analyze judicially, as the sanctity of the source of power that, should have been normally exercised based on the Debenture Trust Deed, which would be binding inter-se amongst the parties, owing to the binding effect of the Debenture Trustee, as given under the Debenture Trust Deed itself, which provides for, that the Debenture Trustee though its functions has to be regulated upon by majority resolution passed by the Debenture Holder, but the contents of the same would have a binding effect on the parties whose act or actions are likely to be affected by the Debenture Trustee Agreement. The above question is answered against the Respondent/Applicant, that since the Debenture Trust Deed, is binding on the Respondents, and the procedure for its recovery under Clause 7 of the Deed, it ought to have been initiated, by a grant of authorization to the Debenture Trustee by a majority resolution, as contemplated under the Debenture Trust Deed, and more particularly when the Debenture Trustee itself has been authorized by the Government of India under the notification referred to herein above, which happens to derive source of issuance of notification is, vested under Section 7(1) of the I B Code, 2016. In the absence of the proceedings being drawn by the Debenture Trustee after its valid procedural authorization, the entire proceedings under Section 7 of the I B Code, 2016, would be vitiated in the eyes of law, which deserves interference by this Appellant Tribunal. Whether the proceedings were barred by limitation? - HELD THAT:- The object of limitation, under the Act, was to safeguard the right, or benefit which might have judicially accrued to, a person who is the beneficiary of adjudication, and maturing of right due to an inaction on the part of the person who seeks to, invoke a remedy for a redressal of his any legal rights created under an Act or law, which has been adversely effected by an adjudication made by the courts, which remains unchallenged, is matured for the winning party due to non-initiation of proceedings before a superior forum, within limitation - A rational interpretation has to be given, and the said extension should not be preposterously extended without rationality to deprive the very object of limitation. The limitation should not be extended at the cost of deprivation of a right which had accrued to the beneficiary. The question of acknowledgment of default, being 30.09.2019 in the instant case, is not in controversy, as Section 18 only deals with the aspect of effect of acknowledgment, which had never been the disputed case of the Respondent, at any stage of the proceedings, because they had persistently argued, that the default stood acknowledged as back as on 30.09.2019 - Once the date of default is not in dispute, the implication of Section 18 of the Limitation Act will have no relevance for the purposes of determining the debt and the date of default and its conjoint reading with Section 238A of I B Code, 2016. The proceedings drawn under Section 7 of the I B Code, 2016, by Respondent/Applicant was barred by limitation, this question too is answered against the Respondent and in favour of the Appellant. Date of Default and its determination - HELD THAT:- It is a rampant case and not in aspect of debate, that the date of default is on 30.09.2019, and it is not in debate rather admitted by Respondent/Applicant, that the limitation has to be determined as per Article 137 of the Limitation Act from the date of admission of default i.e., 30.09.2019 in the instant appeal. If the limitation is construed under Article 137 of Limitation Act, as per the admitted date of default, it will be ending on 30.09.2022, but if it is determined from the date of the imposition of the restrictions because of COVID-19 and even if the same is permitted to be extended, to the period of 90 days as per Hon ble Apex Court Suo motu case [ 2022 (1) TMI 385 - SC ORDER ] irrespective of which that would be falling on 29.09.2022. After the extended date of 90 days of limitation as granted by the judgment of the order of the Hon ble Apex Court, with effect from 01.03.2022, if that be so, there was no legal or factual obstruction for the Applicant/Respondent nor there is any express pleadings for inability to file proceedings between 01.03.2022 till 29.09.2022 and thereafter till 08.09.2023. In that eventuality, they would not be entitled to any benefit of limitations determined on the basis of admitted date of default, even based upon the Suo motu judgment particularly, that has contained under Para 5.3 of the said judgment. The en block exclusion, of the period from 15.03.2020 to 28.02.2022, would not be available to the Appellant, when the Section 7 application was filed after 464 days even after the extended period of 90 days. Hence at the most, the appeal ought to have been filed, prior to 29.09.2022, and since there happens to be no valid explanation, by the Respondent for the inability to file, the application between 29.09.2022 and 07.09.2023. The limitation, could not be extended as argued by the Ld.Senior Counsel for the Respondent; which would be reckoned from the date of admitted default i.e., 30.09.2019, which was prior the restrictions of COVID-19 situation i.e., prior to 15.03.2020. Limitation and effect of Section 10A of the I B Code, 2016 - HELD THAT:- On a simpliciter reading, of the provisions contained under Section 10A it provides for, that the bar which was created for initiation for proceeding, was in relation to the default which was committed on or after 25.03.2020, it not apply to admitted defaults prior subsequent to the insertion of Section 10A. Since there being a specific incorporation of a cut-off date of 25.03.2020 and here in the instant case admittedly the default has been committed on 30.09.2019, Section 10A will have no applicability for the purposes of extension of the period of limitation for initiation of CIRP proceedings owing to COVID-19 situation and more particularly, when the Respondent/Applicant, himself has issued notices for initiation of proceedings on 28.07.2020 after the insertion made by the Act No. 17/2020 with effect from 05.06.2020, that is one month after the insertion. The explanation of Section 10A, has abundantly made quite clear, that the provision under Section 10A would only be applicable when the default is expressly shown to have been committed after 25.03.2020 and it will not be inclusive of any defaults which are committed prior to it. Under Section 10A of the I B Code, 2016, will not be attracted in the instant case and in those cases where the default has chanced prior to cut-off as ascribed under Section 10A of the I B Code, 2016. This Appellate Tribunal too, had an occasion to deal with almost a similar issue in the matter of Company Appeal (AT) (CH) (Ins) No. 95/2024, Mr. Sudhir Bobba versus M/s. TVN Enterprises Another [ 2025 (3) TMI 1142 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI] , the Judgment rendered by this Tribunal is based upon the ratio of Raghavendra Joshi [ 2023 (8) TMI 1376 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] as well as that of, Narayan Mangal [ 2023 (8) TMI 1378 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] had to propound to the same principles that Section10A will not apply in those cases where the default has occurred, prior to the insertion of Section 10A in I B Code, 2016, and period prescribed therein. Section 10A will have no applicability for the purposes of extension of the period of limitation in the instant case, as it has been argued by the Ld. Counsel for the Respondent/Applicant to the proceedings. Because of the fact, that the Respondent/Appellant themselves have chosen to issue notice on 28.07.2020, i.e., one month after the exemption contemplated under Section 10A, as made effective by the amending act with effect from 05.06.2020. The Respondent/Applicant will not be entitled to any benefit under Section 10A of the I B Code, 2016, which would not be applicable - from the conduct of Respondent/Applicant, they have attempted to blow hot and cold simultaneously and take the benefit of the extended period of limitation under Section 10A of the I B Code, 2016, by knowing the fact that they had issued the notice under Section 8, after almost one month from the date of the insertion of Section 10A of the I B Code, 2016, and then sitting over the issue and instituting the proceedings, even after the taking off the period of limitation by the Hon ble Apex Court, with effect from 28.02.2022 to 30.05.2022 and waiting till 07.09.2023, the proceedings drawn by the Respondent would be barred by limitation and Article 137 of the Limitation Act will come into play. Thus, this question is answered, against the Respondent thereby the Section 7 proceedings were barred by limitation. What implications would Section 65 of the I B Code, 2016, would have on the proceedings? - HELD THAT:- The plea of malicious prosecution was raised in written submissions, but the Adjudicating Authority did not address it. The Court found this omission significant, rendering the judgment perverse for not considering all relevant pleas. Conclusion - i) Because of the fact that the default is an aspect not disputed, and its limitation for the purpose of initiation of proceedings, under Section 7 of the I B Code, 2016, will be expiring on 30.09.2022, after the gracious period granted by the Hon ble Apex Court, since the Respondent having filed the same on 07.09.2023 would be barred by limitation. Since being in violation to Article 137 of the Limitation Act. ii) Because of the fact that, the Debenture Trust Deed dated 22.03.2019, it was a self-contained provision, which provided for conferring of a right for initiation of proceedings for insolvency, after a majority decision of the Debenture Holders, which was to be exercised by the Debenture Trustee and since the same was not done in accordance with the covenants of the inter-se binding implications of the Debenture Trust Deed. The entire proceedings would be vitiated, since there being a contravention to the agreed terms of the deed, which is not in dispute. iii) Because of the fact that, as per the affidavit which was filed in support of the application preferred under Section 7 for initiation of I B proceedings was by an individual, who on the relevant date was not even holding a valid authority, owing to the cessation of his authority which was vested to him by the Boards Resolution of 05.03.2019. On the date of filing of the proceeding, since the said Boards Resolution stood superseded by the subsequent Boards Resolution of 02.02.2021, where the right set in subsequently conferred an authority to initiate proceedings to Mr. Kaustubh Sudame, by an attorney executed in his favour on 22.02.2022, thus on the date of filing of the proceedings, Mr. Manohar Maddili as he was not holding a valid authority. The proceedings would be vitiated since, having not been instituted under the valid authority. iv) Since, the entire proceeding was maliciously oriented, as having been instituted on the basis of the notice issued on 28.07.2020, which was falling during the COVID-19 period. v) Operation of Section 10A will not in any way impact the limitation period in this case since the limitation would start running from the date of the default being 30.09.2019, which was prior to the COVID-19 period and the limitation thereto of three years will be expiring on 30.09.2022 even after taking into account the implication of Suo motu judgment of Hon ble Apex Court due to COVID-19 situation. vi) It would be a malicious proceeding and would be barred by Section 65 of the I B Code, 2016. The plea of Section 65 of the I B Code, 2016, since having been taken by the Appellant after the leave of the Tribunal and has not been considered, it would vitiate the proceedings. The application under Section 7 of the I B Code, 2016 is rejected - appeal allowed.

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• PMLA

• 2025 (3) TMI 1189
  Money Laundering - proceeds of crime - Scheduled offences - attachment of bank accounts, movable as well as immpovable properties - reasons to believe - When the alleged proceeds of crime already stand seized by another law enforcement authority, i.e., the DRI, and same are in its possession, and therefore wholly outside the control and reach of the appellants, how could the respondent Directorate have justifiably entertained the reason to believe under the Second Proviso to section 5(1) that if such property is not attached immediately, the non- attachment of the property is likely to frustrate any proceeding under the Act? - HELD THAT:- The only offences that have been made out against the appellants are the offences under Sections 135(1)(a)(i)(A) and 135(1)(b)(i)(A) which are in relation to the foreign gold bars and biscuits valued at 13.56 crores which were seized by the DRI. The said value matches exactly with the value of movable properties recovered and seized by DRI. The material on record, therefore, does not reveal that there are any allegations in respect of any other scheduled offence(s) against any of the appellants herein. Insofar as the offences under Sections 135(1)(a)(i)(A) and 135(1)(b)(i)(A) of the Customs Act, 1962 are concerned, the property involved in the said offence is already under seizure by the DRI and attachment by the ED. Further, the confiscation thereof has also been proposed in the Prosecution Complaint under the PMLA, 2002 which remains pending. As held by the Hon ble Supreme Court in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT (LB) ], the respondent Directorate could not have assumed that any other scheduled offence(s) were committed by the appellants and proceeds were derived therefrom and attached property over above the seized gold, even if the same were found to out of unexplained sources. Unexplained investment in properties may no doubt be actionable under the Income-tax Act or other laws, but no action under PMLA, 2002 could have been initiated against the same based on assumption that because they were found to in excess of the known sources of income, the same were necessarily derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence. Conclusion - The attachment under PMLA can extend to properties not directly linked to the scheduled offence and properties of non-accused persons if connected to proceeds of crime. However, attachment cannot exceed the value of the alleged proceeds without evidence of additional criminal activity. Appeal disposed off.

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• Service Tax

• 2025 (3) TMI 1188
  Condonation of delay in filing appeal - time limits as prescribed u/s 85(3A) of the Finance Act, 1994, as applicable to Service Tax matters - authority of Commissioner (Appeals) to condone delay - HELD THAT:- In the present case the Order-In-Original was undisputedly received by the Appellant on 13.07.2020. They filed the appeal before the Commissioner (Appeal) on 15.02.2023, i.e. after more than 30 months. Even if the benefit of the order dated 10.01.2022 of Hon ble Supreme Court in Suo Motto Writ Petition [ 2022 (1) TMI 385 - SC ORDER] is extended to the Appellant than also the appeal was to be filed by the Appellant within two months from 28.02.2022. Commissioner (Appeal) could have condoned delay in filing the appeal if the same was upto one month. The appeal has been filed much after the date by which this appeal could have been filed even after extending the benefit of this order of Hon ble Apex Court. Appellant had filed the appeal before the Commissioner (Appeals) beyond the period which could have been condoned by the Commissioner (Appeals) as per Section 35 of the Central Excise Act. Judgment relied upon by Commissioner (Appeals) has clearly laid down that Commissioner (Appeals) has no Authority to condone the delay beyond 30 days. That being so by application of the said provision of the Central Excise Act and the decision of the Hon ble Supreme Court in the order of Singh Enterprises [ 2007 (12) TMI 11 - SUPREME COURT] holding In the instant case, the explanation offered for the abnormal delay of nearly 20 months is that the Appellant concern was practically closed after 1998 and it was only opened for some short period. From the application for condonation of delay, it appears that the Appellant has categorically accepted that on receipt of order the same was immediately handed over to the consultant for filing an appeal. If that is so, the plea that because of lack of experience in business there was delay does not stand to be reason. Conclusion - i) Appeal dismissed as it was filed beyond the permissible time limits set by Section 85(3A) of the Finance Act, 1994. ii) The Commissioner (Appeals) is found to have no authority to condone the delay beyond the statutory period. iii) The Appellant s request for condonation of delay is not supported by sufficient cause, and the decision of the Commissioner (Appeals) to dismiss the appeal, upheld. Appeal dismissed.

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• 2025 (3) TMI 1187
  Classification of services - supply of tangible goods service - services of providing material handling equipment to various clients - demand prior to period 16.05.2008 - HELD THAT:- A similar issue has been dealt with by this Tribunal in the appellant s own case [ 2018 (12) TMI 785 - CESTAT KOLKATA] wherein this Tribunal has already held that the service rendered by the appellant is not liable to be taxed under the category of business support services for the period under dispute. Conclusion - The service rendered by the appellant is not liable to be taxed under the category of business support services . The demand set aside - appeal allowed.

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• 2025 (3) TMI 1186
  Levy of service tax on UCT is undertaking marketing of products, procuring customers, effecting sale of such products and getting commission for same - service tax under Reverse Charge Mechanism on alleged import of Management or Business Consultancy Services on the ground that the appellant is using third party software for which they have remitted the royalty outside India - suppression of facts or not - extended period of limitation. HELD THAT:- The Hon ble Bombay High Court in the case of IDFC First Bank Ltd. vs. Union of India, [ 2023 (8) TMI 1153 - BOMBAY HIGH COURT] wherein while deciding whether the time limit as prescribed in S. 73 (4B) of the Act are mandatory or directory in nature, the Hon ble High Court laid emphasis on the word shall used in the provision to hold that the time limit prescribed in S. 73 (4B) of the Act is mandatory and held If the interpretation of the provisions as canvassed on behalf of the revenue is accepted, it would tantamount to defeating the well settled principles of law that a show cause notice is required to be taken to its logical conclusion within a reasonable period of time and expeditiously, as a show cause notices issued under any fiscal legislation and concerning recovery of revenue would have a very serious concern and bearing on the public revenue. Hence, there cannot be any laxity much less any lethargic approach on behalf of the officers is delaying adjudication of such notices. The legislative provisions which intend to bring about an expeditious and effective adjudication of a show cause notice cannot be defeated by the officers sitting tight on the show cause notice and/or not expeditiously taking them to the logical conclusion. The Section 73 (4B) provision of the Finance Act 1994, is para materia with the provisions of Section 11A (11) of Central Excise Act 1944 and Section 128 (9) under Customs Act 1962. Under all these Acts, the words used are Shall and Where it is possible to do so and in the Manual as far as possible . The importance and significance of these words as well as to whether these are directory or mandatory in nature, have already been interpreted in various case laws - In the Kopertek Metals Pvt Ltd. [ 2024 (12) TMI 269 - CESTAT NEW DELHI] , decided by the Principal Bench Delhi Tribunal, it has been held that non adjudication of the order, with no reason being given to the effect that the order could not be passed on time due to circumstance beyond the control of the Adjudicating authority, the same would be fatal to the legality of the order. In VOS judgement, [ 2024 (12) TMI 624 - DELHI HIGH COURT] the Delhi High Court has also held so and has noted that the delay is required to be viewed from the facts of the case. As per these decisions, when the reason for delay is not explained by way of plausible reasons in the Order in question, it fails to prove that it was not possible to pass the authority within the time-frame. It is found that if the time-frame given in a statute is not fulfilled, the decision as to whether it is correct or erroneous would not depend on the deviation period. The delay, whether it is for one day or one year or ten years are all taken as delay only. Similar is the situation even in case of time-frame given for filing of appeals - The Hon ble Supreme Court in the case of Singh Enterprises [ 2007 (12) TMI 11 - SUPREME COURT] , has held that in case of such appeals, even the Tribunal and Courts have no power to condone the delay. On a factual matrix, it is found that even in the present case in many cases the delay is to the extent to 2 years. Therefore, there are no merits in the arguments of the Revenue that delay by number of days should be the factor to be considered to apply or otherwise the Tribunal s order in the case of Kopertek Metals. In the Order in Original, there is no mention of the circumstances which proved to be impediment in completing the adjudicating process within one year. Another issue weighing in our mind is that in this case, the appellant is a duly registered assessee. They have been paying Service Tax and filing their Returns. The demand as per the Revenue, emanates from the transactions pertaining to import of service. As submitted by the appellant and also held consistently by the Tribunals and Courts that this is a clear case of revenue neutrality, wherein the suppression clause cannot be invoked. This being the case, in the first place, the Revenue did not have the case in respect of extended period itself. In such a situation, the period for adjudication itself gets shortened to six months. However, since the SCN was issued invoking the extended period, though not invocable, the Adjudicating authority cannot be faulted even if the OIO is passed within one year. The ratio laid down by the Tribunal in the case of Kopertek Metals, would be squarely applicable. Conclusion - i) The transactions between the Appellant and UCT are sales, not Business Auxiliary Services, thus not liable for service tax under the reverse charge mechanism. ii) The demand for service tax on alleged consultancy services is not upheld as the use of third-party software did not constitute consultancy. iii) The extended period for demand is not applicable due to lack of suppression and the case being revenue neutral. iv) The adjudication order is set aside for being passed beyond the statutory time limit without justification. Appeal allowed.

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• 2025 (3) TMI 1185
  Levy of service tax - income from assigned portfolio, when the said amount represents consideration acting as a Collection agent / Servicer - extended period of limitation - HELD THAT:- In this case, the Respondent has sold/assigned the portfolio of loan comprising of loans provided to various small borrowers, to the banks/financial institutions by entering into assignment agreements, for the purpose of raising funds. Upon assignment of such loan portfolio, the Respondent immediately receives the principal amount of the loan portfolio or the amount as may be agreed with the assignee and the asset pool is removed from the books of the Respondent as the same becomes the property of the assignee to which the portfolio has been assigned - The Respondent has entered into separate Collection agency agreement with the assignee for the same, which is ancillary to the main contract of assignment. Further, a nominal fee has been earmarked for the activities covered under the Collection Agency agreement . The Respondent is paying service tax on the nominal fees received for collection of the amount. However, the Revenue is of the view that the excess interest spread, i.e. the difference between the interest amount payable by the borrowers in respect of the loans and the yield payable to the assignee, recorded as Income from assignment of loan is the actual consideration of the Recovery service undertaken by the respondent for the banks/financial institutions. The contention of the Revenue is that the respondent in the present case is not merely transferring loans but is actively servicing and collecting the principal and interest amount on behalf of respective banks as a recovery agent. There are no merit in the contention of Revenue. It is pertinent to note that borrowers are not a party to the assignment agreements entered by the Respondent with various banks/financial institutions. The Respondent is collecting the principal and interest amounts in instalments, not in the capacity of a Recovery Agent, but in the capacity of the lender who originally gave the loan to the borrower. Therefore, it is observed that there is no service element involved in this transaction and the interest amount retained by the Respondent cannot be considered as consideration towards rendering the service of collection of the principal and interest for the assignees. The issue is no longer res integra as a similar issue has already been examined by the Tribunal at Chennai in the case of Commissioner of Central Excise Service Tax, LTU, Chennai v. Sundaram Finance Ltd. vice-versa [ 2017 (11) TMI 1002 - CESTAT CHENNAI] where it was held that the tax entries relied upon by Revenue are not squarely covering the activity which are in any case between principal to principal. The cheques and other bills collected by the appellant-assessee are on their own account which are further passed on in terms of agreement with the ICICI bank. The conditions of transaction and schedule of payment will not influence the nature of activity as agreed upon between the two contracting parties. We find no element of Business Auxiliary Service in such arrangement. Conclusion - The income from the assignment of loans is interest income exempt from service tax under Rule 6(2)(iv) of the Service Tax (Determination of Value) Rules, 2006. Appeal of Revenue dismissed.

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• Central Excise

• 2025 (3) TMI 1184
  Challenge to SCN issued by the respondent u/s 11-A of the Central Excise Act - issuance of a personal hearing notice after a significant delay - HELD THAT:- In the instant case, though replies were sent to the impugned show cause notice dated 11.12.2007 as early as in the year 2007 itself, the said replies have not been considered by the respondent in accordance with the procedure contemplated under Section 11-A(10)(11) of the Act. The respondent has failed to determine the amount of duty due from the petitioner after affording an opportunity of hearing to the petitioner, and after giving due consideration to the replies sent by the petitioner to the show cause notice. Section 11-A(11) of the Act, also makes it clear that the respondent shall determine the amount of duty of excise payable by the petitioner within six months from the date of notice in respect of cases falling under sub-section(1); and within two years in respect of cases falling under sub-section (4). In the case on hand, the respondent has not adhered to Section 11-A(11) of the Act and till date, they have failed to determine the amount of duty of excise payable by the petitioner pursuant to issuance of the impugned show cause notice dated 11.12.2007. After a lapse of more than 16 years, the respondent has sent a notice of personal hearing dated 28.07.2023 to the petitioner pertaining to the impugned show cause notice dated 11.12.2007, which is not legally permissible in law. Any proceeding initiated by the respondent without authority under law has to be set aside by this Court - In the instant case, personal hearing notice dated 28.07.2023 has been issued by the respondent without authority under law, that too, after a lapse of 16 years. Even though the learned counsel for the respondent would submit that due to an audit objection there was a delay in proceeding further after the issuance of show cause notice, the said submission has to be rejected by this Court, as, for no fault on the petitioner, they cannot be penalised without authority under law. Conclusion - The impugned personal hearing notice dated 28.07.2023 is issued in violation of the statutory provisions and without authority under law. Petition allowed.

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• 2025 (3) TMI 1183
  Rejection of present application for considering the additional grounds - demand for Basic Excise Duty (BED) and National Calamity Contingent Duty (NCCD) for the period from 15.01.2020 to 31.12.2021, along with interest and penalty - HELD THAT:- There are no reason to reject the present application for considering the additional grounds. However, considering that the issue is also on sustainability of the demand as held by Hon ble Supreme Court and since the issues were not considered by the adjudicating authority, it is proper for this Tribunal to remand the matter to Adjudicating Authority. As regards penalty and demand by invoking Rule 12(5) of the Central Excise Rules 2017, it is found that the appellant had challenged the Notification No. 3/2019-CE dated 06.07.2019 by filing Writ Petition No. 651/2020 and only consequent to the stay order passed by the Hon ble High Court of Karnataka, Appellant had stopped payment of BED and NCCD, on the manufacture and clearance of Chewing Tobacco, with effect from 15.01.2020. They had also stopped filing the statutory returns in Form ER-1, for the said period. In such a situation, no finding can be given that the appellant had failed to file statutory returns to invoke Rule 12(5) of the Central Excise Rules, 2017 or failed to pay appropriate BED and NCCD during the impugned period on the manufacture and clearance of goods with an intent to evade payment of duty. Thus invoking the penal provision under Section 11AC (1)(a) of the Central Excise Act, 1944 and demand under Rule 12(5) of the Central Excise Rules, 2017 are unsustainable. Conclusion - i) The application for additional grounds is allowed. ii) The penalty under Section 11AC(1)(a) and the demand under Rule 12(5) were set aside. iii) The demand for BED and NCCD was remanded for reconsideration by the adjudicating authority. iv) The adjudicating authority was directed to pass an appropriate order within three months, considering all issues and grounds raised by the appellant. Application allowed.

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• 2025 (3) TMI 1182
  Classification of goods namely Student Almanac and teacher planner, Diaries, Workbook, Calendars, Note-Pads and Scrap books - to be classified under Chapter 49 of the Schedule to the Central Excise Tariff Act, 1985 or under Chapter 48 as Articles of Paper or of Paper Board and attract duty @ 12.5% ad valorem? - exemption from waste and scrap under N/N. 27/2011-CE dated 24.03.2011 - invocation of extended period of limitation - Penalty under Rule 26 of the Central Excise Rules of the Central Excise Rules on Director of the assessee. Classification of Student Almanac and teacher planner - HELD THAT:- The Student Almanac is the same as a diary except that it is customized to meet the requirements of students of the particular school. Therefore, the information relevant to that school is printed in it. The submission of the learned counsel that since Student Almanac is used only by students of a particular school, it becomes a product of printing industry cannot be accepted. Undisputedly 90% of the space in the Student Almanac is left blank for students to write. Providing additional information relevant to the school does not make it a product of printing industry. The teacher planner, likewise is to help to make notes and, therefore, stand on the same footing - the submission of the assessee deserves to be rejected. Waste and scrap - HELD THAT:- The only submission of the assessee with respect to waste and scrap is that since Student Almanac and teacher planner were exempted from payment of duty, the scrap generated also should be exempted by virtue of N/N. 27/2011-CE. The submission of the Revenue is that since Student Almanac and teacher planner and other products, such as, diaries, note pads were exigible to duty, the assessee was not entitled to exemption from waste and scrap. For the reasons stated above while dealing with classification of Student Almanac and teacher planner, the submission of the learned authorized representative deserves to be accepted and the assessee is not entitled to the benefit of exemption on waste and scrap. Extended period of limitation - penalty - HELD THAT:- There was no evidence of intention to evade payment of duty and suppression of facts because it was possible for the assessee to have entertained the belief that the Student Almanac and teacher planner were not exigible to duty and, therefore, to have NOT declared them in their excise returns - the question of limitation found in favour of the assessee and against the Revenue and the impugned order needs to be upheld in so far as this limitation is concerned. Consequently, the penalty under section 11AC was also correctly set aside by the Commissioner (Appeals) in the impugned order. Penalty under Rule 26 of the Central Excise Rules of the Central Excise Rules on Director of the assessee - HELD THAT:- In this case there is no confiscation of the goods nor is there any allegation that any Cenvat credit has been wrongly taken - the Commissioner (Appeals) was correct in setting aside the penalty on Shri Kishore Mittal under Rule 26 of the Rules. Conclusion - i) Student Almanac and Teacher Planner are classifiable under Chapter 48 due to their primary purpose for writing, similar to diaries. ii) The denial of exemption for waste and scrap, as dutiable goods are manufactured alongside exempted goods upheld. iii) There are no evidence of intent to evade duty or suppress facts, supporting the decision to set aside the demand for the extended period. iv) The decision to set aside the penalty on the Director upheld, as the conditions for imposing a penalty under Rule 26 were not met. Appeal dismissed.

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• CST, VAT & Sales Tax

• 2025 (3) TMI 1181
  Taxable events or not - levy of Luxury Tax - allied activities conducted by the assessee, particularly those related to the operation of a beach resort and other tourism-related services - HELD THAT:- It is found that before the assessing officer, the assessee could not produce any evidence to substantiate the claim. The question as to whether the allied activities of the assessee would fall outside the taxable event under the Act is purely a matter of adjudication on facts. It was not open for the assessee to have produced the evidence for the 1st time before the tribunal. Even assuming that the assessee could have produced such evidence before the tribunal, the tribunal ought to have remanded the matter back to the assessing officer for fresh consideration. In this context, it is noted that despite the similar facts being presented before the tribunal in T.A.(L.T.) No. 29 of 2023, by order dated 22.2.2024, the very same officer who authored the judgment did not choose to accept the earlier orders which are impugned herein and remanded the matter back for consideration of the assessing officer. Conclusion - In the light of the order passed in the above case wherein the assessing officer was given the liberty to consider the entire evidence on record, it is found that for the assessment years in question, i.e., 2012-2013 and 2013-2014, the matter should regain the attention of the assessment officer. Hence the petitioner is entitled to succeed. The matter is remanded back to the assessing officer for fresh consideration.

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• 2025 (3) TMI 1180
  Constitutional validity of the second proviso to Section 84 of the VAT Act - requirement of pre-deposit of 15% of the disputed tax to entertain an appeal - HELD THAT:- As the petitioner has already preferred an appeal and deposited Rs.68,14,980/- towards the disputed tax, respondent authorities being respondent nos.2 and 3 are requested to entertain the appeal filed by the petitioner and to dispose of the same within eight weeks from date of this order. Petition disposed off.

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• Indian Laws

• 2025 (3) TMI 1179
  Scope of consumer under the Consumer Protection Act, 1986 - liability on the appellant to disburse the remaining consideration amount for sale of the flat payable to the complainant-respondent by the borrower. Whether the appellant was liable to disburse the remaining consideration amount of Rs.31,00,000/- for the sale of the flat to the respondent? - HELD THAT:- The appellant, assuming any liability in this regard existed at all, taking the respondent s case at the highest, could not have been saddled with having to pay more than what was envisaged under the Home Loan Agreement between the borrower and the appellant. In any event, the appellant s liability under the Agreement for sale was restricted only to satisfying the dues of the complainant-respondent with ICICI Bank which sum was in fact quantified at Rs.17, 87, 763/- and, in any view of the matter, could not have exceeded Rs.23, 40, 000/-. Thus, the NCDRC could not have, under any circumstance, taken a view that the appellant was liable to pay Rs.31, 00, 000/- both to ICICI Bank as well as to the complainant-respondent, who was not a party to the ultimate sanction of the loan by the Home Loan Agreement, which was between the appellant and the borrower. Hence, the question is answered in the negative. Whether the respondent qualifies as a consumer under the Consumer Protection Act, 1986? - HELD THAT:- The complainantrespondent cannot be said to be a consumer under the Act as it had no privity of contract with the appellant, due regard being had to the totality of the factual matrix. Condonation of delay in filing complaint - HELD THAT:- The purported Tripartite Agreement is dated 09.02.2008. The cause of action statedly had arisen in/by April/May, 2008. The respondent filed a complaint under the Act on 16.04.2018 - While the NCDRC is competent to condone any period of delay in filing a complaint beyond two years from the date when the cause of action arises, the discretion is circumscribed by twin conditions: (i) that the complainant satisfy the NCDRC that he had sufficient cause for not filing his complaint within such period, and; (ii) that the NCDRC record the reasons for condoning such delay. We have perused the ordersheets of the NCDRC pertaining to the complaint at hand. Neither reasons nor a formal order condoning delay is forthcoming, either in the ordersheets or in the Impugned Order - Delay cannot be condoned. As vivid from Emaar MGF Land Ltd. v Aftab Singh, [ 2018 (12) TMI 1940 - SUPREME COURT] and M Hemalatha Devi [[ 2023 (10) TMI 1510 - SUPREME COURT] , even in a consumer dispute under the Act, or for that matter, the Consumer Protection Act, 2019, arbitration, if provided for under the relevant agreement/document, can be opted for/resorted to, however, at the exclusive choice of the consumer alone. As the appellant is not a consumer in terms of the Act and the existence of the Tripartite Agreement is doubtful, we need not dwell further hereon. Conclusion - i) The respondent is not a consumer under the Consumer Protection Act, 1986, due to the lack of privity of contract with the appellant. ii) The appellant Is not liable to pay the full sale consideration of Rs.31,00,000/-, as the purported Tripartite Agreement did not establish such an obligation. Appeal allowed.

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