TMI Tax Updates - e-Newsletter
April 11, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Law of Competition PMLA Service Tax Indian Laws

TMI Short Notes

1. Structured mechanism for treatment of losses from specified businesses in Clause 114 of the Income Tax Bill, 2025 Vs. Comparison with Section 73A of the Income-tax Act, 1961

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2. Understanding the Tax Treatment of Speculation Losses in Clause 113 of Income Tax Bill, 2025 Vs. Section 73 of Income Tax Act, 1961

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3. Legal Frameworks for losses and unabsorbed depreciation Carry Forward in Co-operative Bank Mergers and Demergers in Clause 118 of the Income Tax Bill, 2025 Vs. Section 72AB of the Income Tax Act, 1961

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4. Strategic Disinvestment and Tax Benefits in Clause 117 of the Income Tax Bill, 2025 VS. Section 72AA of the Income Tax Act, 1961

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Articles

1. Digital Signature and DIN: Why They're Important for OPC Annual Return?

   By: Ishita Ramani

2. INPUT TAX CREDIT – IMPACT OF SAFARI JUDGMENT OF SUPREME COURT

   By: Dr. Sanjiv Agarwal

3. POSTAL IMPORT REGULATIONS, 2025 – AN OVERVIEW

   By: DR.MARIAPPAN GOVINDARAJAN

4. Customs Brokers – An Introduction

   By: YAGAY andSUN

5. Customs Brokers – Legal and Regulatory Frame Work.

   By: YAGAY andSUN

6. What is Freight Forwarding? The Role of Freight Forwards in Import - Export Business.

   By: YAGAY andSUN

7. Applicability of Legal Metrology Packaged Commodity Rules 2011 on Fertilizers.

   By: YAGAY andSUN

8. FTP 2023 and Import of Fertilizers, Bio-Fertilizers and Micro nutrients - Detailed Study.

   By: YAGAY andSUN

9. Import of Fertilizers – An Introduction

   By: YAGAY andSUN

10. The Fertilizer (Control) Order, 1985

   By: YAGAY andSUN

11. Institutionalizing Exporter Grievance Redressal through NIRYAT SAMVAADJNCH – Public Notice No. 28/2025

   By: YAGAY andSUN

News

1. House GOP approves framework for Trump's big bill after intense wrangling wins over GOP holdouts

2. House GOP holdouts threaten Trump's 'big, beautiful' budget, tax cut bill as votes postponed

3. Some House Republicans threaten Trump's 'big, beautiful' budget, tax cut bill ahead of floor vote

4. FM Sitharaman arrives in Austria after India-UK Economic and Financial Dialogue

5. Shared Vision, Shared Responsibility – Strenghtening NBFCs (Speech by Shri Swaminathan J, Deputy Governor, Reserve Bank of India - March 28, 2025 - at the Conference of Non-Banking Financial Companies held at Chennai)

6. RBI issues draft Directions on the regulatory measures announced in SDRP

7. 8th Session of India-Russia Working Group on Priority Investment Projects held in New Delhi

8. Commerce and Industry Minister Shri Piyush Goyal chairs a meeting on the emerging trade scenario with Export Promotion Councils and Industry bodies

9. India and UK hold 13th Economic and Financial Dialogue in London

10. Workshop on Developing Ecosystem for Assistive Technology in India" Organised by NITI Aayog

11. Welcome RBI's rate cut as economy needs push amid trade uncertainties, says FM Sitharaman

12. Four PSU banks cut lending rate in line with RBI's policy, more to follow suit

13. India withdraws transshipment facility for B'desh to export goods to third countries days after Yunus' 'landlocked' remarks

14. Economic offences have deep rooted conspiracies: SC in Adarsh credit cooperative society case

15. Economic storm coming, where is PM Modi hiding: Rahul on US tariff issue

16. India terminates transshipment facility for Bangladesh to export goods to third countries

17. RBI issues draft norms for conduct-related aspects for gold loans

Notifications

GST - States

1. G.O.Ms.No.78 - dated 11-3-2025 - Andhra Pradesh SGST

Amendment in Notification G.O.Ms.No. 95, Revenue (CT-II) Department, dated 19.02.2018

2. G.O.Ms.No.77 - dated 11-3-2025 - Andhra Pradesh SGST

Amendment in Notification GO.Ms.No.494, Revenue(CT-II) Department, dated 03.11.2017

3. G.O.Ms.No.76 - dated 11-3-2025 - Andhra Pradesh SGST

Amendment in Notification G.O.Ms.No.582, Revenue (Commercial Taxes - II) Department, dated. 12.12.2017

4. G.O.Ms.No. 72 - dated 10-3-2025 - Andhra Pradesh SGST

To extend the due date for furnishing FORM GSTR-7 for the month of December, 2024 till the 12th day of January, 2025

5. G.O.Ms.No. 71 - dated 10-3-2025 - Andhra Pradesh SGST

To extend the due date for furnishing FORM GSTR-6 for the month of December, 2024 till the 15th day of January, 2025

6. G.O.Ms. No.70 - dated 10-3-2025 - Andhra Pradesh SGST

Amendment in Notification G.O.Ms.No. 126, Revenue (CT) Department, dated 15.06.2021

7. G.O.Ms. No. 73 - dated 10-3-2025 - Andhra Pradesh SGST

Amendment in G.O.Ms.No.258, Revenue (Commercial Taxes - II) Department, dated. 29.06.2017

8. G.O.Ms.No. 67 - dated 6-3-2025 - Andhra Pradesh SGST

To extend the due date for furnishing FORM GSTR-8 for the month of December, 2024 till the 12th day of January, 2025

9. G.O.Ms.No. 66 - dated 6-3-2025 - Andhra Pradesh SGST

To extend the due date for furnishing FORM GSTR-5 for the month of December, 2024 till the 15th day of January, 2025

10. G.O.Ms.No. 65 - dated 6-3-2025 - Andhra Pradesh SGST

To extend the due date for furnishing FORM GSTR-3B for the month of December, 2024 and the quarter of October to December, 2024

Highlights / Catch Notes

GST

• Minor Invoice Number Mismatch Does Not Justify Penalty: Technical Error Deemed Immaterial Under Section 129 Transport Rules

  Case-Laws - HC : HC held that a minor discrepancy in e-way bill invoice number (3096 instead of 3063) does not warrant penalty proceedings under Section 129. The record confirmed no substantive differences in goods' quality, quantity, or items between accompanying documents. Referencing administrative circular guidance, the court determined the technical error was immaterial. The entire penalty proceedings were deemed legally unsustainable, and the petition was accordingly allowed, effectively quashing the punitive action against the transporter.
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• Procedural Fairness Prevails: Appeal Reinstated After Violation of Natural Justice Principles in Administrative Proceedings

  Case-Laws - HC : HC allowed the Petitioner's appeal, setting aside the Impugned Order-in-Appeal and Rectification Order. The court found that Respondent No. 2 violated principles of natural justice by rejecting the appeal without considering the submitted Power of Attorney and without providing an opportunity to cure procedural defects. The matter was remanded for fresh consideration, with the Petitioner directed to submit self-certified document copies within two weeks. The decision emphasizes procedural fairness and the opportunity to rectify technical non-compliances in administrative appeals under CGST Act, 2017.
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• GST Registration Cancellation Overturned: Procedural Flaws and Lack of Reasoned Order Invalidate Administrative Action

  Case-Laws - HC : HC allowed the petition challenging GST registration cancellation, finding the impugned order non-compliant with procedural requirements. The order was deemed arbitrary and passed without due application of mind, violating principles of natural justice. Specifically, the cancellation order failed to provide a speaking order with substantive reasoning as mandated under CGST Act and Rules, despite the petitioner's non-response to show cause notice. The court held that absence of reasoned explanation renders the administrative action invalid, thereby quashing the registration cancellation order.
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• Taxpayers Can File Delayed GST Returns After Paying Interest, Court Allows Condonation of Delay Under Section 62(2)

  Case-Laws - HC : HC held that the 60-day period under Section 62(2) of GST Act is directory, not mandatory. The petitioner failed to file returns for October 2018 to March 2019 within prescribed time limit, resulting in a best judgment assessment order. The court determined that if an assessee demonstrates valid reasons beyond their control for delay, they can file returns after paying applicable interest and penalties. The petitioner was directed to submit an application for condonation of delay within 15 days, with the understanding that the tax authority shall consider such application on its merits, preserving the fundamental right to file returns.
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• Tax Refund Claim Validated: Department Must Process Refund When No Appeal Challenges Appellate Authority's Order Under Section 54(11)

  Case-Laws - HC : HC upheld the refund claim, ruling that the tax department cannot withhold the refund based solely on Section 54(11) opinion when no appeal challenges the Appellate Authority's order. The court emphasized that in the absence of a stay or pending review, the refund must be processed. The decision aligns with precedent that an administrative opinion cannot override a valid appellate order, particularly when no legal challenge exists. The refund shall be processed with potential interest for delayed payment, with the understanding that any future successful appeal would retrospectively bind the parties.
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• Appeal Reinstated: Authorized Signatory Validated, Procedural Fairness Restored, Previous Order Set Aside for Fresh Consideration

  Case-Laws - HC : HC allowed the petitioner's appeal, finding that the authorized signatory was valid and the previous dismissal violated principles of natural justice. The court set aside the impugned order dated 30th July 2024 and directed Respondent No.2 to restore the appeal to the file for fresh consideration on merits, ensuring procedural fairness and opportunity to be heard.
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• Tax Credit Dispute Resolved: Taxpayer's Genuine Error Recognized, Rectification Application to Be Reconsidered Under GST Act

  Case-Laws - HC : HC allowed petition challenging tax determination order under GST Act. The court found the proper officer erroneously dismissed the taxpayer's rectification application without adequately examining the bonafide mistake in tax credit intimation. The HC held that when taxpayers demonstrate genuine errors and seek immediate rectification, they should not be penalized with exorbitant liabilities inconsistent with constitutional principles. The impugned order was set aside, directing the proper officer to reconsider the rectification application and reassess the tax liability with a comprehensive review of available records.
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• Sale of Incomplete Building Exempted from GST: Transaction Not Considered Supply of Goods or Services Under Schedule II and III

  Case-Laws - HC : HC ruled that the sale of an incomplete building does not constitute a supply of goods or services under GST regulations. The transaction falls outside Entry 5(b) of Schedule II, as no construction service was contemplated between parties. The sale is neither a supply of goods nor services per Schedule III. Consequently, the court quashed the respondents' order rejecting the petitioner's GST refund claim and allowed the refund application, determining that the transaction was not subject to GST levy.
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• Land Acquisition Compensation Exempt from GST: Solatium Payments Ruled Non-Taxable Under Service Supply Regulations

  Case-Laws - HC : HC held that compensation paid as solatium for land acquisition is not subject to GST under CGST/KGST Act. The court determined that sale of land and immovable property falls outside GST taxation, even without specific schedule exemptions. The compensation does not constitute a service supply with consideration, and the conditions in land acquisition agreements do not trigger GST liability. The court emphasized that governmental land acquisition payments are not taxable transactions, and the impugned notices were deemed illegal and without legal jurisdiction. Petition was consequently allowed, quashing GST levy on land acquisition compensation.
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Income Tax

• Taxpayers Get Final Chance to Resolve Pending Tax Disputes Under Vivad se Vishwas Scheme by April 30, 2025

  Notifications : The GoI notified the final deadline of 30 April 2025 for filing declarations under the Direct Tax Vivad se Vishwas Scheme, 2024, as per section 90 of Finance (No. 2) Act, 2024. Declarants must submit tax arrear declarations to the designated authority by the specified date, exercising powers under section 89(1)(l). The notification, issued by the Central Board of Direct Taxes, establishes the conclusive timeline for taxpayers seeking resolution of pending tax disputes through the scheme.
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• Government Designates HUDCO Bonds as Long-Term Specified Assets, Enabling Tax-Efficient Infrastructure Investment Under Section 54EC

  Notifications : The Central Government, through Notification No. 31/2025, designates HUDCO's redeemable bonds issued on or after 01st April, 2025 as 'long-term specified assets' under section 54EC of the Income-tax Act, 1961. The bonds, redeemable after five years, are subject to specific conditions wherein HUDCO must utilize proceeds exclusively for infrastructure projects capable of servicing debt through project revenues without state government dependency. The notification comprehensively defines infrastructure sectors and projects, incorporating the Updated Harmonised Master List of Infrastructure sub-sectors, thereby providing clear regulatory guidelines for bond issuance and utilization.
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• Taxpayer Wins Appeal: Procedural Flaws Exposed in Share Premium Assessment, Remanded for Fresh Valuation Report

  Case-Laws - AT : ITAT allowed the appeal and remanded the case for reassessment. The Tribunal found procedural irregularities in the assessment order, specifically noting that the Assessing Officer (AO) did not provide the assessee an opportunity to submit a Valuation Report from a Merchant Banker using Discounted Cash Flow (DCF) method. The Tribunal directed the assessee to procure a fresh Valuation Report compliant with Rule 11UA of Income Tax Rules, 1962, and instructed the CIT(A) to review the report, obtain a remand report from AO, and provide reasonable hearing opportunity to the assessee before making a final determination on the share premium addition under Section 56(2)(viib).
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• Property Transfer Tax: Section 50C Covers Diverse Ownership Models Beyond Traditional Land Possession Rights

  Case-Laws - HC : HC held that Section 50C's applicability extends beyond traditional ownership, encompassing various modes of property holding including leasehold rights. The term "held by an assessee" is interpreted broadly to include multiple legal arrangements such as leasehold, sub-leasehold, tenancy, and licensee interests. The court emphasized that the method of holding land does not create exceptions to tax provisions. The word 'transfer' under Section 50C must be construed with wide amplitude, covering all legally permissible transfer methods. Consequently, the court dismissed the appeal, affirming a comprehensive interpretation of property transfer and taxation principles.
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• Income Tax Reassessment Invalidated: AO Fails to Provide Substantive Evidence of Undisclosed Income Under Section 147

  Case-Laws - HC : HC held that the AO's reassessment notice under Section 147 was invalid. The AO mechanically recorded reasons based on third-party information without providing substantive evidence directly linking the petitioner to any undisclosed income. The court found no material connection between the survey operation and the petitioner's transactions. The AO's refusal to disclose confidential information to the assessee violated procedural fairness, rendering the reopening of assessment arbitrary and illegal. Consequently, the court quashed the reassessment notice, deciding in favor of the assessee and emphasizing the need for concrete, specific reasons when initiating reassessment proceedings.
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• Taxpayer Wins Partial Relief: ITAT Orders Detailed Probe into Section 153C Assessment and Directs Reconsideration of Capital Loss Claims

  Case-Laws - AT : ITAT held that the matter involving Section 153C assessment requires further investigation into search-related documents. The tribunal restored the case to CIT(A) for detailed examination of additional grounds raised by the assessee. Regarding Section 69A addition, the tribunal deleted the addition after finding the advanced amount was properly reflected in the assessee's books of accounts and the department could not substantiate contrary evidence. The tribunal also directed the Assessing Officer to consider the assessee's claim of setting off Long Term Capital Loss against Section 50C additions in accordance with applicable legal provisions.
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• Reassessment Order Invalidated: Procedural Flaws Undermine Tax Authority's Attempt to Levy Additional Income

  Case-Laws - AT : ITAT quashed the assessment order due to procedural non-compliance. The AO improperly initiated reassessment under Section 147 instead of Section 153C when loose papers suggesting a potential Rs.13 Cr payment were discovered during a third-party search. The tribunal found the AO lacked sufficient material evidence to substantiate the undisclosed income claim. Additionally, the absence of a mandatory Section 143(2) notice rendered the assessment unsustainable. Consequently, the tribunal deleted the income addition and accompanying penalty under Section 271D, emphasizing strict adherence to prescribed legal procedures in tax proceedings.
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• ITAT Grants Tax Deductions for CSR Expenses, Directs Reassessment of Tax Demands Under Sections 80G, 41(1), and 115P

  Case-Laws - AT : The ITAT allowed the assessee's claims in multiple tax-related matters. Regarding Section 80G, the Tribunal upheld the deduction for Corporate Social Responsibility (CSR) expenditure, rejecting the Assessing Officer's (AO) disallowance. For Section 41(1), the Tribunal directed the AO to verify additional evidence and pass an appropriate order after hearing the assessee. Concerning taxes adjusted against interest under Section 115P, the Tribunal instructed the AO to review and rectify the tax demand after providing the assessee an opportunity to be heard. The decisions were predominantly in favor of the assessee, with matters remanded for further administrative review.
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• Faceless Assessment Scheme: NFeAC Lacks Jurisdiction for Notices Issued Before Official Notification Date of 29.03.2022

  Case-Laws - AT : ITAT adjudicated a jurisdictional challenge regarding faceless assessment proceedings. The tribunal found the National Faceless Assessment Centre (NFeAC) lacked legal authority to issue notices under Section 142(1) prior to 29.03.2022. The e-assessment of income escaping assessment scheme, 2022 was notified on 29.03.2022, rendering prior proceedings invalid. Relying on precedent from a similar case, the tribunal determined that the NFeAC had no jurisdiction to conduct assessment or issue notices before the official notification date. Consequently, the tribunal allowed the assessee's appeal, effectively invalidating the assessment proceedings initiated before the statutory notification date.
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• Income Tax Reassessment Limited to Original Grounds: AO Cannot Expand Scope Beyond Initially Recorded Reasons for Reopening Case

  Case-Laws - AT : ITAT held that once the Assessing Officer (AO) is satisfied with the reasons recorded for reopening the case and abstains from making additions on the specific grounds initially cited, the AO's jurisdiction terminates. The tribunal found that the AO cannot proceed to tax additional income that came to notice during reassessment proceedings beyond the original reasons for reopening the case. Relying on judicial precedent, the tribunal concluded that after explaining the initially suspected escaped income, the AO loses jurisdiction to make further additions. Consequently, the assessee's primary ground of challenge was allowed, effectively limiting the scope of reassessment to the originally identified potential tax discrepancy.
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• Taxpayer Wins Major Relief: Multiple Expense Disallowances Deleted Based on Asset Possession, Usage, and Insufficient Evidence

  Case-Laws - AT : ITAT allowed partial relief to the assessee, directing deletion of multiple disallowances. The tribunal found no merit in the AO's disallowance of vehicle depreciation and interest expenses, citing possession and usage of assets as key determinants of ownership. Business promotion expenses appeal was dismissed due to cash expenditure. Loan interest disallowance was deleted citing insufficient nexus. The tribunal also set aside notional income addition on building construction expenditure and 5% salary expenses disallowance, emphasizing lack of substantive evidence and procedural irregularities in the AO's assessment. The ruling predominantly favored the assessee by directing removal of several disputed additions.
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• Company Director Wins Tax Battle: Share Premium Valuation Upheld, No Additional Tax Liability Imposed

  Case-Laws - AT : ITAT held that the assessee, a company director, was not liable for additional tax assessment on share premium. The tribunal rejected revenue's attempt to reassess share valuation, finding no procedural default in the original merchant banker's valuation. The shares issued at Rs. 12,628.20 per unit were deemed appropriately valued under prescribed rules. The tribunal specifically noted that different valuation methodologies cannot be arbitrarily applied when an initial valuation has been correctly determined. Consequently, the revenue's appeal was comprehensively dismissed, upholding the original assessment and protecting the assessee from supplementary tax liability on share issuance.
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Customs

• Customs Circular 29/2020 Withdrawn: Transhipment Rules for Bangladesh Export Cargo Revised with Transitional Provisions

  Circulars : The CBIC rescinded Circular No. 29/2020-Customs regarding transhipment of export cargo from Bangladesh through Land Customs Stations (LCSs) to Ports/Airports, effective immediately. Existing cargo previously entered into India will be permitted to exit Indian territory following the original circular's procedural guidelines. The rescission impacts transhipment protocols for export cargo movement, with provisions for managing in-transit consignments to ensure smooth regulatory transition.
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• Customs Tariff Update: Fixed Valuation Rates Maintained for Edible Oils, Metals, and Areca Nuts Under Section 14(2)

  Notifications : The GoI Ministry of Finance issued Notification No. 23/2025-Customs (N.T.) amending tariff values for various commodities under Sections 14(2) of the Customs Act, 1962. The notification establishes fixed tariff values for edible oils (palm oil, palmolein, soybean oil), brass scrap, precious metals (gold, silver), and areca nuts. Tariff values remain unchanged for most categories, with specific US dollar per metric ton or per kilogram rates specified in three detailed tables. The notification becomes effective from 9th April 2025, providing updated customs valuation guidelines for specified imported goods without substantive changes to existing rates.
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• Strict 90-Day Time Limit for Customs Broker Show Cause Notices Invalidates Administrative Actions Under Regulation 17(5)

  Case-Laws - HC : HC held that the 90-day time limitation for issuing show cause notice under Regulation 17(5) of Customs Brokers Licensing Regulations, 2018 is mandatory, not directory. Relying on precedent in Santon Shipping Services case, the court quashed the show cause notice and inquiry report due to non-adherence to statutory timelines. The court found that strict compliance with procedural regulations is essential, and failure to follow the prescribed 90-day limit renders the administrative actions invalid. Consequently, the writ petitions were allowed, effectively nullifying the challenged administrative documents.
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• Export Valuation Dispute Resolved: Customs Duty Challenge Overturned, Original Value Validated Under Section 113(i)

  Case-Laws - AT : CESTAT adjudicated a customs duty dispute involving export valuation. The tribunal found the Additional Commissioner's re-determination of FOB value unauthorized and without legal basis. The court invalidated confiscation proceedings under Section 113(i), redemption fine, and penalties under Sections 114 and 114AA. The appellant was not obligated to predict or pre-determine alternative valuation methodologies beyond declaring transaction value. The tribunal concluded that the department's allegations of intentional value misrepresentation were unfounded. Consequently, the appellate order was set aside, and the appeal was allowed, effectively reinstating the original declared export value and absolving the appellant of imposed penalties.
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SEZ

• SEZ Performance Tracking: Mandatory Monthly Reports Required for Comprehensive Operational Insights and Strategic Management

  Circulars : The GoI's Ministry of Commerce & Industry issued Instruction No. 119 mandating Development Commissioners of all Special Economic Zones (SEZs) to submit comprehensive monthly reports by the 9th of each month. The directive requires detailed reporting across 20 key performance metrics, including export volumes, unit approvals, zone development status, meetings conducted, investment projections, operational challenges, and administrative tracking. The standardized reporting format aims to enhance proactive management, monitoring, and strategic oversight of SEZ performance nationwide, with the under secretary formally approving the administrative instruction.
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FEMA

• MHA Sets New 3-Year Validity and 4-Year Utilization Timeline for Foreign Contribution Permissions under FCRA

  Circulars : The MHA issued a public notice establishing new guidelines for processing prior permission applications under FCRA, 2010. The directive stipulates a 3-year validity period for receiving foreign contributions and a 4-year period for utilizing them, effective from the application approval date. For existing approved applications with remaining project duration exceeding 3 years, the time limit will be calculated from the order's issuance date. The competent authority retains discretionary power to grant extensions on a case-by-case basis. Violations of these time limits will result in punitive actions, emphasizing strict regulatory compliance for foreign contribution management.
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• Revised IEM Criteria Raise Investment Thresholds for Large-Scale Industries to Boost Manufacturing Sector Growth

  Circulars : The GoI through DPIIT has revised eligibility criteria for Industrial Entrepreneurs Memorandum (IEM) acknowledgment, increasing investment thresholds for large-scale industries. Effective 1st April 2025, enterprises now qualify for IEM acknowledgment with investment in plant & machinery exceeding Rs.125 crore or annual turnover exceeding Rs.500 crore. This represents a significant increase from previous limits of Rs.50 crore and Rs.250 crore respectively, aimed at fostering industrial growth and supporting larger manufacturing enterprises. Eligible companies can apply through the G2B Portal under the updated guidelines, which apply to sectors not requiring compulsory industrial licensing.
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Corporate Law

• HC Quashes Criminal Proceedings, Finds No Substantial Evidence of Fraud in Property Advance Transactions Under Rule 2(1)(c)(xii)(b)

  Case-Laws - HC : HC exercised inherent powers under Section 482 Cr.P.C. to quash criminal proceedings against petitioner-companies. The court determined that advances collected for immovable property sale were exempted from deposit regulations under Rule 2(1)(c)(xii)(b) of Companies (Acceptance of Deposit) Rules, 2014. The complaint was found to be maliciously instituted without substantive legal merit, lacking direct involvement of the complainant in the business transactions. The court concluded that continuing the proceedings would constitute an abuse of judicial process, thereby allowing the petition and quashing the criminal cases against the petitioners.
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• Corporate Governance Dispute: Spouse Lacks Legal Standing to Challenge Arbitration Order Under Sections 241, 242

  Case-Laws - AT : NCLAT upheld NCLT's rejection of recall application, finding appellant lacks locus standi under Sections 241 and 242 of Companies Act. The tribunal determined that Section 44 of Evidence Act does not provide grounds for intervention by a non-party to original proceedings. The court emphasized that appellant, as spouse of original party, cannot challenge the order or cost imposition when the primary litigant's challenge was unsuccessful. The appeal was dismissed, confirming NCLT's original order and maintaining the procedural integrity of the legal process.
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• Capital Reduction Scheme Validated: 99.92% Shareholder Approval Confirms Selective Exit Strategy Under Section 66

  Case-Laws - AT : NCLAT upheld the capital reduction scheme under Section 66 of Companies Act, 2013. The tribunal found the selective capital reduction permissible, with 99.92% shareholder approval validating the minority shareholders' compulsory exit. The E&Y valuation at Rs. 196.80 per share was deemed independent and appropriate, rejecting arguments for control premium. The tribunal confirmed no violation of Section 102, noting no mandatory requirement to attach valuation reports for capital reduction. The 25% Discount for Liquidity of Marketability was justified. Ultimately, the appeal was dismissed, validating the company's capital reduction process and protecting majority shareholder interests.
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IBC

• Legal Challenge Overcomes Procedural Delay Through Comprehensive Evidence and Proactive Efforts in Appeal Refiling Process

  Case-Laws - AT : NCLAT determined the condonation of 154-day delay in refiling an appeal, evaluating the sufficiency of cause. Despite geographical dispersion of appellants across multiple states, the tribunal found substantive evidence demonstrating genuine efforts to cure procedural defects. The court adopted a liberal interpretative approach, recognizing the applicant's proactive steps in addressing filing irregularities. Ultimately, the tribunal concluded that sufficient cause was demonstrated through additional affidavits and supporting documentation, thereby condoning the procedural delay and permitting the appeal's refiling.
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• NCLAT Upholds Property Sale Under SARFAESI Act, Confirming Creditor's Rights and Extinguishing Borrower's Redemption Claim

  Case-Laws - AT : NCLAT dismissed the appeal, upholding the sale transactions of properties under SARFAESI Act. The Tribunal determined that the borrower's right of redemption was extinguished upon issuance of e-auction notice, as per amended Section 13(8). The jural relationship between parties for both properties terminated prior to the Corporate Insolvency Resolution Process commencement, with sale certificates issued before the critical date. The secured creditor's actions were deemed valid, including self-purchase of properties under Sections 13(5A) and 13(5B), and the appellant's contentions regarding non-deposit of sale consideration were rejected.
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• Commercial Wisdom of Creditors Prevails: Higher Bid Wins, Liquidation Process Validated Under Insolvency Code

  Case-Laws - AT : NCLAT upheld the Committee of Creditors' (CoC) commercial wisdom in rejecting the resolution plan. The sole CoC member abstained from voting, which was deemed a valid exercise of discretion. The liquidation application was filed with CoC's consent, and an e-auction was conducted where Respondents 4-7 submitted a successful bid of Rs. 20.63 Cr, significantly higher than the Appellant's offer of Rs. 8 Cr. The tribunal confirmed the legality of the liquidation process, emphasizing that the CoC's decision cannot be questioned. The sale certificate was issued to the successful bidders, and the appeal was consequently dismissed, upholding the statutory framework under the Insolvency and Bankruptcy Code.
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• Corporate Insolvency Resolution: 10-Day Reporting Period Interpreted Flexibly, Allowing Supplementary Information Submission Under Section 99(1)

  Case-Laws - AT : NCLAT held that the 10-day period under Section 99(1) for resolution professional (RP) to submit report is directory, not mandatory. The legislative scheme allows RPs to seek additional information and submit supplementary reports. In this case, the RP's initial and amended reports were properly submitted and considered by the adjudicating authority. The court found no undue delay or prejudice warranting rejection of reports. The Section 95(1) application by financial creditor was correctly admitted. Appellant's arguments challenging report timelines were rejected, and the appeal was dismissed without substantive merit.
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Indian Laws

• Cheque Dishonour Case: Former Partner Cannot Escape Liability Without Clear Evidence of Non-Responsibility

  Case-Laws - HC : HC dismisses petition challenging criminal proceedings for cheque dishonour. The court held that the petitioner, a former partner, cannot summarily escape liability under Section 138 read with Section 141 of NI Act. The retirement from partnership and potential non-responsibility are disputed factual matters requiring evidentiary determination at trial. No unimpeachable evidence was presented to conclusively establish the petitioner's non-liability. The court emphasized that Section 482 CrPC proceedings are not appropriate for resolving complex factual disputes. Consequently, the criminal proceedings against the petitioner shall continue, with the trial court to adjudicate the substantive liability issues.
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• Cheque Bounce Case: Section 139 Presumption Upheld, Criminal Prosecution Continues Despite SARFAESI Proceedings

  Case-Laws - HC : HC dismisses criminal complaint challenge under NI Act, holding that: (1) the presumption under Section 139 applies when cheque execution is undisputed; (2) the burden is on the drawer to prove the cheque was not issued for a legally enforceable debt; (3) SARFAESI proceedings do not bar criminal prosecution under Section 138; and (4) the inherent powers under Section 482 CrPC cannot be exercised to quash proceedings at the summoning stage without unimpeachable evidence. The Court found no material to conclusively determine the cheque's purpose and emphasized that disputed factual questions are matters for trial, thus dismissing the petition.
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Law of Competition

• Airport Operator Cleared of Market Abuse Allegations After Thorough Competitive Practices Investigation Under Section 4

  Case-Laws - CCI : CCI analyzed allegations of abuse of dominant position by an airport operator under Section 4 of the Competition Act. After comprehensive review, the Commission found no prima facie evidence of monopolistic practices or market exclusion. The investigation concluded that contract awards for parking and lounge services were conducted through competitive bidding processes with multiple independent participants. The Commission determined that the allegations of selective contracting and market restriction were unsubstantiated. Consequently, the case was closed under Section 26(2), rejecting all claims of anti-competitive conduct and denying any relief sought by the informant.
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PMLA

• Legal Heir's Rights Upheld: PMLA Proceeding Continues After Appellant's Death, Tribunal's Dismissal Overturned Under Section 72

  Case-Laws - HC : HC held that the Appellate Tribunal's dismissal of the legal representative (LR) petition was improper. The tribunal erroneously applied CPC Order 22 provisions to a PMLA proceeding, violating principles of natural justice. Section 72 of PMLA enables continuation of proceedings upon appellant's death without prescribing a specific time limitation. The court found no legal basis for abating the appeal and emphasized that the tribunal should have taken a liberal approach, allowing the legal heir to be substituted and adjudicating the matter on merits. The impugned order was set aside, with the appeal being allowed, thereby reinstating the legal representative's right to pursue the pending proceedings.
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SEBI

• Foreign Portfolio Investors Face Higher Disclosure Threshold as SEBI Raises AUM Reporting Limit to INR 50,000 Crore

  Circulars : SEBI issued an amendment to the Master Circular for Foreign Portfolio Investors, increasing the threshold for additional disclosure requirements from INR 25,000 crore to INR 50,000 crore of equity Assets Under Management (AUM). The modification impacts specific sub-paragraphs in Parts C and D of the existing FPI Master Circular, with immediate effect. The amendment is promulgated under SEBI's statutory powers to protect investor interests and regulate securities market operations, specifically invoking Sections 11(1) of SEBI Act and Regulations 22(1), 22(6), 22(7), and 44 of SEBI (FPI) Regulations, 2019, thereby expanding regulatory oversight for large foreign portfolio investments in Indian markets.
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Central Excise

• Four Interim Boards Established to Resolve Central Excise Disputes Under Section 31A for Efficient Administrative Settlement

  Notifications : The GoI's MoF through CBIC issued Notification No. 02/2025-Central Excise (N.T.) constituting four Interim Boards for Settlement under Section 31A of the Central Excise Act, 1944. The boards are established with headquarters in Delhi, Kolkata, Mumbai, and Chennai respectively. The notification exercises statutory powers to create Interim Board for Settlement-I, II, III, and IV, enabling administrative mechanisms for resolving central excise disputes across different geographical regions of India. The notification provides a structured approach to settlement proceedings through specialized regional boards.
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Case Laws:

• GST

• 2025 (4) TMI 561
  Levy of penalty - e-way bill Invoice number was wrongly mentioned as 3096 in place of 3063 - HELD THAT:- The record shows that the goods were in transit when the same were intercepted and discrepancy in e-way bill was pointed out as tax invoice number 3096 was mentioned in place of 3063, however no other discrepancy whatsoever was pointed out with regard to quality, quantity or difference of items as mentioned in the accompanying documents. On perusal of circular no. 64/38/2018 - dated 14.9.2018, it shows that if there is any error in one or two digits, the proceedings under Section 129 of the Act should not be initiated. Conclusion - If there is any error in one or two digits, the proceedings under Section 129 of the Act should not be initiated. The entire proceedings itself are bad and not sustainable in the eyes of law - Petition allowed.

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• 2025 (4) TMI 560
  Maintainability of appeal - appeal dismissed on the ground of non-deposit of mandatory pre-deposit in terms of the mandate of Section 107 of the GST Act - HELD THAT:- It is fairly stated by the counsel for the respondents that in case, the Commissioner (Appeals) was of the view that the deposit made by the petitioner through electronic credit ledger would not fall within the deposit as prescribed under section 107 of the GST Act, the Commissioner (Appeals) ought to have confronted the petitioner with the said before passing the order on merit dismissing the appeal. The matter is remanded to the Commissioner (Appeals) to decide the matter afresh. While doing so, it will be open to the petitioner as well as the respondents to argue whether the deposit through electronic credit ledger would be a valid deposit in terms of the prescription contained in section 107 GST Act or not. Petition disposed off by way of remand.

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• 2025 (4) TMI 559
  Dismissal of appeal on the ground that the Petitioner did not produce documents to establish that the person signing the appeal is the authorised signatory - valid document in terms of the CGS (Appeals) Rules, 2017 or not - HELD THAT:- Respondent No. 2, during the personal hearing, directed the Petitioner to submit the proper authorization of the authorized signatory, which, in fact, was submitted to 2nd Respondent s office, in person by the authorised representative of the Petitioner and recorded the said fact vide email dated 04.05.2024. In the said email, a scanned copy of the POA was again submitted. Without considering the said submission of the POA, Respondent no. 2 rejected the appeal for want of proper authorisation. Even otherwise, if Respondent No. 2 had any further objections on entertaining any evidence or submissions, he should have put the Petitioner to notice. Denial of such opportunity violates the principles of natural justice and fair play. Further, Respondent No. 2 rejected the appeal holding that the evidence / documents submitted by the Petitioner in support of their claims are not self-certified. Such a defect is a curable defect. Respondent No. 2 ought to have given an opportunity to submit self-certified copies of the documents before rejecting the appeal. According to the Petitioner, there is no requirement of submission of self-certified copies of the documents in an appeal filed online. The Petitioner, however, undertakes to submit the self-certified copies of all the documents within 2 weeks. Conclusion - Section 161 of the CGST Act, 2017, allows for rectification of errors apparent on the record but does not permit a review of the order. The Impugned Order-in-Appeal dated 21.06.2024 and the Rectification Order dated 08.11.2024 is set aside - the Petitioner s Appeal restored to the file of Respondent No. 2 for fresh consideration on its own merits and as per law.

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• 2025 (4) TMI 558
  Challenge to SCN issued - petitioner was provided adequate notice regarding the imposition of penalty under the CGST Act, 2017 or not - violation of principles of natural justice - HELD THAT:- Admittedly, despite issuance of notices under Sections 61 and 73 of the Act and reminders, no response was filed by the petitioner. The show cause notice issued was very clear and specific, pointing out the discrepancies and calling upon the petitioner to show cause as to why the tax, penalty and interest as indicated be not imposed. The table at page 38 of the writ petition clearly indicates the amount of interest and the penalty as per CGST Act, 2017 and the amount of tax based on show cause notice. When the response was not filed, the order impugned was passed. In the order, the authority has noticed the allegations made in show cause notice and has clearly reiterated the discrepancies as pointed out in the show cause notice and in absence of any response, has levied the tax as indicated in the show cause notice. Once the response was not filed, the authority was not required to raise probable grounds which the assessee could raise and deal with the same. The authority was required to apply its mind to the show cause notice and substantiate the same with the material available on record and was not required to simply make reference to the notices issued under Sections 61 and 73 of the Act, as laid down by this Court in M/s New Manoj Medical Store Vs. State of U.P. and 2 others, [ 2025 (4) TMI 489 - ALLAHABAD HIGH COURT] . In the present case, the authority has recorded sufficient reasons for coming to the conclusion that the petitioner was liable to pay the tax, penalty and interest. Conclusion - The authority is justified in passing the order in the absence of a response from the petitioner. There are no reason to interfere with the order impugned. The petition has no substance, the same is, therefore, dismissed.

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• 2025 (4) TMI 557
  Cancellation of the petitioner s GST registration under the Central Goods and Services Tax (CGST) Act, 2017 - challenge on the ground that the manner in which the GST Registration has been cancelled is arbitrary and the impugned Order of cancellation has been passed without due application of mind - violation of principles of natural justice - HELD THAT:- Section 39 [1] of the CGST Act inter-alia requires a registered person to furnish a return for every calendar month or part thereof, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed. Rule 61 [1] of the CGST Rules has prescribed the Form and manner of furnishing of return electronically through the common portal either directly or through a notified Facilitation Centre, as specified under sub-section [1] of Section 39 of the CGST Act. As per Section 29 [2] [c], an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for such continuous tax period as may be prescribed. As per Rule 21[h] of the CGST Rules, registration granted to a person is liable to be cancelled, if the said person being a registered person required to file returns under sub-section [1] of Section 39 of the CGST Act for each month or part thereof, has not furnished returns for a continuous period of six months. On perusal of the impugned Order, it is evidently clear that the impugned Order is not in conformity with the procedure prescribed in FORM GST REG-19. A speaking order is one which expressly states the reasons for the decision. In other words, a speaking order speaks for itself by assigning the reasons behind the conclusion. If an order is passed without giving a reason by the concerned authority, then the order is a non-speaking one. Non-speaking order is one which does not provide a clear reason for its decision. The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice dated 05.01.2021 or did not appear before the Proper Officer, when she was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality. The impugned Order dated 10.02.2021 is not a speaking order. As such, the impugned Order dated 10.02.2021 is found to be one which is passed without any application of mind. For the afore-stated reasons, the impugned Order dated 10.02.2021 cannot stand the scrutiny of law and is liable to be set aside and quashed. Conclusion - The failure to provide reasons constitutes a violation of natural justice and statutory prescriptions, rendering such orders invalid. Petition allowed.

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• 2025 (4) TMI 556
  Seeking to quash the impugned proceedings of the second respondent in ASMT-13 - withdrawal of assessment order - returns filed beyond the prescribed 60-day period due to ill-health - HELD THAT:- In the present case, the returns were not filed by the petitioner for the months of October 2018 to March 2019 within the prescribed time limit. Hence, the impugned order dated 26.12.2020 has been passed by the second respondent under Section 62(1) of the GST Act. Thereafter, the returns were filed by the petitioner for the months of October 2018 and November 2018 on 05.02.2021 and for the months of December 2018 to March 2019 on 06.02.2021. A reading of Section 62 of the GST Act would make it clear that if any registered person fails to furnish the returns under Section 39 of the Act, a proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant materials, which are available or which he has gathered and pass an assessment order, within a period of 5 years from the date specified under Section 44 of the Act for furnishing of the annual return for the financial year, in which the tax was not paid - In the present case, since the petitioner had not filed the returns for the months of October 2018 to March 2019 within the prescribed time limit, the assessment order has been passed by the second respondent under Section 62(1) of the GST Act on 26.12.2020. The limitation of 60 days period prescribed under Section 62(2) of the Act appears to be directory in nature and if the assessee was not able to file the returns for the reasons, which are beyond his/her control, certainly the said delay can be condoned and thereafter, the assessee can be permitted to file the returns after payment of interest, penalty and other charges as applicable. At any cost, the right to file the returns cannot be taken away stating that the petitioner has not filed any returns within a period of 60 days from the date of best judgment assessment order. Thus, if any application is filed before the authority concerned with sufficient reasons for non-filing of returns within the prescribed time limit as per section 62(2) of the Act, the same shall be considered on merits. Conclusion - i) The 60-day period under Section 62(2) is directory, allowing for condonation of delay if sufficient reasons are provided. ii) The petitioner is directed to file an application for condonation of delay within 15 days. Petition disposed off.

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• 2025 (4) TMI 555
  Refund claim - rejection on the ground that the L1 and L2 suppliers licences as mentioned in the show cause were cancelled - mandatory conditions prescribed under Section 16(2) of the CGST Act, 2017 satisfied or not - HELD THAT:- In the opinion of this Court the Department s opinion under Section 54 (11) cannot be relied upon on a standalone basis. In the absence of an appeal or any other proceeding pending, challenging the order of the Appellate Authority, the opinion under Section 54 (11) cannot result in holding back the refund. The refund having been permitted by the Appellate Authority and no order in review having been passed, the Department cannot hold back the refund. In G.S. Industries [ 2023 (4) TMI 404 - DELHI HIGH COURT] the Coordinate Bench has observed that Concededly, the respondent has not filed any appeal against the order-in-appeal dated 03.01.2022, and there is no order of any Court or Tribunal staying the said order. Indisputably, the order-in-appeal dated 03.01.2022 cannot be ignored by the respondents solely because according to the revenue, the said order is erroneous and is required to be set aside. In view of this position, the refund in favour of the Petitioner would be liable to be allowed in terms of the order passed by the Appellate Authority - In the opinion of this Court, considering the fact that refund amounts are payable with interest for the delayed period for paying the refund, it would in fact be contrary to the interest of the Department itself to hold back the refund inasmuch as if any appeal is filed and the order of the Appellate Authority is reversed, then the same would also bind the Petitioner. Conclusion - In the absence of an appeal or any other proceeding pending, challenging the order of the Appellate Authority, the opinion under Section 54 (11) cannot result in holding back the refund. Petition disposed off.

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• 2025 (4) TMI 554
  Violation of principles of natural justice - Challenge to impugned SCN and the Audit Report - demand of tax alongwith interest - HELD THAT:- In the case on hand, the Audit Memo was issued on 09.11.2022, wherein the petitioner was directed to furnish their reply within a period of two working days. However, the petitioner was not in a position to file their reply within time. Subsequently, the respondent had finalized the draft Audit report on 14.11.2022. In such case, it is an admitted fact that the reply was not at all considered by the respondent while passing the draft Audit Report. It is clear that the reply was not filed by the petitioner before preparing the draft Audit Report. However, it is not that the petitioner had once for all lost his opportunity of filing their reply. The petitioner is granted liberty to file their reply to the impugned show cause notice dated 19.09.2023 within a period of 4 weeks from the date of receipt of a copy of this order - Upon receipt of the said reply, the respondent shall independently consider the reply filed by the petitioner, on its own merits and pass orders in accordance with law, after providing sufficient opportunities to the petitioner, as expeditiously as possible. Conclusion - While the petitioner s reply was not considered before the draft Audit Report, they still had the opportunity to address grievances by responding to the show cause notice.The court ordered that the petitioner is granted liberty to file a reply to the show cause notice within four weeks. Petition disposed off.

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• 2025 (4) TMI 553
  Recovery of refund along with interest in terms of Budgetary Support Scheme read with affidavit-cum-indemnity bond dated 23.01.2018 - change in ownership of a business unit - disqualifies from receiving benefits under the Budgetary Support Scheme or not - HELD THAT:- The facts of the case in Zydus Wellness Products Limited Versus Union of India and Others And Alkem Laboratories Limited Versus Union of India and Others [ 2024 (12) TMI 873 - SIKKIM HIGH COURT ] is similar to the present case, where it was held that the appellants were indeed eligible for the BSS benefits. The writ petition is accordingly disposed along with the interim application.

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• 2025 (4) TMI 552
  Principles of natural justice - written submissions filed by the Petitioner have not been considered by the Respondent No. 1 and no personal hearing notice has also been issued - HELD THAT:- The Court has observed that there are a large number of GST related matters, which are being filed before this Court on a daily basis. The issues, which are raised by the Petitioners, are both procedural and substantive. The procedural issues include issues such as non-communication of replies, non-communication of the personal hearing notices, non-receipt of emails and other notices from the Department, etc. In addition, some of the issues, which are raised include applications for refund being not processed. Thus, it is impressed upon the Principal Chief Commissioner of CGST Central Excise, Delhi Zone to consider deputing at least two officials from the litigation section, who can coordinate with the various Commissionerates of the GST department and give instructions to the Department s counsels, in an expedited manner. List on 21st April, 2025.

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• 2025 (4) TMI 551
  Dismissal of petitioner s appeal on the ground that the authorized signatory of the Petitioner did not sign the same - HELD THAT:- Proper material has been produced to show that the signatory on the Appeal memo was indeed authorized to sign the same. Similarly, if Respondent No.2 had any objections on entertaining any evidence or submissions, he should have put the Petitioner to notice. Denial of such opportunity violates the principles of natural justice and fair play. The impugned Order dated 30th July 2024 is set aside and the Petitioner s Appeal restored to the file of Respondent No.2 for fresh consideration on its own merits and as per law.

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• 2025 (4) TMI 550
  Availment of excess input tax credit - Challenge to order of determination under Section 73(9) of the Central Goods and Services Tax Act, 2017 and State Goods and Services Tax Act, 2017 - challenge to order dismissing an application for rectification - HELD THAT:- There is no dispute that petitioner had, through DRC-03, intimated the payment of a huge amount of Rs. 3,50,94,614/- by utilisation from cash and credit. However, if the said intimation did not relate to the period 2019-20, the proper officer ought to have rejected it, without accepting the said payment. Since there is no case for the proper officer that petitioner had any liability in existence for the year 2019-20, the said payment could only have been for the period 2018-19 as stated by the petitioner - There is nothing to indicate that such an acknowledgment was given. In fact, in the application for rectification, it has been specifically claimed that DRC-03 submitted by the petitioner had not been rejected. If the application was rejected pointing out the mistake in the financial year, certainly the petitioner could have re-submitted the intimation with the corrected period, within the time available. On verifying the records, the proper officer could have even identified whether there existed any apparent error. The term record ought not to be interpreted in a restrictive manner to confine it to just the order sought to be rectified. The said term takes within its sweep other proceedings and documents already available in respect of the case under consideration - When mistakes are found to be bonafide, and the taxpayer has taken immediate steps to rectify such errors, they should not be penalised or imposed with an exorbitant amount, which is otherwise not liable to be paid. Such imposition will not have the backing of Article 265 of the Constitution of India. On a perusal of the impugned order dismissing the application for rectification, it is noticed that the proper officer has merely proceeded to dismiss the application without considering the nature of error that was pointed out. If the records do indicate that there was a bonafide mistake while determining the tax liability, which was evident from the records available in the portal, certainly, it was open for the proper officer to rectify such an order rather than imposing such a huge liability. In view of the above, this Court is of the view that the impugned order dismissing the rectification application is liable to be set aside and a re-consideration ought to be directed. Conclusion - The proper officer has merely proceeded to dismiss the application without considering the nature of error that was pointed out. The impugned order dismissing the rectification application is liable to be set aside and a re-consideration ought to be directed. Petition allowed.

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• 2025 (4) TMI 549
  Levy of GST - transaction involving the sale of an incomplete building - Transaction falls under Entry 5(b) of Schedule II, which treats certain construction activities as a supply of services subject to GST or not? - refund of the GST paid - HELD THAT:- When the constructed immovable property whether fully constructed or partially constructed is sold, as such, without providing any construction service subsequently, the same would not attract Paragraph 5 (b) of Schedule II and Section 7 of the Act, since there is no supply of goods or services or both in the said transaction and consequently, the question of whether the building has received completion certification or not would be irrelevant in such cases. The fact that Paragraph 5 (b) of Schedule II and Section 7, contemplates only construction service provided by a builder/promoter to a service recipient is further evident from the description of service entries provided under construction services in the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 prescribed the rate of GST. Sale of land is treated under the Act as neither supply of goods nor a supply of service. As far as sale of building is concerned, if the same is not coming within the ambit of Paragraph 5 (b) of Schedule II, then the same would be treated neither as supply of goods nor a supply of service. In the present case, the subject transaction would not fall within the ambit of Paragraph 5 (b) of Schedule II, as there was no construction service being contemplated between the parties and consequently, in terms of Paragraph 5 of Schedule III, the subject sale transaction between the Petitioner and Respondent No. 4 is neither a supply of goods nor a supply of service as wrongly held in the impugned order which deserves to be quashed. Conclusion - The respondents completely fell in error in coming to the erroneous conclusion that the subject sale transaction is covered by Entry 5 (b) of Schedule II which was clearly inapplicable without appreciating that by virtue of Entry 5 of Schedule III or even otherwise, the subject sale transaction was neither exigible nor amenable to levy of GST and consequently, the impugned order rejecting the refund claim of the petitioner deserves to be quashed. The impugned rejection order at Annexure-A dated 15.02.2023 passed by the 3rd respondent is hereby quashed - The refund application/claim of the petitioner is hereby allowed - Petition allowed.

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• 2025 (4) TMI 548
  Levy of GST - compensation paid in favour of the petitioners towards acquisition of their lands by the State/KIADB under the Head Solatium - HELD THAT:- Compensation paid in favour of the petitioners by the KIADB under the Head Solatium is not exigible / amenable to levy of GST under the provisions of CGST / KGST Act and the impugned notices, orders etc., issued / passed by the respondents are illegal, arbitrary and without jurisdiction or authority of law and the same deserve to be quashed. Even if Entry 5 of Schedule III were not there, sale of land and building cannot be brought under GST as they are covered under the State List II and there is no intention to tax sale/ acquisition immovable property per se under the GST legislations. It is also significant to note that this position is clarified by the aforesaid Circular No. 177/09/2022-TRU dated 03.08.2022 which clearly states that Sale of land either as it is or after some development is covered by Entry No.5 of Schedule III of the CGST/KGST Act and accordingly, does not attract GST; in other words, even if the said entries were not present in the said schedule, there was still no intention to tax stamp duty transactions of the nature which could be subsumed under the GST and consequently, not only sale of land or completed building, even compulsory acquisitions of such land cannot be the subject matter of a GST levy. Learned Senior Counsel is also right in contending that after the retrospective amendment in Section 7 to exclude 7(1)(d) and include Section 7(1A), Schedule II is merely a classification schedule; Entry 5 (e) of Schedule treats agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act as a supply of service and would only be a classification entry and the need to prove that an activity or transaction is a supply stems from Section 7(1). It is relevant to state that conditions to a contract are different from consideration to a contract ; so also, conditions contained in the contract cannot be seen in the light of consideration for the contract and merely because the service recipient has to fulfill such conditions would not mean that this value would form part of the value of the taxable services that are provided; to put it differently, when amount is paid for an obligation to do an act, it is only then Entry 5 (e) of Schedule II is attracted and not otherwise, thereby indicating that the terms and conditions of the agreements, documents etc., executed between the petitioners and KIADB are merely conditions to the contract and not obligations undertaken for a consideration as required under Entry 5 (e) of Schedule II which will have no application nor cover the solatium received by the petitioners. The agreements entered into between the petitioners and KIADB may contain several conditions, but the same do not amount to an obligation coupled with consideration and payment of solatium to the petitioners cannot be construed or treated as supply of services under Entry 5 (e) of Schedule II; the subject matter of the agreements is not an obligation to do or tolerate an act; rather, it is simply acquisition of lands by the Government and the conditions are incidental to the acquisition of land and to ensure that there is finality to the same as regards both the parties and in the absence of an agreement for an obligation to do or refrain from any act coupled with consideration for the same, it cannot be said that solatium received by the petitioners is exigible/amenable to levy of GST as contended by the respondents whose contentions cannot be accepted on this ground also. Conclusion - The compensation paid in favour of the petitioners towards acquisition of their lands by the State/KIADB under the Head Solatium is not exigible/ amenable to levy of GST under the provisions of CGST/KGST Act, 2017. Petition allowed.

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• Income Tax

• 2025 (4) TMI 547
  TP Adjustment - MAM selection - RPM v/s TNMM - as per HC [ 2023 (11) TMI 289 - DELHI HIGH COURT] once the ITAT, on considering the relevant facts as well as the order of the TPO, had concluded that the business of the assessee was merely that of a pure trader, and there was no value addition made before re-selling the particular products (i.e. the SIM cards), its consequent finding that RPM is the Most Appropriate Method, is irreproachable. HELD THAT:- There is a gross delay of 434 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner. Special Leave Petition is, accordingly, dismissed on the ground of delay.

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• 2025 (4) TMI 546
  Reopening of assessment u/s 147 - Disallowance of CSR amount u/s 37(2) - reason to believe or suspect - tangible material to reopen - amount being 50% of the aggregate donation was deducted and claimed u/s 80G - as decide by HC [ 2024 (3) TMI 665 - BOMBAY HIGH COURT] notice of reopening assessment does not by any measure disclose any material leave aside any information leading to formation of cogent and requisite belief. AO was infact in the knowledge of and in possession of all the relevant details regarding the deductions on account of CSR. The computation sheets, the tax audit report, the receipts from the donees and the other relevant documents were all provided and disclosed by Petitioner. It is thus a clear case of change of opinion by the AO. HELD THAT:- There is a gross delay of 268 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioners. Special Leave Petition is, accordingly, dismissed on the ground of delay.

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• 2025 (4) TMI 545
  Applicability of Section 50C to a property held under a leasehold right - HELD THAT:- What is material to note is, that the expression is held by an assessee and not owned by an assessee. Insofar as the immovable property, i.e. land or building is concerned, there are number of ways, in which it can be held. The holding can be either as an owner, lessee, sub-lessee, allottee, tenant, licensee, gratuitous licensee or any other mode, permissible or recognized by law. The expression held by an assessee therefore does not restrict the manner in which the land or building can be held. The holding of land, is merely a method in which rights to the land, can be held or acquired, by a person. That cannot be in any manner equated with land or building, but rather, would be a species of the right to hold it, which as indicated above, are of multiple nature. We, therefore, find that merely because the land was originally allotted by the MIDC by way of a lease to the predecessor of the appellant, who in turn has received the same by way of an assignment, that being one of the modes of transfer, of land or building, the mere use of a particular mode of transfer, cannot create any exception vis-a-vis the holding of the land or building by the Assesee. The word transfer as used in Section 50C (1) of the IT Act, also cannot be used in a restricted sense and will have to be given widest amplitude, considering the nature and purpose of the section and thus would include all modes and methods of transfer as are permissible and recognizable in law. Appeal dismissed.

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• 2025 (4) TMI 544
  Reopening of assessment u/s 147 - reasons to believe - AO has not provided any documents, statements or any material to the petitioner as relied upon - HELD THAT:- AO has recorded the reasons in mechanical manner, referring on the basis of the information provided by the DCIT, Central Circle-1, Rajkot, which relied on the survey and the search operation carried out in case of M/s. National Shroff Company on 19th September, 2014. There is no reference to the transaction carried out by the petitioner. The details of the transactions carried out by the petitioner appear to pertain to the reliefs from the seized material or from any other source. It is also pertinent that AO has not provided any documents, statements or any material to the petitioner but, on the contrary, in the affidavit-in-reply it is averred that such information cannot be provided to the assessee because it is a confidential matter of the department. Such a stand taken by the respondent-Assessing Officer is contrary to the provision of the Act, inasmuch as, unless and until the petitioner is provided the material upon which the reasons are recorded the action of the respondent is illegal. Non disposal of objections - AO has failed to consider the objections of the petitioner in the true perspective and in absence of any material from M/s. National Shroff, Rajkot pertaining to the details relating to the petitioner, so as to prove that income has escaped assessment, we are of the opinion that there is no link between the material and the reasons recorded, resulting into dis-satisfaction on the part of the AO and in such circumstances, the AO could not have assumed jurisdiction to issue impugned notice for reopening. Decided in favour of assessee.

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• 2025 (4) TMI 543
  Levy of penalty u/s 271(1)(c) - additions made by AO u/s 68 - HELD THAT:- We are of the considered view that Ld. CIT(A) has correctly held that penalty cannot be imposed in case additions have been made on estimated basis. We further observe that in the following cases, various courts have held that when income of the assessee is determined on an estimated basis, no penalty under Section 271(1)(c) isa liable to be imposed for concealment of income or for furnishing inaccurate particular of income. We find no infirmity in the order of Ld. CIT(A) deleting the imposition of penalty u/s 271(1)(c) looking into the instant facts. Estimation of income - bogus purchases u/s 69A - HELD THAT:-We note that CIT(A) has taken a consistent approach by following orders passed by his predecessor and as well as ITAT in which similar additions for other years were restricted to 5% of purchases.

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• 2025 (4) TMI 542
  Assessment u/s 153C - Admission of additional ground - HELD THAT:- Additions were not made on the basis of incriminating material found during the course of search have been raised for the first time before us and this aspect, whether additions have been made on the basis of incriminating materials found during the course of search, in our considered view, would require further investigation into the facts of the case to assess whether there is any factual force in this ground sought to be taken by the assessee. In our view, this additional legal argument would require further investigation into the documents found during the course of search and whether the additions have been made on the basis of such incriminating documents found during the course of search at third party premises. Since this additional ground has been taken before us for the first time and as pointed by us the preceding part of the order that this additional ground would require further enquiry took into the facts, the matter is hereby restored to the file of Ld. CIT(A). Addition u/s 69A - addition was confirmed in the hands of the assessee was on the ground that the assessee was unable to show details showing execution of contract with the said party - HELD THAT:- It is a fit case where the addition is liable to be deleted. This is for the reason that this amount was advanced to Shri Punabhai Babarbhai was duly reflecting in the books of accounts maintained by the assessee and the fact of refund of such amount back to the assessee was also duly reflecting in the books of account maintained by the assessee. Even as per the cash book available with the assessee, the assessee had adequate cash in hand to advance the aforesaid amount to Shri Punabhai Babarbhai. Accordingly, even before us during the course of hearing as well, the Department has not been able to bring anything on record to controvert these facts, we are of the considered view that the addition is liable to be deleted. Credit of set off of Long Term Capital Loss against the additions made under Section 50C - The alternate claim of the assessee with regards to set off of Long Term Capital Loss against the additions made under Section 50C of the Act may be considered and decided by the Assessing Officer, in accordance with law.

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• 2025 (4) TMI 541
  Reopening of assessment u/s 147 - addition on account of excess share premium charged by the assessee u/s. 56(2)(viib) - HELD THAT:- We find that since material information was not disclosed properly in the regular scrutiny proceedings as well as in the income-tax return, AO was very well within his jurisdiction to issue notice u/s. 148 and carry out the re-assessment proceedings u/s. 147 of the Act. Addition made u/s. 56(2)(viib) for the excess share premium charged by the assessee - assessee adopted DCF method and the Valuation Report was to be procured from the Merchant Banker - We find merit in the contention of assessee that if the AO was not satisfied with the DCF method and the Valuation Report being prepared by the auditor of the assessee company, then he ought to have given an opportunity to the assessee to furnish another report under DCF method from Merchant Banker. AO rather concluded the FMV on the basis of NAV method and made the impugned addition. On finding given by the ld.CIT(A), we find that the order is cryptic. Ld.CIT(A) has only harped on the technical aspect of the Valuation Report given by the auditor of the assessee company with regard to issue of Equity Shares and merely confirmed the action of the AO. It is the contention of assessee that the assessee company submitted the Valuation Report before ld.CIT(A) as an additional evidence which was obtained from M/s. Pantomath, a Class-I Merchant Banker on 24.04.2019 but ld.CIT(A) has ignored the same. There is no discussion on merits on the issue. We therefore, considering the facts and circumstances of the case, deem it proper to give one more opportunity to the assessee and direct the assessee company to procure the Valuation Report from the merchant banker as contemplated in Rule 11UA of the Income Tax Rules, 1962 and provide such report to ld.CIT(A) before whom the issues raised on merit are being restored for necessary re-adjudication. CIT(A) shall sent a copy of the report under DCF method to the AO to get the remand report and thereafter shall carry out the proceedings as per law after allowing reasonable opportunity of hearing to the assessee. Effective grounds of appeal No. 3 to 13 raised on merits are allowed for statistical purposes.

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• 2025 (4) TMI 540
  Estimation of income @ 6% by rejecting the books of accounts of the assessee - HELD THAT:- AO cannot reject the books of accounts merely for the reason of un-substantiating the claim of loss on works contract at Hyderabad Branch when all other evidences filed by the assessee goes to prove that the books of accounts maintained by the assessee are verifiable and there is no adverse comments in the books of accounts maintained by the assessee either from the AO or from the Auditor. To this extent, we cannot uphold the reasons given by the AO for rejection of books of accounts. Estimation of profit - AO without any valid reasons, simply estimated 6% profit on total contract receipts even though the assessee s financial results shows the profit in this line of business ranging from 4.1% to 5%. Since the assessee s own financial results is acceptable and in fact the AO has accepted the financial results of assessee for earlier assessment year, in our considered view, the AO should have adopted the assessee s financial results for earlier years to estimate the profit for the impugned assessment year. Thus, we direct the AO to estimate 5% profit on total contract receipts, including other receipts and interest income which is equal or similar to the profit declared by the assessee for earlier assessment years. Accordingly, the appeal of the assessee is allowed.

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• 2025 (4) TMI 539
  Reopening of assessment u/s 147 v/s assessment 153C - loose paper/documents pertaining to a third party found in search - HELD THAT:- We have taken cognizance of the alleged seized material (loose paper) as well as the belief formed by the AO while recording the reasons for re-opening of the assessment. According to the Revenue, this paper pertains to the assessee. The information contained in this paper is regarding payment of Rs.13 Cr to the assessee. Thus, this also pertains to the assessee. In such situation, to our mind, the AO ought to have initiated the proceedings under Section 153C. AO of the searched person i.e. AO of Shri Sanjay Bansal or of the Trust should have recorded satisfaction that information contained in this loose paper pertains to the assessee and action against the assessee deserves to be taken under Section 153C because income has escaped assessment in the hands of the assessee. Such satisfaction ought to have been transmitted to the AO of the assessee and only thereafter, assessment could have been made. No action under Section 147/148 could be taken against the assessee because Section 153C starts with a non obstante clause namely, notwithstanding anything contained in Section 139/147. Thus, Section 147/148 has no bearing if proceeding required to be taken against the assessee u/s 153C - AO has failed to follow the mandatory procedure required to be followed, hence, assessment order is not sustainable and accordingly, is quashed. The Act contemplated a procedure which is required to be followed mandatorily and which has not been followed by the AO. Addition on account of undisclosed income - loose paper was found - AO harboured the belief that Shri Sanjay Bansal has paid a sum of Rs.13 Cr to the assessee and hence, this amount deserves to be assessed in the hands of the assessee - AO was not in possession of any material which can authorize him to firmly reach at a conclusion that Shri Sanjay Bansal has made payment of Rs.13 Cr in cash to the assessee. The AO is simply harping upon the statement of Accountant of Shri Sanjay Bansal against whom a FIR has been lodged by his employer. If we exclude that statement from the evidence on the basis of the judgement of Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] as well as DSG Papers (P) Ltd. [ 2023 (11) TMI 762 - PUNJAB AND HARYANA HIGH COURT ] then nothing will remain with the AO to draw such a conclusion. Therefore, this addition is not sustainable. We allow this ground of appeal and delete the addition. Whether re-assessment is not sustainable because no notice was issued to the assessee u/s 143(2)? - There is no dispute with regard to the fact that assessee has filed two applications pleading therein that original return filed u/s 139(1) be treated as filed in response to notice received u/s 148. If Section 143(2) is being perused, then it will reveal that this Section provides first opportunity to an assessee what he wants to say in support of his return. Only thereafter AO would carry out investigation. In the present case, physical copy of the notice has not been brought before us by the Revenue. In the judgement of Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT ] cited by the assessee as well as Shri Shiv Shankar Traders [ 2015 (10) TMI 1765 - DELHI HIGH COURT ] it has unanimously been propounded that before taking a return for scrutiny, a notice u/s 143(2) is the prerequisite condition and if such notice was not issued, then assessment is not sustainable. Therefore, on this ground also, assessment is not sustainable and accordingly quashed. Penalty u/s 271D - acceptance of loan in cash in violation of Section 269SS of the Income Tax Act - HELD THAT:- This penalty is not sustainable for two reasons as we have already deleted the addition made to the total income of the assessee, therefore, it cannot be construed that assessee has accepted a sum of Rs.13 Cr in cash. This was neither loan nor deposits. This amount does not fall within the ambit of Section 269SS of the Income Tax Act. Therefore, no penalty is imposable on the assessee.

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• 2025 (4) TMI 538
  Addition u/s. 56(2)(vii)(b) - value of new flat allotted as compensation received by the assessee in the form of a flat for vacating a property occupied illegally - disallowance of deduction claimed u/s. 54F - whether compensation received by the assessee from the builder for clearing the nuisance shall constitute capital asset in the hands of the assessee? - HELD THAT:- The assessee has created nuisance to the developer/builder and the said flat was allotted to the assessee as compensation for removing nuisance created by the assessee. We notice that an identical issue has been considered in the case of Shri Kishre D.P. [ 2017 (2) TMI 1567 - ITAT MUMBAI] wherein it was held that the compensation received for creating a nuisance is a capital receipt in the hands of the assessee and the same is not taxable - Decided in favour of assessee.

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• 2025 (4) TMI 537
  Disallowance of Deduction w/s 80G qua the CSR expenditure - HELD THAT:- We find the Pune Bench of the Tribunal in the case of Advik Hi Tech (P.) Ltd. [ 2024 (10) TMI 1648 - ITAT PUNE] has held that the deduction claimed by the assessee u/s 80G on account of Corporate Social Responsibility (CSR) deserves to be allowed. Thus, we hold that the AO is not justified in denying the claim of deduction u/s 80G - Decided in favour of assessee. Addition u/s 41(1) - unilaterally written off by the vendors - HELD THAT:- As we find the additional evidences filed by the assessee go to the root of the matter. We, therefore, admit the same and restore the matter to the file of the AO with a direction to verify the same and pass an appropriate order as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The second issue raised by the assessee is accordingly allowed for statistical purposes. Disallowing credit of taxes adjusted against the interest charged u/s 115P - since the interest charged allegedly for non-payment of DDT has not been deleted and raised the demand of tax erroneously in the final order, the Ld. Counsel for the assessee submitted that the same may be deleted - HELD THAT:- We deem it proper to restore this issue to the file of the Assessing Officer with a direction to verify the record and rectify the demand of tax after providing due opportunity of being heard to the assessee. The fourth issue raised by the assessee is accordingly allowed for statistical purposes.

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• 2025 (4) TMI 536
  Validity of order passed u/s 147 r.w.s.144B by National Faceless Assessment Centre - whether it is without jurisdiction as provisions of Section 151A as the the e-assessment of Income escaping assessment scheme, 2022 was notified on 29.03.2022 vide notification No.18/2022/F.No.370142/16/2022-TPL for assessment? HELD THAT:- The case of the assessee find support from the decision of Nabiul Industrial Metal Pvt. Ltd [ 2024 (10) TMI 1649 - ITAT KOLKATA] wherein allowed the appeal of the assessee by holding that the assumption of jurisdiction by the NFAC is invalid as there is no power with NFAC to issue notice u/s 142(1) of the Act prior to 29.03.2022 because the scheme of faceless enquiry u/s 142B for issuance of notice u/s 142(1) of the Act by NFAC was notified on 30.03.2022 vide Notification no. 19/2022 though it was inserted on the statute book w.e.f. 1.11.2020 for faceless enquiry and valuation. Further u/s 151A e-assessment of income escaping assessment scheme, 2022 was duly notified on 29.03.2022 vide notification no. 18/2022/F.No/370142/16/2022-TPL for assessment, reassessment or re-computation under section 147 of the Act through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in Section 148 for issuance of notice and in a faceless manner to the extent provided in Section 144B. Therefore prior to 29.3.2022, the NFeAC has no jurisdiction to make assessment u/s 147 or to issue notice 142(1) vide notification no. 18/2022, dated 29.03.2022 u/s 151A. Accordingly appeal of the assessee is allowed.

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• 2025 (4) TMI 535
  Scope of limited scrutiny - Disallowance of short term capital loss on account of forfeiture of share warrant - HELD THAT:- In the present case, the AO has travelled beyond his jurisdiction and made additions on the issues which are not part of the reasons for limited scrutiny. Therefore, both the AO and CIT(A) has committed an error in making the addition and sustaining the same which requires to be set aside. This view of our is supported by the decision of Padmavathi reported [ 2020 (10) TMI 425 - MADRAS HIGH COURT] . As the facts of the present case are squarely covered by the decision of the Hon ble Madras High Court in the case of Padmavathi (supra) in our opinion no addition could be made in the hands of the assessee beyond the scope of limited scrutiny without following the procedure laid down for converting the limited scrutiny into complete scrutiny by recording satisfaction and further by taking necessary approval from the higher authorities as prescribed. Appeal of the assessee is allowed.

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• 2025 (4) TMI 534
  Assessment order passed u/s 148 r.w.s. 144 - addition made on the issue of cash deposits - Reasons for opening of the assessment are different than reasons for making additions - HELD THAT:- Revenue was in possession of the information that the assessee has deposited a sum of Rs 42,46,000/- during the F.Y. 2011-12 in his saving bank account held with ICICI Bank Ltd. The assessee has not filed his return of income for the year under consideration. In absence of return of income the above transactions considered was considered as not verifiable and accordingly, reasons for reopening of the case were recorded, and notice u/s 148 of the Act was issued on 19.03.2019, which was duly served upon the assessee through registered post. The assessee made part compliance and submitted the copy of balance Sheet and Profit loss account. Thereafter despite various opportunities provided assessee remained non-compliant and ld. AO went on making the addition which were based on the profit and loss account and Balance Sheet filed by the assessee and the has abstained from making any addition on account of cash deposited to the Saving Bank account as alleged in the reasons recorded for re-opening of the case. Thus, once the Assessing Officer is satisfied with the reasons recorded for reopening the case, they no longer have the jurisdiction to tax any other income. We get strength of this view from a decision serviced by the ld. AR of the assessee in the case Shri Ram Singh [ 2008 (5) TMI 200 - RAJASTHAN HIGH COURT] as held AO was justified in initiating the proceedings under section 147/148, but then, once he came to the conclusion, that the income, with respect to which he had entertained reason to believe to have escaped assessment, was found to have been explained, his jurisdiction came to a stop at that, and he did not continue to possess jurisdiction, to put to tax, any other income, which subsequently came to his notice, in the course of the proceedings, which were found by him, to have escaped assessment. Thus once the ld. AO abstained from making any addition on the reasons recorded his jurisdiction came to a stop at that, and he did not continue to possess jurisdiction, to put to tax, any other income, which subsequently came to his notice, in the course of the proceedings, which were found by him, to have escaped assessment. Based on these observations ground no. 1 raised by the assessee is allowed.

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• 2025 (4) TMI 533
  Revision u/s 263 - validity of assessment u/s 147/148 - assessee s claim of long-term capital gain (LTCG) as exempt u/s 10(38) was erroneous and prejudicial to the interests of the revenue - HELD THAT:- As perused the reasons for reopening u/s 147/148 where no reasons have been given to reopen the assessment on this score of purchase of immovable properties. We further hold that merely because ROI for A.Y 2015-16 is filed for Rs. 19,23,970/-is no ground to order fresh assessment proceedings basis order u/s 263. Assessee in any case has given plausible explanation in reply and Ld. PCIT ought to have considered the same and ought to have made some bare minimum enquiry before ordering fresh assessment no such step was taken under section 263 despite express provision in this regard u/s 263 therefore the impugned order is bad in law, not proper and illegal within the meaning of Section 263 of the Act and accordingly we set aside the same on both counts on basis of which fresh assessment is ordered. We also hold that during the course of the proceedings u/s 147/148 of the Act several queries were raised and that the same were properly replied by the assessee. The same were duly considered. There was a checking and verification which fact is recorded. Therefore in law it cannot be said that assessment u/s 147/148 of the Act was done by Ld. AO without conducting any inquiry and verification the case is one of no inquiry. PCIT in the impugned order has failed to establish erroneous character of assessment order and that too in such a manner that it is prejudicial to the interest of Revenue. In the assessment proceedings where Ld. AO is consciously satisfied with the material on record, does checking and verification and accepts the return of income then such an assessment order cannot be called erroneous and prejudicial to the interest of Revenue. In the instant case all this has happened. We also hold that in proceedings u/s 263 reply to the show cause notice and all other queries of Ld. PCIT is satisfactorily given to establish that order in assessment of Ld. AO is not erroneous and prejudicial to the interest of Revenue so as to warrant invocation of provision u/s 263 of the Act. Appeal of the assessee is allowed.

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• 2025 (4) TMI 532
  Disallowance of interest expenses and claim of depreciations on Car - Cars (Motor Vehicle) not registered in the name of company but registered in the name of Director - HELD THAT:- While disallowing the said expenditure the ld. AO noted that interest expenses and depreciation claimed for the car which was not in the name of the company but was registered in the name of the Individual. As per-loan-papers, the other car (Ciaz) was also in the name of an individual and not in the name of company. AO considered that the vehicles were not registered in the name of the company and yet the company was bearing interest expenses and depreciation pertaining to them and therefore, AO disallowed interest expenses and claimed on depreciations. When the matter carried before the ld. CIT(A) he rejected the claim of the assessee by observing that if a vehicle is in the name of the director, then personal use cannot be ruled out. While vehicle expenses for running may be paid by the company and therefore, he hold that the depreciation and interest on vehicles cannot be allowed on an assets owned by another person. Before us the assessee submitted the assessee claiming the said expenditure since 2012 and the relevant assets is reflected in the books of the company and has since the car is used for the purpose of the business interest and depreciation on the assets put to use by the company cannot be denied to the assessee. Assessee cited the decision of the apex court in the case of CIT Vs. Poddar Cement P. Ltd. [ 1997 (5) TMI 2 - SUPREME COURT] wherein it has been held that any one in possession of the property in his own title exercising such dominical over the property as would enable the others being excluded there from and having the right to use and occupy the property and / or to enjoy its usurp in his own right would be the owner . Respectfully following the binding precedent, we do not find any reason to sustain the disallowance direct the ld. AO to delete the same. Disallowance of business promotion expenses - assessee submitted that the claim was for the purpose of the business of the assessee - HELD THAT:- Before us assessee did not rebut the finding of the ld. CIT(A) that claim made was contrary on facts and the expenditure was incurred in cash and therefore, we do not find any merit in this grounds of appeal raised by the assessee and same is dismissed. Disallowance being the interest on the loan given - HELD THAT:- On this aspect of the matter we note that the advance were not given in the year under consideration except Shri Kulbir Singh. Assessee submitted that all the parties in the line of fabrication work, colonizer and developer which is also at par with nature of the business of the assessee. Even otherwise there was no direct nexus was established and the assessee was having sufficient interest free funds and therefore, considering the decision of the jurisdictional high court cited by the ld. AR of the assessee in his written submission we do not find any reason to sustain the addition and therefore, the same is directed to be deleted. Disallowance of revenue expenditure @ 12 % on the building construction expenditure - HELD THAT:- AO noted that since the assets on which the expenditure incurred was not put to use the notional income is required to be added and ordered to be capitalized. When the matter carried before the ld. CIT(A) he has confirmed the addition stating that the assessee could not refute the reasoning given by the ld. AO. Whether the assets is put to use or not without correlating the fact that the assessee has used the borrowed fund in building the assets then interest can be capitalized. When there is no nexus, no addition can be made. We get support for this view from decision in CIT Vs. Ram Kishan Verma [ 2016 (1) TMI 223 - RAJASTHAN HIGH COURT] . Considering that aspect of the matter that no notional disallowance of interest can be made and thereby ground raised by the assessee is allowed. Disallowance being the 5 % claim of the assessee under the head salary expenses - HELD THAT:- There was no defect pointed out by the ld. AO in the books or that of with the vouchers. Even the vouchers produced for which the AO gave the credit this itself shows that the ld. AO acted based on the assumptions and presumptions. Even he has not given any basis by which he arrived to disallow 5 % of the expenses claimed. Thus, there is no such basis and that too without rejecting the books of account no disallowance can be made. We direct the ld. AO delete the disallowance so made on estimate basis.

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• 2025 (4) TMI 531
  Income earned as Perquisites u/s 17 (2) - company shares allocated on discounted/subsidised rates - HELD THAT:- Assessee admittedly happens to be one of the director(s) of the company herein who had issued shares to him on 25.02.2014 @ 12628.20 each unit. The said premium was undisputedly based as per the prescribed merchant banker going by Rule 3(8)(i), (ii) (iii), wherein the clinching date is that of exercise of the option involving unlisted shares. This case file further reveals that the assessee s company issued shares to Mauritius based entity M/s Norwest Venture Partners Mauritius as well within a month on 27.03.2014 at a premium of Rs. 97,465/- each. Revenue s endeavour in this factual background is that the assessee is liable to be assessed qua the differential amount of the foregoing share premium as a perquisite u/s 17 (2) (vi) of the Act. We are of the considered view that once CIT(A)/NFAC has upheld the former premium of Rs. 12628.2 per share unit going by the merchant bankers valuation, the latter premium rate as per the master circular dated 1.7.2023 issued by the Reserve Bank of India, prescribing specific discount free cash flow method in case of unlisted companies would not apply as both these provisions deal with altogether different situations. There is no specific default noticed by AO in the assessee s merchant bankers valuation and therefore, the revenue s endeavour to revive the impugned addition based on discount free cash flow method would not apply in the given facts. We thus reject the Revenue s instant sole substantive grievance and its main appeal.

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• 2025 (4) TMI 530
  Disallowance u/s. 14A read with Rule 8D - disallowance under Rule 8D(2)(ii) r.w.s. 14A, should be made on the average value of investments, yielding exempt income during the year - HELD THAT:- It is the say of the assessee that such investment actually works out to Rs. 66,11,88,530/-, whereas, the A.O. has worked out the quantum of investment based on market value. We find substantial merit in the submissions of the assessee. On a perusal of the facts on record, as well as, the order of the co-ordinate bench in assessee s own case in A.Y. 2017-18 [ 2024 (12) TMI 1555 - ITAT MUMBAI] it is observed that the average value of investments, giving rise to exempt income during the year under consideration works out to Rs. 66,11,81,530/-. Therefore, in terms of Rule 8D(2)(ii), the disallowance @ 1% would work out to Rs. 66,11,815/-. That being the case, we direct the A.O. to restrict the disallowance. Disallowance of depreciation claimed - assessee through a manually filed revised return of income, had claimed depreciation at a higher figure - HELD THAT:- As per Explanation 5 to section 32(1) AO has to compute depreciation in terms with the provisions of the Act, rules and in consonance with the rate provided in the schedule of depreciation. Irrespective of the claim made by the assessee, AO has to compute depreciation, in accordance with the provisions of the Act and rules. Therefore, even if the assessee might have computed depreciation incorrectly, duty is cast upon the AO to correctly compute the depreciation. Therefore, if the assessee claims that the depreciation computed by it in the original return of income is incorrect, such claim needs to be factually verified. We restore the issue to the AO with a direction to factually verify assessee s claim of enhanced depreciation and compute depreciation, in accordance with the statutory provisions. Ground is allowed for statistical purposes.

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• Customs

• 2025 (4) TMI 529
  Time limitation for issuance of SCN - Failure to follow 90 days time limit prescribed under Regulation 17 (5) of the Customs Brokers Licensing Regulations, 2018 - HELD THAT:- The respondents have not disputed that there was a delay on their part in complying with the timelines fixed in the CBLR, 2018 under regulation 17. However, the only contention before this Court is that those timelines are only directory in nature and therefore, for non compliance of timelines, the petitioner cannot seek for quashing of the impugned show cause notice dated 28.03.2022 as well as the impugned Inquiry Report dated 17.06.2022. This Court is bound by the decision of the Division Bench of this Court in the case of Santon Shipping Services Vs. The Commissioner of Customs [ 2017 (10) TMI 621 - MADRAS HIGH COURT] , wherein the Division Bench has categorically held that similar regulations applicable to Customs House Agents, viz., CHALR, 2004 are mandatory and strict timelines will have to be necessarily followed as per the said regulations. Conclusion - This Court is of the considered view that the impugned show cause notice as well as the impugned inquiry report have to be quashed on the ground of non adherence to the timelines fixed under regulation 17 (5) and (7) of CBLR, 2018, which are mandatory in nature. The impugned show cause notice dated 28.03.2022 and the impugned Inquiry Report dated 17.06.2022 are hereby quashed and these writ petitions are allowed.

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• 2025 (4) TMI 528
  Determination of customs duty - rejection of declared FOB value - delaration of high value in the shipping bill so as to claim excess benefit of MEIS and IGST refund - redetermination of value under Rule 6 and Rule 8 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962 - HELD THAT:- Section 14 of the Customs Act provides that for the purpose of Customs Tariff Act, 1975 or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, but it provides for some exceptions. These exceptions include the conditions under which the transaction value can be rejected and the value can be re-determined as per rules. It needs to be noted that the Customs Tariff Act and the schedules thereunder determine the amount of duty payable. As per Section 12 of the Customs Act, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into or exported from India. Duties on most goods are charged on ad-valorem basis and, therefore, the value of the goods is important. Section 14 provides for determining the value and also provides for the Government to make Rules for the purpose. The Customs Valuation (Determination of Value of Export Goods) Rules 2007 have been framed under Section 14 of the Act to determine the export value of the goods. Rule 3 provides that the value shall be the transaction value subject to Rule 8. Rule 8 provides for rejection of the declared value under certain conditions. Rules 4 to 6 provide for re-determination of value if the transaction value is rejected under Rule 8. In this case, the Additional Commissioner rejected the value under Rule 8 and re-determined the value under Rule 6. However, no export duty is chargeable on the goods. Therefore, re-determination of value under Section 14 and the Valuation Rules is irrelevant. The confiscation of the goods under Section 113 (i) and consequential imposition of redemption fine cannot be sustained and need to be set aside - Penalty under Section 114 is attracted if the export goods are confiscated. Since in this case, confiscation under Section 113 itself cannot be sustained, penalty under Section 114 also cannot be sustained. The case of the department is that the appellant had knowingly declared wrong value and hence penalty is imposable. As discussed above, since the appellant has to only declare the transaction value and has neither any obligation nor power under the law to re-determine the Value under some other method, and further since he has no obligation whatsoever under the law to predict what value the proper officer may determine, the appellant had not mis-declared the value in the Shipping Bill. Therefore, penalty under Section 1114AA is not imposable on the appellant. Conclusion - i) The re-determination of the FOB value by the Additional Commissioner is without any authority of law and it has been wrongly upheld by the Commissioner (Appeals) in the impugned order. ii) The finding that the goods were liable to confiscation under Section 113(i) and the redemption fine imposed are liable to be set aside. iii) The penalties under Section 114 and 114AA are also liable to be set aside. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 527
  Classification of goods imported by the appellant - Carbon and Sulphur Analyzer CS-800 - to be classified under CTH 90271000 by treating it as Gas or Smoke analysis apparatus or not - HELD THAT:- Clearly, CTH 9027 is the heading which covers Instruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus); Instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes . A plain reading of the coverage, as per HSN, would indicate that the kind of gas or smoke analysis apparatus, which is specifically covered under CTH 90271000, are the one where the apparatus is used to analyze combustible gases or combustion by-products (burnt gases) and especially in coke ovens, gas producers, blast furnaces, etc., for determining their content of carbon dioxide, carbon monoxide, oxygen, hydrogen, nitrogen or hydrocarbons - The technology it is using requires creation of fume or gas only with intent to ultimately test the presence of carbon or sulphur element in the metal and not the presence of carbon dioxide or sulphur dioxide gas in the metal. Therefore, this particular equipment is not classifiable under CTH 90271000. It is also noted that different types of analysers have been imported through different ports and they have been classified under many headings including CTH 90279090 90278090. From perusal of the same, it is also noticed that those equipments, which are specifically meant for analysing gases like SOX/NOX i.e., sulphur dioxide and nitrous oxide, etc., are getting classified under CTH 90271000, whereas, other kinds of analysers are getting classified under CTH 90278090. As far as the argument that appellants themselves have started classifying the product under CTH 90271000 and therefore, now they cannot go back and claim that it is not classifiable is concerned, it is found that there is no estoppel on the appellant to challenge the classification even if they have started paying the duty under different heading during subsequent period. As far as the issue of payment under protest is concerned, it has got no relevance for the present appeal as during the material period, they had contested the classification and the said classification is being examined and not for the future classification practice adopted by them. Conclusion - The apparatus s primary function was to measure element content in solid samples, not to analyze gases. The appellant was not estopped from challenging the classification, even if they had previously classified the apparatus under CTH 90271000. The order of the Commissioner (Appeals) is not tenable and therefore, liable to be set aside - Appeal allowed.

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• 2025 (4) TMI 526
  Revocation of Customs Broker License - forefeiture of security deposit - levy of penalty - alleged breach of timelines, obligations enumerated in regulation 10 of Customs Broker Licensing Regulations, 2018 - HELD THAT:- In the instant case, notice was issued on 22nd May 2023 well beyond the 90 days from receipt of offence report stipulated for initiating action. Furthermore, the report dated 28th November 2023 was also submitted beyond the 90 days from the date of show cause notice prescribed for completion of inquiry. It is also seen that the revocation order dated 12th June 2024 exceeded the 90 days from the date of enquiry report mandated for completion of the process. There was, thus, patent breach of timelines at every stage of the proceedings. On perusal of the impugned order, there is no finding that the acts, omission or commission on the part of the customs broker was cause of one or more of the delays. The Hon ble High Court of Bombay in Principal Commissioner of Customs (General), Mumbai v. Unison Clearing P Ltd [ 2018 (4) TMI 1053 - BOMBAY HIGH COURT] held that the timelimit contained in Regulation 20 cannot be construed to be mandatory and is held to be directory. As it is already observed above that though the time line framed in the Regulation need to be rigidly applied, fairness would demand that when such time limit is crossed, the period subsequently consumed for completing the inquiry should be justified by giving reasons and the causes on account of which the timelimit was not adhered to. In addition to the circumstances failing to portray any delay occasioned by dereliction on the part of the customs broker, there is no explanation whatsoever in the impugned order justifying the delay as unavoidable and beyond human control. Conclusion - The timelines specified in the Customs Broker Licensing Regulations, 2018, are directory and not mandatory. The licensing authority failed to justify the delays and that the customs broker was not responsible for any procedural delays. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 525
  Applicatiion for cancellation of bail granted to the respondent - smuggling of gold into India and selling it in the Grey market - HELD THAT:- This application is filed on 03.05.2024. Thereafter on 16.05.2024, the respondent came to be detained under COFEPOSA Act and he was under detention till 06.03.3025 for a period of almost 10 months. Record shows that this application is not pursued, though reply by the respondent is filed on 07.05.2024. The Hon ble Apex Court in Joyi Kitty Joseph V/s. Union of India and Ors. also noted submission of both the sides that this application for cancellation of bail was not pursued by both the sides. The respondent having undergone preventive detention for almost 10 months during pendency of this application is a circumstance weighing in favour of the respondent. It is submitted during the course of oral submissions that complaint in the Court is still not filed by the DRI. The period of more than one year from the date of first remand is elapsed. As per the provisions of the Criminal Procedure Code, 1973, accused becomes entitled to statutory bail if investigation is not completed within the stipulated period, depending on the punishment provided for the offence - The respondent was already in custody from 06.03.2024 to 16.04.2024 and even otherwise he would have been entitled to statutory bail after the period of 60 days was over. In this view of the matter, the prayer for cancellation of bail coupled with continuation of investigation without filing complaint is not permissible under the law. The Ld. trial Court while deciding the plea of respondent s bail, has considered all the relevant material in detail and released the respondent on bail by imposing certain conditions, which even the Hon ble Apex Court, while dealing with the petition challenging preventive detention of the respondent, was pleased to consider. No supervening circumstances are brought on record which warrant interference under Section 439(2) of Cr.P.C. in the bail order passed in favour of the respondent. Therefore, after going through the principles laid down in the judgments relied upon by both the parties and the facts and circumstances of the case, no case is made out by the applicant for cancellation of the bail granted to the respondent and the application is liable to be rejected. Conclusion - The application for bail cancellation rejected, as no supervening circumstances or breaches of bail conditions were established. Application dismissed.

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• Corporate Laws

• 2025 (4) TMI 524
  Exercise of jurisdiction under Section 482 of Cr.P.C. - amounts collected by the petitioners as advances for the sale of immovable property - deposits under Section 73 of the Companies Act, 2013 - exemption under Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposit) Rules, 2014. HELD THAT:- Section 482 of the Code of Criminal Procedure empowers the High Court to exercise its inherent power to prevent abuse of the process of Court. In proceedings instituted on complaint exercise of the inherent power to quash the proceedings is called for only in cases where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance is taken by the Magistrate it is open to the High Court to quash the same in exercise of the inherent powers under Section 482. There are considerable force in the contention of the petitioners that the said Guruzala Venkateswara Rao foisted many false complaints against the petitioners in order to settle his personal scores with petitioners herein and the other group of companies. Further, the said Guruzala Venkateswara Rao is neither allottee nor he is in any way directly involved or linked with the business transactions of the petitioners. Whether the amounts collected by the petitioners for sale of immovable property as advance would come under the purview of deposits or could be exempted from the purview of deposits by virtue of Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014? - HELD THAT:- Admittedly, petitioners - companies had purchased the agricultural land and after obtaining the permission from the competent authorities for conversion of agricultural land into non-agricultural land, have obtained permission for development of the said land duly converting into layout of plots for residential/commercial housing. To unlock the funds invested in development of the lay outs etc., petitioners had offered to sell the land in its possession and for this purpose entered into written agreement/arrangement. By virtue of proviso to Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, the advances received by the petitioners for sale of immovable property are exempted from the purview of the deposits. The respondent No. 3 is neither allottee nor he is in any way directly involved or linked with the business transactions of the petitioners, however, he lodged complaint against the petitioners with some ulterior motive to wreck vengeance on the accused. This Court is of the considered view that continuation of proceedings against the petitioners in both cases/accused would amount to abuse of process of the Court. Conclusion - The proceedings against the petitioners in both criminal cases are to be quashed, as the allegations did not meet the criteria for deposits under the Companies Act, and the proceedings appeared to be maliciously motivated. Petition allowed.

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• 2025 (4) TMI 523
  Seeking recall of the order passed by the NCLT, which application has been rejected - locus standi of appellant, who was not a party to the original proceedings, to file an application seeking the recall of an order - Sections 241 242 of Companies Act - HELD THAT:- Section 44 of the Evidence Act, 1872 provides that any party to a suit or other proceeding may show that any judgment, order or decree which is relevant under Sections 40, 41 42 and which has been proved by the adverse party was delivered by a Court, not competent to deliver it or was obtained by a fraud of the collusion. The purpose of the above provision is to give right to other party to prove that judgment of the Court which is relied as evidence was delivered by a Court nor competent to deliver it or was obtained by fraud of collusion - Section 44 cannot be used or utilised by the appellant since appellant was never party to the proceeding under Sections 241 242 of the Act and the order dated 15.12.2023 is not an order which was relied as evidence by any party in the proceeding under Sections 241 242, in fact the order dated 15.12.2023 is an order passed in the same very proceeding. The submission of the appellant that by virtue of Section 44 appellant can very well impeach the order dated 15.12.2023 on the ground that it was delivered by a Court, not competent to deliver it cannot be accepted. The submission of the appellant on basis of Section 44 of the Evidence Act is misplaced and has no applicability to give any locus to the appellant to file an application to recall the order dated 15.12.2023 before the NCLT. Order 1 Rule 8A of the CPC empowers a Court while trying a suit to allow a person or body of person to present case or his opinion on the question of law and to take parts in proceedings of the suit. If the Court is satisfied that person or body or person is interested in any question of law which is directly and substantially issued in the suit. The provisions of Rule 8A is enabling power which empowers the Court to permit person or body person interested in any question of law to present such opinion and to take part - When Col. Ashish Khanna, who was party to the proceeding and has filed various application, including the application CA 40/2022, which was rejected on 15.12.2023, NCLT has not committed any error in holding that appellant the wife of Col. Ashish Khanna has no locus to file the application to recall order 15.12.2023. The order dated 15.12.2023, which was sought to be challenged by Col. Ashish Khanna which challenge having not been entertained the order 15.12.2023 and the cost imposed by the order dated 15.12.2023 could not be allowed to be challenged by the appellant. Cost was imposed on Col. Ashish Khanna for the reasons as was noticed in the said order dated 15.12.2023. Col. Ashish Khanna having unsuccessfully challenged the said order, Appellant has no locus to question the imposition of cost on Col. Ashish Khanna. Conclusion - The NCLT s decision to reject the appellant s application for recall rejected, due to lack of locus standi and there are no grounds to interfere with the order dated 15.12.2023. NCLT (Principal Bench, New Delhi) did not commit any error in holding that appellant/applicant has no locus to file CA 90/2024 praying for recall of the order dated 15.12.2023 - appeal dismissed.

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• 2025 (4) TMI 522
  Reduction of capital under Section 66 of the Companies Act, 2013 - shares got extinguished after passing special resolution by the Respondent No. 1 - selective capital reduction in terms of Section 66(1)(b)(ii) of the Code - Appellants minority shareholders could have been compelled to be ousted from the equity holding by passing resolution by majority of shareholders despite unwillingness of the minority shareholders - valuation of shares -valuation done by E Y Merchant banking division was really Independent or was biased - applicability of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 - 25% Discount for Liquidity of Marketability (DLOM) was permitted and justifiable or not - minority shareholder who supported the Respondent company right from inception were entitled to receive Control Premium instead of DLOM - failure to disclose and attach the required documents in the explanatory statement, enclosed along with the notice for acquisition of shares from minority shareholders was issued - violation of Section 102 of the Companies Act, 2013 making the resolution passed for the approval of the scheme of reduction of share capital void and illegal or not. Whether reduction of capital by the Respondent No. 1/ BTL was in accordance with Section 66 of Companies Act, 2013? - Whether selective capital reduction was permissible in terms of Section 66(1)(b)(ii) of the Code? - Whether the Appellants minority shareholders could have been compelled to be ousted from the equity holding by passing resolution by majority of shareholders despite unwillingness of the minority shareholders? - HELD THAT:- In Punjab Distilling Industries Ltd. v. CIT [ 1965 (2) TMI 6 - SUPREME COURT ], the Hon ble Supreme Court of India outlined the process of capital reduction i.e. the company s general body must pass a resolution approving the reduction of capital, often involving the distribution of accumulated profits to shareholders. An application for court (now NCLT) approval must be submitted. Once the court (now NCLT) confirms the reduction, it must be registered with the Registrar of Companies. Notices are issued to shareholders inviting applications for refunds of share capital and finally, upon receiving these applications, the company distributes the refunded amount. Just like CoC in Corporate Insolvency Resolution Process under Insolvency and Bankruptcy Code, 2016, the Shareholder of the company are true owners and understand what is in interest of the company as well as owners (shareholders) and therefore shareholders have exclusive jurisdiction to decide on the issue of capital reduction in any manner including selective capital reduction and if so, in what manner. There are no conditions attached to the terms in any manner as stipulated under Section 66 of the Companies Act, 2013. There is no vested right of minority shareholders to continue as shareholders in case of reduction of share capital and therefore, they can be ousted from shareholding if a special resolution is passed by the majority of the equity shareholder, which happened precisely in the present case where special resolution was passed by 99.92% of voting shares. The reduction of capital by the Respondent No. 1/ BTL was in accordance with the Section 66 of the Companies Act, 2013. We also held that the selective capital reduction was permissible in terms of Section 66(1)(b)(ii) of the Companies Act, 2013. We further hold that Section 66 is applicable in case of any capital reduction, be it listed company or non listed company and therefore, the Respondent No. 1 was supposed to comply with Section 66 of the Companies Act, 2013 - there are no error in the Impugned Order on this account. Whether valuation of the shares carried out by E Y @ Rs. 196.80 was correct and in accordance with law along with established valuation practices done keeping in view the valuation of the same company done @ Rs. 310 few months back while allotting preferential shares to SingTel? - Whether the valuation done by E Y Merchant banking division was really Independent or was biased? - Whether SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR Regulations, 2009) were applicable in the present case? - HELD THAT:- Share valuation under the Companies Act, 2013, involves the process of determining the value of shares, which is crucial in various corporate transactions. This process is governed by several provisions of the Act, particularly emphasizing the role of registered valuers. Valuation is essential in ensuring that shares are issued at a fair price, preventing undervaluation or overvaluation that could impact shareholder rights. The valuation of shares involves determining the fair value of a company s shares, which is significant for both listed and unlisted companies. This valuation can be used and becomes desirable in cases like selling a business, securing loans using shares as collateral, mergers and acquisitions, converting share types and compensating shareholders in case of capital reduction like the present case. The contentions of the Appellants that, share valuation as done by the E Y Merchant Banking Division in the present case, was not appropriate and this Appellate Tribunal should reject the same. In this connection, reference made to ratio laid down in the case of Cadbury India Ltd. [ 2014 (5) TMI 1189 - BOMBAY HIGH COURT ] which noted that before a court can decline sanction to a scheme on account of valuation, an objector to the scheme must first show that the valuation is ex-facie unreasonable i. e. so unreasonable that it cannot be accepted. It was also held that plausible rationale provided by a valuer is not be readily discarded merely because an objector has a different view. It was held that valuation is not an exact science and all valuations proceed on assumptions and to dislodge a valuation, it must be shown that those assumptions as such as could never have been made, and that they are so patently erroneous that the end result itself could not, but be wrong unfair and unreasonable - the ratio laid down in case of Cadbury India Ltd. is quite explicit and hardly leaves any scope for interference by this Appellate Tribunal on the issue of valuation. Noting that ICDR Regulations 2009 do not apply to the Capital Reduction in question, the current position with respect to period to be considered for the purpose of pricing has changed from 26/2 weeks to 90/10 days under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (as amended in 2022) further shortening the period to examine the days for the purpose of valuation, wherein 26 weeks was noted to be too long a period to value shares especially as price can be very volatile over a period of 26 weeks. Therefore, it is the judgement of a valuer on the historic price to be considered of a volatile listed share, that would represent the value of such shares correctly. This seems quite logical. The allegation that Ernst Young LLP on account of being the internal auditor of BAL and therefore amenable to influence by Respondent No. 1 is found to be untenable - the Tribunal has correctly complied the same, in the present appeal and there are no merit in the pleading of the Appellants on this ground. Whether 25% Discount for Liquidity of Marketability (DLOM) was permitted and justifiable in determining the valuation for the purpose of offering the minority shareholders? - Whether the minority shareholder who supported the Respondent company right from inception were entitled to receive Control Premium instead of DLOM ? - HELD THAT:- The valuation of shares is rather intricate and subjective matter for experts who has got domain knowledge of not only the valuation methodology but also have fair knowledge about relevant industry for which valuation is being done with the help of the relevant financial facts and figures. While doing these valuations there may be more challenges in case of valuation of unlisted companies like the Respondent No. 1/ BTL as the relevant market shares dates is not available - By no stretch of imagination, someone can expect that the court/ tribunal shall have such expertise to go into the correctness or otherwise of the valuation done by the independent valuers. The only duty of the court/ tribunal is to ensure that the whole process has been fair and unbiased and has not caused any prejudice to the rights of shareholders including and especially the minority shareholders. In the present case, there are no such reason to come to the conclusion that whole process has been biased or unfair. It is the case of the Appellants that instead of DLOM, the valuation should have provided Control Premium since promoters acquired shares from the minority shareholders forcefully. Hence it would be desirable to understand the concept of Control Premium and its applicability in the present case - Equity Shares may be subject to premium or discounts, depending upon the context of valuation including whether they represent controlling or minority interests. The contention of the Appellants that Ernst Young Merchant Banking Services Pvt. Ltd. submitted flawed Valuation Report as it failed to include a control premium, is not found convincing. The majority shareholders in the Respondent No. 1/ BTL already had control over majority of the shares and the remaining of 1.09% of shareholders were not in any significant position or say in the dealing with the company matters. Further, this percentage of minority shareholders did not have the ability to influence any major decision of the Respondent No. 1. Thus, the question of a control premium does not arise as there is no change in control of the Respondent No. 1 pursuant to the capital reduction. There is no error in the Impugned Order which allowed scheme based on Independent Valuer report which provided 25% discount for DLOM in arriving at fair value of Rs. 196.80 per shares. It is already noted that in the present case, there seems to be no case of control premium which the Appellants have claimed, simply as majority of shareholder has brute majority of 98.91%. Whether the Respondent company failed to disclose and attach the required documents in the explanatory statement, enclosed along with the notice for acquisition of shares from minority shareholders was issued? - Whether the Respondent company BTL violated Section 102 of the Companies Act, 2013 making the resolution passed for the approval of the scheme of reduction of share capital void and illegal? - HELD THAT:- Uder the Companies Act, 2013 Section 62 allows for a Preferential Allotment of shares like in the case of SingTel. Under Section 62(1)(c) read with Companies (Share Capital and Debentures) Rules, 2014, Rule 13, it is mandatory for a company to (a) obtain a valuation report and (b) send the valuation report along with the notice under Section 102 of the Companies Act, 2013. This requirement of law was duly complied for the SingTel Preferential Allotment. In contrast to the provision relating to Preferential Allotment, in the case of Capital Reduction under Section 66 of the Companies Act, 2013 there is no such stipulated requirement to send the valuation report along with the notice. The only requirement is to permit an inspection by virtue of Section 102 (3) of the Companies Act, 2013 which was duly complied by the Respondent No. 1 company. Thus, it is not convinced with the arguments of the Appellants that failure to send the valuation report together with the notice has caused legal infirmity or any prejudice to the interest of the Appellants. In fact, the right to inspect was availed from by some of the Appellants as is evident from the email dated 12.07.2018, where an inspection was provided to the counsel of the Appellant. Conclusion - i) Reduction of capital by the Respondent No. 1/ BTL was in accordance Section 66 Companies Act, 2013. ii) Selective capital reduction was permissible in terms of Section 66(1)(b)(ii) of the Companies Act, 2013. iii) The Appellants minority shareholders could have been compelled to be ousted from the equity holding by passing resolution by majority of shareholders despite unwillingness of the minority shareholders. iv) The valuation of the shares carried out by E Y @ Rs. 196.80 was correct and in accordance with law along with establish valuation practices. v) The valuation done by E Y Merchant banking division was Independent. vi) The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ( ICDR Regulations, 2009 ) were not applicable in the present case. vii) 25% Discount for Liquidity of Marketability (DLOM) was permitted and justifiable in determining the valuation for the purpose of offering the minority shareholders. viii) The minority shareholder who supported the Respondent company right from inception were not entitled to receive Control Premium instead of DLOM . ix) The Respondent No. 1/ BTL did not fail to disclose and attach the required documents in the explanatory statement enclosed along with the notice for acquisition of shares from minority shareholders was issued. x) The Respondent No. 1/ BTL did not violate Section 102 of the Companies Act, 2013 and therefore making the special resolution passed for the approval of the scheme of reduction of share capital was valid. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2025 (4) TMI 521
  Maintainability of section 9 application - initiation of CIRP - Existence of pre-existing dispute between the parties or not - HELD THAT:- From the exchange of correspondence between the Appellant and the Respondent, it is found that there is a dispute with respect to quantum of the amount payable by the Respondent. It is also found that this issue has been raised multiple times prior to the issuance of the demand notice dated 31.12.2021 by the Appellant. This has not been satisfactorily resolved. The submissions of the Respondent is agreed upon, that UCIL is a Govt. body and all work done is to be certified by a third-party independent agency and the invoices have to be backed by the logbook maintained by the Appellant duly signed by the respondent and certified by an independent agency otherwise these are mere one-sided statements. Furthermore, the contention of the respondent also agreed that mere stamping of the tax/proforma invoices done at the site office by lower functionaries of the respondent is indicative of mere receipt of the same; it does not mean that the same has been accepted by the respondent company. There is a dispute with respect to the quantum of amount which is much prior to the issuance of the demand notice dated 31.12.2021 by the Appellant. As per Section 8(2)(a) of the Code, the respondent has brought on record the existence of a dispute. The AA as per the provisions of Section 9(5) on finding a notice of a pre-existing dispute has not admitted the Section 9 Application. Conclusion - The communications and evidence presented by the Respondent demonstrated a genuine dispute regarding the quantum of the debt and other issues. The Adjudicating Authority s decision to dismiss the Section 9 application upheld. Appeal dismissed.

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• 2025 (4) TMI 520
  Condonation of delay of 154 days in refiling the appeal - sufficient cause for delay or not - HELD THAT:- The law with regard to condonation of refiling delay is well settled, although the Courts have adopted a liberal approach while condoning the refiling delay, but there has to be sufficient cause shown by the applicant for condoning the refiling delay. There are no incompetency of learned advocate on record in filing the additional affidavit in support of application for condonation of refiling delay. From the facts which has been noticed, it is clear that present is a case where steps were taken by applicant for curing the defect. The fact that 8 appellants who have filed the appeal are not from one place. Two of the appellants are from Thane West, State of Maharashtra and others are from Beawar, State of Rajasthan. Conclusion - Sufficient cause has been shown in the application, additional affidavit and rejoinder affidavit filed by the applicant in support of the refiling delay application. Refiling delay is condoned.

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• 2025 (4) TMI 519
  Reversal of sale transactions of the properties - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - whether the relationship in respect of first property between the CD and the R1 came to end on the day when the notice for e-auction was issued in terms of amended provision of Section 13(8) of the Act? - HELD THAT:- Hon ble Supreme Court in the case of Celir LLP [ 2023 (10) TMI 48 - SUPREME COURT ] has held that in view of the aforesaid discussion, we hold that as per the amended section 13(8) of the Act, once the borrower fails to tender the entire amount of dues with all costs and charges to the secured creditor before the publication of auction notice, his right of redemption of mortgage shall stand extinguished / waived on the date of publication of the auction notice in the newspaper in accordance with Rule 8 of the 2002 Rules. In the presence of direct decision of the Hon ble Supreme Court interpreting Section 13(8) of the Act, the decision relied upon by the Appellant in the case of Indian Overseas Bank [ 2022 (5) TMI 926 - SUPREME COURT ] which has only interpreted Section 14(1) of the Code does not apply because Section 13(8) was not brought to the notice of the Hon ble Court. In respect of the second property, the first public notice was issued on 03.01.2019. By that time the Appellant did not move to redeem the property by making the payment of the Bank. However, the first sale could not take place, therefore, the public notice was again published scheduling the sale of the properties on 28.01.2019. In that sale, the Bank itself purchased the property which is permitted under Section 13(5A) 13(5B) of the Act and adjusted the amount which it had to recover from the CD. The jural relationship between the parties in respect of second property also came to an end on 03.01.2019 or 28.01.2019 which was much earlier than the date of commencement of CIRP on 01.02.2019. In this case, even the letter of confirmation was issued on 28.01.2019 and sale certificate was issued on 30.01.2019 much before the date of commencement of the CIRP on 01.02.2019. The Hon ble Supreme Court has held in the case if Celir LLP while interpreting Section 13(8) that the relationship between the parties i.e. mortgager and mortgagee, for the purpose of redemption exists till the date of issuance of notice of sale, if the property is being sold under Section 13(8) of the Act then in that situation also the Appellant has no right to the property for the purpose of raising the dispute. The contention of the Appellant that non-deposit of the sale consideration in the estate of the CD effects the right of the secured creditor is of no avail. Conclusion - The right of redemption is extinguished upon the issuance of the e-auction notice as per the amended Section 13(8) of the SARFAESI Act. The validity of the sales conducted under the SARFAESI Act upheld. Appeal dismissed.

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• 2025 (4) TMI 518
  Liquidation of the Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- There is no dispute to the fact that RBL Bank is the sole member of the CoC with 100% voting right. It is also not in dispute that there were three resolution plans before the CoC in which one of the resolution plan was submitted by the Appellant and the sole member of the CoC abstained from voting. The CIRP Regulations provides for different modes of voting. As per the regulations, the members of the CoC may either vote in favour, against or abstain from voting. In the present case, it is alleged that sole member of the CoC abstained from voting, therefore, the resolution plan submitted by the Appellant was not rejected but the very fact that the sole member of the CoC did not vote in favour of the resolution plan submitted by the Appellant, therefore, it had exercised its commercial wisdom and chose to abstain from voting as has been held by the Hon ble Supreme Court in the case of K. Sashidhar [ 2019 (2) TMI 1043 - SUPREME COURT] that commercial wisdom of the CoC is paramount, therefore, the reason cannot be questioned by the Appellant. In so far as, the application for liquidation, having been filed without consent of the CoC is concerned, argument of the Appellant is not tenable because in the 6th CoC meeting, there was discussion regarding the possibility of the liquidation and in the course of said discussion, the CoC sought recommendation for the nomination of liquidator. In this regard, erstwhile RP sent email to the CoC seeking its consent to file the liquidation application and the nomination of liquidator to which the sole member of the CoC gave consent by returning email on the same. It is also a fact to be noticed that when the case was listed for hearing on 31.05.2024 before this Court, it was brought to the notice of this court that e-auction notice was issued on 23.05.2024 scheduling the e-auction of the CD as a going concern on 21.06.2024 at the reserve price of Rs. 20.61 Cr. Instead of granting stay, this court clearly said that the Appellant shall have the right to participate but it had failed to participate whereas in the auction, Respondent No. 4 to 7 were held to be successful as they gave the bid of Rs. 20.63 Cr. which was over and above the reserve price. The said amount has already been paid by R4 to 7 and the sale certificate has been issued in their favour whereas the Appellant had only offered a sum of Rs. 8 Cr. to take over the CD as a going concern. Conclusion - The CoC s decision upheld, emphasizing the primacy of its commercial wisdom. The legality of the liquidation process and subsequent auction confirmed. Appeal dismissed.

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• 2025 (4) TMI 517
  Admission of Section 95(1) application filed by the financial creditor against the personal guarantor - whether 10 days period provided to the RP for submitting a report under Section 99 is mandatory and whether report which is submitted after period of 10 days cannot be taken on record by adjudicating authority or looked into for passing an order under Section 100? - HELD THAT:- The scheme of Section 99 clearly indicates that although Section 99(1) provides that RP shall examine the application referred to Section 94 or Section 95 within 10 days of his appointment and submit his report. But subsequent provisions, i.e., sub-Section (4) of Section 99 empowers the RP to seek such other information or explanation in connection with the application and by virtue of sub-Section (5) of Section 99, the person who has been asked for information is required to submit information within seven days from receipt of the request. On looking into the scheme as delineated by Section 99(1), (4), (5), (6) (7) as noticed above, it is clear that submission of report within 10 days from appointment of the RP is only directory and cannot be held to be mandatory. When the RP after examining the application, if come to the conclusion that certain further information or explanation are required, he may ask for the information from the debtor or the creditor or any other person. The person from whom information is asked for is required to give information within seven days of the receipt of the request and under sub- Section (6) the RP has to again examine the information received from under sub-Section (4) and thereafter submit his recommendation and sub-Section (7) of Section 99. The above legislative scheme clearly indicates that legislature never intended that period of 10 days for submitting a report for appointment of RP is mandatory. The use of expression shall although generally indicate mandatory nature of provision but use of shall is always not conclusive and whether expression shall cast a mandatory duty or only directory depends on the scheme of the statute. The present is a case where necessity of submitting amended report arose because of receipt of the information from financial creditor subsequent to the submission of first report on 02.02.2024. Reports were brought on record by a supplementary affidavit, which were taken on the record. There was no such undue delay in submission of the report on 02.02.2024 or submission of the amended report on 14.02.2024, that the said report were required to be ignored and rejected by the adjudicating authority. There are no substance in the submission of the appellant that report 02.02.2024 which was filed beyond 10 days from date of appointment of the RP on 16.01.2024 could not have been taken on the record or relied by the adjudicating authority. Adjudicating Authority has rightly relied on the report dated 02.02.2024 as well as amended report dated 14.02.2024. Reason for submitting amended report was also explained by the RP before the adjudicating authority, which has been noticed by adjudicating authority. Conclusion - There are no merit in the appellant s arguments regarding the mandatory nature of the 10-day timeline and the need for condonation of delay. The adjudicating authority s decision to accept the RP s reports is affirmed and Section 95 application admitted. There is no merit in the appeal. Appeal dismissed.

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• 2025 (4) TMI 516
  Continuation of CIRP despite the issuance of a SCN by the Insolvency and Bankruptcy Board of India (IBBI) and the subsequent suspension of the Authorization for Assignment (AFA) - HELD THAT:- The issuance of show cause notice dated 30.01.2025 in no manner prohibit the RP to continue with the assignment. In any view of the matter, the Hon ble Supreme Court in order dated 29.01.2025 [ 2025 (2) TMI 19 - SUPREME COURT ] has directed for consideration of Resolution Plan of the Appellant by the CoC and RP submitted as on 28.10.2022. Admittedly, Intervention Petitions and other Applications are still pending and have still not been finally decided. When the Hon ble Supreme Court had directed the CoC to reconsider the Resolution Plan of the Appellant as on 28.10.2022, the Resolution Plan Application along with all objections regarding continuance of the RP in the CIRP, need to be finally decided by the Adjudicating Authority. Stopping the process will further delay the resolution of the CD. It is already noticed that IA 269/KB/2025 has already been filed by the RP for extension of timeline of the CIRP. The Hon ble Supreme Court having directed for consideration of Resolution Plan of the Appellant, the Adjudicating Authority has to consider and pass an appropriate order on the said Application, which Application is also now pending for adjudication. The present is a case where CIRP has commenced as early as on 21.10.2021 and the process has not reached to its culmination. In view of the order of the Hon ble Supreme Court, the Adjudicating Authority need to proceed with the consideration of all pending Applications, including Plan approval Application and Application. Conclusion - The RP could continue with the existing CIRP despite the show cause notice and suspension of AFA, as it did not prohibit ongoing assignments. Appeal disposed off.

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• 2025 (4) TMI 515
  Dismissal of application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 - application filed under Section 9 was beyond the period of limitation and below the threshold of Rs. 1 Cr. excluding the amount of interest - HELD THAT:- The Appellant has been non-suited by the Tribunal on the issue of limitation and that the petition is being hit by Section 4 of the Code. The Appellant, in order to cross the threshold, has added the component of interest making it an amount of Rs. 1,41,57,817/- alleging that the interest is provided in the invoice which can be charged by the Appellant in case the payment is not made within the required time but the Appellant has failed to show that the said invoice has been signed by the CD. Thus, the question arises as to whether the interest mentioned in the invoice which is not signed by the CD is a unilateral document and cannot be recovered. In this regard, this Tribunal in the case of S.S Polymers Vs. Kanodia Technoplast Ltd. [ 2019 (11) TMI 1428 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] has held that Admittedly, before the admission of an application under Section 9 of the I B Code, the Corporate Debtor paid the total debt. The application was pursued for realisation of the interest amount, which, according to us is against the principle of the I B Code, as it should be treated to be an application pursued by the Applicant with malicious intent (to realise only Interest) for any purpose other than for the Resolution of Insolvency, or Liquidation of the Corporate Debtor and which is barred in view of Section 65 of the I B Code. Similarly, the Hon ble Karnataka High Court in the case of Jyothi Limited Vs. Boving Fouress Limited [ 2000 (12) TMI 817 - HIGH COURT OF KARNATAKA ] regarding winding up of company has observed that the invoice having not been signed by the both parties is an unilateral document and interest cannot be claimed. Thus, in view of the fact that the component interest cannot be added to be principal amount, on the basis of the entry and endorsement in the invoice which is not signed by the CD, the Appellant was entitled only to the principal amount which is less than Rs. 1 Cr., therefore, the Appellant has failed to prove that it has crossed the threshold of Rs. 1 Cr. for maintaining the application under Section 9. Conclusion - Since the Appellant has failed to cross the threshold for maintaining the petition under Section 9, it is not required to go into the issue of limitation and the present appeal is without any substance and hence, the same is hereby dismissed. Appeal dismissed.

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• 2025 (4) TMI 514
  Restoration of Electricity Connection at the auctioned property - jurisdiction of National Company Law Tribunal (NCLT) to direct the restoration of an electricity connection at the auctioned property as part of the liquidation proceedings - HELD THAT:- There is no dispute that the respondent became the Successful Auction Purchaser in the liquidation proceeding of the Corporate Debtor. The appellant has already filed a claim in the liquidation proceeding and his claim has been dealt with in the liquidation proceedings. The submission which has been pressed by the Appellant is that the Adjudicating Authority has no jurisdiction to consider the application filed by the Successful Purchaser. Reliance has been placed in Gujarat Urja Vikas Nigam [ 2021 (3) TMI 340 - SUPREME COURT] . There cannot be any dispute to the preposition laid down by the Hon ble Supreme Court that the adjudication of dispute that arise dehors the insolvency of corporate debtor cannot be entertained. The present is a case where application arose of auction purchase arising out of the liquidation proceeding, hence is fully covered by the Section 60(5)(c) of the Insolvency and Bankruptcy Code. Conclusion - The disputes arising from the liquidation proceedings, including those related to auction purchases, fall within the jurisdiction of the NCLT under Section 60(5)(c) of the IBC. Appeal dismissed.

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• 2025 (4) TMI 513
  Liquidation of the Corporate Debtor - Section 33(2) of I B Code - HELD THAT:- The fact of completion of the process of liquidation is not a fact which has been disputed by the Learned Counsel for the Appellant in his notes of submission - in the instant case, the process of liquidation is complete, the sale of assets have been confirmed and the assets have been handed over. Apart from it, if the impugned order dated 27.01.2021, as rendered by the Learned Adjudicating Authority is taken into consideration, it has been a logical outcome of the resolution which was passed in the 9th CoC meeting which recommended liquidation of the Corporate Debtor and based on such resolution of CoC and the written of consent of the Resolution Professional dated 18.06.2020 to function as liquidator, Learned Adjudicating Authority had ordered the Corporate Debtor to be put to liquidation, which is not established or argued to be in contravention to any of the provisions of law, as contemplated under the I B Code. Since now much water has been flown after passing of the order of the appointment of the liquidator, the appeal deserves to be dismissed, as now third-party interest has been created subject to the confirmation of the sale made by the liquidator. The consequential effect would be that the so-called claim of the right of indemnification comes to an end, as over the assets as detailed above, with the Auction Purchaser already been placed in possession. Conclusion - The liquidation order is valid and in accordance with Section 33(2) of the I B Code. Appeal dismissed.

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• Law of Competition

• 2025 (4) TMI 512
  Abuse of dominant position - creation of monopolistic environment, thereby violating Section 4(2)(a)(i) of Competition Act - limiting the provision of services in the Delhi airport market by ousting other prospective contractors, in contravention of Section 4(2)(b)(i) of the Act - selectively awarding contracts to its own formed companies, denying market access, in violation of Section 4(2)(c) of the Act - leveraging its dominant position to engage in exclusionary practices, restricting services in the downstream market, in violation of Section 4(2)(e) of the Act. Creation of monopolistic environment, thereby violating Section 4(2)(a)(i) of Competition Act - HELD THAT:- The Commission, in relation to the allegation under Section 4(2)(a)(i), is of the view that the imposition of 13% fee on tenders is a continuation of the charges previously levied by AAI, a statutory body, and notes that the same is being levied uniformly on all the service providers, with no further increase. In view of generic and wide nature of allegations related to creation of monopolistic environment which could lead to imposition of exorbitant charges on customers in future, the Commission is of the view that in absence of any evidence, it may not be prudent to deal with the allegation/apprehension at this juncture. Selectively awarding contracts/tender by OPs to its own entities leading to limiting the provision of services in the airport market of Delhi and denial of market access - HELD THAT:- The Commission is of the view that, as per the OMDA Agreement, OP-3 has the right to sub-contract third party entities for providing services such as parking and lounge services and also have the right to acquire ownership of such entities. It is also noted that OP-3, in its submissions, gave details of the bidding process adopted for both parking and lounge services through which DAPSL and Encalm were awarded their respective contracts. OP-3 has stated that in each of the processes involving award of contract for parking facility and lounge facility, multiple third-parties participated in the bid process and none of the bidders were related parties to OP-3 or OP-4. Allegation pertaining to parking services - HELD THAT:- The Commission noted the submission of OP-3, wherein it is mentioned that DIAL issued the RFP dated 15.10.2009 and carried out a competitive bidding process, in which ten domestic and international entities participated. Based on a technical and financial evaluation of the bids submitted, a consortium of Greenwich and Tenaga was identified as the highest bidder for the purpose of awarding the concession for parking services - the Commission observes that the entity for parking services was selected through a competitive bidding process, in compliance with the OMDA agreement. Thus, the allegation raised in the Information, under Section 4(2)(b), 4(2)(c) and 4(2)(e) of the Act, in relation to the award of parking services to entities allegedly under significant control of OP-3 is unsubstantiated. Allegation pertaining to lounge services - HELD THAT:- OP-3 has stated that Encalm is an independent third party and has no relation with DIAL or GIL except being the licensee to provide certain services at IGI Airport. It is also stated that none of the Encalm s shareholders hold any directorship in DIAL/GIL or vice versa. The contract for operating and managing lounge facility at IGI Airport was awarded to Encalm on 17.11.2021, by way of competitive bidding process. Thus, similar allegations, under the above-mentioned provisions of the Act, raised in relation to Encalm s selection process are unsubstantiated. Conclusion - The Commission finds that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the Opposite Party. Accordingly, the information is ordered to be closed forthwith in terms of the provisions contained in Section 26(2) of the Act. Consequently, no case for grant for relief(s) as sought under Section 33 of the Act arises and the same is also rejected. The Secretary is directed to communicate to the Informant, accordingly.

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• PMLA

• 2025 (4) TMI 511
  Money Laundering - dismissal of LR petition, and the appeal on the ground of delay in filing the LR petition - absence of any specific limitation prescribed under Section 72 of PMLA - applicability of provisions of CPC to Section 35 of the PMLA - proper opportunity not provided to the appellant to defend her case - violation of principles of natural justice - HELD THAT:- The Order 22 of C.P.C., deals with death, marriage and insolvency of parties and Order 22, Rule 2 contemplates the procedure where one of the several plaintiffs or defendants dies and right to sue survives. The said provisions which are the basis for the orders under challenge cannot be made applicable to the PMLA, which is a special enactment. In fact, the Code of Civil Procedure had limited application to the Appellate Tribunal in respect of the matters as set out in Section 35. From a plain reading of the said provision, it is clear that the Appellate Tribunal is not bound by the procedure laid down by the Code of Civil Procedure, but it should be guided by the principles of natural justice and it shall have the powers to regulate its own procedure. When the provision i.e., Section 35 contemplates the application of Code of Civil Procedure to the extent indicated therein and that the Appellate Tribunal is not bound by the procedure laid down by the Code of Civil Procedure, provisions of Order 22 C.P.C., though there is no absolute bar, in the opinion of this Court cannot be pressed into service, in the absence of any regulations / rules formulating the procedure or making it applicable to the matters before the Appellate Tribunal, more particularly in view of the Section 72 of the Act, which enables continuation of proceedings in the event of death or insolvency. A close reading of Section 72, is indicative of the intention of the legislature of continuation of proceedings in the event of death or insolvency and it shall be lawful for the legal representative of an appellant, who dies during the pendency of an appeal to continue the same before the Appellate Tribunal in the place of the deceased-appellant. No time limit was prescribed for making of an application for continuation of proceedings/appeal by the legal representatives of the appellant. In M.P. Steel Corporation s case [ 1998 (6) TMI 322 - CEGAT, MUMBAI] , the appellant before the Hon ble Supreme Court was challenging the order of Customs, Excise Service Tax Appellate Tribunal (CESTAT). The Commissioner of Customs (Appeals) dismissed the appeal on the ground of delay stating that the same was filed beyond the period of 60 days + 30 days provided for in Section 128 of the Customs Act. On Appeal, CESTAT dismissed the appeal stating that the Commissioner of Customs (Appeals) had no power to condone the delay beyond the period specified in Section 128 of the Act. The Hon ble Supreme Court inter alia examined the point as to whether the Limitation Act applies to only Courts and not to Tribunals with reference to a series of decisions, wherein it was laid down that the Limitation Act applies only to Courts and does not apply to quasi judicial bodies. The order of the Tribunal pressing into service the provisions of C.P.C., i.e., Order 22 and thereby dismissing the appeal as abated is also not tenable. Even if the appeal is abated, the right conferred under statute viz., Section 72 cannot be taken away on the ground that no formal application to condone the delay was filed. Section 35 provides for limited application of the provisions of the C.P.C., and no regulations have been framed formulating the procedure / applicability of provisions of C.P.C., under Order 22 etc. - Further, in the present case, the legal heir of the deceased / appellant filed the application to record her as legal representative while the appeal is pending. The Appellate Tribunal, in such circumstances, in the considered opinion of this Court should have allowed the same and decided the matter on merits taking a liberal view rather than rejecting it on technicalities. Conclusion - i) The dismissal of the LR petition and the appeal on the grounds of delay is not legally sustainable. ii) The Tribunal s use of CPC provisions to abate the appeal is not tenable. iii) The Tribunal s decision violated principles of natural justice by not allowing the legal representative a proper opportunity to be heard. The impugned order is set aside - appeal allowed.

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• Service Tax

• 2025 (4) TMI 510
  Tenability of service tax demand invoking rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 (Valuation Rules) - inclusion of reimbursed expenditures or costs incurred in the course of providing taxable services - tenability of demand of cenvat credit availed and utilized for payment of tax on non- taxable output service. Inclusion of reimbursed expenditures or costs incurred in the course of providing taxable services - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [ 2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants Technocrats Pvt Ltd v UOI, [ 2012 (12) TMI 150 - DELHI HIGH COURT] , wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. The findings in the impugned order in appeal confirming the demand on non-inclusion of reimbursable charges cannot sustain and are liable to be set aside. Cenvat credit availed and utilized for payment of service tax on services that are non-taxable - HELD THAT:- The said issue also stands decided in the appellant s favour in light of the Hon ble Apex Court decision in CCE, Vadodara v Narmada Chematur Pharmaceuticals Ltd, [ 2004 (12) TMI 93 - SUPREME COURT] , wherein the wrongly availed cenvat credit was utilized for payment of excise duty, the Hon ble Apex Court has held that the consequences of payment of excise duty after availing modvat credit was revenue neutral and thus dismissed the appeal filed by the revenue. Thus, the demands made on the appellant on this count too will not sustain. Conclusion - i) The reimbursed expenses should not be included in the taxable value of services. ii) The reversal of CENVAT credit for non-taxable services is not warranted. Appeal allowed.

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• 2025 (4) TMI 509
  Denial of CENVAT credit - invocation of extended period of limitation - demand of interest - Imposition of penalty under section 78. Admissibility of CENVAT Credit on the disputed services - Training Service provided by other institutions to employees of GAIL - HELD THAT:- The term coaching and training must be coaching and training of the employees of the assessee. Merely because the bills were paid by the assessee, the services provided by way of coaching and training of employees of GAIL do not become input services of the assessee. The submission of the appellant that the entire legal entity should be considered to determine eligibility of CENVAT credit and that the appellant was not distinct from GAIL deserves to be rejected. Unlike income tax, where the tax is assessed on the corporate entity combining all the incomes and expenses across all its units across the country, in Service Tax, every individual service providing entity is an assessee by itself. It has to pay service tax on the output services which it provides and it has no responsibility to pay service tax if some other unit of the same company had provided services. Similarly, every unit is entitled to take CENVAT credit on the inputs and input services which it uses in providing output services but it cannot take CENVAT credit of some input services used by some other unit of the same corporate entity. Simply because the bills are paid by the appellant, the training service will not become an input service for its output service which is commercial coaching and training. For all these reasons, the submissions by the appellant deserve to be rejected. Admissibility of CENVAT Credit on the disputed services - Cable service - Housekeeping service - Pest control service - Courier service - Insurance service - Manpower recruitment service - Photocopying service - Security service - Telecommunication service - Ticket booking service - Works contract/maintenance and repair service - Catering service - Hiring of vehicles service - HELD THAT:- No reason has been given in the SCN or in the impugned order to deny CENVAT credit on this service. Considering the nature of the service provided by the appellant, it is clear that the appellant is entitled to CENVAT credit of the service tax paid on the above services. Extended period of limitation - HELD THAT:- The Returns do not require invoice-wise details of CENVAT credit nor any justification or explanation about the credit availed on each of the invoices. Once the Return is filed, it is the responsibility of the Range Officer to scrutinize it and for this purpose, he can call for any records and accounts of the assessee. Had this been done, the officer would have found out on which services CENVAT was availed and could have acted on it. Apparently, the officer did not scrutinize the Returns as the audit did much later and found the alleged irregularities. All that this proves is that the Range officer had not done his job properly and it does not show that the appellant had suppressed anything. Therefore, there is no ground to invoke extended period of limitation at all. Demand of interest - HELD THAT:- If some CENVAT credit is recoverable, interest, at the appropriate rates also must be paid as per section 75. Penalty - HELD THAT:- The Commissioner imposed a penalty under section 78 of the Finance Act which can be imposed only if the service tax was not paid by reason of fraud or collusion or willful mis-statement or suppression of facts or violation of the Act or Rules made thereunder with an intent to evade payment of service tax. In other words, the same elements which are required to invoke extended period of limitation are also required to impose penalty under this section. Since none of these elements were present, the penalty needs to be set aside as well. Conclusion - The appeal is partly allowed by upholding the denial and recovery of CENVAT credit availed on training services within the normal period of limitation with appropriate interest and setting aside the rest of the demand and penalties. The matter is remanded to the Commissioner for the limited purpose of calculation of the CENVAT credit and interest to be recovered. Appeal allowed by way of remand.

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• Indian Laws

• 2025 (4) TMI 508
  Quashing the criminal proceedings against respondent No.1 - prima facie evidence to proceed with the charges against the respondent or not - invocation of inherent powers under Section 482 Cr.P.C. - HELD THAT:- The contours of exercise of the powers under Section 482 Cr.P.C. have been expressed in various judgments. In the well known case of State of Haryana v. Bhajan Lal [ 1990 (11) TMI 386 - SUPREME COURT ] this Court, while recognizing that it would not be possible to account for all possibilities, detailed seven circumstances where the exercise would be justified. What is, therefore, to be seen is whether, in the present facts, any of the seven circumstances/situations mentioned in Bhajan Lal [ 1990 (11) TMI 386 - SUPREME COURT ] are justifiably met. One of the submissions advanced on behalf of respondent No.1 was that reliance solely on the statement of the co-accused is not justified. It is found that this submission to be incorrect for presently, respondent No.1 s own statement also presents some corroboration for the statement of accused No.1. When his own statement acknowledges the possibility that he had received money from accused No.1, which the latter has also alluded to, there prima facie appears to be a connection. This, however, is not the only connection between these two persons. It was on accused No.1 s recommendation that respondent No.1 appointed one Ritesh Merugu, who is accused No.2, as Accounts Manager. Furthermore, it is surprised by the fact that the CFO of a company and an alleged chartered accountant, both readily agreed to not put ink to paper to formalise this relationship between them, and sans the same found it completely alright to share all financial details and books of accounts. Conclusion - The inherent powers under Section 482 Cr.P.C. should be exercised with caution, ensuring that prima facie evidence is not disregarded without due trial. The proceedings are revived and restored to the file of III Additional Chief Metropolitan Magistrate, Bengaluru - application disposed off.

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• 2025 (4) TMI 507
  Recovery of financial benefits - Principles of natural justice - whether recovery of the amount extended to the appellants while they were in service is justified after their retirement and that too without affording any opportunity of hearing? - HELD THAT:- The law in this regard has been settled by this Court in catena of judgments rendered time and again; Sahib Ram vs. State of Haryana [ 1994 (9) TMI 373 - SUPREME COURT ], Shyam Babu Verma vs. Union of India [ 1994 (2) TMI 329 - SUPREME COURT ], Union of India vs. M. Bhaskar [ 1996 (5) TMI 450 - SUPREME COURT ] and V. Gangaram vs. Regional Jt. Director [ 1997 (4) TMI 550 - SUPREME COURT ] and in a recent decision in the matter of Thomas Daniel vs. State of Kerala Ors. [ 2022 (5) TMI 1674 - SUPREME COURT] . This Court has consistently taken the view that if the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee or if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous, such excess payments of emoluments or allowances are not recoverable. It is held that such relief against the recovery is not because of any right of the employee but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered. In the case at hand, the appellants were working on the post of Stenographers when the subject illegal payment was made to them. It is not reflected in the record that such payment was made to the appellants on account of any fraud or misrepresentation by them. It seems, when the financial benefit was extended to the appellants by the District Judge, Cuttack, the same was subsequently not approved by the High Court which resulted in the subsequent order of recovery. It is also not in dispute that the payment was made in the year 2017 whereas the recovery was directed in the year 2023. However, in the meanwhile, the appellants have retired in the year 2020. It is also an admitted position that the appellants were not afforded any opportunity of hearing before issuing the order of recovery. The appellants having superannuated on a ministerial post of Stenographer were admittedly not holding any gazetted post as such applying the principle enunciated by this Court in the above quoted judgment, the recovery is found unsustainable. Conclusion - The recovery of excess payments from retired employees, particularly without a hearing, is unsustainable. Appeal allowed.

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• 2025 (4) TMI 506
  Dishonour of Cheque - vicarious liability of petitioner, having retired from the partnership - Section 138 read with Section 141 of the Negotiable Instruments Act (NI Act) - main thrust of the petitioner s argument is that he was not the person responsible for the conduct of the accused firm at the time of issuance of the subject cheque - HELD THAT:- Concededly, the petitioner, at the time of the issuance of the security cheque, was a partner in the accused firm. The subject cheque is claimed to be given in exchange of the cheque which was issued at the time when the petitioner being partner was the person responsible for the conduct of the accused firm. Whether the petitioner can be held liable for dishonor of the replaced cheque, even if it is to be presumed that he had retired by that time, is a mixed question of facts and law which cannot be decided at this stage, without the evidence being led by the parties. Moreover, the retirement of the petitioner from the accused firm is also disputed and is subject matter of other litigations initiated by other partners. The said fact, thus, is not of such sterling nature to be considered while exercising power under Section 482 of the CrPC. Therefore, from the totality of facts, it cannot be said at this stage that the petitioner was not the person responsible at the time of commission of offence committed by the accused partnership firm. To quash the proceedings by petition filed under Section 482 of CrPC, the petitioner is to place some unimpeachable and uncontroverted evidence which is beyond suspicion or doubt. The factual issues that serve as defences in the case are not appropriate for determination under the powers conferred by Section 482 of the CrPC at this stage. It is well-established that this Court should refrain from expressing any views on disputed questions of fact in proceedings under Section 482 of the CrPC, as doing so could pre-empt the findings of the trial court. Conclusion - Considering the material on record, the documents adduced by the petitioner cannot be said to be of such sterling and unimpeachable quality that it merits the quashing of the summons and consequential proceedings thereof. This Court can exercise its jurisdiction only upon unimpeachable and uncontroverted evidence being placed on record, however, in the absence of such evidence, the fact whether the accused person is responsible for the affairs of the accused company becomes a factual dispute, which is to be seen during trial. This Court finds no reason to interfere with the impugned order passed by the learned Trial Court - Petition dismissed.

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• 2025 (4) TMI 505
  Dishonour of Cheque - discharge of a legally enforceable debt or merely as a security instrument - simultaneous invocation of SARFAESI proceedings bar the criminal complaint under Section 138 of the NI Act or not. HELD THAT:- It is relevant to note that the inherent jurisdiction of the Court under Section 482 of the CrPC ought to be exercised sparingly especially when the matter is at the stage of issuance of summons as the same has the effect of scuttling the proceedings without the parties having an opportunity to adduce the relevant evidence. The Hon ble Apex Court, in the case of Rathish Babu Unnikrishnan v. State (NCT of Delhi) [ 2022 (4) TMI 1434 - SUPREME COURT ] adverting to a catena of judgments, had underscored the parameters for exercising inherent jurisdiction to quash the proceedings at the stage of the summoning order. In the present case, Respondent No. 2 had filed a complaint under Section 138 of the NI Act. The learned MM relying upon the complaint supported by the affidavit of the complainant, took cognizance under Section 138 of the NI Act, and passed the summoning order dated 02.07.2018 - the allegations made in the complaint, at the stage when the complaint is sought to be quashed at the outset, are to be taken as correct unless evidence of unimpeachable character has been produced. Whether the subject cheque was issued in discharge of a Legally Enforceable Debt? - HELD THAT:- It is well-settled law that the presumption under Section 139 of the NI Act, applies once the execution of the subject cheque is undisputed. The burden is on the drawer to rebut the presumption that the cheque was issued for a legally enforceable debt or liability which is required to be established during trial. In the present case, the petitioners contended that the subject cheque was in the nature of security and not against an accrued or existing liability at the time of its issuance. According to the petitioners, the cheque was provided solely to secure the transfer of title deeds from Yes Bank to Respondent No. 2 and was not intended to be presented for encashment. It is further submitted that upon the successful transfer of those title deeds, the underlying purpose of the cheque stood extinguished, and as such, its dishonour cannot attract penal consequences under Section 138 of the NI Act - In the present case, no material has been placed on record to prima facie demonstrate that Respondent No. 2 had agreed not to present the cheque after receipt of the title deeds. In the absence of such evidence, the liability under the subject cheque cannot be said to have been extinguished, and the consequences of its dishonour must follow the mandate of law subject, of course, to the findings at trial. In the present case, the loan account of the petitioners was declared NPA, and they failed to regularize their payments, prompting Respondent No. 2 to present the subject cheque for payment. Whether the subject cheque was given as security for facilitating the transfer of property documents from Yes Bank and not towards repayment of any legally enforceable liability constitutes defence of the accused and is a matter of trial. No unimpeachable material has been placed on record to indicate that the subject cheque was issued solely for securing the release of title deeds or that it was never intended to be presented for payment. The purpose behind the issuance of the cheque, and whether it was connected to a subsisting liability or merely a collateral assurance, is a disputed question of fact, which cannot be conclusively determined while exercising power under Section 482 of the CrPC. Whether the simultaneous invocation of SARFAESI proceedings bar the criminal complaint under Section 138 of the NI Act? - HELD THAT:- The loan extended by financial institutions does not become the personal asset of the borrower; rather, it is disbursed in a fiduciary capacity, sourced from public funds contributed by taxpayers. Recognizing the need for a swift and effective mechanism to recover non-performing assets (NPAs), the legislature enacted the SARFAESI Act. This law empowers banks and financial institutions to recover dues without court intervention, ensuring financial stability - Conversely, the NI Act is a codified statute governing promissory notes, bills of exchange, and cheques. It establishes criminal liability for dishonour of cheques to uphold the sanctity of negotiable instruments and prevent financial misconduct. The SARFAESI Act and the NI Act serve distinct legislative purposes, addressing civil debt recovery and criminal liability for dishonoured cheques, respectively. In the present case, the petitioners are not corporate debtors, nor are proceedings pending under the IBC. The SARFAESI Act contains no provision that bars or stays criminal prosecution under the NI Act. The pendency of SARFAESI proceedings, therefore, does not impede the continuation of proceedings under Section 138 of the NI Act. Conclusion - It is well settled that the inherent powers should be exercised sparingly, with circumspection, and in the rarest of rare cases when the Court is convinced, on the basis of material on record, that allowing the proceedings to continue would be an abuse of the process of law. The inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice. At this stage, this Court cannot go into the merits and/or come to the conclusion that there was no existing debt or liability. In the present case, prima facie, it is evident that the principal grounds of challenge by the petitioners are all matter of defence at the trial - there are no illegality or irregularity in the impugned order. The present petition is dismissed.

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