TMI Tax Updates - e-Newsletter
April 12, 2025

Case Laws in this Newsletter:

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

Articles

1. Documents Required for 80G5 Registration in India

   By: Ishita Ramani

2. SEEKING COMPOUNDING OF OFFENCE UNDER ‘FEMA’ AFTER CONCLUSION OF ADJUDICATION PROCEEDING – ALLOWED?

   By: DR.MARIAPPAN GOVINDARAJAN

3. Export of Human Hair from India[under HS Code 05010010 and HS Code 05010020 of the Indian Tariff Act, 1975].

   By: YAGAY andSUN

4. Export of Home Textile Items from India

   By: YAGAY andSUN

5. Marketing or Manipulation (In context with ethical Marketing in India)

   By: YAGAY andSUN

6. Guidelines for Prevention and Regulation of Dark Patterns, 2023.

   By: YAGAY andSUN

7. Environmental Impact Assessment (EIA): In the Indian context

   By: YAGAY andSUN

8. Environmental Impact Assessment (EIA) - International

   By: YAGAY andSUN

9. Customs Freight Stations (CFS) and Inland Container Depots (ICD) – An Introduction

   By: YAGAY andSUN

News

1. Advisory on reporting values in Table 3.2 of GSTR-3B

2. Advisory on Table-12 of GSTR-1 or GSTR-1A

3. US budget deficit grows to $1.3 trillion, second highest six-month level on record

4. Jaishankar flags concerns over weaponisation of economic activities

5. India hosts 8th Meeting of Joint Committee on ASEAN-India Trade in Goods Agreement (AITIGA)

6. NITI Aayog launches a Report on “Automotive Industry: Powering India’s Participation in Global Value Chains”

7. Union Commerce and Industry Minister, Shri Piyush Goyal meets with H.E Mr Antonio Tajani, Deputy Prime Minister and Minister of Foreign Affairs & International Cooperation of Italy to India

8. Innovation, AI, super computers, space technology, defence are key areas for joint partnerships between India-Italy: H.E. Antonio Tajani, Deputy PM, Italy

9. Congratulate Centre on bringing back Rana but what happened to black money: Farooq

Notifications

GST - States

1. G.O.Ms.No.80 - dated 11-3-2025 - Andhra Pradesh SGST

Amendment in Notification G.O.Ms. No . 588/ Revenue (Commercial Taxes - II) Department/ dated 12.12.2017

2. G.O.Ms.No.79 - dated 11-3-2025 - Andhra Pradesh SGST

Amendment in Notification G.O.Ms.No. 259, Revenue(CT-II) Department, dated 29.06.2017

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/IMD-RAC/P/CIR/2025/54 - dated 11-4-2025

Specialized Investment Funds ('SIF') - Application and Investment Strategy Information Document (ISID) formats

Customs

2. PUBLIC NOTICE No. 12/2025 - dated 4-4-2025

Safe custody of detained/ seized/ Confiscated cargo and inspection of Unclaimed/ Uncleared/ Abandoned Cargo – Reg.

3. STANDING ORDER No. 01/2025 - dated 27-3-2025

Local Risk management System (LRM)-reg

Highlights / Catch Notes

GST

• GST Assessment Order Invalidated for Procedural Violations, Demand of Rs. 19.8 Lakh Quashed Under Section 62

  Case-Laws - HC : HC held the assessment order under GST Act section 62 invalid due to procedural irregularities. The order creating a demand of Rs. 19,80,000 was passed without prior notice under section 46, violating principles of natural justice. The court found serious procedural defects in the assessment process, rendering the order unsustainable. Following precedent from a similar Jharkhand HC case, the court remitted the matter to the Deputy Commissioner to reconsider and issue a fresh notice to the petitioner within two weeks, effectively allowing the petition and setting aside the impugned orders.
  Visit to Get Source

  ---

• Judicial Order Permits Conditional Release of Truck and Areca-nut Cargo After Deposit of Specified Amount

  Case-Laws - HC : HC declined interim relief, directing respondent authorities to release a TATA truck transporting 17,760 kg of Areca-nuts upon payment of Rs. 100,000. Regarding the goods, the court mandated selling 222 bags (80 kg each) within 15 days at best possible price, with proceeds retained in a separate account pending writ petition outcome. The appellant was permitted to participate in auction proceedings. Vehicle release was conditioned on payment, and goods sale was ordered to prevent potential deterioration and ensure preservation of value.
  Visit to Get Source

  ---

• Procedural Flaws Invalidate Tax Notice: Lack of Natural Justice Principles Leads to Quashing of Summary Order

  Case-Laws - HC : HC set aside the summary of show cause notice and summary of order due to violation of principles of natural justice. The court found that issuing summaries without proper show cause notice under Section 73(1) and order under Section 73(9) of CGST Act, 2017 was procedurally incorrect. Following the precedent in Construction Catalysers Pvt. Ltd., the court determined that summary documents do not substitute formal legal notices and orders, which must be authenticated as per Rule 26(3) of the 2017 Rules. The petitioner was not provided adequate opportunity of hearing, rendering the proceedings invalid.
  Visit to Get Source

  ---

• Tax Transfer Dispute Resolved: No Evasion Found in Machine Movement Between Units with Proper Documentation Validated

  Case-Laws - HC : HC adjudicated a tax seizure case involving inter-unit transportation of goods. The court determined that no tax evasion occurred during the transfer of a compactor machine from Rajasthan to Uttar Pradesh. Despite initial interception due to missing documentation, the subsequent production of delivery challan and e-way bill demonstrated compliance. The court emphasized that stock transfers between organizational units without a sales transaction do not attract GST liability. Critically, the respondent authority failed to establish any deliberate intent to circumvent tax regulations. Relying on precedential reasoning, the HC ruled that procedural technicalities did not warrant punitive action. The petition was ultimately allowed, nullifying the seizure proceedings under Section 129 of the CGST Act.
  Visit to Get Source

  ---

• Judicial Review Finds Demand Order Defective, Mandates Procedural Correction and Fair Hearing for Petitioner Under Section 75(6)

  Case-Laws - HC : HC determined that the undated demand order was procedurally defective under Section 75(6), lacking substantive reasoning beyond referencing a show cause notice. The court remanded the matter to the respondent, directing them to provide the petitioner an opportunity to respond to the original show cause notice within four weeks. Following the petitioner's response, the respondent must conduct a hearing and issue a legally compliant order. The petition was allowed through judicial remand, requiring procedural rectification of the original administrative action.
  Visit to Get Source

  ---

• Writ Petition Dismissed: Show Cause Notice Upheld Due to Petitioner's Non-Appearance and Availability of Alternative Remedy

  Case-Laws - HC : HC dismissed the writ petition challenging a show cause notice, finding no violation of natural justice principles. The court determined that the petitioner failed to appear on the scheduled hearing date despite prior opportunities, and had an alternative remedy of filing an appeal under Section 107. The order was deemed valid as the competent authority reviewed submitted documents and responses. The petitioner's claim of procedural impropriety was rejected due to non-appearance and lack of substantive evidence supporting the allegation of prejudice.
  Visit to Get Source

  ---

• Judicial Review Exposes Procedural Gaps in Tax Penalty Application, Mandates Comprehensive Reasoning Under Section 74 CGST Act

  Case-Laws - HC : HC allowed the petition, finding a violation of natural justice due to lack of proper application of mind by the respondent authority under Section 74 of the Central Goods and Services Tax Act, 2017. The court directed the Commissioner to review orders lacking substantive reasoning for invoking fraud provisions, specifically mandating explicit documentation of willful misstatement or material fact suppression. The judicial intervention emphasized procedural integrity by requiring comprehensive rationale when applying statutory penalties, effectively remanding the matter for comprehensive reconsideration and appropriate administrative action.
  Visit to Get Source

  ---

Income Tax

• High Court Clarifies Limitation Period for Section 153C Notice Starts from Document Seizure Date, Not Search Date

  Case-Laws - HC : HC held that the limitation period for issuing notice u/s 153C commences from the date of seizure of documents (30.06.2022), not the search date (10.11.2020). The petitioner, being a third party, can respond to the show cause notice dated 30.12.2024 and contest the proceedings in accordance with law. Despite prior settlement at IBS, the Department retains liberty to proceed if new material emerges. The court found no merit in the petitioner's limitation argument and dismissed the writ petitions, upholding the impugned notice and order.
  Visit to Get Source

  ---

• High Court Overturns ITAT Decision, Permits Additional Evidence Under Rule 29 for Comprehensive Case Evaluation

  Case-Laws - HC : HC allowed the appeal, setting aside ITAT's order rejecting additional evidence under Rule 29. The court found ITAT erroneously rejected crucial documents (cash book and cash flow statement) without specifically recording why such evidence was unnecessary for proper adjudication. The HC determined the documents were vital for limited scrutiny assessment and essential for just disposal of the appeal. Consequently, the application for additional evidence was permitted, and the previous appellate order was set aside, restoring the applicant's right to present comprehensive documentary evidence.
  Visit to Get Source

  ---

• High Court Validates Assessment Order Under Section 153C, Extends Limitation Period Due to COVID-19 Legislative Measures

  Case-Laws - HC : HC held that the Assessment Order u/s 153C was not time-barred due to COVID-19 related limitation extensions. The statutory period for passing the order would have expired on 31.03.2023, but governmental disruptions and subsequent legislative measures like Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and TOLA 2021 effectively extended the limitation period. The court ruled that the assessment order was within jurisdiction, overruling the petitioner's objection. The respondent shall apply preponderance of probability standard and make efforts to produce the director for cross-examination within six months.
  Visit to Get Source

  ---

• Tax Deduction Dispute Resolved: Voluntary Expense Disallowance Does Not Automatically Trigger Default Status Under Section 40(a)(ia)

  Case-Laws - AT : ITAT adjudicated a tax dispute concerning TDS liability and provisions reversal. The tribunal determined that voluntary disallowance of expenses under section 40(a)(ia) does not automatically constitute an "assessee in default" under section 201(1). The provisions of sections 40(a)(ia) and 201(1)/201(1A) were deemed mutually exclusive. Consequently, the assessee cannot be treated as in default, and no interest is chargeable under section 201(1A). The tribunal emphasized that no estoppel exists against statutory provisions. Ultimately, the assessee's appeal was allowed, effectively negating potential tax penalties and interest implications.
  Visit to Get Source

  ---

• Wind Power Unit Transfer Recognized as Slump Sale, Enabling Tax Deduction Under Section 80IA(4) with Full Depreciation Benefit

  Case-Laws - AT : ITAT adjudicated a tax dispute involving wind power generation unit transfer. The tribunal held that the transfer between parties constituted a valid slump sale, thereby enabling deduction under Section 80IA(4). The assessee's claim for deduction was substantiated by proper documentation, including Form 3CEA and transaction certificates. The tribunal distinguished the case from a prior precedent involving windmill sales, affirming the eligibility for tax deduction. Furthermore, the tribunal rejected the disallowance of depreciation, confirming that depreciation was correctly computed based on the asset's written down value and in compliance with Section 43(1) of the Income Tax Act. The appeal was allowed in favor of the assessee.
  Visit to Get Source

  ---

• Leave Encashment Deduction Upheld: Full Amount Allowed Under Section 10(10AA) Based on Recent CBDT Notification

  Case-Laws - AT : ITAT allowed the assessee's appeal challenging leave encashment deduction under section 10(10AA). The tribunal found that the CIT(A)'s rejection based on non-submission of Form 16 was untenable, as the Assessing Officer already had information about the claimed amount of Rs. 20,29,482. Pursuant to the CBDT notification dated 24th May 2023, the leave encashment limit was revised to Rs. 25,00,000, thereby enabling the assessee to claim the entire amount instead of the previously restricted Rs. 3,00,000. The tribunal directed the Assessing Officer to allow the deduction consistent with the revised statutory limit.
  Visit to Get Source

  ---

• Tax Authorities Validate Reopening of Assessment Due to Incomplete Disclosure of Interest Income and Inventory Valuation Discrepancies

  Case-Laws - AT : ITAT upheld the reopening of assessment under section 147, finding no true and full disclosure of necessary facts regarding interest income from Mexican subsidiaries. The tribunal rejected the assessee's arguments about inventory valuation, ruling that provisions for inventory loss must be added back to book profit under section 115JB(2). The key issue centered on incomplete reconciliation of interest income and improper accounting treatment of inventory provisions. The tribunal determined that the Assessing Officer validly reopened the assessment due to escaped income, specifically noting discrepancies in interest income reporting and inventory valuation methodology. Consequently, the assessee's appeal was dismissed, affirming the lower authorities' computational adjustments.
  Visit to Get Source

  ---

• Tax Additions Canceled: Uncorroborated Evidence Fails to Prove Undisclosed Income Under Sections 69A and 69C

  Case-Laws - AT : The ITAT rejected the revenue's appeal, finding that the Assessing Officer (AO) improperly made additions under sections 69A and 69C without substantive evidence. The tribunal held that the AO relied on uncorroborated documents, specifically a WhatsApp image from an employee's smartphone, which could not be considered credible proof. No physical money was found, and the statements used were retracted. The tribunal emphasized that abstract documents without supporting evidence cannot form the basis for tax additions. Consequently, the additions made by the AO were deleted, and the CIT(A)'s original order was upheld, effectively dismissing the revenue's challenge.
  Visit to Get Source

  ---

• Electronic Notice Validated: ITAT Reduces Section 271B Penalty to Rs 10,000, Balancing Compliance and Proportionality

  Case-Laws - AT : ITAT partially allowed the assessee's appeal, restricting penalty u/s 271B to Rs 10,000/-. The Tribunal acknowledged electronic notice service to the assessee's email ID, which remained unrebutted. Applying established legal principles against double penalty for identical default, the Tribunal referenced precedent to delete the balance penalty. The decision emphasizes procedural fairness by limiting punitive measures to a proportionate quantum, ensuring compliance without excessive financial burden on the taxpayer.
  Visit to Get Source

  ---

• Tax Penalty Canceled: Salaried Employee Wins Appeal After Proving Genuine Mistake in Income Reporting Under Section 270A(9)(a)

  Case-Laws - AT : ITAT held that penalty u/s 270A(9)(a) for under-reporting of income is deleted. The appellant, a salaried employee, demonstrated a bona fide mistake by relying on tax representative's advice and TDS portal figures. Given the taxpayer's full tax payment, reliance on official portal data, and genuine error, the tribunal found no intentional misreporting. The 200% penalty initially imposed by the Assessing Officer was consequently nullified, with the decision rendered in favor of the assessee based on mitigating circumstances.
  Visit to Get Source

  ---

• Taxpayer Successfully Challenges Income Reporting Penalty by Proving Unintentional Error and Voluntary Correction Under Section 148

  Case-Laws - AT : ITAT adjudicated a tax penalty case involving multiple PAN registrations. The assessee demonstrated inadvertent income reporting across different PAN statuses (from "Firm" to "AOP"). Despite initially not including certain income components, the assessee voluntarily corrected the return during reassessment proceedings under Section 148. The Tribunal found no deliberate concealment of income, noting the assessee provided comprehensive explanations and documentary evidence. Consequently, the Tribunal deleted the penalty imposed by the Assessing Officer, ruling in favor of the assessee by accepting the returned income and concluding there was no intentional tax evasion.
  Visit to Get Source

  ---

• Property Indexation Benefit Calculated from Allotment Date, Long-Term Capital Losses Permitted for Set-Off Against Gains

  Case-Laws - AT : ITAT held that indexation benefit for property acquisition shall be calculated from the allotment date (3/12/2010), allowing cost indexation based on payments made during financial year 2010-11. The tribunal determined the property's acquisition date as the allotment letter date, permitting the assessee to claim indexed cost of acquisition. Additionally, the tribunal allowed brought forward long-term capital losses to be set off against long-term capital gains, noting no substantive reason existed to deny the claim, particularly since prior assessment orders had not challenged similar claims. Ground raised by the assessee was consequently allowed in entirety.
  Visit to Get Source

  ---

• Tribunal Strikes Down Tax Revision Order, Validates Original Assessment's Comprehensive Examination of Complex Financial Transactions

  Case-Laws - AT : ITAT quashed PCIT's revision order under Section 263, finding no valid basis for challenging the original assessment. The Tribunal determined that PCIT's directions were vague, mechanical, and lacked substantive legal grounds. Key issues involving transfer pricing adjustments, interest on compulsorily convertible debentures, revenue recognition, and foreign equity transactions were deemed adequately examined in original proceedings. The Tribunal emphasized that PCIT failed to demonstrate how the original assessment order was erroneous or prejudicial to revenue interests. Consequently, the revision order was nullified, providing a comprehensive victory for the assessee by rejecting all proposed modifications to the original assessment.
  Visit to Get Source

  ---

• Tax Dispute Resolved: Survey Income Taxed at Normal Rates, Not Punitive Rates Under Section 115BBE

  Case-Laws - AT : ITAT resolved tax dispute regarding surrendered income from sundry debtors, determining that income disclosed during survey proceedings should be taxed at normal rates rather than punitive rates under Section 115BBE. The tribunal found that since the assessment proceedings accepted the return and did not challenge the source or details of income during survey, the AO could not subsequently characterize the income as unexplained under Sections 69 and 69A. The bench emphasized that when source and nature of income were already considered and accepted, the amounts must be subjected to standard taxation rates. The decision aligned with precedent in Silver Wings Life Spaces, ultimately ruling in favor of the assessee.
  Visit to Get Source

  ---

• Amalgamation Share Allotment: Tax Exemption Confirmed for Public Companies Under Section 56(2)(vii)(c)(ii)

  Case-Laws - AT : ITAT ruled that Section 56(2)(vii)(c)(ii) does not apply to public limited companies, being exclusively applicable to individuals and HUFs. In a scheme of amalgamation involving share allotment, there is no traditional 'transfer' under Section 47(vii). The High Court-approved amalgamation scheme with its share exchange ratio is conclusive, precluding arguments about discounted share pricing. The tribunal affirmed the CIT(A)'s findings, dismissing the revenue's appeal and holding that the new share issuance does not trigger tax implications under the challenged provision.
  Visit to Get Source

  ---

Customs

• High Court Strikes Down Illegal IGST Penalties Under Unamended Customs Tariff Act, Validates Import Regularization for Advance Authorization Scheme

  Case-Laws - HC : HC held that under the unamended Section 3(12) of Customs Tariff Act, 1975, imposing interest, penalty, and redemption fine on IGST was without legal authority. Following the precedent in Mahindra & Mahindra Limited, the court quashed the impugned order levying interest and penalties. The amendment to Section 3(12) by Finance Act, 2024 is prospective, applicable only from 16th August, 2024. Additionally, a trade notice allowed regularization of imports under Advance Authorization Scheme that could not meet pre-import conditions, further supporting the court's decision to set aside confiscation and redemption fine. Petition allowed.
  Visit to Get Source

  ---

• Copper Rod Import Case: Tribunal Confirms Duty Classification and Penalties Under Sections 114A and 114AA

  Case-Laws - AT : CESTAT appellate tribunal determined copper rod import classification dispute. The tribunal upheld classification under CTH 74081190, rejecting CEPA exemption due to misclassification of imported goods. The certificate of origin was deemed incorrect as the goods were in coil form contrary to statutory definitions of "bars and rods". The tribunal partially allowed the appeal, remanding the case for verification of document submission to assess extended limitation period applicability. Basic customs duty at 5% was confirmed, and penalties under Sections 114A and 114AA were justified due to intentional mis-declaration of imported goods' characteristics.
  Visit to Get Source

  ---

• Customs Broker Wins Partial Relief: Reduced Penalty and License Preserved Despite Documentation Irregularities Under Regulations 10(a), 10(d), 10(n)

  Case-Laws - AT : CESTAT adjudicated a customs broker (CB) case involving alleged regulatory violations related to export documentation. The tribunal partially allowed the appeal, finding no substantive evidence of deliberate misconduct in regulatory breaches under Regulations 10(a), 10(d), and 10(n). While exculpating the CB from direct responsibility for exporters' fraudulent actions, the tribunal nonetheless imposed a reduced penalty of Rs 25,000 (from original Rs 50,000), recognizing the CB's professional obligations. Key outcomes include: (i) CB license revocation set aside, (ii) security deposit forfeiture rescinded, and (iii) penalty substantially mitigated, acknowledging the CB's peripheral role in potential export documentation irregularities.
  Visit to Get Source

  ---

• Importer's Appeal on Expired Drug Export Fails Due to Insufficient Evidence and Procedural Inconsistencies Under Customs Regulations

  Case-Laws - AT : CESTAT determined that the importer failed to conclusively prove lack of knowledge regarding export of expired drugs. Despite multiple transactional relationships, the appellant could not substantiate claims of non-awareness. The tribunal rejected arguments about consignment value and re-importation timelines, noting Pipavav was not a notified port for medicine imports. The procedural irregularities and lack of definitive evidence led to a partial allowance of the appeal, with the matter to be referred to a regular bench for further adjudication under customs regulations.
  Visit to Get Source

  ---

• Exporters Win Partial Relief: Dual Incentive Scheme Interpretation Requires Comprehensive Policy Review Under SHIS and EPCG

  Case-Laws - AT : CESTAT adjudicated a dispute involving simultaneous utilization of Status Holder Incentive Scheme (SHIS) and Zero Duty Export Promotion Capital Goods (EPCG) scheme under Foreign Trade Policy 2009-2014. The tribunal found that the original authority did not comprehensively consider certain aspects of the DGFT public notice and the contextual circumstances of benefit utilization. Consequently, the tribunal set aside the previous order and remanded the matter to the original authority for de novo adjudication, leaving all substantive issues open for fresh determination with a holistic examination of the policy prescriptions and factual matrix.
  Visit to Get Source

  ---

FEMA

• FCRA Registration Certificates Extended: Validity Maintained for Pending Renewals Until June 30, 2025

  Circulars : The MHA issued a public notice extending FCRA registration certificates' validity for entities with pending renewal applications. Certificates expiring between 01.04.2025 and 30.06.2025 will remain valid until 30.06.2025 or until renewal application disposal. Associations whose renewal is refused will have their certificate deemed expired on refusal date, rendering them ineligible to receive or utilize foreign contributions. The extension applies to previously extended registrations and those nearing expiration, providing temporary relief and continuity for FCRA-registered entities during the renewal process.
  Visit to Get Source

  ---

• Foreign Investors Can Receive Bonus Shares in Restricted Sectors Without Changing Ownership Proportions Under New Regulatory Guidelines

  Circulars : Indian regulatory authorities issued a clarification permitting bonus share issuance by Indian companies in FDI-prohibited sectors to existing non-resident shareholders, contingent upon maintaining identical pre-existing shareholding proportions. The directive mandates strict compliance with applicable regulatory frameworks and becomes effective upon corresponding FEMA notification issuance. The policy amendment allows bonus share distribution without altering existing non-resident shareholding patterns, providing clarity for foreign investment structures in restricted sectoral domains.
  Visit to Get Source

  ---

PMLA

• Govt Official Denied Bail in Coal Transport Extortion Case Under PMLA Section 45 Amid Strong Evidence

  Case-Laws - HC : HC rejects bail application in money laundering case involving illegal coal transportation extortion. The applicant, a government servant, failed to satisfy twin conditions under Section 45 of PMLA, 2002. Evidence indicates direct involvement in extortion syndicate and generation of proceeds of crime. Court determined no prosecutorial sanction was required as alleged acts were outside official duties. The bail application was conclusively denied, finding prima facie involvement substantive and the applicant's arguments unpersuasive. Bail application under Section 483 of BNSS was rejected, maintaining strict interpretation of money laundering bail provisions.
  Visit to Get Source

  ---

• Digital Gaming Platform Faces Major Asset Freeze for Alleged Rs.2850 Crore Money Laundering Scheme Under Section 20(1)

  Case-Laws - AT : AT upheld seizure and freezing order against gaming company for alleged money laundering through unauthorized digital transactions. The company collected approximately Rs.2850 crore, transmitting Rs.2320 crore outside India, without transparent disclosure of fund sources. ED's reasons to believe under Section 20(1) were legally recorded, and the Adjudicating Authority found substantial evidence of potential financial irregularities. The order of seizure and property retention was justified based on ongoing investigations, API integration with game platforms, and suspicious financial movements. The appeal was dismissed, with final determination of criminal culpability reserved for the Trial Court, maintaining the provisional seizure order's validity pending full judicial review.
  Visit to Get Source

  ---

SEBI

• Specialized Investment Funds Get New Rules: Maturity Exemptions and Investment Thresholds Redefined Under SEBI Guidelines

  Circulars : SEBI issued a regulatory clarification for Specialized Investment Funds (SIF), modifying two key provisions. First, paragraph 12.27.2.4 regarding securities maturity in interval schemes is exempted for SIF Interval Investment Strategies. Second, the minimum investment threshold is set at INR 10 lakh across all investment strategies per PAN, with an exception for mandatory employee investments. The circular, issued under SEBI Act Section 11(1) and Mutual Funds Regulations, aims to protect investor interests and regulate securities market development, effective immediately from the circular's date.
  Visit to Get Source

  ---

Service Tax

• Consortium Services Classified as Works Contract Under Section 65A, Exemption Claims Rejected with Partial Relief

  Case-Laws - AT : CESTAT held that the consortium's services constituted works contract service under Section 65A of the Finance Act, 1994. The tribunal rejected exemption claims under Notifications 11/2010-ST, 32/2010-ST, and 45/2010-ST, finding they did not apply to EPC contract services. The extended period of limitation was not invoked due to bonafide belief and interpretational confusion. Penalties were set aside considering the appellant's government undertaking status. The appeal was partly allowed, upholding service tax classification while providing relief on limitation and penalties.
  Visit to Get Source

  ---

Central Excise

• Silver Jewelry Manufacturer Wins Complex Tax Appeal, Defeats Multiple Revenue Department Challenges Under Excise Duty Rules

  Case-Laws - AT : CESTAT appellate proceedings involving silver jewelry manufacturer. The tribunal ruled in favor of the appellant, addressing multiple key issues: (1) goods classified under CETH 7113 without evidence of precious stone studding, (2) compliance with Notification No. 12/2012 exemption conditions, (3) hedging activities not considered trading, (4) no willful suppression of facts justifying extended limitation period, and (5) ineligible credit demand previously dropped. The tribunal comprehensively rejected the revenue's contentions across classification, duty exemption, and credit-related challenges. The appeal was ultimately allowed, substantially vindicating the appellant's legal and procedural positions across multiple contested aspects of the excise duty dispute.
  Visit to Get Source

  ---

Case Laws:

• GST

• 2025 (4) TMI 628
  Validity of assessment order dated 21.09.2020, passed under section 62 of the GST Act - non-issuance of a notice under section 46 of the GST Act prior to the assessment order - violation of principles of natural justice - HELD THAT:- The record reveals that admittedly, an order dated 21.09.2020 was passed under section 62 of the GST Act creating demand against the petitioner to the tune of Rs. 19,80,000/-, but the notice under section 46 of the GST Act was issued on 25.09.2020, much after the passing of the order dated 21.09.2020. The record clearly shows that the assessment order under section 62 of the GST Act suffers from serious lacuna due to non-issuance of notice under section 46 of the GST Act. Even the appellate court has failed to taken note of the said fact. Therefore, the impugned orders suffer from serious infirmity for non-compliance of principles of natural justice and procedural requirement prescribed under the Statute in absence of proper service on the petitioner. On an identical set of fact, the High Court of Jharkhand, in Vinman Constructions Limited Vs. State of Jharkhand [ 2022 (3) TMI 88 - JHARKHAND HIGH COURT ], has held that The impugned action has led to serious penal consequences which cannot be sustained in view of serious infirmities in the procedure adopted by the Assessing Officer. This Court is, therefore, of the view that the impugned assessment order dated 02.08.2018 passed by the Respondent No. 2 (Annexure-6)as also the Summary of the Order contained in DRC-07 dated 01.10.2018 issued by the Respondent No. 3 deserves to be set aside. Conclusion - The impugned orders suffer from serious infirmity for non-compliance of principles of natural justice and procedural requirement prescribed under the Statute in absence of proper service on the petitioner. The matter is remitted to the respondent no.2/Deputy Commissioner, State Tax, Sector 8, Noida, Gautam Buddha Nagar to reconsider the matter by issuing a fresh notice to the petitioner within a period of two weeks from today - petition allowed by way of remand.

  ---

• 2025 (4) TMI 627
  Declination to grant any interim order - HELD THAT:- It is for the appellant to agitate the claims in the pending writ petition. Two issues which arise out of the matter is detention of the vehicles and the goods. Vehicles is the TATA truck which was carrying the goods which are Areca-nuts measuring a quantity of 17760 kg. If the vehicle continues to be under detention the vehicle will get deteriorated and it will ultimately be reduced to a scrap. Therefore, we direct the respondent authorities to release the vehicle in question subject to appellant paying a sum of Rs.1,00,000/- to the appropriate authority of the respondent and the vehicle should be released with three days from the date of payment. So far as the goods are concerned, since they are stated to be Areca-nuts, they have self-life. If the Areca-nuts which are packed in 222 bags of 80 kg. which will ultimately be unfit for human consumption and destruction has to be ordered. The department is directed to sell the Arec-anuts at the best possible price which is realisable within 15 days from receipt of server copy of the order and retain the sale proceeds in a separate account subject to the outcome of the writ petition. It will be well-open to the appellant to participate in the auction sale proceeding. Appeal disposed off.

  ---

• 2025 (4) TMI 626
  Violation of principles of natural justice - issuance of summary of SCN without issuing any SCN u/s 73 (1) of the CGST Act, 2017 and the summary of the order without passing any order u/s 73 (9) of the CGST Act, 2017 - opportunity of hearing also not provided - HELD THAT:- The issue raised in Construction Catalysers Pvt. Ltd. [ 2024 (10) TMI 279 - GAUHATI HIGH COURT ] and the present petition is similar and therefore, the determination made in Construction Catalysers Pvt. Ltd, shall accordingly cover the present petition and as agreed to by the learned counsel for the parties, the present writ petition stands dsposed of by setting aside the summary of show cause notice dated 28.09.2023 and the summary of order dated 30.12.2023 in terms of the determination and conclusion arrived at para 29 of Construction Catalysers Pvt. Ltd. It was held in Construction Catalysers Pvt. Ltd that The issuance of the Summary of the Show Cause Notice, Summary of the Statement and Summary of the Order do not dispense with the requirement of issuance of a proper Show Cause Notice and Statement as well as Page passing of the Order as per the mandate of Section 73 by the Proper Officer. As initiation of a proceedings under Section 73 and passing of an order under the same provision have consequences. The Show Cause Notice, Statement as well as the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Rules of 2017. Petition disposed off.

  ---

• 2025 (4) TMI 625
  Seizure of goods - initiation of proceedings under Section 129 of the Act - evasion of tax - goods in question were being transported without any invoice / bilty and E-way Bill - HELD THAT:- The record shows that the goods were intercepted on the ground that same were being transported without having necessary documents, however before the seizure as well as penalty order could be passed, all the required documents were produced. The records shows that the compactor machine was transported from head office at Rajasthan to work place at Uttar Pradesh for completion of work. The delivery challan and e-way bill were not produced at the time of interception but along with the notice, the same were produced in which no other discrepancy was pointed out. The delivery challan itself shows that goods were transferred from head office Rajasthan to its work place at Uttar Pradesh. Further there is no element of sale involved in the present transaction hence no tax evasion can be attributed. The record further reveals that the goods were sent from one unit to another unit, and there is no provision under the Act for charging any tax in such transaction. The respondent authority has utterly failed to prove any intent of tax evasion in the present case. This Court in Shyam Sel Power Limited [ 2023 (10) TMI 218 - ALLAHABAD HIGH COURT ] has held that As notices hereinabove, on the facts of this case, it has precisely been found that there was no intent on the part of the writ petitioners to evade tax and rather, the goods in question could not be taken to the destination within time for the reasons beyond the control of the writ petitioners. Conclusion - The absence of intent to evade tax invalidates proceedings under Section 129 of the CGST Act. Stock transfers between branches without sale do not attract GST. Petition allowed.

  ---

• 2025 (4) TMI 624
  Dismissal of appeal as being beyond limitation, recording the reasoning as delay in submission of appeal. - HELD THAT:- The Central Government in exercise of its power conferred by Section 148 of the CGST, extended the time for filing appeal for all the assessee s, who could not file the appeal under the time prescribed against an order passed under Sections 73 and 74 of the GST Act. If the said order was passed before 31.03.2023, an additional precondition was prescribed that the assessee would have deposited admitted amount etc. and the additional 12.5% of the remaining amount of tax which is deposited by the assessee. In the present case, as the entire amount as assessed against the petitioner has already been deducted, no amount has to be paid, thus, the condition no.3 as prescribed in the Notification No.53 of 2023 stood satisfied by the assessee. The appeal had to be heard on merits and had to be disposed off on merit. The said appeal could not be dismissed as being beyond limitation - petition allowed.

  ---

• 2025 (4) TMI 623
  Challenge to undated demand order - failure to fulfill requirement of Section 75(6) - HELD THAT:- Admittedly, in the present case, the undated order (Annexure-1) also does not contain any reason and only the indication made in the show cause notice has been incorporated by reference and, therefore, the said order cannot be sustained. The matter is remanded back to respondent No.2, who shall provide an opportunity of filing response to the show cause notice issued under Section 73 of the Act to the petitioner, which response shall be filed within a period of four weeks from today and, thereafter, after providing opportunity of hearing, a fresh order in accordance with law be passed - Petition allowed by way of remand.

  ---

• 2025 (4) TMI 622
  Cancellation of petitioner s registration under the UPGST Act - HELD THAT:- It does merit acceptance that the petitioner was not obligated to visit the GST portal to receive the show cause notices that may have been issued to the petitioner for 2018-19 through e-mode, preceding the adjudication order dated 27.04.2024 passed in pursuance thereto. It is also not the case of the revenue that any physical/offline notice was issued to or served on the petitioner before the impugned order came to be passed - In view of peculiar facts noted, no useful purpose may be served in keeping the petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy Since essential requirement of rules of natural justice has remained to be fulfilled, the order dated 27.04.2024 is set aside - petition disposed off.

  ---

• 2025 (4) TMI 621
  Challenge to SCN - Violation of principles of natural justice - alleged lack of an opportunity for a personal hearing for the petitioner - HELD THAT:- The very fact that in the reply uploaded on 29.07.2024, indication was made that documents have already been submitted, the same essentially refer to the documents admittedly produced by the petitioner on 26.10.2023 pursuant to the directions issued by this Court and apparently on 28.08.2024, the plea raised that personal appearance was made on behalf of the petitioner for filing the hard copy of the documents, cannot be accepted. Once the petitioner chose not to appear on 28.08.2024 despite opportunity having been provided, the passing of the order by the competent authority after going through the response filed along with documents, cannot be faulted. There is also substance in the submissions made by counsel for the respondents that the petitioner has efficacious alternative remedy of filing appeal under Section 107 of the Act, however, except for indicating in Para 43 of the writ petition that petitioner is aware of availability of alternative remedy of filing the appeal but since the order was passed in violation of principles of natural justice, petition under Article 226 was being filed, nothing else has been indicated. s it has been found by this Court based on the material available on record, that no appearance was made by the petitioner on 28.08.2024, the date fixed for personal hearing, the allegations regarding violation of principles of natural justice cannot be accepted. Conclusion - As it has been found by this Court based on the material available on record, that no appearance was made by the petitioner on 28.08.2024, the date fixed for personal hearing, the allegations regarding violation of principles of natural justice cannot be accepted. Petition dismissed.

  ---

• 2025 (4) TMI 620
  Violation of principles of natural justice - no-application of mind by respondent authority - challenge to order passed by the respondent under Section 74 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- It is trite law that to be covered under Section 74 of the Act, there is a mandatory requirement of there being fraud or any willful-misstatement and/or suppression of material facts. This being an essential ingredient of the particular section, the authority concerned could not have made the statement in the impugned order that it was not appropriate for him to deal on this aspect at his level of adjudication. There appears to be complete non application of mind which leads us to intervene in this matter at this stage. Accordingly, the Commissioner, Central Goods and Services Tax, Varanasi is directed to look into this particular issue wherein officers are passing orders under Section 74 of the Act without providing the reasons for invoking Section 74 of the Act for fraud or any willful-misstatement or suppression of material facts. Commissioner, Central Goods and Services Tax, Varansi is directed to take appropriate action at his end. Petition allowed by way of remand.

  ---

• 2025 (4) TMI 619
  Violation of principles of natural justice - order impugned has been passed without indicating any reason whatsoever - HELD THAT:- The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that the proper officer, in his order shall set out the relevant facts and the basis of his decision , the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no. 2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order. The matter is remanded back to respondent no. 2/Deputy Commissioner, State Tax, Sector-3, Sonbhadra to provide an opportunity of filing response to the show cause notice issued under Section 73 of the Act to the petitioner - Petition allowed by way of remand.

  ---

• Income Tax

• 2025 (4) TMI 618
  Tax Collection at Source (TCS) - Addition u/s 206C(6)/206C(7) - Tribunal held that Swan timber is different from timber when there is no distinction drawn under Section 206C except in the case of timber obtained under forest lease - HC concluded [ 2022 (7) TMI 1271 - CALCUTTA HIGH COURT] if the timber is being sized, sawn into logs of different dimensions and shapes in activities carried on saw mills authorised by the Government, it would amount to a different produce. Even in respect of timbers which are procured as described in table, if it is used in the process of manufacturing, the provision of Section 206C(1) of the Act would not be applicable due to the fact that the product ceased to be a forest produce. HELD THAT:- There is a delay of 880 days in filing the Special Leave Petition which has not been satisfactorily explained. Even otherwise, we have gone through the Special Leave Petition and do not find any merit in the same. Special Leave Petition is, therefore, dismissed on the ground of delay as well as on merits.

  ---

• 2025 (4) TMI 617
  Addition of cash transactions u/s 40A(3) - assessee had purchased gold jewellery worth Rs. 34.68 Crores by way of cash in the auction - as decided by HC [ 2019 (1) TMI 607 - MADRAS HIGH COURT] Assessee could not demonstrate that he was representing any syndicate nor he could demonstrate that he was collecting cash from such syndicate members for making payments to the Finance Company. The Tribunal correctly held that the assessee was unable to demonstrate a situation which compelled him to make payment in cash which would have exempted him from application of recourse of Section 40A(3) of the Act. HELD THAT:- Having heard the petitioner and having gone through the materials on record, we see no reason to interfere with the impugned order passed by the High Court. The Special Leave Petition is, accordingly, dismissed.

  ---

• 2025 (4) TMI 616
  Reopening of assessment u/s 147 - reasons to believe - notice u/s 148A(b) - whether information disclosed vide notice under Section 148A(b) of the IT Act is not covered by the information specified in Explanation 1(i) of Section 148 of the IT Act? - as decided by HC [ 2024 (1) TMI 368 - RAJASTHAN HIGH COURT] Jurisdictional Authority along with notice dated 13.3.2023 u/s 148A(b) of the IT Act has supplied information available with it with the documents such as insight portal, wherein information/description has been given. In the notice dated 13.3.2023 under Section 148A(b) and the order dated 28.3.2023 u/s 148A(d) of the IT Act issued by the Assessing Officer, it is clearly mentioned that in the insight portal, the case of the petitioner is flagged on High Risk CRIU/RU PAN Case for the relevant assessment year. Case of the petitioner is covered by information specified in Explanation 1(i) of Section 148 of the IT Act. HELD THAT:- It is brought to our notice that Assessment order has already been passed on 26.03.2024. Petitioner(s) also submits that the appeal against the said order(s) has been filed and is pending consideration before the Appellate Authority. In this view of the matter, there is no reason for us to interfere with the order(s) impugned. The Special Leave Petitions are dismissed.

  ---

• 2025 (4) TMI 615
  TDS u/s 195 - Royalty or FTS or business profits - payment made to NTOs is towards interconnectivity charges - as decided by HC [ 2023 (7) TMI 1164 - KARNATAKA HIGH COURT] scope of Section 195(2) it is important to note that the tax which is required to be deducted at source is deductible only out of the chargeable sum. This is the underlying principle of Section 195 - Thus it is clear that an assessee is entitled to take the benefit under a DTAA between two countries. Hence, the ITAT s view that DTAA cannot be considered in proceedings under Section 201 of the Act is tenable. HELD THAT:- Following the order passed in Special Leave Petition in Deputy Director of Income Tax and another vs. M/s.Vodafone Idea Limited [ 2024 (10) TMI 601 - SC ORDER] , we dismiss these Special Leave Petitions also on merits.

  ---

• 2025 (4) TMI 614
  Addition u/s 69-A and 69-C - AO based addition on report of the handwriting expert proving the handwriting of the assessee on relevant documents - ITAT deleted addition - HELD THAT:- Tribunal has failed to properly appreciate the significant findings from the search operation conducted at multiple locations, including the assessee s residential premises, those of his partners/brothers, the business premises of M/s Prime Ispat Limited (a closely-held company dealing in the manufacture and sale of structural steel), and the residential and office premises of the then Chartered Accountant, Shri Sunil Kumar Agrawal. The search revealed that M/s Prime Ispat Limited, a newly established entity, had amassed substantial capital in its initial years. This capital was primarily sourced from cash deposits made by numerous individuals from the village of Kharo and persons with no or inadequate means to invest such amounts. Tribunal has erred by not appreciating the significance of the statements made by Shri Vimal Agrawal and Shri Vinod Agrawal, who admitted that, under the direction of Shri Pawan Agrawal, Shri Ashok Agrawal, and Shri Babulal Agrawal, 13 companies and other firms were created. The primary objective of these entities was to convert black money into white, circumventing taxes. Approximately 230 bank accounts were opened in the names of various individuals, enabling the conversion and concealment of funds. These admissions should have been carefully considered, as they directly implicate the Assessee in a deliberate effort to evade tax obligations through illegal means. The learned Tribunal also erred by not acknowledging the full scope of the fund circulation scheme, which was exposed during the search at the premises of CA Shri Sunil Kumar Agrawal. Despite the clear implication of this statement, the respondent/assessee failed to provide any satisfactory explanation regarding these assertions, merely claiming that the CA had retracted his statement. In the absence of a credible explanation, the AO appears to have rightfully added these funds to the Assessee s income under sections 69-A and 69-C of the Income Tax Act, 1961. The scheme of fund transfer ultimately benefitted M/s Prime Ispat Limited. The unaccounted funds, which were transferred from individuals connected to the Company, were effectively placed at the disposal of the Company, thereby concealing the true origin of these funds and facilitating the further concealment of income. The Tribunal s failure to recognize this critical aspect of the case undermines the finding that the respondent/assessee s actions were part of a broader scheme to conceal income. Tribunal has further not taken into account the unaccounted income was introduced into M/s Prime Ispat Limited in the form of share capital and premium via 13 shell Companies and certain villagers from Kharora. The Tribunal did not adequately address the fact that M/s Prime Ispat Limited, being a new entity, could not have legitimately accumulated such large sums of capital, especially when the source of these funds can be traced to shell companies created to facilitate the conversion of black money into white. The statements of Shri Vimal Agrawal and Shri Vinod Agrawal confirm the deliberate actions taken to hide the true nature of these transactions, which were orchestrated by the respondent/ assessee and his associates. Tribunal has failed to consider crucial evidence and overlooked the implications of the statements made by key individuals involved in the case. The Tribunal s failure to appreciate the full scope of the evidence and its failure to apply relevant legal principles in the context of the assessee s actions has led to an erroneous conclusion. Tribunal as well as the CIT(A) have not taken into account the statements of Shri Vimal Agrawal and Shri Vinod Agrawal who were the Directors in the shell Companies through which huge sum was introduced in the garb of share capital and share premium in the books of M/s Prime Ispat Limited. The statement of these two individuals ought to have been considered in proper perspective before arriving at any finding. Shri Vinod Agrawal and Vimal Agrawal have accepted in their statement that on the direction of Shri Pawan Agrawal, Shri Ashok Agrawal and the appellant, 13 shell Companies and other firms were created as these persons wanted to convert their black money into white without paying any tax. Even as per the learned counsel for the parties, the CBI, ED and EOW has registered various cases against the respondent/Assessee which are pending consideration. Tribunal orders set aside - remand the matters back to the learned CIT(A) to consider the statements of the individuals and the grounds raised by the appellant/Revenue afresh.

  ---

• 2025 (4) TMI 613
  Validity of Notice issued u/s 153C as barred by limitation - HELD THAT:- In this case, the search was conducted on 10.11.2020. Thereafter, the documents or assets were seized or requisitioned by the AO on 30.06.2022 and the show cause notice dated 30.12.2024 was issued. The claim of the petitioner is that the date of issuance of show cause notice should be considered as the date of initiation of proceedings as far as the other person is concerned and hence, the limitation period of 6 year has to be calculated from the said date, in which case, the present proceedings are barred by limitation. In this case, on 10.11.2020, the search was not conducted in the petitioner s premises. The petitioner is the other person, from whom the documents or assets were seized or requisitioned on 30.06.2022 and thus, the said date, i.e., 30.06.2022, only has to be considered for calculating the limitation period of 6 years. With regard to all other aspects, i.e., for initiation or completion of proceedings, it is left open for the petitioner to give suitable reply to the show cause notice dated 30.12.2024 and contest the same in accordance with law, if so advised. As far as the settlement arrived at IBS is concerned, even though the case was settled before the IBS, the liberty is granted to the Department to proceed further, in future, if any new material is found. When such being the case, this Court finds no substance in the submissions made by the petitioner on this aspect. For all the reasons stated above, this Court does not find any merits in the submissions made by the petitioner on the aspect of limitation and thus, this Court is not inclined to interfere with either the impugned notice dated 30.12.2024 or the impugned order dated 13.03.2025. Therefore, the writ petitions are liable to be dismissed.

  ---

• 2025 (4) TMI 612
  Writ in the nature of Mandamus directing the respondents to expedite the disposal of the pending appeal filed on 08.05.2015 in a time bound manner - HELD THAT:- A perusal of the record shows that the appeal was filed on 08.05.2015 i.e. almost about 10 years back and till date there is no progress in the proceedings. The present writ petition is disposed of with a direction to respondent No. 4 Commissioner of Income Tax (Appeals) to decide the appeal filed by the petitioner within a period of six months from the date of receipt of copy of this order.

  ---

• 2025 (4) TMI 611
  Non admission of additional evidence by ITAT - application filed under Rule 29 of the ITAT Rules came to be rejected by the ITAT on the ground that both the cash book and cash flow statement which the assessee filed before the CIT (A) were in the nature of additional evidence and the assessee firm had adopted an evasive approach in assessment proceedings and not filed either of the aforesaid documents, which formed the very basis for selecting its case for limited scrutiny assessment u/s 143(2) of the IT Act - HELD THAT:- ITAT did not record a finding that the documents mentioned in paragraph 6 of the order as additional evidence are not necessary for deciding the case and pronouncing judgment or order for any substantial cause even after having recorded finding that those documents are vital and important as they form basis for limited scrutiny assessment u/s 143(2) of the Act. It is pertinent to note that so far as cash book is concerned, only one page had already been filed before the AO and it is not the finding of the ITAT that these documents are not necessary for just and proper disposal of appeal preferred by the appellant and for pronouncing the judgment. ITAT has erred in law without recording a specific finding which is sine qua non for considering the admission of documents and proceeded to reject the application. ITAT has legally erred in law in rejecting the application which runs contrary to the well settled decision in this behalf and consequently, the impugned order rejecting the application filed under Rule 29 of the ITAT Rules is set aside and subsequently, the appellate order dated 5-12-2023 is also set aside. The application under Rule 29 of the ITAT Rules for admission of additional evidence is allowed, as it is necessary for just and proper disposal of appeal.

  ---

• 2025 (4) TMI 610
  Assessment Order u/s 153C - Order passed long beyond the period of limitation as under Proviso to Section 153B - HELD THAT:- The period of limitation for making assessment or reassessment is two years from the end of the Financial Year of the search or nine months from the end of the Financial Year, in which, the Books of Account or Documents or Assets were seized or requisitioned and were handed over u/s 153C to the AO having jurisdiction over such other person, whichever is later. Thus, the period for passing the Assessment Order u/s 153C would have expired on 31.03.2023. However, with effect from 24.03.2020, the Country was under lock-down which resulted in large scale disruption of Governmental / social / political and economic activities. The Honourable Supreme Court came to the rescue of litigants and various departments and passed its first order on 24.03.2020 to extend the period of limitation. Ultimately, the Central Government passed Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 which was subsequently replaced by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021 and statutorily extended the period of limitation. Several notifications have been issued extending the limitation. Thus, it cannot be said that the impugned Assessment Order was passed beyond the period of limitation. Therefore, the objection of the petitioner to the impugned Assessment Order is time-barred and without jurisdiction is over ruled. Respondent will be governed by the principle of preponderance of probability and not by strict rules of evidences. The respondent shall endeavour to summon and produce the said N.Viswanathan, Director of SLN Coffee Pvt. Ltd., for cross examination by the petitioner. In case, the said N.Viswanathan, Director of SLN Coffee Pvt. Ltd. fails to answer to the summons, appropriate steps may be taken to secure his presence in person for Cross Examination by the petitioner. It is expected that the entire exercise will be completed within a period of six months from the date of receipt of a copy of this order.

  ---

• 2025 (4) TMI 609
  Assessee in default - TDS liability in respect of the provisions made at the end of the accounting year which was ultimately reversed in subsequent year - HELD THAT:- We find that ITAT, Delhi A Bench in assessee s own case for the assessment year 2012-13[ 2024 (1) TMI 853 - ITAT DELHI] concluded merely because the assessee had voluntarily disallowed the expenses u/s 40(a)(ia) of the Act in the return, the same would not automatically enable the ld. AO to treat it as assessee in default u/s 201(1) of the Act and consequentially levy interest u/s 201(1A) of the Act. The provisions of section 40(a)(ia) and section 201(1) / 201(1A) of the Act are mutually exclusive. In any case, there is no estoppel against the statute. Thus, assessee cannot be treated as assessee in default u/s. 201(1) of the Act and no interest is chargeable u/s. 201(1A) of the Act on the same. Assessee appeal allowed.

  ---

• 2025 (4) TMI 608
  Deduction u/s 80IA(4)(iv) - assessee has generated power through its wind power generation unit situated at Maharashtra (undertaking) and power generated from the undertaking was distributed to Maharashtra State Electricity Distribution Company - HELD THAT:-CIT(A) acknowledged that the transferee could be eligible for deduction, provided the transfer had occurred by way of a slump sale. Notably, the department has not filed an appeal before the ITAT challenging this specific finding of the CIT(A). Whether the transfer between JAL and Vision Finstock LLP qualifies as a slump sale ? - On merits, it is submitted that the question of whether a transferee can claim deduction is now a settled legal position. Judicial precedents have recognized that the transaction between JAL and Vision Finstock LLP constitutes a slump sale. The transferee has offered the amount to tax in its computation, and Form 3CEA was duly filed on the income tax portal, as reflected in APB-40. JAL s certificate confirming the slump sale transaction and the offering of the transaction amount to tax is included as APB-42. DR referred to a coordinate bench decision of Armstrong Knitting Mills Private Limited [ 2013 (12) TMI 192 - ITAT CHENNAI] . However, that case is factually distinguishable. There, the assessee had sold used windmills to a sister concern and leased them back, and it was held that the windmills were not newly established, disqualifying the deduction. In the present case, the facts are different. The Ld. CIT(A) accepted that deduction u/s 80IA is permissible if the transfer is by way of a slump sale, and the factual matrix supports the assessee s claim. Accordingly, we find no merit in the order of the Ld. CIT(A), and hold that the assessee is eligible for deduction under Section 80IA(4) Disallowance of depreciation claim - We find that this depreciation was correctly computed based on the written down value and was duly claimed in the tax computation. The asset was received by the assessee as a gift from Vision Finstock LLP. As per Section 43(1) of the Act, read with Explanation 2, in the case of an asset acquired by way of gift, the actual cost to the assessee shall be the cost to the previous owner, reduced by the depreciation actually allowed. Therefore, the assessee has rightly computed depreciation on the actual cost as per the depreciation schedule of Vision Finstock LLP for A.Y. 2017 18. Hence, the disallowance of depreciation is unwarranted.

  ---

• 2025 (4) TMI 607
  Penalty u/s 271(1)(c) - disallowance of payments have been directed to be restricted to 8% of the total turnover. HELD THAT:- In the case of AKM Resorts [ 2025 (2) TMI 650 - ITAT CHANDIGARH] ITAT held that where additions to assessee s income were made by AO based on application of estimated rate of NP on gross receipts following rejection of books of account, penalty could not be sustained u/s 271(1)(c) of the Act. As additions have been partly confirmed in the hands of the assessee on estimation basis by ITAT Surat in assessee s own case in quantum proceedings, in our considered view, no penalty is leviable under Section 271(1)(c) of the Act for concealment of income - Decided in favour of assessee.

  ---

• 2025 (4) TMI 606
  Denial of deduction u/s 80P - return of income was field on after the due date for filing the return - HELD THAT:- The audit report was made ready on 10/08/2018 but the same was not filed, but filed before us whereas in the cited order, the assessee had not filed the audit report and also not furnished any information about the audit in the appropriate column in the income tax return and therefore this Tribunal had not accepted the case of the assessee and dismissed the same. Therefore the order cited by the DR could not be cited as precedent on the facts and circumstances of the case and therefore we are not relying on the said order passed by this Tribunal. We are restoring the entire issue to the file of the AO with the direction to consider the audit report furnished by the assessee and if the same is found otherwise eligible, grant the deduction u/s. 80P of the Act by suitably amending the intimation passed u/s. 143(1) -Appeal filed by the assessee is allowed for statistical purposes.

  ---

• 2025 (4) TMI 605
  Rectification u/s 154 - addition of rent payable credited to the capital account of the appellant - HELD THAT:- There is no material on record to suggest that the amount of rent payable calls for addition. I do not find any mistake apparent from record which is being capable of being rectified u/s. 154 of the Act. Therefore, the AO ought not have exercised jurisdiction u/s. 154 of the Act. Accordingly the order passed u/s. 154 of the Act is hereby quashed. Appeal filed by the assessee stands allowed.

  ---

• 2025 (4) TMI 604
  Penalty imposed u/s 271 (1) (c) - allegation of defective notice - as per AO assessee has furnished inaccurate particulars of income in order to decrease its tax liability - HELD THAT:- AO has not specified the relevant limb for initiation of penalty proceedings in the notice issued u/s 274. When the charge has not been specified in the notice, it is an omnibus notice. In such circumstances, Hon ble Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Co. Ltd. [ 2019 (8) TMI 409 - DELHI HIGH COURT] has held that the penalty order passed is liable to be quashed on account of this defect which is fatal. We further note that in the case of Mr. Mohd. Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] has held that no specification of charge in the penalty notice leads to same become void and penalty on that count is to be deleted - Decided in favour of assessee.

  ---

• 2025 (4) TMI 603
  Additions u/s 57 and disallowance of payment of commission claimed as expenditure u/s 57 - HELD THAT:- No infirmity in the findings of the CIT(A). Accordingly, we are not inclined to interfere with the order of CIT (A) and affirmed the orders of the lower authorities, hence the grounds taken by the assessee are dismissed.

  ---

• 2025 (4) TMI 602
  Disallowance of expenses on sale promotion including publicity, photoshoot expenses and Information and Technology Cost (ERP Maintenance) - HELD THAT:- CIT(A) has taken a correct view in the matter, the items involved cannot be said to be enduring benefits being capital in nature. The case laws referred by the ld. CIT(A) MAGIC BRICKS REALITY SERVICES LIMITED [ 2022 (8) TMI 1288 - ITAT DELHI] is also germane and supports the case of the assessee. Appeal filed by the Revenue stands dismissed.

  ---

• 2025 (4) TMI 601
  Rejection of claim made by the Assessee for the first time before the DRP - HELD THAT:- Assessee can raise additional claims before the appellate authorities including the DRP even though the Assessee had not made any claim in the return of income or before the Assessing Officer. Therefore, the claim made by the Assessee for the first time before the DRP cannot be rejected on the ground that such claim was not made before the AO. Dividend distribution tax - As perused the order of the Special Bench of Mumbai Tribunal in Total Oil India (P) Ltd.[ 2023 (4) TMI 988 - ITAT MUMBAI (SB)] wherein it has been held that the DTAA does not get triggered when a domestic company pays Dividend Distribution Tax (DDT) u/s 115-O of the Act. Levy of interest u/s 234A 234B of the Act which are consequential in nature.

  ---

• 2025 (4) TMI 600
  Levying of penalty u/s 271 (1)(c) - addition made in the assessment order, which forms the basis for penalty, is deleted - HELD THAT:- We observed that coordinate bench in the quantum proceedings in assessee s own case [ 2025 (3) TMI 145 - ITAT DELHI] held that the assessment completed u/s 153A is without any incriminating material and, accordingly quashed the assessment order. Hence, we hold that when the assessment order in quantum appeal is quashed, the penalty levied on the basis of the quantum appeal is not sustainable. Coordinate Bench of the Tribunal vide order dated 29.02.2025 (supra) quashed the assessment. In these circumstances, the penalty levied by the AO is not sustainable in view of the law laid down in case cited as K.C. Builders Anr [ 2004 (1) TMI 7 - SUPREME COURT] because when the addition made in the assessment order on the basis of which penalty for concealment is levied have been deleted there remains no basis at all for levying the penalty for concealment and in such case, no penalty can survive and the penalty is liable to be cancelled. So, in view of the matter, the penalty order passed by the AO and confirmed by the ld. CIT (A) is set aside and the appeal filed by the assessee is hereby allowed.

  ---

• 2025 (4) TMI 599
  Revision u/s 263 - assumption of jurisdiction u/s 153C by the AO is vitiated in the absence of recording of any valid satisfaction for the instant assessment year - as per CIT assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the revenue, inasmuch as, the AO has failed to take into account the relevant seized material found during the course of search in the case of M/s. MSN Group of companies on 24.02.2021 which clearly shows on-money payment for purchase of land by the appellant and other group companies HELD THAT:- We are of the considered view that the satisfaction note recorded by the AO u/sec.153C of the Act is not in accordance with law as provided u/sec.153C of the Act and this fact is further strengthened by the decision of Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] wherein it has been clearly held that unless the Assessing Officer records satisfaction with reference to the incriminating material qua each assessment year, the initiation of proceedings u/sec.153C and consequent assessment proceedings is null and void ab initio. Since the satisfaction note recorded by the Assessing Officer is not a valid satisfaction, in our considered view, any assessment order passed by the Assessing Officer pursuant to the said invalid satisfaction note also void ab initio and liable to be quashed. Therefore, once the assessment order considered to be illegal assessment order, in our considered view, the assumption of jurisdiction by the PCIT to revise the assessment order in terms of sec.263 is also illegal and void ab initio and liable to be quashed because an illegal order cannot be legalised by exercising revisionary power u/sec.263 of the Act. Therefore, we are of the considered view that, the order passed by the PCIT u/sec.263 of the Act is not sustainable in law. Thus, we quash the order passed by the PCIT u/sec.263 of the Income Tax Act, 1961. Decided in favour of assessee.

  ---

• 2025 (4) TMI 598
  Restricting claim of leave encashment u/s 10(10AA) - assessee being retired employee of State Govt. of Rajasthan - Assessee argued that the limit of leave encashment which has been enhanced by CBDT should be given benefit to the assessee - CIT(A) has dismissed the appeal of the assessee merely on the grounds that the assessee has not filed form No. 16 and thereby he could not verify the claim of the assessee u/s 10(10AA) HELD THAT:- Records reveals in the order under challenged passed by the AO CPC that CPC was having information that the assessee has claimed Rs. 20,29,482/- as per provision of section 10(10AA) of the Act. Thus, contention of the ld. CIT(A) has no leg to stand. Now coming to the issue as to allowability of the claim between Rs. 3 or to Rs. 20,29,482/- as claimed by the assessee, the bench noted that the limit of leave encashment to be claimed by the assessee was revised to Rs. 25,00,000/- as specified vide notification No. 31/2023/F. NO. 200/3/2023-ITA-1 dated 24th May, 2023. Therefore, the assessee is eligible to claim Rs. 20,29,482/- as deduction which was restricted to Rs. 3 lac as the limit was revised on 24th May 2023. On being consistent with that finding we direct the Id. AO to allow the claim to the extent of the revised limit as per the circular as referred herein above. Based on that observation ground no. 1 to 3 are allowed.

  ---

• 2025 (4) TMI 597
  Revision u/s 263 - As per CIT AO while completing the assessment, has not considered the prior period expenses debited to the Profit and Loss Account and liosoning charges while computing the closing work-in-progress for the year under consideration and no justification for the allowability of these expenses to be added to the work-in-progress has been called by the AO for which work-in-progress is shown at higher figure - HELD THAT:- A perusal of the details furnished by the assessee in the paper book shows that he has filed various details substantiating the work-in-progress and the PCIT has neither gone through those details nor made any minimal enquiry and has simply set aside the order passed by the AO. Further, by showing the work-in-progress at a higher figure, the assessee has shown more profit and paid more taxes meaning thereby there is no loss to the Revenue. Therefore, we find merit in the arguments of assessee that although the order may be erroneous but it is definitely not prejudicial to the interest of Revenue. It is the settled proposition of law that for invoking the jurisdiction u/s 263 of the Act, the twin conditions namely, the order is erroneous and the order is prejudicial to the interests of Revenue must be satisfied. In the instant case, although the order may be erroneous because of non-verification on the part of the AO of work-in-progress, however, the order is not prejudicial to the interest of Revenue because by showing higher WIP the assessee has shown more profit and paid more taxes. Therefore, the twin conditions are not satisfied as laid down in the case of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ] Appeal filed by the assessee is allowed.

  ---

• 2025 (4) TMI 596
  Penalty u/s 271(1)(c) - non specification of clear charge - addition confirmed was in the nature of estimated income - HELD THAT:- Whether the penalty proceedings initiated u/s 271(1)(c) of the Act is correct or not in the instant case is a pure question of law as it does not involve any investigation or inquiry with regard to any fact. The question of law clearly arises from the facts as found by the authorities below and it has bearing on liability of the assessee. Penalty is in addition to tax liability of the assessee. It entails serious civil consequences to the assessee too. We conquer with the contention of Ld. AR that it is incumbent upon the revenue to state expressly in the notice(s) supra the material ingredients of Section 271(1)(c) of the Act. The authorities must specify as to whether the case is one of concealment of particulars of income or furnishing inaccurate particulars of income. In the instant case nothing is spelt out by the Revenue, save and except bare Section 271(1)(c) of the Act which perse is not sufficient compliance of law. While issuing notice(s) for penal proceeding authorities must be clear in their mind at the time of issue itself as to whether charge of concealment of particulars of income would hold or whether the charge of furnishing inaccurate particulars of income would hold. Failure to mention either of these charges within the meaning of Section 271(1)(c) of the Act would vitiate the entire penal proceedings against the assessee. See Kulwant Singh Bhatia [ 2018 (5) TMI 960 - MADHYA PRADESH HIGH COURT ] Decided in favour of assessee.

  ---

• 2025 (4) TMI 595
  Reopening of assessment u/s 147 - assessment has been reopened beyond 4 years - income chargeable to tax had escaped assessment on account of under assessment of interest received from its Mexican subsidiaries and also incorrect computation of book profit u/s 115JB by making adjustment towards unrealized forex loss / gain and provision created for loss on inventory - HELD THAT:- Arguments of the assessee that there is true and full disclosure of necessary facts in respect of interest income received from Mexican subsidiary is devoid of merit and cannot be accepted, because the assessee has never furnished any details with regard to interest income either in its financial statements, by way of notes to accounts and the accounting policies followed for accounting interest income from Mexican subsidiary, in light of financial year followed by the assessee and calendar year followed by the Mexican subsidiary, nor has explained this difference to the AO during the course of assessment proceedings. Therefore, in our considered view, there is no true and full disclosure of necessary facts in respect of interest income either in the financial statement or during the course of assessment proceedings. Although the assessee claims that it has furnished relevant financial statements and books of accounts, in our considered view, mere production of books of accounts and other evidence from which material evidence could with due diligence has been discovered by the AO will not necessarily amount to disclosure within the meaning of the proviso to section 147. Therefore there is no merit in the argument of the assessee on the issue of reopening of assessment in respect of interest income received from Mexican subsidiary. Computation of book profit u/s 115JB(2) - Although the assessee claims that it follows lower of cost or net realizable value, but has made provision and the same has been debited under the head material consumed and from the above, it is evident that the assessee has made separate provision for inventories on the basis of its own assessment of inventory, but the said method followed by the assessee is not in accordance with the accounting standard issued by the Institute of Chartered Accountants of India for valuation of inventory. Since the assessee has reduced the value of inventory, it is nothing but a diminution in the value of asset and the same falls under Explanation 1 to section 115JB of the Act and thus, the same needs to be added back to the profit computed for the year under consideration. Therefore, we are of the considered view that there is clear escapement of income on account of excess deduction towards loss of inventory in respect of obsolete stock and the same has not been properly explained by the assessee, either in the notes to account in the financial statement or during the course of assessment proceedings and in our considered view, there is valid ground for the AO to reopen the assessment u/s 147 of the Act. Interest received from Mexican subsidiary - assessee submitted that the CIT(A) erred in sustaining interest income, even though the assessee has explained the reasons for difference in interest income offered to tax - HELD THAT:- There is no dispute with regard to the fact that the assessee has received interest of Rs. 10,06,93,540/-, whereas offered interest income of Rs. 9,72,31,723/-. The difference of Rs. 35,89,671/- could not be reconciled with relevant evidences, except stating that due to difference in financial year followed by the assessee and the subsidiaries, there is difference in interest income as reported by the subsidiaries. In our considered view, whether the assessee follows financial year or calendar year, but need to reconcile interest income with books of accounts of the assessee and interest income claimed to have been paid by the subsidiaries. Since the assessee failed to reconcile, in our considered view, Ld.CIT(A) rightly sustained the additions. Re-computation of book profit u/s 115JB by making addition towards provision for loss of inventory - Assessee could not explain as to how the amount has been debited under the head loss on inventory into material consumed account. Therefore, going by the arguments of the assessee in light of the method of accounting followed for valuation of inventory, in our considered view, there is no merit in the claim of the assessee towards accounting policy and treatment given for reduction in value of assets, therefore, to this extent we cannot appreciate the reasons given by the assessee. Whether the provision for loss on inventory is an item which needs to be added back to the book profit in terms of section 115JB(2) and Explanation 1 of the Act? - As per section 115JB(2), Explanation 1, Clause (i), any amount or amounts as the provision for diminution in the value of any asset should be added back to book profit. In the present case, the assessee has set apart a provision for loss of inventory and therefore, in our considered view, the said provision comes under Explanation 1, clause (i) of Section 115JB(2) of the Act under the head any amount or amounts set aside as provision for diminution in value of asset. Since the inventory is an asset, any reduction in value of asset should be added back to book profit computed in terms of section 115JB(2) of the Act. Therefore, we are of the considered view that there is no error in the reasons given by the AO and the Ld.CIT(A) to recompute the book profit, by making addition towards diminution in value of asset being loss on inventory. there is no error in the reasoning given by the AO and the CIT(A) to recompute book profit by making adjustment towards provision for loss on inventory in terms of Explanation 1 to section 115JB(2) Assessee appeal dismissed.

  ---

• 2025 (4) TMI 594
  Unexplained money u/s 69A - additions on the basis of an image found from the smart phone of person working as personal assistant /Shri Ahish Chhangani - AR submitted that the presumption u/s 292C/ 132(4A) of the Act may be invoked in the hands of Shri Ashish Chhangani only and not against the assessee HELD THAT:- It is well settled proposition of law that abstract documents, which could not be corroborated with any other credible evidences, should be considered as dumb documents only. In that case, the AO could not have made addition on the basis of dumb documents For invoking the provisions of sec.69A of the Act, it is required to be shown that the above said assets were physically available and further, the assessee was found to be the owner thereof. In the instant case, no physical money was found either with the assessee or with any other person and hence the question of the assessee, being owner of the same does not arise. Hence, the provisions of sec.69A are not applicable to the facts of the present case. We have held that the AO was not justified in relying upon whatsapp image taken from the phone of Shri Ashish Chhangani for making the addition. Hence we confirm the relief granted by Ld CIT(A) on the above said reasoning. Even otherwise, as rightly held by Ld CIT(A), the sources of alleged disbursements would stand explained from the same document and hence no addition is warranted. Accordingly, this ground of revenue is rejected. Unexplained expenditure u/s 69C - We notice that the document containing the details of alleged cash expenses was found in the smart phone of Shri Ashish Chhangani. It is stated that the said document did not contain the name of the assessee. Further, the assessee has disowned the document and also did not accept the statement given by Shri Ashish Chhangani. We noticed earlier that Shri Ashish chhangani has also retracted his statement. Hence, the said image cannot be considered as a credible evidence that could be related to the assessee. In our view, it should be considered as a dumb document only. It is a fact that the AO has not brought any corroborating material to support the image found in the smart phone of above said employee. Accordingly, we are of the view that the AO could not have made addition Unaccounted bonus payment - During the course of search operation, certain papers were found in the drawer of Ms. Manjusha Bhagwat Patil, who was an HR employee who explained that those papers represent bonus payments made to the employees in cash by the Account section - According to the assessee, the bonus disbursements are made from Accounts department and not by her, hence her statement should not be relied upon - HELD THAT:- AO did not conduct any enquiry with any of the employees in order to find out the veracity of explanation given by the assessee. Hence, the AO could not have made the addition on the basis of retracted statements and also without conducting any enquiry with the employees whose names were found in the document. AO has failed to discharge its burden and to bring on record the cogent, convincing and relevant documentary evidences to make addition u/s 69C. See M/S RUCHA PROMOTERS AND DEVELOPERS PVT LTD. [ 2025 (2) TMI 1166 - ITAT MUMBAI] Addition u/s 69A - addition has been made by the AO on the basis of a dumb document - HELD THAT:- AO should have conducted further enquiries in order to find out the truth, which he has failed to do. It is also stated that the statement given by the above said person has been retracted. Hence, we are of the view that the impugned addition has been made by the AO on the basis of a dumb document, which remained uncorroborated. In the earlier paragraphs, while adjudicating the issue no.1 urged by the assessee, we have held that the provisions of sec.69A could be invoked only if money is physically found in the hands of the assessee, which is not the case. Accordingly, we are of the view that the impugned additions made u/s 69A of the Act and made u/s 69C of the Act are liable to be deleted. Addition has been made on the basis of a third party statement - HELD THAT:- AO could not have made any addition on the basis of third party statement which is not corroborated, and not confronted with the assessee. We notice that the Ld CIT(A) has relied upon various case laws in support of the decision reached by him. Before us, no contrary decision was placed reliance by the revenue. We noticed earlier that the assessing officer has made the addition u/s 69A of the Act, but the assessee was not found to be the owner of any cash. Accordingly, we are of the view that the Ld CIT(A) was justified in deleting the addition. Addition on the basis of whatsapp chat and also on the basis of statement given by Shri Shailendra Rathi - provisions of sec.69A could be invoked only if money is physically found in the hands of the assessee, which is not the case. The Ld A.R further submitted that the AO had also made the addition in the hands of Shri Prashant Prakash Nilawar on the basis of whatsapp chat found in the phone of Shri Shailendra Rathi. The said addition has been deleted by the Tribunal, vide its order passed in the hands of Shri Prashant Prakash Nilawar [ 2025 (2) TMI 1167 - ITAT MUMBAI] - CIT(A) was justified in deleting the addition. Appeal of the Revenue is dismissed.

  ---

• 2025 (4) TMI 593
  Not entertaining / adjudicating the additional ground by CIT(A) - HELD THAT:- We are of the view that assessee can take additional ground if it is legal in question and all the relevant material is available before the authorities for adjudicating the same. Hon ble Supreme Court in the case of NTPC Co Ltd. [ 1996 (12) TMI 7 - SUPREME COURT] , M/S. PRUTHVI BROKERS SHAREHOLDERS PVT. LTD. [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] categorically held that assessee can raise a fresh claim before the appellate authorities for the first time even without filing a revised return. CIT(A) should have entertained and adjudicated the additional grounds raised by the assessee which is legal in nature and all the required documents for adjudicating the same were already available before him. Thus, we admit the additional ground raised by the assessee before Ld. CIT(A) and while setting aside the impugned order, restore the matter back to the file of Ld. CIT(A), with the directions to adjudicate the same on merits.

  ---

• 2025 (4) TMI 592
  Rejecting the applications filed seeking permanent registration u/s. 12AB and Section 80G - as per CIT(E) objects of the assessee leave room for any future potential endeavour that may result in incurring expenditure outside India, which is in violation of sec.11 of the Income tax Act AND activities claimed to have been done are not justified by the expenses incurred by the assessee. HELD THAT:- CIT(E) has to ensure that the charitable trust or institution has complied with the requirement of any other law for the time being in force , as are material for the purpose of achieving its objects. Here, it is pertinent to note that the verification by CIT(E) should be restricted to compliance of those laws as are material for the purpose of achieving its objects. As noticed that clauses (a),(c),(d) and (e) would be attracted only when there is application of income as mentioned in those clauses. Hence actual application of income is the condition to be satisfied for attracting the above said four clauses. In our view, the provisions of sec.11(1) would not fall under the category of any other law , since it is only a computation provision. The provisions of sec.11(1) do not require the charitable trust or institution to comply with any requirements, which are essential to achieve the objects of the trust. Further provisions of sec.11(1) do not state that the application of income derived from property held under trust for activities carried outside India results in violation of any law. Sec.11 only states that the exemption under that section is restricted to income applied for charitable purposes in India, i.e., it does not permit exemption of income applied outside India. Hence income, if any, applied for objects outside India cannot be construed to be violation of any other law falling within the meaning of clause (f) of Explanation to sec.12AB(4) of the Act. The foregoing discussions would show that the application of income of a charitable trust or institution outside India for carrying out its objects will not fall under any of the categories of specified violation as mentioned in the Explanation to sec.12AB(4) of the Act. Hence, the decision rendered in the case of M.K. Nambyar Saarf Law Charitable Trust [ 2004 (5) TMI 51 - DELHI HIGH COURT] will apply to the provisions of sec.12AB of the Act also, since the provisions of sec.12AB also do not refer to the activities carried in India or outside India. It can be concluded that existence of any object for carrying out any activity outside India will not enable the CIT(E) to deny registration u/s 12AB of the Act. As observed earlier, such kind of application of income outside India (unless it is permitted by the CBDT) will not be exempted u/s 11 of the Act. Hence, the first reasoning given by Ld CIT(E) is liable to be quashed. Second reasoning given by the assessee is that the expenses incurred by the assessee do not prove the activities carried on by it. In this regard, the Ld A.R submitted that the assessee has filed required documents before Ld CIT(E). He further submitted that the assessee has also furnished additional evidences relating to the activities carried on by the assessee. Accordingly, he prayed that these additional evidences may be admitted and the assessee may be provided with an opportunity to present all the details before Ld CIT(E) to prove the activities carried on by it. We find merit in the prayer of the assessee. We notice that the observations made by Ld CIT(E) with regard to activities is general in nature, i.e., the Ld CIT(E) did not state the deficiencies noticed by him in the documents furnished by the assessee. Further, the assessee has furnished additional evidences in order to satisfy Ld CIT(E) with regard to the genuineness of activities. Accordingly, in the interest of natural justice, we admit the additional evidences furnished by the assessee. Accordingly, we set aside the impugned order passed by Ld CIT(E) rejecting the application filed by the assessee seeking permanent registration u/s 12AB of the Act and recognition u/s 80G and restore all the issues to his file with the direction to process the application of the assessee again afresh in the light of discussions made supra.

  ---

• 2025 (4) TMI 591
  Penalty u/s. 271B - non-compliance in respect of two notices issued - HELD THAT:- The factum of service of notice on the assessee electronically on her email ID couldn t be rebutted by the ld AR. At the same time, it is a settled legal proposition that for the same default, the penalty cannot be levied twice and reference can be drawn to the decision of Rekha Rani[ 2015 (5) TMI 1100 - ITAT DELHI] . In light of aforesaid, we deem it appropriate to restrict the levy of penalty to Rs 10,000/- and the balance penalty is hereby deleted. Appeal of the assessee is partly allowed.

  ---

• 2025 (4) TMI 590
  Levying penalty u/s 270A(9)(a) - under reporting of income inconsequence of misrepresentation of facts - HELD THAT:- Penalty levied @ 200% on the suppressed tax by the Ld. AO under section 270A of the Act is deleted as CIT(A) has deleted part of the penalty relating to section 80C of the Act and thus there is no misreporting/under reporting on both the additions made by the Ld. AO. The appellant is a salaried employee and there is a bonafide mistake on his part as he relied on the advice of his tax representative who filed a revised return based on the figures appearing on Income Tax Portal of TDS Traces. Taking a lenient view that (i) it is a bonafide mistake (ii) as he relied on the figures of Income Tax TDS Portal, (iii) followed the advice of tax representative (iv) payment of full taxes was done, the penalty levied by the Ld. AO is deleted. Decided in favour of assessee.

  ---

• 2025 (4) TMI 589
  Levy of penalty u/s. 271(1)(c) - treatment of income under two different PANs - Assessee claimed loss on account of mutuality, which was set off against the rental and interest income - HELD THAT:- It is a fact on record that there were two PANs which were allotted to the assessee. The one which is referred as old PAN, was allotted with the status of Firm which was surrendered for cancellation, by making an application as early as on 24.07.2012. Thereafter, assessee had filed its return against the new PAN with the status AOP . Assessee admitted in its explanation furnished in response to notice for levying penalty on account of concealment of particulars of income that it had inadvertently claimed loss on account of mutuality, which was set off against the rental and interest income, the same was corrected while filing the return in response to the notice u/s. 148. Assessee also included interest relating to time deposit in its return filed in response to the notice u/s. 148. It is also undisputed fact that the assessment u/s. 143(3) r.w.s. 147 was completed by ld. Assessing Officer, accepting the returned income, there being no addition or disallowance. Penalty proceedings were initiated on the income components, which were reported by the assessee in the return filed in response to notice u/s. 148, vis- -vis which were not included in the original return, u/s. 139. Thus, we find that assessee has duly complied with Explanation 1 to Section 271(1) by offering all the possible explanations substantiating it by documentary evidences to establish that there is no concealment of particulars of income on its part. Having satisfied by the submissions made by the assessee in the course of re-assessment proceedings, AO has accepted the income returned by the assessee as such. There is no concealment of particulars of income on the part of the assessee. We accordingly, delete the penalty so imposed by ld. Assessing Officer. Ground raised by the assessee is allowed.

  ---

• 2025 (4) TMI 588
  Denial of indexation from the year 2010 - HELD THAT:- There are various decisions of this Tribunal that took view that, the benefit of indexation is to be allowed from the date of allotment and on the basis of payment made to builders/ societies/ other institutions during the different financial years towards cost of acquisition of asset. In the present facts of the case, the assessee was issued allotment letter on 3/12/2010 relevant to financial year 2010-11. It is noted that the assessee made full payment during the assessment year 2014-15, and the document was registered in favor of the assessee. Subsequently, the said property was sold during the assessment year 2015-16. Since the date of acquisition of the property is to be reckoned from date of allotment letter, benefit of indexed cost of acquisition should be available to assessee based on payments made beginning from financial year 2010-11. Accordingly Groungno.2 raised by the assessee stands allowed. Denial of brought forward Long term capital loss to be set off against long term capital gains earned by the assessee from sale of property - HELD THAT:- The loss were not allowed to be set off merely because the Ld.AO was of the opinion that, STT was not paid on these shares and that, they were to be considered under section 10(38) of the Act. As submitted by the assessee that, the assessee filed all relevant documents before the authorities below, however the same was not considered. AR also submitted that, application under section 154 on this issue is still pending against the assessment order. It is further noted that, in the past assessment years, AO did not deny the benefit on the basis that the claim is incorrect. No reason to deny the claim of the assessee Decided in favour of assessee.

  ---

• 2025 (4) TMI 587
  Revision u/s 263 - TP adjustment on account of interest paid by the assessee on CCDs issued to AE - HELD THAT:- On perusal of the of the order of the ld PCIT, we find that he has merely reproduced the various show cause notices issued by him and the replies filed by the assessee and his finding starts only by merely stating that the comparables chosen by the ld TPO for benchmarking the rate of interest of CCDs to AEs are to be rejected. This observation of the ld PCIT has got absolutely no basis. PCIT does not even state as to why and how the order of ld TPO is erroneous. Tribunal in assessee s own case. [ 2024 (9) TMI 1721 - ITAT DELHI] had categorically held that no domestic transfer pricing adjustment is permissible in view of the decision of Texport Overseas Pvt. Ltd. [ 2019 (12) TMI 1312 - KARNATAKA HIGH COURT] wherein, it was held that once the Section 92BA(i) of the Act is omitted w.e.f. 01.04.2017 from the statute, the resultant effect would be that it had never been passed to be considered as a law and never been existed in the statute. Hence, the Tribunal order had categorically held that no transfer pricing adjustment per se in respect of domestic transaction could be made. This fact was duly brought to the notice of the ld PCIT and despite that he has proceeded to treat the order of the ld TPO/ AO as erroneous (without stating as to why it is erroneous) and prejudicial to the interest of the revenue for calculating ALP of interest rate of selecting different robust and correct comparables. This action of the ld PCIT is clearly condemnable and not to be appreciated in the eyes of law. Assessee has received certain security premium which was not investigated by the ld AO thereby making his order erroneous and prejudicial to the interest of the revenue - PCIT had also directed to the ld AO to consider the provisions of section 94B of the Act while addressing the said issue - The equity shares have been issued by the assessee only to its joint venture partners at a premium of Rs. 130 and no external or 3rd party is involved thereon. The initial allotment of shares was done at the same premium in AY 2016-17 which was accepted by the revenue. Hence, there is absolutely no reason for the ld AO to even doubt the genuineness, creditworthiness of the investors with regard to issue of shares at premium during the year under consideration. Hence, his order cannot be treated as erroneous much less prejudicial to the interest of the revenue. Further adequate enquiries were indeed made by the ld AO. Hence, this is not a fit case for assumption of revision jurisdiction u/s 263 of the Act on the impugned issue and hence, the assumption of jurisdiction is hereby quashed on this issue. Assessee had disclosed inventories whereas no revenue has been disclosed - PCIT had merely made a general and vague observation by directing the ld AO to examine the issue in order to make fishing and roving enquiry which is not legally permitted while assuming revision jurisdiction u/s 263 - recognition of revenue under POCM even if deferred by the assessee (though factually that is not the case of the assessee herein), still there would be no loss of tax to the exchequer as ultimately the same would only result in revenue neutral mechanism as it is only timing difference of recognition of revenue. Hence, it cannot be said that the order passed by the ld AO would be prejudicial to the interest of the revenue. Reliance in this regard is placed on the decision of Excel Industries Ltd. [ 2013 (10) TMI 324 - SUPREME COURT] Hence, direction of the ld PCIT, being vague and mechanical and the impact not being prejudicial to the interest of the revenue, become fatal to the assumption of revision jurisdiction u/s 263 of the Act qua the issue of recognition of revenue under the POCM. Hence, the action of the ld PCIT in this regard is hereby quashed. PCIT has assumed revision jurisdiction is only by directing the ld AO to examine the complete details of the borrowing cost, including its purpose and utilization for the project - As the borrowing cost incurred by the assessee arises out of fund raised by the assessee from its joint venture partners vide issuance of CCDs and OCDs. The fact of interest paid by CCDs and OCDs was subject matter of detailed examination by the ld TPO and a sum of Rs. 63.95 crores was even proposed as a transfer pricing adjustment by the ld TPO. Hence, this is not a case where no enquiry has been made by the lower authorities. Further, it is relevant to note that the borrowing cost has been capitalized by the assessee under inventories and the ld AO had already examined the entire inventories in the earlier ground. Hence, it could be safely concluded that the ld PCIT had merely given a vague and general direction without any legal basis and without pointing out any error in the order of assessment of the ld AO. Hence, revision jurisdiction u/s 263 of the Act is hereby quashed qua this issue. CIT giving direction to the ld AO to examine the genuineness of the financial liability and examine the details of foreign equity, valuation of the assessee company and selling of equity to non residents and taxability of the same as per the Act - This interest accrued but not due is in respect of CCDs and OCDs issued to joint venture partners which had already been examined by the ld AO and ld TPO in the original assessment proceedings wherein, they were convinced that it merely represent unpaid portion of borrowing cost. It is pertinent to note that the said item has been duly subjected to deduction of tax at source also. These facts were duly brought to the notice of the ld PCIT vide reply dated 15.03.2024 in response to show case notice u/s 263 of the Act which was completely ignored by the ld PCIT for reasons best known to him with a preconceived notion in order to reach pre meditated destination. Hence, assumption of revision jurisdiction u/s 263 of the Act by the ld PCIT is not permissible and deserves to be quashed on this issue. Similar was the direction given by the ld PCIT to the ld AO to examine details of foreign equity valuation of the company and selling of flats to non residents etc. In this regard, the assessee only issued equity shares to its non resident joint venture partners which has already been duly examined by the ld AO. Hence, assumption of revision jurisdiction u/s 263 of the Act by the ld PCIT is not permissible and deserves to be quashed on this issue. PCIT giving direction to the AO to investigate the transaction of purchase of rights in land parcel from M/s. DLF Home Developers Ltd - This is also a vague direction without narrating the facts of the case and only to enable the AO to make fishing and roving enquiries on the subject mentioned issue. The transaction of purchase of rights in land parcel pertain to AY 2016-17 and is already disclosed in the balance sheet. Even this primary basic fact was not looked into by the ld PCIT or sought to be understood from the reply given by the assessee. Either way, it does not pertain to the year under consideration. Further in AY 2016-17, the ld TPO/ AO made upward TP adjustment in respect of the issue of purchase of rights in land parcel which was deleted by this Tribunal [ 2024 (9) TMI 1721 - ITAT DELHI] Hence, the assumption of revision jurisdiction u/s 263 of the Act was purely mechanical with vague direction. Thus we have no hesitation to conclude that the very assumption of revision jurisdiction u/s 263 of the Act of the ld PCIT is completely flawed and deserves to be quashed and void ab initio - Decided in favour of assessee.

  ---

• 2025 (4) TMI 586
  Denial of deduction u/s 80G - donations/contributions made towards its corporate social responsibility especially when the assessee company suo-motto disallowed the claim of expenditure U/s 37 of the Act. HELD THAT:- The existing approval u/s 80G(5)(vi) of the Act expiring on or after 1st October, 2009 shall be deemed to have been extended in perpetuity unless specifically withdrawn. Any new approval obtained u/s 80G(5) of the Act on or after 1.10.2009 would be a one time approval, which would be valid till it is withdrawn. Therefore, in view of the circular No.7/2010 dated 27.10.2010, we are of the opinion that this ground of the ld. CIT(A)/NFAC is not tenable. Section 37(1) of the Act pertains solely to the computation of income from business or profession and its scope is confined to allowing or disallowing expenditure incurred for business purposes. On the other hand, section 80G provides deduction for donation made to specified funds and institutions while computing the taxable income of the assessee. Disallowance of CSR expenditure under explanation 2 to section 37(1) of the Act applies only in the context of determining its income from business and does not preclude an assessee from claiming deduction under Chapter VIA (which includes section 80G) for eligible donation. While CSR expenditure is mandatory u/s 135 of the Companies Act, 2013, the assessee retains discretion over the recipients of such contributions. When such contributions are made to approved institutions or fund u/s 80G of the Act, they qualify as donation for the purpose of that section, even if incurred under a statutory obligation . The term donation u/s 80G of the Act includes both voluntary contributions and mandatory payments made to specified entities. The mandatory nature of CSR expenditure does not dilute its eligibility for deduction u/s 80G of the Act, as the deduction depends on the nature of recipient and compliance of the conditions specified u/s 80G of the Act. We hereby set aside the orders of ld. AO and direct him to delete the addition made in both these assessment years. Hence, the grounds of appeal of the assessee

  ---

• 2025 (4) TMI 585
  Validity of reopening of assessment - jurisdictional requirements of Sections 147 to 151 - whether approval obtained from the appropriate authority? - whether the Principal Commissioner of Income Tax or the Principal Chief Commissioner of Income Tax was the Specified Authority for seeking approval for passing order u/s 148A(d) of the Act and issuance of notice under Section 148 - HELD THAT:- In the present case the period of 3 years from the end of the Assessment Year 2017-2018 fell for completion on 31st March 2021. The expiry date fell during the time period of 20th March 2020 and 31st March 2021, contemplated under Section 3(1) of TOLA. Resultantly, the authority specified under Section 151(i) of the new regime could have granted sanction till 30th June 2021. On perusal of the order passed u/s 148A(d) of the Act we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax. Since the aforesaid order was passed after the expiry of 3 years from the end of the Assessment Year 2017- 2018, as per the new regime, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to grant approval. We note that even the notice, dated 30/07/2022, was issued under Section 148 of the Act (new regime) after obtaining the prior approval of the Principal Commissioner of Income Tax. Accordingly, we conclude that in the present case the approval has been obtained by authority specified u/s 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime. \The non-compliance by the AO with the provisions contained in Section 148A(d) read with Section 151(ii) of the new regime affects the jurisdiction of the AO to issue a notice under Section 148 of the Act. Accordingly, the order, dated 30/07/2022 passed under Section 148A(d) of the Act, the consequential reassessment proceedings and the order, dated 25/05/2023, passed under Section 147 read with Section 144B of the Act are quashed as bad in law being violative of the provisions contained in Section 148A(d), Section 148 and Section 151(ii) of the Act. Decided in favour of assessee.

  ---

• 2025 (4) TMI 584
  Addition u/s.69A - treating the cash deposits as unexplained money - HELD THAT:- As we find that assessee has submitted all the possible evidences to substantiate its cash deposit in the bank account. However, we find that assessee has not been able to prove all its personal expenditure and drawings, which was utilized by the assessee, out of cash withdrawals from bank and balance was re-deposited by him in the bank account. That is, a reconciliation was not submitted by the assessee to that effect. We therefore take into account all these peculiar facts to restrict the impugned disallowance @ 5% of Rs. 17,98,000/-, which comes to Rs. 89,900/-. Since the assessee has deposited the cash in the bank account out of recognized sources, therefore, he is not liable to pay tax under section 115BBE of the Act, hence, we direct the assessing officer to tax Rs. 89,900/-, by applying the normal rate of income tax. Instant adjudication shall not be treated as a precedent in any preceding or succeeding assessment year. AO is accordingly, directed to recompute the impugned disallowance @ 5% afresh, as noted by us above. Appeal filed by the assessee is partly allowed

  ---

• 2025 (4) TMI 583
  Treatment to the surrendered income on account of sundry debtors and excess cash found - income undisclosed or unexplained investment or money u/s 69 69A in place of business income - Whether the same is to be charged to tax at normal rate or the rate as prescribed u/s. 115BBE? - HELD THAT:- The assessment proceedings were concluded accepting the return of income but while doing so ld. AO considered that income disclosed on account of debtors recorded in the diary as income chargeable to tax as per provision of section 69 of the Act and charged tax in accordance with the provisions of section 115BBE of the Act. The bench noted in the survey proceeding neither the question as to source or the details of the debtors were asked, the assessee on being questioned offered the income for the current year and the same has been accepted and not question was raised about the year of earning that income and thereby the accounted as debtors of the assessee. Since that finding is missing from the time of survey till the completion of the assessment proceeding. Without bringing anything contrary ld. AO could not charge that income chargeable to tax as per provision of section 69 of the Act. As decided in Silver Wings Life Spaces [ 2024 (7) TMI 1620 - ITAT JAIPUR] amounts surrendered by the assessee at the time of survey could not be subjected to tax under the deeming provisions of section 69 69A of the Act. When the source and nature of income had already been considered and accepted, the subject amounts were required to be subjected to tax at normal rate. Decided in favour of assessee.

  ---

• 2025 (4) TMI 582
  Addition made on account of excess value transferred to beneficiary within the meaning of provision of Section 56(2)(vii) (c)(ii) - excess value transferred to beneficiary related parties was added to the returned income of the assessee- public limited company, on a protective addition by the assessing officer while passing the assessment order. HELD THAT:- Provision of section 56(2)(vii)(c)(ii) does not apply in the case of Public limited company, it is only applicable to individual and HUF- assessees. New shares allotment by amalgamated company does not give rise to a transfer of shares and hence also section 56(2)(vii) (c) has no application and proviso (h) excludes the transfer from rigor of deeming provision. In case of shares issued under amalgamation, there are no two parties to a transfer of a property. There are tripartite arrangements between amalgamated company, amalgamating company and shareholder of the amalgamating company. Transfer of shares in a scheme of amalgamation is not considered as transfer u/s 47 (vii) of the Act. If it is not transferred, then the application of section 56(2) is not applicable. There is no anti- abuse of provision and the new share is allotted as per the Amalgamation scheme under the supervision of the High Court after hearing of all stake holders including the Government. The Scheme of amalgamation under which an exchange ratio of shares is approved by the high court, and it is conclusive. So, question of skewed swap ratio or issuing shares at discounted rate does not arise. Based on the above factual position and position in Law, the conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A). Appeal filed by the revenue is dismissed.

  ---

• 2025 (4) TMI 581
  Legality of addition made in the intimation u/s 143(1) - delayed payment of Employees Contribution of PF/ESIC Fund as per the actual date of payments made - HELD THAT:- The assessee found mistakes in the Tax Audit Report due to typographic and feeding error by the Tax Auditor in Form no.3CD, due to details of actual date of payment and due date of payment being furnished incorrectly in the column. Consequently, a revised Tax Audit Report dated 04/01/2020 was issued and uploaded by the Tax Auditor. On the application for rectification by which the assessee furnished revised Tax Audit Report correcting the mistake due to typographical error in the original Form no.3CD, and also re processed the return of income rectifying the mistake, the ADIT, CPC, accepted the application of rectification and the rectification order under section 154 was passed on 04/02/2020 and in the aforementioned rectified intimation, the addition was restricted details of which are available in the rectified intimation order. Thus, for the purpose of present appeal, the amount finally disallowed shall be Rs. 9,88,728, in view of the discussions made hereafter about the legal grounds raised by the assessee. Addition made on account of belated payment of employees contribution to PF and ESIC is now covered by the decision of Supreme Court in Checkmate Services (P.) Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] Accordingly, following the judgement of Supreme Court, the ground of the assessee s appeal stands dismissed. Interest charged under section 234C - As provisions of section 234C which provides that where in any financial year the assessee liable to pay Advance Tax under section 208 has failed to pay such tax or is less than the percentage prescribed in every quarter mentioned in the Clause (i) of section 234C of the tax due on the returned income than the assessee shall be liable to pay simple interest @1% per month as per mechanics provided therein on the tax due on returned income. Thus, the interest under section 234C is required to be determined considering the tax due as per returned income. Accordingly, the Assessing Officer is directed to determine the interest under section 234C on the basis of tax due on returned income.

  ---

• 2025 (4) TMI 580
  Denial of the Foreign Tax Credit (FTC) u/s 90 - Form 67 was belatedly filed - HELD THAT:- As decided in Anindya Sarkar [ 2024 (7) TMI 1564 - ITAT KOLKATA] since the provision of DTAA override the provision of Section 90 of the Act as they are more beneficial to the assessee, in view of judicial pronouncements in this regard and since Rule 128(a) does not preclude the assessee from the claiming credit for FTC in case of delay in filing the return of income as the credit for FTC is a vested right of the assessee and since form 67 was filed in response to the query received from CPC as contended by the assessee, therefore, there was no justification for not allowing the credit for FTC. Appellant deserves the credit for taxes paid in Nepal since the provisions of DTAA (in this case DTAA with Nepal) have an overriding effect over other provisions of the Act. Accordingly, the claim of the appellant is directed to be allowed.

  ---

• Customs

• 2025 (4) TMI 579
  Condonation of gross delay of 544 days in filing and 44 days in refiling the appeals - delay not satisfactorily explained - Classification of imported goods - it was held by SC order that There is a gross delay of 544 days in filing and 44 days in refiling the appeals which have not been satisfactorily explained. HELD THAT:- There are no merit in the review petition and the same is, accordingly, dismissed.

  ---

• 2025 (4) TMI 578
  Imposition of interest, penalty, and redemption fine on IGST under Section 3(7) of the Customs Tariff Act, 1975 in lieu of payment of IGST leviable under Section 3 (7) of the Customs Tariff Act, 1975 - pre-import condition was not met - HELD THAT:- Section 3 (12) of the Tariff Act, prior to its amendment, did not make applicable the provisions of the Customs Act relating to interest, offences and penalties to integrated tax chargeable under Section 3 (7) of the Tariff Act. This issue is no longer res integra. In Mahindra Mahindra Limited [ 2023 (8) TMI 135 - SC ORDER] , this Court was interpreting Sections 3 (6) and 3A (4) of the Tariff Act, which are pari materia to the unamended Section 3 (12) of the Tariff Act, held that no specific reference was made to interest and penalties in Sections 3 (6) and 3A (4) of the Tariff Act, which are substantive provisions and, therefore, imposing interest and penalty would be without the authority of law. In the present case, the levy of IGST is under Section 3 (7) of the Tariff Act, and Section 3 (12) of the Tariff Act which is applicable to the said levy is pari materia to Sections 3 (6) and 3A (4) of the Tariff Act as referred to in the case of Mahindra Mahindra Limited. In these circumstances, the said decision is squarely applicable to the facts of the present case. The impugned Order, to the extent that it levies interest and penalty, is without the authority of law and is liable to quashed and set aside. Redemption fine - HELD THAT:- Section 3 (12) of the Tariff Act, after its amendment by Finance (No. 2) Act, 2024, dated 16th August, 2024, makes applicable the provisions relating to interest, offences and penalties of the Customs Act to the Tariff Act. As already, Section 3 (12) of the Tariff Act, as amended, is applicable only after 16th August,2024 and is not applicable to the present case. Accordingly, in the present case, no confiscation could have been imposed. Further, the Joint Director General of Foreign Trade, by Trade Notice No. 7 of 2023-24 dated 8th July, 2023 clarified that all imports made under the Advance Authorization Scheme on or after 13th October, 2017 and upto and including 9th January, 2019, which could not meet the pre-import condition, may be regularized by making payments as prescribed in the Customs Circular No. 16/2023 Customs dated 7th June, 2023. For this reason also, no confiscation can be done nor any redemption fine can be imposed. Conclusion - i) It is declared that Circular No. 16 of 2023-Customs dated 7th June, 2023, to the extent that it purports to levy interest upon the IGST payment, is beyond the provisions of the Customs Tariff Act, 1975 and is bad in law. ii) The impugned Order dated 1st August, 2024, to the extent that it seeks to recover interest, confiscate goods, impose redemption fine and impose penalty, is quashed and set aside. iii) It is declared that the amendment to the provisions of Section 3 (12) of the Customs Tariff Act, 1975 by Finance (No. 2) Act, 2024 dated 16 th August, 2024 is prospective in nature and is applicable only from 16th August, 2024 onwards. Petition allowed.

  ---

• 2025 (4) TMI 577
  Classification of imported goods - Copper Rod Nominal Dia 8mm with ATSM B49 - to be classified under CTH 74071020 or under CTH 74081190? - rejection of the Certificate of Origin (COO) without verification - suppression of facts or not - extended period of limitation - HELD THAT:- The goods which were in the coil form contrary to the definition of bars and rods contained in Customs Tariff Act, 1985, which are supposed to be not in coils as culled out above in para 3.1 and 3.2, were still declared as bars and rods and not as a wire by the appellant. The statutory provisions being clear, no doubt, even from the literal interpretation, in the minds of anyone could be left that the same were not to be treated as bars and rods . We, therefore, find that the certificate of origin as submitted was incorrect as the HSN is allied in most countries and could not have been different in South Korea. Therefore, with such apparent mistake, benefit has been correctly denied by the department. This is supplemented by the assertion of the party too, when they state that CL in COO refers to coil.Tariff Heading 74081190 is appropriate heading as indicated by the department. Therefore, exemption under CEPA notification was correctly denied and BCD @ 5% was correctly demanded, in Show Cause Notice dated 19.06.2019. Extended period of limitation - HELD THAT:- In the certificate of origin-CL is mentioned in the description portion which refers to coil. The department terms the same as cryptic reference to the coil trying to use the same as an alibi, if there were caught. The intention is to be construed with overall facts and circumstances, while the description is not available in the Bills of Entry which is a most reliable document in the International imports, the same however, is available in the packing list and in an cryptic manner in the certificate of origin. It is not coming out from records, as to whether, these documents specially the packing list were submitted by the importer as part of the documents attached with Bills of Entry while seeking assessment by the party or not - the adjudicating authority/assessing authority is directed to verify this aspect and construe the limitation, accordingly. If, the description of the goods being in coils was sufficiently reflected in the documents like packing list and the same was provided in the system, then benefit on limitation which is beyond normal period can be permitted to the appellant. However, if the benefit on limitation is decided as not being available to the party, then extended period as well as penalty will sustain, accordingly. Conclusion - i) The classification of goods under CTH 74081190 is correct, the CEPA exemption denied. ii) The rejection of the COO without verification is upheld as the issue is misclassification, not origin. iii) The imposition of penalties under Sections 114A and 114AA is justified due to intentional mis-declaration. iv) The extended period for issuing the SCN is applicable due to suppression of facts. The appeal Is partly allowed by way of remand for verification of whether the packing list was submitted with the Bills of Entry to determine the applicability of the extended period.

  ---

• 2025 (4) TMI 576
  Revocation of Customs Broker License - forefeiture of security deposit - levy of penalty - mis-declaratin of quantity and value of the goods, in order to avail higher amount of drawback and other incidental export benefits - violation of provisions of Regulation 10(a), 10(d), and 10(n) of the CBLR, 2018. Violation of of Regulation 10(a) - HELD THAT:- The adjudicating authority has held that even though the appellant had procured the authorisation letters of the exporters, they were not obtained from the exporters directly by the appellant. It has been accepted by the Ld Counsel that the appellant did not meet the exporter but the documents were received through Sh. Ram Pratap, who was the appellant s friend, and acquainted with one of the exporters. Rule 10(a) does not cast any responsibility on the appellant CB to obtain the authorisation from the exporter directly. It only requires the appellant to have the authorisation from the firm/company etc, which was available with the appellant. Therefore, the violation of 10(a) cannot be upheld. Violation of of Regulation 10(d) - HELD THAT:- The appellant CB cannot be held responsible for the actions of the exporters. It is an admitted fact that the goods were found to be less in quantity as well as they were valued much higher than its cost. This was clearly an attempt by the exporters to defraud the Government by claiming higher drawback, but the actions were purely of the exporters. The department has not been able to lead any evidence of any active collusion by the appellant or any evidence of the appellant CB having advised the exporters or assisted them in then activity. Consequently, the conclusions reached by the adjudicating authority cannot be agreed upon. Violation of of Regulation 10(n) - HELD THAT:- There is no evidence that the appellant CB did not undertake verification of the KYC documents. It is noted that IEC and Aadhar/PAN card are issued by the Government departments. Therefore, any verification would be based on the copies of these documents submitted by the client/exporter, which can be verified independently online in the respective portals. The Department cannot expect the appellant/CB to be responsible to ensure the correctness of the actions of the Government Department which have issued these certificates. Consequently, verification of certificates as part of the obligation under Regulation 10(n) on the Customs Broker stands satisfied as long as it satisfies itself that the IEC and the Aadhar were issued by the concerned officers. Levy of penalty - HELD THAT:- Once the goods were seized by the Department, the said exporters did not come forward to claim the goods. It is a matter of concern is that when the goods were seized, no one came forward to claim the said goods, clearly evidencing the attempt of the exporters to defraud the government. This should have been a warning to the appellant CB that the export goods obviously did not belong to the exporters on paper. Though there is no collusion of the appellant CB in the attempt of the exporters to defraud the Government, the appellant CB plays a crucial role in international trade. The CB has an obligation as the appointed agent to transact Customs formalities and is responsible for their clients. Therefore, the appellant is liable for penalty. Conclusion - i) The revocation of CB license is set aside. ii) The forfeiture of security deposit is set aside. iii) The penalty of Rs 50,000/- imposed on the appellant is reduced to Rs 25, 000/-. Appeal allowed in part.

  ---

• 2025 (4) TMI 575
  Importer under the Customs Act, 1962 or not - levy of penalty on the basis of evidence available of construed knowledge - difference of opinion - majority order - Two containers loaded with the medicine had been discharged at the port of Pipavav and were lying unclaimed by the importer. It was also revealed through intelligence that the subject consignments were earlier exported by the Appellant from some other port by availing the benefit of DEPB. - Pipavav is not the notified port to import. HELD THAT:- When all these facts are taken up together, it is found that the appellant has not been able to conclusively prove that they were not aware of the sending back of the expired drugs by M/s Private Party Oderig. The mere fact that they have not returned the export proceeds to M/s Biologica (UK) Ltd., cannot come to the rescue of the appellants. Since admittedly they were carrying on multiple transactions both with M/s Biologica (UK) Ltd. as well as with M/s Private Party Oderig, they may be maintaining a running account for their transactions which has not been properly investigated by the Revenue. So far as the appellant s argument that the value of the consignment should be treated as nil, since it pertains expired drugs, this can come to their rescue only if the Pipavav Port is designated as a proper port for import of medicines. Since this could not have been imported at Pipavav Port, even in the case of normal pharma products, the import could not have been cleared on payment of customs duty. In respect of the argument of the appellant about re-importation required to be made within one year, the office of Authorised Representative provides the copy of the Notification 135/99-cus dated 27.12.1999 wherein the period for re-importation has been increased from one year to three years. Therefore, even this argument of the appellant cannot be legally sustained. Matter to be posted before the regular bench - Appeal allowed in part.

  ---

• 2025 (4) TMI 574
  Violation of the FTP 2009-2014 - simultaneous availing of benefits under the Status Holder Incentive Scheme (SHIS) and the Zero Duty Export Promotion Capital Goods (EPCG) scheme - HELD THAT:- Few aspect of the impugned public notice of the Director General of Foreign Trade (DGFT) had not been taken into account by the original authority as also the circumstances in which the utilization was effected by the appellant. In order that the sequence of events and the relevant policy prescription be appreciated in context, the matter requires to be re-adjudicated afresh to enable which the impugned order is set aside leaving all issues open. The impugned order is set aside and the dispute restored to the original authority for a fresh decision.

  ---

• Insolvency & Bankruptcy

• 2025 (4) TMI 629
  Seeking direction to the respondents to consider the representation regarding the pending petition under the Insolvency and Bankruptcy Code, 2016 - Whether the petitioner could apply for an interim moratorium under Section 94 of the IBC, 2016, considering the definition of debtor within the context of sole proprietorship firms? - HELD THAT:- Section 94 of IBC, 2016 gives remedy to debtor only to either apply personally or through a resolution professional (RP) to the Adjudicating Authority for initiating the insolvency resolution process. Section 3(8) of IBC, 2016 defines corporate debtor which means a corporate person who owes a debt to any person and corporate person is defined in sub-section (7) of Section 3, it means a company under the Companies Act, 2013, a limited liability partnership under the Limited Liability Partnership Act, 2008 or any other person incorporated with limited liability under any law. Therefore, in this definition the proprietorship firm is not included. The M/s Rainbow Sales and M/s Kothari Enterprises are sole partnership firms, thus, in respect of these two firms, no application under Section 94 is liable to be entertained even at the instance of the present petitioner. Even otherwise, now stage of consideration of the representation is over. The Additional District Magistrate has already passed an order hence, become a functus officio. The Tehsildar who has issued a notice does not enjoy any adjudication power to consider the objection / representation of the petitioner. Petition dismissed.

  ---

• PMLA

• 2025 (4) TMI 573
  Seeking grant of Regulat Bail - Money Laundering - illegal extortion on Coal Transportation - twin conditions of Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) satisfied or not - HELD THAT:- This Court has already rejected the bail application of other co-accused persons who are also senior Government Officers. This Court while rejecting their bail application has recorded prima facie involvement of the Government servants, therefore, considering the prima facie involvement of the applicant as also the role played by the applicant, the present bail application deserves to be rejected. Even otherwise, the law has been well settled by Hon ble the Supreme Court in Directorate of Enforcement Vs. Aditya Tripathi [ 2023 (5) TMI 527 - SUPREME COURT ] that while considering the bail application, the Court is not required to weigh the evidence collected by the investigating agency meticulously, nonetheless, the Court should keep in mind the nature of accusation, the nature of evidence collected in support thereof, the severity of the punishment prescribed for the alleged offences, the character of the accused, the circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the time of trial, reasonable apprehension of the witness being tempered with, the large interest of the public/state etc. From bare perusal of ECIR with regard to the allegations leveled against the present applicant, it is quite vivid that the present applicant has played a specific role in commission of offence. Investigation revealed that the applicant had helped Surykant Tiwari in the offence. The ECIR would further reflect that the present applicant has knowingly and willingly assisted the extortion syndicate in committing the predicate crime of extortion and also in generation of proceeds of crime - the applicant is unable to fulfill the twin conditions of Section 45 of the PMLA, 2002. Further contention of learned counsel for the applicant is that the applicant is government servant, therefore, before prosecuting the applicant under the PMLA, 2002, sanction to prosecute as per Section 218 of the BNSS is necessary, as such the prosecution is illegal, therefore, the applicant is entitled to be released on bail, is being considered by this Court - In the present case, prima facie, the applicant is involved in crime in question which is not relates to public duty, therefore, sanction to prosecute under Section 218 BNSS is not required. Accordingly, the submission made by counsel for the applicant that without sanction prosecution has been initiated, therefore, the prosecution deserves to be quashed and he may be released on bail, is rejected. Conclusion - i) The stringent conditions under Section 45 of the PMLA must be met for bail to be granted in cases of money laundering, the applicant failed to meet these conditions, given the evidence of his involvement in the extortion scheme. ii) It is also held that no sanction for prosecution is required when the alleged acts are outside the scope of official duties, thereby rejecting the applicant s argument for bail based on the lack of sanction under Section 218 of the BNSS. The bail application filed under Section 483 of the Bhartiya Nayay Suraksha Sanhita, 2023 is liable to be and is hereby rejected.

  ---

• 2025 (4) TMI 572
  Money Laundering - challenge to seizure and freezing order - generation of proceeds of crime by cheating and defrauding Indian user of Garena Free Fire by M/s Garena International with the help of M/s Coda Payments India Private Limited. - reasons to believe - HELD THAT:- Due to lack of transparency, the people were not knowing that appellant s company was an entity behind the unauthorized deductions from their accounts and hence the appellant s name may not appear in all the FIRs, but the Company has collected the money. An amount of Rs.2850 crore was collected and out of it Rs.2320 crore was transmitted out of India. The appellant company was keeping its ratio of profit. The appellant company otherwise failed to disclose source of Rs.100 crore in their account though required under Section 8(1) of the Act of 2002 for which show cause notice was given by the Adjudicating Authority. In view of the above, first ground of challenge to the order is not made out. It has come on record that reasons to believe were recorded under Section 20(1) of the Act of 2002. It was sent to the Adjudicating Authority and has been quoted by us. The procedure under Section 17 of the Act of 2002 was also followed. The reasons to believe under section 20(1) of the Act of 2002 were recorded in writing and forwarded to the Adjudicating Authority. It is, thus, not correct on the part of the appellant to state that the procedure given under section 20(1) of the Act of 2002 has been flouted - The compliance of the aforesaid provisions has been made and while raising the issue, the appellant has failed to show basis for alleging the violation of Section 20(1) of the Act of 2002. Thus, even the second argument raised by the appellant is not made out. The third argument is in reference to alleged violation of Section 8(3) of the Act of 2002. It is alleged that the Adjudicating Authority has failed to record its findings that the property is involved in money-laundering. In the absence of such a finding, the order of seizure and retention could not have been confirmed. The final finding on it is to be recorded by the Trial Court otherwise it would create two parallel jurisdictions of the Court and Authority on one in the same subject. The Adjudicating Authority found that in pursuance to the FIRs, investigation is going on and it has further noted that the Company integrated its APIs with the website of game publishers, including Garena Free Fire and when customers purchase digital content on the game s website, they were not knowing who is collecting the money. It was with the further opinion that the main persons of the accused company did not come forward to join the investigation rather they avoided their appearance before the ED. All these grounds were considered by the Adjudicating Authority to justify further retention of the documents and the property. The Adjudicating Authority was thus cautious to record that the finding on commission of crime would be recorded by the Special Court trying the criminal case. Conclusion - The detailed facts about the working and involvement of appellant company and others have been given, substantiate the findings that the documents would be required for further investigation and otherwise property has rightly been seized and retained by the respondent as is involved in money-laundering, which would obviously subject to final outcome of the Trial. There are no reason to cause interference in the impugned order and hence the appeal is dismissed

  ---

• Service Tax

• 2025 (4) TMI 571
  Classification of service - Erection and Commissioning Service or Works Contract Service - exemption under N/N. 11/2010-ST, 32/2010-ST, and 45/2010-ST. - Invocation of extended period of limitation - penalty. Classification of the services received by the Appellant - HELD THAT:- Section 65A(1) provides that classification of taxable services shall be determined according to the terms of the sub-clauses of clause (105) of section 65. Thus, sub clause (zzzza) of Section clause (105) of Section 65 specifying taxable services of works contract has been aptly applied by the adjudicating authority while classifying the services of the consortium rendered to the appellant - what emanates from the LOI is that the activities of designing and drawing and model test, inland transportation etc., are bundled as ancillary services in their entrustment to the consortium to be rendered by the consortium to the appellant in the course of execution of the composite works contract by the consortium. Since the services of works contract provide the essential character to the entire gamut of services provided by the consortium to the appellant, the adjudicating authority has rightly found that the consortium is rendering works contract service to the appellant and the appellant is liable under Section 66A to pay service tax on the entire amount of contract under the category of works contract service . The findings of the Adjudicating Authority in the impugned order classifying the activities of the foreign companies while executing the EPC contract for the appellant under Works Contract Service , applying the provisions of Section 65A of the Finance Act, 1994, warrants no interference and is accordingly upheld. Whether the services in question are exempt under the Notifications No. 11/2010-ST, 32/2010-ST, and 45/2010-ST - HELD THAT:- These notifications applied to services related to already generated electricity, not to the EPC contract services provided by the consortium, which were prerequisites for electricity generation. The CBEC Circular No.131/13/2010 ST dated 07.12.2010 merely states in the context of supply of electricity meters for hire that the said activity is an essential activity having direct and close nexus with transmission and distribution of electricity, which is understandable as such electricity meters are used for measuring the electricity that is generated, transmitted and distributed and has no application in the instant case. The notifications cannot be given a stretched interpretation to bring the works contract services of the consortium of foreign suppliers rendered to the appellant, within the ambit of the aforementioned notifications. The benefit of the aforesaid notifications sought to be claimed are not available to the appellant. Invocation of Extended Period of Limitation - HELD THAT:- Although, from the documents it is evident that the appellant was aware of the concept of works contract and works contract tax and had considered the same in the light of the TNGST and CST regime while arranging the tax matters, dehors the fact whether such arrangement was accepted by the State tax authorities or not, nevertheless, the fact remains that there did prevail a lot of confusion regarding the coverage of services that had the characteristics of works contract upon which the assessee had discharged service tax under different classification of service in the case of ongoing works contract that commenced prior to 01-06-2007. The CBEC Circular No. 128/10/2010-S.T., dated 24-8-2010 concedes the factum of existence of such confusions/disputes - When the assessee entertains a bonafide belief that it is not liable to tax due to issues of interpretational nature, the extended period of limitation cannot be invoked and hence the demand made on the appellant is sustainable only for the normal period, if any. Penalty - HELD THAT:- In the facts and circumstances of the case, including considering the fact that the appellant is a Government Undertaking, invoking Section 80 of the Finance Act, 1994, the penalties imposed in the impugned Order in Original set aside. Conclusion - i) The classification of services as works contract service, upheld applying Section 65A of the Finance Act, 1994. ii) The exemption under Notifications No. 11/2010-ST, 32/2010-ST, and 45/2010-ST, denied applying a strict interpretation of exemption notifications as per the Supreme Court s guidance. iii) The invocation of the extended period is rejected due to the appellant s bona fide belief and prevailing confusion. iv) Penalties set aside invoking Section 80 of the Finance Act, 1994, considering the appellant s status as a government undertaking. The appeal is thus partly allowed.

  ---

• 2025 (4) TMI 570
  Time limitation for filing appeal - appeal filed within the permissible time limit as stipulated under section 85(3A) of the Finance Act, 1994 or not - service of the order upon one partner of a partnership firm constitutes service upon the firm itself - HELD THAT:- There is nothing on the record to show that there was any dispute between the two partners as no documents have been filed except a complaint before the Police which was also not pursued - Service of an order upon a partner shall be deemed to be service upon the appellant. The order shall, therefore, be deemed to have been served upon the appellant on 07.04.2017 and it is this date which has to be considered for the purposes of calculating limitation under section 85(3A) of the Finance Act. On a plain reading of the aforesaid provisions of section 85(3A) of the Finance Act, it is clear that any person aggrieved by any decision or order passed by the adjudicating authority may appeal to the Commissioner (Appeals) within two months from the date of receipt of the decision or order. The proviso, however, stipulates that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, allow it to be presented within a further period of one month. It is, therefore, clear that an appeal can be filed within two months from the date of communication of the order, but if the appeal is filed after two months but within one month after the expiry of two months, the Commissioner (Appeals) may condone the delay in filing the appeal if he is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within two months. This issue was considered by the Supreme Court in Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur [ 2007 (12) TMI 11 - SUPREME COURT] . The Supreme Court examined the provisions of section 35 of the Central Excise Act, 1944, which are para materia the provisions of section 85 of the Finance Act, and observed that delay can be condoned in accordance with the language of the Statute which confers power on the Appellate Authority to entertain the appeal by condoning the delay only up to 30 days after expiry of 60 days which is the normal period for preferring the appeal. It is for this reason that the Supreme Court observed that the Commissioner and High Court were justified in holding that there was no power to condone the delay after expiry of 30 days period. A Division Bench of the Tribunal in Diamond Construction [ 2019 (2) TMI 1822 - CESTAT NEW DELHI] , in which the provisions of section 85 (3A) of the Finance Act 1994 relating to appeals to the Commissioner of Central Excise (Appeals) came up for consideration, after placing reliance upon the decision of the Supreme Court in Singh Enterprises observed that the discretion of the Commissioner to condone the delay is circumscribed by the conditions set out in the proviso and any delay beyond that period cannot be condoned. Conclusion - As the appeal is preferred by the appellant before the Commissioner (Appeals) even beyond the extended period of one month after the expiry of the statutory period of two months, it is liable to be dismissed and is rightly dismissed by the Commissioner (Appeals). There is, therefore, no infirmity in the order passed by the Commissioner (Appeals). The appeal is, accordingly, dismissed.

  ---

• 2025 (4) TMI 569
  Taxability - declared service or not - income received as forfeiture of security Deposit/ Earnest Money Deposit and Fine penalties recovered from contractors by the appellant - HELD THAT:- The Tribunal in the case of South Eastern Coal Fields Ltd. vs. CCE ST, Raipur 2020 (12) TMI 912 - CESTAT NEW DELHI] has considered the same issue and held that the issue of leviability of Service tax on penalty, liquidated damages, compensation, forfeiture amounts, cancellation charges etc. stands settled by various pronouncements wherein it has consistently been held that the said amounts recovered as charges for breach or non-compliance of contractual terms and conditions cannot be construed as consideration for refraining or tolerating an act and were thus not leviable on Service Tax. From the perusal of the decisions it becomes abundantly clear that the issue of considering a forfeited amount as an amount of consideration towards declared services stands already settled in favour of the assessee. The same is already held to not to be the consideration towards rendering declared service defined under section 66E(e) of the Finance Act, 1944. In fact the cancellation of contract itself is held to not to be a service. There are no reason to differ from this finding. In appellant s own case [ 2024 (12) TMI 11 - CESTAT NEW DELHI] , while relying upon the decision of South Eastern Coal (supra) has set aside the demand of service tax confirmed on the identical allegations holding that the penalties, fines and forfeited amounts cannot be treated as consideration towards declared services defined under section 66 E(e) of the Finance Act. Conclusion - Amounts recovered as penalties or for breach of contract are not consideration for a service and thus not subject to service tax. Appeal allowed.

  ---

• 2025 (4) TMI 568
  CENVAT Credit - Cenvat Credit taken without proper documents - Cenvat Credit taken on the basis of documents not prescribed under Rule 9(1) of CCR - Credit taken on certain ineligible services - Credit taken on the goods, which are neither inputs nor capital goods - reverse charge mechanism - time limitation. Disallowing credit on the basis of not having proper documents - HELD THAT:- The provisions under Rule 9(1) of CCR are quite clear and it is an admitted fact that none of these specified documents were available with the appellant for taking the credit. We also find that as far as Rule 9(2) is concerned, certain minimum details were required to be shown in the documents for its admissibility as valid document for taking credit and the concerned Deputy Commissioner is also required to be satisfied about its actual receipt/use by the person taking the credit - where credit has been denied on this ground and where the proper documents have not been submitted, prima facie, they will not be entitled for the credit. However, since they are claiming that these documents are having those details, in the interest of natural justice, we find it fit to remand this issue back to the Original Adjudicating Authority to go through the documents submitted by them and satisfy himself whether Rule 9(2) criteria is met or otherwise and thereafter, allow the credit to the extent it meets the criteria. Disallowing credit on the basis of input services being not input services in relation to the output services of the appellant - HELD THAT:- There is nothing on record to suggest as to what would be the actual nature and their relationship to the services provided. Therefore, this aspect is also remanded back to the Adjudicating Authority, who shall go through the details as well as documents to be furnished by the appellant to come to the conclusion that whether these services were required for providing output services or otherwise and thereafter, allow the credit. Reverse charge mechanism - HELD THAT:- There is another aspect also where the appellants have paid certain service tax in relation to payment to Indian Port Association (IPA) where they have themselves paid the service tax and have claimed the credit thereof. Here also, the issue would be whether they are eligible to take the credit on Reverse Charge Mechanism (RCM) or otherwise. Therefore, this aspect also needs to be re-examined to understand whether service tax paid by them on the reimbursement made to IPA was service tax paid by them on behalf of IPA/service provider or it was paid by them on their own as service recipient under RCM. This needs to be examined to come to the conclusion whether they were admissible to credit. Time Limitation - HELD THAT:- This aspect is not examined as the Adjudicating Authority has given certain reasons to invoke extended period. On remand proceedings, the Adjudicating Authority will take into consideration this Order of the Tribunal dt. 14.03.2019 where the invocation of extended period was not found tenable against the same appellant by this Bench and see if there is any other extra ground or positive evidence to invoke extended period to come to the conclusion whether extended period is applicable or otherwise. If there is nothing, then by virtue of the order of this Tribunal dt. 14.03.2019, they being a Government Organisation, extended period is not liable to be invoked. Conclusion - i) The remand of issues concerning documentation and input services to the Adjudicating Authority for further examination and determination of compliance with Rule 9(2) of CCR. ii) The remand of the issue concerning eligibility for credit under RCM to ascertain the nature of service tax payments related to the IPA. iii) The instruction to the Adjudicating Authority to consider the Tribunal s previous order regarding the non-applicability of the extended period for demand due to the appellant s status as a government organization. The appeal is remanded back to the Adjudicating Authority - Appeal allowed by way of remand.

  ---

• Central Excise

• 2025 (4) TMI 567
  Violation of principles of natural justice - Appellant was not given an opportunity of personal hearing in the matter to record his submission as to question of jurisdiction - refund claim - HELD THAT:- The appeal was rejected on the ground that appellant was failed to file an appeal against earlier communication dated 22.09.2021 within the time stipulated under the Law. Appellant have given proper and satisfactory reason why he had not filed the appeal against the communication dated 22.09.2021 as stated in Memorandum of Appeal that on receipt of communication from Central Tax, Gachibowli Division, Hyderabad, the appellant approached Jurisdictional Customs Authorities in relation to his refund claim, however, he was denied of filing any claim saying that the CVD and SAD duties are not customs components but clearly part of Cenvat duty . It is also important that no any opportunity of hearing has been given by the Adjudicating Authority. It is a Statutory procedure that no application for a refund should be rejected without giving an opportunity to the appellant of being heard. Hon ble Supreme Court in M/s Nagarjuna Construction Company Vs Government of Andhra Pradesh and Others [ 2008 (10) TMI 686 - SUPREME COURT ], in which Hon ble Supreme Court held that natural justice is another name for common sense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common sense liberal way. Justice is based substantially on natural ideals and human values. Conclusion - The Adjudicating Authority passed the order without giving proper opportunity of hearing which is against the natural justice and procedure established by law. Learned Commissioner (Appeals) also not considered these facts therefore, appeal is liable to be allowed by way of remand with direction to decide refund claim on merit after giving proper opportunity to appellant. Appeal allowed by way of remand.

  ---

• 2025 (4) TMI 566
  CENVAT Credit - input services - renting of motor vehicle - Repair and maintenance services relating to motor vehicle - life/medical or health insurance services extended to staff and personnel of CISF security - services of catering, health, travel - services of miscellaneous nature viz., removal of honey comb, removal of debris, disposal of canteen waste/medical waste, maintenance of garden grass cutting etc., which are not related to manufacturing activities - levy of interet and penalty. Medical/health insurance policy taken for their employees - HELD THAT:- The appellants are mandatorily required to take medical/health insurance for their employees in compliance with the above statutory requirement. However, for those employees who are not covered by the ESI scheme, general medical/health insurance has been taken by the appellants - the beneficiary of such services is the appellants and not the individual employees. Therefore, the embargo put on the input services used primarily for personal use or consumption of any employee for exclusion from the scope of coverage of input service under Clause (C) of Rule 2(l) of CCR of 2004, does not apply to the present case. The dispute in respect of availment of Cenvat credit on medical insurance service is no more open to debate, as in a number of cases the Tribunal has held the same as admissible - Reliance can be placed in the case of Honda Motorcycle Scooter (I) Pvt. Ltd. Vs. Commissioner of C. Ex. Delhi-III [ 2016 (8) TMI 308 - CESTAT CHANDIGARH] - Service Tax paid on medical/health insurance services for an amount of Rs.35,42,452/- are eligible to be availed of Cenvat credit as per statutory provisions. Security services provided by CISF - HELD THAT:- CISF has been tasked with providing security to all petroleum oil refineries, recognizing their strategic importance and the need for robust security measures including fire safety, counter terrorist attack etc., As such security services have become mandatory, the health/medical insurance incurred in connection with such security staff shall also be considered as integral part of the security services which are essential input service required to be used in manufacture of petroleum products. Further, security services have also been specifically provided in the inclusive part of the definition of input service under Rule 2(l) ibid. Therefore, Service Tax paid on medical/health insurance services for CISF Security for an amount of Rs.10,06,493/- are eligible to be availed of as CENVAT credit. Service tax paid on maintenance of gardens - HELD THAT:- In view of the mandatory nature of services that is required to be engaged by industry in carrying out their manufacturing activity, we find that the services engaged by the appellants in respect of maintenance of gardens, dry grass cutting in order to avoid fire hazard is found to be eligible input services. Therefore, Service Tax paid on such services for an amount of Rs.4,88,735/- are eligible to be availed of as CENVAT credit. Service tax paid on the services of search of documents which are stored in safe custody for eight years - HELD THAT:- The services of underwater diving services used in the appellants refinery is also found to be an essential services inasmuch as these services are used for removing the debris from the sea, near the jetty pumps maintained for receipt of crude petroleum or other petroleum products, which are used in processing at their refinery plant. As these services are in the nature of routine repair and maintenance of operational equipment involved in the manufacturing process, these are covered as eligible input under Rule 2(l) ibid. Therefore, Service Tax paid on the above two services for an amount of Rs.2,842/- as discussed above are eligible to be availed of as CENVAT credit. Outdoor catering services - HELD THAT:- The service is specifically excluded under clause (C) of Rule 2(l) ibid, it cannot be included in the eligible input services. Maintenance and repair of asphalt road, removal of crushed stones etc. - bus service for travel of CISF security from Vashi to Bandra Station, in the city which is outside the refinery plant - maintenance of honeycomb - supply and erection of shamiana which is used for resting of contract workers during shutdown maintenance period - video imaging work, programme services in respect of various programs conducted for vendors and for discussion point with employees - HELD THAT:- There are no proper justification have been provided by the appellants for treating these services as input services, having direct or indirect connection with the manufacturing operations of the appellants. Hence, we do not find any reason to differ with the findings of the learned adjudicating authority, in rejecting the CENVAT credit taken as ineligible input service to the extent of an amount of Rs.9,03,065/- on the above services. Service tax paid on insurance premium in respect of health/medical insurance of family members/dependents of the employees - HELD THAT:- The appellants have already reversed the ineligible CENVAT credit prior to the issue of SCN, on their own. Levy of interest and penalty - HELD THAT:- There do not exist any ground for imposition of penalty on the appellants and for levy of any interest on the above disputed amount, which have been confirmed as part of the adjudged demands in the impugned order. In view of detailed discussions on individual input services, it is opined that for total amount of Rs. 50,40,522/- such services are found to be eligible for availing the service tax paid as CENVAT credit. Therefore, to this extent the impugned order is not legally sustainable. Conclusion - The appellants are entitled to CENVAT credit for an amount of Rs. 50,40,522/- for services found to be eligible under the statutory provisions. The denial of CENVAT credit for services amounting to Rs.9,03,065/- partially upheld, which did not qualify as input services. Appeal disposed off.

  ---

• 2025 (4) TMI 565
  Classification of goods - articles of silver jewellery/ articles of silver - to be classified under CETH 7113 or 7114? - applicability of benefit of exemption under Notification No. 12/2012 dated 17.03.2012 amended - demand of excise duty on goods exported - hedging amounts to trading of goods or not - availing ineligible credit in respect of renting of motor vehicles and repair and maintenance of motor vehicle - Time limitation. Time Limitation - HELD THAT:- Since the demand is made for the period from 01.03.2016 to 30.06.2017 and Show Cause Notice (SCN) was issued on 03.01.2021, the issue regarding invoking the extended period of limitation is well settled as per the judgment of the Hon ble Supreme Court in the matter of Continental Foundation Jt. Venture Vs. Commr. Of C. Ex., Chandigarh-I [ 2007 (8) TMI 11 - SUPREME COURT] wherein it is held it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word wilful , preceding the words mis-statement or suppression of facts which means with intent to evade duty. The next set of words contravention of any of the provisions of this Act or Rules are again qualified by the immediately following words with intent to evade payment of duty. Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. The dispute in the present appeal is regarding classification of the goods and appellant was filing ER-8 returns from time to time. Moreover the Appellant has not collected the excise duty from the customers on sale of the goods. All the transactions are duly accounted in the books of accounts and the same were audited by the Central Excise Audit team from time to time. Considering the Judgment of the Hon ble Supreme Court in the matter of Continental Foundation Jt. Venture (supra) and Densons Pultretaknik, in the absence of any mis-statement or willful suppression of facts or contravention of any of the provisions of law with intent to evade payment of duty, there was no justifiable reason for invoking the extended period of limitation. Classification of goods - articles of silver jewellery/ articles of silver - to be classified under CETH 7113 or 7114? - HELD THAT:- Central Excise Tariff Heading 7114 relates to Articles of goldsmiths or silversmiths wares and parts thereof, of precious metal or of metal clad with precious metal, of precious metal. The assessee is a reputed manufacture of such products and maintaining records over a period of time. As per the documents produced by the Appellant including the ER returns and the invoices, it is evident that when such goods are sold, the presence of precious stones is specifically mentioned in the invoices. Even as per the calculation made by the Adjudication authority, it is admitted that the Appellant were selling articles of silver jewellery and other articles of silver @ Rs.56 per gram at the relevant time and based on that turn over is assessed. There is no evidence to show that such goods are studded with Diamond, Ruby, Emerald or Safire. Facts being so, the goods manufactured by the appellant can be classifiable under CETH 7113 as declared by the appellant since there is no admissible evidence to prove that the impugned goods are studded with diamond, ruby, emerald or sapphire. Whether the goods are falling under the category (I), (II) or (III) of 7113 as per Notification No. 26/2016-CE dated 26.07.2016? - HELD THAT:- As per the Notification No. 6/2017 dated 02.02.2017, condition No. 52A was introduced against the serial No. 199 of the Notification 12/2012, where the condition of not availing the cenvat credit of inputs or capital goods used in the manufacture of these goods is added with inputs or capital good or service tax on input services. Thus, appellant complied with condition No. 52A also since they have not availed cenvat credit of inputs or capital goods used in the manufacture of these goods and by reversing cenvat credit availed against service tax on input services used in the manufacture of these goods. Accordingly, they are entitled for claiming the benefit of nil rate of duty for the period even after 02.02.2017 to 30.07.2017 as confirmed the impugned order. Whether hedging amounts to trading of goods? - HELD THAT:- Hedging is a risk management strategy employed to offset losses in investment which is meant to reduce a potential loss. As per the Cambridge Dictionary Hedging means A way of controlling or limiting a loss or risk . There is no sale of gold with the bank based on forward selling contract has part of Hedging, thus there is no trading involved in Hedging. Moreover, SBI charges service tax for booking of forward contract, service tax is charged and collected from the appellant - following the ratio of the judgment of the Hon ble Supreme Court in the matter of Sales Tax Officer, Pilibhit [ 1954 (5) TMI 17 - SUPREME COURT] and considering the facts and circumstances of the case including payment of service tax through SBI while Hedging activities are carried out by the Appellant, Hedging cannot be considered as trading. Thus, demand of Rs. 55,23,98,187/- under Section 11A (10) of the Act confirmed under Rule 6 (3) of the Cenvat Credit Rules, 2004 is also unsustainable since the appellant has complied with condition No. 52A by reversing the cenvat credit availed against service tax. Ineligible credit in respect of renting of motor vehicle - HELD THAT:- As evident from Show cause notice (SCN) No. 01/2021-CE dated 18.02.2021 and Order dated 18.07.2024, the said demand is considered and dropped by Commissioner (Appeals) in separate proceedings. Facts being so, the said demand is unsustainable. Conclusion - i) The goods are classifiable under CETH 7113, as there is no evidence to support classification under CETH 7114. ii) The appellant is entitled to the benefit of Notification No. 12/2012, as they complied with the conditions for exemption. iii) On the demand for excise duty on exports, it is held that the demand is unsustainable due to sufficient evidence of export provided by the appellant. iv) Concerning hedging, it does not constitute trading, and the related demand is unsustainable. v) On ineligible credit for renting motor vehicles, the previous decision to drop the demand upheld. The Appeal is allowed.

  ---

• CST, VAT & Sales Tax

• 2025 (4) TMI 564
  Disallowance of the input tax credit for the purchase tax paid on sales turnover made to a manufacturer-exporter - Applicability of exemption provisions under Section 7(c) and the restrictions under Section 13(7) of the Act - HELD THAT:- Plainly interpreting and applying section 7(c) provides that no tax under the Act shall be levied and paid on the turnover of sale or purchase of such goods by such class of dealers as may be specified in the notification. The said exemption applies to the goods and also to the class of dealers who satisfy the conditions and fall within the notification issued under section 7(c) of the Act. The controversy is not over the exemption from levy and collection of tax between the dealer and the department, since the subject turnover falls admittedly under section 7(c) of the Act, read with notifications dated 24.02.2010 and 25.03.2010. The said admitted position takes to the entitlement or eligibility of the dealer for the input tax credit. It is axiomatic, particularly in tax jurisprudence, that distinct concepts, such as taxable persons, taxable goods and taxable events, are established for levying and collecting the tax. Similarly, the scheme of availing input tax credit is determined by section 13 of the Act. Section 13(1) provides for allowing credit of an amount as input tax credit to the extent provided by or under the relevant clause to which the applicable condition is attracted. Section 13(7) outlines the circumstances under which such a benefit cannot be allowed. Section 13(7) also sets out that no facility for input tax credit shall be allowed to a dealer with respect to the purchase of any goods where the sale of such goods by the dealer is exempt from tax under Section 7(c) of the Act. The prohibition from allowing input tax credit is a statutory mandate, and the view taken by the orders impugned, in the facts and circumstances of this case, is available and correct. Conclusion - The appellant is not entitled to input tax credit for the sales turnover made to the manufacturer-exporter, as the sales are exempt under Section 7(c), and Section 13(7) prohibits input tax credit in such cases. Appeal dismissed.

  ---

• 2025 (4) TMI 563
  Rejection of account books of the applicant - legality of accepting survey report which is inadmissible in the eyes of law in view of the law laid down by this Hon ble Court in the case of M/s Girja Ispat Pvt. Ltd. Vs. Commissioner of Trade Tax U.P. Lucknow [ 2013 (5) TMI 1014 - ALLAHABAD HIGH COURT] - justification in relying on the stock noted by surveying authority on estimate basis without actual weighment ignoring the law laid down by this Hon ble Court in the case of M/s Girja Ispat Pvt. Ltd. - HELD THAT:- Perusal of the order impugned reveals that the books of account as produced by the petitioner at the time of survey were disbelieved on the basis of the survey carried out and the goods which were found based upon eye estimation. Considering the fact that it is well settled that the calculation of goods cannot be done only on the basis of eye estimation as held in the case of M/s Girja Ispat Pvt. Ltd. and also in the case of Maa Mahamaya Alloys Private Limited vs. State of U.P. Ors.[ 2023 (3) TMI 1358 - ALLAHABAD HIGH COURT] , a judgment of this Court, the order impugned based upon eye estimation cannot be upheld, more so, when provision of Section 28(5) of U.P. Value Added Tax Act empowers passing of an order of assessment, which has to be based upon credible material as prescribed under Section 28(2)(ii). Conclusion - In the present case, weighing all the goods merely on the basis of eye estimation cannot be termed as a credible material and cannot be judged as foundation for passing the order under the best judgment assessment powers conferred upon the Assessing Authority. Petition allowed.

  ---

• 2025 (4) TMI 562
  Levy of penalty under Section 34(8) of U.P. VAT Act, 2008 - infraction of law - no reasons have been recorded in the penalty order regarding the explanation furnished by the Applicant and also the quantum of penalty - HELD THAT:- The Tribunal, while allowing the appeal and restoring the penalty order, has recorded that the revisionist being a habitual defaulter and therefore, justified the penalty order, but the record shows that not only the amount of TDS was deposited, but also the amount of interest were deposited. The penalty order as well as the order of the first appellate authority specifically records the stand of the revisionist that it is a Central Government Undertaking and for depositing any money, sanction and budget is allocated and thereafter, the amount is paid and deposited, which took its own time, but no weightage of the said fact has been given by the Tribunal in the impugned order. It is a matter of common knowledge that in Government Department, some unintentional procedural delay occurs, which takes its own time, to which interest were paid by the applicant. This Court, on an identical set of facts, in the case of Sahayak Samagri Prabandhak (Astt. Material Manager), Charbagh [ 2019 (2) TMI 428 - ALLAHABAD HIGH COURT] , has reduced the penalty to the extent of 5%. The issue in hand is also covered by the said judgement. Conclusion - The record shows that pursuant to the order dated 18.12.2019 passed by this Court, the revisionist has deposited 1/4th amount of payment under the impugned order before the Authority concerned - Considering the peculiar facts circumstances of the case, the revisionist is liable for penalty to the extent of 1/4th, which has already been deposited by the revisionist pursuant to the order of this Court dated 18.12.2019. The impugned orders passed by the Commercial Tax Tribunal, Bench II, Varanasi in all the revisions are modified - the revisions allowed in part.

  ---