TMI Tax Updates - e-Newsletter
April 8, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. A Deep Dive into Unexplained Asset in Clause 104 of Income Tax Bill, 2025 Vs. Section 69A of Income Tax Act, 1961

  Bill:

2. Understanding Unexplained Investments Taxation in Clause 103 of Income Tax Bill, 2025 Vs. Section 69 of The Income Tax Act, 1961

  Bill:

Articles

1. INADVERTENT ERROR IN MENTIONING THE CORRECT FIGURE IN A CHEQUE CANNOT BE A GROUND TO DISCHARGE THE ACCUSED

   By: DR.MARIAPPAN GOVINDARAJAN

2. 80G5 Registration: Documents Required and Filing Process

   By: Ishita Ramani

3. Swachh Bharat Abhiyan logo – An Introduction

   By: YAGAY andSUN

4. Penalty for not getting OOC on BILL OF ENTRY

   By: YAGAY andSUN

5. Growing Urban Jungles for Greener Cities, Cleaner Air, Enriched Biodiversity, and Environmental Protection. [Environment Protection and Climate Change]

   By: YAGAY andSUN

6. EDPMS (Electronic Declaration Processing and Monitoring System) and IDPMS (Import Data Processing and Monitoring System)

   By: YAGAY andSUN

7. Revolutionizing Mobility: The Make in India Auto Story

   By: YAGAY andSUN

8. ​​​​​​​Boilers Bill, 2024 introduced in Lok Sabha

   By: YAGAY andSUN

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

   By: YAGAY andSUN

10. Bureau of Indian Standards establishes Standards on Respiratory Protection, Fall Prevention, and Fire Safety for overall occupational health and safety of workers

   By: YAGAY andSUN

News

1. Bengal's GST collection in FY 2024-25 higher than national-level: Mamata

2. MCD Mayor, House leader against adding waste management charges to property tax bills

3. Govt stepping up efforts to help exporters; Group to monitor possible import surge

4. NSO, India Unveils Digital Innovations to Strengthen Statistical System

5. 18th National Seminar on National Sample Surveys: “Critical Insights through Research and Emerging Trends in latest Survey Findings”

6. Sitharaman to attend India-UK Economic and Financial Dialogue in London on April 9

7. A Decade of Growth with PM Mudra Yojana

8. Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman to embark on an official visit to United Kingdom and Austria today

9. Govt stepping up efforts to help exporters; working group to monitor possible import surge

10. Reserve Bank MPC starts deliberations amid expectations of 25 bps rate cut

11. China accuses US of unilateralism, protectionism, economic bullying with tariffs

12. Put the draft Rules also

13. China accuses US of unilateralism, protectionism and economic bullying with tariffs

14. Release of Publication “Women and Men in India 2024: Selected Indicators and Data”

15. GeM Showcases Startup Power at Startup Mahakumbh 2025, Unlocks New Growth Avenues for Innovation-Driven India

16. Union Minister of Commerce & Industry, Shri Piyush Goyal confers ‘Startup Maharathi’ Awards at Startup Mahakumbh 2025

17. Fourth Candidate Open House hosted by the Ministry of Corporate Affairs

18. MCA invites public comments on proposed amendment in the Rules to widen the scope of fast track mergers under Companies Act, 2013

19. Economic metric will always be higher than previous years: Chidambaram on PM's TN funds remark

20. Impact of US tariffs: Sri Lanka seeks deeper economic ties with India

21. Income Tax official dies by suicide in Hyderabad due to 'health issues'

22. ED claims FEMA contravention after raids against 'L2: Empuraan' producer Gopalan's chit fund firm

Notifications

Central Excise

1. 02/2025 - dated 7-4-2025 - CE

Amendment in Notification No. 05/2019-Central Excise, dated the 6th July, 2019

GST - States

2. CT/8/0005/2025-Sec-1-05(CT)(14) - dated 21-3-2025 - Madhya Pradesh SGST

Madhya Pradesh Goods and Services Tax (Amendment) Rules, 2025

3. CT/8/0004/2025-Sec-1-05(CT)(16) - dated 21-3-2025 - Madhya Pradesh SGST

Notifies the respective date by which payment for the tax, as per the notice, statement, or order, must be made to qualify for a waiver of interest and penalties under Section 128A of the MPGST Act.

4. CT/8/0002/2025-Sec-1-05(CT)(15) - dated 21-3-2025 - Madhya Pradesh SGST

State Tax Notification for waiver of the late fee

IBC

5. IBBI/2025-26/GN/REG124 - dated 3-4-2025 - IBC

Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2025

6. IBBI/2025-26/GN/REG123 - dated 3-4-2025 - IBC

Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2025.

Circulars / Instructions / Orders

Customs

1. 12/2025 - dated 7-4-2025

Clarification on the classification and applicable Basic Customs Duty (BCD) for Interactive Flat Panel Displays (IFPDs) and other monitors

2. PUBLIC NOTICE No. 06/2025 - dated 30-3-2025

Important Guidelines for Proper Document Submission and Compliance with the Faceless Assessment Process.

3. PUBLIC NOTICE NO. 20/2025 - dated 29-3-2025

Extension of transitional provisions for the SCMTR till 31.05.2025

Highlights / Catch Notes

GST

• Legal Appeal Reinstated: Signature Validation and Natural Justice Principles Protect Procedural Fairness in Landmark Ruling

  Case-Laws - HC : HC allowed the petition challenging dismissal of appeal, finding substantial procedural irregularity. The court determined that the authorized signatory's signature was valid, and the original dismissal violated principles of natural justice. The impugned order was set aside, with the appeal restored to the original file for fresh merits-based consideration, ensuring procedural fairness and opportunity to be heard.
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• Taxpayers Can Rectify Technical Errors in GST TRAN-1, Ensuring Legitimate Input Tax Credit Entitlements Without Penalty

  Case-Laws - HC : HC held that a registered assessee who committed a technical error in filing GST TRAN-1 cannot be denied transitional tax credit. The court emphasized that procedural technicalities should not deprive an eligible taxpayer of legitimate tax benefits. Relying on SC precedents, the court directed the tax authorities to facilitate revision of the GST TRAN-1 form, recognizing the indefeasible nature of input tax credits. The writ appeal was dismissed, upholding the Single Judge's order that allows the taxpayer to rectify the inadvertent error in the transitional credit form.
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• PWD Wins Partial Relief: GST Refund, Service Tax Payment Directed with Penalty Exemption Under Multiple Statutory Provisions

  Case-Laws - HC : HC dismissed the writ petition while directing PWD authorities to refund Rs. 65.28 lakhs of GST to appellant's cash/credit ledger and pay Rs. 84,84,035/- towards service tax within a stipulated timeframe. The appellant must remit the service tax amount to authorities within three days of receipt. The court set aside penalties imposed under Sections 78 of Finance Act, Section 174 of CGST Act, and Sections 77(1)(a) and 77(2) of Finance Act, finding no justification for penalty imposition. The order upheld the principle of exhausting statutory appellate remedies and recognized administrative complexities in the transaction, ultimately allowing the appeal with specific monetary and procedural directions.
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Income Tax

• Tax Deduction Exemption Granted for National Savings Scheme and Deferred Annuity Withdrawals Under Section 194EE

  Notifications : The Central Government, through a notification, exempts tax deduction under section 194EE of the Income Tax Act 1961 for withdrawals from National Savings Scheme or deferred annuity plans by individual assesses. The notification, issued by the Ministry of Finance and Department of Revenue, specifies that no tax deduction shall be made on payments related to clause (a) of sub-section (2) of section 80CCA, effective from the date of publication in the Official Gazette. This amendment provides tax relief for individual investors in specified savings instruments.
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• Transfer Pricing Dispute: ITAT Validates CUP Method, Mandates Indigenous Tested Party and Comprehensive Service Comparisons

  Case-Laws - AT : ITAT adjudicated a transfer pricing dispute involving international transactions. The tribunal upheld the TPO's rejection of the assessee's transfer pricing study, determining that the tested party should be indigenous rather than foreign affiliated entities. The ITAT mandated adoption of the Comparable Uncontrolled Price (CUP) method for benchmarking and validated Kotak as a suitable comparable, subject to specific service comparisons. The tribunal critically noted that the TPO should comprehensively examine evidence regarding intra-group services, emphasizing the need for thorough analysis of arm's length pricing mechanisms. The decision underscores the importance of substantive evidence and proper transfer pricing methodology in evaluating cross-border transactions, ultimately remanding the matter for detailed quantitative assessment consistent with income tax regulations.
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• Data Management Charges Not Taxable as Technical Services Under Section 9(1)(vii)(b) Without Permanent Establishment

  Case-Laws - AT : ITAT determined that remittances for data management charges do not constitute taxable technical services under section 9(1)(vii)(b). The non-resident entity lacks permanent establishment in India. Referencing precedent, the tribunal held that technical services are only taxable when the recipient cannot independently apply the technical knowledge without the service provider's aid. The tribunal directed the Assessing Officer to grant appropriate TDS credit and recalculate refund figures in accordance with legal provisions, allowing the grounds for statistical purposes.
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• Electronic Portal Notice Service Invalidated: Procedural Defects Render Ex-Parte Order Unsustainable Under Section 282

  Case-Laws - HC : HC affirmed ITAT's order regarding service of notice through electronic portal. The court held that uploading notice on ITBA portal without explicit consent or actual email communication does not constitute valid legal service. Following precedential principles, the court determined that electronic service via e-portal without direct recipient confirmation fails to meet procedural requirements under Section 282 of Income Tax Act and Rule 127 of Income Tax Rules. Consequently, ex-parte dismissal of appellant's appeal was deemed improper, with HC setting aside lower appellate authorities' orders as illegal and directing reconsideration of the original appeal on merits.
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• Tax Authority's Reassessment Against Mutual Fund Invalidated Due to Procedural Flaws and Lack of Substantive Evidence Under Section 148A

  Case-Laws - HC : HC held that the tax authority's reopening of assessment against the mutual fund was invalid. The notice contained discrepancies between alleged fund manipulation and actual transaction details. Relying on precedent in a similar case involving JM Financial, the court found no substantive basis for reassessment. The jurisdictional defect in the reopening process rendered the Section 148A notice and subsequent order unsustainable. Consequently, the impugned notice and order were quashed, effectively allowing the assessee's appeal and nullifying the attempted reassessment.
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• Tax Deduction Dispute: Section 194A Interpretation Protects Deductor from Immediate Penalty Without Proper Tax Verification Process

  Case-Laws - HC : HC held that under Section 194A of Income Tax Act, 1961, the tax deductor was not liable for immediate penalty when TDS was not deducted from interest/finance charges paid to NBFCs. The AO must first provide an opportunity to the appellant to establish that the tax deductee has paid applicable taxes. The lower appellate authorities' orders were set aside, and the matter was remanded to the AO for fresh consideration, requiring a fair hearing to the appellant and verification of whether the NBFCs incorporated the receipts in their accounts and paid corresponding taxes.
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• Penalty Order Under Section 271D Upheld: Limitation Period Extended Through Notification No.113/2021

  Case-Laws - HC : HC dismissed the writ petition challenging a penalty order under Section 271D of the Income Tax Act. The court held that the limitation period for passing the penalty order was extended till 31.03.2022 through Notification No.113/2021, rendering the order dated 19.08.2021 within valid jurisdiction. The petitioner's arguments regarding premature order and awaiting appellate commissioner's decision were rejected. The court granted liberty to the petitioner to file an appeal before the Appellate Commissioner under Section 246A within 30 days of receiving the order's copy, effectively upholding the penalty order's validity.
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• Taxpayer Wins Relief: Direct Tax Dispute Resolution Act Interpretation Allows Partial Tax Payment and Potential Refund

  Case-Laws - HC : HC allowed the writ petition, setting aside the respondent's order rejecting the petitioner's application to rectify Form-3 under the Direct Tax Vivad Se Vishwas Act, 2020. The court interpreted Sections 2(j), 2(o), and 3 of the Act, determining that the petitioner is liable to pay only half the calculated tax amount. The court also clarified that if the petitioner had paid excess tax under the Income Tax Act, 1961, they would be entitled to a refund without interest, subject to the provisions of Section 7 of the Act.
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• Income Additions Under Block Assessment Upheld Based on Search Statements, Seized Materials, and Lack of Contrary Evidence

  Case-Laws - HC : HC held that additions to income under block assessment can be made based on statements recorded u/s 132(4) and seized materials. The appellant's argument attributing income to deceased father was rejected due to lack of supporting evidence. The court found the statement reliable as the appellant did not retract it and failed to respond to notice u/s 158BC. Seized materials and assessee's own statement substantiated the income additions. Relying on precedent, the court affirmed that where inferences about undisclosed income are strong and based on search materials and statements, such additions are permissible. The order was ultimately decided in favor of the revenue.
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• MRF Pace Foundation Expenses Deemed Business Promotion, Tax Deductions Upheld for Rubber Manufacturing Units Under Sections 80IA and 80IB

  Case-Laws - HC : HC held that expenditure towards MRF Pace Foundation constitutes business promotion and is not a charitable donation. The revenue's power is limited to examining the genuineness of expenditure. Regarding reassessment, the court ruled differently for various assessment years: for AY 2002-03, reassessment was barred by limitation; for AY 2004-05, revenue's jurisdiction was upheld; for AY 2003-04 and 2004-05, amendments to Section 80HHC were not applicable. The court affirmed the assessee's entitlement to deductions under Sections 80IA and 80IB for rubber manufacturing units, emphasizing a seamless continuation of tax benefits across assessment years.
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• Trust's Section 12AB Registration Upheld: Procedural Fairness Prevails in Exemption Determination Under Section 11

  Case-Laws - AT : ITAT addressed registration denial under Section 12AB, focusing on Trust's eligibility for exemption under Section 11. Jurisdictional HC judgment in CIT(E) vs. Jamiatul Banaat Tankaria established that Section 13 provisions apply during assessment, not registration. For Trusts created before 01-04-2021, registration eligibility precedes Section 13(1)(b) applicability. ITAT allowed assessee's appeal, directing CIT (Exemption) to grant final registration under Section 12AB after providing hearing opportunity, effectively reinstating Trust's registration status subject to subsequent assessment scrutiny.
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• Shell Company Purchases Disallowed: Tax Tribunal Upholds 12.5% Disallowance for Unsubstantiated Business Transactions

  Case-Laws - AT : ITAT ruled that the appellant failed to substantiate the genuineness of purchase transactions involving shell companies. Despite presenting bank statements and tax challans, the tribunal found the documentary evidence insufficient to prove legitimate business transactions. The AO's findings of non-existent suppliers and lack of cross-examination were upheld. Consequently, the tribunal allowed a 12.5% disallowance of unverified purchase amounts, effectively rejecting the appellant's appeal grounds and maintaining the original assessment order's core findings regarding tax evasion through grey market purchases.
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Customs

• Polyethylene Glycol Export Clarified: No SCOMET Authorization Needed for Chemical Trade Compliance

  Circulars : The CBIC issued an instruction clarifying the export policy for Polyethylene Glycol (CAS No. 25322-68-3). Based on DGFT's office memorandum, the chemical does not fall under the SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) category. Consequently, no SCOMET export authorization is required for its export. Customs authorities are directed to sensitize officers regarding this export policy condition and ensure strict compliance across jurisdictions.
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• Gold Seizure Overturned: Insufficient Evidence Challenges Smuggling Claim Under Customs Act Section 123(1)(a)(i)

  Case-Laws - AT : CESTAT appellate proceedings involving seized gold bars. Tribunal found insufficient evidence to prove foreign origin of gold, with purity ranging 995.7 to 998.9. Revenue failed to establish 'reasonable belief' of smuggling under Customs Act. Seizure deemed improper as appellant falls under Section 123(1)(a)(i) as possessor. Tribunal directed opportunity for cross-examination of initial seizure officers and remanded case for fresh adjudication, requiring Adjudicating Authority to comprehensively reassess evidence. Appeal disposed with directions to conduct detailed reexamination, potentially leading to return of seized gold to appellant.
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• Corporate Appeals Fail: Insufficient Delay Explanation Leads to Dismissal of Condonation Application Under Procedural Rules

  Case-Laws - AT : CESTAT dismissed the appellant's condonation of delay application for appeals. Despite being a large corporate entity with established legal infrastructure, the appellant failed to provide sufficiently substantive reasons for delay. The tribunal found the explanations vague and unconvincing, including references to cyclone impact and advocate unavailability. Settled legal principles require detailed day-wise explanations for delay, which were absent in this case. The court emphasized that negligence, gross inaction, and lack of bona fides cannot justify time-barred appeals. Consequently, the application was rejected, reinforcing that condonation of delay is not a mere procedural formality but requires compelling and reasonable justifications for each day's postponement.
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FEMA

• RBI Sets Foreign Portfolio Investment Limits for 2025-26, Maintaining Stable Percentages Across Securities Categories

  Circulars : RBI establishes Foreign Portfolio Investors (FPIs) investment limits for fiscal year 2025-26, maintaining existing percentage allocations across securities categories. Government Securities (G-Secs) remain at 6%, State Government Securities (SGSs) at 2%, and corporate bonds at 15% of outstanding stock. The total debt investment limit increases incrementally from Rs. 12,95,323 crore to Rs. 14,70,654 crore across two half-yearly periods. An additional Credit Default Swaps limit of Rs. 2,93,612 crore is set at 5% of corporate bond outstanding stock. Limits are implemented through Fully Accessible Route (FAR) with 50:50 allocation between 'General' and 'Long-term' sub-categories, providing structured foreign investment framework for debt instruments.
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IBC

• Strict Statutory Timelines: Appeal Dismissed for Failing to Meet 45-Day Filing Deadline Under Section 61 of IBC

  Case-Laws - SC : SC dismissed the appeal due to non-compliance with statutory time limitations under Section 61 of IBC. The appellant failed to file certified copies and demonstrate sufficient cause for delay within the prescribed 30-day period extendable by 15 days. The court strictly interpreted procedural rules, emphasizing that legislative intent mandates adherence to limitation periods. The appellate tribunal's rejection of condonation applications was justified, as no compelling reasons were presented to explain the delay in filing the appeal. Consequently, the appeal was dismissed, reinforcing the statutory requirement for timely legal proceedings.
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• Operational Creditor's Insolvency Application Rejected Due to COVID-19 Moratorium Period Under Section 10A of IBC

  Case-Laws - AT : NCLAT dismissed the appeal challenging the rejection of a Section 9 insolvency application. The operational creditor's default dates (03.05.2020, 15.08.2020, and 01.01.2021) fell within the Section 10A prohibited period under IBC. Consistent with Supreme Court precedent in Ramesh Kymal, the tribunal held that defaults occurring during the specified COVID-19 period cannot form the basis for initiating corporate insolvency resolution proceedings. The tribunal emphasized that the creditor bore the responsibility to amend default dates if required, and the adjudicating authority was not obligated to modify dates sua sponte. Consequently, the Section 9 application was deemed non-maintainable, and the appeal was dismissed without merit.
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Indian Laws

• Buyer's Refund Encashment Signals Contract Breach, Bars Specific Performance Under Established Legal Principles

  Case-Laws - SC : SC held that the buyer's conduct in encashing refund drafts demonstrated unwillingness to perform the agreement to sell. The seller's prior cancellation letter constituted a jurisdictional fact precluding specific performance. The buyer failed to establish readiness and willingness to execute the contract, thereby disentitling herself from the equitable relief. The court emphasized that absent a declaratory challenge to the agreement's termination, the specific performance suit remains non-maintainable. Consequently, the appellant's appeal was allowed, effectively preventing specific performance and upholding the seller's right to cancel the agreement based on the buyer's unequivocal actions.
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PMLA

• Public Servant Shielded from Money Laundering Prosecution Due to Lack of Mandatory Sanction Under PMLA Section 197

  Case-Laws - HC : HC quashed the cognizance order against the petitioner, a public servant holding the position of Joint Secretary in the Department of Commerce and Industry, in a money laundering case under PMLA. The court held that since the alleged offence was connected to official duties, prosecution sanction was mandatory. The Special Judge (PMLA), Raipur had taken cognizance without obtaining requisite prosecution sanction, rendering the proceeding illegal. The HC set aside the cognizance order and granted the Enforcement Directorate liberty to seek fresh cognizance after obtaining proper prosecution sanction, emphasizing the procedural requirement for prosecuting public servants.
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SEBI

• Financial Intermediaries Must Meet Strict Risk-Return Verification Standards Under New SEBI Framework for Agencies

  Circulars : SEBI established a comprehensive framework for Past Risk and Return Verification Agency (PaRRVA) to verify and validate risk-return metrics for regulated financial intermediaries. The framework mandates specific eligibility criteria for Credit Rating Agencies (CRAs) and Stock Exchanges (SEs) to participate, including minimum 15 years of existence, substantial net worth, and robust investor grievance mechanisms. The verification process will operate on a two-stage approval mechanism, with an initial pilot period of two months, during which verified risk-return metrics will not be publicly disclosed. PaRRVA will be responsible for defining verification methodology, formulating operational workflows, and establishing systems for data management and dispute resolution, with SEBI retaining oversight and enforcement capabilities.
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• SEBI Mandates Standardized System and Network Audit Reporting Framework for Market Infrastructure Institutions

  Circulars : SEBI issued a standardized circular mandating a comprehensive format for System and Network audit reports for Market Infrastructure Institutions (MIIs). The circular establishes a uniform template to enhance data quality, regulatory compliance monitoring, and observation traceability across stock exchanges, clearing corporations, and depositories. Applicable from FY 2024-25, the directive requires MIIs to implement the new reporting framework, including amendments to existing bylaws and regulations. The standardized format introduces a unique observation identification system and detailed compliance tracking mechanisms to improve technological risk management and regulatory oversight in financial market infrastructure.
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Service Tax

• Yoga Services Taxable as Health and Fitness Training with Specific Exemption Periods and Partial Tax Liability Calculation

  Case-Laws - AT : CESTAT analyzed the classification of yoga services for service tax purposes. The Tribunal held that yoga and meditation services fall under 'health and fitness service' for the period October 2008 to June 2012, rendering them taxable. Training courses like TTC, ATTC, and Vastu Shastra were classified as 'Commercial Training or Coaching Centre Service'. For the period July 2012 to October 2015, services provided by the charitable trust were exempted under the Negative List regime. The extended period of limitation was upheld. The appeal was partially disposed of, with directions to compute the exact tax liability, interest, and penalties after excluding unrelated receipts.
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Central Excise

• Sub-contractors win excise duty exemption for thermal power project supplies under N/N. 6/2006-CE via International Competitive Bidding

  Case-Laws - AT : CESTAT allowed the appeal, affirming that sub-contractors can claim excise duty exemption under N/N. 6/2006-CE for thermal power project supplies when the main contractor (ABB Limited) was awarded the contract through International Competitive Bidding. The tribunal determined that the appellant met all necessary conditions by supplying goods for NTPC's power project, with the main contractor having complied with certification requirements. Relying on precedent from a coordinate bench, the tribunal held that the exemption applies to sub-contractors when the primary contractual conditions are satisfied, thereby reversing the initial denial of duty exemption.
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Case Laws:

• GST

• 2025 (4) TMI 341
  Challenge to dismissal of appeal - authorized signatory of the Petitioner did not sign the appeal - HELD THAT:- In almost identical circumstances, this Court has entertained and allowed several Petitions where appeals were rejected by the same Officer because they were not instituted or signed by the authorized signatories - Reliance can be placed in Court in ZYDUS WELLNESS PRODUCTS LIMITED VERSUS UNION OF INDIA ORS. [ 2024 (8) TMI 1483 - BOMBAY HIGH COURT] . The facts in the present case are also not significantly different. Proper material has been produced to show that the signatory on the Appeal memo was indeed authorized to sign the same. Similarly, if Respondent No. 2 had any objections on entertaining any evidence or submissions, he should have put the Petitioner to notice. Denial of such opportunity violates the principles of natural justice and fair play. The impugned Order dated 30th June 2024 set aside and the Petitioner s Appeal restored to file of Respondent No. 2 for fresh consideration on its merits and as per law - Appeal disposed off.

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• 2025 (4) TMI 340
  Validity of direction to open the GST portal enabling the writ petitioner to submit the revised FORM GST TRAN-1 in view of Rule 120A of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- A registered assessee who was eligible for a credit of tax paid under pre-GST regime was entitled to claim credit of input taxes as per the provisions contained in Section 140 of the Central GST Act. GST TRAN-1 is the transition form to be filed for taxpayers who were registered under the pre-GST regime to avail the accumulated input tax, remaining in their account on 30-6-2017 i.e. the day preceding the appointed day. The said form is to be filed by every person having input tax credit on the closing stock and who have migrated to GST regime. It is the case of the writ petitioner / respondent No. 1 herein that the Tax Consultant engaged by it while opening and making entries in TRAN-1 portal, qua the writ petitioner, instead of entering eligible CENVAT credit amount, mistakenly entered NIL in the Form TRAN-1 and pressed the submit button, upon which, immediately, the Form got freezed and there was no option to edit the uploaded form, which is also supported by the affidavit of Tax Consultant Mr. Rishikesh Sharma filed along with the writ petition vide Annexure P-6 against which the writ petitioner made representation to the Principal Commissioner, Central GST Central Excise, but to no avail. Whether on account of such technical error / advertent error, can the registered assessee be denied the transitional credit? - HELD THAT:- The Supreme Court in Filco Trade Centre Private Limited [ 2022 (7) TMI 1232 - SC ORDER ], considering the technical glitches suffered by the registered assessees, granted two months time from 1-9-2022 to 31-10-2022 to file transitional credit through TRAN-1 and TRAN-2 and extended the same up to 30-11-2022 by order dated 2-9-2022. The Supreme Court in the matter of Collector of Central Excise, Pune and others v. Dai Ichi Karkaria Ltd. and Others [ 1999 (8) TMI 920 - SUPREME COURT ] held that credit obtained by the manufacturer for the excise duty paid on raw material to be used by him in the production of an excisable product is indefeasible. Coming to the facts of the present case, although the writ petitioner committed blunder in filing Form TRAN-1, but as per the writ petitioner, huge sum of money was credited in his account and same was found lying unutilized in the last return filed by it for the month of June, 2017. As held by the Supreme Court in Unichem Laboratories Ltd. [ 2002 (9) TMI 110 - SUPREME COURT ], it is not the duty of the Revenue to deprive an assessee of the benefit available to him in law and for which he was otherwise eligible and is legitimately available to him and the authorities functioning under the Act are required to act reasonably and fairly. The circular issued under Section 168A of the Central GST Act would not come in way of the assessee to revise its Form TRAN-1 and in that view of the matter, the learned Single Judge is absolutely justified in directing respondents No. 1, 2 5 therein to facilitate revising of Form GST TRAN-1 to the writ petitioner. We do not find any good ground to entertain the instant writ appeal. Conclusion - The right to transitional credit, are indefeasible and cannot be curtailed by procedural technicalities or administrative instructions. The appeal dismissed, upholding the Single Judge s order to allow the writ petitioner to revise FORM GST TRAN-1.

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• 2025 (4) TMI 339
  Dismissal of petition on the grounds of an available statutory appellate remedy under Section 85 of the Finance Act, 1994 - Effect of the post-facto approval which was granted on 6th June, 2017 - Challenge to adjudication order passed by the Service Tax Authority pertaining to certain transactions done during the period 2016-17 upto June, 2017 - Penalty imposed on the appellant in the adjudication order dated 29.9.2022. HELD THAT:- This court had an occasion to consider an identical issue in M/S. RAJLAXMI CONSTRUCTION, M/S. BISWAS ENTERPRISE VERSUS EXECUTIVE ENGINEER, HOOGHLY HIGHWAY DIVISION NO. 1 ORS. [ 2025 (4) TMI 233 - CALCUTTA HIGH COURT] . In the said case also the argument was based upon the post-facto approval dated 6th June, 2017. Apart from considering the said approval, the other internal correspondence between the various authorities of the department were also taken note of by the court and it was held that it will be too late for the respondents to now contend that the sanction was a post-facto sanction for the project and the question of payment of any amount of the contractor would not arise. The only difference in the instant case is that since the consideration was received by the appellant during the GST regime, the GST authorities have demanded GST on that and recovered Rs.65.28 lakhs. This amount has to be necessarily refunded to the appellant by re-credited to the cash/credit ledger of the appellant. After doing so the PWD Authorities have to pay the appellant a sum of Rs.84,84.035/- which being the service tax demanded by the Service Tax Department and such payment should be made to the appellant within a stipulated time and on receiving the said payment the appellant should remit the said amount to the service tax authorities within three days from the date of the receipt of the money. Penalty imposed on the appellant in the adjudication order dated 29.9.2022 - HELD THAT:- It is deemed appropriate to hold that this is not a fit case where penalty should be imposed on the assessee either under Section 78 of the Finance Act read with Section 174 of the CGST Act, 2017 and Section 77(1)(a) of the Finance Act, 1994 and Section 77(2) of the Finance Act, 1994 - penalty set aside. Conclusion - i) The dismissal of the writ petition upheld due to the availability of a statutory appellate remedy, reinforcing the principle of exhausting statutory remedies before seeking judicial intervention. ii) The post-facto approval is found to be binding, requiring the State authorities to refund the GST amount and pay the service tax amount to the appellant. iii) The penalties and interest imposed on the appellant are set aside, with the court recognizing the administrative confusion and delays as mitigating factors. The order passed by the State authorities are set aside - appeal allowed.

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• Income Tax

• 2025 (4) TMI 352
  Seeking permission to bring on record as the legal heir of the deceased petitioner during the pendency of this petition when the matter was closed for judgment - HELD THAT:- It is in the interest of justice that the application is allowed. It is accordingly allowed in terms of prayer clause (b). Necessary amendments be carried out during the course of the day. Consequent to the present Interim Application being allowed, the title of the judgment [ 2025 (2) TMI 296 - BOMBAY HIGH COURT] passed by us, is also required to be amended. Let the same be amended as Vijay Shrinivasrao Kulkarni being deceased through the legal heir Smt. Godavari Vijay Kulkarni . The Judgment be accordingly corrected and be made available to the parties.

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• 2025 (4) TMI 351
  Validity of Reopening of assessment - notices issued u/s 148 - HELD THAT:- As petitioner has challenged the notices issued u/s 148 only after the 2nd respondent had overruled its objections by way of speaking orders. Therefore, the petitioner s challenge to the impugned notices issued u/s 148 cannot be countenanced. That apart, if the petitioner had approached this Court immediately after the issuance of the impugned notices on the ground that the same were issued without jurisdiction, these writ petitions would have been entertained on merits. Therefore, these writ petitions are liable to be dismissed. Accordingly, these Writ Petitions are dismissed.

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• 2025 (4) TMI 350
  Addition u/s 69A - cash book for the whole year was not produced and as such the withdrawals remain unverified - As argued AO accepted the cash withdrawal but did not accept the deposit made out of the withdrawal on account of demonetization. HELD THAT:- Since the assessee is a contractor and had turnover of more than Rs. 3.5 Crore, there was no justification for addition of Rs. 2 Lakh and accepting the rest of the deposits of Rs. 3,97,500/- which were deposited in old currency notes on 12.11.2016 when the assessee had also made withdrawal of Rs. 8 Lakh before the demonetization was announced and the unutilized cash was deposited in the bank account. The assessee also submits that the Ld. CIT(A) was not justified in dismissing the appeal ex parte only after issuing two notices after enabling communication window on e-portal on 04.11.2022. Therefore, the Ld. AO was not justified in making the addition as well as the CIT(A) was not justified in upholding the same for an amount of Rs. 2 Lakh when the assessee had made withdrawals of Rs. 8 Lakh and had claimed deposit of Rs. 5,97,500/- out of the withdrawals without the Ld. AO specifying or bringing anything to the contrary to disbelieve that the deposit was out of the withdrawals made immediately before the demonetization. Appeal filed by the assessee is allowed.

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• 2025 (4) TMI 349
  Addition u/s 68 - assessee has failed to prove creditworthiness and identity of the creditors, and genuineness of the transaction - HELD THAT:- AO made addition of unverified sundry creditors but contention of the assessee that the assessee has repaid M/s. Vaibhav Enterprises in April 2009 through banking channel and the same has been verified by the AO by issuing notice u/s. 133(6) of the Act to the banks is false as notice u/s. 133(6) of the Act issued to Vaibhav Enterprises was not served as the factory was closed due to sealing by the Delhi Govt. Except for oral assertions no documentary evidence has been placed on record by the assessee to substantiate creditworthiness of the creditors and genuineness of the transaction. The onus to prove creditworthiness and identity of the creditors is on the assessee. The assessee has failed to discharge the same. Hence, addition is upheld. With regard to M/s. Viraj Industries once the AO in subsequent assessment year i.e. AY 2011-12 has accepted the creditors and transactions as genuine, there is no question of disallowing the same in the impugned assessment year. In light of material available on record addition is directed to be deleted. Capital gains on sale of gold jewellery - The assessee had declared gold jewellery of 860 grams under VDIS 1997, whereas, in impugned assessment year the assessee has sold gold jewellery to the extent of 1276 grams. Thus, the AO has made addition of the excess gold jewellery sold by the assessee i.e. 416.06 grams. The contention of the assessee is that the jewellery was purchased by the assessee in the year 1972-73 and 1986-87. AO had taken cost of acquisition as on 31.03.1987 which has resulted in capital gain, whereas, the assessee has declared Long Term Capital Loss on gold jewellery. No error in the computation of Long Term Capital Gains on the sale of gold jewellery, hence, no interference with the findings of the AO/CIT(A) on this issue is called for

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• 2025 (4) TMI 348
  Disallowance business expenditure - HELD THAT:- We find no reason to sustain the impugned disallowance. Learned counsel first of all takes us to the AO s section 143(3) assessment for AY 2012-13 accepting this very expenditure claim. Various judicial precedents i.e Mazagaon Dock Ltd. [ 1958 (5) TMI 2 - SUPREME COURT] , Upasana Hospital[ 1996 (7) TMI 117 - KERALA HIGH COURT] , Distributors (Baroda) (P.) Ltd. [ 1971 (9) TMI 20 - SUPREME COURT] , Amalgamations (P.) Ltd.[ 1976 (3) TMI 31 - MADRAS HIGH COURT] and ESSAR Investments Ltd. [ 2005 (10) TMI 426 - ITAT MUMBAI] that a business expenditure could not be disallowed even in an instant of a holding company having made investments in subsidiary as such an activity could indeed be treated as business itself. We find merit in the assessee s instant first and foremost substantive ground to delete the impugned disallowance, in very terms. Disallowing the assessee s directors remuneration on the ground that the same was over and above that held allowable under the companies law - HELD THAT:-Learned counsel, inter alia, invites our attention to the assessee s alternate plea that it had already reversed the alleged excess expenses in financial year 2014-15 and got assessed for the same. That being the case, we are of the considered view that the instant issue deserves to be restored back to the AO for his afresh appropriate verification/computation. Disallowance u/s 14A - HELD THAT:- We find no merit in the Revenue s foregoing arguments as not only the jurisdictional high court in Chemnivest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] has settled the issue prior to the above amendment that the impugned disallowance does not get attracted in absence of any exempt income but also in Era Infrastructure (India) Ltd. [ 2022 (7) TMI 1093 - DELHI HIGH COURT] their lordships have held that the above statutory amendment carries only prospective effect. We thus accept the assessee s instant last ground, in very terms.

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• 2025 (4) TMI 347
  Addition u/s 68 and 69C - treating the transaction in shares by the assessee as bogus - HELD THAT:- There is no reference to any portion of sworn statements wherein any adverse observation against the assessee has been noted by the Investigation Wing. The price fluctuation of shares of the entities in which the assessee has transacted also does not support the case of the Revenue, as no material has been brought on record to show that the assessee was involved in such price manipulation even after purchasing and selling the shares on the stock exchange through a SEBI registered stock-broker. Therefore, in the present case, it is sufficiently evident that the AO, without finding any fault with the evidence submitted by the assessee, proceeded to treat the transaction as non-genuine and the long-term capital gains earned by the assessee as bogus. We also find that the AO did not issue any summons or examine the broker of the assessee, i.e. Anand Rathi Securities Ltd. Therefore, no merit in the impugned order upholding the addition made u/s 68 and disallowing the exemption of long-term capital gains claimed by the assessee. Consequently, we also do not find any merit in the addition on account of the alleged commission payment. Accordingly, the additions made by the AO are deleted, and the Grounds raised in assessee s appeal are allowed.

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• 2025 (4) TMI 346
  Taxing remittances as fee for technical services u/s.9(1)(vii)(b) - income was in the shape of data management charges and reimbursement of expenses - as per assessee it would be business income which would be taxable only when the assessee has permanent establishment (PE) in India which was not the case - HELD THAT:- Admittedly, the assessee is a non-resident and having no PE in India. We have gone through the decision of De Beers India Minerals (P) Ltd [ 2012 (5) TMI 191 - KARNATAKA HIGH COURT] referred by the ld. counsel for the assessee and noted that the Hon ble Supreme Court while interpreting the India US DTAA has held that the principle requirement of make available technical services is made only if the service recipient is unable to independently apply the technical knowledge, skill, etc., in future without the aid of service provider, the same cannot be held as make available and such technical services would not fall within the definition of technical services in term of DTAA and not liable to tax. Correct TDS credit as reported in Form No.26AS - as stated that the assessee has not received any refund and Ld. AO has erred in noting the correct fact - As it would suffice on our part to direct AO to grant TDS credit in accordance with law and determine the correct figures of refund as available to the assessee. These grounds stand allowed for statistical purposes.

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• 2025 (4) TMI 345
  Rectification application u/s 154 - addition on account of difference in import purchase and custom duty w.r.t. CBEC VAT return - HELD THAT:- CIT (A) has not adjudicated the matter on merits and merely dismissed the appeal without considering the materials that the assessee has filed during the assessment proceedings. We also find that the CIT(A) has not accorded adequate opportunity and virtual hearing as requested by the assessee. We consider it fit, in the interest of justice, to set aside the issue to the file of the CIT for a fresh adjudication after examining all the materials and evidence filed by the assessee. Appeal of the assessee allowed for statistical purposes.

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• 2025 (4) TMI 344
  Penalty u/s. 271(1)(c) - addition made u/s 68 - reassessment order was passed by the AO u/s.147/144 as there was no compliance on the part of the assessee, which led to addition on account of cash deposits in the bank account - HELD THAT:- Assessee has not filed any return of income. The matter against quantum additions made by the AO reached Tribunal and the Tribunal has restored the quantum additions to the file of AO for denovo re-assessment and to verify the additional evidences and submissions filed by the assessee for the first time before ITAT. The assessee is claiming that he is small trader in shoe on Feri basis, and the income being below taxable limits, no return of income was filed. Assessee has claimed before ITAT against quantum additions that the bank account in which cash was deposited is a joint account with his brothers who has owned up the bank deposit in the said bank account. The affidavits executed by his brother were filed before the ITAT, in the quantum proceedings, and Tribunal restored the matter back to the file of AO for fresh determination of the issue after considering affidavits and other submissions. Since the Tribunal has restored the quantum additions back to the file of the AO to denovo frame reassessment in quantum, it will be fair and appropriate that this matter relating to levying of penalty u/s 271(1)(c) be also restored back to the file of AO for fresh determination. The appeal of the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 343
  Denial of deduction u/s.54F - assessee neither claimed the said deduction in original return of income filed nor has filed any revised return of income - CIT(A) has accepted the claim of the Assessee that the Assessee is entitled to claim deduction u/s 54F - HELD THAT:- We note that in the case of National Thermal Power Co. Ltd. [ 1996 (12) TMI 7 - SUPREME COURT] held that the failure to make a claim in the return of income does not take away the power of the appellate authorities to consider a fresh claim, which is otherwise tenable in law, if the relevant material is available on record. We do not find any infirmity in the decision of the CIT(A) to entertain and allow claim of deduction u/s 54F - Decided in favour of assessee.

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• 2025 (4) TMI 342
  Undisclosed foreign asset under Black Money Act - As submitted Assessee is a senior citizen and belongs to middle class family and earned income from donation, property and capital gains - Assessee claimed that he was not in possession of relevant details/documents/evidence and therefore failed to produce the same before the authorities below, however, now by making sincere efforts has procured certain evidences and therefore has filed a application for admission of additional evidences HELD THAT:- Admittedly the orders passed by the authorities below are based on non-submission of relevant evidences which the Assessee now may be not completely but in part has filed before us. As it is the mandate of the law that real income has to be taxed and in the instant case the authorities below made and affirmed the addition, admittedly in the absence of relevant reply/documents and therefore for the just decision of the case and substantial justice and fair play, we are inclined to remand the instant case to the file of the Ld. Commissioner for decision afresh, but subject to reasonable cost of Rs. 21,000/- as voluntarily offered by the Assessee. Appeal filed by the Assessee stands allowed for statistical purposes.

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• 2025 (4) TMI 338
  Reopening of assessment u/s 147 - denial of allowance u/s 54 of the Act as well as deduction u/s 54EC - HELD THAT:- ITAT had rejected the reasoning that the deduction under Section 54 of the Act is available in respect of investment in one residential unit only. ITAT, following the decision in the case of Arun K. Thiagarajan [ 2020 (6) TMI 513 - KARNATAKA HIGH COURT] held that Section 54 of the Act contemplated investment in a residential house , which did not mean one residential house. The learned ITAT held that expression a residential house could not be construed as a singular house. It is not necessary to examine the merits of the learned ITAT s decision as the Revenue has accepted the ITAT s decision and has not filed an appeal against the impugned order. Thus, we must proceed on the basis of the AO s reasoning that the deduction under Section 54 of the Act was confined to investment made in one residential house has not been sustained. Second reason that the deduction under Section 54EC of the Act is confined to Rs. 50,00,000/- only the same was also not sustained by the ITAT. ITAT had following the decision of C. Jaichander [ 2014 (11) TMI 54 - MADRAS HIGH COURT] concluded that the issue whether a deduction u/s 54EC of the Act could exceed the said amount, as claimed by the Assessee, was covered in the Assessee s favour. The Revenue s appeal against the CIT(A) s order was, accordingly dismissed. The principal question to be addressed is whether the additions made by the AO are sustainable if the reasons for which the reassessment proceedings had been initiated are not sustained. Undisputedly, the said question is squarely covered by the several decisions of this court. In Ranbaxy Laboratories Limited [ 2011 (6) TMI 4 - DELHI HIGH COURT] Sub-section (2) of section 148 mandates reasons for issuance of notice by the Assessing Officer and sub-section (1) thereof mandates service of notice to the assessee before the Assessing Officer proceeds to assess, reassess or recompute the escaped income. Section 147 mandates recording of reasons to believe by the Assessing Officer that the income chargeable to tax has escaped assessment. All these conditions are required to be fulfilled to assess or reassess the escaped income chargeable to tax. As per Explanation 3 if during the course of these proceedings the Assessing Officer comes to conclusion that some items have escaped assessment, then notwithstanding that those items were not included in the reasons to believe as recorded for initiation of the proceedings and the notice, he would be competent to make assessment of those items. However, the Legislature could not be presumed to have intended to give blanket powers to the Assessing Officer that on assuming jurisdiction under section 147 regarding assessment or reassessment of the escaped income, he would keep on making roving inquiry and thereby including different items of income not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction. Question of law as framed is answered in favour of the Assessee.

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• 2025 (4) TMI 337
  ITAT affirming the order of CIT who dismissed the appeal of the appellant ex-parte on the grounds of non-appearance - Method of service of notice - validity of service of notice on ITBA portal (e-portal) - HELD THAT:- As it is quite vivid that admittedly the appellant did not opt for service of notice through e-mail mode and, even in the e-mail address mentioned in Form 35, the appellant was not served with the notices in appeal, however, the same has been sent on appellant s old email address and also uploaded on ITBA portal. In this regard, the decision of the Munjal BCU Centre of Innovation and Entrepreneurship [ 2024 (3) TMI 479 - PUNJAB HARYANA HIGH COURT ] may be noticed herein profitably wherein it has clearly been held that service of notice on ITBA portal (e-portal) is not a valid piece of service. Since the appellant/assessee did not opt for service of notice through e-mail and even it is not the case of the respondent-revenue that the appellant has been served with the notice on his e-mail address mentioned in Form 35 and further in light of the provisions contained under Section 282 of the Act of 1961 and Rule 127 of the Income Tax Rules, 1962 following the principles of law rendered in the matter of Munjal BCU Centre of Innovation and Entrepreneurship (supra) uploading of notice on ITBA portal (e-portal) cannot be treated to be a valid service of notice, we are of the considered opinion that the orders passed by the CIT (A) and by the learned ITAT, Raipur dismissing the appeals of the appellant on the ground of non-prosecution, are liable to be set aside being bad and illegal.

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• 2025 (4) TMI 336
  Validity of reopening of assessment - allegations in the notice is against the JM Balanced Fund-Annual Dividend Option Regular Plan of JM Financial which is alleged to have manipulated accounting methodology so as to artificially inflate the distributable surplus - HELD THAT:- The petitioner has disclosed the short term capital loss suffered during the year under consideration in the computation of the income as well as return of income. On perusal of the statement placed on record pertaining to the short term capital loss from the mutual fund there is no reference to JM Balanced Fund-Dividend as stated in the reasons forming part of the notice under Section 148A (b) of the Act being the information which led to reopening of the assessment. Perusal of the impugned order u/s 148A (d) also refers to the transaction made by the assessee during the Financial Year 2017-2018 pertaining to Assessment Year 2018-2019 refers to JM Equity Hybrid Fund only and not the JM Balanced Fund whereas the allegations in the notice is against the JM Balanced Fund-Annual Dividend Option Regular Plan of JM Financial which is alleged to have manipulated accounting methodology so as to artificially inflate the distributable surplus. As relying on Karan Maheshwari [ 2024 (3) TMI 953 - BOMBAY HIGH COURT] rendered in the similar facts of transactions for violation of law by JM Financial AO could not have assumed the jurisdiction for reopening the assessment and adopting the same reasoning as per the aforesaid decisions, we are also of the opinion that the impugned notice as well as order are required to be quashed and set aside. Accordingly, impugned notice issued under Section 148A (b) and the order passed under Section 148A (d) and the notice issued under Section 148 of the Act of the even date are quashed and set aside. Assessee appeal allowed.

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• 2025 (4) TMI 335
  Bogus purchases - CIT(A) restricted additions/disallowances of the purchases to 5% - ITAT sustained the addition @ 6% - HELD THAT:- This Court finds that in several matters arising out of transactions with the said Bhanwarlal Jain Group, the Tax Appeals of the Department have been dismissed where, the learned ITAT has assessed the disallowance at 6%, as has been done in the present case. In case of PCIT I Vs. Magnifique Gems Pvt. Ltd [ 2025 (1) TMI 1012 - GUJARAT HIGH COURT] and also in the present Assessee s own case this Court [ 2024 (11) TMI 1266 - GUJARAT HIGH COURT] has dismissed the aforesaid Tax Appeals by holding that no question of law arises in the facts of the case and no interference is called for in the conclusion and findings of the Tribunal. The present appeals are dismissed summarily holding that no question of law, much less, any substantial question of law arises in the facts and circumstances of the present case.

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• 2025 (4) TMI 334
  TDS on interest/finance charges paid to the NBFCs by virtue of Section 194A - HELD THAT:- A careful reading of the judgment of Hindustan Coca Cola Beverage (P) Ltd. [ 2007 (8) TMI 12 - SUPREME COURT ] would show that it has categorically been made clear that demand visualized under Section 201 (1) of the Act of 1961 should be enforced after the tax deductor has satisfied the Officer-In-Charge of TDS that taxes due on him have been paid by the deductee-assessee. In the present case, by virtue of Section 194A of the Act of 1961 the appellant was required to deduct TDS on payment of interest/finance charges made to the NBFCs but, admittedly, the same has not been deducted by the appellant herein and, consequently, the circular issued by the CBDT dated 29.01.1997 would come into play where it has been clearly held that demand visualized u/s 201 (1) should be enforced after the tax deductor has satisfied the Officer-In-Charge of TDS (Assessing Officer) that taxes due on him have been paid by the deductee/assessee. Admittedly, in the instant case, in accordance with Section 194A of the Act of 1961 TDS have not been deducted on the interest/finance charges paid by the appellant to the NBFCs and the respondent-revenue has held the appellant as assessee deemed to be in default and, therefore, enforced demand u/s 201 of the Act of 1961. AO was required to afford opportunity to the appellant/tax-deductor to satisfy and establish that taxes have been paid by the deductee/assessee, as, in absence of which, the appellant/tax-deductor has failed to satisfy the AO (Officer-In-Charge of TDS) by establishing that taxes have been paid by the deductee/assessee more particularly when the appellant/tax-deductor and NBFCs/tax-deductee/ assessee are two different entites/personalities. As such, the AO ought to have given opportunity to the appellant before imposing liability u/s 201 (1) which, in the present case, has not been done and straightaway liability sought to have been imposed upon the appellant by the Assessing Officer and same has also been affirmed by the CIT (Appeals) and the ITAT, Raipur. Thus, orders to the extent that the appellant failed to deduct TDS on interest/finance charges paid to the NBFCs, u/s 194A are hereby set aside. The matter is remitted to the AO for fresh consideration on the point whether the assessee/tax-deductee has paid tax on the amount received by them by incorporating the receipts in their books of accounts after providing due opportunity of hearing to the appellant.

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• 2025 (4) TMI 333
  Validity of Penalty order u/s 271D beyond period of limitation - case of the petitioner that the limitation period u/s 275(1)(c) of the IT Act for passing the impugned Penalty Order expired on 31.03.2020 and the impugned Penalty Order dated19.08.2021 was without jurisdiction - HELD THAT:- As period of limitation to pass order(s) stood extended from time to time. Therefore, the limitation prescribed under Section 275(1)(a) of the IT Act which would have otherwise expired during the period between 30.03.2020 and 30.03.2022 stood extended till 31.03.2022 in view of Clause A of the Notification No. 113/2021 in S.O.3814(E) dated 17.09.2021 issued under Section 3(1)(a) of TOLA, 2020. The argument of the petitioner that the limitation for passing the impugned Penalty Order u/s 271D of the IT Act was to be reconciled in terms of the limitation period prescribed u/s 275(1)(c) of the IT Act has to be held without merits. That apart, the arguments that the respondents should have awaited for the order of Appellate Commissioner in the appeal filed against the Assessment Order and that, the impugned Penalty Order is premature, is also of no solace as limitation stood extended till 31.03.2022 in view of Clause A of the Notification No.113/2021 dated 17.09.2021. Since the impugned Penalty Order was passed on 19.08.2021 , it has to be held that it has been passed well before the extended period of limitation in terms of the above Notification. Given that the impugned Penalty Order has been passed before the expiry of the limitation period, it can be revised after the appeal is disposed by the Appellate Authority against the Assessment Order dated 30.12.2019, in terms of Section 275(1A) of the IT Act. Therefore, the impugned order imposing penalty is not required to await the order of the Appellate Authority in the appeal filed by the petitioner against the Assessment Order dated 30.12.2019. By the same token, it cannot be also said that the impugned Penalty Order is premature. Consequently, this Writ Petition has to fail. Writ Petition is dismissed with liberty to the petitioner to challenge the impugned Penalty Order dated 19.08.2021 by way of filing an appeal before the Appellate Commissioner under Section 246A of the IT Act, within a period of 30 days from the date of receipt of a copy of this order.

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• 2025 (4) TMI 332
  Direct Tax Vivad Se Vishwas Act - rejecting the application filed by the petitioner to rectify the mistake in Form-3 - scope of expression disputed tax and tax arrear have been defined in Section 2(j) and Section 2(o) of the Direct Tax Vivad Se Vishwas Act, 2020 HELD THAT:- The amount payable by the petitioner is only one-half of the amount calculated in Sl.No.(3) to Table No.1, in such issue, and in such manner as may be prescribed as per the 1st Proviso to Section 3 of the Direct Tax Vivad Se Vishwas Act, 2020. The case of the petitioner ought to have been reconciled in terms of Serial No.(a) to Table to Section 3 of the Direct Tax Vivad Se Vishwas Act, 2020 read with 1st Proviso to the said Act and the definition of disputed tax in Section 2(j)(F) and definition of tax arrears in Section 2(o) of the Direct Tax Vivad Se Vishwas Act, 2020. As per Section 7 of the Direct Tax Vivad Se Vishwas Act, 2020, only amounts paid in pursuance of a declaration made u/s 4 shall not be refundable under any circumstances. Here, no amount has been paid by the petitioner pursuant to the declaration filed under Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020. As per Explanation to Section 7 of the Direct Tax Vivad Se Vishwas Act, 2020, where the declarant had paid any amount under the Income Tax Act, 1961 in respect of his tax arrear which exceeds the amount payable under Section 3 of the Direct Tax Vivad Se Vishwas Act, 2020, he / she shall be entitled to a refund of such excess amount. However, the said person will not be entitled to interest on such excess amount. Therefore, this Writ Petition is allowed by setting aside the Impugned Communication/Order rejecting the application filed by the petitioner to rectify the mistake in Form-3 dated 20.04.2021 issued by the respondent under the provisions of the Direct Tax Vivad Se Vishwas Act, 2020.

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• 2025 (4) TMI 331
  Additions made under the block assessment only on the basis of evidence gathered during the course of search - Whether additions under the block assessment can be made solely on the basis of the statement recorded u/s 132(4) without any other material evidence to corroborate with? - Addition for investment in the property and Articles found in search - One of the arguments put forth by the appellant is that the additions to income should be attributed to the appellant s father, who had passed away in 1993 - HELD THAT:- There is no merit in this submission as it is unsupported by any material such as books maintained by his father or returns filed by him offering income/claiming expenditure in his hands. A perusal of the assessment order reveals that there has been substantial seized material relied upon in the framing of the assessment. The Statement in question has been recorded from the assessee on oath and Section 132(4) states that any such Statement may be used in evidence in any proceeding under the Indian Income Tax Act, 1922 or this Act. The scope of the Statement is set out in the Explanation to Section 132(4) where Legislature clarifies that the examination of the person is not a restrictive examination touching only upon documents or assets found in the search but may encompass all materials relevant for the purposes of investigation connected with the proceedings under the Act. This is not a case where the appellant has retracted the statement despite having had the opportunity to do so. Hence, the statement remains part of the record as a reliable document. Moreover, the appellant has also not responded to Notice u/s 158BC dated 06.12.1996 by filing a block return. Hence, in the absence of a return and the fact that the Appellant has stood by the recorded statement, we are not inclined to intervene. The Departmental Instruction states that the computation of undisclosed must be based on evidence. In the present case, there are seized material duly supported by the assessee s own statement. In the case of Smt.Dayawanti Foot Note Supra [ 2016 (11) TMI 211 - DELHI HIGH COURT] has affirmed the position that where inference is strong in respect of undisclosed income of assessee, such inferences being premised on materials found as well as statements recorded in the course of search operations, such additions are permissible and warranted. Intervention in such a case would arise only where the estimation has been shown to be arbitrary or unreasonable. In all the issues raised for consideration before us, incriminating material has been found in the course of search proceedings. Over and above, the statement of the assessee confirms the position that the additions made are justified. We are thus of the considered view that the order of the Tribunal does not suffer from any infirmity. Decided in favour of revenue.

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• 2025 (4) TMI 330
  Validity of reassessment proceedings beyond period of limitation - HELD THAT:- In the present case, the period of six years from the end of the relevant AY 2014-15 expired on 31.03.2021. The impugned notice has been issued thereafter, and the same is thus barred by limitation.

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• 2025 (4) TMI 329
  Expenditure incurred towards advertisement/business promotion in the form of MRF Pace Foundation is being charity in nature and hence, not an allowable deduction - HELD THAT:-Issue decided in the assessee s own case in the appeals for AY 2006-07 and 2007- 08 in MRF Ltd. [ 2021 (4) TMI 501 - MADRAS HIGH COURT] as held the power of the Revenue is confined only to examine the purpose of genuineness of the expenditure and not the expediency or the quantum. Nowhere there is any observation either made by the Assessing Officer or the Tribunal that the expenditure was not genuine. In fact, Mr.T.Ravikumar would fairly submit that all other expenditure, which have been claimed by the assessee towards sponsorship, advertisement, have been allowed in its entirety. The Tribunal fell in error in coming to a conclusion that donations were extended towards the Pace Foundation, when the fact remains that the assessee has established the foundation and it is part and parcel of the assessee themselves and not a separate entity to draw any such inference of donation. Validity of reopening of assessment - notice issued beyond 4 years - AY 2002-03 - claims of deduction u/s 80HHC and 80IA - HELD THAT:- The provisions of Section 147, particularly the proviso thereto, enable the assessing authority to take action under Section 147 only in a case where there has been no full and true disclosure on the part of the assessee at the first instance. In light of our unequivocal findings that the claims of deduction under Sections 80HHC and 80IA have been fully and truly disclosed as part of the original returns of income, duly noticed by the assessing authority, discussed with the assessee in the course of assessment and figure in detail in the original order of assessment, we are of the considered view that the proceedings for re-assessment as far as AY 2002-03 are concerned are barred by limitation. The substantial question of law in relation to this issue for AY 2002-03 is hence answered in favour of the assessee Reassessment for AY 2004-05 - Explanation 2 to Section 147, sets out specific situations where the assumption of jurisdiction to re-assess has specifically been enabled by way of a deeming fiction. The adumbrated situations are deemed to be cases where income chargeable to tax has escaped assessment. One of such situations is the excess grant of deductions. In the present case, the reason for re-opening is that the grant of deduction under Sections 80HHC and 80IA by the assessing officer was in excess of what the appellant was entitled to. Thus, while the veracity or otherwise of that allegation in regard to excess claim of deduction requires to be tested, as far as the assumption of jurisdiction under Section 147 is concerned, we do not find any cause to intervene. The re-opening has been made within the time limit provided and the invocation of Explanation 2 to justify the assumption of jurisdiction to reassess is also in order, subject of course, to the process of re-assessment on merits. The substantial question of law in relation to assumption of jurisdiction under Section 147 for AY 2004-05 is answered in favour of the revenue and against the assessee. Reassessments for AY 2003-04, 2004-05 and 2005-06 - The first issue touches on the amendments made by way of the Taxation Laws Amendment Act, 2005 to Section 80HHC, with retrospective effect from 01.04.2000. The amendments were the subject matter of challenge before the Hon ble Supreme Court and in the case of Commissioner of Income-tax v. Avani Exports [ 2015 (4) TMI 193 - SUPREME COURT] as upheld the amendments, though prospectively i.e., on and with effect from date of amendment being 01.04.2005, with respect to AY 2005- 06 onwards. Hence, the amendment cited as a reason for re-opening of the assessments, would have no application for AY 2003-04 2004-05. In this light of the matter, although we have upheld the assumption of jurisdiction for re-opening of assessment for AY 2004-05, the substantial question of law relating to deduction under Section 80HHC is, on merits, answered in favour of the assessee. Deduction u/s 80IA in respect of the rubber manufacturing units at Kottayam in Kerala and Medak in Andhra Pradesh - While Section 80IA continued to grant relief in respect of industrial undertakings or enterprises engaged in infrastructure development, Section 80IB provides for a deduction for industrial undertakings other than those engaged in infrastructure development. The business of the petitioner thus continued to be entitled to the benefit of deduction, though under Section 80IB. The effect of bifurcation of Section 80IA into 80IA and 80IB is a seamless continuation of the deductions under the new provisions and what was available under erstwhile 80IA would continue to be available under Section 80IB subject to compliance with the statutory conditions. Thus, the entitlement of an assessee that had claimed, and had been granted deduction under erstwhile Section 80IA was to be traced from the initial year when the claim had been successfully made, and would continue onward to the entire ten year period, straddling both pre and post 1999 (see the decision of Natraj Stationery Products (P.) Ltd. [ 2008 (11) TMI 48 - HIGH COURT DELHI] on this point). The petitioner had admittedly been granted relief under Section 80IA till 1999 and thereafter under Section 80IB till 2004-05. It is only in the instant re-assessment proceedings for AY 2002-03 and 2004-05 (AY 2004-05 being the last year of claim), that the claim has been questioned. Thus, even on first principles, we do not accept that, on identical facts and legal position, the department could find an assessee ineligible for a claim of deduction for only two years out of the ten year period. We reiterate that no material difference, or for that matter, any difference at all, has been pointed out in the factual and legal positions both pre and post the years in question. We conclude that that the denial of deduction under Section 80IA and 80IB is misconceived.

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• 2025 (4) TMI 328
  Revision u/s 263 - AO allowed the contribution made by the assessee to Core SGF, which as per the PCIT is a contingent liability, and therefore, held that the assessment order is based on wrong assumption of facts and incorrect application of law - assessee has contributed an amount towards Contribution to NSCCL Core Settlement Guarantee Fund ( Core SGF ) and debited the same in the Profit Loss account under the head Office Expenses , which is a contingent liability of the assessee, and therefore is not permissible deduction u/s 37 HELD THAT:- From the perusal of the notices issued by the AO during the assessment proceedings and the reply filed by the assessee thereto, we find that the issue of the claim of contribution to Core SGF was specifically raised during the scrutiny assessment proceedings, and the same was duly replied to by the assessee. No basis in the findings of the PCIT that the claim of the assessee was allowed without conducting a proper inquiry and verification. Accordingly, the reliance placed on the provisions of clause (a) of Explanation 2 to section 263(1) of the Act is completely misplaced in the present case. As regards the findings of the PCIT that the order passed by the AO is based on a wrong assumption of facts and wrong application of law, since the contribution made by the assessee to Core SGF was allowed despite being a contingent liability, we find in assessee s own case in National Exchange of India Ltd. [ 2024 (6) TMI 456 - ITAT MUMBAI ] , after considering the SEBI s circular, as noted in the foregoing paragraphs, held that the statutory contribution made by the assessee to the Core SGF is allowable under section 37(1) of the Act as the said contribution has been made exclusively during the course of carrying on its business as a stock exchange. Since the view taken by the AO has also been affirmed by the Co-ordinate Bench of the Tribunal in the assessee s own case in subsequent years, there cannot be any dispute that the same is a plausible view. Therefore, PCIT has erred in concluding that the assessment order is based on a wrong assumption of facts and a wrong application of law - grounds raised by the assessee are allowed.

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• 2025 (4) TMI 327
  Denying registration u/s 12AB - violation of provisions of Section 13(1)(b) and therefore the Trust is not entitled for exemption u/s 11 - whether a Trust created before 01-04-2021 can be denied registration u/s 12AB of the Act and by invoking the provisions of Section 13(1)(b) of the Act? HELD THAT:- This issue is no more res-integra since the Jurisdictional High Court Judgment in the case of CIT(E) vs. Jamiatul Banaat Tankaria [ 2024 (10) TMI 712 - GUJARAT HIGH COURT ] held that the provisions of Section 13 of the Act would be attracted only at the time of assessment since the quantum of expenses made for religious and common purposes can be determined from Profit and Loss accounts only and not at the time of granting registration u/s. 12A of the Act following case of CIT v. Bayath Kutchhi Dasa Oswal Jain Mahajan Trust [ 2016 (9) TMI 8 - GUJARAT HIGH COURT ] The above judgments will hold good to a Trust created before 01-04-2021. Since the assessee has to first cross the hurdle of being eligible to exemption under section 11 by obtaining a certificate of registration under section 12A of the Act. Having crossed this hurdle then after the provisions of Section 13(1)(b) will get attracted whether the trust spended for the benefit of particular community, when the trust having mixed objects in it. Therefore grounds raised by the assessee is hereby allowed. The matter is restored to the file of Ld. CIT (Exemption) with a direction to grant Final Registration u/s. 12AB of the Act, after giving due opportunity of hearing to the assessee and in accordance with law. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 326
  TP Adjustment - rejection of TP Study of the assessee - TPO held that the tested party is the foreign AE except one. Those tested parties are service providers unlike the assessee - selection of tested parties was questioned by the Ld. TPO on the basis of functionality along with the geographical area and various market factors affecting the overall pricing, margin and cost of the services - HELD THAT:- Since no material was brought on the records by the assessee to contradict the finding of the authorities below. We therefore, of the considered view that there is no infirmity in the finding of the authorities below that the assessee should be the tested party and comparables should be indigenous instead of foreign AE service providers and foreign comparables. Similar issue raised in the assessee s case in the [ 2024 (8) TMI 1546 - ITAT DELHI] was also upheld in principle by the coordinate bench. Thus, in view of the above, we, in principle, also upheld the finding of the authorities below rejecting the TP Study of the assessee. Adoption of CUP method instead of TNMM for benchmarking international transactions - Since no material was brought on the records by the assessee to contradict the finding of the authorities below. We therefore, of the considered view that there is no infirmity in the finding of the authorities below applying the CUP method for benchmarking. Selection of comparable - Kotak - We are of the considered view that Kotak is suitable comparison provided their similar services are compared amongst themselves along with the specific data in that regard only for arriving the correct benchmarking. Ordered accordingly. Considering the facts in entirety, we find that the Ld. TPO is not justified in arriving the ALP at NIL on the reasoning that the assessee failed to submit any corroboratory evidence for receipt/rendering of services by its AEs. The TPO should have looked into all the evidences submitted by the assessee and give finding thereafter. It is an accepted fact that the transactions between the assessee and AE will be always subjective in nature. It may be advantageous to the assessee to engage its AE for Intra Group Services as a business model. The costing of the same therefore, required proper analysis and examination to rule out any payment made than that of arm s length price. For that purpose, the TPO should verify and work out the arm s length margin by applying applicable transfer pricing mechanism as per Income Tax Rules and determine the quantum of the adjustment thereon.

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• 2025 (4) TMI 325
  Bogus purchases - Whether the appellant was denied the opportunity for cross-examination of the parties involved ? - addition of entire bogus purchase amount or only the profit element embedded - HELD THAT:- AO has also made independent inquiries and has arrived at conclusion that the parties are non-existent/ non-genuine. A.O, has also pointed out some defects in the purchase bill submitted by the appellant i.e. delivery note, suppliers reference, buyers order, dispatch documents, term of delivery etc. A.O. has also mentioned that appellant was not able to produce the above party/seller for examination and that M/s Macro IT Systems Pvt. Ltd. is controlled by Shri Naresh Kumar Jain involved in providing the accommodation entries. The same have been confronted to the appellant too. In response, the appellant has failed to produce the parties for examination. Hence, the onus remained un-discharged on part of the appellant. Hence, there is no failure on part of the AO in terms of adherence to the principles of natural justice. Appellant has given papers and documents like bank statement, VAT/ST challans etc. However, the shell companies are paper-based companies and all documents/papers are generated. Also it is trite law that transactions through banking channel are not sacrosanct. Hence, the arguments of the assessee for complete genuineness are not acceptable. However, keeping in view the assessment order wherein AO has not questioned the genuineness of the sales Hence, there must be purchases made by the appellant from grey market in respect of the sales.The appellant would have saved taxes like VAT, which were payable on genuine purchases. The grey market purchases also evade indirect taxes. A fair estimation of the disallowance of 12.5% of unverified alleged bogus purchase will meet the end of justice. The grounds of appeal in absence of any other supporting material evidence are not tenable. Therefore, the grounds of appeal are dismissed.

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• 2025 (4) TMI 324
  Rejection of registration u/s 12A(1)(ac)(vi)-B and u/s. 80G(5)(iv) due to part submission of the details/ information to verify the genuineness of the activities, charitable objects and commencement of the activities charitable - HELD THAT:- We find that ld. CIT(E), Delhi has summarily rejected both the applications without discussing any of the merits as well as even without discussing the details of questionnaire which he wanted to be supplied by the assessee. Thus in this view of the matter, we are of the considered opinion that both the matters needs to be remitted back to the file of the Ld. CIT(E), Delhi. Ld. CIT(E), Delhi.Assessee s appeals are allowed for statistical purposes.

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• 2025 (4) TMI 323
  Rejecting the application for registration u/s 12A and approval u/s 80G(5) - As per CIT(A) assessee does not conclusively prove the genuineness of the activities and rejected the registration. HELD THAT:- The assessee has furnished several documents and evidences which were furnished before the CIT(E) before us to establish the genuineness of the activities of the trust. Be that as it may, we are of the view that the CIT(E) has not given sufficient time to assessee to present its case. We are of the considered view that the CIT(E) ought to have given a reasonable and adequate opportunity of being heard to the assessee. Therefore, we deem it fit to restore the issue of registration u/s 12A to the file of the CIT(E). CIT(E) is directed to rehear and consider all the documents submitted along with the application after affording a reasonable and adequate opportunity of being heard to the assessee. The ground of the appeal is allowed for statistical purposes.

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• 2025 (4) TMI 322
  Rejecting the Registration u/s.12A and certificate u/s.80G - CIT(A) rejected this application because of non-compliance of the notices issued by him calling for various details - As submitted that the notices were sent by e-mail to the e-mail ID of the President of the assessee trust, who was unable to attend to the same due to her illness as she was undergoing medical treatment for breast cancer at the relevant time. Eventually, she passed away on 02/01/2025. HELD THAT:- As submitted that the non-compliance of the notices was due to circumstances, and it was purely unintentional. Under these circumstances we find it there was a reasonable cause in not able to file the appeal in time. Assessee could not attend to the notices issued from the office of CIT (E) as it was sent on personal email of the President of the assessee trust and due to her terminal illness the notice went unnoticed, accordingly the order u/s.12AB passed by ld. CIT (E) is set aside and is restored back to him for deciding it afresh, after considering the assessee s application and giving due opportunity of hearing to the assessee. CIT (E) rejecting the assessee s fresh application u/s.12A(1)(ac)(iii) because the provisional registration u/s.12AB was already cancelled and in absence thereof, no registration u/s.12AB could be granted - Once we have set aside the order u/s.12AB wherein its provisional registration u/s.12AB has been cancelled then, the very basis of 12AB order dated 13/11/2024 will not survive and become infructuous. Since we have already restored the matter to the file of the ld. CIT (A) to decide the issue of registration of 12AB, therefore, this appeal is infructuous, however, CIT(E) will decide assessee s application filed and accordingly, this appeal is also set aside and ld. CIT(E) may decide accordingly.

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• Customs

• 2025 (4) TMI 321
  Confiscation of seized Gold Bars - levy of penalty u/s 112(b)((1) and section 135 of th Customs Act, 1962 - burden of proof - denial of cross-examination of the Government Railway Police Force (GRPF) officers - violation of principles of natural justice - HELD THAT:- From the Test Report, it is seen that except for Sl No.17 and 20, none of the gold bars fall under the category of 24 carats. Further in respect of all the 26 pcs, the fineness of gold is ranging from 995.7 to 998.9. The Assay Report does not state anything to the effect that any Foreign Markings have been found. As seen from the Seizure Report also, nothing emerges to the effect that the seized gold had any Foreign Markings. In such a case the reasonable belief that the gold is of foreign make is liable to be doubted, since the Assay Test Report dated 5th April 2017 as well as the Seizure Report do not speak anything about the Foreign Marking and the purity is not that of International Standard of gold bars. Now coming to the appellant s claim as the owner of the gold, this can be rejected by the Revenue, only if the Revenue proves the Reasonable belief by way of proper evidence. So long it is not proved to be smuggled gold of foreign origin , the Revenue does not have the authority to confiscate the same. As has been seen from the Seizure Memo as well as the Show Cause Notice issue, the appellant has been mentioned as Owner - In this case, the appellant does not fall under Section 123 (1) (b), but he falls under Section 123 (1) (a) (i) the person from whose possession the goods are seized. Therefore, in case the seizure and confiscation is held as not legal and proper, the goods are to be returned to the person from whose possession the goods were seized. The appellant is not required to prove that he is the owner of the gold. Therefore, even on this count, the goods are required to be returned to him. It is more or less clear that the gold is not of foreign origin, it also has lesser purity / fineness than the standard foreign gold bar. The ownership issue favours the appellant on two counts referred to above. However, the cross-examination of the GRPS who are the first persons to seize the goods, would be crucial to throw more light on the entire transaction. Hence, the opportunity to cross-examine these officials should be given to the appellant. Conclusion - The result of the cross-examination, along with the detailed observations of the Tribunal are to be taken into consideration by the Adjudicating authority while passing his considered Order. Appeal disposed off by way of remand.

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• 2025 (4) TMI 320
  Condonation of delay in filing the appeals - sufficient cause for delay or not - HELD THAT:- Considering the fact that the appellant is a large corporate house and not a kind of one man industry, taking care of all business operations, these arguments make no sense and are vague and loosely worded. Nowhere is the alleged remote location identified in the miscellaneous application filed before us. Which remote place, from what time to what time was the advocate not available etc., nothing is expressly stated in the condonation of delay petition. It does not behove the appellant to sound so helpless and na ve, being a major Navratna of the Govt., and a pioneer producer of iron and steel goods, besides being regular importers having established legal units and proper verticals to look after such work in the organization, manned by personnel having expertise to look into the said affairs and has been handling the subject matter of coking coal imports on a regular basis. Such kind of half baked excuses do not gel with their prime status. It is further stated in the petition that after nearly four months when the said Advocate returned to base and the petitioner could finally establish contact with their lawyers, the files were not traceable. The appellant had to all over again start the process of collecting and verifying the concerned records, which process took them nearly six months. Even the argument of cyclone Fani does not justify the gross delay, as the appeals have been filed after several months of the cyclone striking the coastline of Orissa. The hon ble apex court in the case of Ramegowda v. Special Land Acquisition Officer, Bangalore [ 1988 (3) TMI 408 - SUPREME COURT] had clearly stated that negligence, gross inaction, lack of bonafides of the party/counsel could be no reasons to expose the other party to a time barred appeal. It is settled law that when applying for COD, the applicant is required to explain each day s delay by giving a reasonable/plausible explanation, of which none exists in the present case. A person who has not been diligent and slept over the matter and has been quite casual cannot and ought not to be favoured by courts, by exercising discretion in favour of such a person. Conclusion - The condonation of delay is not a mere formality and requires a reasonable explanation for each day s delay. The delay cannot be condoned due to insufficient explanations. The applications filed by the appellant for condonation of delay are hereby dismissed.

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• Insolvency & Bankruptcy

• 2025 (4) TMI 319
  Dismissal of appeal as a consequence of dismissal of the applications of condonation of delay on the even date - Section 61 of the IBC - HELD THAT:- The facts are not in dispute and therefore are not being repeated. As is apparent, first appeal was preferred along with the free certified copy which was made ready and available after the pronouncement of the Order of 20th July 2023 on 01.08.2023. It is an admitted position on facts that in the second appeal, no certified copy was appended. Rather, an application for exemption from filing of the certified copy was filed with an assertion that the certified copy had been applied for. In the absence of any certified copy having been applied for, the period of limitation would start from the very next day of pronouncement of the order i.e., 21.07.2023 as the date of pronouncement of the Order stands excluded as per Section 61 of the IBC. Statutory time limit of 30 days within which an appeal can be preferred has been provided for in sub-section (2) of Section 61 of IBC. Proviso thereto allows an additional period of 15 days to file an appeal only on the satisfaction of NCLAT that there was sufficient cause for not filing the appeal earlier within the initial period of 30 days. The restrictions with regard to allowing extension in the provisions stipulated is cloaked in such a manner that the provisions have to be strictly followed. The first aspect is that the period is extendable by 15 days and not beyond that - The cumulative reading of the proviso would therefore entail that the extension of period so provided for has to be strictly construed and has not to be exercised in a liberal manner which highlights the legislative intent which has to be given effect to. The litigant has to file its appeal under Section 61(2) within 30 days which can be extended up to a period of 15 days, and no more, upon showing sufficient cause. A slate of interpretation of procedural rules cannot be used to defeat the substantive objective of legislation which is prescribed in a time frame. As a result, thereof, the period of limitation for filing the appeal having been laid down and proviso thereto limiting the exercise up to a distance for condoning the delay mandatorily has to be adhered to. The application of condonation of delay in the first appeal, disclosing no reasons whatsoever in filing the appeal, the Appellate Tribunal was justified in dismissing the application for condonation of delay. The satisfaction has to be of the Appellate Tribunal and that too on justifiable grounds, which, as is apparent, from the perusal of the application there is none pleaded which can be said to be projecting sufficient cause for not approaching the Appellate Tribunal within the time stipulated under Section 61(2) of the IBC - The other reasons as has been assigned by the Appellate Tribunal for rejecting the application for condonation is clearly borne out from the pleading and the facts which do not call for any interference in the present appeals. Conclusion - The denial of the applications for condonation of delay affirmed, due to the absence of sufficient cause and procedural compliance. Appeal dismissed.

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• 2025 (4) TMI 318
  Dismissal of Section 9 application filed by the Operational Creditor - pre-existing dispute - date of default fell within the Section 10A period - HELD THAT:- On perusal of Part IV of Form 5 as annexed in the Section 9 petition, it is found that the dates of default have been clearly shown as 03.05.2020, 15.08.2020 and 01.01.2021 in respect of the outstanding operational debt claimed by the Operational Creditor. The same dates of default have also been mentioned in Form 3 of the Demand Notice dated 27.01.2022 as is seen at page 170 of APB. Whether these three dates of default mentioned in Section 8 Demand Notice and Section 9 application fall within the purview of the prohibited period prescribed under Section 10A and consequentially hit by the bar imposed by Section 10A of the IBC? - HELD THAT:- The ambit and scope of Section 10A has been well settled in the landmark judgment of the Hon ble Supreme Court in Ramesh Kymal Vs Siemens Gamesha Renewable Power Pvt. Ltd. [ 2021 (2) TMI 394 - SUPREME COURT] wherein it was held that no application for initiation of CIRP under Section 9 can be initiated for default which is committed during the Section 10A period - In the present case, the dates of default of the claims, basis which the Section 9 application has been filed, the dates indisputably fall during the prohibited period of Section 10A of IBC. The dates of default in the present facts of the case fell between 03.05.2020 and 01.01.2021 which dates were hit by Section 10A of the IBC. In terms of the statutory provision of Section 10A and as held by the Hon ble Supreme Court in Ramesh Kymal judgment, no default falling within this period can form the basis for initiating CIRP since the default which occur during the Section 10A period cannot be included in the calculation of debt and default for initiating CIRP. No liability can be fastened on the Corporate Debtor for default committed during Section 10A period. The Adjudicating Authority has therefore not committed any error in holding the Section 9 application as non-maintainable. There are no error in the impugned order holding that since the date of default falls within the Section 10A period, Section 9 proceedings under IBC cannot be initiated at the instance of Operational Creditor. The contention of the Appellant that the Adjudicating Authority should have modified the date of default after examining the records is an absurd proposition. If the date of default required any change or modification, the onus was on the Appellant to have sought leave of the Adjudicating Authority to file an amendment application. To expect the Adjudicating Authority to have amended the date of default without any amendment application or specific pleading made for such a modification would tantamount to the Adjudicating Authority exceeding its jurisdiction which cannot be countenanced. Conclusion - The Section 9 application is non-maintainable due to the dates of default falling within the Section 10A period.The Adjudicating Authority correctly dismissed the application without amending the dates of default. There are no merit in the Appeal. The Appeal is dismissed.

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• PMLA

• 2025 (4) TMI 317
  Money Laundering - challenge to cognizance taken by the Special Judge (PMLA), Raipur, against the petitioner under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002 - offence is committed by a public servant or not - petitioner s alleged act reasonably connect with the discharge of official duty or not. Whether the offence is committed by a public servant? - HELD THAT:- The term public servant has been defined in Section 2 (28) of the Bharitya Nyay Sanhita, and it is an admitted fact that the petitioner was working as Joint Secretary of the Department of Commerce and Industry in the State of Chhattisgarh and he is in the service of Central Government, therefore, he is public servant as defined under Section 2 (28) of the BNS. Whether petitioner s alleged act reasonably connect with the discharge of official duty? - HELD THAT:- A bare perusal of Section 197 Cr.P.C. shows that the essential conditions must be satisfied for the appreciation of Section 197 Cr.P.C. i.e.; (1) Offence mention therein must be committed by a public servant.; (2) The protection is available only when the alleged act done by the public servant is reasonably connected with the discharge of his official duty - there must be connection between official duty with the alleged offence. Section 197 Cr.P.C. restrict its scope of operation to only those acts or actions which are done by a public servant in discharge of official duty. Since Respondent/ ED has alleged that the Petitioner, who was the Joint Secretary of the Department of Commerce and Industry at the time of commission of the alleged offences. The alleged offence is alleged to have been committed while acting or purporting to act in the discharge of his duties as Joint Secretary of the Department of Commerce and Industry. Therefore, there is official nexus in doing the said act. The ED knows very well that in this case prosecution sanction is mandatory to prosecute the petitioner. It is crystal clear that on the date of taking cognizance there was no prosecution sanction obtained by the ED and without posecution sanction learned Special Judge PMLA, Raipur has taken cognizance on 05.10.2024 against the petitioner which is illegal and bad in law and it deserves to be set aside. The order dated 05/10/2024 passed by the learned Special Judge (PMLA) Raipur whereby the cognizance has been taken in Prosecution Complaint dated 19/06/2024 sine qua to the petitioner is set aside. However, the respondent/ ED is granted liberty to take recourse to the concerned Trial Court for taking cognizance afresh against the petitioner. And, the learned Trial Court is directed to examine the sanction order produced by the respondent/ED before taking cognizance. Conclusion - The petitioner is a public servant whose alleged acts are connected with his official duties, necessitating prior sanction for prosecution. The cognizance taken without such sanction is set aside, with liberty granted to the ED to seek fresh cognizance upon obtaining the required sanction. The instant criminal revision stands allowed.

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• Service Tax

• 2025 (4) TMI 316
  Entitlement for exemption under Sl.No.13 of the N/N. 25/2012-ST dated 20.06.2012 - services of works contract provided by the appellant within the residential complex/commercial premises - Penalty imposed under Section 78 and 77 of the Act. HELD THAT:- The construction activity performed by the appellant was within the residential complex/commercial premises. The interpretation placed by the appellant by relying on the definition of general public that it refers to body of people which in the present case are the residents of the complex and also the visitors to the residents and is defined by that common quality of public, has not merits. The factors stated in the definition are not satisfied when the roads are built for any residential or commercial complex in as much as by its very nature, the access to the roads built within the complex has restricted access and is not open to the public at large. The appellant cannot claim that there is any error. On the other hand, the appellant had deliberately avoided the proceedings. The plea taken by the appellant in this regard is a lame plea and do not merit consideration. Penalty imposed under Section 78 and 77 of the Act - HELD THAT:- The appellant was registered with the Service Tax Department, however, they had not filed the service tax returns (ST-3). It is also on record that the appellant had collected service tax from the clients but failed to credit the service tax to the Government exchequer. The conduct of the appellant clearly reveals the intent to evade the service tax liability by suppressing the assessment of the taxable value and the liability under the provisions of the Act. There are no reason to differ with the Authorities below in imposing penalty under Section 77 and 78 of the Act. On the same considerations, the extended period has been rightly invoked. Conclusion - i) The exemption under Notification No.25/2012-ST is strictly applicable only to roads intended for use by the general public. Roads constructed within private residential or commercial complexes do not qualify for this exemption due to their restricted access nature. The imposition of service tax on the appellant for the services rendered affirmed, as they did not meet the exemption criteria. ii) The penalties imposed under Sections 77 and 78 upheld. The impugned order upheld - appeal dismissed.

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• 2025 (4) TMI 315
  Entitlement to refund of unutilized CENVAT credit lying in the CENVAT account at the time of surrender of service tax registration following closure of business - Interest on refund under Section 11BB of the Central Excise Act, 1944 - HELD THAT:- The issue is settled by the decision of the Hon ble Apex Court in the case of Union of India vs. Slovak India Trading Co Pvt. Ltd. [ 2007 (1) TMI 556 - SC ORDER] which affirmed the decision of Karnataka High Court [ 2006 (7) TMI 9 - KARNATAKA HIGH COURT] . In this decision, the Hon ble Karnataka HC has held The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of the assessee. When Rule 5 of CENVAT Credit Rules, 2004 is read in conjunction with Section 11B, it provides a comprehensive framework for refund of CENVAT credit in cases of closure of business. Rule 5 specifically deals with refund of CENVAT credit, and while it primarily addresses export scenarios, it does not expressly prohibit refund in other circumstances. The adaptable provisions of the Act through Section 83 of the Finance Act enable refund to be routed through Section 11B of the Central Excise Act read with Rule 5 of CENVAT Credit Rules. This interpretation is consistent with the principle that the CENVAT credit is a vested right of the assessee which cannot be extinguished merely because the business has closed down - the appellant is eligible for the refund of unutilized Cenvat credit. Interest on refund claim - HELD THAT:- The Appellant had filed the refund application within the stipulated time and has been wrongfully denied the refund. Therefore, the Appellant is entitled to interest from the date of expiry of three months from the date of the refund application until the date of actual refund. Conclusion - i) The appellant is eligible for the refund of unutilized Cenvat credit of Rs. 5,58,015/-. ii) The appellant is eligible for interest as per Section 11BB of Central Excise Act from three months after the date of application till the date of grant of refund. Appeal disposed off.

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• 2025 (4) TMI 314
  Recovery of wrong availment and utilization of input service credit with interest and penalty - appellant has taken input service credit under RCM - application of Rule 3(4)(e) of CCR, 2004 - HELD THAT:- The appellant has availed CENVAT Credit amount of Rs.30,18,941/- under RCM in June, 2017 prior to the date of the payment of the said amount to Government Exchequer and filing of the ST-3 on 27.12.2017. I find that there is no dispute regarding the receipt of the service by the appellant and issue of the corresponding invoice for the same prior to 01.07.2017. Thus, there is no dispute regarding the eligibility of the credit for the appellant. The ground under which the input service credit taken by the appellant under RCM basis during June, 2017 was that the said amount was deposited to the Government Exchequer under Challans dated 27.12.2017. There is no infirmity in availing the credit by the appellant when the eligibility of credit was not in dispute. It is observed that in June, 2017, when GST was introduced there were many issues related to availment of Cenvat credit. There was no clarity regarding availment of credit in respect of the services rendered and invoices issued prior to 1st July 2017 and payments made after 01.07.2017. In the present case, the appellant has received the service and invoice prior to 01.07.2017, but payment of service tax was not made as on 01.07.2017, under reverse charge. To avoid any issue on the availment of credit later, they took the purported credit amount of Rs.30,18,941/- in their credit ledger in the month of June, 2017. It is observed that if the credit is not taken prior to 01.07.2017 and transferred through TRAN-1, the appellant would be eligible for refund of the said credit by cash as per the provisions of section 142(3) of the GST Act. This view has been held by the Hon ble Madras High Court in the case of Ganges International Pvt. Ltd. v Assistant Commissioner of GST C.Ex, Puducherry [ 2022 (3) TMI 544 - MADRAS HIGH COURT] where it was held that the applications should be considered for carrying forward the accrued credit to the electronic credit ledger of the GST regime, not for refund in cash. Thus, by relying on the decisions rendered by the Hon ble Madras High Court, it is held that the appellant is eligible for taking, utilizing and transferring the input tax credit of Rs. 30,18,941/- payment of which under RCM was made on 27.12.2017. Conclusion - The appellant is entitled to the CENVAT Credit under the transitional provisions of the GST regime. The demands confirmed in the impugned order set aside - appeal allowed.

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• 2025 (4) TMI 313
  Classification of service - appellant providing services in the nature of yoga and yoga classes - classificable under Commercial Training or Coaching Services or not - scope of services under the Negative List regime - exemption under N/N. 25/2012-ST dated 20.06.2012 - invocation of extended period of limitation - penalty - HELD THAT:- Recently, this Tribunal in the case of Patanjali Yogpeeth Trust Vs. CCE, Meerut-I [ 2013 (8) TMI 804 - CESTAT NEW DELHI] , in more or less similar circumstances where the appellant therein was also engaged in the activities of provided services relating to health and fitness by way of teaching yoga and meditation and failed to discharge service tax, analysing the definition and referring to an earlier judgment of Delhi Bench of this Tribunal, reported as Patanjali Yogpeeth Trust Vs. CCE, Meerut-I which is also relied upon by the learned Commissioner in the impugned order. It is observed by the Tribunal that The phrase Yoga and Meditation have been specifically mentioned in the definition of health and fitness service as defined under Section 65 (51) of the Finance Act, 1994. The claim of the appellant that they are providing treatment for specific ailments being suffered by the person is not supported by any positive evidence. Instructions on Yoga and Meditation in these camps are not imparted to individual but to the entire gathering together. No prescriptions are made for any individual in writing, diagnosing and treating the specific ailment/ complaint of any individual. There are no reason not to follow the said judgment of the Tribunal which has been upheld by the Hon ble Supreme Court. Consequently, the conclusion of the learned Commissioner that the services which are in the nature of yoga, rendered by the appellant, fall under the taxable category of health and fitness service during the period October 2008 to June 2012, agreed upon. Leviability of service tax on TTC and ATTC and also Vastu Shastra - HELD THAT:- There is no valid reason not to accept the said reasoning of the Commissioner as no contrary evidence has been placed on record to buttress their claim that the courses viz. TTC, ATTC and Vastu Shastra offered by the appellant do not fall under the category of Commercial Training or Coaching Centre Service . Levy of service tax under the Negative List w.e.f. 01.07.2012 - HELD THAT:- The learned Commissioner in the impugned order has not disputed that the appellant are a charitable trust registered under Section 12AA of the Income Tax Act, 1961; hence, the services of the yoga provided by them covered under the said Notification which has been given effect from 01.07.2012 to 20.10.2015, the demand confirmed therefore not sustainable. Extended period of limitation - HELD THAT:- This Tribunal in Patanjali Yogpeeth Trust s case, the facts of which is more or less similar to the present one, upheld the invocation of extended period of limitation after analysing and following the principles of law on the subject. Conclusion - i) Service tax on the activity of yoga for the period October 2008 to 30.06.2012 under the category of health and fitness service , yoga courses of TTC, ATTC and Vastu Shastra under Commercial Training and Coaching services is liable to be paid; however, the exact amount of demand, applicable interest and penalty to be computed for the said period after taking note of the receipts not connected with the said activities as claimed by the appellant. ii) Levy of service tax for the period 01.07.2012 to 31.03.2014 be examined in the light of the 11C Notification No.42/2016-ST dated 26.09.2016. Appeal disposed off.

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• Central Excise

• 2025 (4) TMI 312
  Goods supplied to NTPC for a power project executed by ABB Limited - Benefit under N/N. 6/2006-CE dated 1.3.2006, denied to appellant, being sub-contractor - requirement of supply against International Competitive Bidding - denial of exemption on the grounds that the appellant did not participate directly in the International Competitive Bidding - HELD THAT:- The appellants have enclosed copy of the order given to them by ABB which clearly shows that these are meant for thermal power projects of NTPC at various places. It is also seen that ABB was awarded the contract based on the International Competitive bidding. Therefore, the supplies are covered by Notification No. 6/2006-CE dated 1.3.2006 for the exemption of Excise Duty for clearances made to such projects. The appellant met all necessary conditions for the exemption, as the goods were supplied for a project awarded through International Competitive Bidding, and the main contractor had complied with the necessary certification requirements. Similar issue was before the Coordinate Bench of CESTAT, Kolkata in the case of BPIL Ltd versus CCE Kolkata III [ 2024 (11) TMI 986 - CESTAT KOLKATA] where it was held that appellant was entitled to the benefit of the Notification, and the demands made in the impugned order were deemed unsustainable. Conclusion - The sub-contractors can benefit from the exemption if the main contractor fulfills the bidding condition. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 311
  Time limitation of filing revisional order - initiation of suo motu revision proceedings - whether the revisional order was within the time period of one year or not? - Section 63-A(3) of the Karnataka Value Added Tax Act, 2003 - HELD THAT:- This Court while deciding the writ petition, had made an observation with regard to the fact that the reason that revisional orders are awaited from the Commissioner of Commercial Tax is not a relevant ground or reason to withhold the refund, particularly when it is not shown that the Commissioner of Commercial Tax has already initiated revisional proceedings under the Act. This observation of the Court is relevant as it was only on 10.07.2014 that a notice was issued by the Joint Commissioner under Section 47 (3) read with Section 63-A of the Act. The said notice is the starting point of initiation of proceedings under sub-section (3) of Section 63-A of the Act, which finally culminated in the order dated 21.02.2015. So in that sense, the revisional proceeding culminated within one year of its initiation i.e., the date of issuance of notice on 10.07.2014. In effect, the respondent had challenged the order dated 21.02.2015 on merits of the conclusion arrived at by the Joint Commissioner in the revisional proceedings. As the learned Single Judge has allowed the writ petition only on the ground that the order has been passed beyond one year and as such, without jurisdiction, and has set aside the order without going to the merits of the assessment order dated 21.02.2015, the impugned order of the learned Single Judge to that extent needs to be set aside. Though submissions have been made by the counsel for the parties on the merits of the assessment order by relying on judgments, as the same have not been considered by the learned Single Judge in the impugned order, it shall be appropriate that the writ petition is revived on the board of the learned Single Judge for a decision on the merits of the assessment order dated 21.02.2015 after hearing the counsel for the parties. Conclusion - The revisional order is timely and within jurisdiction, setting aside the learned Single Judge s decision and remanding the case for consideration of the merits of the revisional order. The impugned order passed by the learned Single Judge is set aside - Appeal allowed.

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• Indian Laws

• 2025 (4) TMI 310
  Decree of suit for specific performance of an Agreement to Sell, if the buyer had accepted the refund of majority of the earnest money deposit/advance consideration, during the pendency of the civil suit - HELD THAT:- After examination of the pleadings and evidence in the present suit as well as the conduct of the Respondent No.1-buyer, this Court is unable to agree with Respondent No.1-buyer that she was willing to perform the Agreement to Sell dated 25th January, 2008 and go ahead with the purchase of the property. This Court says so because admittedly, as noted above, the five demand drafts dated 7th February 2008 for Rs. 2,11,000/- were encashed by the Respondent No.1-buyer in July, 2008. The conduct of the Respondent No.1-buyer in encashing the demand drafts establishes beyond doubt that the Respondent No.1-buyer was not willing to perform her part of the Agreement to Sell and proceed with execution of the sale deed; for the Respondent No.1-buyer would not have encashed the demand drafts if she was indeed willing to perform the contract and have a sale deed executed. Consequently, once it is established that the Respondent No. 1-buyer is not willing to perform the contract, the fact that the entire advance consideration/earnest money had not been returned to Respondent No.1-buyer is irrelevant and immaterial. Since in the present case, the seller had issued a letter dated 07th February, 2008 cancelling the agreement to sell prior to the institution of the suit, the same constitutes a jurisdictional fact as till the said cancellation is set aside, the respondent is not entitled to the relief of specific performance - Consequently, this Court is of the opinion that absent a prayer for declaratory relief that termination/cancellation of the agreement is bad in law, a suit for specific performance is not maintainable. Locus standi to file appeal - HELD THAT:- The appellant was impleaded as defendant no. 3 in the subject suit as she is a beneficiary under the Will dated 23rd September 2002 executed by the original owner/seller, whereby the subject property has been bequeathed in her favour. Consequently, the appellant, being a necessary and interested party to the lis, has the locus to file the present appeal. Further, the onus to establish readiness and willingness is on the Respondent No.1-buyer and the failure to establish the same disentitles the Respondent No.1-buyer from the equitable and discretionary relief of specific performance. Conclusion - The buyer s encashment of the refund constituted acceptance of the agreement s cancellation. The Agreement to Sell cannot be specifically enforced. Appeal allowed.

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