Foreclosure charges not taxable under Banking and Other Financial Services, clarifying service tax scope on loan preclosure.
Foreclosure charges collected by banks and NBFCs on premature loan termination are not taxable under Banking and Other Financial Services as defined by Section 65(12) of the Finance Act; the tribunal, relying on a larger-bench precedent, held that such penal preclosure fees do not fall within the enumerated BOF services and set aside revenue demands and orders seeking service tax, interest and penalties on those charges. (AI Summary)

Settlement under Regulation 30A permits withdrawal of insolvency proceedings when settlement and payment occur before committee constitution.
A settlement and payment between an operational creditor and corporate debtor shortly after admission, followed by a withdrawal application under the regulatory withdrawal mechanism filed before constitution of the Committee of Creditors, can justify withdrawal of insolvency proceedings when statutory safeguards are met; objections based on the moratorium, alleged improper transfers and unpaid IRP fees may be addressed within the same proceedings and do not alone defeat a valid pre-committee settlement. (AI Summary)

Mere change of opinion does not justify reopening assessments beyond limitation; reopening requires reason to believe and undisclosed material.
Reopening an assessment beyond the statutory four year period cannot be based on a mere change of opinion. The Assessing Officer must have a recorded reason to believe that income escaped assessment and must establish that the assessee failed to disclose material facts fully and truly; the reasons recorded must identify tangible, undisclosed material and cannot be supplemented later. A notice issued without such tangible material or proof of nondisclosure is invalid and may be set aside. (AI Summary)

Interest deduction on capital borrowed allowed for capital asset purchases, limited only until the asset is first put to use.
Section 36(1)(iii) allows deduction for interest on capital borrowed for business or profession, while a proviso disallows interest for the period from borrowing until the acquired asset is first put to use. Amendments removed an "extension of existing business" limitation, requiring capitalisation of borrowing costs until asset use regardless of acquisition motive. Allowability depends on whether the borrowed capital was applied for business purposes in the relevant year; whether the asset is capital or revenue in nature does not by itself determine deduction, and disallowance is confined to the pre-use period under the proviso. (AI Summary)

Aadhaar PAN linkage: inoperative PANs restrict refunds, attract higher TDS/TCS until Aadhaar is intimated and PAN reactivated.
Failure to intimate Aadhaar or Enrolment ID by the prescribed date renders the PAN inoperative for furnishing, intimating or quoting under the Act; payment of the prescribed fee and subsequent Aadhaar intimation will restore the PAN's operative status within the prescribed period. While inoperative, refunds are not made and no interest is payable on withheld refunds, and tax deductors/collectors must apply higher rates. The tax administration shall prescribe the effective dates, verification formats and procedures for operational status and reactivation. (AI Summary)

Purchase under Section 54F includes non registered acquisitions, enabling residential property exemption for long term capital gains.
The tribunal construed purchase in Sections 54/54F to include acquisitions effected other than by registered sale deed, observing that legal title transfer by sale deed is distinct from acquisition of beneficial ownership which may arise via agreement to sell or power of attorney; payments from long term capital gains toward such acquisitions satisfy the statutory purchase/construction requirement. The tribunal also treated properties described as house, plot, cottage, farmhouse or villa as qualifying residential assets, concluding they are neither commercial nor agricultural and therefore qualify for exemption under Section 54F. (AI Summary)

Reopening of assessment invalid when reasons are vague and no independent inquiry, depriving statutory preconditions.
The assessing authority issued a reassessment notice alleging sales to a shell entity, but the reasons recorded were vague and lacked material showing the purchaser was a sham. The authority had not independently applied its mind or conducted inquiry, and reopening must be judged on the reasons recorded which cannot be supplemented by affidavits or oral submissions. Accordingly, the statutory preconditions for initiating reassessment were not satisfied. (AI Summary)

FCRA compliance requirements: annual returns, specified forms and permissions govern receipt and use of foreign contributions.
The document sets out operative FCRA compliance obligations: registered persons and prior permission holders must file the annual return (Form FC-4) with certified accounts by the prescribed year end, maintain proper books, and file a compulsory nil return if no foreign contribution is received or utilized. Non compliance attracts penalties and imprisonment. It lists principal online forms and their purposes-intimations (FC-1 parts), permissions (FC-2, FC-3 parts, FC-5) and annual reporting (FC-6)-and notes that prior permission is project linked while registration requires an organizational track record and renewal. (AI Summary)

Expansion of PMLA coverage to virtual digital assets imposes enhanced reporting and due diligence obligations on entities.
The amendment brings a wide range of cryptocurrency and virtual digital asset activities under the PMLA, treating VDA dealers as reporting entitys and requiring expanded recordkeeping and due diligence. It lowers thresholds for identifying beneficial ownership, mandates disclosure of trustees, senior management and other controlling persons, links specified non-profit organisations to additional registration requirements, and defines Politically exposed persons to trigger tailored compliance obligations. (AI Summary)

Central Registry registration of security interests requires electronic filing and authentication, with prescribed forms, fees and post registration notices.
CERSAI records securitization, asset reconstruction and creation, modification or satisfaction of security interest, maintained by a Central Registrar and officers, with electronic entries treated as register entries. Prescribed forms and electronic authentication methods govern filings for mortgages, hypothecation, intangible assets and attachment orders; fees apply and the Central Government may require retrospective registration. Post registration duties require notice of satisfaction or modification, the Registrar records memoranda of satisfaction or notes of dispute, the register is open for inspection for prescribed fees, and the Government may allow rectification or extension of filing time on equitable terms. (AI Summary)

GST enforcement intensifies through data analytics, provisional attachments and amended registration and assessment provisions.
Recent GST measures prioritize compliance and administrative modernization: Finance Bill, 2023 amendments address persons not liable for registration, revocation of cancellation, assessment of non filers and constitution of the GST Appellate Tribunal; enforcement is being strengthened through data analytics, Aadhaar based registration authentication, reduced e invoice thresholds, e way bill integration, beneficial owner liability and expanded provisional attachment powers; GSTN advisories enable cash ledger transfers under the same PAN, HSN reporting requirements, grievance redressal and other portal upgrades. (AI Summary)

TDS credit allowed despite non-deposit where employer deducted tax; credit must be recognised in processing under Section 143(1).
Where an employer has deducted tax at source from salary, the deductee is entitled to credit for that TDS in the processing of the return under Section 143(1), irrespective of whether the employer subsequently deposited the deducted amount; non-reflection in Form 26AS due to the deductor's non-payment or insolvency does not by itself defeat the deductee's statutory credit arising from deduction. (AI Summary)

Cancellation of registration without determining tax liability is invalid, requiring recorded reasons and a fresh reasoned notice.
Cancellation of GST registration issued without recording reasons or determining the amount payable is cryptic and unsustainable; administrative orders must state specific particulars and calculate the tax demand so that a registrant can meaningfully respond. Authorities may reissue a reasoned show cause notice with detailed grounds and a quantified demand and must provide a reasonable opportunity of hearing before final cancellation. (AI Summary)

Advance ruling admissibility: applications may be rejected if identical issues are pending, decided, out of scope, or beyond jurisdiction.
The Authority for Advance Ruling may admit or reject an application after examining records and hearing parties; rejection requires prior hearing and written reasons communicated to applicant and concerned officer. Key admissibility grounds are pending or decided proceedings on the same question, lack of territorial or subject-matter jurisdiction, issues beyond the statutory scope of advance rulings, and other case-specific factors (including infructuousness). Case examples illustrate rejections where show-cause notices, investigations, anti-evasion or legal proceedings, prior AAR decisions, jurisdictional defects, or changed facts precluded admission. (AI Summary)

Re-opening beyond statutory period requires failure to disclose material facts, not mere 'reason to believe' alone.
Re-opening an assessment beyond the statutory period requires recorded satisfaction that the assessee failed to disclose fully and truly all material facts necessary for assessment; reliance solely on a 'reason to believe' without demonstrating such failure and without application of mind does not satisfy the jurisdictional condition for reassessment. (AI Summary)

Binding nature of departmental circulars: revenue cannot contradict standing circulars or issue demands contrary to them.
Circulars are general administrative communications addressed to a circle of persons and may take the form of letters. Judicial authorities hold that binding circulars cannot place taxpayers in a worse position than the statute and the Department is ordinarily bound by them; trade notices based on Board circulars also bind the Department unless modified. Circulars contrary to current legal interpretation are not binding on quasi judicial authorities, and the revenue cannot argue or issue demands contrary to existing binding circulars; inconsistent show cause notices are ab initio bad. (AI Summary)

Input Tax Credit entitlement preserved as GST return correction permitted, enabling acceptance of corrected return and claiming ITC.
The court permitted correction of Form GSTR-1 where supplies were wrongly shown as B2C instead of B2B so the recipient could claim Input Tax Credit, finding no revenue loss from accepting corrected returns. The petitioner was allowed to resubmit corrected GSTR-1 and the respondent was directed to receive the manual corrections and upload them to the web portal within a stipulated period. The ruling relied on precedent allowing rectification of bonafide, inadvertent filing errors to vindicate legitimate credit entitlements. (AI Summary)

Burden of Proof: differing evidential burdens under Section 68 and the Section 69 family affect unexplained income assessments.
Burden of proof in unexplained receipts differs: Section 68 places the onus on the assessee to explain entries, whereas the Section 69 family requires the revenue to first establish existence of the investment, expenditure or asset on record before invoking those provisions. When surrendered excess stock and cash are accepted as business income on the record and no incriminating material arises from search, such amounts are not treated as income from undisclosed sources and do not attract the residuary special tax treatment. (AI Summary)

Personal hearing requirement: adverse assessments require granting a hearing, upholding audi alteram principles.
An assessment order issued without affording a personal hearing violates the principles of natural justice; where an adverse decision is contemplated in assessment proceedings an opportunity of hearing must be granted, and the right to such a hearing is mandatory rather than discretionary. (AI Summary)

Rectification of errors apparent on the face of record allows limited correction of manifest GST document errors subject to procedural safeguards.
Section 161 permits rectification of errors apparent on the face of record in GST documents. Only manifest errors that do not require debate or new facts are rectifiable. The issuing authority may act on its own motion or after notice by an authorized officer or an affected person. Temporal limits apply to applications by affected persons and to authority-initiated rectifications, but purely clerical or arithmetic errors from accidental slips or omissions are exempt from the longer limitation. Proposed rectifications that adversely affect a person require observance of natural justice. (AI Summary)