Issues: Whether the notice dated 14 April 2022 issued under Section 148 of the Income-tax Act, 1961 for A.Y.2015-16 and the consequential assessment and recovery orders are valid or liable to be quashed.

Analysis: The petition challenges a Section 148 notice dated 14 April 2022 and consequential assessment and recovery actions for A.Y.2015-16. The Court noted the Revenue's concession recorded in the Supreme Court in Union of India v. Rajeev Bansal that for A.Y.2015-16 all notices issued on or after 1 April 2021 are required to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of certain Provisions) Act, 2020. The Supreme Court's concession was followed in subsequent authority (Deepak Steel). The Court observed that these authorities directly govern the validity of the impugned notice and related orders. The petitioner's explanation for delay was considered but found not to cure or validate a notice held invalid by law; the existence of recovery proceedings based on the impugned orders added urgency to quashing those orders. The Court also relied on prior decisions of this High Court applying the same principle and allowing similar relief where notices for A.Y.2015-16 were issued on or after 1 April 2021.

Conclusion: The notice dated 14 April 2022 issued under Section 148 of the Income-tax Act, 1961 for A.Y.2015-16, the assessment order dated 19 February 2024 under Section 147 read with Sections 144 and 144B, and all consequential orders/notices including recovery notices are quashed and set aside; relief is granted to the petitioner (in favour of the assessee).

Issues: Whether the Tribunal was correct in deleting additions made under Section 68 of the Income-tax Act, 1961 in respect of alleged loans, having regard to the evidence of identity, creditworthiness and genuineness of the transactions and the remand proceedings.

Analysis: The Tribunal examined remand-stage enquiries, confirmations, ITR acknowledgements, audited financial statements and bank statements produced by the creditors and found that identity and creditworthiness were established; transactions were routed through account-payee cheques and loans were repaid through banking channels. The Tribunal noted that creditworthiness under Section 68 is not confined to current year income and may include net worth and other sources. The short tenure of repayment (two days) and absence of interest paid were treated as not determinative of sham transactions, since short-term interest-free or low-interest advances may arise from business or personal relations. The record also shows that the Assessing Officer did not undertake certain enquiries (for example regarding money-lender licensing or the nature of relationship between parties) which the Court considered could have been pursued before drawing adverse inference. The matter thus involved primary findings of fact and appreciation of evidence on which the Tribunal had taken a view after remand.

Conclusion: The Tribunal's findings that identity, creditworthiness and genuineness of the loan transactions were established are upheld; there is no warrant for interference with the Tribunal's order deleting the additions under Section 68. The appeal is dismissed and the deletion sustained in favour of the assessee.

Issues: Whether a penalty order under Section 271D of the Income-tax Act, 1961 can be validly passed while the assessment/quantum order (Section 147 assessment upheld by CIT(A)) is under challenge before the Income-tax Appellate Tribunal (ITAT), and whether the impugned penalty order dated 9th December 2025 should be quashed.

Analysis: The Court examined prior decisions of this Court establishing that penalty proceedings should be kept in abeyance while the challenge to the underlying assessment/quantum is pending before the appellate forum. The petitioner had filed an appeal before the ITAT against the assessment order for A.Y. 2016-2017 and had informed the department during penalty proceedings; notwithstanding this, the penalty order under Section 271D was passed on 9th December 2025. The respondents have not demonstrated that the assessment appeal was considered and decided against the petitioner before passing the penalty, and no satisfactory explanation was provided for non-consideration of the petitioner's submission placed on record during penalty proceedings. In view of the binding precedents and the factual position that the quantum challenge was pending, the Court held that continuation of penalty proceedings at that stage was impermissible and the appropriate course was to keep penalty proceedings in abeyance until the ITAT decides the appeal.

Conclusion: The impugned penalty order dated 9th December 2025 is quashed and set aside. Penalty proceedings are to be kept in abeyance until the ITAT disposes of the appeal against the assessment order; only if the ITAT's decision is favourable to the Revenue may the Revenue resume and conclude penalty proceedings. The writ petition succeeds in favour of the petitioner (assessee).

Issues: Whether the addition of Rs.17,80,299/- by treating the stamp duty valuation as the full value of consideration under Section 50C of the Income-tax Act, 1961 is sustainable in view of the agreement date and receipt of part consideration by account payee cheques prior to the agreement date.

Analysis: Section 48 prescribes computation of capital gains by reference to the full value of consideration. Section 50C operates as a deeming provision replacing the actual sale consideration with the stamp duty valuation where the latter is higher. The first proviso to Section 50C permits use of the stamp valuation as on the date of the agreement (instead of date of registration) where the date of agreement and date of registration differ, provided that the amount or part thereof has been received by the assessee by account payee cheque, bank draft or electronic clearing system on or before the date of the agreement. The record shows an Agreement to Sell in March 2012 and receipt of more than Rs.1,80,00,000/- by account payee cheques in March 2012 before registration in May 2012. Accordingly, the proviso to Section 50C is engaged and the relevant stamp duty valuation date for comparison is the date of the agreement (12.03.2012). If the stamp valuation on that date exceeds the contract price, the AO may then, in accordance with sub-clause (ii) of Section 50C, obtain a valuation by the DVO to determine the appropriate deemed value.

Conclusion: The addition is not sustainable as made; benefit of the first proviso to Section 50C applies. The impugned orders are set aside, the additions deleted, and the matter is remitted to the AO to identify the stamp duty valuation as on 12.03.2012 and, if necessary, obtain DVO valuation and recompute the tax consequences.

Issues: (i) Whether the assessee scheme is eligible for exemption under section 10(23FBA) read with section 115UB of the Income-tax Act, 1961 notwithstanding that SEBI registration is in the name of the Trust and the scheme holds a separate PAN; (ii) Whether the difference of Rs. 16,63,15,486/- (surplus over amount distributed to investors) is taxable as business income or attributable to indexation and not taxable in the hands of the assessee.

Issue (i): Whether the assessee scheme qualifies for exemption under section 10(23FBA) read with section 115UB despite scheme-level PAN and SEBI registration being in the Trust.

Analysis: The Tribunal examined the statutory recognition of a "scheme of the investment fund" in Explanation 1 to section 115UB and the SEBI regulatory framework permitting multiple schemes under a single AIF trust. The Assessing Officer relied mainly on the existence of a separate PAN to treat the scheme as an independent trust; however, PAN is an administrative identifier and not conclusive of separate legal character. The Tribunal noted absence of any finding based on governing documents establishing the scheme as an independent trust distinct from the SEBI-registered Trust, and relied on contemporaneous scheme documentation (including the Private Placement Memorandum) and regulatory amendments showing that schemes of an AIF can obtain separate PANs while the AIF registration remains with the Trust. The Tribunal also found persuasive the coordinate Bench view that separate PAN and separate books are procedural and not determinative for entitlement to statutory exemption where the scheme is part of the registered fund.

Conclusion: The exemption under section 10(23FBA) read with section 115UB is allowable to the assessee scheme; denial solely on account of separate PAN or SEBI registration in the Trust is not justified. (In favour of Assessee)

Issue (ii): Whether the addition of Rs. 16,63,15,486/- as business income is sustainable or represents indexation benefit on long-term capital gains passed through to investors.

Analysis: The Tribunal held that once the pass-through framework under section 115UB and section 10(23FBA) applies, the computation and character of income must follow that framework and cannot be altered by reference to book surplus. On merits, the Tribunal found that the difference arose from application of indexation under section 48 to long-term capital gains on unlisted equity shares, while the book surplus did not reflect statutory indexation; securities were recorded as "Investments" and gains were reported as capital gains and passed to investors in Form 64D. The Assessing Officer did not produce material to show conversion of capital gains into business income.

Conclusion: The addition of Rs. 16,63,15,486/- as business income is deleted; the difference is attributable to indexation and not taxable as separate business income. (In favour of Assessee)

Final Conclusion: The Tribunal allowed the appeal, directing deletion of the additions and holding the assessee scheme entitled to exemption under section 10(23FBA) read with section 115UB; consequential interest to be recomputed and penalty proceedings to be dropped.

Ratio Decidendi: A scheme formed under a SEBI-registered AIF trust is entitled to pass-through relief under section 10(23FBA) and section 115UB where governing documents and scheme records establish the scheme's linkage to the registered Trust; a separate PAN or separate books are administrative identifiers and do not, by themselves, negate entitlement to the statutory exemption, and differences between book surplus and distributable taxable gains arising from statutory indexation under section 48 cannot be treated as independent business income.

Issues: Whether reassessment orders and consequential penalties passed under Sections 147 read with Sections 144 and 144B, Section 272A(1)(d) and Section 270A of the Income-tax Act, 1961 in respect of assessment year 2019-20 are liable to be set aside where proceedings were initiated and continued against a deceased person despite the department having been informed of the death.

Analysis: Notice under Section 148 was issued in the name of the deceased original assessee. The department received information of the death on December 28, 2023 by way of a response to a notice under Section 133(6). After receipt of that information, the reassessment proceedings and consequential penalty orders were continued and ultimately culminated in orders dated February 29, 2024, June 29, 2024 and July 3, 2024. The continuation of reassessment and penalty proceedings after the department had been informed of the death was considered without the requisite corrective measures or observance of appropriate statutory formalities. The petitioner's obligation to furnish names of legal representatives was addressed, and a direction was given permitting the department to treat the petitioner as legal representative if the petitioner fails to provide information after a written request.

Conclusion: The impugned reassessment order dated February 29, 2024 under Section 147 read with Sections 144 and 144B, the order dated June 29, 2024 under Section 272A(1)(d) and the order dated July 3, 2024 under Section 270A, together with consequential notices of demand for assessment year 2019-20, are set aside.

Ratio Decidendi: Continuation of reassessment and penalty proceedings after the tax authorities have been informed of the assessee's death, without taking required corrective or statutory steps, renders the resulting orders liable to be set aside.

Issues: Whether the assessee is entitled to exemption under Section 54 of the Income-tax Act, 1961 for the amount claimed by him towards acquisition and construction of a new residential property, where construction was completed within three years though certain formal registration was delayed beyond the statutory period and payments/construction were evidenced by documents and bank statements.

Analysis: The Tribunal examined whether conditions of Section 54 were satisfied: (a) acquisition/ construction of new residential house within the statutory period (construction completed within three years from date of transfer), (b) cost of the new residential house to be adjusted against capital gains includes cost of land and construction-related expenditures, and (c) there is no requirement that the very sale proceeds must be separately retained or deposited in a capital gains account if the cost is incurred within the stipulated period and is substantiated. The record contains collaboration agreement copy, registered sale deed, construction bills, bank statements showing payments, and other corroborative documents. The Tribunal applied binding and persuasive precedents establishing that commencement of construction prior to transfer, delayed formal registration, or utilisation of funds intermixed with other bank receipts does not defeat the exemption if the new house is purchased or constructed within the statutory period and the cost is proved.

Conclusion: The Tribunal reversed the findings of the lower authorities and directed allowance of deduction under Section 54 as claimed by the assessee; the appeal is allowed in favour of the assessee.

Final Conclusion: The decision establishes that where the cost of acquisition/construction of the new residential house, including land and construction expenses, is incurred and substantiated within the statutory period prescribed by Section 54, the assessee is entitled to the exemption even if (i) construction commenced before the date of transfer, (ii) formal registration was delayed by a short period, or (iii) sale proceeds were not kept separately in a capital gains account, provided the expenditure is otherwise proved.

Ratio Decidendi: Under Section 54 of the Income-tax Act, 1961 the cost of the new residential house--inclusive of land and construction-related costs--may be set off against capital gains where acquisition or construction is completed within the statutory period; the statute does not mandate exclusive utilisation of the original sale proceeds and short procedural delays or mixed banking of funds do not defeat the exemption if the cost is duly incurred and evidenced within the prescribed period.

Issues: Whether interest income earned by a credit co-operative society from investments with cooperative banks (and certain banks) is deductible under Section 80P(2)(a)(i)/80P(2)(d) of the Income-tax Act, 1961 as income attributable to the business, or is taxable as income from other sources under Section 56; and whether the PCIT's revisionary order under Section 263 holding the assessment erroneous and prejudicial to the Revenue is sustainable.

Analysis: The assessing officer issued a show cause and examined the claim under Chapter VIA, allowing deduction under Section 80P for interest from cooperative banks while treating a small amount from a commercial bank as taxable under Section 56. The Principal Commissioner invoked Section 263 relying on a contrary decision of the jurisdictional High Court to hold the assessment erroneous and prejudicial. The Tribunal examined contrary decisions of the jurisdictional High Court (including Tumkur Merchants and Totagars) which hold that interest on short-term deposits of funds attributable to the business of providing credit to members is "attributable to" business profits and deductible under Section 80P. The Tribunal also applied the principle that where two reasonable views exist and the AO has adopted one view supported by judicial authority, the AO's order cannot be held erroneous and prejudicial to the revenue under Section 263 (as reflected in Max India precedent). The AO had followed one of the views available in law and granted deduction accordingly.

Conclusion: The Tribunal held that the PCIT's revisionary order under Section 263 is not sustainable; the assessing officer's allowance of deduction under Section 80P in respect of the interest income was permissible and the appeal is allowed in favour of the assessee.

Issues: Whether commission paid to foreign agents for services rendered outside India was chargeable to tax in India so as to attract deduction of tax at source under section 195 of the Income-tax Act, 1961 and consequential disallowance under section 40(a)(i) of the Income-tax Act, 1961.

Analysis: Disallowance under section 40(a)(i) applies only where the sum payable outside India or to a non-resident is one on which tax is deductible at source and such tax has not been deducted. The decisive question was therefore whether the commission paid to foreign agents was a sum chargeable to tax under the Act. The assessment order did not record any finding that the foreign agents rendered services in India or that the commission income accrued or arose in India. In the absence of chargeability under sections 4, 5 and 9 of the Income-tax Act, 1961, no withholding obligation arose under section 195. The Tribunal also followed the settled principle that commission to non-resident agents for services rendered outside India is not taxable in India and that section 40(a)(i) cannot be invoked merely because no tax was deducted.

Conclusion: The commission payment was not chargeable to tax in India, no obligation to deduct tax at source arose, and disallowance under section 40(a)(i) was not sustainable. The issue is decided in favour of the assessee.

Issues: Whether the Assessing Officer was justified in rejecting the assessee's books of account under Section 145(3) of the Income-tax Act, 1961 and in estimating the net profit at 1% of turnover in assessment completed under section 143(3) read with section 144B, and if so, whether the Tribunal should interfere with the estimation made by the AO or direct recomputation.

Analysis: The Tribunal examined the factual discrepancies relied upon by the AO, including mismatches between sales recorded by the assessee and replies from certain trade debtors, unexplained cash deposits in the assessee's bank account, and discrepancies in rent payments with potential TDS implications under Section 194I. The Tribunal considered the legal framework permitting rejection of books where the AO is not satisfied about correctness or completeness of accounts under Section 145(3), and the consequent power to estimate net profits when books are rejected. The Tribunal found that some deficiencies (unexplained cash deposits and rent discrepancies) justified rejecting the book results in principle, but also noted that the AO had misconstrued aspects of the business (beer wholesale v. liquor) and that the AO's selection of 1% net profit was not adequately tailored to the facts of the case. The Tribunal applied the corrective discretion to fix a more appropriate profit rate responsive to the nature of the business and the deficiencies identified.

Conclusion: The rejection of books under Section 145(3) is upheld in principle, but the AO's estimation at 1% is adjusted. The net profit is directed to be recomputed at 0.50% of turnover and the total income recomputed accordingly, resulting in the appeal being partly allowed in favour of the assessee.

Issues: Whether imposition of penalty under Section 114AA of the Customs Act on the Customs Broker for alleged use of false or incorrect material (misstated country of origin and related documents) was justified.

Analysis: The decision examines whether the Revenue established that the Customs Broker had prior knowledge of falsification or knowingly utilised false/incorrect material so as to attract Section 114AA. The framework applied includes the statutory requirement that penalty under Section 114AA requires knowledge of the falsification or conscious use of incorrect material, the burden on the Revenue to prove such mens rea, and the expectation of due diligence by a customs broker in documentary verification as set out in Regulation 10 of the CBLR 2018. The factual matrix considered includes that invoice, weight, quantity, description and other material particulars matched across documents, that key import documents were received from the importer, that a discrepancy in invoice number could be a clerical error, and that the broker's suspension had been revoked prior to hearing. The record did not disclose any evidence of pecuniary benefit, active manipulation by the broker, or any material showing prior knowledge of falsification; the penalty appeared to have been imposed mechanistically without proof of the requisite knowledge.

Conclusion: Penalty under Section 114AA was not justified as the Revenue failed to prove that the Customs Broker had prior knowledge of falsification or knowingly used false/incorrect material; appeal allowed, impugned order set aside and no penalty imposed.

Ratio Decidendi: Penalty under Section 114AA of the Customs Act can be imposed only where it is established that the person knowingly used false or incorrect material; absence of evidence of prior knowledge or conscious use precludes imposition of the penalty.

Issues: (i) Whether an appeal was maintainable against the order dismissing the contempt application in limine.

Issue (i): Whether an appeal was maintainable against the order dismissing the contempt application in limine.

Analysis: Appeal under Section 19 of the Contempt of Courts Act, 1971 lies only from an order passed in exercise of jurisdiction to punish for contempt. An order declining to initiate, dismissing, or otherwise rejecting contempt proceedings without imposing punishment is not an order made in the exercise of such punitive jurisdiction. The authorities relied upon reaffirm that only an order imposing punishment for contempt is appealable as of right, while a dismissal in limine of a contempt application does not answer any contention on merits of contempt so as to attract Section 19.

Conclusion: The appeal was not maintainable and was liable to be dismissed.

Issues: Whether an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996 for extension of the mandate of the arbitrator is maintainable after expiry of the time prescribed under Section 29A(1) and the extended period under Section 29A(3), and even after an award has been rendered.

Analysis: Section 29A is designed to secure timely completion of arbitral proceedings while preserving the court's supervisory power to extend time before or after expiry of the statutory period. The structure of Section 29A, including the proviso to sub-section (4), sub-sections (5) to (9), and the deeming continuity of the reconstituted tribunal, shows that the mandate is not treated as finally extinguished in a manner that disables judicial intervention. The absence of an express bar on a post-award application, together with the legislative purpose of ensuring that arbitration reaches an effective conclusion, supports the view that the court's power under Section 29A(5) is not lost merely because the arbitrator has rendered an award after the mandate expired. Such an award is ineffective and unenforceable, but that circumstance does not denude the court of jurisdiction to consider extension on sufficient cause and on appropriate terms.

Conclusion: The application under Section 29A(5) is maintainable even after expiry of the statutory and consensual extension periods and even after an award has been rendered; the award passed after expiry of mandate is unenforceable, and the court may still consider extension, substitution, costs, and other conditions as warranted.

Final Conclusion: The challenge to the High Court's refusal was accepted, and the matter was sent back for decision on the Section 29A application in accordance with the declared principles, thereby preserving the arbitral process rather than treating the late award as an absolute bar to relief.

Ratio Decidendi: Section 29A of the Arbitration and Conciliation Act, 1996 does not create a threshold prohibition against seeking extension of an arbitrator's mandate after expiry of the prescribed period or after a late award has been made; the court retains jurisdiction to extend time on sufficient cause, with incidental powers to impose conditions, substitute arbitrators, and secure effective continuation of the arbitration.

Issues: (i) Whether the Respondent denied the benefit of GST rate reduction from 18% to 12% to recipients by not effecting a commensurate reduction in prices and, if so, the quantum of profiteering; (ii) Whether interest and penalty can be imposed on the profiteered amount for the period 15.11.2017 to 31.12.2018.

Issue (i): Whether the Respondent denied the benefit of GST rate reduction and the determination of the amount of profiteering.

Analysis: DGAP compared invoice-wise base prices in the pre-rate-reduction period (01.11.2017 to 14.11.2017) with invoice-wise base prices in the post-rate-reduction period (15.11.2017 to 31.12.2018). Where direct sales in the reference pre-period were absent, sequential earlier months were used. Documentary material, including price-revision circulars and invoices, and DGAP calculations (Annex-11) were considered alongside the respondent's submissions on input cost increases and market conditions. The presumption under Section 171 that tax reduction must be passed on is rebuttable by cogent contemporaneous evidence of cost increases; the respondent's evidence was examined against the specific timing and quantum of price and cost changes and found not to justify the increase in base prices contemporaneous with the tax reduction.

Conclusion: The Respondent denied the benefit of GST rate reduction; profiteering of Rs. 90,90,310/- for the period 15.11.2017 to 31.12.2018 is confirmed in favour of the Revenue.

Issue (ii): Whether interest and penalty are payable on the profiteered amount for the relevant period.

Analysis: Rule 133(3)(c) (as amended) making interest payable at 18% became effective from 28.06.2019. Section 171(3A) prescribing penalty came into force w.e.f. 01.01.2020. The temporal applicability of these fiscal provisions was assessed in light of the period of alleged profiteering (15.11.2017 to 31.12.2018) and the principle that fiscal liabilities imposing additional burdens cannot be applied retrospectively unless expressly provided.

Conclusion: Interest and penalty are not imposed on the profiteered amount for the period 15.11.2017 to 31.12.2018.

Final Conclusion: The DGAP's report is accepted to the extent that the Respondent profiteered Rs. 90,90,310/-; the respondent is directed to deposit this amount in the Consumer Welfare Fund (Centre and States equally); interest and penalty are not directed due to non-retrospective application of the relevant fiscal provisions.

Ratio Decidendi: A supplier who increases base prices contemporaneously with a statutory reduction in tax must justify the increase by cogent, contemporaneous evidence of cost escalation; absent such justification, the presumption under Section 171 that the benefit of tax reduction be passed on leads to a finding of profiteering, and fiscal penalties or interest enacted after the profiteering period cannot be imposed retroactively unless expressly made retrospective.

Issues: Whether the penalty under section 271(1)(c) of the Income-tax Act, 1961, levied in respect of addition under section 69A for AY 2015-16 is sustainable where the assessee contends that the cash deposits are from members (supported by documentation) and the assessment computation shows nil tax liability due to an apparent arithmetical mistake.

Analysis: The appeal arises from confirmation of penalty by the Commissioner (Appeals) against the assessee where an addition of Rs. 60,07,700/- was made under section 69A. The assessing officer treated the addition as income and initiated penalty proceedings under section 271(1)(c). The assessment record includes a computation sheet showing no tax liability, which the Tribunal found to be an arithmetical/mathematical error rather than a substantive finding of nil tax by the AO. It is a settled proposition that quantum and penalty proceedings are separate and the assessee may place explanations and supporting material in penalty proceedings even if no appeal was filed against the quantum order. The assessee consistently explained that the cash deposits were collections from members and furnished detailed supporting documentation which neither the AO nor the Commissioner (Appeals) recorded specific findings upon. Given the absence of a considered finding on the assessee's explanation and documentary evidence in the penalty proceedings, the matter required re-examination by the assessing officer with an opportunity to the assessee.

Conclusion: The appeal is allowed in favour of the assessee and the penalty order is set aside and remitted to the assessing officer for fresh consideration of the explanation and supporting documents regarding the cash deposits and levy of penalty under section 271(1)(c), after affording the assessee a reasonable opportunity of being heard.

Issues: Whether the entire bank deposits of Rs. 10,27,541/- can be treated as unexplained income, or whether the income should be estimated by applying a net profit rate (presumptive taxation) on the gross receipts shown in the bank account.

Analysis: The assessment was completed ex-parte by treating the aggregate cash deposits as unexplained income. The assessee later furnished the complete bank statement with entry-wise explanations showing small and moderate deposits throughout the year accompanied by frequent withdrawals and negligible running balances. The factual pattern indicates linkage of the deposits with petty electrical contracting business activity rather than undisclosed sources. Where deposits are linked to business activity, the entire deposits are not taxable as income; only the income element in the gross receipts can be brought to tax. Considering the nature of the business and the transaction pattern, estimation of income by applying a presumptive/net profit rate is appropriate. Both parties' pleadings on the appropriate net profit rate were considered and a 12% net profit rate on the gross receipts of Rs. 10,27,541/- was applied as a balanced estimate.

Conclusion: The addition treating the entire cash deposits of Rs. 10,27,541/- as unexplained income is set aside; income is to be recomputed by applying net profit @ 12% on gross receipts of Rs. 10,27,541/-, with consequential relief to the assessee. The appeal is partly allowed in favour of the assessee.

Ratio Decidendi: Where bank deposits are shown to be linked with business activity, only the income element of gross receipts is taxable and the assessing authority may estimate income by applying an appropriate net profit/presumptive rate rather than treating gross receipts as unexplained income.

Issues: Whether the payment of Rs. 25,00,000 made by the company by debiting the assessee's deposit account and claimed as deduction u/s 80GGC of the Income-tax Act, 1961, amounts to deemed dividend under Section 2(22)(e) of the Income-tax Act, 1961.

Analysis: The assessee, a 57% shareholder and managing director, had a substantial credit balance in his deposit account with the company prior to payments totalling Rs. 25,00,000 being made on his instructions and debited to that account. The payments did not create any fresh liability of the company to the assessee and at no time did the deposit account show a debit balance; the payments reduced the assessee's existing deposit balance. The statutory language of Section 2(22)(e) covers any payment by a closely held company on behalf of, or for the individual benefit of, a qualifying shareholder to the extent the company possesses accumulated profits; however, where the payment represents withdrawal or repayment of the shareholder's own deposit (and no fresh loan or advance is made by the company), the element of benefit flowing from the company to the shareholder is absent. Applying these principles to the facts, the transaction here was a repayment/withdrawal from the assessee's deposit account and did not constitute a payment by the company conferring a benefit under Section 2(22)(e).

Conclusion: The payment of Rs. 25,00,000 by debiting the assessee's deposit account does not fall within Section 2(22)(e) of the Income-tax Act, 1961; the appeal is allowed in favour of the assessee.

Final Conclusion: The legal effect is that the addition made by the Assessing Officer treating the payment as deemed dividend under Section 2(22)(e) is set aside, and the assessment stands corrected accordingly.

Ratio Decidendi: A payment by a closely held company that merely withdraws or repays a shareholder's existing deposit (without constituting a fresh loan or an accruing benefit from the company) does not amount to deemed dividend under Section 2(22)(e) of the Income-tax Act, 1961.

Issues: Whether the appeal filed against the Assistant Commissioner's order dated 18.03.2024 is maintainable before the Customs, Excise and Service Tax Appellate Tribunal in view of Section 129A of the Customs Act, 1962 and Regulation 14 of the Sea Cargo Manifest and Transhipment (Amendment) Regulations, 2020.

Analysis: The Tribunal examined Section 129A of the Customs Act, 1962 which prescribes the classes of orders that may be appealed to the Appellate Tribunal and specifies that orders passed by an Assistant Commissioner/Deputy Commissioner are to be appealed to the Commissioner (Appeals). Regulation 14 of the Sea Cargo Manifest and Transhipment (Amendment) Regulations, 2020 permitting appeals to the Tribunal was considered but found incapable of overriding the statutory scheme under Section 129A which governs the forum for appeals against orders of the Assistant Commissioner.

Conclusion: The appeal is not maintainable before the Appellate Tribunal; the appeal is rejected on the ground of maintainability and the decision is in favour of the Revenue.

Issues: (i) Whether the Section 7 application was barred by limitation despite invocation of the corporate guarantee and subsequent acknowledgments in the balance sheets. (ii) Whether the Adjudicating Authority erred in considering amounts realised in liquidation and another insolvency proceeding while determining debt and default.

Issue (i): Whether the Section 7 application was barred by limitation despite invocation of the corporate guarantee and subsequent acknowledgments in the balance sheets.

Analysis: The guarantee was invoked on 12.02.2020 and the limitation period therefore commenced from that date. The balance sheets for the relevant financial years contained acknowledgments of the outstanding liability. An acknowledgment in the balance sheet constitutes acknowledgment within the meaning of Section 18 of the Limitation Act, 1963. The exclusion of the Covid period also operated in the creditor's favour. On this basis, the filing of the application on 14.04.2025 remained within time.

Conclusion: The application was not barred by limitation.

Issue (ii): Whether the Adjudicating Authority erred in considering amounts realised in liquidation and another insolvency proceeding while determining debt and default.

Analysis: The consideration of amounts already received from the liquidation of the principal borrower and the resolution of another corporate guarantor was undertaken only to ascertain the surviving debt and default for the purpose of the Section 7 proceeding. The financial creditor had already disclosed the essential particulars of debt and default in the application, and the record showed that a substantial unpaid balance still remained. No suppression or jurisdictional error was established in the manner in which the outstanding liability was assessed.

Conclusion: No error was shown in the finding on debt and default.

Final Conclusion: The order admitting the Section 7 application was upheld and the appeal was dismissed.

Issues: (i) Whether CENVAT credit is admissible on inputs, input services and capital goods used in construction of immovable property that is subsequently let out and taxed under Renting of Immovable Property Service; (ii) Whether the demand is time-barred by limitation/extended period.

Issue (i): Admissibility of CENVAT credit on inputs, input services and capital goods used in construction of immovable property let out and taxed as Renting of Immovable Property Service.

Analysis: The rules define "input service" by a means-clause covering services used by a provider of taxable service for providing an output service and by an inclusive clause listing services used in relation to setting up premises of a provider of output service. Rule 3 permits CENVAT credit on input services and utilization for payment of service tax on output services. The Tribunal examined prior decisions of Tribunals and High Courts holding that services used for construction of premises used to provide a taxable renting service fall within the definition of input service where received prior to the 2011 exclusion. The 2011 amendment excluded certain construction services prospectively w.e.f. 01.04.2011; services received before that date remain covered. Departmental circulars cannot override statutory provisions.

Conclusion: CENVAT credit is admissible in favour of the appellant for inputs, input services and capital goods used in construction of immovable property let out and taxed as Renting of Immovable Property Service for the period prior to 01.04.2011.

Issue (ii): Whether the demand raised by the department is barred by limitation or requires invocation of extended period.

Analysis: The record shows filing of ST-3 returns and regular audits by the department. No evidence was produced to show suppression or collusion or willful misstatement by the appellant to evade tax. Precedent limits invocation of extended period absent such suppression.

Conclusion: The demand is barred by limitation and the extended period is not invocable; conclusion is in favour of the appellant.

Final Conclusion: The impugned order is set aside and the appeal is allowed, with consequential reliefs as per law, because the appellant was entitled to CENVAT credit for the relevant pre-1.4.2011 period and the demand is time-barred.

Ratio Decidendi: Where services are used by a provider of a taxable output service for providing that output, including services used in relation to setting up premises, they qualify as "input service" under Rule 2(l) of the CENVAT Credit Rules, 2004 and CENVAT credit is admissible for periods prior to the prospective exclusion effective 01.04.2011; departmental circulars cannot override the statutory definition and extended period requires proof of suppression or collusion.