Issues: Whether provisional freezing of a bank account under Section 110(5) of the Customs Act, 1962 can continue beyond the maximum statutory period on account of pendency of adjudication proceedings following a show cause notice under Section 124.

Analysis: Section 110(5) permits provisional attachment for up to six months, extendable by a further period not exceeding six months upon recorded reasons and prior communication. The provision imposes a maximum twelve-month statutory limitation. A subsequent show cause notice and pendency of adjudication do not extend or preserve an attachment that has expired by efflux of time.

Conclusion: The continued freezing after expiry of the maximum period under Section 110(5) lacked authority of law; the provisional attachment had ceased to operate by efflux of time.

Issues: (i) Whether the adjudication was invalid for want of service of the show-cause notice and opportunity of hearing; (ii) Whether the adjudication concerning recovery of duty drawback required reconsideration in light of receipts said to establish realisation of export sale proceeds.

Issue (i): Whether the adjudication was invalid for want of service of the show-cause notice and opportunity of hearing.

Analysis: Section 75(1) of the Customs Act, 1962, Rule 16A(1) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, and Rule 18(1) of the Customs and Central Excise Duty Drawback Rules, 2017 were invoked on the premise of non-realisation of export proceeds. No material established non-receipt of the show-cause notice, and the available record showed that opportunities had been extended but were not availed.

Conclusion: The plea of non-service and denial of hearing was not established, in favour of the Revenue.

Issue (ii): Whether the adjudication concerning recovery of duty drawback required reconsideration in light of receipts said to establish realisation of export sale proceeds.

Analysis: Receipts issued by the Directorate General of Foreign Trade, produced as evidence of realisation of export sale proceeds, were material to the proposed drawback recovery. Their consideration could avert monetary prejudice, whereas allowing a further opportunity to establish the claim would cause no prejudice to the authority. Procedural fairness required consideration of those documents before determining liability.

Conclusion: A fresh opportunity to establish realisation of export sale proceeds and to have the supporting documents considered was warranted, in favour of the assessee.

Final Conclusion: The proposed duty-drawback recovery requires determination after evaluation of the documentary material relating to realisation of export proceeds, notwithstanding that the plea of non-service was not accepted.

Ratio Decidendi: Where material official evidence bearing on realisation of export proceeds is produced, fairness requires its consideration before liability to repay duty drawback is determined.

Issues: Whether redemption of confiscated gold jewellery could be refused under the discretionary power applicable to prohibited goods.

Analysis: Section 125 of the Customs Act, 1962 makes grant of redemption an option in respect of prohibited goods, while making it mandatory for goods other than prohibited goods. The discretion applicable to prohibited goods must nevertheless be exercised judiciously on the facts of each case and cannot be denied mechanically merely because the goods are prohibited. The absence of any serious or prior violation, coupled with payment of the imposed penalty, warranted exercise of the discretion in favour of redemption. The redemption fine must remain within the statutory ceiling of the market price less applicable duty and be fixed consistently with the governing principles for determining such fine.

Conclusion: Redemption of the confiscated gold jewellery must be permitted upon payment of redemption fine determined in accordance with Section 125 of the Customs Act, 1962.

Issues: (i) Whether the admitted question concerning exclusion of certain comparables arose when it had not been raised before the Tribunal; (ii) Whether applying an upper turnover filter of Rs. 200 crores to exclude high-turnover software-development comparables was legally sustainable under Rule 10B.

Issue (i): Whether the admitted question concerning exclusion of certain comparables arose when it had not been raised before the Tribunal.

Analysis: The admitted question was not raised before the Tribunal, while the appeal before the High Court arose from dismissal of the Revenue's appeal by the Tribunal. The question therefore did not arise for consideration.

Conclusion: The admitted question did not arise for consideration, in favour of the assessee.

Issue (ii): Whether applying an upper turnover filter of Rs. 200 crores to exclude high-turnover software-development comparables was legally sustainable under Rule 10B.

Analysis: Transfer-pricing comparability must conform to Rule 10B. An upper turnover filter of Rs. 200 crores is rational because turnover, brand value, economies of scale, bargaining power and ownership of intangibles materially affect comparability and profitability. The excluded entities had substantially higher turnover and were also functionally dissimilar to the assessee.

Conclusion: The upper turnover filter and exclusion of the high-turnover comparables were legally sustainable; no substantial question of law arose, in favour of the assessee.

Final Conclusion: The Tribunal's exclusion of the identified high-turnover comparables on transfer-pricing comparability grounds remains undisturbed.

Ratio Decidendi: Transfer-pricing comparability under Rule 10B may validly apply an upper turnover filter where turnover and associated commercial attributes materially affect comparability and profitability.

Issues: (i) Whether penalty under Section 270A(3) was leviable where the return filed in response to Section 148 was accepted and the conditions of Section 270A(6)(a) were met; (ii) Whether delayed furnishing of the tax audit report attracted penalty under Section 271B where pandemic conditions and director disputes constituted reasonable cause.

Issue (i): Whether penalty under Section 270A(3) was leviable where the return filed in response to Section 148 was accepted and the conditions of Section 270A(6)(a) were met.

Analysis: Section 270A(6)(a) excludes income from under-reporting where a bona fide explanation is supported by disclosure of all material facts. The tax audit report and audited financial statements had been uploaded, advance tax and self-assessment tax had been paid before issuance of notice under Section 148, and the returned income was accepted without any addition. These facts satisfied the statutory exclusion.

Conclusion: Penalty under Section 270A(3) was not leviable and was directed to be cancelled, in favour of the assessee.

Issue (ii): Whether delayed furnishing of the tax audit report attracted penalty under Section 271B where pandemic conditions and director disputes constituted reasonable cause.

Analysis: Section 44AB imposes an obligation to obtain and furnish the tax audit report, while Section 273B protects an assessee that establishes reasonable cause for the failure. The pandemic period and disputes between directors delayed finalisation of accounts; the report was uploaded once the accounts were finalised and taxes had already been paid. As the returned income was accepted, the delay was treated as a technical breach causing no prejudice to the assessment process.

Conclusion: Reasonable cause was established; therefore, penalty under Section 271B was not imposable and was directed to be cancelled, in favour of the assessee.

Final Conclusion: The statutory conditions excluding both penalty liabilities were established on the facts.

Ratio Decidendi: A fiscal penalty cannot be sustained where the assessee establishes the statutory exclusion through a bona fide, fully disclosed explanation or through reasonable cause for the default.

Issues: Whether a regular scrutiny assessment under Section 143(3) was valid where the Assessing Officer consulted the Additional Commissioner throughout the proceedings and obtained prior approval before passing the assessment order.

Analysis: A regular assessment under Section 143(3) requires the Assessing Officer to exercise the statutory quasi-judicial power independently. The statutory scheme did not authorise prior approval by, or consultation with, the Additional Commissioner for such an assessment. The recorded consultations and prior approval showed that the assessment was not the product of the Assessing Officer's independent application of mind and discretion.

Conclusion: The assessment was void ab initio and was quashed.

Issues: (i) Whether the writ petitions were entertainable despite the available statutory appellate remedy; (ii) Whether licensing by an original copyright holder of cinematographic films before 1 October 2021 was licensing of information technology software taxable at 18%, or licensing of intellectual-property rights in goods other than information technology software taxable at 12%; (iii) Whether the pre-1 October 2021 GST regularisation on an as-is-where-is basis extended to producer-to-distributor licensing of theatrical rights.

Issue (i): Whether the writ petitions were entertainable despite the available statutory appellate remedy.

Analysis: Article 226 of the Constitution of India permits writ intervention notwithstanding an alternative remedy where the impugned action suffers from a jurisdictional error or the controversy is purely legal and does not require resolution of disputed facts. The classification issue turned on the statutory entries, definition of information technology software and applicable service classifications; the appellate tribunal was also not functional when the petitions were instituted.

Conclusion: The writ petitions were entertainable notwithstanding the statutory appellate remedy, in favour of the assessee.

Issue (ii): Whether licensing by an original copyright holder of cinematographic films before 1 October 2021 was licensing of information technology software taxable at 18%, or licensing of intellectual-property rights in goods other than information technology software taxable at 12%.

Analysis: Entry 17 distinguished intellectual-property rights in goods other than information technology software from rights in information technology software. The statutory definition required a machine-readable representation capable of manipulation or providing interactivity to a user. The classification scheme separately identified licensing of computer software and databases under SAC 997331 and licensing rights to broadcast and show original films under SAC 997332.

Analysis: A cinematographic film is a passive audio-visual work and does not become information technology software merely because it is supplied electronically or through a hard disk. The essential character of the licensed supply, rather than its delivery mode, governed classification. The impugned orders neither applied the statutory definition nor explained the disregard of the specific entry for original films; reliance on an undisclosed statement concerning the transmission mode could not cure that defect.

Conclusion: Licensing copyright in cinematographic films was classifiable under Entry 17(i) at 12%, and not under Entry 17(ii) at 18%, in favour of the assessee.

Issue (iii): Whether the pre-1 October 2021 GST regularisation on an as-is-where-is basis extended to producer-to-distributor licensing of theatrical rights.

Analysis: The circulars acknowledged overlap between competing classifications for licensing theatrical rights before the rate rationalisation and regularised tax paid at the lower rate on an as-is-where-is basis. That ambiguity concerned the nature of theatrical-rights licensing throughout the chain of exploitation and did not turn on whether the licensor was the original copyright holder, distributor or sub-distributor.

Conclusion: The as-is-where-is regularisation extended to producer-to-distributor licensing of theatrical rights, in favour of the assessee.

Final Conclusion: The differential GST treatment was unsupported by the pre-amendment classification scheme and the applicable regularisation of the acknowledged classification overlap.

Ratio Decidendi: GST classification is determined by the essential character of the supply under the applicable tariff entry; the physical or electronic mode of delivering cinematographic content does not render it information technology software absent the statutory attributes of manipulability or user interactivity.

Issues: Whether the Revenue's proposed substantial questions of law challenging the finding on dependent agent permanent establishment arose from the order passed on the miscellaneous application.

Analysis: The appeal was confined to the order modifying the earlier remand directions. The finding that the Indian subsidiary could not be treated as a dependent agent permanent establishment where the software-sale transaction was accepted as a purchase-and-sale transaction and subjected to arm's-length-price determination remained unaltered. The proposed questions challenged that unaltered finding in the earlier order rather than any determination made in the miscellaneous-application order.

Conclusion: The proposed substantial questions of law did not arise from the impugned miscellaneous-application order; the Revenue may challenge the earlier order in accordance with law.

Issues: (i) Whether rejection of the assessee's transfer pricing study and conduct of a fresh comparable search were justified; (ii) Whether delayed receivables from associated enterprises warranted a separate interest adjustment and could be set off against outstanding payables.

Issue (i): Whether rejection of the assessee's transfer pricing study and conduct of a fresh comparable search were justified.

Analysis: Section 92C(3) permits rejection of the transfer pricing analysis where the data used for determining the arm's length price is unreliable or incorrect. The functions, assets and risks, tested party, databases, search keywords and contractual terms adopted in the study were not disputed. The objection was confined to modification of certain filters. Mere disagreement with filters did not establish that the underlying data or analysis was unreliable or incorrect so as to justify rejecting the entire study and undertaking a fresh search.

Conclusion: Rejection of the transfer pricing study was unjustified. Determination of the arm's length price for the software development segment is remitted for verification using the assessee's database after applying the modified filters and examining the accept-reject matrix.

Issue (ii): Whether delayed receivables from associated enterprises warranted a separate interest adjustment and could be set off against outstanding payables.

Analysis: Outstanding receivables may constitute a separate international transaction where they are not aggregated with the margins determined under the transactional net margin method after working capital adjustment. Outstanding payables and receivables from associated enterprises do not automatically correlate, and a set-off is therefore unavailable. Since the arm's length price of the software development segment requires fresh determination, the relevance of working capital adjustment and aggregation of receivables also requires reconsideration.

Conclusion: No set-off of associated-enterprise payables against receivables is allowable. The delayed-receivables adjustment is remitted for fresh determination in conjunction with the arm's length price of the software development segment.

Final Conclusion: The transfer pricing adjustments relating to software development services and delayed receivables require fresh examination on the prescribed comparability and working-capital basis.

Ratio Decidendi: A transfer pricing study cannot be rejected merely because certain comparability filters require modification when its underlying data, databases, search methodology and functional analysis remain undisputed.

Issues: Whether conversion of compulsorily convertible debentures into compulsorily convertible preference shares through a book entry, without receipt of funds in the relevant previous year, permits an addition of share premium under Section 68 of the Income-tax Act, 1961.

Analysis: Section 68 applies to an unexplained sum credited in an assessee's books for a previous year. The conversion of the debentures into preference shares during the relevant year was only a book entry. No funds were received by the assessee in that year, and the share premium entry did not represent a sum received during that previous year.

Conclusion: Addition of the share premium under Section 68 for the relevant assessment year was impermissible. The issue was decided in favour of the assessee and did not give rise to a substantial question of law.

Issues: Whether the appeal could continue after the appellant-company was taken up for liquidation.

Analysis: Rule 22 of the CESTAT Procedure Rules, 1982 provides for abatement where a company is being wound up unless a successor, liquidator, or other legal representative seeks continuance within the prescribed period, subject to extension for sufficient cause. The liquidation proceedings and appointment of an insolvency resolution professional attracted this rule.

Conclusion: Continuance of the appellate proceeding was unavailable in the absence of an application under Rule 22.

Issues: (i) Whether reassessment could be initiated to revisit the existence of a permanent establishment after a scrutiny assessment and the binding advance ruling; (ii) Whether the reassessment notice was barred by limitation in the absence of the assessee's failure to make full and true disclosure.

Issue (i): Whether reassessment could be initiated to revisit the existence of a permanent establishment after a scrutiny assessment and the binding advance ruling.

Analysis: The advance ruling classified the subscription receipts as business income rather than royalty and directed an inquiry into the existence of a permanent establishment. In the original scrutiny assessment, permanent-establishment-specific queries were raised, detailed replies were furnished, and the assessment was completed at the returned income. The absence of a detailed express finding in the assessment order could not justify reassessment to remedy the Assessing Officer's omission after undertaking that inquiry. Reopening on the same material amounted to an impermissible change of opinion and impaired finality of assessment.

Conclusion: Reassessment to revisit the permanent-establishment issue after the completed scrutiny inquiry was invalid.

Issue (ii): Whether the reassessment notice was barred by limitation in the absence of the assessee's failure to make full and true disclosure.

Analysis: After an assessment under Section 143(3), the first proviso to Section 147 permits action beyond four years only where income escaped assessment because of the assessee's failure to make full and true disclosure. The nature of the subscriptions and the role of the Indian agent were already disclosed and addressed during scrutiny; therefore, the requisite jurisdictional fact was absent. Further, the six-year period under Section 149(1)(b) expired on 31.03.2023, whereas the notice was issued on 28.04.2023.

Conclusion: The extended reassessment period was unavailable and the reassessment notice was time-barred.

Final Conclusion: The completed assessment could not be disturbed through the impugned reassessment proceedings.

Ratio Decidendi: Reassessment beyond four years after a scrutiny assessment is impermissible where material facts were fully disclosed and the proposed issue had already been inquired into, even if no express finding was recorded.

Issues: Whether uncorroborated loose sheets containing scribbled figures could validly form the sole basis for an addition towards undisclosed consideration for purchase of property.

Analysis: In an assessment pursuant to search, loose sheets containing scribbled figures, which do not constitute books of account, cannot by themselves establish undisclosed consideration. The figures were unsupported by material showing payment of cash or availability and deployment of funds beyond the consideration recorded in the registered sale deed. The settled requirement of corroborative incriminating material was not met.

Conclusion: The addition based solely on the uncorroborated loose sheets was unsustainable.

Issues: (i) Whether the 325-day delay in filing the appeal should be condoned; and (ii) Whether the four contested companies could be retained as comparables for determining the arm's length price.

Issue (i): Whether the 325-day delay in filing the appeal should be condoned.

Analysis: The COVID-19 outbreak and the location of key decision-makers outside India satisfactorily explained the delay. The explanation did not indicate mala fides.

Conclusion: The 325-day delay is condoned.

Issue (ii): Whether the four contested companies could be retained as comparables for determining the arm's length price.

Analysis: Transfer Pricing Comparability requires Data Reliability and Functional Comparability based on the relevant financial and functional information. One contested company lacked a relevant-year annual report and verifiable public functional disclosures; another performed broad, highly technical infrastructure-project services with Brand Intangibles; a further company undertook government-driven and diversified activities; and the remaining company failed the applied Employee Cost Filter.

Conclusion: None of the four contested companies can be included in the comparable set. Their inclusion is set aside, and the challenge to the transfer-pricing adjustment succeeds in favour of the assessee.

Final Conclusion: The arm's length price determination must exclude the four impugned comparables.

Ratio Decidendi: A transfer-pricing comparable lacking reliable contemporaneous financial and functional data, failing an applied quantitative filter, or being materially functionally dissimilar cannot be used to determine the arm's length price.

Issues: Whether reassessment initiated through a notice issued more than three years after the end of the relevant assessment year was valid when the approval was granted by the Principal Commissioner rather than the authority specified under section 151(ii).

Analysis: The consequential notice under section 148 was issued in July 2022, after expiry of three years from the end of assessment year 2016-17. Section 151, as amended, distinguishes cases based on whether more than three years have elapsed and mandates approval from the specifically designated higher authority under section 151(ii) in the latter category. Approval by the Principal Commissioner did not meet that mandatory jurisdictional safeguard. The conversion of an earlier notice under the old reassessment regime into deemed proceedings under section 148A(b) did not dispense with compliance with the statutory conditions, including competent sanction, for the consequential notice issued after the order under section 148A(d).

Conclusion: The notice under section 148 was invalid for want of approval from the competent authority under section 151(ii); consequently, the reassessment and assessment framed under sections 147 and 144B, including the addition under section 68, were set aside.

Issues: Whether penalty for concealment was sustainable where the assessee claimed knowingly inadmissible deductions in a revised return and filed the correct return only after detection.

Analysis: Section 271(1)(c) of the Income-tax Act, 1961 permits penalty where income is concealed. The revised return claimed excess deductions under Chapter VI-A despite the assessee's awareness that they were not allowable, resulting in an improper refund claim. The correct income was disclosed only after detection during survey proceedings and issuance of reassessment notice. The explanation that the tax consultant had misled the assessee did not displace the finding of conscious concealment.

Conclusion: The penalty for concealment under Section 271(1)(c) was validly imposed and sustained.

Issues: (i) Whether notice and an opportunity of hearing were duly afforded to the mortgagee bank in the benami adjudication; (ii) Whether the benami property mortgaged as collateral was liable to be released on the bank's claim of priority under SARFAESI.

Issue (i): Whether notice and an opportunity of hearing were duly afforded to the mortgagee bank in the benami adjudication.

Analysis: The bank's own recovery measures and its representation to the authorities established its knowledge of the pending adjudication. The statutory framework permits a person claiming an interest in the property to approach the Adjudicating Authority, including through addition as a party, and treats service on one of several persons holding property as valid in the circumstances specified by the Act. No prejudice resulted from the bank's non-participation, particularly as service of the notice and reference was recorded.

Conclusion: The plea of absence of notice and denial of hearing is rejected, against the appellant bank.

Issue (ii): Whether the benami property mortgaged as collateral was liable to be released on the bank's claim of priority under SARFAESI.

Analysis: Attachment under the benami regime is directed towards confiscation of property found to be benami, rather than recovery of a debt. Rights created to defeat the purposes of that regime are void. Accepting priority of a secured creditor over a benami property would enable evasion of confiscation through a subsequent mortgage. The bank possessed other mortgaged securities furnished by the borrower and guarantors and was required to pursue those securities first; if any dues remained unrecovered, it could invoke the statutory claim mechanism.

Conclusion: Release of the mortgaged benami property is declined, against the appellant bank.

Final Conclusion: The mortgage claim does not displace the confirmed benami attachment, and any unrecovered claim may be pursued through the available statutory mechanism.

Issues: Whether an appeal electronically filed beyond the outer condonable period under Section 61(2) of the Insolvency and Bankruptcy Code, 2016, solely because of a technical failure in the tribunal's e-filing system, could be treated as having been presented within time.

Analysis: Section 61(2) prescribes a mandatory thirty-day limitation period with a further condonable period of fifteen days, and does not empower the appellate tribunal to condone delay beyond that limit. However, limitation runs only when the forum is capable of receiving a bona fide filing. The registry report established that timely e-filing attempts were frustrated by OTP-delivery and backend failures in the e-filing system, without any negligence, laches, ignorance of law, or fault attributable to the appellant. The principle of actus curiae neminem gravabit, together with the principle reflected in Order VII Rule 6 of the Code of Civil Procedure, 1908, permits exclusion of the period during which the tribunal's system was non-functional and treatment of the first bona fide e-filing attempt as the date of presentation.

Conclusion: The statutory outer limit did not prevent exclusion of the period lost solely because of the tribunal's system failure; the appeal was required to be reconsidered by treating the bona fide initial filing attempt as the relevant date of presentation.

Issues: (i) Whether Section 6(3)(b) of FEMA applied to the 2006-2008 contraventions despite its later omission; (ii) Whether the foreign remittances and delayed or mismatched share allotments contravened the applicable FEMA Regulations and attracted civil penalties without proof of mens rea; (iii) Whether confiscation of the Barakhamba Road property under Section 13(2) of FEMA was warranted; (iv) Whether the individual directors were liable and whether the penalties imposed on the appellants required modification.

Issue (i): Whether Section 6(3)(b) of FEMA applied to the 2006-2008 contraventions despite its later omission.

Analysis: Section 6(3) was omitted through the Finance Act, 2015 only with effect from 15.10.2019. As the relevant foreign remittances and alleged breaches occurred between 2006 and 2008, the provision was operative when the contraventions arose.

Conclusion: Section 6(3)(b) of FEMA governed the relevant contraventions notwithstanding its subsequent omission, against the appellants.

Issue (ii): Whether the foreign remittances and delayed or mismatched share allotments contravened the applicable FEMA Regulations and attracted civil penalties without proof of mens rea.

Analysis: The foreign remittances were investment funds, yet the prescribed reports of receipt and share allotment were not furnished within the stipulated periods. Shares were also allotted to an entity other than the remitter, and the funds were deployed for acquisition of immovable property in a restricted real-estate sector. These acts breached Paragraphs 2, 8, 9(1)(A), and 9(1)(B) of Schedule I to Regulation 5(1) and the RBI Master Circular. Penalty under Section 13(1) is civil regulatory liability; its text does not require willful conduct, intention, or mens rea. Administrative difficulty, eventual regularisation, and absence of loss did not displace the established contraventions.

Conclusion: The corporate appellant committed the established FEMA contraventions and incurred civil penalty without any requirement to prove mens rea, against the corporate appellant.

Issue (iii): Whether confiscation of the Barakhamba Road property under Section 13(2) of FEMA was warranted.

Analysis: Section 13(2) authorises discretionary confiscation in addition to monetary penalty and requires that discretion to be exercised judiciously on the facts. A substantial part of the foreign remittances was used to acquire the property, while the remittance-and-share transaction and investment in the restricted sector were themselves non-compliant.

Conclusion: Discretionary confiscation of the property was justified, against the corporate appellant.

Issue (iv): Whether the individual directors were liable and whether the penalties imposed on the appellants required modification.

Analysis: No evidence established that the non-managing director was in charge of, or responsible for, the company's business when the contraventions occurred. Conversely, the managing director admitted a managerial role, disclosed the initial incorrect declarations concerning remittances, and did not establish that the contraventions occurred without his knowledge or despite due diligence. The monetary sanctions required reduction in the circumstances.

Conclusion: The penalty imposed on the non-managing director was set aside in her favour. The managing director remained personally liable, but his penalty was reduced to Rs. 5,00,000; the corporate appellant's penalty was reduced to Rs. 50,00,000.

Final Conclusion: Civil FEMA liability of the corporate appellant and the managing director remains, with reduced monetary sanctions and confiscation of the property, whereas the director not shown to be responsible for the company's affairs bears no personal penal liability.

Ratio Decidendi: A breach of a civil statutory obligation under Section 13(1) of FEMA attracts penalty once the contravention is established, without proof of mens rea unless the statute expressly makes guilty intention an ingredient.