Appeal allows marketing payments as deductible business expenses under Sec.37; director pay retained; R&D deductible from certificate date under Sec.3...
Registration under s.12AB upheld; CIT(Exemptions) exceeded jurisdiction by deciding taxability instead of preliminary verification and registration di...
The HC dismissed the appeal and affirmed the impugned judgment, holding that imposition of interest/penalty by the regulator was without jurisdiction in the absence of a valid demand notice. The court found that Regulation 3(Form I) and Regulation 5 of the 2011 Regulations make issuance of a demand notice a statutory precondition to any accrual of interest; interest accrues only upon failure to pay within the period specified in such notice. The regulator's contention that interest automatically crystallises on expiry of the penalty period was rejected as unsupported by the statutory scheme and contrary to the principle of legality. No restitutionary or pari materia basis exists to retroactively trigger interest; appeal dismissed.
The HC dismissed the appeal and affirmed the impugned judgment, holding that imposition of interest/penalty by the regulator was without jurisdiction in the absence of a valid demand notice. The court found that Regulation 3(Form I) and Regulation 5 of the 2011 Regulations make issuance of a demand notice a statutory precondition to any accrual of interest; interest accrues only upon failure to pay within the period specified in such notice. The regulator's contention that interest automatically crystallises on expiry of the penalty period was rejected as unsupported by the statutory scheme and contrary to the principle of legality. No restitutionary or pari materia basis exists to retroactively trigger interest; appeal dismissed.
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