Dependent Agent PE unresolved for lack of factual inquiry; arm's-length distribution accepted; royalty claim rejected; 15% refund interest (Section 24...
Exemption under s.10(23C)(iiiad) upheld; appeal allowed, interest and dividends excluded from annual receipts, disallowance deleted, capital gains exe...
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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