Issues: (i) Whether royalty paid by a partnership firm to its partner co-owners for use of a jointly owned trade mark constituted a taxable intellectual-property service; (ii) Whether the extended limitation period could sustain the demand.

Issue (i): Whether royalty paid by a partnership firm to its partner co-owners for use of a jointly owned trade mark constituted a taxable intellectual-property service.

Analysis: Under the service-tax framework, taxability requires a service rendered by one person to another for consideration. The trade-mark rights were co-owned by the partners and were deployed for the partnership's common business. A partner's use or contribution of an asset for the mutual benefit of the partnership does not create a service provider-service recipient relationship or a distinct quid pro quo. The royalty arrangement was therefore in the nature of service to self.

Conclusion: The royalty received by the partners did not constitute a taxable intellectual-property service. This issue was decided in favour of the assessees.

Issue (ii): Whether the extended limitation period could sustain the demand.

Analysis: The royalty payments were disclosed in the accounts, and the records and returns had been regularly available to the department. There was no suppression of facts or intent to evade, particularly as any service tax paid by the partners would have been available as CENVAT credit to the partnership firm. The assessees' bona fide belief regarding absence of a taxable service relationship was also supported by the nature of the arrangement.

Conclusion: The extended limitation period was unavailable, and the demand for that period was unsustainable. This issue was decided in favour of the assessees.

Final Conclusion: The royalty arrangement lay outside the service-tax net and, independently, the extended-period demand lacked a legal basis.

Ratio Decidendi: A partner's deployment of property for the mutual benefit of a partnership, without a distinct service provider-service recipient relationship and quid pro quo for a specific service, is not a taxable service.

Issues: Whether a delay of 735 days in filing the appeal against the revision order was supported by sufficient cause.

Analysis: The explanation based on reliance on professional assistance, delay in monitoring communications, and change of auditor did not satisfactorily account for the prolonged inaction. Participation through professional representation in the consequential assessment proceedings indicated that the revision order had not been timely challenged; filing the appeal only after the consequential assessment was treated as an afterthought.

Conclusion: The delay was not condoned.

Issues: Whether interest income earned by a co-operative society from investments with a co-operative bank qualifies for deduction under Section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The settled position applied was that a co-operative bank is also a co-operative society for the purpose of deduction of interest income derived from investments with another co-operative society. The exclusion in Section 80P(4), applicable to a co-operative bank's own claim for deduction, does not disqualify a co-operative society from claiming deduction on interest earned from investments made with such bank. The amendment concerning tax deduction at source under Section 194A(3)(v) does not exclude co-operative banks from the class of co-operative societies for this purpose.

Conclusion: Interest earned from investments with a co-operative bank is eligible for deduction under Section 80P(2)(d); the questions were answered in favour of the assessee and against the Revenue.

Issues: Whether the addition for unsecured loans could be sustained under Section 68 of the Income-tax Act, 1961 where the assessee furnished lender particulars, confirmations and banking records.

Analysis: The assessee established the identity of the creditors and genuineness of the loan transactions through PAN details, confirmations and bank statements; the loans were also repaid through banking channels. This discharged the initial onus of proof, shifting the burden to the Revenue. The absence of income-tax returns of certain lenders was insufficient to sustain the addition when the Assessing Officer did not independently verify the lenders despite having their particulars, and the appellate authority also failed to undertake or cause necessary enquiries into their creditworthiness.

Conclusion: The addition of Rs. 2,06,70,000 for unsecured loans was unsustainable and was deleted.

Issues: Whether revision of the assessment under Section 263 on the ground that related-party payments required examination under Section 40A(2)(b) was valid.

Analysis: Revision under Section 263 requires the assessment order to be both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer has made inquiry, obtained particulars of payments to specified persons, considered the explanation regarding their nature and reasonableness, and adopted a plausible view, the matter is not one of lack of inquiry merely because the assessment order contains no detailed discussion. Section 40A(2)(a) does not permit disallowance solely because a payment is made to a specified person; excessiveness or unreasonableness must be established with reference to the statutory criteria or comparable market material. No such material, identification of excessive payment, or quantification of prejudice was provided. Explanation 2 to Section 263(1) does not authorise revision merely because further inquiry is considered desirable.

Conclusion: The assessment order was neither erroneous nor prejudicial to the interests of the Revenue; the revision under Section 263 was invalid.

Issues: (i) Whether gross cash movements recorded in seized notebook and digital material of an angadia operator could be assessed as unexplained money under Section 69A of the Income-tax Act, 1961; (ii) Whether commission income on the unaccounted turnover was properly estimated at 2% and taxable under Section 115BBE of the Income-tax Act, 1961.

Issue (i): Whether gross cash movements recorded in seized notebook and digital material of an angadia operator could be assessed as unexplained money under Section 69A of the Income-tax Act, 1961.

Analysis: Section 69A applies to money beneficially owned by the assessee whose nature and source remain unexplained. The accepted angadia business model involved receiving and routing third-party cash through a network for a service fee. The seized entries reflected gross transit funds and did not establish that their principal amount belonged to the assessee. The absence of client particulars did not by itself convert third-party transit funds into the assessee's income. Treating identified transactions as commission-bearing while treating unidentified transactions as the assessee's own money was impermissibly inconsistent and attracted the doctrine of approbation and reprobation. Applying the real income doctrine and embedded profit theory, gross receipts could not be equated with taxable income.

Conclusion: The gross principal cash movements were not assessable as unexplained money under Section 69A of the Income-tax Act, 1961; only the embedded commission income was taxable, in favour of the assessee.

Issue (ii): Whether commission income on the unaccounted turnover was properly estimated at 2% and taxable under Section 115BBE of the Income-tax Act, 1961.

Analysis: The 2% estimate lacked a reasonable nexus with the low-margin nature and large volume of the cash-transfer business. A reasonable estimation of income required a realistic commission rate consistent with the operating model and comparable angadia business margins. Since the amount represented business commission income rather than unexplained money, it was not liable to tax under Section 115BBE of the Income-tax Act, 1961.

Conclusion: Commission income shall be estimated at 0.30% of the total unaccounted turnover, taxed at normal rates, and recomputed after adjustment for commission income already assessed, in favour of the assessee.

Final Conclusion: Taxability is confined to the reasonably estimated embedded commission income and not to the gross cash turnover handled in the angadia business.

Ratio Decidendi: Where an intermediary merely handles and transfers third-party cash without beneficial ownership, only the embedded commission or profit may be taxed on a reasonable estimate, not the gross funds routed through it.

Issues: (i) Whether sufficient cause was established for condonation of the 803-day delay in filing the appeal; and (ii) Whether the penalty order under Section 271D of the Income-tax Act, 1961 was barred by limitation under Section 275(1)(c) of the Income-tax Act, 1961.

Issue (i): Whether sufficient cause was established for condonation of the 803-day delay in filing the appeal.

Analysis: The requirement of sufficient cause calls for a justice-oriented but reasonable assessment of the explanation for delay, including the party's conduct and diligence throughout the relevant period. The cessation of business and departure of two partners did not explain the delay where seven other partners remained, related tax proceedings continued to be pursued, and no credible account was given for non-compliance in the set-aside proceedings or for failure to monitor communications. The prolonged unexplained inaction evidenced gross negligence rather than a bona fide impediment.

Conclusion: Sufficient cause for condonation of the 803-day delay was not established; the issue is against the assessee.

Issue (ii): Whether the penalty order under Section 271D of the Income-tax Act, 1961 was barred by limitation under Section 275(1)(c) of the Income-tax Act, 1961.

Analysis: Penalty proceedings were initiated by notice in May 2003 and the penalty order was made in November 2003. The order was therefore made within six months from the end of the month in which the penalty proceedings were initiated, as required by Section 275(1)(c).

Conclusion: The penalty order was not barred by limitation; the issue is against the assessee.

Final Conclusion: The unexplained prolonged inaction precluded consideration of the delayed penalty challenge, and the independent limitation objection also failed.

Ratio Decidendi: Sufficient cause for condonation requires a credible explanation for the entire period of delay, and prolonged unexplained inaction despite the ability to pursue tax affairs constitutes gross negligence warranting refusal of condonation.

Issues: (i) Whether the delay in filing the penalty appeals for assessment years 2013-14 and 2019-20 should be condoned and the appeals reconsidered after decision of the pending quantum appeals; and (ii) whether penalty for non-compliance with notices could exceed Rs. 10,000 per assessment year when subsequent notices followed the original default and compliance was later furnished.

Issue (i): Whether the delay in filing the penalty appeals for assessment years 2013-14 and 2019-20 should be condoned and the appeals reconsidered after decision of the pending quantum appeals.

Analysis: The assessment and penalty proceedings had been completed ex parte. The non-availability of the accountant, coupled with the director's inability to effectively operate the income-tax portal, constituted sufficient cause for the delay. Principles governing condonation of delay require a liberal approach in such circumstances. As the penalties under Section 271(1)(c) and Section 270A rested on assessments under challenge in pending quantum appeals, their adjudication was required to await determination of the corresponding quantum matters.

Conclusion: The delay was condoned and the penalty appeals were restored for decision on merits after disposal of the quantum appeals, in favour of the assessee.

Issue (ii): Whether penalty for non-compliance with notices could exceed Rs. 10,000 per assessment year when subsequent notices followed the original default and compliance was later furnished.

Analysis: Although the assessee initially remained ex parte, an adjournment request was made and necessary compliance was subsequently furnished. Following the best judgment assessment, the later notices were treated as continuations of the first notice on which default had occurred. Penalty under Section 271(1)(b) could therefore be imposed only for the initial default, not separately for each subsequent notice.

Conclusion: The penalty was restricted to Rs. 10,000 for each assessment year and the balance penalty was deleted, in favour of the assessee.

Final Conclusion: Penalties dependent on unresolved quantum assessments require reconsideration after quantum adjudication, while default penalties for repeated notices in continuation of the same original default remain confined to the initial default.

Issues: Whether the show-cause notice and Order-in-Original under Section 122 of the Central Goods and Services Tax Act, 2017 were void for want of a valid assignment of the competent proper officer.

Analysis: Sections 2(91) and 122 of the Central Goods and Services Tax Act, 2017 govern the assignment and exercise of functions by a proper officer. Although CBIC Circular No. 254/11/2025-GST dated 27.10.2025 was issued after the impugned proceedings, it designated the Joint Commissioner as the proper officer for matters involving an amount exceeding Rs.2 crore. The Order-in-Original was passed by the Joint Commissioner in a matter exceeding that monetary threshold. Section 160 of the Central Goods and Services Tax Act, 2017 prevents invalidation of proceedings merely for a mistake, defect, or omission where they substantially conform to the Act.

Conclusion: The jurisdictional challenge failed; the show-cause notice and Order-in-Original were not void for want of jurisdiction.

Issues: (i) Whether the show-cause notice validly invoked Section 74(1) of the Central Goods and Services Tax Act, 2017? (ii) Whether the writ challenge to the appealable order-in-original should be entertained despite the statutory appellate remedy?

Issue (i): Whether the show-cause notice validly invoked Section 74(1) of the Central Goods and Services Tax Act, 2017?

Analysis: Section 65(7) permits action under Section 73 or Section 74 where audit detects unpaid or short-paid tax. Invocation of Section 74(1) requires the notice itself to disclose foundational facts supporting fraud, wilful misstatement, or suppression of facts to evade tax; a mechanical recital is insufficient. The notice specified audit-detected non-payment and short payment of tax, delayed statutory filings, unpaid late fees, reverse-charge liabilities, communications of the audit findings, and non-compliance with the final audit report. These particulars supplied the factual basis for the proper officer's prima facie satisfaction of deliberate non-compliance. The notice also proposed the demands, interest, and penalties and afforded an opportunity to respond, satisfying natural justice.

Conclusion: The show-cause notice does not suffer from non-application of mind or jurisdictional error in invoking Section 74(1) (against the assessee).

Issue (ii): Whether the writ challenge to the appealable order-in-original should be entertained despite the statutory appellate remedy?

Analysis: Section 107 provides an efficacious statutory appeal against the order-in-original. Exercise of jurisdiction under Article 226 is ordinarily unwarranted where such remedy exists unless a jurisdictional defect or another recognised exception is established. Since no jurisdictional error was found in the notice, the merits of the order-in-original are to be addressed in appeal. The statutory appellate authority may consider an appeal filed within one month on its merits.

Conclusion: The writ challenge to the order-in-original cannot be entertained in view of the efficacious statutory appeal (against the assessee).

Final Conclusion: The jurisdictional challenge to the Section 74 notice fails, while the merits of the tax, interest, penalty, and all remaining questions are left open for determination by the appellate forum.

Ratio Decidendi: An Article 226 challenge to an appealable GST order is not maintainable where the Section 74(1) notice itself discloses foundational facts supporting the proper officer's prima facie satisfaction of wilful suppression and no jurisdictional error is established.

Issues: Whether the purchase of pre-bonus shares of listed companies through a recognised stock exchange and sale of an equivalent quantity after bonus allotment, resulting in short-term capital loss set off against long-term capital gains on a slump sale, constituted an arrangement and an impermissible avoidance arrangement under the General Anti-Avoidance Rule provisions.

Analysis: Chapter X-A requires the Revenue to establish an arrangement under Section 102(1), that its main purpose was obtaining a tax benefit, and that it additionally fell within one of the conditions in Section 96(1). Open-market dealings in listed shares through a regulated stock exchange, at arm's length and at market-determined prices with unidentifiable counterparties, lacked the concert, pre-ordained design, or control over outcome necessary to constitute an operation or scheme. The investment decisions were supported by a commercial deployment of surplus funds, diversification across asset classes, and the prospect of market returns; the continuing retention of substantial shares was inconsistent with manufacture of a loss.

Analysis: A short-term capital loss genuinely sustained through ordinary securities transactions may be set off against long-term capital gains under Section 70(2). The resulting tax efficiency from applying the statutory computation mechanism does not itself establish a tax benefit or a dominant tax-avoidance purpose. Use of a recognised stock exchange, payment of applicable transaction taxes, statutory computation of bonus-share cost, and application of the prescribed first-in-first-out method did not amount to misuse or abuse of the Act, nor were they means not ordinarily employed for bona fide purposes under Section 96(1)(b) or (d).

Conclusion: The transactions did not constitute an arrangement or an impermissible avoidance arrangement. The short-term capital loss was validly available for set-off against the long-term capital gains from the slump sale.

Issues: Whether Section 430 of the Companies Act, 2013 bars civil suits seeking a declaration that a registered sale deed is void and not binding on a company.

Analysis: Sections 241 and 242 of the Companies Act, 2013 confer jurisdiction on the National Company Law Tribunal in matters concerning oppression, mismanagement, company affairs and shareholders' rights. Section 430 excludes civil-court jurisdiction only in respect of matters that the Tribunal is empowered to determine. As a statutory tribunal has no inherent jurisdiction, its powers cannot be extended to grant a declaration invalidating a registered sale deed as against the company. Under Section 9 of the Code of Civil Procedure, 1908, civil jurisdiction continues unless expressly or necessarily impliedly excluded, and such exclusion cannot rest on assumptions.

Conclusion: Section 430 of the Companies Act, 2013 does not bar the suits; the Commercial Court has jurisdiction to adjudicate the declaratory relief concerning the registered sale deed.

Issues: (i) Whether a one-day delay in filing the appeal before the Commissioner (Appeals), within the statutorily condonable period, could be rejected merely because no separate condonation application was filed; (ii) Whether the service-tax demand for FY 2015-16, raised by invoking the extended period of limitation, was sustainable.

Issue (i): Whether a one-day delay in filing the appeal before the Commissioner (Appeals), within the statutorily condonable period, could be rejected merely because no separate condonation application was filed.

Analysis: The proviso to Section 85(3A) of the Finance Act, 1994 permits presentation of an appeal within a further one-month period on sufficient cause. Its exercise is not expressly conditional upon a separate condonation application. Since the delay was only one day and the appellant had been heard, an explanation could have been sought instead of rejecting the appeal on a technical lapse.

Conclusion: The one-day delay was condoned; rejection of the appeal on limitation for want of a separate condonation application was erroneous and in favour of the assessee.

Issue (ii): Whether the service-tax demand for FY 2015-16, raised by invoking the extended period of limitation, was sustainable.

Analysis: The entire demand was beyond the normal limitation period and could survive only upon proof of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax under the proviso to Section 73(1) of the Finance Act, 1994. The notice was based on income-tax-return data already available to the Government. Mere non-payment of tax, non-registration, or non-filing of returns did not establish deliberate concealment or intent to evade. The Revenue produced no corroborative material establishing wilful suppression. Further, the demand for April to September 2015 was issued after expiry of the maximum five-year period.

Conclusion: The extended period was unavailable, and the entire demand was barred by limitation; the consequential interest and penalties were unsustainable, in favour of the assessee.

Final Conclusion: The service-tax liability, interest, and penalties arising from the time-barred demand do not survive.

Ratio Decidendi: Invocation of the extended limitation period requires proof of deliberate suppression or other statutory ingredients with intent to evade tax; a mere failure to pay tax, register, or file returns, particularly where relevant information was available to the Revenue, is insufficient.

Issues: (i) Whether the extended-period CENVAT credit demand was sustainable; (ii) Whether CENVAT credit on inputs claimed to have been used for fabrication, repair and maintenance of capital goods was admissible for the normal period.

Issue (i): Whether the extended-period CENVAT credit demand was sustainable.

Analysis: The dispute regarding credit eligibility arose from an interpretative issue concerning inputs used in fabrication and support of capital goods. The legal position previously relied upon to deny credit had subsequently been overturned, and such an interpretative dispute could not sustain invocation of the extended period of limitation.

Conclusion: The extended-period demand was unsustainable, in favour of the assessee.

Issue (ii): Whether CENVAT credit on inputs claimed to have been used for fabrication, repair and maintenance of capital goods was admissible for the normal period.

Analysis: Inputs used in fabrication of capital goods, including structural supports integral to their functioning, may qualify for credit under the CENVAT Credit Rules, 2004. However, entitlement depends upon reliable proof of actual use. The burden of establishing such use had not been discharged through adequate documentary material or certification by a Chartered Engineer.

Conclusion: Credit eligibility for the normal period remained undetermined pending factual verification of the inputs' actual use.

Final Conclusion: Extended limitation is unavailable for a merely interpretative CENVAT credit dispute, while normal-period entitlement depends on substantiated evidence of actual use in relation to capital goods.

Ratio Decidendi: An extended limitation demand cannot be sustained where CENVAT credit eligibility turns on statutory interpretation rather than suppression or deliberate non-disclosure.

Issues: Whether persons separately penalised could receive the benefit of the SVLDR Scheme where the principal party had obtained that benefit, despite not having made independent scheme applications.

Analysis: The principal party's dispute had been granted SVLDR Scheme benefit. Coordinate Tribunal decisions had extended comparable benefit to separately penalised persons in similar circumstances, and no contrary authority was shown.

Conclusion: The penalised appellants were entitled to the corresponding SVLDR Scheme benefit and consequential relief.

Issues: Validity of the residuary penalty imposed for delayed filing of the return after payment of late fees, including whether the penalty exceeded the statutory maximum.

Analysis: The return had been filed and the applicable late fees had been paid. The aggregate penalty of Rs. 50,000 imposed under Section 125 exceeded the maximum limit under the Uttar Pradesh Goods and Services Tax Act, 2017.

Conclusion: The show-cause notice and the penalty order imposing the aggregate penalty are quashed and set aside.

Issues: Whether ex parte adjudication and penalty orders could be sustained where show-cause notices were uploaded only on the common portal after cancellation of the taxpayer's registration.

Analysis: The registration had been cancelled several years before the show-cause notices were issued electronically. The applicable departmental circular required physical service of notices where adjudication proceedings were initiated after cancellation of registration. Electronic upload in those circumstances did not effectively notify the taxpayer, who consequently remained unaware of the proceedings and was proceeded against ex parte. The taxpayer was therefore required to be afforded an opportunity to file replies, seek documents or cross-examination, and receive adequate advance notice of personal hearing.

Conclusion: The ex parte adjudication and penalty orders were set aside, and the matters were restored for fresh adjudication after affording the taxpayer the prescribed opportunity of reply and hearing.

Issues: Whether service tax could be levied on legal services provided by individual advocates or firms of advocates notwithstanding Notification No. 25/2012-ST dated 20.06.2012 and Notification No. 30/2012-ST dated 20.06.2012.

Analysis: The notifications prescribed a nil rate and exemption for legal services provided by an individual advocate or a partnership firm of advocates. The demands were contrary to these binding notifications and were consequently without jurisdiction.

Conclusion: Legal services provided by individual advocates or firms of advocates were exempt from service tax under the notifications; the impugned levy and consequential actions were unsustainable.

Issues: Whether transfer of the assessee's case from Kolkata to New Delhi under Section 127(2) of the Income-tax Act, 1961 for coordinated investigation was lawful.

Analysis: The power of transfer under Section 127 is a machinery provision which must be exercised on a demonstrated and legitimate necessity for coordinated investigation. Although the Revenue may investigate alleged accommodation entries, the material did not establish a structural connection with the searched group, interlacing of funds, or interconnection of business activities. An isolated banking transaction, without such demonstrated nexus, was insufficient to justify an inter-State transfer. The transfer order lacked a transparent factual basis and proper application of mind, resulting in disproportionate operational prejudice.

Conclusion: The transfer of jurisdiction to New Delhi was arbitrary and legally untenable; it was quashed, with jurisdiction remaining with the competent Assessing Officer at Kolkata.