TaxTMI Updates e-Newsletter
Mar 10,2026

Interim stay of the operation and effect of the impugned order - Jurisdictional error and breach of principles of natural justice in the proceedings leading to confirmation of a higher tax demand.

Stay of operation of impugned order - HELD THAT: - The Court considered the petition seeking relief against the impugned order and, after hearing the parties, granted interim relief. The State-respondents were granted four weeks to file a counter-affidavit and the petitioner two weeks thereafter to file a rejoinder. While no adjudication on the merits of the challenge or on the alleged jurisdictional error and breach of natural justice was made, the Court stayed the operation and effect of the impugned order until the next listing to preserve the subject matter pending further proceedings. [Paras 5]

Till the next date of listing, operation and effect of the impugned order shall remain stayed; timelines for filing counter and rejoinder affidavits were fixed.

Final Conclusion: Interim stay granted on the impugned order pending filing of counter and rejoinder and further consideration; no decision on merits.

Scope of "supply" - activities or transactions by a person (other than an individual) to its members for cash or other valuable consideration -Collection of a corpus fund by an unincorporated membership organisation for future capital expenditure - Advance payment treatment - Exemption under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) - Whether the collection of corpus fund from members for the purpose of meeting future capital expenditure amounts to a “supply” under Section 7 of the CGST Act, 2017.

Supply - Collection of corpus fund from members for future capital expenditure is a supply. - HELD THAT: - The Authority applied the Explanation to Section 7(1) to treat the association and its members as distinct persons and examined the definition of consideration. The proviso to the definition of consideration excludes a deposit from being consideration unless it is applied as such. The Authority distinguished advances from deposits, noting advances are payments toward future services and not ordinarily refundable whereas deposits are typically refundable. The applicant is a legal entity performing services for members, and the services fall under the classification for membership organisations (Chapter Heading 9995, Service Code 999598). On these findings the corpus contributions were held to be advances (not mere deposits) and thus constitute consideration; accordingly, the collection of corpus fund qualifies as a supply under Section 7 of the CGST Act, 2017. [Paras 15]

Collection of corpus fund from members amounts to a supply under Section 7 of the CGST Act, 2017.

Time of supply - GST on corpus fund advances is payable at the time of receipt/collection. - HELD THAT: - Having held the corpus to be an advance for future supply, the Authority applied the time of supply provisions for services. Section 13(2)(a) makes the time of supply the earlier of the date of issue of invoice or the date of receipt of payment. Since corpus amounts are collected in advance prior to supply or invoicing, the receipt of payment triggers the time of supply. Consequently, tax liability arises at the time of collection/receipt of the corpus amounts. [Paras 16]

GST on corpus fund collections is payable at the time of collection in terms of Section 13(2)(a).

Exemption under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) - HELD THAT: - The Authority examined Notification Nos. 11/2017 and 12/2017 and Circular No. 109/28/2019-GST. It distinguished monthly maintenance charges-applied to recurring day-to-day services-from corpus funds, which are infrequent, earmarked for capital or major non-recurring works. Given the distinct character and purpose of corpus collections, the Authority concluded they stand separate from monthly maintenance and therefore cannot be aggregated with maintenance charges to claim the Rs.7,500 per member per month exemption under Entry No. 77. As the exemption is inapplicable to corpus contributions, questions about month-wise or pro rata application of the threshold do not arise. [Paras 17, 18]

The exemption under Entry No. 77 is not available in respect of corpus fund contributions and such amounts cannot be aggregated with monthly maintenance charges for claiming the Rs.7,500-per-member-per-month exemption.

Final Conclusion: The Authority ruled that corpus fund collections by the apartment owners association constitute a supply; GST is chargeable at the time of collection; and the Rs.7,500-per-member-per-month exemption under Entry No. 77 does not apply to corpus fund contributions.

Eligibility to claim Input Tax Credit (ITC) on direct and indirect expenses (other than vehicle purchase) incurred in the business of selling used motor vehicles - Availing benefits under Notification No. 8/2018-Central Tax (Rate) dated 25th January 2018 as amended.

Whether the applicant is eligible to avail Input Tax Credit (ITC) on inward supplies such as refurbishment expenses, marketing and advertising services, professional fees, housekeeping services, rent, office expenses, software subscriptions, manpower recruitment and staffing services, administrative overheads, and capital goods including laptops, equipment, and furniture.

Eligibility for input tax credit on input services and capital goods under margin scheme for used motor vehicles - HELD THAT:- The Authority examined Notification No. 08/2018-Central Tax (Rate) and observed that the expression 'such goods' in paragraph 2 refers back to the specific goods listed in the Table and therefore limits the prohibition on availment of ITC to the old and used motor vehicles themselves. The notification consequently does not, by its language, extend the ITC bar to other inputs or input services procured in the course or furtherance of the used vehicle business. The Authority further considered Sections 16 and 17(5) of the CGST Act and found no statutory bar preventing a registered person, who sells under the margin scheme prescribed by the notification, from claiming ITC on admissible input services and capital goods (such as refurbishment and repair services, marketing and advertising services, professional fees, housekeeping, rent, office expenses, software subscriptions, manpower recruitment and staffing, administrative overheads, and capital goods) provided the conditions of Sections 16-21 and the relevant Rules are satisfied. The Authority noted that these expenses are incurred in the course or furtherance of business and are directly linked to the enhancement of sale value of the goods; therefore, the input tax paid on them qualifies as ITC, and paragraph 2 of the notification does not restrict such claim. [Paras 11, 12]

The Applicant may claim input tax credit on the listed input services and capital goods while availing the margin scheme, subject to fulfilment of conditions in Sections 16-21 of the CGST Act and Rules 36-45 of the CGST Rules.

Final Conclusion: The Authority ruled that the Notification No. 08/2018 margin scheme restriction on availment of ITC is confined to the notified used motor vehicles and does not prohibit the claimant from availing ITC on other admissible input services and capital goods, subject to statutory conditions.

Applicability of GST exemption for solid waste management services provided to a Gram Panchayat under Notification No. 12/2017 dated 29.06.2017. & Under Section 98(4) - Activity in relation to functions entrusted to a Panchayat under Article 243G - composite supply exclusion​​​​​​​ -Entry No. 3.

Pure services provided to local authority - HELD THAT: - The Authority examined the two cumulative conditions in entry No. 3 of Notification No. 12/2017. First, the services supplied to the Gram Panchayat in Gantiganahalli are "pure services" (excluding works contracts or composite supplies involving goods) and the Gram Panchayat constitutes a "local authority" under Section 2(69) of the CGST/KGST Acts; accordingly the recipient/character of supply requirement is satisfied. Second, the services relate to functions entrusted to Panchayats under Article 243G of the Constitution; solid waste management falls within entry 23 (health and sanitation) of the Eleventh Schedule. Because both conditions in the notification are met, the supply falls within entry No. 3 and is exempt from GST. The Authority applied these legal tests to the factual activities described (collection, transportation, segregation, processing, street sweeping and public awareness) and reached the exemption conclusion. [Paras 11, 12, 13]

The applicant's solid waste management services to the Gram Panchayat are exempt under entry No. 3 of Notification No. 12/2017.

Final Conclusion: The Advance Ruling Authority held that the solid waste management services supplied by the applicant to the Gram Panchayat satisfy both limbs of entry No. 3 of Notification No. 12/2017 and are therefore exempt from GST.

Liability to pay tax - Supply of services​​​​​​​ -Corpus/sinking fund contributions collected by a residential association​​​​​​​ - definition of “supply” underSection 7 - Doctrine of mutuality​​​​​​​ -corpus fund distinct from maintenance charges - Applicability of Time of Supply Provisions - expression “Consideration” - Whether corpus funds collected by a residential association for future contingencies treated as “consideration” under the GST Act, 2017 and do they attract GST ?

Consideration- supply - mutuality - Whether corpus funds collected by the applicant constitute consideration and attract GST. -HELD THAT: - The Authority examined the statutory definitions of "supply" and "consideration" and concluded that the applicant, being a registered association, is a "person" distinct from its members for GST purposes under the Explanation to Section 7(1). Activities carried out by the association for members fall within services (SAC 999598) as membership-organisation services. Contributions labelled as corpus/sinking fund are advances collected for future services (capital/major repairs) and not mere deposits. The deeming provision rejecting the doctrine of mutuality prevents treating such collections as non consideration. Consequently, corpus fund collections qualify as consideration for future supply of services and attract GST. [Paras 14, 18]

Corpus fund collections are advances constituting consideration for future supply of services to members and attract GST.

Separate and independent character- Whether corpus funds can be treated as separate and independent from monthly maintenance charges for GST purposes. -HELD THAT: - The Authority analysed the nature and purpose of monthly maintenance (recurring operational services) and corpus/sinking fund (infrequent, ring fenced, earmarked for capital/major non recurring expenditures). The applicant's bylaws require separate investment and restricted use of corpus funds for capital purposes, demonstrating distinct accounting and purpose. Given this independent character and differing temporal/service profiles, corpus funds are distinct from monthly maintenance charges for GST applicability. [Paras 15, 18]

Corpus fund collections are distinct and independent from monthly maintenance charges for the purpose of GST applicability.

Time of supply - advances - Whether GST is payable at the time of collection of corpus funds or at the time of their utilisation; and whether time of supply provisions apply. - HELD THAT: - Treating corpus collections as advances for future supply brings them within the time of supply rules for services. Under the statutory provision governing time of supply for services, the earlier of the invoice date or the date of receipt of payment determines liability. Since the corpus is collected in advance before supply or invoicing, receipt of payment triggers the time of supply. Therefore GST liability arises on receipt/collection of the corpus amounts. [Paras 16, 18]

GST is payable at the time of collection/receipt of corpus funds; the time of supply provisions apply and trigger liability on receipt.

Admissibility under Section 97(2) - Whether the Authority may rule on the applicant's questions 4, 6 and 7 regarding accountal, documentation and audit demonstration of corpus funds. - HELD THAT: - The Authority examined the scope of matters admissible under the Advance Ruling provisions and found that questions 4, 6 and 7 do not fall within the categories for which an advance ruling may be issued under Section 97(2). Those questions concern procedural or compliance guidance not encompassed by the admitted issues (time and value of supply; liability to pay tax), and therefore the Authority declined to pass a ruling on them. [Paras 17]

The Authority is not liable to pass a ruling on questions 4, 6 and 7 as they are not covered under the admissible heads of Section 97(2).

Final Conclusion: The Authority ruled that corpus/sinking fund collections by the apartment owners association are advances constituting consideration for future supply of services and attract GST; such corpus funds are distinct from monthly maintenance charges; GST liability arises on receipt/collection under the time of supply provisions; and the Authority declined to rule on the applicant's questions on accounting, documentation and audit demonstration as outside the admissible scope.

Advance ruling jurisdiction - Refund of accumulated input tax credit ​​​​​​​- Jurisdictional limitation - inverted duty structure - scope of matters covered under Section 97(2) - Jurisdiction to rule on the refund quantification or sanction.

Advance ruling application for refund under inverted duty structure - HELD THAT:- The Authority examined the applicant's questions which sought guidance on the manner of claiming refund of accumulated input tax credit under the inverted duty structure and on claiming refund under the category of "refund on any other ground". These questions concern quantification and sanction of refund under the refund provisions (section 54 and the rules) and are therefore matters of refund administration. Section 95(a) read with section 97(2) restricts the Authority's jurisdiction to the categories specified therein; matters concerning quantification or sanction of refund fall outside the enumerated categories in section 97(2). Consequently, the application does not raise a question within the scope of section 97(2) and is therefore inadmissible before the Authority for Advance Ruling. [Paras 4, 10].

Final Conclusion: The Authority rejected the application for advance ruling as inadmissible and outside its jurisdiction, and proceeded to reject the application under the provisions governing advance rulings.

Effective date of Certificate u/s 197 - whether the certificate will be treated as effective from the date of issuance or for the entire assessment year - HELD THAT: - The Court construed Section 197(1)-(2) and Rule 28AA(2) to hold that a certificate granted by the Assessing Officer is valid for the assessment year specified in the certificate unless cancelled earlier. The assessment framework and tax liabilities operate on an assessment year basis; consequently a certificate issued for an assessment year is to be given effect throughout that assessment year and not only prospectively from the date of issuance. [Paras 11, 13]

The certificate under Section 197 is effective for the entire assessment year specified in the certificate.

Assessee in default under Section 201(1) - Whether the deductor can be held an assessee in default u/s 201 and liable to interest under Section 201(1A) where payments were made prior to issuance of a Section 197 certificate but the certificate is granted for the assessment year? - HELD THAT: - Applying the conclusion that the Section 197 certificate operates for the entire assessment year, the Court held that the deductor could not be deemed an assessee in default under Section 201(1) for lower deduction where the certificate in force covered that assessment year. Consequently, interest under Section 201(1A) that had been levied was not sustainable because the deductor was entitled to rely on the certificate unless it had been cancelled by the AO [Paras 15]

The respondent cannot be held an assessee in default under Section 201(1) and the interest under Section 201(1A) is not leviable where a valid Section 197 certificate exists for the assessment year.

Final Conclusion: The appeals are dismissed - Section 197 certificate is effective for the whole assessment year and, on that basis, the deductor cannot be held an assessee in default nor charged interest u/s 201(1A) for the payments covered by the certificate.

Validity of notice u/s 148 - requirement of prior approval u/s 151 ignored - invalid notice - non independent application of mind -

HELD THAT:- Tribunal found that the notice issued u/s 148 was vague, mechanical and issued without application of mind because various entries were left blank and nothing was struck out, reflecting no considered exercise of jurisdiction by the AO. Record shows that the AO recorded a satisfaction note on the same date and issued the notice without obtaining prior approval from the competent authority u/s 151.

It is also noted that in the said notice issued u/s. 148 of the Act, there is nothing is strike off and everything left open/blank by the ITO, Ward 2(2), Ghaziabad which shows that the notice is invalid and the consequent assessment on the basis of this invalid notice has become void ab initio, thus, the assessment order is erroneous and quashed on this account. [Paras 7, 10]

Notice u/s 148 invalid for being vague and issued without prior approval u/s 151 consequent assessment held void ab initio and quashed.

Final Conclusion: Reassessment founded on the invalid notice is quashed and the assessment for A.Y. 2009-10 is held void ab initio.

Revision u/s 263 - scope of revision u/s 263 where revisional authority alleges non-invocation of special charging provisions - as per CIT AO should have invoked section 69C read with section 115BBE when purchases recorded in the books were held to be bogus and disallowed u/s 37(1) -Distinction between bogus expenditure disallowed u/s 37(1) and unexplained expenditure u/s 69C - applicability of section 69C and section 115BBE to expenditures recorded in books -

HELD THAT: - The Tribunal examined the facts that the AO, on the basis of information from the Investigation Wing and verification, found the supplier unverifiable and held the purchases as bogus, disallowing them under section 37(1). Section 69C applies where an assessee has incurred expenditure and offers no explanation about the source of such expenditure or the explanation is unsatisfactory.

CIT did not demonstrate that the assessee had failed to explain the source of the recorded purchases; rather he only contended that the AO should have invoked section 69C and consequently section 115BBE.

Tribunal agreed with coordinate-bench authorities that the legal scope of section 69C (taxing unexplained expenditure) is different from disallowance of non-genuine or unverifiable expenses booked in the profit and loss account. In the absence of any material showing failure to explain the source, invoking section 69C/115BBE was not legally warranted, and the revisional order u/s 263 founded on that omission was unsustainable. [Paras 9, 13, 17]

The revisional order u/s 263 is not justified because section 69C/115BBE was not applicable where the AO had disallowed purchases as bogus u/s 37(1) and the Pr. CIT did not show that the source of such purchases was unexplained.

Final Conclusion: The Tribunal quashed the Principal Commissioner's revision order u/s 263 and allowed the assessee's appeal, holding that the AO's disallowance of purchases as bogus u/s 37(1) did not mandate application of section 69C r.w.s. 115BBE in the absence of material showing unexplained source.

Deduction u/s 80P(2)(d) - interest income earned by Co-operative Societies on deposits made out of surplus funds generated by the society with the another Co-operative Bank - Interpretation of "co-operative society" under section 2(19)

Deduction under section 80P(2)(d) for interest from investments in another co-operative society - HELD THAT: - The Tribunal held that where a co-operative society derives interest from investments made in another co-operative society, such interest falls squarely within the scope of section 80P(2)(d) and is eligible for deduction. The Tribunal applied the definition of "co-operative society" in section 2(19) of the Act to include a co-operative bank registered under the State Co-operative Societies Act, and relied on the decision of Thorapadi Urban Co-op Credit Society Ltd [2023 (11) TMI 779 - MADRAS HIGH COURT] observing that the facts of that case are identical and its ratio is directly applicable.

Tribunal distinguished the Supreme Court decision in Totgars Co-operative Sale Society Ltd [2010 (2) TMI 3 - SUPREME COURT] on the basis that Totgars dealt with a different sub-clause of section 80P and therefore is not apposite to the present issue. Applying these principles to the material on record, the Tribunal directed the Assessing Officer to allow the deduction under section 80P(2)(d) in respect of the interest income earned on deposits with the co-operative bank. [Paras 7, 8]

Final Conclusion: Appeal allowed - Tribunal directed that the interest income earned by the assessee from deposits with the co-operative bank be allowed as deduction under section 80P(2)(d) for Assessment Year 2016-17.

AO jurisdiction to complete the set aside proceedings when the seized material was not before the CIT(A) at the time of set aside -Admission of additional legal grounds - scope of de novo assessment - jurisdictional limitation on use of subsequently seized material in set-aside proceedings - whether in the set aside proceeding, can the AO bring on record fresh material which was not available before the CIT(A) at the time of set aside to make fresh assessment?

HELD THAT: - AO has no jurisdiction to complete the set aside proceedings when the seized material was not before the Ld CIT(A) at the time of set aside. It is settled proposition that even the Ld CIT(A) cannot make addition or enhance the addition without any notice of enhancement. Regarding set aside proceedings also, first Ld CIT(A) has to issue enhancement notice, he has to get the response on the issue of enhancement from the assessee, only after which he can set aside the proceedings to the AO to make fresh assessment.

As held in the case of Saheli Synthetics (P) Limited [2008 (2) TMI 182 - GUJARAT HIGH COURT] that it is not possible to define a set aside assessment as either open set aside or a conditional set aside or a limited set aside. The set aside assessment made by the appellate authority is always in accordance with the directions given by the appellate authority for making a fresh assessment.

Information what was available at the time of set aside alone is the material to be applied for completing the set aside proceedings. Subsequently, any new material is made available to the AO, he must apply the same as per law depending upon the quality of material.

In the given case, the material available with the AO is the seized material from the possession of the third party, AO must have initiated the proceedings as per law. AO only had the option to proceed to make separate proceedings u/s 158BD only to the extent of undisclosed income unearthed during the search. Therefore, the order passed by the AO utilizing the material found during the search in the set aside proceedings is bad in law. Therefore, we are inclined not to disturb the findings of Ld CIT(A) for quashing the assessment order.

Final Conclusion: The Revenue's appeal is dismissed: the AO erred in completing the set-aside regular assessment by relying on seized material that was not before the appellate authority at the time of set-aside and without initiating the requisite separate search-assessment proceedings; having found the assessment process legally flawed on jurisdictional and procedural grounds, the Tribunal declined to examine the merits of the addition.

Assessment framed without valid notice - no valid notice u/s. 143(2) had been issued by a jurisdictionally competent Assessing Officer - Validity of assessment framed u/s 153A r.w.s. 143(3) -HELD THAT: - The Assessing Officer relied upon a notice dated 30.09.2020 under section 143(2). Record shows jurisdiction was assumed by the DCIT, Central Circle-31 only on 15.10.2020 by order under section 127, communicated later to the assessee. Therefore, on the date of issuance of the notice the AO did not have jurisdiction.

E-filing portal copy attached was the first page of the appraisal report and not the statutory notice. The CIT(A) sought a remand report but the AO merely reiterated issuance of the notice without addressing that jurisdiction under section 127 was assumed only after the notice date.

Tribunal held that issuance of a valid notice by a jurisdictionally competent AO is a mandatory precondition for completing assessment under section 143(3) and that section 292BB (which concerns service) does not cure absence of valid issuance. Relying on settled principle that absence of a valid notice under section 143(2) renders the assessment liable to be quashed, the Tribunal concluded the assessment was void ab initio and directed that it be quashed. [Paras 6]

Final Conclusion: The Tribunal quashed the assessment for AY 2019-20 as void ab initio because the notice under section 143(2) was issued before jurisdiction was assumed by the Assessing Officer; the Revenue's cross-appeal was rendered infructuous and dismissed.

Disallowance u/s 14A - disallowance under section 40(a)(ia) for transmission and uplinking charges - treatment of software expenses as revenue expenditure - deductibility of ESOP expenses - comparability and exclusion of non-comparable entities in TNMM

Disallowance u/s 14A- when no exempt income is earned - addition proposed u/s 14A by the AO vide draft assessment order which stood denied by CIT(A) - HELD THAT: - The AO invoked section 14A though the assessee had not earned any exempt income in the year despite holding investments. The Tribunal followed the decision of the Delhi High Court in Cheminvest [2015 (9) TMI 238 - DELHI HIGH COURT] and the Coordinate Bench decisions in the assessee's own case for preceding assessment years [2020 (6) TMI 409 - ITAT DELHI]. which hold that where no exempt income is earned no disallowance under section 14A can be sustained. Applying those precedents to the facts, the DRP's direction deleting the section 14A disallowance was held to be correct. [Paras 10, 11]

DRP correctly deleted the section 14A disallowance; Revenue's grounds on this issue are dismissed.

TDS u/s 195 - Disallowance u/s 40(a)(ia) for transmission and uplinking charges - Validity of the DRP's deletion of the disallowance u/s 40(a)(ia) in respect of transmission and uplinking charges paid to Intelsat Corporation, USA - HELD THAT: - The Tribunal examined the identical issue decided in earlier assessment years in the assessee's own case [2020 (6) TMI 409 - ITAT DELHI] holding that such receipts in the hands of the foreign recipient were not chargeable to tax, negating the payer's obligation to deduct TDS. The DRP relied on those binding decisions and directed deletion of the disallowance; the Tribunal found no contrary judicial precedent to displace that view and accepted that filing of an SLP by Revenue does not sustain the disallowance. [Paras 12, 13, 14]

DRP's deletion of the disallowance u/s 40(a)(ia) for transmission and uplinking charges to Intelsat is upheld; Revenue's ground is dismissed.

Nature of expenses - Treatment of software expenses - revenue expenditure or capital in nature - HELD THAT: - DRP followed the Coordinate Bench's reasoning in the assessee's own earlier years AY 2008-09 [2020 (6) TMI 409 - ITAT DELHI] that the software (including upgrades) were of short life and for the broadcasting business were revenue in nature. The Tribunal found no error in the DRP's reliance on earlier decisions and confirmed deletion of the disallowance. [Paras 16, 17]

DRP correctly deleted the software expenses disallowance; Revenue's ground is dismissed.

TP Adjustment - Comparability and exclusion of non-comparable entities in TNMM - Exclusion of M/s Global Procurement Consultants Ltd. and M/s TSR Darashaw Ltd. from the final set of comparables - HELD THAT: - The Tribunal examined the functional profiles, annual reports and earlier Coordinate Bench decisions. It found Global Procurement Consultants to be engaged in procurement and technical services for government/World Bank projects and functionally different from the assessee's business support services; TSR Darashaw was shown to provide registrar/record management/payroll services dissimilar to the assessee's functions. The DRP's exclusion of both entities as non-comparables was therefore upheld. [Paras 26, 30]

DRP correctly excluded both Global Procurement Consultants Ltd. and TSR Darashaw Ltd. from the comparable set; Revenue's challenge is dismissed.

Deductibility of ESOP expenses - Allowability of revised ESOP expense claim and deletion of the AO's disallowance - HELD THAT: - The assessee sought to revise its ESOP expense claim in line with Special Bench precedent in Biocon [2013 (8) TMI 629 - ITAT BANGALORE] and earlier favourable decisions in the assessee's own cases. The Tribunal followed the Coordinate Bench and the High Court authorities recognising the deductibility of ESOP-related discount as a business expenditure on mercantile basis, and accepted the assessee's revised claim, directing deletion of the addition. [Paras 36, 38]

DRP's direction deleting the ESOP disallowance is upheld; the assessee's ground is allowed.

Comparability and exclusion of non-comparable entities in TNMM - Exclusion of APITCO Ltd. from the final set of comparables - HELD THAT: - The Tribunal applied the jurisdictional High Court's guidance that mere broad functional similarity under TNMM is insufficient and that comparables must exhibit a meaningful similarity of functions, assets and risks. APITCO's profile (government-promoted, diverse high-end/technical projects and predominant government clientele) was found to be materially different from the assessee's limited-risk business support services. Prior Tribunal and High Court authority excluding APITCO were followed and applied. [Paras 49, 53]

APITCO Ltd. is functionally dissimilar and must be excluded from the comparable set; the assessee's grounds on this issue are allowed.

Treatment of corporate guarantee as international transaction - assessee submits that assessee is not providing any type of corporate guarantee during the year under appeal - HELD THAT: - Hon’ble Delhi High Court while deciding the appeal of the assessee on this issue, vide its order [2025 (2) TMI 193 - DELHI HIGH COURT] directed the TPO to examine whether the transaction fall within the ambit of section 92B of the Act and act in terms of the directions of the Tribunal. Since this issue presently pending with the AO / TPO in terms of the directions of hon’ble high court, which is yet to be decided therefore, in terms of the directions given by Hon’ble High Court in [2025 (2) TMI 193 - DELHI HIGH COURT], we remand this issue to the file of AO to decide the same in the light of decision taken in AY 2008-09. [Paras 60]

Issue remitted to the file of the AO/TPO to decide whether the undertaking amounts to an international transaction and to proceed in accordance with the Delhi High Court's directions.

Final Conclusion: For Assessment Year 2010-11 the Tribunal dismissed the Revenue's appeal and partly allowed the assessee's appeal: it upheld the DRP's deletions of the section 14A disallowance, the section 40(a)(ia) disallowance for transmission/uplinking charges to Intelsat, and the disallowance treating software costs as capital; it allowed the assessee's revised ESOP claim; it confirmed exclusion of several non-comparable entities (Global Procurement Consultants, TSR Darashaw and APITCO) from the TNMM comparable set; the question whether an undertaking constitutes an international transaction was remitted to the AO/TPO for fresh consideration in accordance with the Delhi High Court's directions.

TP Adjustment - Treatment of amortisation of goodwill as extraordinary/non-operating expense for PLI computation under TNMM - penalty proceedings u/s 271(1)(c)

Treatment of amortisation of goodwill as extraordinary/non-operating expense for PLI computation under TNMM - determination of ALP of purchases from Associated Enterprises. - HELD THAT: - The Tribunal examined its earlier directions [2021 (2) TMI 327 - ITAT DELHI] where it had observed that the goodwill written off ought to be treated as an extraordinary expense affecting normal profitability for the period of amortisation and remanded the matter to the TPO/AO for verification limited to whether depreciation was claimed.

Tribunal found that the lower authorities misconstrued the earlier order by treating that depreciation was disallowed and thereby refusing the extraordinary-item treatment. Applying the earlier finding that goodwill amortisation is an extraordinary/non operating item for PLI computation, the Tribunal held that the AO/TPO must treat the amortisation as non operating and adjust the PLI accordingly, giving the assessee opportunity of hearing as required by the remand directions. [Paras 9]

AO/TPO directed to treat the goodwill amortisation as a non operating/extraordinary item and adjust the PLI of the assessee while computing ALP.

Penalty proceedings under section 271(1)(c) to be treated as premature and are dismissed.

Final Conclusion: The appeal is partly allowed: the goodwill amortisation is to be treated as an extraordinary/non operating item and adjusted in computing the PLI under TNMM for AY 2012 13 (AO/TPO so directed) and initiation of penalty proceedings under section 271(1)(c) is dismissed as premature.

Revision u/s 263 - deduction u/s 80P(2)(d) - allegation of non examination of interest earned on investments held with cooperative banks.

HELD THAT: - The Tribunal analysed the scope and compartments of Section 263 and the settled tests for invoking revisionary jurisdiction. On the merits it found that the Assessing Officer had allowed deduction for interest earned on investments with cooperative banks and that the issue is covered by consistent decisions recognising that interest from investments in other cooperative societies/banks is deductible under Section 80P(2)(d).

Since the Assessing Officer's view was sustainable in law and the deduction was correctly allowable to a cooperative society, the order could not be characterized as erroneous and prejudicial to the interests of revenue and therefore did not attract exercise of Section 263 power. [Paras 9, 10, 11, 12, 13]

Finding of Commissioner under Section 263 in respect of interest on investments is not sustainable; the direction to re-examine this issue was uncalled for.

Revisionary jurisdiction u/s 263 - AO has also not examined the income tax paid amount as debited to the profit and loss account which is liable to be disallowed - deduction u/s 80P(2)(a)(i) - HELD THAT: - The Tribunal noted that income-tax paid, as an expense, is ordinarily disallowable and requires addition back; however the assessee, being a cooperative society, is eligible for deduction under Section 80P(2)(a)(i). Even if the income-tax amount were added back to profit, the assessee's claim under Section 80P(2)(a)(i) would increase correspondingly, leaving total taxable income unaffected and causing no loss to revenue. On this basis the Tribunal concluded the assessment order was not erroneous and prejudicial to revenue and the Commissioner's direction to re-open that aspect under Section 263 was unjustified. [Paras 14]

Commissioner's exercise of Section 263 in relation to the tax charged to profit and loss account is unsustainable as it causes no prejudice to revenue.

Final Conclusion: The Tribunal quashed the impugned revisionary order under Section 263 insofar as it directed re-examination of (i) interest on investments (deductible under Section 80P(2)(d)) and (ii) income-tax charged to profit and loss (neutralised by deduction under Section 80P(2)(a)(i)), and restored the assessment order for A.Y. 2018-19 - Assessee appeal allowed.

Addition u/s 69A - unexplained cash deposits - bank-credit reconciliation relied upon - HELD THAT: - The Tribunal examined the Assessing Officer's computation of bank credits and the reconciliation advanced by the assessee. The authorised representative produced ledger entries for an unsecured loan of Rs. 45,00,000/- which was received and repaid in the year, and bank statements evidencing inter bank transfers totalling Rs. 9,64,788/-.

On comparing the AO's analysis with the bank statements and the assessee's reconciliation, the Tribunal found that credits excluded by the AO from the sales computation included inter bank transfers and short term unsecured loans which did not form part of sale consideration. After accounting for these items, there remained no unexplained cash deposit equal to the addition made by the AO. The Tribunal therefore concluded that the addition under Section 69A had no basis. [Paras 7]

Final Conclusion: The appeal is allowed: the Tribunal, after reconciling bank credits with bank statements and excluding inter bank transfers and an unsecured loan repaid in the year, found no unexplained cash deposits to sustain the addition under Section 69A and deleted the addition.

Deduction u/s 80IA(4)(i) - claim denied as activities carried out by the assessee do not fall within the scope of “infrastructure facility” relating to development of roads u/s 80IA(4)(i) - nature of the activities undertaken by the assessee pursuant to the contract awarded by the Jaipur Municipal Corporation - According to AR, the controversy has arisen primarily on account of the absence of a specific and exhaustive definition of the term “road” in the Income-tax Act, 1961 - AR contended that the AO had, on mere presumption, characterized the assessee’s activities as being limited to installation of lighting and decorative work on roads,

HELD THAT: - The Tribunal examined the agreements, audited financials and the scope of obligations undertaken by the assessee and held that all statutory conditions under section 80IA(4)(i) were satisfied. The assessee was a company registered in India and had entered into an Energy Performance Contract with the Jaipur Municipal Corporation; Capital Work-in-Progress as on 31.03.2017 established commencement of development before 01.04.2017. The Tribunal adopted a purposive and contextual construction of the undefined term "road" and relied on the inclusive definition of "street" under the Rajasthan Municipalities Act, 2009 to show that ancillary and appurtenant components forming part of public access infrastructure fall within the scope of an "infrastructure facility".

The Tribunal found that the assessee's obligations - design, finance, implement, commission, operate and maintain the lighting system; provision of performance guarantees; deployment of technical manpower; and payment based on energy savings - transcended mere supply-and-installation and exhibited entrepreneurial and financial risk of a developer. Functional elements such as lighting, monitoring and automation were held to be integral to road/highway projects because they render the network usable, safe and operational. Applying these legal and factual conclusions, the proviso excluding works contracts did not apply, since the project was undertaken on a DBFOM-like basis with long-term operational responsibilities and performance guarantees, establishing the assessee as a developer rather than a contractor performing a works contract. [Paras 8, 9]

The assessee satisfied the conditions of section 80IA(4)(i); the disallowance of the claimed deduction is deleted and the claim is allowed.

Final Conclusion: The Tribunal allowed the assessee's appeal for AY 2018-19, holding that the energy-efficient public lighting project formed an integral part of road infrastructure and that the assessee qualified as a developer (not a works contractor) for the purposes of section 80IA(4)(i), thereby deleting the disallowance.

Opting for provisions of section 115BAA for concessional rate - non-submission of Form No.10-IC - assessee failed to furnish Form No.10-IC for which the CPC while processing the return of income u/s 143(1) of the Act computed the tax liability at 30% instead of 22%

Whether the assessee should be permitted to file Form 10-IC and be allowed to claim concessional tax under section 115BAA despite non-filing of Form 10-IC with the original return BUT in the return filed in ITR-6

HELD THAT: - The Tribunal found that the assessee had unambiguously manifested its intention to opt for the concessional regime by selecting the option in the ITR and paying tax accordingly, and that the failure to upload Form 10-IC arose in the factual context of the Covid period and portal limitations.

Relying on precedents of Akash Fishmeal & Fishoil Pvt. Ltd. [2025 (4) TMI 992 - ITAT PUNE] following the case of Pr.CIT v. Fastner Commodeal (P.) Ltd. [2025 (1) TMI 769 - CALCUTTA HIGH COURT] and having regard to the CBDT Circular condoning delayed filing of Form 10-IC subject to specified conditions, the Tribunal concluded that the procedural lapse did not preclude consideration of the substantive claim. Accordingly, following the earlier coordinate Bench decision, the Tribunal restored the matter to the file of the Assessing Officer with a direction to permit the assessee to file Form 10-IC and to consider what relief, if any, is available, provided the assessee satisfies the requisite conditions under law. [Paras 13, 14]

The issue is restored to the Assessing Officer to permit filing of Form 10-IC and to consider the assessee's entitlement to relief subject to fulfillment of statutory and circular conditions.

Final Conclusion: The appeal is allowed for statistical purposes and the matter is restored to the Assessing Officer with directions to permit the assessee to file Form 10-IC and to determine the relief, if any, in accordance with law and applicable conditions.

Reopening of assessment - validity of the sanction granted u/s 151 for issuance of notice u/s 148 - Competent authority for sanction under section 151 after three years -

HELD THAT: - The Tribunal examined the sanction and found that the approval for initiating reassessment beyond three years from the end of the relevant assessment year was accorded by the Principal Commissioner (Pr. CIT-20, Mumbai), who was not the authority competent under section 151(ii) as the law stood prior to its amendment by Finance Act, 2023.

Reliance was placed on binding jurisdictional precedent in Shabbir Taheri [2025 (10) TMI 1372 - ITAT MUMBAI] which held that where more than three years have elapsed the sanction must be granted by the authority specified in section 151(ii) and that the proviso subsequently inserted into section 151 w.e.f. 01.04.2023 cannot be given retrospective effect.

In light of these settled legal positions and the coordinate decisions analysed, the Tribunal concluded that the Assessing Officer's assumption of jurisdiction lacked valid sanction and therefore the notice under section 148, the order under section 148A(d) and all consequential reassessment proceedings were invalid. Because the reassessment was quashed on this legal ground, the Tribunal did not adjudicate the merits of the additions made in the assessment order. [Paras 8, 9]

The sanction was invalid, and the notice, the order under section 148A(d) and the reassessment proceedings are quashed.

Final Conclusion: On the ground that the sanction for reassessment beyond three years was accorded by an authority not competent under section 151 as it stood prior to 01.04.2023, the Tribunal quashed the notice, the order under section 148A(d) and all consequential reassessment proceedings.

Treatment of unsecured loans as unexplained credit u/s 68 - assessee has not provided any detail to verify the identity, creditworthiness and genuineness of the transactions - statements recorded from the accommodation providers during the search conducted in their premises -enhancement of 2% of commission towards payment of accommodation entry to the providers.

HELD THAT:- Tribunal found that the AO completed the assessment heavily relying on (a) statements of Late Shri Mul Chand Malu and (b) a report of the Investigation Wing, Kolkata, without conducting independent inquiries of his own.

Investigation Wing's material did not specifically identify Hallow Securities Pvt. Ltd. (HSPL) as an accommodation-entry provider; statements relied upon pre-dated the search in the assessee's case and did not list HSPL.

Assessee had furnished confirmations, bank statements, returns and financial statements of HSPL and particulars of the lender.

AO did not produce independent corroborative evidence to show that HSPL was a paper company or that the loans were accommodation entries.

Applying these facts, and having regard to a Coordinate Bench decision in Vikas Malu [2025 (3) TMI 1612 - ITAT DELHI] which deleted similar additions after finding the AO's reliance on investigation reports without independent verification unsustainable, the Tribunal concluded that the addition under section 68 could not be sustained and deleted it. Addition u/s 68 deleted. [Paras 23, 24, 25, 26, 27].

Enhancement @ 2% commission is also deleted.

Final Conclusion: Tribunal allowed the appeal: the additions sustained by the CIT(A) u/s 68 and the enhancement as presumed commission were deleted, the impugned assessment thereby set aside.

Levy of penalty u/s 271(1)(b) - non-compliance to the notices u/s 142(1) - allegation ofvague show-cause notice for penalty - assessment itself has been set aside by the first appellate authority

HELD THAT: - The Tribunal noted that the assessment itself has been set aside by the first appellate authority and restored to the Assessing Officer for de novo assessment. Show-cause notice initiating penalty proceedings did not specify the particular notices said to have been disobeyed, and the assessment order contains inconsistent statements regarding compliance to the notice dated 30.01.2024.

In these circumstances, and having regard to the absence of a proper opportunity for the assessee to explain non-compliance, the Tribunal held that the levy of penalty was not justified and ordered deletion of the penalty. [Paras 6, 7]

Penalty under section 271(1)(b) deleted

Invalidity of vague show-cause notice for penalty - Validity of the show-cause notice issued u/s 271(1)(b) - HELD THAT: - The Tribunal found that the show-cause notice merely stated that the assessee had failed to comply with 'the following notices issued to him' without specifying those notices. The absence of details prevented the assessee from being given a proper opportunity to explain reasons for non-compliance. AO also relied on an incorrect factual premise in the penalty order by treating a notice as not complied with despite record of a reply. For these reasons the show-cause notice was held to be legally defective. [Paras 6]

Show-cause notice held to be defective for lack of specification of notices; penalty unsustainable

Final Conclusion: The appeal is allowed; the penalty imposed under section 271(1)(b) is deleted because the show-cause notice was vague and the assessment giving rise to the penalty has been set aside, denying a proper opportunity to the assessee.

Misapprehension of law or material committed Customs, Excise & Service Tax Appellate Tribunal (CESTAT) - Classification of imported goods - HELD THAT:- Having heard learned counsel for the appellant and the respondent, we are of the opinion that the Customs, Excise & Service Tax Appellate Tribunal [CESTAT] [2025 (6) TMI 1102 - CESTAT MUMBAI] has not committed any error in law or fact.

The civil appeals are, accordingly, dismissed and the accompanying interlocutory application(s), if any, stands disposed of.

Seeking direction to liquidate the Fixed Deposit and transfer the amount alongwith accrued interest and declare the purported claim of Respondent No.1-Debenture Trustee to stand extinguished - initiation of CIRP against the Corporate Debtor - principle of finality of the approved resolution plan - margin money characterization - unmarked lien on a fixed deposit - failure to file a claim during CIRP leads to extinguishment of that claim - Adjudicating Authority had committed an error in failing to appreciate the fact that the FD was an asset of the Corporate Debtor.

Asset included in Information Memorandum binds the resolution plan - HELD THAT:- The Tribunal examined the Information Memorandum and the Corporate Debtor's audited balance sheet and held that, although FDRs were shown in consolidated form, the affidavit of the Bank confirmed the existence of the specified fixed deposit. Reading the Information Memorandum together with the Bank's affidavit, the Tribunal concluded that the fixed deposit formed part of the Corporate Debtor's assets and was therefore within the ambit of assets disclosed to resolution applicants and considered in the approved resolution plan. The Tribunal treated the inclusion of the FDRs in the Information Memorandum and the corroborating bank affidavit as sufficient to characterise the specified deposit as an asset of the Corporate Debtor. [Paras 7, 13]

The fixed deposit formed part of the Corporate Debtor's assets and was included in the Information Memorandum.

Unmarked lien on a fixed deposit does not create a security interest - failure to file a claim during CIRP leads to extinguishment of that claim - HELD THAT: - The Tribunal relied on the Bank's affidavit expressly stating that no lien had been created on the fixed deposit and on the fixed deposit document which showed blank entries for 'Lien Noted on' and 'Lien Cancelled on'. In the absence of evidence that a lien or charge had been endorsed or recorded, the Tribunal found no basis to treat the deposit as margin money or as a segregated security for the debenture holders. Separately, the Tribunal applied the settled principle that claims not filed during CIRP do not survive approval of a resolution plan, citing the Supreme Court decision in the Ghanshyam Mishra [2021 (4) TMI 613 - SUPREME COURT] that claims not incorporated in the approved plan stand extinguished. Since the debenture trustee had not filed a claim with the Resolution Professional asserting a lien, its alleged security interest was held to be untenable and could not be allowed to alter the asset allocation under the approved plan. [Paras 16, 17, 18, 20]

No lien or charge existed on the fixed deposit in favour of the debenture trustee; the trustee's unfiled claim was extinguished and could not prevent liquidation and transfer of the deposit to the successful resolution applicant.

Final Conclusion: The appeal is allowed; the impugned order is set aside and the Bank of Baroda is directed to liquidate the specified fixed deposit and transfer the deposit amount with accrued interest to the successful resolution applicant.

Estoppel and waiver of claim by acceptance of payment - defects in consideration and quantification of employees' claims - Statutory employee dues (EPF, gratuity, earned leave) and afforded priority and enforceable payment mechanisms as required by law - requirement to substantiate workmen claims under Regulation 19 and Schedule II - limited judicial review of CoC commercial wisdom where plan approved by 100% voting - priority of operational creditors for statutory dues in resolution plan - non-compliance with Section 30(2)(d) & (e) of the I & B Code, 2016.

Estoppel and waiver of claim by acceptance of payment - Acceptance of amounts under the approved Resolution Plan by some workmen estops them from belatedly challenging the plan and the prior partial rejection of their claims. - HELD THAT: - Nine appellants had unconditionally accepted the amounts determined to be paid under the approved Resolution Plan; those appellants are estopped from contesting the impugned order. Where claims were partially admitted/rejected by the Liquidator in September 2023 and that determination was not challenged under Section 42 within the process, the partial admission attained finality and cannot be re-opened at the stage of challenge to plan approval. The Court emphasised that a belated challenge to the CoC's and Tribunal's approval of the plan cannot succeed where claimants previously accepted the procedure and amounts, and where the approval represents the CoC's commercial wisdom which is not re-examined de novo by the Appellate Tribunal. [Paras 19, 20, 34, 35, 37]

Appellants who accepted payments are estopped; the unchallenged partial rejection of claims precludes reopening the same in this appeal.

Requirement to substantiate workmen claims under Regulation 19 and Schedule II - Whether the Appellants had complied with Regulation 19 (IBBI Liquidation Process Regulations) and Schedule II to substantiate their claims. - HELD THAT: - Regulation 19(2) and 19(3) require proof in Form E (or Form F by authorised representative) and supporting material to establish existence and quantum of dues. The Tribunal found nothing on record demonstrating that the Appellants furnished the proof required by Regulation 19 and Schedule II to substantiate their claims. In absence of such proof, the partial rejection by the Liquidator was not shown to be vitiated and the Appellants cannot fault the treatment of their claims in the Resolution Plan. [Paras 15, 16, 17, 18]

Appellants failed to satisfy Regulation 19/Schedule II proof requirements; their challenge based on non-consideration of properly substantiated claims fails.

Limited judicial review of CoC commercial wisdom where plan approved by 100% voting - priority of operational creditors for statutory dues in resolution plan - Whether the approval of the Resolution Plan suffered from legal or procedural vices warranting judicial interference, including alleged non-compliance with Section 30(2) requirements and absence of monitoring. - HELD THAT: - The Tribunal reiterated that judicial review of a CoC-approved plan is very limited, particularly where the CoC approved the plan with 100% voting; the commercial wisdom of the CoC is not to be re-examined afresh. The impugned order and accompanying Form H and Bank Guarantee demonstrated compliance with eligibility and payment covenants, and the plan provided priority to operational creditors (including EPFO and gratuity) as required by law. Allegations of absence of a monitoring committee or malicious intent by the Successful Resolution Applicant did not establish apparent illegality or procedural infirmity in the approval process that would warrant interference. [Paras 24, 27, 28, 33, 34]

No apparent legal or procedural vice found in approval of the plan; limited judicial review precludes re-opening CoC's commercial decision.

Priority of operational creditors for statutory dues in resolution plan - enforcement of resolution plan obligations through statutory remedies - Whether statutory dues to employees (EPF, gratuity, earned leave) were provided for and how enforcement of those entitlements is to be pursued. - HELD THAT: - The Tribunal recorded that EPF dues as per the Apex Court's pronouncement have been paid in full. Gratuity and earned leave entitlements were recognised and provided for in the Resolution Plan and will be settled in priority and in accordance with the plan's terms; respondents accepted liability and agreed to disburse amounts settled under the plan and any marginal increases. The appropriate remedies for enforcing payment under the approved plan were noted to include statutory avenues (reference made to invocation of Companies Act remedies), which the Appellants had not pursued. The Resolution Professional was directed to ensure remittance in accordance with the plan, with any excess payments to be adjusted from cash recovery from Secured Financial Creditors as contemplated by the plan. [Paras 31, 32, 33, 35, 36]

EPF paid; gratuity and earned leave are accounted for and to be paid in priority under the approved plan; RP to ensure remittance and statutory enforcement remedies remain available.

Final Conclusion: The company appeal is dismissed. The Appellants who accepted payments are estopped from reopening the matter; those who did not substantiate their claims under Regulation 19 cannot fault the plan's treatment of claims; the CoC's approval by 100% voting and the Tribunal's affirmation do not disclose a ground for interference. The Resolution Professional and Successful Resolution Applicant shall ensure payment of employees' statutory dues (EPF, gratuity, earned leave) in accordance with the approved Resolution Plan and the terms recorded in the judgment.

Financial debt under Section 5(8)(f) of the IBC -funding the development obligations of the Corporate Debtor - debt and default of the Corporate Debtor in repayment - interest free security deposit - pendency of arbitral proceedings bars initiation/admission of proceedings under Section 7 - Does the ₹ 13.20 crores disbursed constitute “financial debt” under Section 5(8) IBC in the facts and circumstances of the case?

Financial debt under Section 5(8)(f) of the IBC - commercial effect of borrowing - The sum of Rs. 13.20 crores disbursed to the Corporate Debtor constitutes a financial debt. - HELD THAT: - The Tribunal examined the agreement dated 18.02.2014 as a whole and held that Clauses 6-9 provide for return of the disbursed amounts together with a 50% share of project profit as consideration for time value of money. The definition of 'financial debt' in Section 5(8) includes transactions having the commercial effect of a borrowing; the arrangement here contemplates refund of funds and a profit share in lieu of interest, and is therefore within Section 5(8)(f). The Adjudicating Authority's finding was supported by the Corporate Debtor's repeated admissions in board resolutions, termination letter, pleadings and arbitration filings describing the disbursements as financial assistance; those contemporaneous records and the contractual scheme show the disbursement had the commercial effect of borrowing. Distinguishing authorities relied upon by the Appellant, the Tribunal found them inapposite on facts and followed precedent recognising that interest-free financial assistance or amounts termed as 'security deposit' may nonetheless qualify as financial debt where the transaction has the commercial effect of borrowing. [Paras 74, 76, 80, 81]

Rs. 13.20 crores is a financial debt within Section 5(8)(f) of the IBC.

Default - Whether default by the Corporate Debtor has been established. - HELD THAT: - The Tribunal noted that the Corporate Debtor unilaterally terminated the agreement on 24.12.2022 but has not refunded the disbursed amounts. Once the agreement was terminated the obligation to refund crystallised; the Adjudicating Authority correctly treated non refund as non payment of a debt. The Tribunal relied on the contractual term providing for refund and the admitted receipt and utilisation of funds by the Corporate Debtor to conclude that a debt had become due and a default had occurred. [Paras 103]

Default is established upon termination of the agreement and non refund of the disbursed amount.

Pendency of arbitral proceedings not a bar to initiation of CIRP under Section 7 - Whether the pendency of arbitration proceedings prevents admission of a Section 7 petition. - HELD THAT: - The Tribunal applied settled precedents and held that pending arbitral proceedings do not preclude a Financial Creditor from invoking Section 7 if debt and default are otherwise established. Indus Biotech [2021 (3) TMI 1178 - SUPREME COURT] and subsequent authority were read to give primacy to the Section 7 process; the Adjudicating Authority is required first to record satisfaction on debt and default even where arbitration or Section 8 processes exist. The Tribunal found the invocation of arbitration by the Corporate Debtor to be an attempt to avoid liability and that arbitration pendency did not impede admission of the Section 7 petition in the present facts. [Paras 104]

Pendency of arbitral proceedings does not bar admission of a Section 7 application when debt and default are made out.

Final Conclusion: The Tribunal dismissed the appeal: the disbursed amount of Rs. 13.20 crores qualifies as a financial debt under Section 5(8)(f) of the IBC; default stands established upon termination of the agreement; and pendency of arbitration does not preclude admission of the Section 7 petition. The NCLT order admitting the Section 7 petition is affirmed.

Condonation of delay in refiling of Appeal - inordinate delay - reasonable explanation - lack of diligence disentitles applicant to condonation - delay vitiating time-bound CIRP mandate.

Condonation of delay in refiling - lack of diligence disentitles applicant to condonation- Application for condonation of 130 day's delay in refiling -HELD THAT: - The Tribunal treated the present application on the same premises as its earlier decision in connected appeals and the Principal Bench in the matters of Adisri Commercial Private Limited versus Reserve Bank of India [2022 (12) TMI 917 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI], applied the principle that inordinate delay in refiling must be reasonably explained. The appellant's new contention that records went missing and certain documents were illegible was considered but found insufficient. The appeal had been e filed and the appellant's prolonged efforts to trace records and cure defects demonstrated lack of diligence. The supporting affidavit was held to be evasive and failed to particularise efforts taken to retrieve files or to establish why legible copies could not have been procured earlier. The Tribunal also noted that condoning lengthy unexplained delay would undermine the time bound mandate of CIRP and relied on the cited authorities emphasising that condonation is not to be granted routinely without testing the reasonableness of the delay.

The application for condonation of 130 day's delay is rejected and the appeal is dismissed.

Condonation of delay in refiling - inordinate delay requires reasonable explanation - delay vitiating time-bound CIRP mandate - Application for condonation of 209 day's delay in refiling the appeal - HELD THAT: - The Tribunal applied the same reasoning as in the connected earlier appeals and the authorities of the Principal Bench: an inordinate delay in refiling must be satisfactorily explained. The appellant's additional plea about missing records and illegible documents was found to be inadequately supported; the affidavit did not disclose particulars of the alleged loss or steps taken to obtain copies. The Tribunal observed that waiting for recovery of files and curing defects over a protracted period evidenced want of diligence. It also recognised the public interest in preserving the time bound nature of CIRP proceedings and accepted the authorities cited to refuse routine condonation of long delays.

The application for condonation of 209 day's delay is rejected and the appeal is dismissed.

Final Conclusion: Both applications for condonation of delay in refiling are rejected on the ground that the delays were inordinate and not reasonably explained, the additional grounds advanced were inadequately substantiated and showed lack of diligence, and consequently both appeals are dismissed.

Provisional attachment of proceeds of crime - agents/directors involved in promotion and collection of deposits for illicit schemes - failed to demonstrate independent legitimate sources for the acquisition of properties -salary and commission as proceeds of crime -FIR registered mainly against the Directors/Officials of M/s Rose Valley Group of Companies involved in the commission of crime under IPC and the Act of 1978.

Provisional attachment of proceeds of crime - Provisional attachment of the appellants' properties was justified on the material before the Adjudicating Authority and requires no interference. - HELD THAT: - The Tribunal examined the role attributed to the appellants in promoting and collecting deposits for the illicit schemes of M/s Rose Valley Group of companies and noted that the ECIR recorded a case of money laundering. The Provisional Attachment Order specified the role of individual appellants and relied on statements and investigative material. Admissions recorded in the statements established that certain appellants collected deposits and acquired properties from the proceeds so derived. In that factual matrix, the Tribunal held that the provisional attachment was not in ignorance of record and that the Adjudicating Authority was justified in confirming the attachment. [Paras 17, 18, 19, 23]

Provisional attachment confirmed as justified on the evidence and admissions recorded.

Salary and commission as proceeds of crime - HELD THAT: - The Tribunal rejected the appellants' contention that commission or salary paid to them could not be regarded as proceeds of crime. It found that where persons act as instruments to promote and collect funds for illicit, unlicensed and fraudulent schemes, amounts earned by them are not from legitimate sources. The Tribunal therefore accepted the Adjudicating Authority's approach to treat such earnings as proceeds of crime for the purpose of provisional attachment. [Paras 20, 22]

Earnings by appellants from participation in the illicit schemes were treated as proceeds of crime and supported attachment.

Attachment of assets held by recipients - Assets held in the names of spouses or other recipients can be provisionally attached even if those persons are not formally accused, where material shows they are recipients of proceeds of crime. - HELD THAT: - The Tribunal observed that the wives of two appellants could not demonstrate independent sources for acquisition of the properties and their statements admitted that funds were provided by their husbands. The Adjudicating Authority properly treated them as recipients of proceeds of crime and subjected the properties to provisional attachment. The Tribunal held that naming as an accused is not a prerequisite to attachment where the person is a recipient of proceeds. [Paras 21, 22]

Properties held by recipients whose acquisition is shown to be from proceeds of crime are liable to provisional attachment.

Final Conclusion: The Tribunal upheld the Adjudicating Authority's confirmation of provisional attachment: the materials and admissions established the appellants' involvement in the proceeds-generating activity, remuneration/commissions were treated as proceeds of crime, and assets held by recipients were properly attached; the appeals are dismissed.

Provisional Attachment Order (“PAO”) - proceeds of crime - Existence of a prima facie offence - allegation involving bribe and service to the Railway officers to get supply order for bogey frames.

Prima facie case for money laundering - HELD THAT: - The Tribunal accepted the material collected during investigation, including recovery of bribe money from the public servant, and noted that the FIR remains pending and has not been quashed. While deeper inquiry into commission of the offence would prejudice the pending criminal trial, the available material established a prima facie case involving the alleged payment and transmission of bribe, and potential money laundering consequences. Accordingly, the contention that no crime was committed was rejected and a prima facie case was held to exist. [Paras 13]

A prima facie case involving offences including money laundering is found; the plea that no crime was committed is rejected.

Provisional attachment to be limited to quantifiable proceeds and not entire transaction value - HELD THAT: - Although the supply of additional bogey frames may have been in terms of the contract, the allegations of bribery cannot be ignored. The Tribunal held that the entire contract value cannot be mechanically treated as proceeds of crime because manufacturing costs and legitimate expenses are part of the transaction. Equity requires that the attachment be confined to that portion which can reasonably be regarded as proceeds of crime (for example, the profit element), rather than the whole consideration. The Tribunal therefore directed the respondent to quantify the proceeds of crime appropriately and reassess the provisional attachment accordingly. [Paras 16, 17]

The provisional attachment must be limited to the quantifiable proceeds of crime (not the entire value received); respondent directed to quantify the proceeds within four weeks and adjust the attachment accordingly.

Final Conclusion: The Tribunal found a prima facie case of money laundering and refused to accept the appellant's contention that no crime was committed; however, it held that the provisional attachment cannot cover the entire contract value and remitted the matter for quantification of proceeds of crime (limited to the appropriate profit/illicit portion), directing the respondent to complete such quantification within the specified period.

Review petition -Condonation of delay - Challenge to validity of subrule (20) of rule 17 of the Central Sales Tax (Rajasthan) Rules, 1957 - misrepresentation of fact or by fraud or in contravention of the provisions of the Central Sales Tax Act, 1956 - HELD THAT:- The application for listing the Review Petition in open Court is rejected.

Despite the fact that there is a delay of 237 days in filing the Review Petition for which no satisfactory explanation has been furnished, we have gone through the same on merits. In our opinion, no case for review of the order [2025 (4) TMI 952 - SUPREME COURT], is made out.

The Review Petition is, accordingly, dismissed on the ground of delay as well as on merits.

As a result, the pending interlocutory application, if any, also stands disposed of.

Seeking withdrawal of the reference - hearing prerequisite for reference​​​​​​​ - allocation of taxing power between Union and State​​​​​​​ -Questions referred kept open for future decision.

High Court may decline to answer a reference when the party that caused it is not interested - HELD THAT:- The Court held that although a reference is made by the Tribunal, the High Court is not obliged to answer the question of law where the party who caused the reference appears and expressly states it is not interested in the reference being answered. Citing authoritative decisions, the Court observed that a reference requires a hearing before the duty to decide arises; if the preliminary condition of hearing is not satisfied because the initiating party does not pursue the matter, the Court may decline to answer the reference. The Court declined to permit withdrawal of the reference by the initiating party but exercised its discretion to dispose of the reference by declining to answer the question and keeping the question open for consideration in an appropriate case. [Paras 7, 8]

Reference declined to be answered as the party who caused it is not interested; reference disposed of with questions kept open.

Questions referred kept open for future decision - Disposition of a subsequent, similarly constituted reference where the initiating party sought that the reference not be answered. - HELD THAT:- Applying the reasoning in the earlier part of the order, the Court disposed of the second reference in the same terms. Where the initiating party informed the Court it was no longer interested, the Court declined to answer the referred question and kept the legal question open for adjudication in an appropriate future case. [Paras 3]

Disposed of by declining to answer the reference and leaving the question open for future adjudication.

Final Conclusion: Both references were disposed of by the High Court on the ground that the parties at whose instance the Tribunal made the references were not interested in prosecution; the Court declined to answer the referred questions and left them open for consideration in an appropriate case.

Writ jurisdiction in departmental proceedings -lawful cause of action -suspension of government servant - process of distortion - prima facie non-attribution of alleged misconduct - distortion occurred during the petitioner’s tenure as Inspector of Taxed, especially when the internal inquiry report implicated the petitioner along with other officials.

Interference in pending departmental proceedings - HELD THAT:- The Court examined the Single Judge's exercise of writ jurisdiction in the context of an ongoing departmental inquiry where memorandum and articles of charge had been served and the inquiry authority was preparing to record witness statements. The Court recognised the general principle that interference by a writ court in disciplinary proceedings is restricted and permissible only in exceptional cases or where statutory violation is shown. Applying that principle to the facts, the Court found the case to be exceptional insofar as the petitioner had challenged the foundation of the charges on a prima facie basis and there was material indicating the petitioner may not have been attached to the charge-sheeted post when the alleged act occurred. Rather than wholly supplanting the disciplinary process, the Court modified the relief granted by the Single Judge: it confirmed that inquiry should proceed but directed the inquiry authority to conclude the proceedings expeditiously and fairly by a specified date, while ensuring the petitioner cooperates with the process. [Paras 14, 24, 25]

Writ interference limited: inquiry to continue but must be concluded expeditiously and fairly; the Court modified the Single Judge's order to impose a timetable and supervisory direction rather than permanently precluding the disciplinary process.

Prima facie non-attribution of alleged misconduct - Whether on the material before the Court the petitioner could be prima facie implicated in the alleged overwriting/distortion of the assessment order. - HELD THAT:- On perusal of the articles of charge and the assessment orders relied upon, the Court observed that the two assessment orders (dated 22.08.2012 and 28.03.2015) were passed by two different officers and the record of service showed that the petitioner occupied the post of Inspector of Taxes when those orders were passed and was promoted to Superintendent of Taxes only with effect from 02.02.2017. Given that chronology, the Court found it surprising that a memo of charge had been issued implicating the petitioner in respect of the charge-sheeted assessment order. The Court treated this as a significant prima facie defect in attribution of the alleged misconduct and a factor rendering the case exceptional for limited judicial intervention. [Paras 22, 23]

The petitioner's prima facie non-implication on the material before the Court was recognised as a basis for limited relief; this undermined the foundation of the departmental allegation and warranted direction for a fair and expeditious inquiry.

Direction for expeditious conclusion of departmental inquiry - Whether the Court should direct a timeframe for conclusion of the departmental inquiry and permit the petitioner to continue in service pending its outcome. - HELD THAT:- Balancing the limited scope for judicial intervention in disciplinary matters with the petitioner's prima facie case on attribution, the Court exercised supervisory power to ensure effective adjudication. It ordered the inquiry authority to conclude the departmental proceedings expeditiously and fairly, specifying a target date for completion. The Court also noted that the petitioner had already resumed charge in a promoted post and directed that he would continue in service until the disciplinary authority proceeds in accordance with law. [Paras 25]

Inquiry to be completed preferably on or before 31st August, 2026; petitioner to cooperate with proceedings and to continue in service until further lawful orders.

Final Conclusion: The appeal was disposed of by modifying the Single Judge's order: the Court recognised a prima facie defect in attributing the alleged distortion to the petitioner, restricted broad writ interference with the disciplinary process but directed the inquiry authority to proceed fairly and conclude the departmental inquiry expeditiously (preferably by 31st August, 2026); the petitioner shall cooperate and continue in service pending the outcome.

Finality of Supreme Court orders - benefits of this Court's earlier order in favour of the appellants - remedy for non-parties affected by judgments. - Promotion to the post of Associate Professor before acquiring Ph. D. qualification

Finality of Supreme Court orders - Whether the High Court could revisit or alter the effect of this Court's earlier order in favour of the appellants. - HELD THAT: - The appellants had obtained relief from this Court and their promotions were implemented pursuant to that order; consequent contempt proceedings were disposed on the basis that the order had been complied with. The Court held that, having granted the appellants relief, the High Court could not, in essence, revisit or disturb the finality of this Court's order so as to prejudice the appellants' career prospects. The Court noted that had the appellants been impleaded and the prior Supreme Court order placed before the High Court, the controversy might have been avoided, but that procedural omission did not permit the High Court to undermine the earlier judgment. In view of these special facts the appeal was allowed insofar as to protect the appellants against any adverse effect of the impugned High Court order on their career progression. [Paras 13, 14, 15]

Appeal allowed limitedly: nothing in the impugned High Court order will affect the appellants' career prospects in view of the prior order of this Court.

Remedy for non-parties affected by judgments - Whether persons not impleaded in earlier proceedings but who are adversely affected by those decisions have a remedy. - HELD THAT: - The Court reviewed its precedents (K. Ajit Babu [1997 (7) TMI 671 - SUPREME COURT], Rama Rao [2007 (8) TMI 836 - SUPREME COURT] and Union of India v. Nareshkumar [2018 (11) TMI 1855 - SUPREME COURT]) and reaffirmed that persons who were not parties to earlier proceedings but are affected by the outcome may have recourse to appropriate remedies - including review in limited circumstances and/or filing fresh proceedings before the Administrative Tribunal under Section 19 - to seek reconsideration of the earlier decision. Applying that principle, the Court held that intervenors and petitioners who assert prejudice from the High Court's order are not without remedy and may approach the appropriate forum for adjudication of their individual grievances. [Paras 16, 17, 18, 19, 20]

Liberty granted to intervenors and the petitioner in the connected matter to pursue appropriate remedies before the competent forum; connected SLP and interim applications disposed accordingly.

Final Conclusion: The appeal is allowed to the extent of protecting the appellants from any adverse effect of the High Court's order on their promotions; persons not party to earlier proceedings who claim to be prejudiced by those decisions are granted liberty to seek appropriate remedies before the relevant fora, and the connected SLP and interim applications are disposed of.

Entitlement to Anticipatory bail - seizure of 710 bottles of cough syrup -protection from custodial interrogation when accused cooperates with investigation - right against self-incrimination.

Entitlement to anticipatory bail and protection from custodial interrogation where the accused has joined and is cooperating with the investigation. - HELD THAT: - The appellant was not named in the FIR though the seized vehicle belonged to him. After interim protection was granted, the appellant joined the investigation and is cooperating. The State may complete its investigation but cannot compel the appellant to incriminate himself or insist upon acts that would violate the constitutional right against self-incrimination. In the factual matrix, there are no grounds at present for custodial interrogation; continued cooperation within legal limits is a condition for relief. The Court therefore exercised its discretionary jurisdiction to grant anticipatory bail subject to the appellant continuing to cooperate with the investigation and complying with the conditions prescribed by law.

The High Court order denying anticipatory bail is set aside; the appellant is entitled to anticipatory bail and, if arrested in relation to the FIR, shall be released on bail on such terms as the trial Court may fix, subject to continued cooperation and compliance with Section 482(2) of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Final Conclusion: The appeal is allowed on the limited ground that the appellant, having joined and cooperating with the investigation, is entitled to anticipatory bail and protection from custodial interrogation, subject to continued cooperation and the trial Court fixing appropriate bail conditions.