TMI Tax Updates e-Newsletter
Apr 23,2026

Cancellation of GST registration - Input tax credit on fake invoices - Proof of actual movement of goods

Cancellation of GST registration - Input tax credit on fake invoices - Proof of actual movement of goods - Cancellation of the appellant's GST registration for availing input tax credit on the basis of fabricated documents and without proof of actual movement of goods was upheld. - HELD THAT: - The Court held that the record disclosed material showing violation in the availment of input tax credit and that mere production of print-outs of e-way bills, without proof of actual movement of goods, was insufficient to establish genuine transactions. It accepted that where the benefit of input tax credit is claimed on fabricated documents and fake invoices, cancellation of registration is a valid measure to prevent further misuse. The Court further held that after adequate opportunity had been given to produce evidence and the appellant failed to substantiate actual movement of goods, cancellation under Section 29(2)(a) for contravention of the Act and Rules was justified. [Paras 4, 5]

The challenge to cancellation of registration failed, and the orders of the authorities as affirmed by the learned Single Judge were sustained.

Final Conclusion: The writ appeal was dismissed. The Court affirmed the view that, on the available material and in the absence of proof of genuine movement of goods, cancellation of GST registration for contravention of the Act and Rules was lawful.

Bail in economic offences - Discretion under Section 480(6) BNSS

Bail in economic offences - Prima facie involvement - Gravity of offence - The petitioner's entitlement to bail in a prosecution under Section 132 of the CGST Act involving alleged fake invoicing, fraudulent e-way bills and large-scale tax evasion was rejected. - HELD THAT: - The Court held that the material collected during investigation, including documentary evidence and statements recorded under Section 70 of the CGST Act, prima facie indicated the petitioner's active role in the alleged syndicate and his operation of multiple firms used in the fraudulent transactions. It found that the allegations disclosed a structured and deep-rooted economic offence causing significant loss to the public exchequer, and applied the principle in Y.S. Jagan Mohan Reddy v. CBI [2013 (5) TMI 896 - SUPREME COURT] that economic offences constitute a distinct class requiring a stricter approach in bail matters. The Court further noted that the petitioner's role was not distinguishable from that of the co-accused whose bail had already been declined, and that mere period of custody, without other mitigating circumstances, was not decisive in such a case. [Paras 18, 19, 20, 28, 29]

Having regard to the nature of accusation, the scale of the alleged evasion and the material on record, the Court declined bail.

Discretion under Section 480(6) BNSS - Speedy trial and bail - Judicial discretion - Section 480(6) of the BNSS was held not to confer an absolute or indefeasible right to bail merely because the trial had not concluded within the stated period. - HELD THAT: - The Court held that the bail regime under the BNSS, CrPC and special statutes in non-bailable cases remains fundamentally discretionary and must be exercised with regard to the facts of the case, societal impact, conduct of the accused and possibility of tampering, with heightened consideration in economic crimes. Interpreting Section 480(6) BNSS in the light of Subhelal v. State of Chhattisgarh, the Court held that the provision only empowers the Magistrate to grant bail if the trial is not concluded within sixty days, while preserving the power to refuse bail for reasons. The Court also referred to Section 479 BNSS to note that statutory safeguards concerning prolonged detention are structured and conditional, and that the right to bail remains subject to judicial discretion rather than operating automatically. [Paras 23, 24, 25, 26, 27]

The plea founded on Section 480(6) BNSS and on custody period was rejected.

Final Conclusion: The Court dismissed the bail application, holding that the case disclosed a serious economic offence supported by prima facie material and that Section 480(6) BNSS did not create an automatic right to bail. Continued detention was therefore not found unjustified at this stage.

Limitation period for refund claims - Relevant date for refund of unutilised input tax credit - Applicability of the amendment to Explanation 2(e) to Section 54 of the CGST Act - Prospective operation of amendment curtailing limitation - Refund of unutilised input tax credit on zero-rated supplies - Inverted duty structure refunds

Relevant date for computing limitation period for refund claims -Prospective operation of amendment curtailing limitation - Vested right to claim refund - Unamended Explanation 2(e) - whether the Petitioners’ refund applications were filed within the prescribed period of limitation or not? - HELD THAT: - The Court held that the applicable limitation provision is the one in force on the date of the underlying transaction giving rise to the refund claim. Since the transactions in both petitions pertained to periods prior to 1st February, 2019, the subsequent amendment shortening or altering the reckoning of limitation could not be applied to curtail an already existing right to seek refund. The Court concurred with the view that such amendment is prospective and cannot retrospectively divest the claimant of the benefit available under the unamended provision. [Paras 90, 91, 92, 106, 107]

The refund claims in both petitions were required to be tested under the unamended Explanation 2(e), and the contrary view taken in the impugned orders was set aside.

Relevant date for refund of unutilised input tax credit - Zero-rated supplies without payment of tax - HELD THAT: - The Court distinguished between refund of tax paid on exports and refund of unutilised ITC. It held that Explanation 2(a) applies where refund is sought of tax paid in respect of exported goods or the inputs or input services used in such goods, whereas refund of unutilised ITC is a distinct category dealt with under Section 54(3). Since unutilised ITC depends upon availment, reflection in the electronic credit ledger, filing of returns, and its remaining unutilised, applying the export-date based rule under Explanation 2(a) would produce anomalies and may extinguish the refund remedy before the entitlement could effectively be worked out. Accordingly, for such refund claims, Explanation 2(e) is the governing provision. [Paras 101, 102, 103, 104, 105]

For the petitioner claiming refund of accumulated unutilised ITC on zero-rated exports, the relevant date had to be reckoned under unamended Explanation 2(e), rendering the rejection on limitation unsustainable.

Final Conclusion: The Court held that the amended Explanation 2(e) could not be applied retrospectively to refund claims relating to periods prior to 1st February, 2019. It further held that refund of unutilised ITC on exports is governed by Explanation 2(e) and not Explanation 2(a); accordingly, the orders rejecting the claims as time-barred were set aside and the refund applications were directed to be processed on merits.

Advance ruling under the GST law - Judicial review of advance ruling - Division Bench hearing of challenge to advance ruling - Classification of cut tobacco - Equality in tax treatment

Judicial review of advance ruling - Division Bench hearing - An advance ruling under the GST law - HELD THAT: - The Court held that though an applicant is bound by an advance ruling under the statute, that binding effect does not exclude the constitutional jurisdiction of the High Court. The High Court, however, cannot act as an appellate forum over the ruling and can interfere only within the settled limits of judicial review, such as jurisdictional error, error of law, breach of natural justice or perversity; if two views are possible, the Court cannot substitute its own view for that of the authority. Referring to Dabur India Ltd [2020 (1) TMI 707 - ALLAHABAD HIGH COURT] and Colombia Sportswear Co. [2012 (8) TMI 105 - SUPREME COURT] the Court further directed that writ petitions challenging rulings of the Authority for Advance Ruling or the Appellate Authority for Advance Ruling should be listed directly before the Division Bench and not before a Single Judge. [Paras 4, 6, 7]

The challenge to an advance ruling is maintainable in writ jurisdiction on limited grounds, and such matters must be placed before the Division Bench.

Classification of cut tobacco - product would fall under CETH 2401 20 90 OR CETH 2403 99 10 - HELD THAT: - The Court noted that the appellant raised the same classification issue as in another writ appeal involving a similar tobacco product manufactured through the same process. In that companion matter, the Court had held that the goods would fall under CETH 2401 20 90 so long as the activity continued to remain within what had been approved in Pachiappa Chettiar v. State of Madras [1961 (9) TMI 48 - MADRAS HIGH COURT]. Since the advance ruling authorities had taken a contrary view, permitting the impugned rulings to stand would result in similarly placed persons being subjected to different rates of compensation cess for similar products. The Court treated such differential treatment as an egregious breach of the equality principle and therefore interfered. [Paras 8]

The impugned advance rulings and the order under challenge were set aside, and the writ appeal was allowed.

Final Conclusion: The Court held that an advance ruling under the GST enactment can be challenged in writ jurisdiction only within the narrow limits of judicial review, and that such challenges must be heard by the Division Bench. On the merits, the impugned rulings were set aside because their continuation would create unequal tax treatment for similarly placed manufacturers of the same tobacco product.

Speaking order - Non-application of mind - Refund adjudication

Speaking order - Non-application of mind - De novo consideration - The appellate rejection of the refund claim could not be sustained where the order did not deal with the petitioner's submissions and recorded no specific finding before rejecting the claim. - HELD THAT: - The Court found that the impugned appellate order did not advert to the submissions made at the personal hearing or to the reply filed by the petitioner, and that no specific finding had been recorded while rejecting the refund claim. On that basis, the Court held that a reasoned and speaking order was required before rejecting the claim, and that the impugned order suffered from the vice of a non-speaking order. Since the defect lay in the manner of adjudication, the matter was required to be remanded for fresh consideration, with all contentions kept open. [Paras 7, 8]

The impugned order was quashed and the proceedings were remanded to the appellate authority for de novo consideration of the refund claim after hearing the parties and passing a fresh order in accordance with law.

Final Conclusion: The Court set aside the appellate order rejecting the refund claim on the ground that it was non-speaking and reflected non-application of mind. The matter was remanded for fresh adjudication in accordance with law, after hearing the parties, with all contentions kept open.

Levy of late fee for delayed annual return - Form GSTR-9C as part of annual return

Form GSTR-9C as part of annual return - Late fee for delayed filing - Delayed furnishing of Form GSTR-9C by a registered person whose turnover exceeded the prescribed threshold amounted to failure to furnish the annual return as required, attracting late fee. - HELD THAT: - The Court held that the levy under Section 47(2) is attracted where there is failure to furnish the return required under Section 44 by the due date, and that expression had to be construed on the footing of the statutory scheme as it stood after amendment. Section 44 contemplated an annual return which may include a self-certified reconciliation statement, and Rule 80(3) made such reconciliation statement in Form GSTR-9C mandatory for persons whose aggregate turnover exceeded five crore rupees, to be furnished along with the annual return. Reading the amended provision with the definition of "return", the Court held that Form GSTR-9C was a component completing the annual return in the cases covered by Rule 80(3), so that filing Form GSTR-9 without Form GSTR-9C would amount to non-filing of the return as required under Section 44. The Court also noted that the petitioner had not filed Form GSTR-9C within the period contemplated for waiver under the notification referred to in the circular. The view taken in Anishia Chandrakanth Vs. Superindentent, Central Tax & Central Excise was not followed. [Paras 17, 19, 20, 21]

The levy of late fee for belated filing of Form GSTR-9C was upheld and the challenge to the assessment failed, subject to liberty to pursue an appeal on factual aspects.

Final Conclusion: The writ petition was dismissed. The Court held that, in cases covered by Rule 80(3), Form GSTR-9C forms part of the annual return required to be furnished, and its delayed filing attracts late fee under Section 47(2), while leaving the petitioner free to pursue an appeal on factual aspects.

Refund rejection - Opportunity of personal hearing - Principles of natural justice

Refund rejection - Opportunity of personal hearing - Principles of natural justice - Rule 92(3) compliance - The refund rejection order was vitiated for want of personal hearing before rejection of the refund claim. - HELD THAT: - The Court held that before passing an order adverse to the assessee, the authority was bound to grant a hearing, and the proviso to Rule 92(3) specifically requires that no refund application be rejected without giving the applicant an opportunity of being heard. As the petitioner had specifically sought rescheduling of the hearing and the authority nevertheless proceeded ex parte, the rejection stood in breach of natural justice. The Court therefore directed fresh adjudication after issuance of a fresh show cause notice and grant of personal hearing. The petitioner's objection regarding the shorter time granted in the earlier notice was not adjudicated on merits and was left for consideration by the authority in the fresh proceedings. [Paras 11, 12]

The impugned show cause notice and refund rejection order were set aside, and the matter was remitted for de novo proceedings with a fresh notice, personal hearing, and speaking order.

Final Conclusion: The Court set aside the refund rejection and the antecedent show cause notice on the ground that the petitioner had not been afforded the hearing mandated before rejection of the refund claim. The matter was remitted for fresh adjudication after a fresh notice, personal hearing, and consideration of all contentions in accordance with law.

Re-credit of input tax credit - Portal functionality cannot defeat substantive entitlement

Re-credit of input tax credit - Manual intervention - The petitioner was entitled to re-credit of the input tax credit debited for refund claims rejected under the category in question, despite absence of portal functionality for such re-credit. - HELD THAT: - The Court held that the respondent department had, in its own communication, accepted that the petitioner had sought re-credit after rejection of the refund claims, had not pursued any further appeal, and that the non-grant of re-credit was only because the common portal did not provide the relevant option for issuance of PMT-03 or restoration of the amount to the electronic credit ledger. Once the Department did not dispute the petitioner's entitlement to re-credit, any procedural lapse, whether attributable to the petitioner or the respondents, was held to be immaterial. The absence of system functionality could not stand in the way of giving effect to the undisputed substantive entitlement, and the amount was therefore directed to be restored through manual intervention. [Paras 5, 6, 7]

The respondents were directed to credit the amount back to the petitioner's electronic credit ledger through manual intervention.

Final Conclusion: The writ petition was allowed. Since the Department itself did not dispute the petitioner's entitlement to re-credit, the Court directed restoration of the amount in the electronic credit ledger through manual intervention within the stipulated time.

Rejection of the refund application - required bank realisation proof was not produced - Non-consideration of material documents - Non-application of mind in refund adjudication

HELD THAT: - The Court found from the record that the refund claim had been rejected on the footing that the petitioner failed to produce the Bank Realisation Certificate for the stated invoice. At the same time, the petition specifically asserted that the FIRC and corresponding export invoice documents had in fact been submitted. In these circumstances, the Court held that the matter required re-examination so that all documents placed in support of the refund claim are duly considered.

The determinative defect found was non-consideration of the material on record, and for that reason the impugned order could not stand. The merits of the refund claim were not adjudicated and were left open for fresh consideration. [Paras 3, 4]

The impugned refund rejection order was quashed and the matter was remanded for de novo consideration with a reasoned order after considering all documents and granting a hearing to the petitioner.

Final Conclusion: The Court set aside the order rejecting the refund claim on the ground that the material documents relied on by the petitioner required proper consideration. The matter was remanded to the competent authority for fresh decision in accordance with law, with all contentions kept open.

Principles of natural justice - Service of show cause notice

Principles of natural justice - Service of show cause notice - Opportunity of hearing - The adjudication order and consequential recovery notice were vitiated for want of proper service of the show cause notice and denial of opportunity of hearing. - HELD THAT: - The Court found that the show cause notice had not been served at the correct address and correct e-mail ID furnished by the petitioner and reflected in the registration records and GST portal. The respondents were unable to substantiate to which address or e-mail ID the notice had in fact been issued. Since an adverse order had been passed without affording the petitioner an opportunity of being heard, the proceedings stood vitiated on account of breach of natural justice. [Paras 7]

The impugned adjudication order and recovery notice were quashed, and the respondents were directed to issue a fresh show cause notice at the registered address and registered e-mail ID, grant personal hearing, and pass a fresh speaking order in accordance with law.

Final Conclusion: The petition was disposed of by setting aside the impugned order and recovery notice on the ground of breach of natural justice arising from improper service of the show cause notice and absence of hearing. The matter was directed to be taken up afresh from the stage of issuance of notice, with all contentions kept open.

Refund of unutilized input tax credit under inverted duty structure - Applicability of binding Supreme Court precedent - Requirement of a speaking order

Refund of unutilized input tax credit under inverted duty structure - Exclusion of input services from Net ITC - Speaking order - The refund claim was directed to be reconsidered by the competent authority in the light of the law declared by the Supreme Court on refund under an inverted duty structure, without the High Court examining the petitioner's computation on merits. - HELD THAT: - The Court held that the controversy was no longer open, since the Supreme Court in Union of India v. VKC Footsteps India Pvt. Ltd. had settled the legal position by upholding the restriction of refund under Rule 89(5) to unutilized ITC on input goods and by not accepting inclusion of input services within Net ITC. As the department itself stated that a fresh order would be passed in accordance with the Supreme Court decision, the Court left the computation aspect open for reconsideration by the competent authority. It further required that, if the authority disagreed with the computation furnished by the petitioner, a speaking order assigning specific reasons must be passed expeditiously. [Paras 6, 8, 10]

The petition was disposed of by leaving the refund computation to fresh consideration by the competent authority in accordance with the Supreme Court decision, with a direction to pass a reasoned order in case of disagreement.

Final Conclusion: The Court disposed of the writ petition without entering into the merits of the refund computation, holding that the governing legal position stood settled by the Supreme Court. The competent authority was left to pass a fresh order in accordance with that decision, and, if it disagreed with the petitioner's computation, to give specific reasons in a speaking order.

Validity of electronic tax communication - Reference Number in lieu of DIN - Service of orders through common portal

Reference Number in lieu of DIN - Service of orders through common portal - Validity of electronic tax communication - Absence of the expression DIN on the impugned GST penalty order did not invalidate the order when it bore a verifiable RFN and had also been communicated through statutory modes recognised by law. - HELD THAT: - The Court held that the decisions cited by the petitioner did not govern the present case because, unlike a communication carrying no verifiable identifier, the impugned order bore the number "I/3740446/2025", which the respondents explained to be a portal-verifiable RFN. Section 169 recognises service of decisions and orders by making them available on the common portal, as well as by registered post and e-mail, and the order itself recorded communication through those modes. The Court further relied on the CBIC circular dated 09.06.2025, which clarified and modified the earlier DIN circulars by stating that communications generated through the GST common portal and bearing a verifiable RFN need not separately quote a DIN, since RFN already serves the function of traceability and authenticity. In that view, once the order was portal-generated, bore a verifiable RFN, and was also communicated through recognised statutory modes, a challenge founded solely on absence of the label DIN was held to be without substance. [Paras 11, 12, 14, 15, 16]

The challenge to the penalty order on the sole ground of absence of DIN was rejected, and the writ petition was dismissed.

Final Conclusion: The writ petition was dismissed as the impugned order, though not bearing a DIN, carried a verifiable RFN and had been duly communicated in the modes recognised under law. The Court, however, observed that if the petitioner chooses to pursue the statutory appeal, the period spent in the writ proceedings shall stand excluded for limitation in accordance with law.

Jurisdictional validity of assignment under GST proceedings - Proceedings without authority of law - validity of the proceedings initiated for the 2021-2022 tax period on the basis of an assignment made by the Joint Commissioner after the authority under which he acted had ceased - HELD THAT: - The Court held that the Joint Commissioner derived power of assignment only from the Commissioner's order dated 30.01.2023, which authorised assignment of proceedings under Sections 73 and 74 for the financial years 2017-2018 and 2018-2019 and remained valid only till 31.12.2023. Since proceedings for the 2021-2022 tax period were assigned thereafter on the strength of that order, the Joint Commissioner lacked subsisting authority to make such assignment. The consequential pre-intimation notice, show cause notice and adjudication order were therefore treated as non est and without jurisdiction. [Paras 5, 6]

The proceedings founded on the invalid assignment were quashed as being without jurisdiction.

Final Conclusion: The writ petition was allowed on the ground that the assignment of proceedings for the 2021-2022 tax period lacked jurisdictional authority. Consequently, the pre-intimation notice, show cause notice and order in original were quashed, and the direction for de-freezing of bank accounts followed.

Overlapping GST proceedings - Parallel adjudication on same subject matter - Commonality of suppliers and duplicate ITC disallowance - Duplicate adjudication - validity of the Central GST adjudication where the same suppliers and the same ITC dispute for the same periods had already been the subject of adjudication by the State GST Authority - HELD THAT: - The Court found from the materials on record and the Department's report that the impugned adjudication substantially covered the same suppliers who had already been treated by the State GST Authority as fake or non-existent for the financial years 2017-2018 and 2018-2019, and that the disallowance of ITC arose from the same set of allegations. Applying the law governing overlapping jurisdiction and parallel proceedings on the same subject matter, the Court held that the later Central adjudication could not be sustained. The Court expressly declined to enter into other aspects of the matter. [Paras 13]

The impugned adjudication order was held unsustainable in law and was set aside.

Final Conclusion: The writ petition was allowed to the extent that the Central GST adjudication was set aside, the Court holding that in view of the overlapping proceedings on the same subject matter, the order could not be sustained. The connected applications were disposed of accordingly.

Technical corrections on the GST Common Portal - petitioner entitlement to opt out of the QRMP Scheme and be migrated to monthly filing of GSTR-1 and GSTR-3B

HELD THAT: - The Court held that, in the facts and circumstances of the case, the petitioner ought to be permitted to opt out of the QRMP Scheme and file regular monthly returns in Forms GSTR-1 and GSTR-3B. Accepting the position that the necessary migration could be effected through backend changes on the portal, the Court directed the GSTN and GST authorities to carry out such changes and enable monthly filing. As regards delay-related consequences, the Court directed the petitioner to file the returns with applicable late fees and interest, while preserving liberty to seek refund before the concerned Commissionerate in accordance with law. [Paras 8, 9, 10]

Backend changes were directed to be made on the GST Common Portal, and the petitioner was permitted to migrate to monthly filing with effect from March 2026, subject to filing returns with applicable late fees and interest and with liberty to apply for refund.

Final Conclusion: The writ petition was disposed of by directing the GSTN and GST authorities to enable the petitioner's migration from the QRMP Scheme to monthly filing on the GST Common Portal with effect from March 2026. The petitioner was required to file the returns with applicable late fees and interest, with liberty to seek refund in accordance with law.

Doctrine of consistency - Res judicata application to taxation matters - Appellate power to entertain claims not made in return - Actuarial liability for employee benefits - Disallowance under section 14A - Bad debts and provision for bad and doubtful debts - Real income theory - Valuation of bank securities

Doctrine of consistency - Res judicata application - Appellate power to entertain claims - CBDT instructions vis-a-vis statute - Revenue's preliminary objections founded on absence of res judicata, separate nature of each assessment year, irrelevance of claims made through notes, and reliance on CBDT Instruction No. 17/2008 - HELD THAT: - The Tribunal held that though strict res judicata does not apply to income-tax proceedings, the Revenue cannot depart from an earlier accepted position on identical facts without showing any material change in facts, law, or binding precedent. It further held that claims raised through notes or before appellate authorities cannot be rejected on that ground alone, since appellate authorities are empowered to determine the correct tax liability on the basis of material already on record. CBDT Instruction No. 17/2008 was treated as administrative guidance incapable of enlarging statutory disallowances or overriding the Act. [Paras 5, 6]

The preliminary objections of the Revenue were rejected.

Actuarial liability- disallowance of Provision for pension u/s 37(1) - Provision for pension computed on actuarial basis allowable as business expenditure or not? - HELD THAT: - The Tribunal held that pension liability accrued with the rendering of service and, once scientifically determined by actuarial valuation in accordance with AS-15, constituted an ascertained liability and not a contingent one. It further held that the claim was not for contribution to any recognised or unrecognised fund, and therefore sections 36(1)(iv), 36(1)(v), 40A(7), 40A(9) and 43B did not apply. Following consistent orders in the assessee's own case, the provision was held deductible under section 37(1). [Paras 7]

The disallowance of provision for pension was deleted.

Depreciation on matured securities - assessee recognized a loss on account of depreciation in respect of certain securities which had matured during the year but in respect of which the redemption proceeds were not received on the due dates - HELD THAT: - The Tribunal followed the earlier decisions in the assessee's own case and the jurisdictional High Court in State Bank of India [2016 (8) TMI 1441 - BOMBAY HIGH COURT] upholding that such claim could not be allowed on the facts. Since no distinguishing feature in facts or law was shown for the year under appeal, the settled position against the assessee was applied. [Paras 8]

The assessee's claim for depreciation on matured securities was rejected.

Disallowance under section 14A - Strategic investments - Investments yielding exempt income - HELD THAT: - The Tribunal held that in the case of a bank having interest-free own funds in excess of the investments, disallowance under rule 8D(2)(ii) could not be made merely because separate accounts were not maintained. It further held that strategic investments held as part of banking operations and investments constituting stock-in-trade did not attract mechanical disallowance under section 14A. However, for the remaining component under rule 8D(2), the matter was restored only to examine and include only those investments which actually yielded exempt income during the year, after giving credit for the assessee's own disallowance, and subject to the ceiling of exempt income. [Paras 9]

The assessee's ground was allowed and the Revenue's related grounds were partly allowed for limited recomputation.

Depreciation on leased assets - assessee submitted that in certain cases the transactions were in the nature of sale and lease back and assessee is the owner of the assets given on leased back he is the parties - AO disallowed the claim on the ground that assessee had not assumed any risk of ownership of the leased assets and therefore it was not the owner’s of these assets - HELD THAT: - The Tribunal noted the consistent factual findings in earlier years that the assessee was merely advancing loans under the garb of lease transactions, the lessees were the real owners, and the assessee was only a nominal owner. In the absence of any change in facts, the earlier view was followed. [Paras 10]

The disallowance of depreciation on leased assets was upheld.

Disallowance of deduction u/s 36(1)(viia) on non-rural advances - claim was made by way of Note No.18 to the return of income - HELD THAT: - The Tribunal rejected the Revenue's objection that such a claim could not be entertained because it was not made in the return itself. On merits, it held that the interrelationship of sections 36(1)(vii) and 36(1)(viia) had to be examined in the light of the Supreme Court decision in Catholic Syrian Bank Ltd. [2012 (2) TMI 262 - SUPREME COURT] which explained that the two provisions operate in distinct fields and that the statutory restriction is directed against double deduction. As the claim had not been fully examined on facts and law in that light, the matter was restored for verification and fresh adjudication. [Paras 11]

The issue was remanded to the Assessing Officer for fresh examination in accordance with law.

Deduction in respect of provision for employee benefits -Applicability of section 43B(f) - Actuarial valuation - HELD THAT: - The Tribunal held that the relevant test was whether the liability had accrued with reasonable certainty and not whether the cash outflow would occur in future. It found that the liabilities arose from services already rendered and, being computed on scientific principles under AS-15, were ascertained liabilities. Leave travel concession was not in the nature of leave encashment, and casual leave and sick leave were non-encashable; consequently section 43B(f), which deals with sums payable in lieu of leave at the credit of an employee, had no application. [Paras 12]

The disallowance of provision for these employee benefits was deleted.

Provision for Leave encashment - HELD THAT:- Tribunal noted that the constitutional validity of section 43B(f) stood upheld by the Supreme Court. [2020 (4) TMI 792 - SUPREME COURT] and therefore deduction in respect of leave encashment could not be allowed merely on provision. The claim could be granted only in the year of actual payment, including payment made on or before the due date as permissible u/s 43B. [Paras 13]

Assessing Officer was directed to allow the claim only on actual payment basis.

Depreciation on securities - Valuation of securities - Lower of cost or market value - Real income - securities in AFS and HFT categories valued at scrip-wise at lower of cost or market value - HELD THAT: - The Tribunal held that RBI-prescribed aggregation for book purposes could not govern computation of taxable income where it resulted in taxation of notional gains. It accepted the distinction between regulatory accounting and tax computation, and held that the recognised principle of valuation at lower of cost or market value on a scrip-wise basis reflected real income. The claim could not be rejected merely because it was raised through a note, and the consistent view in the assessee's own case supported the claim. [Paras 14]

The assessee's claim for depreciation on AFS and HFT securities was allowed.

Provision for standard assets - addition u/s 36(1)(viia) - HELD THAT: - The Tribunal held that section 36(1)(viia) uses the expression 'any provision for bad and doubtful debts' and does not confine the deduction only to assets classified as NPAs under RBI norms. It treated RBI classifications as relevant but not controlling for the purposes of the statutory deduction, and followed the consistent view in the assessee's own case that even provision on standard assets forms part of provisioning for inherent credit risk. Since the exact allowable quantum had to be reconciled with the provision created and statutory limits, the remand was confined to quantification. [Paras 15]

The issue on principle was decided in favour of the assessee and remanded only for quantification.

Interest on non-performing assets - Interest onsticky advances - Real income theory - addition u/s 43D - HELD THAT: - The Tribunal held that section 43D, read in the light of the real income doctrine, could not be applied so as to tax hypothetical income merely because rule 6EA prescribed a longer delinquency norm. RBI norms on income recognition were held relevant in determining whether income had in fact accrued. Since the assessee had not credited such interest to the profit and loss account and recovery was uncertain, the addition of interest on sticky advances and non-performing investments was unsustainable. [Paras 16, 17]

The additions in respect of interest on NPAs and non-performing investments were deleted.

Contribution to Retired Employees Medical Benefit Scheme - Addition u/s 40A(9) - Business expediency - HELD THAT: - The Tribunal held that a bona fide contribution made under a structured employee welfare scheme, having nexus with employee morale, industrial harmony and efficient conduct of business, could not be disallowed merely because retired employees were beneficiaries as well. It followed the earlier decisions in the assessee's own case and treated the payment as a genuine business outgo rather than a prohibited contribution to a camouflage fund. [Paras 18]

The disallowance of contribution to the medical benefit scheme was deleted.

Recovery of bad debtswritten off - addition u/s 41(4) - assessee submitted that it did not claim any deduction to this extent u/s. 36(1)(vii) - HELD THAT: - The Tribunal accepted the legal position that section 41(4) applies only where a prior deduction of bad debts has been allowed, and not merely because the assessee had claimed deduction for provision under section 36(1)(viia). Since the assessee's assertion that no deduction under section 36(1)(vii) had been allowed for the relevant post-2004 write-offs was not verified from the record, the matter was remanded for limited verification. [Paras 18]

The issue was restored to the Assessing Officer for verification of the earlier allowance of deduction.

Contingent provision - Provision for meritorious students - Provision towards corpus for incentives to meritorious students - HELD THAT: - The Tribunal held that the provision for incentives to meritorious students represented only a future outlay dependent on later events and therefore did not constitute an ascertained liability deductible in the year of provision; deduction was directed only to the extent of actual payments, if any, after verification. [Para 18]

Non-taxability of income from foreign branches - HELD THAT:- On the claim for exclusion of foreign branch income, it followed the later coordinate bench view applying section 90(3) and the notification thereunder, and rejected the assessee's treaty claim. [Paras 19, 20]

Additional claim under section 36(1)(viia)- allowance of one-time insurance premium paid on special home loan scheme - AO disallowed the claim as it did not arise out the return of income filed by assessee - HELD THAT: - The Tribunal held that the assessee's higher claim under section 36(1)(viia), though raised by note, could not be rejected only on that ground and therefore required verification to ensure correct computation and absence of double deduction. Similarly, the claims that no disallowance under section 40(a)(ia) arose on short deduction, that deduction under section 80-IA was allowable in respect of windmills, and that excess DDT was refundable, had not been examined on merits and were therefore restored. By contrast, the claim for one-time insurance premium was rejected because the assessee failed to establish actual payment and furnish foundational details linking the expenditure to its business. [Paras 21, 22, 23]

The enhanced section 36(1)(viia) claim and the claims under sections 40(a)(ia), 80-IA and DDT were remanded, while the insurance premium claim was dismissed.

Deduction in respect of education cess on Income tax and secondary and higher education cess on Income tax while computing total income for the year under consideration - HELD THAT:- This issue is no longer res integra. The Hon’ble Supreme Court in the case of PCIT v. Chambal Fertilisers and Chemicals Ltd. [2022 (12) TMI 1098 - SC ORDER] has settled the controversy by holding that education cess and secondary & higher education cess on income-tax are not allowable as deduction while computing business income. In view of the binding precedent of the Hon’ble Supreme Court, the claim of the assessee cannot be sustained. [Para 23]

Additional ground - Bad debts write-off - Section 36(1)(vii) - HELD THAT: - The Tribunal admitted the additional ground, holding that a pure question of law arising from material already on record could be raised before it notwithstanding delay. On merits, it rejected the Revenue's absolute objection that a bank which had claimed deduction under section 36(1)(viia) could never raise a claim under section 36(1)(vii). At the same time, it held that the assessee had to establish an actual write-off and compliance with section 36(2), and that the matter therefore required remand for verification in the light of Vijaya Bank Ltd. [2010 (4) TMI 46 - SUPREME COURT] and Catholic Syrian Bank Ltd [2012 (2) TMI 262 - SUPREME COURT] [Paras 25, 26]

The additional ground was admitted and restored to the Assessing Officer for verification and fresh adjudication.

Interest on securities on due basis - Broken period interest - Guarantee commission - Depreciation on HTM securities - HELD THAT: - Following binding precedent in the assessee's own case, the Tribunal declined to interfere with the finding that interest on securities was taxable on due basis notwithstanding the Revenue's objections on accrual principles. It further held that broken period interest paid on purchase of securities was deductible because once the corresponding receipt was brought to tax as business income, the payment could not be treated as capital outlay. Depreciation on HTM securities was also sustained on the footing that securities held by a bank form part of its banking business and RBI classification is not conclusive for tax purposes. However, on deferred payment guarantee commission, the Tribunal followed the later coordinate bench decision and held that the commission accrued and was taxable in the year of receipt and could not be spread over the guarantee period. [Paras 28, 29, 30, 33]

The Revenue failed on interest on securities, broken period interest and HTM depreciation, but succeeded on deferred guarantee commission.

Staff welfare expenditure - Section 43B verification - Donation - Section 244A interest - Wage revision provision - HELD THAT: - The Tribunal held that expenditure incurred for reservation of school seats and other staff welfare measures had direct nexus with business operations and employee welfare, and therefore qualified as business expenditure. In relation to the remaining grounds, it found that the allowability of bonus and other employee-related payments under section 43B, the alternate claim for deduction of donation under section 80G, the computation of interest on refund under section 244A, and the deduction for provision towards wage revision all turned on factual verification which had not been properly undertaken at the assessment stage. Those matters were therefore restored for fresh examination in accordance with law. [Paras 31, 34, 35, 36, 37]

The staff welfare ground was dismissed, and the other issues were remanded for limited verification.

Final Conclusion: The assessee's appeal and the Revenue's appeal were both partly allowed for statistical purposes. Several issues were decided on merits in favour of the assessee, including pension provision, employee benefit provisions, valuation of securities, NPA and NPI interest, staff welfare expenditure and contribution to the retired employees medical benefit scheme, while a number of issues were remanded for limited verification, and certain claims of the assessee as well as the Revenue were rejected.

Deduction u/s 42 - reopening of assessment under section 147 of the Income Tax Act - application of Minimum Alternate Tax under section 115JA of the Income Tax Act - production sharing contract (PSC) and incorporation of Model PSC (MPSC) - change of opinion doctrine in reassessment - limits of Assessing Officer's powers in original assessment- business consisting of the prospecting for or extraction for production of mineral oil - HELD THAT:- No good ground to interfere with the impugned order/judgment [2025 (11) TMI 1616 - GUJARAT HIGH COURT] in exercise of our jurisdiction under Article 136 of the Constitution of India.

Accordingly, the special leave petition stands dismissed.

Accrued liability for construction expenditure - Mercantile system of accounting - Sale and lease back transaction - Depreciation on cinematographic films - Colourable device

Accrued liability for construction expenditure - Mercantile system of accounting - Matching concept - adoption of hybrid system of accounting (i.e.) receipt based on sale and on accrual basis for expenses - Deduction of construction and incremental expenditure accounted for on accrual basis - HELD THAT: - The Court held that the issue stood governed by the principle recognised by the Supreme Court in Calcutta Company Limited [1959 (5) TMI 3 - SUPREME COURT] namely, that where liability to incur expenditure has already accrued under the business transaction, the estimated expenditure is deductible under the mercantile system while computing business profits. Since the appellate authority and the Tribunal had followed that principle, the concurrent finding allowing the construction expenditure called for no interference. [Paras 12]

The deduction of construction expenditure on accrual basis was upheld against the Revenue.

Sale and lease back transaction - Depreciation on cinematographic films - Colourable device - Depreciation on cinematographic films purchased and leased back to the vendor denied because the transaction was suspected to be a tax-saving device - HELD THAT: - The Court found that, notwithstanding the immediate lease back to the vendor, title in the cinematographic rights had passed to the assessee and the vendor thereafter held the asset only as lessee. The disallowance was based only on suspicion, without supporting material. Sale and lease back was treated as a recognised business transaction, and the record showed payment of sale consideration by cheque, while the amount received thereafter by the assessee was lease rent and not return of sale consideration. In those circumstances, mere tax-saving motive did not render the transaction a colourable device, and the claim for depreciation was rightly accepted. [Paras 13, 14, 15]

The claim of depreciation on the cinematographic films was upheld, and the substantial questions on sham transaction and colourable device were answered against the Revenue.

Final Conclusion: The High Court upheld the concurrent orders of the appellate authority and the Tribunal on both controversies. The Revenue's appeals were dismissed, and all the substantial questions of law were answered against it.

Adjustment of refund during subsistence of stay of demand - Stay of recovery u/s 220(6)

HELD THAT: - The Court found that the factual position was undisputed: a stay of recovery of the disputed demand for AY 2018-19 had been granted u/s 220(6) till disposal of the first appeal, yet the refund determined for AY 2025-26 was adjusted against that very demand. Once the stay of recovery was operating, adjustment of the refund towards the stayed demand was treated by the Court as illegal, arbitrary and perfunctory, warranting interference in writ jurisdiction. [Paras 7]

The Department was directed to release the refund due as computed under the intimation for AY 2025-26 together with interest u/s 244A.

Final Conclusion: The writ petition was disposed of by holding the adjustment of the refund against the stayed demand to be illegal and by directing release of the refund with statutory interest within the time stipulated by the Court.

Deduction u/s 10A - Total turnover and export turnover parity - Interest disallowance on advances to subsidiaries - Business purpose of investment in subsidiary

Deduction under Section 10A - Total turnover and export turnover parity - Expenditure in foreign exchange treatment while computing deduction u/s 10A - HELD THAT: - The Court held that the question stood concluded by the earlier Division Bench decision in the assessee's own case, which had followed Commissioner of Income-Tax, Central-III vs. HCL Technologies Limited [2018 (5) TMI 357 - SUPREME COURT] It accepted the principle that when the formula is intended to determine profits from export business, any expense excluded from export turnover must equally be excluded from total turnover; otherwise, the computation becomes unworkable and absurd. [Paras 6]

The substantial question of law was answered in favour of the assessee.

Interest disallowance on advances to subsidiaries - Business purpose of investment in subsidiary - HELD THAT: - The Court noted that the appellate authorities had accepted the assessee's explanation that the impugned entries did not involve actual cash movement and related to allotment of shares in the subsidiary pending approval. However, it found that neither authority had examined the further and material aspect whether such investment in the subsidiary was connected with business expenditure. Since that factual foundation had not been addressed, the matter required fresh examination by the AO after giving the assessee opportunity to produce the necessary materials. [Paras 6]

The issue was remitted to the Assessing Officer for fresh consideration limited to the tax computation relating to that transaction.

Final Conclusion: The appeal was disposed of by answering the question relating to computation of deduction under Section 10A in favour of the assessee. The question relating to deletion of the interest disallowance was not finally decided on merits and was remitted to the Assessing Officer for fresh examination on the business nexus of the investment in the subsidiary.

Computation of Section 10A deduction - Depreciation on goodwill - Apportionment of common disallowance between STP and non-STP units - Interest disallowance on advances to subsidiaries

Section 10A deduction - Export turnover and total turnover parity - Expenditure incurred in foreign exchange treatment while computing deduction u/s 10A - HELD THAT: - The Court held that the question stood covered by the earlier Division Bench decision in the same assessee's case, which had followed HCL Technologies Limited [2018 (5) TMI 357 - SUPREME COURT] It accepted the principle that, for arriving at profits from export business under the statutory formula, whatever is excluded from export turnover must likewise be excluded from total turnover; otherwise the formula becomes unworkable and leads to an absurd result. [Paras 10]

The question was answered in favour of the assessee.

Depreciation on goodwill - investment made to acquire goodwill and non-compete fees - HELD THAT: - The Court noted that the issue formed part of a batch of matters decided by the Supreme Court in Sharp Business Systems [2025 (12) TMI 1235 - SUPREME COURT] in which parameters were laid down for examining acquisition of goodwill and non-compete rights and the matters were remitted for fresh consideration. Since the present assessee's case was one among that batch, the issue was required to be reconsidered by the Tribunal in the light of the law so declared. [Paras 10]

The issue was remitted to the Tribunal for fresh consideration in accordance with the Supreme Court decision.

Apportionment of common disallowance between STP and non-STP units - Concurrent findings of fact - HELD THAT: - The Court held that the controversy before it was not the general allowability of ROC fee as revenue expenditure, but the correctness of apportioning the disallowance between STP and non-STP units for tax computation. On that aspect, both the appellate authority and the Tribunal had concurrently found that total disallowance in one lump was improper and that apportionment was necessary. Treating this as a factual determination, the Court declined to interfere. [Paras 10]

The Tribunal's order on apportionment was confirmed and the issue was decided in favour of the assessee.

Interest disallowance on advances to subsidiaries - Business nexus of investment - whether the investment in the subsidiary had nexus with business expenditure? - HELD THAT: - The Court observed that the appellate authority and the Tribunal had accepted the assessee's explanation that there was no cash outflow and that the entry represented a proposed conversion, subject to approval, of amounts due into shares of the subsidiary. However, they had not examined whether the investment in the subsidiary was connected with business expenditure. Since that factual aspect was essential, the matter required fresh examination by the Assessing Officer after affording the assessee an opportunity to produce material. [Paras 10]

For this limited purpose, the issue was remitted to the Assessing Officer for fresh consideration.

Final Conclusion: The appeal was disposed of by answering the Section 10A computation issue and the apportionment issue in favour of the assessee. The goodwill depreciation issue was remitted to the Tribunal, and the interest disallowance issue was remitted to the Assessing Officer for fresh consideration on the limited question of business nexus.

Rejection of book results u/s 145(3) - Estimation of net profit - Distinction from earlier year order - determination of proper rate of net profit to be estimated for the year under consideration - HELD THAT: - The Tribunal noted that the first appellate authority had itself recorded categorical findings that no specific defect had been pointed out in the books, that the books were correct and complete, that quantitative records and stock registers were properly maintained, and that purchases and sales were verifiable with an improved gross profit rate. It held that the net profit rate adopted in the assessee's own earlier year could not be mechanically applied because, in those years, deficiencies had been specifically found on the basis of third-party enquiries, whereas no such enquiry had been made in the present year. Having regard to those findings, the assessee's declared profit rate, and the concession for a reasonable estimation, the Tribunal held that estimation at 0.45 per cent of turnover would meet the ends of justice. [Paras 4]

Net profit was directed to be estimated at 0.45 per cent of turnover, and the appeal was partly allowed.

Final Conclusion: The Tribunal held that the earlier year's profit rate could not be directly adopted for the present assessment year because the factual basis was different. On the findings recorded and the concession for reasonable estimation, it directed adoption of net profit at 0.45 per cent of turnover and partly allowed the appeal.

Notice issued u/s 143(2) as illegal, bad in law and without jurisdiction - notice issued by non jurisdictional AO -HELD THAT: - ITR of assessee for AY 2014-15 mentioned address of Vasundhara, Ghaziabad, U.P. designation of AO as ITO Ward 43(2). After selection of case by scrutiny, notice u/s 143(2) was issued by ITO Ward 67(2), Delhi, on transfer of case of assessee to correct jurisdiction of ITO Ward 1(3), Ghaziabad, the notice u/s 143(2) dated 21.09.2015 was issued.

Appellant-assessee submitted that the appellant-assessee could not furnish books of accounts before Ld. AO and Ld. CIT(A), so the matter may be referred to Ld. AO. Ld. Departmental Representative gave no objection.

Thus, assessment order of Ld. AO and order of Ld. CIT(A) are set aside and the matter is restored to the file of Ld. AO for fresh decision in accordance with law after affording fair opportunity of hearing to the assessee.[Paras 8, 9,10, 11, 13]

Final Conclusion: The Tribunal restored the matter to the Assessing Officer for fresh adjudication in accordance with law after granting fair opportunity of hearing. The other grounds, including the jurisdictional and merits objections, were left open.

Rejection of books of account - Profit estimation - Incorrect assumption of fact - HELD THAT: - The Tribunal found that the controversy stood covered by the earlier decision in the assessee's own case for another assessment year, where it had been held that the AO proceeded on a fundamentally incorrect factual premise regarding purchase and sale transactions with the concerned entity. In the present year also, the Revenue did not place any fresh material to distinguish that decision. On that footing, the basis for invoking rejection of books and for estimating profit at a flat rate did not survive, and the order deleting the addition was followed. [Paras 6]

The Revenue's challenge to deletion of the addition failed, and the order of the Commissioner (Appeals) was sustained.

Final Conclusion: Following the earlier order in the assessee's own case on identical facts, the Tribunal held that no case was made out for rejection of books or estimation of profit and upheld deletion of the addition. The Revenue's appeal was dismissed.

TP Adjustment - Functional comparability - exclusion of comparable company with the name MPS Ltd. - comparable with the assessee's ITES segment - HELD THAT: - The Tribunal compared the assessee's profile as a limited risk service provider performing content development and editing services for its associated enterprises with the functional profile emerging from the annual report of MPS Ltd.

It found that MPS Ltd. was engaged in a wider business of content solutions, publishing solutions, accessibility solutions and platforms, had developed multiple in-house platforms, undertook end-to-end and product development activities, carried out research and development, and had grown through acquisitions. In the absence of segmental data separating these activities, and having regard also to coordinate bench rulings for the same assessment year excluding that company, the Tribunal held that MPS Ltd. was not functionally comparable with the assessee's ITES segment. [Paras 9, 10]

MPS Ltd. was directed to be excluded from the final set of comparables, and on that basis the assessee's margin fell within the arm's length range so that no transfer pricing adjustment survived.

Final Conclusion: The Tribunal allowed the appeal by directing exclusion of MPS Ltd. from the final set of comparables for Assessment Year 2018-19. Consequent to such exclusion, no transfer pricing adjustment was held to be called for, and the remaining grounds were treated as academic.

Penalty u/s 270A - under-reporting of income - assessee had not filed return of income within the prescribed time and the return filed in response to notice under section 148 was either not verifiable or not supported by details

HELD THAT: - The findings recorded by the CIT(A) clearly establish that the income was already disclosed by the assessee, the major component of income was salary duly subjected to TDS, the addition was made merely on account of non-consideration of available records by the AO and there was no unexplained or undisclosed income warranting addition. In such circumstances, the very basis for invoking section 270A, namely “under-reporting of income”, ceases to exist.

Section 270A(2) contemplates under-reporting of income where the income assessed exceeds the income determined in the return. However, once the returned income is accepted and the assessed income stands reduced to the returned income, the condition precedent for invoking section 270A fails. In the present case, after the relief granted by the CIT(A), the assessed income stands aligned with the returned income.

Therefore, there remains no under-reporting within the meaning of section 270A(2) of the Act.

Income in question was already within the knowledge of the department through ITS and TDS mechanism. The taxes were duly deducted at source by the employer and reflected in Form 26AS. Thus, even on facts, there is no case of concealment or misreporting. When the addition itself is found to be unsustainable on account of non-consideration of relevant material, the consequential penalty cannot be sustained. [Paras 12, 14, 15, 16]

The penalty levied under section 270A was deleted.

Final Conclusion: The Tribunal held that, with the deletion of the entire quantum addition in appellate proceedings, the very basis of the penalty ceased to exist. The assessee's appeal was accordingly allowed and the penalty was deleted.

Limited scrutiny - travelling beyond the scope of limited scrutiny -Investment in Immovable Property - Surrender of tenancy rights - Year of taxability of capital gains

Limited scrutiny - Scope of scrutiny - HELD THAT: - The case had been selected for limited scrutiny to verify investment in immovable property. The Tribunal held that, since during the relevant year the assessee had entered into transactions relating to immovable properties, examination of matters arising from such investment, including the question of income under the head capital gain, fell within that scrutiny itself. On that reasoning, the enquiry made by the Assessing Officer was treated as remaining within the permitted scope. [Paras 7]

The challenge to the validity of the assessment on the ground of expansion of limited scrutiny was rejected.

Addition as STCG - Surrender of tenancy rights - Transfer of capital asset - Year of taxability of capital gains - HELD THAT: - On construction of clauses 4, 7 and 8 of the tripartite agreement, the Tribunal found that the assessee's tenancy rights in the existing premises were expressly preserved until possession of the permanent alternate accommodation in the redeveloped building was handed over. Since possession of the alternate premises was admittedly given only in April, 2019, the surrender or extinguishment of tenancy rights could occur only then. The taxable event for capital gain, if any, therefore arose only in FY 2019-20, and the Department could not disregard the clear contractual terms to treat the transfer as having taken place in the year under consideration. [Paras 9]

The addition made as short term capital gain in AY 2018-19 was directed to be deleted, the gain, if any, being assessable only in AY 2020-21.

Final Conclusion: The appeal was partly allowed. The Tribunal upheld the assessment against the objection based on limited scrutiny, but deleted the addition on capital gains by holding that surrender of tenancy rights occurred only on delivery of alternate premises and was not taxable in AY 2018-19.

Sale consideration adopted for capital gains computation - Computing the share of the appellant in sale consideration - benefit of 3rd Proviso to section 50C(1) - difference between the actual sale consideration and the stamp valuation - scope of Safe harbour under stamp duty valuation - Retrospective operation of curative proviso - Deemed full value of consideration

HELD THAT: - The Tribunal held that the third proviso to section 50C(1), introduced by the Finance Act, 2018, is retrospective and operates from the date on which section 50C was introduced. The proviso grants a safe harbour where the stamp valuation does not exceed 105 per cent of the consideration received. Since, on the assessee's half share, the variation between the actual consideration and the stamp valuation was approximately 1.19 per cent, the case fell within the permissible tolerance band. Consequently, adoption of the stamp valuation as deemed consideration was held to be unsustainable, and the actual consideration had to be taken as the full value of consideration. [Paras 5]

AO was directed to adopt the actual consideration of the assessee's share for computing capital gains, and the appeal was allowed.

Final Conclusion: The Tribunal held that the tolerance proviso to section 50C(1) applied retrospectively and covered the variation in the present case. The actual sale consideration, and not the stamp valuation, was directed to be adopted for computation of capital gains.

Exemption u/s 54F - sale consideration invested before filling Return under section 139(4) - Capital gains account deposit requirement - Ownership of more than one residential house - Undivided share in contiguous residential property - Separate capital asset for section 54F computation

Exemption under section 54F - Capital gains account deposit requirement - sale consideration was invested in a residential house before filing the return under section 139(4), without deposit in the capital gains account - HELD THAT: - The Tribunal recorded that the payments towards the builder buyer agreement had been made before the filing of the return and that the return itself was filed within the time permitted under section 139(4). On those admitted facts, it rejected the view taken by the appellate authority that section 54F required compliance only with section 139(1). The determinative principle applied was that the sale consideration could be utilised within the time limit under section 139(4) for claiming section 54F relief, and where such utilisation had already taken place before furnishing the return under section 139(4), the requirement of deposit in the capital gains account did not arise. [Paras 7, 8]

The denial of section 54F exemption on the ground that the investment was not completed before the due date under section 139(1) was rejected, and the assessee succeeded on this controversy.

Ownership of more than one residential house - Undivided share in contiguous residential property - whether assessee's 1/3rd undivided share in the contiguous Preet Vihar property will make him owner of two separate residential houses so as to disentitle him to exemption u/s 54F? - HELD THAT: - The Tribunal accepted that the assessee held only an undivided one-third share in the property and that the two municipal numbers formed a single contiguous residential unit used jointly by the co-owners. On that factual position, it held that the authorities below were wrong in treating the assessee as owner of two residential properties. It also noted that in the case of the assessee's brother involving the same issue, exemption under section 54F had been directed to be allowed. [Paras 9, 10]

The objection founded on ownership of more than one residential house was rejected and the assessee's claim under section 54F was held allowable on this aspect.

Separate capital asset for section 54F computation - Long-term capital loss outside section 54F relief - HELD THAT: - The Tribunal did not accept the approach of the Assessing Officer that all shares sold by the assessee collectively constituted a single asset for section 54F. It read section 54F(1) as applying to capital gain arising from transfer of any long-term capital asset and, on that basis, held that shares of each company constituted a separate capital asset to be dealt with accordingly. It further held that section 54F grants exemption only in respect of long-term capital gain arising on sale of a capital asset, and therefore an asset sold at a loss falls outside the purview of that provision; the view that gains had first to be reduced by loss for determining section 54F relief was held to be legally untenable. [Paras 11, 12]

The aggregation of all share transactions for restricting exemption under section 54F was disapproved, and the assessee's method of claiming relief with reference to assets yielding long-term capital gain was accepted.

Final Conclusion: The Tribunal allowed the assessee's appeal. It held that section 54F relief could not be denied where the sale consideration had been utilised before filing the return under section 139(4), that the assessee was not owner of two residential houses by reason of his undivided share in a single contiguous property, and that section 54F had to be applied asset-wise to the shares yielding long-term capital gain.

Unexplained cash credit - Discharge of onus u/s 68 - Cash advance in property transaction

HELD THAT: - The Tribunal found that the assessee had explained the receipt by producing the agreement to sell, the civil suit material filed by the buyer, the buyer's audited accounts, and the entries in its own books and cash book showing receipt of the amount as part of the advance in the land transaction. It further noted that the High Court had taken cognizance of these facts and that the receipt stood fully explained and corroborated.

Applying the principle in CIT Vs. Orissa Corporation (p) Ltd. [1986 (3) TMI 3 - SUPREME COURT] Tribunal held that once the assessee had established the identity of the payer and furnished supporting material regarding the transaction, the initial burden stood discharged, and in the absence of adverse material from the Revenue, the addition could not be sustained on mere suspicion. [Paras 7, 8, 9]

The addition was set aside as illegal and the assessee's grounds were accepted.

Final Conclusion: Tribunal allowed the appeal and deleted the addition made under section 68. It held that the impugned cash receipt was duly explained by contemporaneous documentary material and could not be treated as unexplained cash credit.

RoDTEP rebate eligibility - Restricted exports - Uniformity in interpretation of Central statutes - export Rebate under the Remission of Duties and Taxes on Export Products Scheme (RoDTEP) for exports of white refined sugar

HELD THAT: - The Court held that the restriction imposed on export of sugar by the notification changing its status from free to restricted did not make such exports totally prohibited or absolutely ineligible for the scheme, since the policy itself continued to permit export under specific permission and approved quota from the Directorate of Sugar. Once the petitioners had exported under that permitted regulatory framework, denial of RoDTEP on the footing that sugar was a restricted or prohibited export was arbitrary and rested on a misreading of the notification and the scheme conditions.

The Court also treated the controversy as concluded in Shree Renuka Sugars Ltd. [2023 (4) TMI 789 - GUJARAT HIGH COURT] and M/s. Satyendra Packaging Ltd [2019 (7) TMI 1306 - GUJARAT HIGH COURT] whose view had attained finality after dismissal of the Special Leave Petition, and observed that, in matters involving interpretation of Central legislation, the principle of uniformity stated in Maneklal Chunilal & Sons Ltd.[1953 (3) TMI 26 - BOMBAY HIGH COURT] Bombay and followed in Commissioner of Income Tax, Bombay City-II vs. Jayantilal Ramanlal & Co. [1981 (9) TMI 72 - BOMBAY HIGH COURT] ought ordinarily to guide the department. [Paras 22, 23, 24, 25, 26]

The petitioners were held entitled to RoDTEP benefits; benefits not granted were directed to be granted, and amounts already recovered on withdrawal of such benefit were directed to be refunded with interest, with no coercive recovery to continue.

Final Conclusion: The petitions were allowed. The Court held that exports of sugar made under specific permission could not be denied RoDTEP merely because sugar had been placed in the restricted category, and directed grant or restoration of the benefit with refund of recovered amounts and interest where applicable.

Interest on refund - Non-application of mind - Requirement of reasoned order

Interest on refund - Non-application of mind - Requirement of reasoned order - The omission to consider and decide the petitioners' claim for accrued interest while sanctioning refund was held unsustainable. - HELD THAT: - The Court found that, while refund had been granted, the impugned order was completely silent on the petitioners' claim for interest and recorded no finding or reason for denying that component. Such absence of discussion on a specific claim raised in the refund application showed non-application of mind. Since the claim for interest required independent consideration and adjudication, the matter could not be sustained on the existing order. [Paras 7, 8]

The claim for interest was remitted to Respondent No. 1 for fresh consideration and adjudication in accordance with law after granting a personal hearing, with all contentions kept open.

Final Conclusion: The Court did not decide the petitioners' entitlement to interest on merits. It held only that the refund order failed to address that claim and, on that ground, directed fresh consideration of the interest application in accordance with law.

Principles of natural justice - Opportunity of personal hearing - Speaking order

Principles of natural justice - Opportunity of personal hearing - Speaking order - The adjudication order could not be sustained when the hearing notice was received by the petitioners on the very date fixed for personal hearing and their written submissions were not considered. - HELD THAT: - The Court found that the respondents were unable to place any material to show that the hearing notice had been received by the petitioners before the scheduled date of hearing. Accepting the petitioners' contention that they received the notice only on the date fixed for hearing, the Court held that they were effectively denied an opportunity of hearing. The Court further found, on a perusal of the impugned order, that the petitioners' written submissions were not taken into account, rendering the order non-speaking. On that basis, the impugned adjudication was held to be vitiated for breach of natural justice and liable to be set aside, with a direction for fresh hearing and de novo adjudication by a reasoned order. [Paras 13]

The impugned order was quashed and set aside, and the respondents were directed to issue a fresh hearing notice, grant personal hearing, and decide the show cause notice afresh by a well reasoned speaking order.

Final Conclusion: The petition was allowed on the ground that the impugned adjudication order had been passed in violation of natural justice and without proper consideration of the petitioners' submissions. The matter was remitted for fresh personal hearing and de novo adjudication by a reasoned order.

Tariff classification of parts of seats - CTI 9401 90 00 v/s seats or under CTI 8708 99 00 - Parts and accessories of motor vehicles - Judicial discipline - Binding precedent -

Tariff classification of parts of seats v/s Parts and accessories of motor vehicles - imported track assembly, gear vertical adjuster, case sub-assembly, brake sub-assembly and bar seat track lock - classifiable as parts of seats under CTI 9401 90 00 or parts and accessories of motor vehicles under CTI 8708 99 00 - HELD THAT: - The Tribunal found that the goods were supplied to seat manufacturers and formed integral components of the seat mechanism, enabling seat movement, adjustment and locking as part of the completed seat. They were not supplied to vehicle manufacturers as independent automobile accessories. The advance rulings relied upon in the impugned order were held incapable of displacing the binding precedent in the appellant's own case.

The reliance placed on Insulation Electrical [2008 (3) TMI 22 - SUPREME COURT] was also rejected because that decision concerned rail assembly and lock assembly supplied directly to a car manufacturer, whereas the present goods, particularly track assembly and allied components, were different in character and were used as integral parts of car seats.

‘Track assembly’ is an integral part of a complete seat and is supplied to a car seat manufacturer for manufacture of the seats. ‘Gear vertical adjuster’ is affixed in a car seat at a particular location along with brake seat lifter. ‘Track assembly’ helps in the upward and downward seat adjustment. ‘Bar seat track lock’ is used to lock the position of the seat at the required position. It cannot, therefore, be doubted that all the four parts imported by the appellant are parts of car seats and cannot be described as ‘parts’ and ‘accessories’ of motor vehicles. The appellant, therefore, correctly classified the goods under CTI 9401 90 00 as ‘parts of seats’.[Paras 32, 33, 34]

The reclassification under CTI 8708 99 00 was erroneous, and the appellant's classification under CTI 9401 90 00 was upheld.

Judicial discipline - Binding precedent - Commissioner refused to follow the earlier Tribunal decision in the appellant's own case on the ground that, in his view, that decision had not considered certain judgments, advance rulings and explanatory notes- HELD THAT: - The Tribunal held that so long as the earlier decision of the Tribunal had not been set aside by a superior court, it had precedential value and was binding on the Commissioner. The Commissioner did not hold that the earlier decision was factually inapplicable, but declined to follow it because he considered that some materials had not been taken into account. Such an approach was held to be contrary to judicial discipline. A subordinate adjudicating authority is bound to follow the order of the appellate forum, and the mere fact that the authority considers the precedent incorrect or inadequately reasoned furnishes no ground to disregard it. [Paras 20, 26]

Final Conclusion: The Tribunal set aside the Commissioner's order and allowed the appeal. It held that the Commissioner had acted contrary to judicial discipline in disregarding binding precedent in the appellant's own case, and that the imported goods were correctly classifiable under CTI 9401 90 00 as parts of seats.

Benefit of DEPB licenses - DEPB scrips fraudulently obtained - duty exemption under the transferred DEPB scrips -Subsequent cancellation of licence - Fraudulently obtained but genuine licence distinguished from forged scrips

HELD THAT: - The Tribunal held that the determinative distinction is between scrips which are forged or fake and scrips which were actually issued by the licensing authority but were procured by the original holder through fraud. Since there was no finding that the scrips used by the appellant were not genuine or had not been issued by DGFT, and the scrips were valid when utilised, the subsequent cancellation could not defeat the exemption already availed. The reliance placed by the Commissioner (Appeals) on Friends Trading Co. was held to be misplaced because that decision concerned scrips found to be not genuine. [Paras 11, 15, 16, 17]

The denial of DEPB benefit was held unsustainable; the impugned order was set aside and the appeal was allowed.

Final Conclusion: The Tribunal held that where DEPB scrips were genuinely issued and were valid when utilised, later cancellation on account of fraud by the original holder does not deprive the transferee importer of the benefit. On that basis, the impugned appellate order was set aside and the appeal was allowed.

Rejection of transaction value - basis of the statements made by the appellant, the high seas seller, and other importers under section 108 of the Customs Act -Mandatory compliance with section 138B - reliability on untested statements - HELD THAT: - The Tribunal found that the Commissioner (Appeals) had rejected the transaction value solely on the basis of statements of the appellant, the high seas seller and other importers recorded under section 108.

Referring to M/s. Surya Wires Pvt. Ltd. [2025 (4) TMI 441 - CESTAT NEW DELHI] it held that such statements become relevant for proving the facts stated therein only after the maker is examined before the adjudicating authority, the authority forms the requisite opinion regarding admissibility, and the affected party is afforded cross-examination. Since this mandatory procedure under section 138B had not been followed, no reliance could be placed on those statements. [Paras 6, 10, 11, 12]

Final Conclusion: The Tribunal held that statements recorded under section 108 could not be relied upon in adjudication without following the mandatory procedure under section 138B. As the impugned order rested solely on such statements, it was set aside and the appeal was allowed.

Electronic evidence u/s 138C - Rejection of transaction value - Extended period of limitation - Penalty for undervaluation

Electronic evidence u/s 138C - Forensic extraction from mobile phone - Documents retrieved from the director's mobile phone relied upon - HELD THAT: - The Tribunal held that where the mobile phone was undisputedly that of the director, was recovered from him under panchnama, and was thereafter forensically examined, absence of a separate certificate u/s 138C did not render the retrieved material inadmissible. Following Additional Director General, Adjudication, DRI vs. Suresh Kumar and Co. Impex & Ors, the Tribunal treated the recovery proceedings and connected record as sufficient compliance for the purpose of section 138C in the facts of the case. [Paras 7, 8]

The objection to reliance on the electronic records for want of a separate section 138C certificate was rejected.

Rejection of transaction value - Customs valuation - Undervaluation of imported goods - HELD THAT: - The Tribunal held that under Rule 12 of the Valuation Rules, transaction value could be rejected where there was reasonable doubt about its truth and accuracy. In the present case, that doubt arose from the director's statement during investigation and the parallel invoices recovered from his mobile phone showing higher values than those declared. The statements under section 108 were treated only as additional support, but the documentary material itself justified rejection of the declared value and re-determination of assessable value. [Paras 9]

The rejection of transaction value and re-determination of value were upheld.

Confiscation for misdeclaration of value - Liability under section 111(m) - Imported goods confiscation for mismatch in declared value- HELD THAT: - The Tribunal held that once the goods did not correspond in value with what was declared in the Bills of Entry, section 111(m) stood attracted. The legal consequence of liability to confiscation followed from misdeclaration of value, although no physical confiscation or redemption fine could arise because the goods were no longer available. [Paras 11]

The finding that the goods were liable to confiscation under section 111(m) was sustained.

Extended period of limitation - Suppression and wilful misstatement - HELD THAT: - The Tribunal held that section 28(4) applied where short-payment resulted from collusion, wilful misstatement or suppression of facts. Since invoices different from those filed with the Bills of Entry were found in the director's mobile phone and no explanation was offered for that discrepancy, the case justified invocation of the extended period. The absence of any explanation connecting or disconnecting those invoices from the imports weighed against the appellants. [Paras 13, 14]

The extended period of limitation under section 28(4) was rightly invoked.

Penalty under section 114A - Penalty under section 114AA - Proportionality of penalty - HELD THAT: - The Tribunal held that once the ingredients justifying demand under section 28(4) were established, there was no reason to take a different view regarding penalty under section 114A, which is attracted on the same species of conduct. However, considering the facts, the Tribunal found that confirmation of differential duty together with equal penalty under section 114A sufficiently met the ends of justice, and therefore separate penalties on the company and its director under section 114AA did not warrant retention. [Paras 15, 16, 18]

Penalty under section 114A on the importer was upheld, while penalties under section 114AA on both appellants were set aside.

Final Conclusion: The Tribunal upheld the demand of differential duty, rejection of declared value, confiscability of the goods, invocation of the extended period, and the penalty under section 114A against the importer. It, however, set aside the separate penalties imposed under section 114AA on the company and its director, with consequential relief.

DFIA exemption for non-sensitive inputs - Correlation of technical characteristics under DFIA - Binding nature of DFIA licence conditions - Strict construction of exemption notifications

DFIA exemption for non-sensitive inputs - Correlation of technical characteristics under DFIA - applicability of Customs Notification No. 25/2023-Cus dated 01.04.2023 which exempts materials imported into India against a valid DFIA issued by Regional Authority - HELD THAT: - The Authority held that the notification has to be read with the DFIA scheme under the Foreign Trade Policy. On that framework, correlation of technical characteristics, quality and specifications is required only for sensitive inputs specified in Para 4.29 of the Foreign Trade Policy, 2023. In the case of inputs falling under Paras 4.12 and 4.28, only the specific name or description and quantity used in the export product are required to match the shipping bill and authorisation. Relying on Circular No. 20/2025-Cus, the Authority held that for non-sensitive inputs such technical correlation is not a condition for exemption, provided the goods fall within the specific description endorsed in the DFIA licence and conform to the value and quantity limits in the authorisation. [Paras 7, 8]

The applicant can claim the exemption for non-sensitive inputs without establishing correlation of quality, technical characteristics and specifications, subject to the goods being covered by the DFIA, SION norms and other applicable conditions.

Binding nature of DFIA licence conditions - Actual user condition - Strict construction of exemption notifications - HELD THAT: - The Authority rejected the applicant's contention that value cap and actual user conditions in the DFIA licences lacked legal force because they were based on a public notice. It held that the Rajasthan High Court decision in Nrapen Shanker Acharya [2024 (10) TMI 1767 - RAJASTHAN HIGH COURT] did not invalidate SION amendments or licence conditions and instead recognised that policy formulation lies in the executive domain. The Authority construed Notification No. 25/2023-Cus strictly and held that the exemption is available only where the authorisation is valid and compliant with SION norms, including the stipulation that the benefit is unavailable where SION prescribes actual user condition. It further held that conditions embedded in SION norms and carried into the DFIA condition sheet are valid under the policy framework, and Customs authorities are bound to assess imports strictly in terms of the licence as issued, without adding to or diluting those conditions. [Paras 7, 8]

Exemption is admissible only on strict conformity with the DFIA licence, SION norms and attached conditions, and any breach, including violation of actual user condition wherever applicable, renders the benefit inadmissible.

Final Conclusion: The Authority ruled that exemption under Notification No. 25/2023-Cus is available for non-sensitive inputs imported under transferable DFIA without establishing correlation of technical characteristics, quality and specifications. However, the benefit is confined to imports strictly conforming to the DFIA licence, relevant SION norms and all attached conditions, including value and actual user restrictions wherever applicable.

Implementation of approved resolution plan - Scope of verification clause in resolution plan - Admitted homebuyer claims - Time-bound obligations of successful resolution applicant

Scope of verification clause in resolution plan - Admitted homebuyer claims - Jurisdiction to verify claims - The successful resolution applicant could not rely on the verification clause in the approved resolution plan to indefinitely re-scrutinise or effectively reject a homebuyer's claim that had already been admitted by the resolution professional and reflected in the list of creditors. - HELD THAT: - The Appellate Tribunal held that, on a holistic reading of the clause, the successful resolution applicant was only entitled to verify the original documents and proceed to execute a fresh builder-buyer agreement. That clause did not confer a power to reopen, re-adjudicate or reject an already admitted claim merely by questioning the authenticity of documents at a later stage. The claim had been filed in time, admitted in full by the resolution professional, and shown in the creditors' list with nothing pending verification. Once the plan had attained finality, it had to be implemented according to its terms, and the successful resolution applicant could not use the clause to alter crystallised liabilities or resile from its obligations. The Tribunal also held that the function of claim verification lay with the resolution professional, and the successful resolution applicant could not claim an indefinite post-approval right to scrutinise such claims. In applying the principle stated in Amit Nehra & Anr v. Pawan Kumar Garg & Ors [2025 (9) TMI 624 - SUPREME COURT] and Ebix Singapore v COC Educomp Solutions [2021 (9) TMI 672 - SUPREME COURT], the Tribunal concluded that a verified and admitted homebuyer claim could not be displaced at the implementation stage by resort to an open-ended verification exercise. [Paras 79, 93, 94, 99, 100]

The verification clause was held not to authorise the successful resolution applicant to keep the claim pending or reject it after approval of the plan, and the admitted homebuyer claim had to be honoured.

Implementation of approved resolution plan - Time-bound obligations of successful resolution applicant - Homebuyer possession rights - The impugned order directing the appellant to again approach the successful resolution applicant for scrutiny was unsustainable, and the appellant was entitled to handover of title and possession of the allotted flat. - HELD THAT: - The Tribunal found that the successful resolution applicant had failed to act within the timelines prescribed in the resolution plan, including the stipulated period for document verification and the period for delivery of flats. The adjudicating authority, instead of enforcing the approved plan, wrongly permitted a fresh scrutiny long after the contractual period had expired. In the facts of the case, the appellant had produced the builder-buyer agreement and payment receipts, his claim stood fully admitted, and the materials on record sufficiently established his entitlement. The successful resolution applicant, having taken over the corporate debtor on that basis, could not withhold possession by belatedly disputing documents which had already been accepted during the insolvency process. The proper course was enforcement of the plan, not relegation of the appellant to another round of scrutiny. [Paras 95, 96, 97, 101, 102]

The impugned order was set aside, and the respondent was directed to hand over title and physical possession of the allotted flat to the appellant.

Final Conclusion: The appeal was allowed. The Appellate Tribunal held that the successful resolution applicant could not invoke the verification clause to indefinitely re-examine or deny an already admitted homebuyer claim, set aside the impugned order, directed handover of the flat to the appellant, and further directed investigation by IBBI into the serious issues raised regarding the conduct of the insolvency process.

Condonation of refiling delay - Sufficient cause - Implemented resolution plan

Condonation of refiling delay - Sufficient cause - Implemented resolution plan - The Tribunal decided that the appellant had failed to show sufficient cause for condonation of the inordinate delay in refiling the appeal against approval of the resolution plan. - HELD THAT: - The Tribunal held that though delay in refiling is to be construed liberally, such liberal approach depends on the facts of each case. On the facts, the appellant had filed the appeal after approval and implementation of the resolution plan, the appeal itself was beyond the initial period, and despite repeated defect notifications the appellant did not act with promptness. The explanation based on logistical difficulty, bulky documents and intervening holidays was found to be general and lacking in specifics, while the nature of the defects, including non-deposit of requisite fee, showed absence of diligence. The Tribunal therefore found no sufficient cause to condone the prolonged refiling delay. [Paras 12, 13, 14]

Condonation of the refiling delay was refused and, as a consequence, the appeal was rejected.

Final Conclusion: The Tribunal rejected the application for condonation of the refiling delay, holding that no sufficient explanation had been furnished for the inordinate delay in curing repeated defects. Consequently, the memorandum of appeal against approval of the resolution plan was also rejected.

Pecuniary threshold for initiation of insolvency - dismissal of Section 9 petition on the grounds that the petition is not maintainable in terms of Section 4 as the debt default is less than Rupees One Crore - Separate legal entity - Aggregation of debts - debt attributable to the proprietorship

HELD THAT: - The Appellate Tribunal found, on examination of the invoices relied on by the appellant, that the substantial part of the claim related to A.G. Pipes, a sole proprietorship concern, whereas only a small portion of the invoices stood in the name of A.G. Pipes Private Limited, the corporate debtor.

Merely because both concerns were managed by the same person did not permit their liabilities to be treated as one, since the company and the proprietorship were separate legal entities. On that footing, the debt attributable to the proprietorship could not be loaded on the corporate debtor for satisfying the minimum threshold under the Code, and the amount relatable to the corporate debtor alone remained below the statutory limit. [Paras 27, 28, 29, 30]

The dismissal of the Section 9 petition as not maintainable was upheld, as the debt against the corporate debtor alone did not meet the statutory threshold.

Final Conclusion: The appeal was dismissed. The Appellate Tribunal upheld the finding that the appellant could not aggregate the liabilities of a separate proprietorship concern with those of the corporate debtor company to meet the threshold for initiation of insolvency proceedings.

Termination of Development Agreement granted in favour of the Corporate Debtor - Development rights as assets of the corporate debtor - Jurisdiction of the Adjudicating Authority - Transfer during moratorium

Termination of development agreement - Continuance of development rights - Conduct inconsistent with termination - HELD THAT: - The Appellate Tribunal held that the alleged termination letter was brought on record for the first time much later and had not been relied on by the appellant in earlier proceedings. In the proceedings before the Supreme Court arising from the settlement between the Seth Group and Mittal Group, the parties proceeded on the basis that the arrangements with the corporate debtor continued, and liberty was contemplated for future termination in specified contingencies, which was inconsistent with any already concluded termination. The appellant had also taken a clear stand before Haryana RERA and DTCP that development rights had been transferred to five developer companies, including the corporate debtor, and that no development rights remained with it. The requirement in the agreement regarding refund of the amount received was admittedly never performed, and the material on record also showed continuing construction activity after the alleged date of termination. The Tribunal therefore concluded that the alleged termination was never acted upon and could not displace the subsisting development rights of the corporate debtor. [Paras 36, 37, 38, 39, 40]

The plea that the development agreement stood terminated in 2009 was rejected, and the development rights were held to remain with the corporate debtor.

Development rights as assets of the corporate debtor - Jurisdiction of the Adjudicating Authority - Exclusion from CIRP - whether the subject development rights formed part of the corporate debtor's assets, and the appellant's request to exclude the project from the CIRP? - HELD THAT: - The Appellate Tribunal held that development rights claimed by the corporate debtor constituted its asset and were central to the insolvency process. Once the controversy concerned whether such rights subsisted in favour of the corporate debtor, the Adjudicating Authority was competent to decide that question within the CIRP. The precedents relied on by the appellant were found inapplicable because, on the facts as determined in the present case, the development rights had continued with the corporate debtor and were not matters dehors the insolvency proceedings. Since those rights formed part of the corporate debtor's asset base, there was no error in refusing to exclude the project and the appellant's property claim from the CIRP. [Paras 44, 48, 49, 50, 51]

The challenge to the jurisdiction of the Adjudicating Authority failed, and the refusal to exclude the subject project from the CIRP was affirmed.

Transfer during moratorium - Alienation of corporate debtor's assets - Void and non-est transaction - appellant right to transfer the development rights during the pendency of the CIRP - HELD THAT: - Having held that the development rights were assets of the corporate debtor and that the CIRP had already commenced, the Appellate Tribunal held that the moratorium operated against any dealing with those assets. The appellant itself had already moved the Adjudicating Authority seeking exclusion of the land from the CIRP, and while that issue was pending, it had no jurisdiction to transfer the same development rights to a third party. The transfer in favour of Parcela was therefore held to be wholly without jurisdiction, void and non-est, and all actions founded on it were declared to have no validity in law. [Paras 53]

The transfer of development rights in favour of Parcela was held void, non-est and incapable of producing any legal consequence.

Final Conclusion: The appeals were dismissed. The Appellate Tribunal held that the subject development rights continued to vest in the corporate debtor, formed part of its assets in CIRP, and that the subsequent transfer in favour of Parcela was void and non-est; it also directed the resolution professional to take control of the asset and proceed with the resolution process, while imposing costs on the appellant.

Rejection of application of Corporate Insolvency Resolution Process -Pre-existing dispute - Plausible contention requiring further investigation -

Whether there was any genuine pre-existing dispute surrounding the debt claimed by the Operational Creditor as due and payable to them by the Corporate Debtor warranting the rejection of the Section 9 application? - HELD THAT: - The Tribunal held that once a notice of dispute is received, the adjudicating authority is only required to examine whether the dispute is a plausible contention requiring further investigation and not a patently feeble defence. On the record, the corporate debtor had, prior to the demand notice, communicated defects in the earlier consignments, including rusting and non-conformity with specifications, sought replacement, and rejected the goods.

The operational creditor's subsequent emails acknowledging quality deficiency and offering compensation reinforced that the dispute was real and existing in fact. Since all consignments arose from a single purchase order, the adjudicating authority was justified in not treating the third invoice as wholly insulated from disputes relating to the earlier supplies. The Tribunal further held that questions concerning interpretation of CFR INCOTERMS or remedies under the Sale of Goods Act were beyond the remit of the summary jurisdiction exercised in a Section 9 proceeding. [Paras 20, 23, 24, 25, 26]

The finding of pre-existing dispute was upheld, and rejection of the insolvency application was affirmed.

Final Conclusion: The appeal was dismissed. The Tribunal upheld the rejection of the Section 9 application on the ground that the material on record disclosed a genuine pre-existing dispute, while leaving it open to the appellant to pursue any other remedy available under law.

Eligibility to submit a resolution plan u/s 29A(f) of the Insolvency and Bankruptcy Code, 2016 - existing prohibition imposed by SEBI and the compulsory delisting order -Resolution applicant ineligibility - SEBI prohibition from accessing securities market - supremacy of IBC over Section 28A of the SEBI or vice-a-versa

HELD THAT: - The Appellate Tribunal held that Section 29A(f) is attracted once there exists an operative order of SEBI prohibiting the person from trading in securities or accessing the securities market. The order dated 26.06.2018, brought on record by the appellant himself, expressly barred the company's promoters from directly or indirectly accessing the securities market for the stated period, and the appellant admittedly fell within that class. In examining eligibility u/s 29A(f), the Adjudicating Authority is not required, nor vested with jurisdiction, to test the correctness or validity of the SEBI order or to declare it void on the basis of moratorium.

Since the SEBI order remained operative and had never been set aside or challenged before the competent forum, the appellant could not seek to ignore it in insolvency proceedings. The authorities cited on disqualification u/s 164 of the Companies Act or on recovery action during moratorium were held inapplicable, as the present case concerned an existing regulatory prohibition and not a presumed disqualification or recovery proceeding against the corporate debtor. [Paras 14, 16, 19, 22, 23]

The appellant was rightly held ineligible under Section 29A(f) to submit a resolution plan, and the rejection of his application was upheld.

Final Conclusion: The Appellate Tribunal held that the appellant's existing SEBI prohibition from accessing the securities market squarely attracted Section 29A(f), and that the Adjudicating Authority could not examine the validity of that regulatory order in the course of deciding eligibility. The appeal was accordingly dismissed and the order rejecting the appellant's application was affirmed.

Territorial jurisdiction under Article 226 - Forum conveniens - Money-laundering as an independent offence - Material, essential and integral cause of action

HELD THAT: - The Court held that mere assertion of territorial jurisdiction was insufficient when the petition itself showed that the petitioners resided in Gurugram, the impugned searches and seizures were conducted there, the ECIR was registered there, the investigating officers were stationed there, and the PMLA proceedings were also taking place there. It reiterated that the location of the respondent-authority or the passing of orders within Delhi is not by itself a determinative or dominant fact for entertaining a writ petition. Even assuming that a part of the cause of action had arisen in Delhi, the Court held that this alone would not compel exercise of writ jurisdiction, particularly when the material, essential and integral facts lay outside Delhi and the doctrine of forum conveniens applied. The Court further held that registration of the predicate offence in Delhi did not alter this conclusion, since the offence of money-laundering under the PMLA is an independent offence. [Paras 13, 15, 16]

The writ petition was dismissed as not fit to be entertained by the Delhi High Court, with liberty to the petitioners to approach the jurisdictional High Court; all rights and contentions were left open.

Final Conclusion: The Court dismissed the writ petition, holding that the dispute was not fit to be entertained in Delhi since the material and integral cause of action arose in Gurugram and a mere connection with Delhi was insufficient. Liberty was granted to approach the jurisdictional High Court.

Services provided will fall under negative list u/s 66 D(d) of the Service Tax - services provided by the petitioner to the Karnataka Forest Department, Government of Karnataka

HELD THAT:- The issue involved in the present Writ Petition is squarely covered by the decision of the Principal Bench at Bengaluru in [2024 (9) TMI 64 - KARNATAKA HIGH COURT] along with connected matters disposed of.

The Writ of Certiorari is ordered. The Order dated 01.04.2022 passed by Respondent-4 is quashed as far as the petitioner is concerned.

Extended period of limitation - Service tax demand based on Form 26AS/ITR mismatch

Extended period of limitation - Suppression of facts - Invocation of the extended period for raising service tax demand was not sustainable on the facts of the case. - HELD THAT: - The Tribunal followed its earlier decision in M/s New Prakash Roadways Vs. Commissioner of Central Excise and Service Tax, Rohtak [2024 (8) TMI 1103 - CESTAT CHANDIGARH] and held that the show cause notice did not disclose any positive act amounting to fraud, suppression, wilful misstatement or deliberate evasion. Where the demand was founded on third-party data and the essential ingredients for invoking the longer limitation were not established, the extended period could not be applied. [Paras 7, 9]

The demand was liable to fail as time-barred insofar as it rested on the extended period.

Service tax demand based on Form 26AS/ITR mismatch - Proof of taxable service - A service tax demand could not be sustained solely on the basis of differences between figures reflected in income-tax records and ST-3 returns. - HELD THAT: - Relying on its earlier decisions, the Tribunal held that service tax can be levied only after establishing the taxable service, the service recipient, and the consideration received for such service. Figures in Form 26AS or income-tax returns, by themselves, do not establish taxable value for service tax purposes, and a demand cannot be confirmed merely on the basis of mismatch with ST-3 returns without independent verification of taxability and receipt of consideration. [Paras 8, 9]

The demand based only on the difference between ITR/Form 26AS data and ST-3 returns was set aside.

Final Conclusion: The Tribunal set aside the impugned order and allowed the appeal. It held that the extended period had been wrongly invoked and that the demand could not be sustained merely on the basis of mismatch between income-tax data and ST-3 returns.

Exemption to sub-contractors providing services to Government - benefit of Notification No. 25/2012-ST dated 20.06.2012 [Sl. No. (12e) and Sl. 25(a)] to the services rendered - Binding nature of coordinate Bench decisions

HELD THAT: - The Tribunal held that the Revenue's challenge proceeded on an erroneous premise that a judicial decision loses precedential force if the department has accepted it only on account of low monetary effect.

A decision of the Tribunal, so long as it holds the field, remains binding on authorities and forums below it irrespective of whether either party has accepted it. Since the Commissioner (Appeals) had followed earlier Tribunal decisions on the same question holding that the exemption extends to sub-contractors indirectly providing the services to Government or local authorities, no illegality was committed in granting the benefit. [Paras 5, 6]

The appeal filed by the Revenue was dismissed as misconceived, and the order granting exemption to the respondent was upheld.

Final Conclusion: The Tribunal held that the Commissioner (Appeals) rightly followed binding Tribunal precedent extending the exemption to the respondent as sub-contractor. The departmental appeal, founded on the incorrect assumption that non-acceptance or low-tax-effect acceptance affects precedential value, was dismissed.

Services actually provided to the educational institutions - Eligibility of exemption to the services of assessing body under Directorate General of Employment and Training - allegation of non Speaking order - failure to record findings - consideration of material documents - natural justice

HELD THAT: - The Tribunal found that, while the adjudicating authority had referred to the exemption entries and tabulated the value of services, the order contained no determinative findings on the actual nature of services rendered to the concerned authorities, universities or agencies, the terms of the relevant contracts, or the documents evidencing payment. It was also unclear whether the documents said to have been produced by the respondent had at all been examined, since the order neither referred to them nor recorded findings on them. In the absence of such reasoning, the order was held to be non-speaking, making it necessary to remit the matter for fresh adjudication after proper consideration of the material on record. [Paras 7, 8, 9]

The impugned order was set aside to the extent challenged, and the matter was remanded to the adjudicating authority for fresh decision after considering the respondent's submissions and evidence and recording definitive reasons and conclusions.

Final Conclusion: The Tribunal held that the impugned order was not a speaking order, as it failed to deal with the material documents and to record clear findings supporting the grant of exemption. The Revenue's appeal was therefore allowed by remand for fresh adjudication after giving the respondent reasonable opportunity of hearing.

Short payment of service tax - service tax on commission income - appellant were engaged in providing taxable services as "Business Auxiliary Service” and “Transport of goods by Road” -Extended period of limitation - Bona fide belief

Service tax on commission income- Business Auxiliary Service - short payment of service tax - date from which, service tax on commission Income came into force - Bonafide belief - HELD THAT: - As per Notification 13/2003-ST as amended by Notification No.08/2004-ST dated 09.07.2004 only commission agents who remained exempted were those engaged in relation to the sale and purchase of agricultural produce.

The statutory provisions are clear and leave no scope for interpretation. Non-payment of tax on the ground that the same was not charged cannot be considered a valid basis for claiming any bona fide belief.

The decisions relied upon by the learned Advocate are inapplicable to the facts of the present case. Therefore, the appeal is liable to fail.

Submission of the learned Advocate regarding payment of duty for the later period, including the extended period, does not support the appellant’s case. The decisions cited are clearly distinguishable and not applicable to the facts of the case. Accordingly, the plea of bona fide belief cannot be sustained.

Final Conclusion: The appeal was rejected. The Tribunal held that, after 09.07.2004, exemption remained available only to commission agents dealing with agricultural produce, and the appellant's plea against taxability and against invocation of the extended period could not be accepted.

Rejection of appeal for want of proof of authorisation - appeal on behalf of a company - Curable defect in appeal authorisation - Maintainability of company appeal - Appellant did not produce any documents in r/o authorized signatory to establish that he is authorized signatory which is a mandatory requirement of law

HELD THAT: - The Tribunal held that an appeal on behalf of a company is maintainable if filed by a duly authorised person, and any jeopardy to maintainability arising from absence of the authorisation document is a curable defect which must be intimated to the appellant so as to enable rebuttal or rectification. Even where the resolution is not initially available, a timely filed appeal ought to be permitted to be validated by substitution or production of the requisite authorising document. In the present case, the board resolution predated the filing of the appeal and the appellant was made aware of the alleged deficiency only through the impugned order; with the resolution now on record, the defect stood removed and the appeal had to be considered on merits. [Paras 5, 6, 7]

The impugned order was set aside and the matter was remanded to the first appellate authority for fresh decision on merits in compliance with principles of natural justice.

Final Conclusion: The Tribunal held that absence of the board resolution along with the appeal was only a curable procedural defect and could not justify rejection of the appeal without adjudication on merits. Since the authorisation was now available on record, the appeal was restored to the first appellate authority for fresh disposal.

Classification of unmanufactured tobacco - Whether the product made by the appellant is classifiable under CETH 2401 20 90? - appellant deserves to be dismissed for non-exhaustion of alternative remedy? - Whether the appellant is bound by the classification earlier made by them or whether the appellant is entitled to seek reclassification before this Court?

Alternative remedy in writ jurisdiction - Pure question of law - HELD THAT: - The Court held that where the dispute turns purely on classification and does not involve disputed questions of fact, the writ court can entertain the matter despite the existence of an appellate remedy. It further held that, after the writ petitions had been heard on merits and the Single Judge had already affirmed the departmental stand, relegating the appellant to the appellate authority would serve no purpose. The principle applied was that availability of an alternative remedy does not bar writ jurisdiction when the controversy is a pure question of law. [Paras 9, 10]

The objection based on non-exhaustion of alternative remedy was overruled and the writ petition was held to be maintainable.

Estoppel in tax classification - Burden of proof in classification - HELD THAT: - The Court held that in taxation matters there is no estoppel against law and that even a prior admission by the assessee is not conclusive in a dispute on classification. The determinative principle applied was that the burden to justify the tariff entry lies on the Revenue, and the department must independently establish the correctness of the classification it seeks to impose. Since prejudice from the appellant's change of stand was neither pleaded nor shown, the earlier classification adopted by the appellant could not foreclose reconsideration of the correct legal position. [Paras 11]

The appellant was entitled to seek reclassification, and its earlier stand did not bind it in law.

Manufacture - Classification of unmanufactured tobacco - HSN Explanatory Notes - product dealt with by the appellant was classifiable under CETH 2401 20 90 as unmanufactured tobacco OR under CETH 2403 99 10 as chewing tobacco - HELD THAT: - The Court held that the decisive test was whether the process employed by the appellant amounted to manufacture. Referring to the Division Bench ruling in Pachiappa Chettiar V. State of Madras [1961 (9) TMI 48 - MADRAS HIGH COURT] it found that cutting or stripping tobacco and sprinkling or liquoring it with jaggery water to preserve flavour and prevent mould does not bring into existence a new and distinct product. The same approach was reinforced by the HSN Explanatory Notes, which include stemmed or stripped tobacco that is cased or liquored within unmanufactured tobacco, and by the settled test in UOI v. Delhi Cloth and General Mills Co., Ltd. [1962 (10) TMI 1 - SUPREME COURT] that manufacture requires emergence of a product with a distinct name, character and use. Since the department did not dispute the appellant's assertion that nothing apart from jaggery water was added, and no new product emerged from the admitted process, the Revenue failed to discharge its burden. The Court therefore held that so long as the appellant confined its activity to the process approved in Pachiappa Chettiar [1961 (9) TMI 48 - MADRAS HIGH COURT] the goods remained unmanufactured tobacco. [Paras 16, 17, 18, 19, 21]

The impugned classification under CETH 2403 99 10 was rejected, and the appellant's product was held classifiable under CETH 2401 20 90.

Final Conclusion: The Court held that the writ petition was maintainable, that the appellant was not bound by its earlier classification, and that the process undertaken by it did not amount to manufacture. The departmental order and the order of the learned Single Judge were set aside, and the appellant's product was held classifiable under CETH 2401 20 90 as unmanufactured tobacco.

Holistic appreciation of evidence- clandestine removal as well as undervaluation of excisable goods resulting in short payment of duty -

Non holistically evaluating the entire gamut of evidence -as argued adjudicating authority has framed her opinion based on the mode and method of calculation of differential duty and her own observation regarding shortcomings in the investigation - Whether the order dropping the excise duty proceedings was sustainable in the face of the department's evidence of clandestine removal and undervaluation? - HELD THAT: - Tribunal found that the investigation had brought on record extensive material alleging undervaluation, clandestine clearances, collection of differential sale proceeds in cash and routing back of such amounts through various devices, and that the case was not founded on statements alone but on documentary corroboration as well. In that background, the adjudicating authority was required to evaluate the entire body of evidence holistically before discarding the demand as based on presumptions or faulty computation.

Tribunal further held that earlier show cause notices issued on different facts and evidence could not, by themselves, justify rejection of the extended period in the present proceedings; if the impugned notice was founded on fresh and elaborate evidence, limitation had to be examined independently on that material. Since the adjudicating authority had not undertaken such comprehensive evaluation, the order was held unsustainable, while all merits and legal objections were left open for fresh consideration. [Paras 14, 15, 17]

The order dropping the proceedings was set aside and the matter was remanded for de novo adjudication after comprehensive consideration of the entire evidence; all issues, including the respondents' legal objections and limitation, were kept open.

Final Conclusion: The Tribunal held that the proceedings had been dropped without proper and comprehensive appraisal of the evidence and that limitation could not be rejected solely on the basis of earlier notices founded on different facts. The impugned order was therefore set aside and the matter remanded for fresh adjudication, with all issues left open.

Clubbing of clearances - SSI exemption - Extended period of limitation

Clubbing of clearances - SSI exemption - Financial flow back - Joint and several show cause notice - clearances of the two proprietary units clubbed to deny SSI exemption under Notification No. 08/2003-CE dated 01.03.2003 - HELD THAT: - The Tribunal found that both units had been set up separately, initially operated from different premises, and had obtained independent approvals, licences and utility connections. It also recorded that the units were filing VAT and income tax returns separately and paying utility charges separately. Mere operation from the same premises at a later stage, even by husband and wife, was held insufficient to treat them as one unit in the absence of evidence of financial flow back. The Tribunal further held that the issuance of demand notices jointly and severally to both units was itself untenable. On these findings, clubbing of clearances and consequent denial of Notification No. 08/2003-CE were held unsustainable. [Paras 25, 26]

Clubbing of the clearances of the two units was held untenable, and denial of the SSI exemption was set aside.

Extended period of limitation - Departmental knowledge - Penalty - HELD THAT: - The Tribunal recorded that the department was already aware of the appellants' activities and yet invoked the extended period in the subsequent notices covering later periods. In the factual matrix of the case, such invocation was held unsustainable. As the duty demand itself could not survive and the extended period was not available, the confirmed interest and penalties were also held unsustainable. [Paras 25, 27]

The extended period was held not invocable, and the consequential interest and penalties were set aside.

Final Conclusion: The Tribunal held that the two units were independent concerns and that their clearances could not be clubbed for denying SSI exemption. It further held that invocation of the extended period was unsustainable; consequently, the duty demands, interest and penalties were set aside and the appeals were allowed.

Purchase tax liability - Revenue neutrality - Defective online return system - Input tax credit adjustment

Purchase tax liability - Revenue neutrality - Defective online return system - Input tax credit adjustment - The demand of purchase tax was not sustainable in the facts of the case where the assessee's failure to pay purchase tax arose from defects in the department's online return system, and the transaction position remained revenue neutral since neither purchase tax was paid nor input tax credit was availed, while tax on the entire sales turnover had been paid. - HELD THAT: - The Court held that, in law, the assessee was liable to pay purchase tax on the relevant purchases under Section 12 and that such tax had admittedly not been paid. However, the determinative feature was that, till May 2010, the departmental software automatically reflected the purchase tax both in the eligible ITC side and in the output tax payable side, causing the figures to stand tallied and leaving no effective provision for separate payment and subsequent ITC claim. The result was a revenue neutral situation in which the assessee neither gained any benefit nor caused any revenue loss, especially since tax on the entire sales turnover had been paid. The Tribunal erred in proceeding solely on the statutory liability to pay purchase tax and in ignoring the admitted software defect and its direct effect on compliance. In those circumstances, the first appellate authority was right in deleting the levy and its order did not call for interference. [Paras 17, 19, 20, 21]

The questions of law were answered in favour of the assessee, and the Tribunal's order restoring the purchase tax levy was set aside.

Final Conclusion: The Court held that though purchase tax was otherwise payable, the levy could not be sustained in the peculiar facts because the non-payment arose from the department's defective online return mechanism and the matter remained revenue neutral. The common order of the Tribunal was therefore set aside and the revisions were allowed.