TaxTMI Updates e-Newsletter
May 04,2021

Anticipatory bail - summons under Section 70 of the Central Goods and Services Tax Act, 2017 - genuineness of invoices - arrest powers of GST authorities - participation in inquiry not amounting to automatic arrest - benefit or collusion with fake invoice issuer

Anticipatory bail - summons under Section 70 of the Central Goods and Services Tax Act, 2017 - participation in inquiry not amounting to automatic arrest - Anticipatory bail application dismissed on merits as no real apprehension of arrest is shown. - HELD THAT: - The Court examined the summons issued under the Central Goods and Services Tax framework and the material placed by the applicant. The inquiry against the supplier relates to allegedly forged/false invoices and the applicant has been summoned to establish genuineness of invoices and produce documentary evidence. Although GST authorities have statutory power of arrest, the present record contains no material indicating a real apprehension that the applicant will be arrested. Mere participation in an ongoing inquiry and being called to produce documents does not automatically result in accusation or arrest. The applicant was granted liberty to lead evidence before the revenue authorities to establish the genuineness of purchases and payments relied upon by him. In the absence of any material suggesting that the revenue proposes to allege that the applicant took benefit of, or colluded in, issuance of fake invoices by the supplier, anticipatory bail cannot be permitted at this stage. [Paras 4, 5, 6, 7]

Anticipatory bail application rejected; no present real apprehension of arrest and applicant may lead evidence before the revenue authorities.

Final Conclusion: The anticipatory bail petition is dismissed at this stage on the ground that no material establishes a real apprehension of arrest; the applicant is directed to cooperate with the inquiry and may produce evidence to the revenue authorities.

Speaking order - manifest non-application of mind - quash for non-speaking order - detention of goods under statutory detention provision - prima facie discrepancy in documentation - remand for fresh consideration and speaking order de novo - liberty to issue fresh notice and reconsider refund claim

Speaking order - manifest non-application of mind - quash for non-speaking order - Impugned show cause notice and order are non speaking, contain blanks and manifest non application of mind, thereby vitiating them. - HELD THAT: - The show cause notice preceding the impugned order failed to furnish basic particulars of hearing, leaving fields such as date and time blank, and the order itself does not record reasons in the portion designated for a speaking order. These deficiencies demonstrate a failure to apply mind and deprive the proceedings of the requisite adjudicatory rationale. For these reasons the proceedings based on such non speaking documents cannot stand and are liable to be quashed. [Paras 2, 3]

Impugned notice and order quashed on account of being non speaking and exhibiting manifest non application of mind.

Prima facie discrepancy in documentation - detention of goods under statutory detention provision - remand for fresh consideration and speaking order de novo - liberty to issue fresh notice and reconsider refund claim - Liberty granted to respondent to issue fresh notice, re hear the petitioner and pass a speaking order de novo in respect of levy of penalty, in view of prima facie documentary discrepancies. - HELD THAT: - Although the impugned proceedings are quashed for want of reasons, the court noted prima facie discrepancies in the documentary record - including the statement recorded in Form GST MOV 01, the delivery challan and the detention order - which relate to the destination and delivery particulars of the consignment. In light of these discrepancies, the respondent is permitted to initiate fresh proceedings by issuing notice afresh, affording the petitioner an opportunity to be heard, and to pass a reasoned order on the penalty afresh. The exercise has been directed to be completed within six weeks from the date of the order. [Paras 3, 4, 5]

Writ allowed while granting respondent liberty to re issue notice, re hear and pass a speaking order de novo within six weeks; impugned order quashed.

Final Conclusion: Writ petition allowed; impugned non speaking show cause notice and order set aside. Respondent permitted to re issue notice, hear the petitioner and pass a speaking order de novo within six weeks; connected petition closed without costs.

Pre-deposit requirement under Section 107(6)(b) of the CGST Act, 2017 - maintainability of appeal before appellate authority - direction to appellate authority to decide appeal on merits upon compliance with pre-deposit - leave to amend cause title and implead parties at admission stage

Leave to amend cause title and implead parties at admission stage - Leave granted to amend the cause title and to implead the Joint Commissioner (Appeals) as a respondent at the admission stage. - HELD THAT: - The Court, exercising its discretion at the admission stage, permitted the petitioner to amend the cause title to challenge the order dated 24-02-2021 and to implead the Joint Commissioner (Appeals) as a party respondent. The amendment was allowed forthwith to enable adjudication of the petition on its merits rather than on a preliminary objection to party array. [Paras 1]

Amendment of the cause title and impleadment allowed.

Pre-deposit requirement under Section 107(6)(b) of the CGST Act, 2017 - maintainability of appeal before appellate authority - direction to appellate authority to decide appeal on merits upon compliance with pre-deposit - Petitioner directed to make the mandatory pre-deposit of 10% as a condition of maintainability; on deposit the appeal to be heard on merits and the impugned order to stand set aside. - HELD THAT: - The Joint Commissioner (Appeals) had dismissed the petitioner's appeal for failure to make the statutory pre-deposit under Section 107(6)(b) of the CGST Act, 2017. The petitioner stated willingness to make the requisite pre-deposit and the respondents did not object to adjudication on merits upon compliance. Accordingly, the Court disposed of the writ petition by directing the petitioner to make the mandatory pre-deposit of 10% within fifteen days. Upon such deposit, the appellate authority was directed to hear and decide the appeal expeditiously and preferably within six weeks. The impugned order would stand automatically set aside on compliance, thereby restoring the petitioner's right to have the appeal adjudicated on merits. [Paras 3, 5]

Petitioner to deposit 10% within 15 days; on deposit the Joint Commissioner (Appeals) to decide the appeal on merits (preferably within six weeks) and the impugned order stands set aside.

Final Conclusion: Writ petition disposed: leave granted to amend cause title and implead the appellate authority; petitioner directed to make the mandatory 10% pre-deposit within fifteen days, and upon compliance the Joint Commissioner (Appeals) shall hear and decide the appeal on merits expeditiously (preferably within six weeks) with the impugned order standing set aside.

Capital receipt vs revenue receipt - Certified Emission Reduction Credit / Carbon Credits - Taxability under heads of income - Disallowance under Section 14A read with Rule 8D

Capital receipt vs revenue receipt - Certified Emission Reduction Credit / Carbon Credits - Taxability under heads of income - Proceeds realized by the assessee on sale of Certified Emission Reduction Credits (carbon credits) are capital receipts and not taxable income. - HELD THAT: - The Court followed the ratio of earlier decisions of this Court and other High Courts and Tribunals which held that carbon credits arise as an offshoot of environmental considerations and not as an asset generated in the course of business; they are not directly linked to the core business activity and therefore constitute capital receipts rather than business income. The decision applied the established tests distinguishing capital and revenue receipts as expounded by the Apex Court in loom-hours cases and subsequent precedents, and accepted that the characterisation declared by those authorities governs the tax consequence. Having regard to that body of authority, the question of law as to the taxability of sale proceeds of carbon credits was decided against the Revenue and in favour of the assessee. [Paras 4, 11]

Substantial question of law concerning treatment of proceeds from sale of carbon credits answered in favour of the assessee: such proceeds are capital receipts and not taxable.

Disallowance under Section 14A read with Rule 8D - The question concerning disallowance under Section 14A read with Rule 8D is remanded to the Assessing Officer for fresh decision on merits after giving the assessee an opportunity. - HELD THAT: - Pursuant to the reasoning reproduced from the cited decision, the Court left issues relating to the Section 14A/Rule 8D disallowance open and directed remand for fresh adjudication by the Assessing Officer in accordance with law. The remand requires reconsideration on merits and fresh findings by the Assessing Officer with opportunity to the assessee. [Paras 41]

Issue as to disallowance under Section 14A read with Rule 8D remanded to the Assessing Officer for fresh decision on merits.

Final Conclusion: Following earlier Division Bench authority, the appeals are dismissed: the sale proceeds of Certified Emission Reduction/Clean Development Mechanism (carbon) credits are held to be capital receipts and not taxable; the question relating to disallowance under Section 14A read with Rule 8D is remanded to the Assessing Officer for fresh decision.

Capital receipt - carbon credits - capital versus revenue distinction - deduction under Section 80IA - precedential effect of High Court and Tribunal decisions

Capital receipt - carbon credits - capital versus revenue distinction - deduction under Section 80IA - precedential effect of High Court and Tribunal decisions - Proceeds from sale of Certified Emission Reduction Credits (carbon credits) are capital receipts and not taxable as business income, and the question is resolved by applying existing High Court and Tribunal precedents. - HELD THAT: - The Court, following earlier Division Bench decisions of this Court and precedent from the Andhra Pradesh High Court and various Tribunal benches, held that receipts from sale of carbon credits are not an offshoot of the assessee's core business activity but arise from environmental considerations and hence constitute capital receipts. The Court relied on the established tests distinguishing capital and revenue-as expounded by the Supreme Court in cases dealing with sale or purchase of loom-hours and the various tests (enduring benefit, fixed versus circulating capital)-to conclude that no asset of the business is created by generation of carbon credits and that such receipts are not integrally linked to the profit-making apparatus of the undertaking. Given that the matter was covered by binding divisional precedents, the substantial question of law is answered in favour of the assessee and against the Revenue; consequential contentions regarding eligibility for deduction under Section 80IA were addressed in light of the characterization of the receipt as capital in nature.

The characterization of proceeds from sale of carbon credits as capital receipts is affirmed and the Revenue's appeal is dismissed.

Final Conclusion: Following earlier Division Bench and High Court authorities, the High Court held that proceeds from sale of carbon credits are capital receipts (not business income) and, applying that ratio, dismissed the Revenue's appeal for Assessment Year 2010-11.

Reopening of assessment under Section 147 and notice under Section 148 - reason to believe as prerequisite for reassessment - change of opinion - relevance of source of information for initiating reassessment - materials supplied during original assessment but not considered as ground for reopening - operation of proviso to Section 147 and temporal limitation for reopening

Reopening of assessment under Section 147 and notice under Section 148 - reason to believe as prerequisite for reassessment - Validity of initiation of proceedings by issuance of notice under Section 148 for Assessment Year 2005-06. - HELD THAT: - The Court examined the reasons recorded by the Assessing Officer (proceedings dated 05.05.2010) and found that the Assessing Officer identified the claim of loss arising from conversion of shares from trading to investment and the absence of computation as constituting a reason to believe that income chargeable to tax had escaped assessment. The Court held that Section 147 empowers the Assessing Officer to reopen an assessment if there is a reason to believe that income has escaped assessment, and that the correctness of the Assessing Officer's conclusion on disputed facts is a matter for the reassessment proceedings, not for interference in writ jurisdiction. Applying settled principles, the Court rejected the writ challenge to the initiation of reassessment and concluded that there was no jurisdictional infirmity in issuing the notice under Section 148 where the Assessing Officer has recorded reasons to believe within four years. [Paras 3, 23, 25, 26, 31]

The initiation of proceedings under Section 147 by issuing notice under Section 148 for AY 2005-06 is valid and not interfered with.

Change of opinion - materials supplied during original assessment but not considered as ground for reopening - Whether the reassessment is vitiated as a mere change of opinion because the same materials were available during the original assessment. - HELD THAT: - The Court rejected the petitioner's contention that reopening amounted to a change of opinion merely because certain information was furnished in the original return or during original proceedings. It observed that the Assessing Officer may form a reason to believe on the basis of materials that were supplied earlier but not considered, and that 'production before the Assessing Officer of account books or other evidence' does not necessarily amount to disclosure preventing reassessment (citing Explanation 1 to Section 147). The Court emphasised that 'new' material does not have to originate externally; facts or informations made available earlier but not considered can furnish a valid reason to believe and support reopening. [Paras 6, 7, 26, 27, 28]

Reopening of assessment is not vitiated as a mere change of opinion where the Assessing Officer identifies materials (even if previously filed) that were not considered and forms a reason to believe.

Relevance of source of information for initiating reassessment - operation of proviso to Section 147 and temporal limitation for reopening - Whether the source of information (including audit report or documents supplied earlier) or the fact that reopening is within four years affects the jurisdiction to reopen. - HELD THAT: - The Court held that the source of information is immaterial for the purpose of initiating proceedings under Section 147; Section 147 allows reassessment where the Assessing Officer has reason to believe income has escaped. The Court also noted that reopening in the present case was within four years of the end of the relevant assessment year, rendering the proviso (which applies to reopenings beyond four years) inapplicable. Consequently, objections based on source or on applicability of the proviso to Section 147 did not invalidate the reopening in these facts. [Paras 17, 18, 24, 25]

Source of information is irrelevant to jurisdiction; reopening within four years is permissible and the proviso to Section 147 is not attracted in this case.

Final Conclusion: The High Court dismissed the writ petition and declined to interfere with the initiation of reassessment proceedings for AY 2005-06, holding that the Assessing Officer had a permissible reason to believe for reopening, that previously supplied but unadjudicated materials can justify reopening, and that the reopening within four years is within statutory competence; the petitioner must pursue objections and merits in the reassessment process.

Assessment demand payable pending stay - coercive recovery action - interim protection pending appeal - treatment as assessee in default under Section 220(6) - duty on assessee to seek stay before appropriate authority

Assessment demand payable pending stay - coercive recovery action - duty on assessee to seek stay before appropriate authority - Prayer for a writ of mandamus restraining respondents from taking coercive recovery action in respect of the demands raised in the assessment orders was rejected. - HELD THAT: - The Court recorded that the assessments for the specified Assessment Years have resulted in demands which remain payable until such time as they are stayed by the Assessing Authority or a superior authority. The petitioners had not filed any application for stay of the demands or sought protection from being treated as assessee in default in terms of the statutory mechanism referenced in the proceedings. In those circumstances, there was no legal basis to grant the equitable relief of a writ forbidding recovery proceedings; absent an extant stay the statutory demand is enforceable and coercive steps may lawfully follow. The petitioners' failure to avail the appropriate pre-existing remedy to seek stay disentitles them from the extraordinary relief sought in these writ petitions. [Paras 4]

Writ petitions dismissed insofar as they seek to prohibit coercive recovery of the undisputedly payable demands.

Interim protection pending appeal - duty on assessee to seek stay before appropriate authority - treatment as assessee in default under Section 220(6) - Court permitted petitioners to apply to the appropriate authority for interim protection and directed expeditious consideration of any such application. - HELD THAT: - Although the substantive prayer for prohibition of recovery was refused, the Court left open the statutory and administrative remedy of seeking interim protection before the competent authority. The petitioners were allowed to approach the appropriate authority with an application for interim relief; any such application is to be decided in accordance with law and the established parameters governing interim protection in revenue matters. The Court specified a four-week timeframe from receipt for disposal of any application so filed, thereby remitting the factual and discretionary assessment of interim relief to the proper forum. [Paras 5]

If petitioners file an application for interim protection, the appropriate authority shall dispose of it in accordance with law within four weeks of receipt.

Final Conclusion: Writ petitions seeking to restrain recovery of tax demands were dismissed for failure to obtain a stay; petitioners may, however, seek interim protection from the appropriate authority, which is directed to decide any such application in accordance with law within four weeks.

Approval under section 80G - religious purpose - charitable purpose - registration under section 12AA - propagation and dissemination of religious education

Religious purpose - charitable purpose - approval under section 80G - Whether the object of providing accommodation to Sadhus, Saints and Priests for propagation and dissemination of Dharmik Shiksha renders the Trust's objects religious in nature and thereby disentitles it to approval under section 80G. - HELD THAT: - The Tribunal examined the memorandum of association which stated that Geeta Bhawan was to provide accommodation to learned Sadhus, Saints and Priests for propagation and dissemination of Dharmik Shiksha. It found that such accommodation was intended for persons who propagate religious teaching for the benefit of society at large and was not confined to adherents of any particular religion or community. The Tribunal noted that the objective, read as a whole, did not denote a purpose confined to a specific religion or community and therefore could not be characterized as wholly or substantially religious so as to bar approval under section 80G. The Tribunal also observed that the Trust had been granted registration under section 12AA after its objects were considered charitable, and there was no record of that registration having been set aside or of any change in the objects. On these facts the Tribunal concluded that the CIT(E)'s denial of approval solely on the ground that the objects were religious was not justified. [Paras 6]

The Tribunal held that the stated object does not make the Trust's objects religious in nature for the purpose of section 80G and that denial of approval on that ground was unjustified.

Registration under section 12AA - approval under section 80G - Whether prior registration under section 12AA, granted on finding the objects to be charitable, is a material factor precluding refusal of approval under section 80G absent any change or set aside of that registration. - HELD THAT: - The Tribunal placed weight on the fact that the Trust had been registered under section 12AA since 01/03/1976 following consideration that its objects were charitable. There was no evidence on record that the registration had been annulled or that the objects had been altered. In the absence of any change in objects or revocation of registration, the Tribunal treated the earlier registration as a relevant indicium that the objects are charitable and concluded that the CIT(E) could not, without addressing or overturning that registration, refuse approval under section 80G solely on the basis alleged in the impugned order. [Paras 6]

The Tribunal directed that, having regard to the subsisting registration under section 12AA and no contrary material, the CIT(E) should grant approval under section 80G.

Final Conclusion: The appeal is allowed; the Tribunal set aside the CIT(E)'s refusal and directed grant of approval under section 80G, holding that the Trust's objects are charitable and not excluded as religious in the circumstances and noting the subsisting registration under section 12AA.

Invocation of Section 69 for unexplained investment not recorded in books of account - genuineness of transaction - mere suspicion or non-attendance of third party insufficient to make addition - onus shifts to assessing officer to disprove documentary evidences - payments through banking channel and ledger entries as corroborative evidence of source - requirement of corroborative evidence before making addition under unexplained investment doctrine

Invocation of Section 69 for unexplained investment not recorded in books of account - genuineness of transaction - mere suspicion or non-attendance of third party insufficient to make addition - onus shifts to assessing officer to disprove documentary evidences - payments through banking channel and ledger entries as corroborative evidence of source - Addition of Rs. 3,50,00,000 as unexplained investment under Section 69 was not sustainable and was correctly deleted by the Commissioner (Appeals). - HELD THAT: - The Tribunal accepted that the assessee produced comprehensive contemporaneous material - original and tripartite banakhat, cancellation deed, registered sale deeds, ledger accounts, bank payment evidence, declaration of the confirming party (TIPL), and TIPL's return and audited balance sheet - which together established the genuineness of the payment and its reflection in books of account. The Assessing Officer neither disproved these records nor questioned the source of payment. The Tribunal applied the principle that Section 69 is attracted only where the investment is not recorded in the books of account, and that mere non-attendance of the third party summoned, or mere suspicion without supporting evidence, cannot justify making an addition. Once the assessee furnished adequate documentary evidence, the onus shifted to the Assessing Officer to bring contrary material, which was not done. Reliance was placed on the jurisdictional ratio that supports deletion where investments are shown in books and corroborated by records. On these determinative grounds the addition was held unsustainable. [Paras 8]

Addition of Rs. 3,50,00,000 under Section 69 deleted; Revenue's appeal dismissed.

Final Conclusion: The Tribunal upheld the deletion of the addition under Section 69 for Assessment Year 2011-12, holding that the payment was recorded in the assessee's books, corroborated by bank entries and confirmations, and that the Assessing Officer failed to discharge the onus to disprove the genuineness; Revenue's appeal is dismissed.

Addition under section 68 as unexplained cash credit - identity and creditworthiness of donors - genuineness of transactions evidenced by account payee cheques and donor declarations - onus on assessee to substantiate gifts - treatment of documentary evidence vis-a -vis suspicion or absence of donor testimony

Addition under section 68 as unexplained cash credit - identity and creditworthiness of donors - genuineness of transactions evidenced by account payee cheques and donor declarations - onus on assessee to substantiate gifts - Whether the gifts of Rs. 4,00,000/- received by the assessee could be treated as unexplained cash credit under section 68 after the assessee produced cheque payments, donor declarations and tax return acknowledgements. - HELD THAT: - The assessee produced account payee cheques for the gifts, donor declarations containing relevant particulars including PANs, and photocopies of the donors' income-tax return acknowledgements showing business income. The Tribunal found that by producing these contemporaneous documentary records the assessee discharged the primary onus to establish the identity and creditworthiness of the donors and the genuineness of the transactions. The authorities below had relied on doubt and suspicion - including the non-appearance of donors under summons and perceived improbability of donors' incomes - without adducing material to dislodge the documentary evidence. The Tribunal held that such mere suspicion, in the absence of evidence contradicting the documents, was insufficient to treat the receipts as unexplained cash credit under section 68 and to sustain the addition. [Paras 5, 6]

The addition of Rs. 4,00,000/- treated as unexplained cash credit under section 68 is deleted and the appeal is allowed.

Final Conclusion: Documentary evidence in the form of account-payee cheques, donor declarations and income-tax return acknowledgements discharged the assessee's primary onus to prove identity, creditworthiness and genuineness of gifts; additions sustained on mere suspicion and donors' non-appearance were deleted and the appeal was allowed.

Retracted statement under section 132(4) and its evidentiary value - admissibility of declaration made during search and seizure proceedings - only real income to be taxed (no tax on notional/hypothetical income) - assessment under section 153A proceedings - unexplained cash credits and explanation under section 68

Retracted statement under section 132(4) and its evidentiary value - admissibility of declaration made during search and seizure proceedings - only real income to be taxed (no tax on notional/hypothetical income) - Validity of addition of the declared amount of Rs. 26 crores based on the assessee's admission during search and subsequent retraction and revised computation. - HELD THAT: - The Tribunal examined whether the affidavit/statement made during the search admitting Rs. 26 crores could sustain an addition when (a) the declaration did not furnish year wise, head wise or concern wise particulars, and (b) the assessee subsequently retracted the declaration and filed a revised computation and returns reflecting substantially lower real income. Reliance was placed on CBDT instructions and judicial authorities holding that a confession made in search/survey proceedings is not conclusive and must be supported by corroborative documentary material before it can be the basis for addition. Applying the principle that only real income can be taxed and observing absence of particulars or corroborative evidence, the Tribunal held there was no basis to treat the declared amount as real income in the assessee's hands and set aside the CIT(A)'s confirmation of the addition. [Paras 8]

Addition of Rs. 26 crores based on the search declaration set aside; the grounds raised by the assessee on this issue are allowed.

Unexplained cash credits and explanation under section 68 - Deletion of addition of bank deposits of Rs. 2.39 crores treated as unexplained cash credits. - HELD THAT: - The Tribunal considered the cash book, ledger and opening cash balances produced before it and noted that the assessee had sufficient cash balances on the relevant dates to account for the deposits. The lower authorities had not rejected those books or the opening balances, and the Tribunal accepted the assessee's explanation that the deposits were from available cash balances and admitted income. On this factual appraisal, the Tribunal found the deletion by the CIT(A) justified and restored that view. [Paras 10]

Order of the CIT(A) deleting the addition of Rs. 2.39 crores is upheld; the revenue's cross objection is dismissed.

Assessment under section 153A proceedings - Challenge to the invocation of section 153A on the ground of absence of incriminating material. - HELD THAT: - The Tribunal noted the CIT(A)'s reasoning that invocation of section 153A was part of the statutory search/assessment process and that the question of incriminating material was not determinative of maintainability of proceedings under section 153A in the facts of the case. The Tribunal found no reason to interfere with the CIT(A)'s conclusion and dismissed the assessee's grounds attacking invocation of section 153A. [Paras 8]

Grounds contesting invocation of section 153A are dismissed; the section 153A proceedings were held to be validly invoked.

Final Conclusion: The appeal is partly allowed: the Tribunal set aside the addition of Rs. 26 crores made on the basis of the search declaration, upheld deletion of the Rs. 2.39 crores unexplained bank deposits, and dismissed the assessee's challenge to the invocation of section 153A; the revenue's cross objection is dismissed.

Depreciation on second-hand assets - installation date versus acquisition/ownership date - interpretation of New Appendix-I of the Income Tax Rules, 1962 - rate of depreciation for windmills - ownership requirement for claiming depreciation

Depreciation on second-hand assets - installation date versus acquisition/ownership date - interpretation of New Appendix-I of the Income Tax Rules, 1962 - rate of depreciation for windmills - Whether windmills installed on or before 31.03.2012 but acquired by the assessee thereafter are eligible for depreciation at the pre-amendment rate of 80% - HELD THAT: - The New Appendix-I and CBDT Notification No.15/2012 refer specifically to windmills "installed on or before 31.03.2012" being eligible for depreciation at 80%. The Tribunal held that the statutory language emphasises the date of installation and does not condition the higher rate on the date of acquisition or change of ownership. Where the asset remained installed (was not dismantled and re-erected) and was acquired on an "as is where is" basis after 31.03.2012, the fact of prior installation falls squarely within the description in Appendix-I. Consequently, the Assessing Officer's and CIT(A)'s approach - treating the date the assessee became owner as determinative and applying the amended 15% rate - was contrary to the rule's plain language and intent. Applying the rule as framed, windmills installed on or before 31.03.2012 retain eligibility for depreciation at 80% even when purchased by a subsequent owner after that date. [Paras 8, 9]

Depreciation at 80% is allowable for windmills installed on or before 31.03.2012 even if acquired by the assessee after that date; the orders of the Assessing Officer and CIT(A) are set aside and the Assessing Officer is directed to allow depreciation at 80%.

Final Conclusion: The appeal is allowed: the Tribunal reversed the CIT(A) and Assessing Officer's disallowance, holding that windmills installed on or before 31.03.2012 are entitled to depreciation at 80% notwithstanding their subsequent acquisition by the assessee, and directed re-computation accordingly.

Revisional jurisdiction under section 263 - Erroneous and prejudicial to the interests of revenue - Application of mind by Assessing Officer - Lack of inquiry versus inadequate inquiry - Explanation 2 to section 263 (clauses (a) and (b)) - Deeming provision and strict interpretation of deeming fiction - When two views are possible - view sustainable in law

Revisional jurisdiction under section 263 - Erroneous and prejudicial to the interests of revenue - When two views are possible - view sustainable in law - Whether the Principal Commissioner of Income Tax rightly exercised revisional jurisdiction under section 263 by holding the assessment order for AY 2013-14 to be erroneous and prejudicial to the interests of revenue - HELD THAT: - The Tribunal held that the twin conditions for exercise of section 263 - that the AO's order is erroneous and, by reason of that error, prejudicial to revenue - must be satisfied and that where two views are possible the AO's view cannot be branded erroneous unless it is unsustainable in law. On the facts the Tribunal found that the AO had examined the assessee's documentary material, had raised queries and had applied his mind; revenue did not demonstrate that the AO's view was impermissible or unsustainable in law. The PCIT's objections amounted to disagreement with the AO's view and to an assertion of preferable enquiries rather than a recorded finding that the AO's order was legally unsustainable. Consequently the PCIT's exercise of revisional jurisdiction was not justified and the section 263 order was quashed. [Paras 13, 16, 20, 30, 31]

Order under section 263 was wrongly invoked and is quashed; appeal of the assessee is allowed.

Application of mind by Assessing Officer - Lack of inquiry versus inadequate inquiry - Whether the Assessing Officer failed to make necessary enquiries or verification regarding the foreign exchange loss and speculation profit so as to render the assessment erroneous - HELD THAT: - The Tribunal found that the assessee had furnished detailed documents and replies during assessment (including attendance and filings on multiple dates) and that the AO had called for and examined bank advices, shipping bills, ledgers, confirmations and other evidence relevant to foreign exchange differences and speculation transactions. On that basis the AO had applied his mind and taken a view. The PCIT's finding that the AO made no inquiries was factually incorrect; mere dissatisfaction with the extent of enquiries or a preference for other modes of inquiry cannot convert an inquiry that took place into 'lack of inquiry'. Absent demonstration that the AO's view was legally unsustainable, the assessment could not be treated as erroneous for want of inquiry. [Paras 15, 16, 17, 30]

AO did make inquiries and apply his mind; there was no lack of inquiry rendering the assessment order erroneous.

Explanation 2 to section 263 (clauses (a) and (b)) - Deeming provision and strict interpretation of deeming fiction - Scope and application of Explanation 2 to section 263 (clauses (a) and (b)) and whether the PCIT correctly relied upon it to deem the AO's order erroneous - HELD THAT: - The Tribunal explained that Explanation 2 is a deeming provision and must be strictly construed; it operates only when the CIT records a clear factual finding that one or more of the specified situations (e.g., assessment passed without inquiries or allowing relief without inquiry) obtain. The 'opinion' of the CIT under the Explanation must be a considered opinion founded on objective material and correct facts; the Explanation cannot be read to give unfettered power to reopen assessments merely because the CIT would have preferred different enquiries. Consequently, the PCIT could not rely on a bare opinion that further inquiries 'should have' been made without independently examining the assessee's replies and recording findings that the AO's view was unsustainable or that the specified clause(s) factually obtained. [Paras 23, 24, 25, 26, 27]

Explanation 2 cannot be invoked absent clear factual findings by the PCIT; the PCIT did not record the necessary factual findings and therefore misapplied Explanation 2.

Final Conclusion: The Tribunal quashed the Principal CIT's order under section 263 and allowed the assessee's appeal for AY 2013-14, holding that the AO had made inquiries and applied his mind and that the PCIT had not established that the AO's view was legally unsustainable or that any clause of Explanation 2 factually obtained.

Penalty under section 271B for failure to furnish tax audit report - Furnishing of Tax Audit Report under section 44AB - Extended due date by Central Board of Direct Taxes under exercise of powers - Reasonable cause and absence of wanton/default for delay

Penalty under section 271B for failure to furnish tax audit report - Reasonable cause and absence of wanton/default for delay - Extended due date by Central Board of Direct Taxes under exercise of powers - Furnishing of Tax Audit Report under section 44AB - Sustainability of penalty under section 271B for delayed filing of tax audit report where return and audit report were filed after the statutory due date but within the period following a CBDT extension and where the assessee attributed delay to technical difficulties and work pressure. - HELD THAT: - The Tribunal examined whether the penalty under section 271B was justified for a 29-day delay in filing the return and tax audit report. It noted that the statutory due date was 30.09.2013 but the CBDT had issued a notification extending the due date under exercise of its powers to 31.10.2013. The assessee, a firm of Chartered Accountants, explained that the delay arose from technical difficulties in electronically filing the return of a trust and pressure of work, and that the delay was marginal and not wanton. Having considered the explanations, the submissions made before the lower authorities and the material on record, the Tribunal found that the delay did not amount to a wanton act and that a reasonable cause for the delay was established. Applying these conclusions, the Tribunal set aside the orders confirming the penalty and directed deletion of the penalty under section 271B. [Paras 5]

Penalty under section 271B deleted and assessee's appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the orders imposing penalty under section 271B for the marginal delay in filing the tax audit report, found reasonable cause for the delay, and directed the Assessing Officer to delete the penalty.

Condonation of delay - remand for fresh adjudication - ex-parte order - opportunity of being heard

Condonation of delay - Condonation of delay in filing the appeal before the Tribunal - HELD THAT: - The affidavit filed by the assessee explained that the delay of 170 days in filing the appeal was due to illness and other unavoidable circumstances. The Tribunal examined the explanation and, in the interest of justice, found the reasons sufficient to condone the delay and proceed to adjudicate the appeal on merits. The Tribunal thus exercised its discretion in favour of the assessee to admit the appeal despite the delay. [Paras 3]

Delay of 170 days in filing the appeal is condoned and the appeal is admitted for adjudication on merits.

Remand for fresh adjudication - ex-parte order - opportunity of being heard - Whether the matter should be remitted to the Assessing Officer for fresh consideration after ex-parte orders were passed - HELD THAT: - The Tribunal noted that both the Assessing Officer and the Commissioner (Appeals) had posted the case on several occasions but neither the assessee nor his representative appeared, leading to ex-parte orders based on material on record. While finding merit in the Revenue's contention that opportunities had been given, the Tribunal considered the assessee's plea and, in the interest of justice, remitted the matter to the Assessing Officer for fresh adjudication with a direction to provide one more opportunity of being heard. The Tribunal cautioned the assessee to cooperate promptly and observed that, if the assessee fails to appear, the Revenue may proceed to pass appropriate orders on merits based on the record. [Paras 5, 6]

Matter remitted to the Assessing Officer for fresh consideration on merits with a further opportunity to the assessee to be heard; assessee cautioned to cooperate.

Final Conclusion: The Tribunal condoned the delay in filing the appeal and remitted the matter to the Assessing Officer for fresh adjudication after granting another opportunity of hearing; the assessee is cautioned to cooperate, failing which the Revenue may proceed to pass orders on the available record.

Disallowance under section 69C - deduction under Section 43B - remand for verification to the Assessing Officer - treatment of statutory filing fee as capital expenditure - admission of additional grounds under the National Thermal Power Co. principle - admission of additional evidence and remand for fresh adjudication

Disallowance under section 69C - deduction under Section 43B - remand for verification to the Assessing Officer - Addition of Rs. 87,70,509/- treated as unexplained expenditure in respect of excise duty and its allowability - HELD THAT: - The Assessing Officer disallowed the amount debited as 'Excise duty' on the basis that the assessee had utilized CENVAT credit and had not paid the excise out of its books for the year. The Tribunal observed that Section 43B(a) permits deduction for sums payable by way of tax, duty or cess only when actually paid, and that CENVAT credit under Central Excise Rules does not constitute a 'sum payable' within that provision. Given the factual dispute whether the excise liability was paid out of the assessee's books in the relevant year, the Tribunal directed a remand to the Assessing Officer to ascertain payment and to decide the matter in accordance with law, permitting the assessee to substantiate its claim with documentary evidence. [Paras 6]

Issue remitted to the Assessing Officer for verification of payment; grounds treated as allowed for statistical purposes.

Disallowance under section 69C - remand for verification to the Assessing Officer - Addition of Rs. 22,07,373/- as unexplained expenditure on account of discrepancies between amounts payable as per assessee and receivable as per creditors - HELD THAT: - The AO treated differences between the assessee's payables and creditors' receivables as unexplained and created bogus creditors, disallowing the aggregate under section 69C. The Tribunal noted that it was not evident whether the differences related to the year under consideration or were carry-forwards from earlier years. Where differences pertain to prior years they cannot be added to the present year; where they arise in the relevant year reconciliation and an opportunity to the assessee to explain are required. In the interest of justice the Tribunal directed the AO to reconcile the amounts for the year under consideration and decide after affording the assessee opportunity to be heard. [Paras 7]

Matter remitted to the Assessing Officer for reconciliation of payables and receivables and fresh adjudication; ground treated as allowed for statistical purposes.

Invocation of section 68 - remand for verification to the Assessing Officer - Addition under section 68 in respect of alleged unexplained additions to fixed assets for which bills/invoices were not produced - HELD THAT: - The AO disallowed additions to fixed assets for want of bills/invoices and invoked section 68. The CIT(A) and the Tribunal observed that the correctness of additions requires verification of supporting bills/invoices, vouchers and bank payments. As the assessee had not substantiated the claim before the Tribunal, the matter was remitted to the Assessing Officer to verify documents and bank accounts and decide in accordance with law after providing reasonable opportunity to the assessee to produce documentary evidence. [Paras 8]

Issue remitted to the Assessing Officer for verification of invoices/vouchers and bank payments; ground allowed for statistical purposes.

Treatment of statutory filing fee as capital expenditure - Disallowance of ROC filing fee of Rs. 3,44,340/- treated as capital expenditure - HELD THAT: - The AO disallowed the ROC filing fee by treating it as capital expenditure, relying on Brooke Bond India Ltd. The assessee contended it was revenue in nature. Having considered the precedent cited by the authorities below, the Tribunal found that the amount was paid in connection with increase of authorized share capital and is capital in nature. There was no infirmity in sustaining the disallowance. [Paras 9]

Order of the CIT(A) upholding the AO's disallowance is affirmed and the grounds raised by the assessee on this point are dismissed.

Admission of additional grounds under the National Thermal Power Co. principle - admission of additional evidence and remand for fresh adjudication - Admission of additional grounds/evidence (including claim of bad debts) raised before the Tribunal for the first time and direction for fresh adjudication - HELD THAT: - Relying on the principle in National Thermal Power Co. (allowing ITAT to examine questions of law raised first before it), the Tribunal admitted the legal additional grounds and accepted additional evidence tendered for the claim of bad debts. In the interests of justice the Tribunal remitted the claim of bad debts (and other admitted additional grounds where evidence was supplied) to the Assessing Officer for fresh adjudication after taking the additional evidence on record. [Paras 2, 10]

Additional grounds and evidence admitted; matter remitted to the Assessing Officer for fresh adjudication on the admitted grounds/evidence; grounds allowed for statistical purposes.

Final Conclusion: The appeal is partly allowed for statistical purposes: the Tribunal remitted several factual issues (excise duty disallowance, creditors' discrepancies, and additions to fixed assets) to the Assessing Officer for verification and fresh decision after affording the assessee opportunity to produce evidence; it upheld the disallowance of the ROC filing fee as capital expenditure; additional grounds and evidence (including the bad debts claim) were admitted and remitted to the Assessing Officer for fresh adjudication.

Revisionary jurisdiction under section 263 - Addition under section 68 - Adequacy of inquiry by Assessing Officer - Acceptance of identity, genuineness and creditworthiness - Reassessment pursuant to revisional directions - Doctrine of merger in revisionary proceedings - View of Assessing Officer being a plausible view/unsustainable in law

Revisionary jurisdiction under section 263 - Doctrine of merger in revisionary proceedings - View of Assessing Officer being a plausible view/unsustainable in law - Validity of the second revisionary order passed by the Pr. Commissioner under section 263 revisiting the assessment for AY 2012-13 - HELD THAT: - The Tribunal held that the second revisional order dated 27/03/2019 was not sustainable. The Assessing Officer had conducted de novo assessment pursuant to the first revisional directions, examined documents, issued summons/notices to investor entities, and recorded and verified voluminous material. Where the Assessing Officer, acting as investigator and adjudicator, takes a possible view based on inquiry and materials on record, the revisional jurisdiction under section 263 cannot be invoked merely because the Commissioner disagrees. The Tribunal applied the principle that section 263 requires the revisional authority to show that the AO's order is erroneous and prejudicial to revenue and that the AO's view is unsustainable in law; neither condition was met here. The Tribunal also observed that the second Pr. CIT did not identify specific omissions in the AO's compliance with the directions of the first revisional order, nor did he produce material to rebut the AO's factual satisfaction, and that reopening the same subject-matter after compliance would imperil finality (doctrine of merger). Accordingly the second revisional order was quashed. [Paras 11, 12]

Second revisional order dated 27/03/2019 under section 263 quashed; appeal allowed.

Addition under section 68 - Adequacy of inquiry by Assessing Officer - Acceptance of identity, genuineness and creditworthiness - Reassessment pursuant to revisional directions - Whether the Assessing Officer in the reassessment complied with directions and made adequate inquiry to accept the share capital and premium under section 68 for AY 2012-13 - HELD THAT: - On detailed review the Tribunal found that the AO in the second assessment complied with the first Pr. CIT's specific directions: he examined the assessee's books, investor bank statements, audited accounts and filings; issued notices under section 133(6) and summons under section 131 to investor companies and their directors; obtained and verified PAN, ITR acknowledgements, audited financial statements and bank evidences; and recorded statements and documentary material running into hundreds of pages. The AO accepted the identity, creditworthiness and genuineness of the shareholders on the basis of these inquiries, a conclusion the Tribunal held to be a plausible view. Revenue produced no material to show the AO's factual satisfaction was erroneous or unsustainable in law. Consequently, the AO's decision not to make additions under section 68 could not be branded as the kind of erroneous and prejudicial order that justifies exercise of revisional jurisdiction. [Paras 54, 55, 56]

AO's reassessment findings accepting share capital and premium under section 68 upheld as a plausible view; no lack of enquiry or inadequacy found.

Final Conclusion: The Tribunal quashed the Pr. CIT's second revisional order dated 27/03/2019 under section 263 for AY 2012-13 and upheld the Assessing Officer's reassessment which, after compliance with the first revisional directions, accepted the identity, genuineness and creditworthiness of the shareholders and declined additions under section 68; the assessee's appeal is allowed.

Opportunity of hearing - service of notice at correct address - ex parte assessment and ex parte appellate order - addition treated as unexplained cash credit under section 68 - set aside and remand for fresh assessment

Service of notice at correct address - opportunity of hearing - ex parte assessment and ex parte appellate order - set aside and remand for fresh assessment - Orders of the Assessing Officer and the Commissioner (Appeals) were set aside and the matter remanded for fresh assessment after holding that the assessee was not given proper and sufficient opportunity of hearing due to notices being sent to an incorrect address. - HELD THAT: - The Tribunal found on the record that notices under section 142(1) and subsequent letters issued by the Assessing Officer during reassessment proceedings were addressed to an incorrect address and therefore were not received by the assessee; this position is not disputed by the Department. The Commissioner (Appeals) dismissed the appeal of the assessee ex parte for non prosecution, but the Tribunal concluded that the absence of service resulted in the assessee not being afforded a proper opportunity of hearing during both assessment and appellate proceedings. In view of this procedural defect, the Tribunal held it just and proper to set aside the orders under challenge and to restore the matter to the file of the Assessing Officer for completion of the assessment afresh after giving the assessee proper and sufficient opportunity to be heard. The Tribunal recorded the assessee's undertaking to cooperate and comply with proceedings so that the Assessing Officer may complete the reassessment expeditiously. [Paras 4, 5]

Orders of the authorities below set aside and matter remanded to the Assessing Officer for fresh assessment after giving the assessee proper and sufficient opportunity of hearing; appeal allowed for statistical purposes.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, set aside the ex parte assessment and ex parte appellate order due to defective service and denial of opportunity of hearing, and remanded the matter to the Assessing Officer for fresh assessment after affording the assessee a proper hearing.

Right of lien of carrier and ship-owner - definition of "Merchant" and joint and several liability - liability for detention, demurrage and destination port charges - Order XXXIX Rules 1 and 2 CPC - remand for fresh consideration - suspension of interim order pending fresh adjudication - territorial jurisdiction clause in bill of lading - valuation under The Suits Valuation Act, 1887 and court fees under The Court Fees Act, 1870

Failure to consider defendants' written submissions - remand for fresh consideration - Impugned interim order set aside for non-consideration of contesting defendants' pleadings and written submissions; matter remitted for fresh decision. - HELD THAT: - The High Court found that the learned Trial Court, while granting the interim relief, did not advert to or record any of the written submissions and the reply filed by defendant nos. 5 and 6 and proceeded solely on the plaintiff's oral submissions. The court observed that the record contained detailed written submissions and statutory and contractual defences which were ignored. In view of the absence of any consideration of the defendants' stand, the High Court refrained from deciding the merits and remitted the interim application to the Trial Court for fresh adjudication after considering all pleadings, documents and rival contentions and applying the tests under Order XXXIX Rules 1 & 2 CPC. [Paras 8, 16, 17, 18, 19]

Impugned order set aside; matter remitted to the Trial Court to decide the interim application afresh after considering the defendants' written submissions and other materials.

Right of lien of carrier and ship-owner - definition of "Merchant" and joint and several liability - liability for detention, demurrage and destination port charges - territorial jurisdiction clause in bill of lading - Contractual and statutory defences raised by defendants (lien, merchant's liability for charges, and forum/choice of law clause) were not adjudicated on merits and require fresh consideration by the Trial Court. - HELD THAT: - The contesting defendants had relied on the contractual terms printed on the bill of lading (including the definition of 'Merchant', clauses as to merchant's responsibility and carrier's lien) and on statutory lien provisions under the Major Port Trust Act to justify withholding delivery until charges were paid. The High Court noted these defences were placed on record (including clauses 12, 15 and clause 25 as to Hamburg jurisdiction and German law) but were not considered in the impugned order. Since these contentions go to the entitlement to retain goods and to the liability to pay invoices, the High Court declined to express any opinion on their merits and directed the Trial Court to consider and decide them in the fresh hearing. [Paras 11, 12, 14, 15, 19]

These contractual and statutory defences are remitted to the Trial Court for adjudication on merits in the course of fresh disposal of the interim application.

Order XXXIX Rules 1 and 2 CPC - suspension of interim order pending fresh adjudication - Interim operational stance pending remand: impugned order to remain suspended until the Trial Court decides the interim application afresh. - HELD THAT: - While refraining from expressing any view on the merits, the High Court directed that the impugned interim order dated 19.11.2020 shall remain suspended until the Trial Court disposes of the interim application after fresh consideration under Order XXXIX Rules 1 and 2 CPC. The parties were directed to appear before the Trial Judge on a fixed date and the Trial Court was requested to give sufficient opportunity to both sides and to endeavor to dispose of the interim application at the earliest. [Paras 19, 20, 21]

Impugned order suspended; Trial Court to decide interim application afresh under Order XXXIX Rules 1 & 2 CPC.

Valuation under The Suits Valuation Act, 1887 and court fees under The Court Fees Act, 1870 - Procedural deficiency in the plaint valuation and court-fee: plaintiff to be afforded opportunity to re-value and pay appropriate court fees. - HELD THAT: - The High Court observed that the suit valuation did not comply with The Suits Valuation Act, 1887 and that appropriate court-fees under The Court Fees Act, 1870 had not been paid on the distinct reliefs claimed. The Trial Judge was directed to permit the plaintiff to segregate each claimed relief, value the suit correctly and deposit the appropriate ad-valorem or fixed court-fees before proceeding further. [Paras 22]

Plaintiff to be given opportunity to re-value the suit and to pay appropriate court-fees; Trial Court to take action accordingly.

Final Conclusion: The High Court set aside the impugned interim order for failure to consider defendants' written submissions and defences, suspended that order, and remitted the interim application to the Trial Court for fresh disposal under Order XXXIX Rules 1 & 2 CPC after affording both parties full opportunity; the Trial Court was also directed to permit the plaintiff to rectify valuation and court-fee deficiencies.

Anticipatory bail - Conditions for grant of anticipatory bail - Section 41A Cr.P.C. - notice to appear in lieu of arrest - Economic offences/duty evasion under the Customs Act - Custody of documents with investigating agency

Anticipatory bail - Conditions for grant of anticipatory bail - Economic offences/duty evasion under the Customs Act - Custody of documents with investigating agency - Grant of anticipatory bail in the event of arrest in File No. DRI/AZU/GI-02/E.NQ-01/(INT-02)/2020 for alleged offences under Section 135 of the Customs Act, 1962 - HELD THAT: - The Court found that the alleged undervaluation and duty evasion are recorded and that relevant documents are in the custody of the Customs Department. The petitioner had been given interim protection and had appeared on multiple occasions for investigation; the Court noted that no convincing reason was shown by the respondent why custody of the petitioner was necessary when documentary material is already with the Customs. Having regard to these facts and to Section 41A Cr.P.C. as the appropriate mechanism to secure attendance where arrest is not required, the Court exercised its discretion to grant anticipatory bail in the event of arrest. The Court attached conditions to the grant, namely: (a) the petitioner must join investigation on being given three days' notice by the authorities and co-operate, failing which bail will be cancelled; (b) the petitioner shall furnish a personal bond of Rs. 1,00,000 with two sureties of the like amount to the satisfaction of the Trial Court; and (c) the petitioner shall provide all mobile numbers to the Investigating Officer and keep them operational at all times. These measures were framed to balance the investigative needs and the liberty of the petitioner. [Paras 8, 9]

Anticipatory bail granted in the event of arrest subject to specified conditions of cooperation, personal bond with sureties, and furnishing operational mobile numbers.

Section 41A Cr.P.C. - notice to appear in lieu of arrest - Economic offences/duty evasion under the Customs Act - Whether allegations of transfer of money through non-banking/hawala channels required determination in this petition - HELD THAT: - The Court observed that the allegation of transfer of money through non-banking/hawala channels pertains to investigation by another authority and is not germane to the present petition under consideration. The Court declined to examine or decide that allegation in the present proceedings and left it open for the concerned authority to investigate and, if necessary, take action including arrest pursuant to a separate case. The Court further indicated that if arrest is not required for the present matter, an appropriate notice under Section 41A Cr.P.C. can be issued to secure the petitioner's attendance for investigation. [Paras 8]

Allegations regarding non-banking/hawala transfers are not addressed in this petition and are reserved for other authorities; attendance may be secured by notice under Section 41A Cr.P.C. if arrest is not necessary.

Final Conclusion: The petition for anticipatory bail is allowed in the event of arrest in the DRI case concerning alleged undervaluation/duty evasion under the Customs Act, 1962, subject to the petitioner joining and cooperating with investigation on three days' notice, furnishing a personal bond with two sureties, and providing operational mobile numbers; separate allegations of hawala transfers are not decided and are left to other authorities to investigate.

Reduction of share capital - special resolution - compliance with Section 66 of the Companies Act, 2013 - power under Memorandum and Articles to reduce capital - auditor's certificate on accounting treatment - notice to Registrar and creditors under the Rules, 2016 - confirmation by the Tribunal - registration and publication of minute

Reduction of share capital - special resolution - compliance with Section 66 of the Companies Act, 2013 - power under Memorandum and Articles to reduce capital - auditor's certificate on accounting treatment - Validity of the proposed reduction of paid-up share capital and confirmation of the minute approving the reduction. - HELD THAT: - The Tribunal found that the company obtained a Special Resolution in the AGM held on 07.11.2020 approving the reduction and that the Memorandum and Articles empower the company to reduce its paid-up capital. The petitioner filed the declaration required by the proviso to sub-section (1) of Section 66 affirming no deposits accepted and no repayment arrears. A statutory auditor's certificate certifying conformity of the proposed accounting treatment with applicable accounting standards was placed on record. Having regard to these statutory requirements and the absence of any objection from governmental authorities or other persons, the Tribunal held that the requisite statutory procedures were fulfilled and the petition for confirmation of the reduction could be made absolute. [Paras 9, 11, 12, 13]

Proposed reduction of paid-up share capital confirmed and the minute approving the reduction is approved.

Notice to Registrar and creditors under the Rules, 2016 - publication of notice - confirmation by the Tribunal - registration and publication of minute - Compliance with procedural requirements of notice, publication and the consequent directions for registration, publication and issue of certificate by the Registrar. - HELD THAT: - The petitioner issued notices to the Central Government, Registrar of Companies and creditors and made the requisite newspaper publications; no objections were received. The RoC/RD did not file objections and their silence was treated as no objection. In exercise of powers under Rule 6 of the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016 and Section 66 (3)-(5) and (4) of the Companies Act, 2013, the Tribunal approved the form of minute and directed the petitioner to deliver a certified copy of the order and the minute to the Registrar of Companies within 30 days, to publish the order of confirmation in two specified newspapers within 30 days of registration, and directed the Registrar to issue the certificate of registration in Form RSC-7 and other regulatory authorities to act on certified copies. [Paras 7, 14, 15, 16, 17]

Procedural compliance accepted; directions issued for delivery of certified copy, publication of the order, issuance of registration certificate and for regulatory authorities to act on certified copy.

Final Conclusion: The Tribunal allowed the Company Petition, confirmed the reduction of paid-up share capital and approved the minute; procedural directions were issued for filing, publication and registration as required by law and the petition is disposed of.

Intra vires exercise of regulatory power to prescribe fees for intermediaries - Reasonable restriction under Article 19(6) - Manifest arbitrariness and Article 14 - Delegation of legislative power and excessive delegation doctrine - Delegation of powers under statutory delegation orders - Judicial deference to expert regulatory authorities

Intra vires exercise of regulatory power to prescribe fees for intermediaries - Judicial deference to expert regulatory authorities - Validity of Regulation 15A of the IA Regulations (2020 Amendment) and consequential paragraph 2(iii) of the SEBI Circular dated 23 September 2020 as being within SEBI's statutory powers. - HELD THAT: - The Court took a prima facie view that SEBI possessed requisite powers under the SEBI Act to insert Regulation 15A and to specify the manner of charging fees by Investment Advisers. Section 11 casts on SEBI a duty to protect investors and regulate the securities market by measures it thinks fit; section 30 confers a broad power to make regulations to carry out the Act's purposes, including matters relating to conditions of registration and 'any other matter' to be specified by regulations. The impugned amendments followed public consultation and approval by SEBI and were notified in the Official Gazette. Given SEBI's role as an expert regulatory body and the wide amplitude of its statutory mandate, the Regulation 15A and the consequential Circular were held to be intra vires the SEBI Act. [Paras 11, 12, 15]

Regulation 15A and paragraph 2(iii) of the Circular are prima facie intra vires SEBI's powers under the SEBI Act.

Reasonable restriction under Article 19(6) - Manifest arbitrariness and Article 14 - Whether caps on fees imposed by the impugned Regulation and Circular violate Articles 14, 19(1)(g) or 21 of the Constitution. - HELD THAT: - Applying the accepted tests for reviewing delegated legislation affecting fundamental rights, the Court found that the impugned measures served the larger public interest of protecting investors and regulating market conduct, responded to documented investor complaints, and were the product of consultation and considered exercise of regulatory judgment. The caps (including option of AUA mode or fixed-fee mode and post-consultation upward revision of the fixed-fee cap) were not shown to be manifestly arbitrary or unreasonable and did not, prima facie, infringe Articles 14, 19(1)(g) or 21. The Court emphasised judicial restraint in economic regulation and that pricing is not a judicial function. [Paras 14, 15, 20]

Prima facie the fee caps and related conditions do not violate Articles 14, 19(1)(g) or 21.

Delegation of powers under statutory delegation orders - Excessive delegation doctrine - Validity of the Circular being signed and issued by the General Manager of SEBI under delegated authority. - HELD THAT: - The Court examined SEBI's power of delegation under section 19 of the SEBI Act and the SEBI (Delegation of Statutory and Financial Powers) Order, 2019. That Order authorises a Deputy General Manager to issue and sign Guidelines/Schemes/Circulars under section 11(1), and further permits officers higher in rank to exercise delegated powers. The impugned Circular was signed by the General Manager of the Investment Management Department, a rank higher than Deputy General Manager. Accordingly, the issuance and signing of the Circular by the General Manager were held to be within the scope of delegated authority and not tainted by want of power. [Paras 16]

The Circular was validly issued under delegated authority and not vitiated for lack of competence by the signatory.

Interim relief and stay of regulatory measures - Judicial deference to expert regulatory authorities - Whether interim relief (stay) should be granted against the impugned Regulation and Circular pending adjudication. - HELD THAT: - The Court declined to grant interim relief. Having formed a prima facie view that the impugned Regulation and Circular are intra vires and not manifestly arbitrary, and bearing in mind the limited scope for judicial interference in economic regulation and the need for restraint in staying laws, the bench refused to stay the measures despite urgency of compliance timelines averred by the petitioner. [Paras 8, 20, 22]

Prayer for interim relief is rejected and no stay granted.

Final Conclusion: On the record before it the Court, exercising judicial restraint in respect of economic regulation, took a prima facie view that the SEBI amendments and the consequential Circular fall within SEBI's statutory powers, are not manifestly arbitrary or violative of Articles 14, 19(1)(g) or 21, the Circular was validly issued under delegated authority, and therefore interim relief in the form of a stay was refused; the petition is ordered to be heard on an expedited basis.

Resolution Professional has no adjudicatory power - Committee of Creditors once constituted cannot be altered by the Resolution Professional - Adjudicating Authority's direction to convene the originally constituted Committee of Creditors and to suspend a subsequently constituted CoC is legally sustainable

Resolution Professional has no adjudicatory power - Committee of Creditors once constituted cannot be altered by the Resolution Professional - Adjudicating Authority's direction to convene the originally constituted Committee of Creditors and to suspend a subsequently constituted CoC is legally sustainable - Validity of the Adjudicating Authority's order directing the Resolution Professional to convene the Committee of Creditors as originally constituted (in 2017) and suspending the presently constituted CoC. - HELD THAT: - The Tribunal held that a Resolution Professional does not possess adjudicatory powers under the Code and, accordingly, cannot alter or reconstitute a Committee of Creditors once it has been formed. The Tribunal considered the sequence of orders restoring CIRP and the manner in which the CoC had been constituted, and concluded that the Adjudicating Authority's direction - that the RP convene a meeting of the CoC as originally constituted after admission and that the CoC constituted subsequently in derogation of the earlier order shall stand suspended and shall not exercise powers under the Code - is free from legal infirmity. The Tribunal therefore upheld the impugned directions and rejected the appellant's contention that the RP should have been permitted to update membership of the CoC without regard to the earlier constitution. [Paras 28, 29]

The Adjudicating Authority's order directing reconvening of the originally constituted CoC and suspending the subsequently constituted CoC is upheld; the appeal is dismissed and connected interim application is dismissed.

Final Conclusion: The Tribunal dismissed the appeal, held that the Resolution Professional has no adjudicatory power to alter a constituted Committee of Creditors, upheld the Adjudicating Authority's directions to convene the CoC as originally constituted and to suspend the presently constituted CoC, and dismissed the interim application; no costs were awarded.

Completion of liquidation process - Liquidation under Insolvency and Bankruptcy Code - No intent to defraud - Distribution of liquidation proceeds - Waiver of appointment of registered valuer - Appointment and discharge of Liquidator - Order for dissolution of corporate debtor

Completion of liquidation process - Liquidation under Insolvency and Bankruptcy Code - No intent to defraud - Distribution of liquidation proceeds - The liquidation of the Corporate Debtor has been completed in accordance with the Code and the Corporate Debtor should be dissolved. - HELD THAT: - The Tribunal examined the Liquidator's filings including the Final Report, Form GNL-2 filed with the Registrar of Companies and the compliance certificate under Regulation 45(3). The Liquidator opened and closed the liquidation account, received and distributed tax refunds and other amounts to stakeholders after consultation, closed all bank accounts, obtained necessary confirmations (including income tax no dues and satisfaction of charge), and filed required progress reports. The Tribunal found from the record that the affairs of the Corporate Debtor have been wound up, assets realised and distributed, liquidation was not carried out with intent to defraud any person, and due process under the Code and Regulations was followed. On these findings the Tribunal concluded that the liquidation process has been duly completed and it is just and equitable to dissolve the Corporate Debtor. [Paras 20, 21, 22]

M/s. Global Proserv Limited is dissolved with immediate effect.

Appointment and discharge of Liquidator - Order for dissolution of corporate debtor - Post-dissolution ancillary directions including discharge of the Liquidator, communication to Registrar of Companies and closure of the Company Petition. - HELD THAT: - Having dissolved the Corporate Debtor, the Tribunal ordered consequential directions: a certified copy of the dissolution order to be forwarded to the Registrar of Companies, the Liquidator to be discharged, and the related Company Petition to be closed. These directions implement the dissolution and remove the Liquidator from office once the statutory process of liquidation has been completed and recorded.

Registry to forward certified copy of order to the Registrar of Companies; the Liquidator is discharged; CP No. 1584/IBC/NCLT/MB/MAH/2017 stands closed.

Final Conclusion: The Tribunal allowed the liquidator's application, holding that liquidation was completed in accordance with the Code and Regulations, that there was no intent to defraud, and accordingly dissolved the corporate debtor, discharged the liquidator, directed communication of the order to the Registrar of Companies and closed the related petition.

Corporate insolvency resolution process - default - date of default - admission under Section 7 of the Insolvency and Bankruptcy Code, 2016 - limitation and acknowledgement of debt under Section 18 of the Limitation Act - moratorium - appointment of Interim Resolution Professional

Default - admission under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Whether the Corporate Debtor committed default and is liable to be admitted into CIRP under Section 7. - HELD THAT: - The Tribunal recorded undisputed facts that the Corporate Debtor failed to pay agreed loan instalments and the debt exceeded the statutory threshold. The Tribunal noted that Section 7(1) requires only a determination whether default has occurred. Applying the statutory definition of "default" as non-payment of the debt or any part thereof, the Tribunal found that the Corporate Debtor had committed default and that the Financial Creditor had established a payable debt. On these findings the Corporate Debtor was admitted into the Corporate Insolvency Resolution Process. [Paras 7, 8, 9, 17]

The Corporate Debtor committed default and is admitted into CIRP under Section 7.

Limitation and acknowledgement of debt under Section 18 of the Limitation Act - Whether the Section 7 application was barred by limitation having regard to the date of default and subsequent acknowledgements/OTS proposals. - HELD THAT: - The Tribunal considered competing contentions on limitation. The Corporate Debtor relied on the date of default and Supreme Court precedents that the date of default does not shift, arguing the petition was filed after three years. The Financial Creditor relied on chronological acknowledgements in the form of OTS proposals submitted by the Corporate Debtor and NCLAT authority holding that Section 18 of the Limitation Act applies to proceedings under the IBC, so that acknowledgement before expiry restarts the limitation period. The Tribunal found that the Corporate Debtor submitted OTS proposals on 09.11.2015 and 29.01.2016, constituting acknowledgement before the expiry of three years from the date of default, and consequently the present application filed on 12.02.2019 was within the fresh limitation period. [Paras 12, 13, 14, 15, 16]

The Section 7 application is within limitation because the Corporate Debtor's acknowledgements (OTS proposals) extended the period under Section 18 of the Limitation Act.

Appointment of Interim Resolution Professional - technical defects and authorisation to file petition - Whether technical defects and the Financial Creditor's authorisation to file the petition vitiate maintainability or require rejection. - HELD THAT: - The Corporate Debtor challenged the authority of the Bank officer to file the petition and pointed to clerical errors (incorrect identification number entry and minor date discrepancies). The Tribunal examined the evidence of a general power of attorney dated 30.08.2016 authorising filing and held the challenge to authorisation unsustainable. It also treated the clerical mistakes as insignificant, particularly when the Corporate Debtor admitted the debt and default. The Tribunal accordingly found no fatal defect in the application and proceeded to admit the Corporate Debtor and appoint the proposed Interim Resolution Professional. [Paras 10, 11]

Technical defects and the challenge to filing authority are rejected; they do not vitiate maintainability and do not preclude admission or appointment of the IRP.

Final Conclusion: The Tribunal admitted M/s. Mithilanchal Industries Pvt. Ltd. into the Corporate Insolvency Resolution Process under Section 7 of the IBC, holding that default was established, the petition was within limitation by reason of pre-expiry acknowledgements (OTS), technical objections to authorisation and minor clerical errors were untenable, and an Interim Resolution Professional was appointed and moratorium declared.

Admission of belated Expression of Interest - Duty of the resolution professional to place eligible proposals before the Committee of Creditors - Objective of the Insolvency and Bankruptcy Code to maximize value and revive the corporate debtor as a going concern - Bonafides of a resolution applicant evidenced by payment of earnest money deposit - Verification of net worth and supporting documents for evaluation of a resolution applicant - Remand for fresh consideration by the Committee of Creditors

Admission of belated Expression of Interest - Bonafides of a resolution applicant evidenced by payment of earnest money deposit - Whether the resolution professional should be directed to place the applicant's resolution proposal before the Committee of Creditors despite the EOI having been submitted after the Form G deadline, having regard to the applicant's payment of enhanced EMD and the objective of the Code. - HELD THAT: - The Tribunal recorded that the applicant had been permitted by an earlier order to submit his resolution plan subject to payment of double the EMD to demonstrate bonafides, which payment was made. The RP had rejected the applicant's EOI as belated and on alleged technical deficiencies and had informed the CoC accordingly. The Tribunal observed that the purpose of permitting the applicant to present his proposal was to further the Code's objective of value maximization and revival of the corporate debtor as a going concern. Given that the plan was not considered in toto by the CoC and that allowing consideration could advance value maximization, the Tribunal directed the RP to place the applicant's overall resolution plan before the CoC again for an informed decision. The Tribunal also noted issues raised by the RP regarding verification of net worth and supporting documents, but the order directs fresh consideration rather than adjudicating merits of those contentions.

Directed the resolution professional to place the applicant's resolution plan before the Committee of Creditors afresh for its informed decision, keeping in view the objectives of the IBC and the applicant's payment of enhanced EMD.

Duty of the resolution professional to place eligible proposals before the Committee of Creditors - Verification of net worth and supporting documents for evaluation of a resolution applicant - Remand for fresh consideration by the Committee of Creditors - Whether the matters concerning verification of the applicant's net worth certificate and other supporting documents were to be finally adjudicated by the Tribunal or sent back for the CoC/RP to verify and consider in the CIRP process. - HELD THAT: - The Tribunal noted the RP's contentions that the applicant failed to furnish satisfactory supporting documents and that the RP attempted verification with the issuing CA and bank. Rather than finally adjudicating the credibility or sufficiency of the net worth certificate and related documentary proof, the Tribunal remitted the matter by directing the RP to place the applicant's overall resolution plan before the CoC for an informed decision. The direction contemplates that the RP and CoC may consider verification issues and technical compliance in the process of evaluating the plan, consistent with the Code's objectives.

Remitted to the resolution professional and the Committee of Creditors for fresh consideration and verification of the applicant's documents in the process of evaluating the resolution plan.

Final Conclusion: The application is disposed of by directing the resolution professional to place the applicant's overall resolution plan before the Committee of Creditors again for informed consideration, with the verification and evaluation of supporting documents to be undertaken by the RP/CoC in accordance with the Code's objective of value maximization and revival of the corporate debtor.

Condonation of delay in filing claims under Regulation 12(2) - applicability of Regulation 40C (lockdown exclusion) - time-bound nature of CIRP and outer limit under Section 12 - prejudice to Resolution Plans and finality of Information Memorandum - power and duties of the Resolution Professional in relation to admission of claims at advanced stage of CIRP - objective of the Insolvency and Bankruptcy Code: resolution and maximisation of asset value

Condonation of delay in filing claims under Regulation 12(2) - applicability of Regulation 40C (lockdown exclusion) - time-bound nature of CIRP and outer limit under Section 12 - Whether the applicant's belated claim filed on 15.09.2020 beyond the timeline prescribed by Regulation 12(2) should be condoned taking into account the lockdown exclusion under Regulation 40C. - HELD THAT: - The Tribunal found that the claim was filed well after the last date for submission (07.01.2020) and after the extended 90-day period which ended on 17.03.2020. The lockdown began on 25.03.2020 and the applicant did not explain the delay in filing until 15.09.2020. Relying on the mandatory, time bound scheme of the Code and authorities emphasizing strict adherence to the outer time limits, the Tribunal held that allowing condonation at such a belated stage would be contrary to the statutory objective of completing CIRP within the prescribed timeframes. Regulation 40C could not be availed to justify the extensive delay here because the critical 90 day window had already expired before lockdown was imposed, and no sufficient explanation was furnished for the subsequent months of inaction. [Paras 4, 5, 11, 13]

Application for condonation of delay is rejected and the belated claim is not condoned.

Prejudice to Resolution Plans and finality of Information Memorandum - power and duties of the Resolution Professional in relation to admission of claims at advanced stage of CIRP - objective of the Insolvency and Bankruptcy Code: resolution and maximisation of asset value - Whether the Resolution Professional can be directed to admit the applicant's claim at the stage when Resolution Plans have been invited/received on the basis of the Information Memorandum. - HELD THAT: - The Tribunal noted that the RP had provided the Information Memorandum to prospective resolution applicants on 04.07.2020 and that resolution plans had been submitted and were at the stage of CoC approval. Admission of the belated claim would require amendments to the IM, stakeholders' list and possibly the resolution plans, causing prejudice to resolution applicants and delaying the CIRP. Given the statutory emphasis on timely completion of CIRP to preserve asset value and the risk that late admissions could frustrate filed resolution plans or push the process towards liquidation, the Tribunal held that directing the RP to admit the claim at this advanced stage was not appropriate. The RP's contention that he could admit the claim only if so directed was noted, but the Tribunal declined to give such direction in the circumstances. [Paras 7, 8, 9, 13]

No direction issued to the Resolution Professional to admit the belated claim; admission at this stage is refused to avoid prejudice and disruption of the CIRP.

Final Conclusion: The application under Section 60(5) read with the CIRP Regulations for condonation of delay and direction to the Resolution Professional to admit the belated claim is dismissed for lack of merit; no costs awarded.

Grant of bail under Section 439 Cr.P.C. - prevention of money laundering offences under Sections 3 and 4 of the PMLA, 2002 - non-grant of bail in serious economic offences involving disproportionate assets - weight of alleged disproportionate assets and ongoing investigation as a ground to deny bail

Grant of bail under Section 439 Cr.P.C. - non-grant of bail in serious economic offences involving disproportionate assets - weight of alleged disproportionate assets and ongoing investigation as a ground to deny bail - Whether the petitioner should be released on bail in proceedings under the Prevention of Money Laundering Act, 2002. - HELD THAT: - The Court considered the petition for bail filed under Section 439 Cr.P.C. in connection with proceedings under Sections 3 and 4 of the PMLA, 2002. The allegations are that the petitioner possessed assets disproportionate to his known sources of income and that further properties have been identified during the continuing investigation. The Court noted that the material on record discloses serious economic offences and ongoing investigative activity, and observed that the nature and magnitude of the alleged disproportionate assets weigh against grant of bail. Without expressing any opinion on the merits, and having regard to the seriousness of the allegations and progress of the investigation, the Court found that the petitioner had not made out a case for bail under Section 439 Cr.P.C. [Paras 11, 12]

Bail petition dismissed and the petitioner is not released on bail.

Final Conclusion: The High Court dismissed the bail application under Section 439 Cr.P.C. in proceedings under the PMLA, concluding that the seriousness of alleged disproportionate assets and the ongoing investigation precluded grant of bail.

Winding up of multi-state cooperative societies - Central Registrar's power to direct winding up under Chapter X of the Multi-State Cooperative Societies Act, 2002 - Provisional attachment under the Prevention of Money Laundering Act, 2002 - Confirmation of attachment by the Adjudicating Authority under PMLA - Scope of High Court's PIL jurisdiction in relation to ongoing PMLA proceedings

Winding up of multi-state cooperative societies - Central Registrar's power to direct winding up under Chapter X of the Multi-State Cooperative Societies Act, 2002 - Prayer for direction to the Central Registrar to initiate winding up and appoint a liquidator at the instance of petitioners - HELD THAT: - The Court held that winding up of a multi-state cooperative society is governed by the statutory mechanism in Chapter X of the Act of 2002, whereby the Central Registrar may, after inquiry and after giving the society a reasonable opportunity to be heard, direct winding up or act on his own motion. Aggrieved persons have a statutory remedy of approaching the Central Registrar; the Court found no basis to exercise writ jurisdiction in a PIL to command the Registrar to initiate winding up on the petitioners' direction. The court therefore declined to grant the writ relief sought for initiation of winding up by the Central Registrar. [Paras 4]

The prayer to direct the Central Registrar to initiate winding up is refused and not entertained in PIL proceedings.

Provisional attachment under the Prevention of Money Laundering Act, 2002 - Confirmation of attachment by the Adjudicating Authority under PMLA - Scope of High Court's PIL jurisdiction in relation to ongoing PMLA proceedings - Prayer for direction to the Enforcement Directorate to release attached properties to the liquidator despite provisional attachment under PMLA - HELD THAT: - The Court observed that an order of provisional attachment under PMLA is subject to confirmation by the Adjudicating Authority under the statute, and possession or confiscation follows the statutory process - confiscation only after trial and proof of the offence. Given that the attachment is governed by PMLA's procedure and is pending confirmation, the petitioners' request to compel release of assets to the liquidator was misconceived. The High Court declined to interfere with ongoing PMLA proceedings in exercise of PIL jurisdiction. [Paras 5]

The petitioners' request for release of properties attached by the Enforcement Directorate is rejected; the Court will not intervene in the PMLA process at this stage.

Final Conclusion: The public interest petition is dismissed; dismissal without prejudice to the rights of aggrieved persons to pursue appropriate statutory remedies before the Central Registrar or in the PMLA process.

Concurrent sentences - Section 427 Cr.P.C. - Sentences awarded in default of payment of fine/compensation - Single transaction doctrine

Concurrent sentences - Section 427 Cr.P.C. - Sentences awarded in default of payment of fine/compensation - Single transaction doctrine - Whether the default sentences imposed in the connected criminal matters should be directed to run concurrently and whether the petitioner is entitled to release on having served one year's default sentence. - HELD THAT: - The Court noted that ten cheques gave rise to three criminal cases and that default sentences of one year were directed in the orders of this Court when compensation/fine was not paid. Reliance was placed on the Apex Court's decision in V.K. Bansal which explained the scope of Section 427 Cr.P.C.: while the Court has discretion to direct substantive sentences to run concurrently where offences arise out of a single transaction, that discretion does not extend to directing concurrent running of sentences imposed in default of payment of fine/compensation. Paragraph 18 of V.K. Bansal was extracted and applied: concurrent running of substantive sentences may be ordered in limited cases of single transactions, but the direction shall be limited to substantive sentences and shall not affect default sentences imposed for non-payment of fine/compensation. In the present case the petitioner had committed default in payment and the sentences before the Court were default sentences; accordingly Section 427 Cr.P.C. did not permit directing those default sentences to run concurrently. The jail authorities were therefore not in error in refusing release despite the petitioner having served one year under one of the orders, and the petition seeking concurrent running and release was unsustainable.

Petition rejected; default sentences cannot be directed to run concurrently and detention under the default sentences was not illegal.

Final Conclusion: The petition under Section 482 Cr.P.C. is dismissed. The High Court's orders directing default imprisonment for non-payment of compensation cannot be ordered to run concurrently under Section 427 Cr.P.C., and the petitioner is not entitled to release on the ground urged.