TaxTMI Updates e-Newsletter
May 25,2021

Power to regulate procedure of Benches - transfer of pending appeals between Benches across different headquarters - scope of section 255(5) - rule 4 of the Income Tax Appellate Tribunal Rules, 1963 - transfer of assessment jurisdiction under section 127 - judicial character of proceedings before ITAT - territorial jurisdiction and forum for writ under Article 226(2) - appeal under section 260A - "every order" in appeal

Scope of section 255(5) - power to regulate procedure of Benches - transfer of pending appeals between Benches across different headquarters - judicial character of proceedings before ITAT - Whether section 255(5) of the Income-tax Act, 1961 empowers the President of the ITAT to transfer live appeals pending before a Bench in one State to a Bench in a different State/headquarters. - HELD THAT: - Section 255(1) permits constitution of Benches by the President and sub section (5) permits the Tribunal to regulate its procedure including places at which Benches shall hold sittings. The Court held that sub section (5) contemplates regulation of procedure and notification of places where Benches sit (for administrative allocation of sittings) but does not confer on the President a jurisdictional power to transfer a pending live appeal from a Bench in one State to another Bench outside that headquarters. Such an expansive reading would amount to interference with an ongoing judicial proceeding of the Tribunal; proceedings before the ITAT are judicial in character and for certain purposes deemed civil court proceedings. The statutory text and scheme do not disclose power to effect inter headquarter transfers of pending appeals under section 255(5).

Section 255(5) does not empower the President to transfer pending appeals from a Bench in one headquarters/State to a Bench in another headquarters/State.

Rule 4 of the Income Tax Appellate Tribunal Rules, 1963 - transfer of pending appeals between Benches across different headquarters - power to regulate procedure of Benches - Whether rule 4 of the ITAT Rules, 1963 authorises the President to transfer appeals from a Bench in one headquarters to a Bench in a different headquarters/State. - HELD THAT: - Rule 4(1) permits a Bench to hear appeals as the President may direct; rule 4(2) expressly addresses transfers only where there are two or more Benches at the same headquarters, enabling transfer between Benches within that headquarters. The Court interpreted rule 4 in context and concluded that it cannot be invoked to transfer a pending appeal from one Bench under one headquarter to another Bench in a different headquarter. The standing orders and office manual that determine territorial jurisdiction (by reference to location of Assessing Officer) reinforce that transfers contemplated by rule 4 are intra headquarter administrative allocations, not inter state reallocation of live appeals.

Rule 4 does not authorise transfer of pending appeals from a Bench in one headquarters/State to a Bench in another headquarters/State.

Transfer of assessment jurisdiction under section 127 - transfer of pending appeals between Benches across different headquarters - Whether prior transfer of assessment jurisdiction under section 127 or the assessee's non opposition to such transfer precludes the assessee from opposing transfer of pending appeals between ITAT Benches. - HELD THAT: - Section 127 pertains exclusively to transfer of assessment cases between Assessing Officers and does not govern transfer of appeals pending before the Tribunal. The Court found no legal nexus permitting respondents to invoke the assessee's earlier acquiescence to assessment side transfer as a licence to transfer already filed appeals between Benches in different States. The two processes are distinct; the assessee's non objection to transfer of assessment jurisdiction cannot estop it from contesting transfer of appeals.

Prior transfer of assessment jurisdiction under section 127 or the assessee's consent thereto does not bar the assessee from opposing transfer of pending appeals between ITAT Benches in different headquarters.

Territorial jurisdiction and forum for writ under Article 226(2) - appeal under section 260A - "every order" in appeal - Whether the writ petition in the Bombay High Court challenging the President's order transferring the appeals was maintainable and whether the remedy by way of appeal under section 260A exclusively bars writ jurisdiction. - HELD THAT: - The President's administrative order dated 20.08.2020 was passed at Mumbai, and clause (2) of Article 226 permits a High Court to issue writs where a cause of action, or part thereof, arises within its territorial limits; the Bombay High Court therefore had jurisdiction. Section 260A(1) provides for appeal to the High Court from 'every order' passed in appeal by the Tribunal where the High Court is satisfied a substantial question of law arises; the Court interpreted 'every order' as limited to orders passed in the course of deciding the appeal on merits and arising out of the appeal itself. The transfer orders under challenge were administrative/administration side decisions and not orders passed in the appeals on their merits; accordingly section 260A did not oust writ jurisdiction in the circumstances.

The writ petition before the Bombay High Court was maintainable; section 260A did not provide an exclusive remedy for challenging the administrative transfer orders impugned in this case.

Transfer of pending appeals between Benches across different headquarters - invalidity of applications for transfer by non parties - Whether applications for transfer filed by authorities who were not parties to the subject appeals rendered the transfer application and consequent orders invalid. - HELD THAT: - The Court noted that the applications for transfer were filed by Commissioner of Income Tax 1, Mumbai and Chief Commissioner (OSD) Mumbai, both of whom were not respondents in the subject appeals (the respondent in the appeals remained the Assistant Commissioner of Income Tax, Central Circle 2(1), Bangalore). Because those authorities were not parties to the appeals, they were not competent to seek transfer of the pending appeals and such applications were invalid. An order for transfer founded on invalid applications could not stand.

Applications for transfer made by authorities who were not parties to the appeals were invalid, and an order of transfer founded on such applications was unsustainable.

Final Conclusion: Both impugned orders - the speaking order dated 19.03.2020 of the Bangalore Bench and the administrative order dated 20.08.2020 of the President, ITAT - were held unsustainable and were quashed. The Court concluded that neither section 255(5) nor rule 4 authorises transfer of live appeals between Benches in different headquarters; prior transfer of assessment jurisdiction under section 127 does not bar challenge to such transfers; the writ petition was maintainable in Bombay High Court; and the applications made by authorities not parties to the appeals were invalid.

Principles of natural justice - faceless assessment scheme - show cause notice accompanied by a draft assessment order - opportunity to accept proposed modifications or to object or to seek personal hearing - set aside of assessment for violation of right to be heard - remand for fresh consideration after receipt of objections and hearing

Principles of natural justice - faceless assessment scheme - show cause notice accompanied by a draft assessment order - opportunity to accept proposed modifications or to object or to seek personal hearing - Impugned assessment order set aside for violation of the principles of natural justice arising from inadequate time to respond to the draft assessment order under the faceless assessment scheme. - HELD THAT: - Under the faceless assessment procedure a show cause notice must be accompanied by a draft assessment order and the assessee must be afforded a meaningful opportunity to accept, object to, or seek a personal hearing after filing a written reply. In the present case the draft assessment order was issued on 12.04.2021 but was received by the petitioner by e-mail on 13.04.2021 and the petitioner was required to respond by 14.04.2021, leaving effectively twenty-four hours to exercise the statutory/options under the draft order. The court found that such a short window amounted to an apparent violation of the principles of natural justice because it did not afford the assessee a reasonable opportunity to furnish objections or seek hearing, and therefore the impugned assessment dated 15.04.2021 could not stand. [Paras 4, 5]

Impugned order of assessment dated 15.04.2021 set aside for violation of the right to be heard.

Remand for fresh consideration after receipt of objections and hearing - facilitation of portal to receive objections - Assessment remitted for fresh consideration after the assessee is permitted to file objections and to be heard; directions issued to enable portal receipt and for reassessment in accordance with law. - HELD THAT: - The court directed the petitioner to comply with the notice dated 12.04.2021 and file its reply and objections within three weeks. The respondents were directed to facilitate receipt of such reply by enabling the portal to accept objections. Upon receipt of objections the Assessing Authority is to hear the petitioner and proceed to complete the assessment in accordance with law. The remand therefore requires fresh consideration of the draft assessment after affording the procedural safeguards guaranteed under the faceless assessment scheme and the principles of natural justice. [Paras 5]

Assessment remanded for fresh consideration; petitioner to file objections within three weeks and respondents to enable portal and hear the petitioner before completing assessment.

Final Conclusion: Writ petition disposed by setting aside the assessment dated 15.04.2021 for breach of the right to be heard; matter remitted to the Assessing Authority to receive the petitioner's objections (within three weeks), facilitate their filing, hear the petitioner and complete the assessment afresh in accordance with law; no costs.

Capital work in progress written off treated as revenue expenditure - revenue expenditure v. capital expenditure (enduring benefit test) - cash basis of accounting versus mercantile system for interest on bad/sick debt - section 35E prospecting/exploration expenditure - amortisation over ten years - TDS liability and disallowance under section 40(a)(ia) for short/non deduction - TDS on interest on enhanced/land compensation deposited with courts - Explanation 8 to section 43(1) - interest after asset put to use treated as revenue - classification of mine development expenditure as plant and machinery for depreciation - prior period expenditure - crystallisation principle for allowance

Capital work in progress written off treated as revenue expenditure - revenue expenditure v. capital expenditure (enduring benefit test) - Allowability of deduction for capital work in progress (CWIP) written off where no asset came into existence - HELD THAT: - The Tribunal accepted the assessee's case that mine development expenditure accounted as CWIP and subsequently written off because the mines were aborted/closed did not result in creation of any enduring asset. Following authoritative decisions which hold that expenditure incurred in abandoned projects or infructuous operations, not giving rise to an enduring asset, is revenue in nature, the write off was held to be deductible as incurred wholly and exclusively for the business. The CIT(A)'s confirmation of disallowance was set aside and the assessee's grounds on this point were allowed.

Addition disallowing CWIP write off deleted; deduction allowed.

Cash basis of accounting versus mercantile system for interest on bad/sick debt - Inclusion of accrued interest receivable from subsidiary declared sick (APHMEL) where assessee follows cash basis for such interest - HELD THAT: - The Tribunal found that where a subsidiary has been declared a sick unit and recovery of interest is uncertain (matter before BIFR/AAIFR), it is permissible for the assessee to account for interest on a cash/realisation basis. Given the uncertainty of receipt and consistent past practice, the addition of accrued interest on an accrual basis was unsustainable. The Tribunal deleted the addition but noted that the AO remains free to tax the interest in the year of actual receipt.

Addition of accrued interest from APHMEL deleted; AO may assess when interest is actually received.

Prior period expenditure - crystallisation principle for allowance - Deductibility of prior period expenditure which was crystallised after financial year cut off - HELD THAT: - The Tribunal recorded that details filed before the AO and during remand proceedings showed certain prior period expenses were crystallised in the year and the AO had accepted in remand that such amounts should be allowed when crystallised. Once revenue accepted in remand proceedings that the expenditure is crystallised, the appellate authority should not confirm disallowance. The Tribunal therefore allowed the assessee's claim in respect of the prior period items covered by that acceptance.

Disallowance of crystallised prior period expenditure deleted; claim allowed.

Section 35E prospecting/exploration expenditure - amortisation over ten years - Treatment of prospecting/exploration expenditure under section 35E (whether to press appeal) - HELD THAT: - Although the AO disallowed a portion of prospecting expenditure invoking section 35E (amortisation over ten years including aborted/suspended mines), the assessee informed the Tribunal that the ground was not pressed as it had already received allowance under section 35E for earlier years and had modified accounting policy accordingly. The Tribunal therefore treated the ground as not pressed and dismissed it as such.

Ground not pressed by assessee; appeal on this issue dismissed as not pressed.

TDS on interest on enhanced/land compensation deposited with courts - TDS liability and disallowance under section 40(a)(ia) for short/non deduction - Whether interest on enhanced land compensation deposited by assessee with courts attracts TDS liability on the assessee and consequent disallowance under section 40(a)(ia) - HELD THAT: - Having regard to the statutory scheme, circulars and administrative instructions (including Board Circular and earlier clarifications), and the fact that the assessee had deposited amounts with the court in compliance with court directions and had not directly paid beneficiaries, the Tribunal held that the assessee was not the person responsible for deduction of TDS in the circumstances. The addition under section 40(a)(ia) was therefore unsustainable and deleted.

Addition for failure to deduct TDS on court deposited interest deleted; assessee not held responsible to deduct at that stage.

Explanation 8 to section 43(1) - interest after asset put to use treated as revenue - Tax treatment of exchange fluctuation interest on foreign currency loan for acquisition of machinery after asset is put to use - HELD THAT: - The Tribunal accepted the assessee's submission that interest incurred after a capital asset is put to use may be revenue in nature in terms of Explanation 8 to section 43(1). However, because the record did not specify the actual date the machinery was put to use, the Tribunal remitted the issue to the AO for limited verification of the put to use date. If interest was paid after put to use, it should be allowed as revenue; otherwise AO to decide in accordance with the provision.

Issue remitted to AO for verification of actual date of put to use; treated as allowed for statistical purposes subject to verification.

Classification of mine development expenditure as plant and machinery for depreciation - Applicability of 15% depreciation rate on mine development expenditure by treating such expenditure as plant and machinery - HELD THAT: - On the facts presented, the Tribunal found that civil works and developmental expenditures incurred within the mines (retaining walls, platforms, inter seam tunnels, bunkers, check dams, dewatering works etc.) functionally assist extraction and are integral to mining operations. Relying on functional tests and earlier decisions including the assessee's own precedent, the Tribunal accepted that such mine development expenditure falls under the block 'plant and machinery' and is eligible for depreciation at 15% rather than 10%.

Depreciation allowed at 15% for mine development expenditure; restriction to 10% set aside.

Prior period expenditure - crystallisation principle for allowance - Enhancement by CIT(A) of income by treating certain prior period items as not allowable - remand for verification - HELD THAT: - The CIT(A) enhanced income by treating certain amounts as not allowable prior period expenditure; the Tribunal found errors in quantification and directed remand to the AO for verification of when the expenditure crystallised. AO to verify and allow amounts if properly crystallised in terms of the accounting method and applicable law.

Matter remitted to AO for verification and decision in accordance with law; ground allowed for statistical purposes.

TDS liability and disallowance under section 40(a)(ia) for short/non deduction - Revenue's appeal against CIT(A) deletion of disallowance under section 40(a)(ia) for short deduction of TDS (payment heads including sections 194C/194J) - HELD THAT: - The Tribunal analysed that section 40(a)(ia) applies where tax has not been deducted at all; in the present facts the assessee had deducted TDS albeit at lower rates. Following coordinate bench reasoning and relevant authorities, the Tribunal concluded that AO was not justified in making disallowance under section 40(a)(ia) for amounts where some TDS had been deducted at a lower rate. The CIT(A)'s deletion was upheld and the revenue appeal dismissed.

Revenue's appeal dismissed; deletion of disallowance under section 40(a)(ia) upheld.

TDS liability and disallowance under section 40(a)(ia) for short/non deduction - Whether interest credited to FBIS fund (small per employee benefit) attracts TDS and consequent disallowance under section 40(a)(ia) - HELD THAT: - The CIT(A) found that interest provided per member under the Family Benefit cum Insurance Scheme was below the threshold for deduction under section 194A and accordingly directed deletion of the AO's disallowance under section 40(a)(ia). The Tribunal found no infirmity in that conclusion and upheld the deletion for both assessment years.

Disallowance deleted; no obligation to deduct TDS where per member interest is below statutory threshold.

Revenue appeals and low tax effect - CBDT thresholds - Dismissal of revenue appeal for AY 2004 05 on account of tax effect below prescribed threshold - HELD THAT: - The Tribunal applied CBDT circulars fixing a tax effect threshold for filing revenue appeals before the Tribunal and dismissed the revenue appeal as the tax effect was below Rs.50 lakhs, while granting liberty to seek recall if exceptions apply.

Revenue appeal dismissed for low tax effect with liberty to recall if exceptions arise.

Final Conclusion: The Tribunal allowed the assessee's appeals in part: CWIP write offs were held deductible as revenue expenditure; accrued interest from the sick subsidiary deleted with taxation allowed on actual receipt; crystallised prior period expenses allowed (and certain prior period quantification remitted for verification); prospecting ground not pressed; TDS disallowance in respect of court deposited interest deleted; exchange loss interest issue remitted to AO to verify put to use date; mine development expenditure held to be plant and machinery attracting 15% depreciation. All revenue appeals were dismissed (including deletion of 40(a)(ia) disallowances and FBIS interest issue), and one revenue appeal was dismissed for low tax effect.

Interest under Section 28 of the Land Acquisition Act treated as part of enhanced compensation - taxability of such interest to be determined on receipt basis - distinction between interest under Section 28 and Section 34 of the Land Acquisition Act - exemption of compensation under section 10(37) of the Income-tax Act - deletion of penalty under section 271(1)(c) consequent to deletion of the addition

Interest under Section 28 of the Land Acquisition Act treated as part of enhanced compensation - taxability of such interest to be determined on receipt basis - exemption of compensation under section 10(37) of the Income-tax Act - distinction between interest under Section 28 and Section 34 of the Land Acquisition Act - Nature and year of taxability of interest awarded under Section 28 on enhanced compensation on compulsory acquisition of agricultural land. - HELD THAT: - The Tribunal held that interest payable under Section 28 of the Land Acquisition Act is an accretion to the value and forms part of the enhanced compensation or consideration, and therefore is not taxable separately as 'interest' under the head 'Income from Other Sources'. Relying on the ratio in Ghanshyam (HUF) and subsequent Supreme Court pronouncements, the Tribunal affirmed that the year of taxability of such interest is to be tested on the receipt basis, and that spreading or apportionment on accrual is not permissible. Because the enhanced compensation (including the interest component under Section 28) is exempt under section 10(37) of the Income-tax Act, the addition made by the Assessing Officer was not sustainable and the CIT(A)'s deletion of the addition was upheld. [Paras 7, 8, 9]

Interest awarded under Section 28 is part of enhanced compensation, taxable on receipt; where the compensation is exempt under section 10(37), the addition on account of such interest is not sustainable and is deleted.

Deletion of penalty under section 271(1)(c) consequent to deletion of the addition - Validity of penalty imposed under section 271(1)(c) which was levied on the basis of the addition deleted in assessment. - HELD THAT: - The Tribunal observed that the penalty levied by the Assessing Officer was predicated on the quantum addition which has been deleted. Following the deleted addition, the CIT(A) had rightly deleted the penalty. In light of the Tribunal's affirmation of the deletion of the addition, there was no ground to sustain the penalty and the CIT(A)'s order deleting the penalty was upheld. [Paras 8]

Penalty under section 271(1)(c) deleted as it was based on the addition which has been deleted.

Final Conclusion: Appeals filed by the Revenue are dismissed; the CIT(A)'s deletion of the addition relating to interest under Section 28 (being part of enhanced compensation and exempt under section 10(37)) and the consequential deletion of penalty under section 271(1)(c) are affirmed.

Reopening of assessment on tangible information - reliance on search/seizure material to motivate reassessment - unexplained cash credit under section 68 (identity, creditworthiness and genuineness) - accommodation entries - onus shifting to Revenue after assessee discharges primary onus under section 68 - verification of claim by summons/notice to shareholders - unexplained expenditure as alleged commission under section 69C - inadmissibility of third party statements not confronted to the assessee

Reopening of assessment on tangible information - reliance on search/seizure material to motivate reassessment - Validity of reopening assessments by issuance of notice under section 148 - HELD THAT: - The Tribunal held that the Assessing Officer had tangible information derived from DGIT(Inv.) and search/seizure proceedings in the case of Shri Shirish Chandrakant Shah which furnished sufficient basis to form a reason to believe that income had escaped assessment. The reopening was effected within four years of the end of the relevant assessment year and the material gathered pursuant to the search constituted tangible information capable of triggering reassessment. Accordingly, the challenge to the validity of the notices under section 148 was dismissed. [Paras 3]

Reopening of assessments held valid.

Unexplained cash credit under section 68 (identity, creditworthiness and genuineness) - accommodation entries - onus shifting to Revenue after assessee discharges primary onus under section 68 - verification of claim by summons/notice to shareholders - unexplained expenditure as alleged commission under section 69C - inadmissibility of third party statements not confronted to the assessee - Whether receipts of share capital and share premium could be treated as unexplained cash credit and whether addition for alleged commission was sustainable - HELD THAT: - For all impugned assessment years the Tribunal found that the assessee had furnished contemporaneous documentary evidence including bank statements, ITR acknowledgements, ROC/financial abstracts, share application forms, share certificates, Form No.2 filings and explanations for premium, together with share valuation workings. Having discharged the primary onus under section 68, the burden shifted to the Revenue to rebut the veracity of the documents. The Assessing Officer did not undertake statutory modes of verification (for example issuing summons/notice to the shareholders) and made additions primarily on the basis of third party statements emanating from search proceedings which were not furnished to the assessee for rebuttal or cross examination. Further, tribunal orders in relation to some investor entities and an affidavit of denial by the third party were noted. On this basis, the Tribunal held that additions under section 68 were based on surmise and conjecture and deleted them; consequently additions under section 69C as alleged commission were also deleted. [Paras 4, 7, 11, 12]

Additions under section 68 and consequent addition under section 69C deleted for the assessment years in dispute.

Final Conclusion: The Tribunal upheld the validity of reassessment notices but found that the Assessing Officer failed to rebut the assessee's documentary evidence; additions treating share capital/share premium as unexplained cash credit and related alleged commission were deleted and the appeals were partly allowed for the assessment years A.Y.2010-11, A.Y.2011-12 and A.Y.2012-13.

Disallowance under section 14A read with Rule 8D - Application of coordinate-bench precedent to delete section 14A addition - Verification of interest receipts under section 244A - Remand for factual verification of undisputed ITS entries - Prematurity of initiation of penalty proceedings

Disallowance under section 14A read with Rule 8D - Application of coordinate-bench precedent to delete section 14A addition - Deletion of the disallowance made under section 14A in assessment framed for A.Y. 2015-16 - HELD THAT: - The Assessing Officer disallowed expenditure by applying section 14A read with Rule 8D. The assessee's contention that investments yielding exempt dividend were made out of surplus (non-interest-bearing) funds and that no interest or related expenditure was incurred was considered. The Tribunal noted that an identical issue on substantially similar facts in appeal by the same assessee for an earlier year had been decided in favour of the assessee by a coordinate Bench, and no changed circumstances were shown. Respectfully relying on that coordinate-bench decision, the Tribunal found no reason to depart from it and deleted the addition made under section 14A. [Paras 5]

Addition under section 14A deleted.

Verification of interest receipts under section 244A - Remand for factual verification of undisputed ITS entries - Addition of interest under section 244A relating to earlier assessment years restored for fresh adjudication - HELD THAT: - The Assessing Officer added interest amounts shown in ITS for earlier years on the basis that the assessee had not offered such interest for those years and had not furnished specific clarification. The assessee contended it had not received the refunds or any intimations. The lower authorities did not verify the assessee's claim. In view of the absence of verification and the factual nature of the dispute (receipt of refund/interest and existence of any intimation), the Tribunal considered it appropriate to remit the matter to the Assessing Officer for fresh decision after examination and verification of the assessee's claim. [Paras 9]

Matter remanded to the Assessing Officer for fresh verification and adjudication.

Prematurity of initiation of penalty proceedings - Objection to initiation of penalty proceedings under section 271C is premature - HELD THAT: - The Tribunal observed that the challenge to initiation of penalty proceedings at this stage is premature and declined to adjudicate on the matter in the current appeal. [Paras 10]

Ground dismissed as premature.

Final Conclusion: Appeal partly allowed: the section 14A addition for A.Y. 2015-16 is deleted on the basis of coordinate-bench precedent; the addition of interest under section 244A relating to earlier years is remitted to the Assessing Officer for verification; the challenge to initiation of penalty proceedings is dismissed as premature.

Registration under section 12AA - Requirement of production of instrument or evidential documents under Rule 17A - Verification of genuineness of activities and consonance with objects - Remand for fresh consideration to verify evidential documents

Requirement of production of instrument or evidential documents under Rule 17A - Registration under section 12AA - Rule 17A does not mandate prior registration with a statutory authority; existence of a trust or institution can be established by producing evidential documents when no constitutive instrument is available. - HELD THAT: - The Tribunal examined clause (a) of Rule 17A which requires that where a trust is created under an instrument the instrument (or certified copy) be produced, and where it is not so created, documents evidencing creation must be furnished. The Tribunal held that Rule 17A contemplates both situations and does not insist on registration with a Charity Commissioner or other statutory registrar as the only mode of proving existence. Accordingly, documents that afford a logical basis to infer creation and existence fall within 'documents evidencing the creation of the trust' under Rule 17A and are capable of discharging the requirement for an application under section 12AA.

Rule 17A permits proof of existence by evidential documents; prior registration with a statutory authority is not an absolute prerequisite.

Verification of genuineness of activities and consonance with objects - Remand for fresh consideration to verify evidential documents - Whether the rejection of the application under section 12AA was sustainable in light of documents filed before the CIT (Exemption). - HELD THAT: - The Tribunal found that the CIT (Exemption) rejected the Form No.10A application on the ground that the assessee failed to furnish documentary evidence to satisfy the existence and genuineness of its creation and activities. On appellate review, the Tribunal observed that the assessee had placed a paper book containing specific evidential documents relating to its nature and activities which the CIT had not specifically examined or disproved in the order. Applying the approach in the cited High Court authority, and construing Rule 17A to allow evidential documents in lieu of a constitutive instrument, the Tribunal concluded that the matter requires fresh adjudication. Accordingly, the Tribunal set aside the impugned order and restored the matter to the file of the CIT (Exemption) for reconsideration after verifying and examining the documents already placed on record and taking into account the observations on Rule 17A.

Impugned rejection set aside and the application remitted to the CIT (Exemption) for fresh decision after verification of the evidential documents filed by the assessee.

Final Conclusion: The CIT(Exemption)'s order rejecting registration under section 12AA is set aside; the matter is remitted for fresh consideration in light of Rule 17A and the evidential documents filed by the assessee, and the appeal is allowed for statistical purposes.

Validity of reopening under section 147/148 - reason to believe for reassessment - reassessment under section 147 is for benefit of Revenue and not for assessee - taxability of receipts - income from business or other sources - effect of appellate remand directions on reassessment - estimation of income on gross receipts

Validity of reopening under section 147/148 - reason to believe for reassessment - effect of appellate remand directions on reassessment - Whether the reassessment notices issued under section 148/147 were valid and sustainable in view of the Tribunal's earlier remand findings. - HELD THAT: - The Tribunal examined the genesis of the reopening and the scope of its earlier remand. The coordinating bench had in the first round held that the twin foundational reasons relied upon by the Assessing Officer (survey findings of no development work and alleged bogus invoices) could not sustain treating the receipts as taxable income and directed limited further enquiries. Applying the principle that the reasons recorded for reopening must stand scrutiny and that appellate findings on those reasons can defeat the basis for reassessment, the Tribunal found that the very foundation for reopening had been negatived by the earlier appellate order. Reliance was placed on the established rule that the AO must disclose his mind through recorded reasons and that where those reasons are held incorrect, reassessment cannot ordinarily be upheld; the Tribunal also adopted the reasoning in GKN Driveshafts and subsequent authorities as to the limited scope of s.147 reassessment. Given that the tribunal's first-round conclusions had closed the options of treating the entire credits/debits or estimating income on the gross receipts, the present reassessment initiated on those same foundational reasons was held unsustainable.

Reassessment proceedings and the notices under section 148/147 are quashed as unsustainable because their foundational reasons were negatived by the earlier tribunal order.

Taxability of receipts - income from business or other sources - estimation of income on gross receipts - reassessment under section 147 is for benefit of Revenue and not for assessee - Whether the impugned receipts could be sustained as income of the assessee (either as income from business or from other sources) or estimated on gross receipts in the reassessment framed. - HELD THAT: - On merits the Tribunal noted the factual findings: initial classification of receipts as contract receipts in returns; survey observations of absence of vouchers and statements suggesting no development work; flow of funds to group concerns; and subsequent revised accounts by the assessee treating amounts as advances. However, the earlier tribunal order had already held that the Assessing Officer could not uphold taxation of the entire receipts as the assessee's income and rejected the approach of treating the whole receipts as taxable or of making gross-estimate additions. The present bench held that because reassessment itself was quashed (see issue above), additions made in the reassessment (whether classified as business income or other sources) cannot survive. The Tribunal further observed that while the AO was directed earlier to make further enquiries, those limited enquiries did not revive the original foundational reasons already negatived; accordingly the Assessing Officer's additions cannot be sustained and the matter stood disposed in favour of the assessee.

Additions treating the impugned receipts as income (whether under business or other sources) and any estimation on gross receipts are not upheld; consequential assessments based on the reopened proceedings are set aside.

Final Conclusion: The Tribunal allowed the appeals: it quashed the reassessment notices and proceedings under section 148/147 as unsustainable in view of the earlier tribunal findings which negatived the foundational reasons for reopening, and accordingly set aside the consequential additions treating the receipts as the assessee's income for AY 2007-08 and 2008-09.

Eligibility of constituent of Joint Venture to claim deduction - Deduction under section 80IA(4) for infrastructure projects executed through Joint Ventures/Consortia - Developer status versus contractor for section 80IA(4) and Explanation - Binding nature of ITAT decisions on revenue authorities

Eligibility of constituent of Joint Venture to claim deduction - Deduction under section 80IA(4) for infrastructure projects executed through Joint Ventures/Consortia - Binding nature of ITAT decisions on revenue authorities - Allowance of deduction under section 80IA(4) in respect of profits attributable to projects awarded to Joint Ventures/Consortia but executed by the assessee as a constituent member. - HELD THAT: - The Tribunal examined the Assessing Officer's disallowance of the portion of deduction claimed on profits attributable to two projects awarded to JVs/consortia on the ground that only the enterprise which enters into the agreement with the government/statutory authority can claim deduction. The assessee's position-that it executed the works in proportion to its share, that the profits did not form part of the JV's total income and that JVs had not claimed the deduction-was considered alongside binding coordinate-bench precedent of the ITAT, Visakhapatnam (M/s. Transtroy India Ltd.). The Tribunal held that the AO was not justified in refusing the deduction merely because the department had not accepted that ITAT order or had preferred appeal against it. Citing authorities on the binding effect of Tribunal decisions on revenue authorities within jurisdiction, the Tribunal concluded that the CIT(A)'s allowance of the deduction (including the amounts attributable to JV-executed projects) was correct and directed allowance of the full claim as returned. [Paras 5]

Deduction under section 80IA(4) allowed in respect of profits attributable to projects executed by the assessee as a constituent of Joint Ventures/Consortia; CIT(A) upheld.

Developer status versus contractor for section 80IA(4) and Explanation - Deduction under section 80IA(4) for infrastructure projects executed through Joint Ventures/Consortia - Whether the assessee qualifies as a developer (and not merely a works contractor) for purpose of claiming deduction under section 80IA(4) including the impact of the Explanation. - HELD THAT: - The Tribunal reviewed the assessment record and the Assessing Officer's own findings that the assessee satisfied the components of development, operation and maintenance, together with financial involvement and exposure to project risk. The Revenue's contention that the assessee was only a works contractor and thus excluded by the Explanation was found to be contrary to the AO's factual findings. On this basis the Tribunal agreed with the CIT(A)'s conclusion that the assessee met the statutory requirements to be treated as a developer eligible for deduction under section 80IA(4). [Paras 6]

Assessee held to be a developer for section 80IA(4) purposes; not merely a works contractor; CIT(A)'s allowance upheld.

Final Conclusion: Revenue appeals dismissed; CIT(A)'s orders allowing the assessee's deduction claims under section 80IA(4), including amounts attributable to projects executed as a constituent of JVs/Consortia and on the finding that the assessee qualified as a developer, are upheld.

Deduction under section 35(1)(ii) - Genuineness of business transactions and evidentiary burden - Disallowance based on conjecture and surmise - Notional income / deemed interest not taxable - Following coordinate-bench precedent

Deduction under section 35(1)(ii) - Following coordinate-bench precedent - Allowability of claim of deduction under section 35(1)(ii) disallowed by AO and affirmed by CIT(A). - HELD THAT: - The Tribunal examined earlier decisions of the Kolkata Bench and coordinate Benches, including Santosh Suresh Kumar Agarwal and other cited coordinate-bench authorities, which favoured the assessee on identical or closely similar factual/legal questions. Applying those precedents, the Tribunal found the disallowance unsustainable and followed the coordinate-bench jurisprudence to admit and allow the claim. The Tribunal therefore set aside the disallowance affirmed by the CIT(A). [Paras 3, 4]

Grounds 1 and 2 allowed; deduction under section 35(1)(ii) claimed by the assessee is allowed following coordinate-bench precedent.

Genuineness of business transactions and evidentiary burden - Disallowance based on conjecture and surmise - Validity of disallowance of loss claimed on purchase and sale of jute where assessee filed bills and vouchers and AO did not conduct verification. - HELD THAT: - The Tribunal noted that the assessee produced relevant bills and vouchers to substantiate the jute transactions and that the Assessing Officer carried out no independent investigation or verification nor produced evidence to show the claim was incorrect. The CIT(A) rejected the contention in a summary manner without consideration of the record. Since the disallowance rested on conjecture and surmise and there was no adverse evidence, the Tribunal deleted the disallowance and allowed the claimed loss. [Paras 5]

Grounds 3 and 4 allowed; the disallowance of the loss is deleted and the loss claimed is allowed.

Notional income / deemed interest not taxable - Sustainability of addition made on account of deemed interest / notional income. - HELD THAT: - The Tribunal held that notional or notional interest income cannot be brought to tax under the scheme of the Income Tax Act, relying on the proposition of law as laid down by the referenced High Court authority. Respectfully following that legal principle, the Tribunal found the addition on account of deemed interest to be unsustainable and deleted the assessment addition. [Paras 6, 7]

Grounds 5 and 6 allowed; the addition on account of deemed interest / notional income is deleted.

Final Conclusion: The appeal is allowed in entirety: the disallowance under section 35(1)(ii) is set aside, the disallowance of the jute-trade loss is deleted, and the addition on account of deemed interest / notional income is deleted; appeal allowed.

Reckoning of six-year period under Section 153C - requirement to frame assessment of a non-searched person under Section 153C/143(3) where satisfaction is recorded - prospective operation of amendment to Section 153C - challenge to jurisdictional validity of primary assessment proceedings in collateral revision under Section 263

Reckoning of six-year period under Section 153C - requirement to frame assessment of a non-searched person under Section 153C/143(3) where satisfaction is recorded - prospective operation of amendment to Section 153C - Whether the assessment for Assessment Year 2017-18 ought to have been framed under section 153C/143(3) (as opposed to a regular assessment under section 143(3)) by reference to the date of the recording of satisfaction and whether the 2017 amendment to section 153C applies retrospectively. - HELD THAT: - The Tribunal applied the ratio of the Hon'ble Delhi High Court in CIT v. RRJ Securities Ltd. and subsequent authorities to hold that, for a person other than the one searched, the relevant six preceding assessment years are to be reckoned with reference to the date of the satisfaction note (the date of recording of satisfaction/handing over of documents) and not the date of the original search. On the facts, the satisfaction note dated 25.09.2018 must be taken as the reference date; consequently the six-year block would include Assessment Year 2017-18 and assessments for that year ought to have been initiated under section 153C read with section 143(3). The Tribunal further held that the amendment introduced by the Finance Act, 2017 clarifying reckoning from the year of search is prospective and does not affect searches conducted prior to its operative effect; therefore that amendment could not validate the Assessing Officer's treatment of AY 2017-18 as a regular assessment under section 143(3). Applying these principles, the assessment dated 18.12.2018 framed under section 143(3) was held to be bad in law insofar as it should have been framed under section 153C/143(3). [Paras 8, 11]

Assessment for AY 2017-18 was required to be framed under section 153C/143(3) having regard to the satisfaction note dated 25.09.2018; the Finance Act, 2017 amendment is prospective and does not validate the assessment framed as a regular assessment under section 143(3).

Challenge to jurisdictional validity of primary proceedings in collateral revision under Section 263 - Whether the assessee can contest the jurisdictional validity of the assessment order (primary proceedings) in appeal against the revision order passed under section 263 (collateral proceedings). - HELD THAT: - The Tribunal examined competing authorities and fundamental principles that an order passed without jurisdiction is a nullity and may be challenged in collateral proceedings. Relying on precedent including the ITAT Mumbai decision in Westlife Development Ltd. and Supreme Court dicta on nullity of orders without jurisdiction, the Tribunal held that where the original assessment is inherently invalid or non est (for example, because it was not in accordance with statutory requirements or was barred by limitation), its validity can be examined in the collateral proceedings under section 263 for the limited purpose of testing the legal foundation upon which the revision was predicated. Applying this to the present facts, because the assessment for AY 2017-18 was unsustainably framed as a regular assessment instead of under section 153C, the Principal Commissioner of Income Tax could not validly exercise revisionary powers under section 263 in respect of that assessment. [Paras 19]

An assessee may challenge the jurisdictional validity of an original assessment order in collateral revision proceedings under section 263; since the assessment for AY 2017-18 was held to be invalid for not being framed under section 153C, the revision under section 263 was unsustainable and is set aside.

Final Conclusion: The impugned revision order dated 24.12.2020 passed by the Principal Commissioner of Income Tax under section 263 is set aside because the assessment for Assessment Year 2017-18 was required to be framed under section 153C/143(3) (with reference to the satisfaction note dated 25.09.2018) and an assessment invalid for lack of jurisdiction cannot be the foundation for a valid revision under section 263; the assessee's appeal is allowed.

Deemed dividend u/s.2(22)(e) - business advance - running/current account v. loan account - company benefit and board resolution determining commercial character - remand for verification of allotment/registration of property

Deemed dividend u/s.2(22)(e) - business advance - company benefit and board resolution determining commercial character - Whether amounts advanced by the company to the shareholder attract the deeming fiction of section 2(22)(e) or are business advances not taxable as deemed dividend. - HELD THAT: - The Tribunal held that the deeming provision in deemed dividend u/s.2(22)(e) applies where a loan or advance is given to a shareholder in circumstances that the shareholder alone benefits and the transaction is in the nature of a loan. Conversely, advances given for the purchase of an asset for the company's business, supported by a board resolution and where the company also benefits, constitute a business advance or commercial transaction and do not attract the deeming fiction. The Tribunal noted the company had passed a board resolution authorising payment for purchase of residential property for company purpose and that factual material (including bank sanction showing company as co-borrower and communications with the builder) indicates the property was intended for the company's use. The Tribunal disagreed with the proposition that a large number of ledger entries by itself necessarily converts a transaction into something other than a loan; nevertheless, where the advance is for the company's business and the company benefits, section 2(22)(e) will not be attracted. [Paras 10]

If an advance is for acquisition of property for the company's business and the company benefits (as shown by board resolution and supporting documents), the advance will be treated as a business advance and not as deemed dividend under section 2(22)(e).

Running/current account v. loan account - remand for verification of allotment/registration of property - Whether, in the present case, the impugned sums should be treated as loans/advances attracting section 2(22)(e) or whether factual verification is required on who finally holds title to the property. - HELD THAT: - Although the Tribunal accepted the assessee's contention that the consolidated ledger shows features of a running/current account v. loan account, it observed that the ledger character alone does not conclusively absolve the assessee from the applicability of section 2(22)(e) - each advance requires explanation and factual scrutiny. New evidence (an allotment letter dated 26.11.2019 showing allotment in the company's name) was produced for the first time before the Tribunal. Given these facts and the need to verify the veracity of the newly produced document and the ultimate allotment/registration of the property, the Tribunal set the matter aside for limited remand. The Assessing Officer is directed to examine whether the advance was given for acquisition of an asset for the company's business and to verify in whose name the property is finally registered, giving the assessee opportunity to substantiate the claim. [Paras 11, 12]

Issue remanded to the Assessing Officer for limited purpose to examine whether the advance was for the company's business and to verify the final allotment/registration of the property; the Assessing Officer shall afford the assessee opportunity to substantiate the claim.

Final Conclusion: The Revenue's appeal is partly allowed for statistical purposes; the Tribunal laid down that advances for purchase of property for the company's business, supported by board resolution and company benefit, are not deemed dividends, but remanded the matter to the Assessing Officer to verify whether the impugned advances were for the company's benefit and to ascertain in whose name the property was finally allotted/registered.

Disallowance of expenses attributable to exempt income under section 14A read with Rule 8D - voluntary disallowance by the assessee and requirement of reasoned rejection - disallowance under Rule 8D(2)(ii) - computation under Rule 8D(2)(iii) confined to investments yielding exempt income - remand for fresh quantification in light of Tribunal precedent

Voluntary disallowance by the assessee and requirement of reasoned rejection - disallowance under Rule 8D(2)(ii) - Whether the disallowance made under Rule 8D(2)(ii) could be sustained when the assessee had voluntarily disallowed an amount and the Assessing Officer did not record reasons why that voluntary disallowance was unrealistic. - HELD THAT: - The Tribunal noted that the assessee had voluntarily disallowed expenditure for earning exempt dividend income and that the Assessing Officer did not explain why the admitted amount was unrealistic for maintaining the investments. The Bench observed there may not be material difference in the quantum of work for maintaining small or large investments and, absent any rationale from the Assessing Officer challenging the assessee's estimate, the invocation of Rule 8D(2)(ii) to increase the disallowance was unjustified. The Tribunal therefore set aside the disallowance made under Rule 8D(2)(ii). [Paras 5]

Disallowance under Rule 8D(2)(ii) deleted for lack of reasoned justification to reject the assessee's voluntary disallowance.

Computation under Rule 8D(2)(iii) confined to investments yielding exempt income - remand for fresh quantification in light of Tribunal precedent - How the Assessing Officer should compute the disallowance under Rule 8D(2)(iii) in respect of investments when exempt income has been earned. - HELD THAT: - The Tribunal directed that for quantification under Rule 8D(2)(iii) the Assessing Officer must consider only those investments which yielded exempt income during the year under consideration. The direction was given with reference to the Delhi Special Bench decision in ACIT v. Vireet Investment (P) Ltd., and the matter was remanded to the Assessing Officer for passing a detailed order applying that principle and recomputing the disallowance accordingly. [Paras 6]

Issue remanded: AO to recompute the disallowance under Rule 8D(2)(iii) considering only investments that yielded exempt income and to pass a detailed order.

Final Conclusion: Appeal partly allowed: disallowance under Rule 8D(2)(ii) deleted for lack of reasoned rejection of the assessee's voluntary disallowance; computation under Rule 8D(2)(iii) remanded to the Assessing Officer to consider only investments yielding exempt income and to pass a detailed recomputation in accordance with the Tribunal precedent.

Ex-parte dismissal for non-prosecution - violation of principle of natural justice - non-receipt of hearing notices / notices returned undelivered - requirement under sub-section (6) of section 250 to state points for determination, decision and reasons - remand for fresh adjudication after opportunity and reasoned order

Ex-parte dismissal for non-prosecution - violation of principle of natural justice - non-receipt of hearing notices / notices returned undelivered - Whether the appellate order passed ex-parte by the Commissioner of Income Tax (Appeals) dismissing the assessee's appeal for non-prosecution was vitiated by denial of opportunity and non-receipt of notices. - HELD THAT: - The Tribunal examined the record and the submissions that notices said to have been issued by the CIT(A) were not received by the assessee and were recorded in the impugned order as returned 'undelivered' by the postal authority. On these facts the Tribunal found that the appeal was dismissed ex-parte without giving the assessee proper and sufficient opportunity of being heard, resulting in a clear breach of the principles of natural justice. The Tribunal accepted that non-receipt of notices furnished a sufficient explanation for the assessee's non-compliance with hearing dates and that the ex-parte dismissal therefore could not be sustained in the absence of service and an opportunity to be heard. [Paras 5]

Impugned ex-parte order dismissing the appeal for non-prosecution was set aside for violation of natural justice and remitted for fresh disposal after giving proper opportunity to the assessee.

Requirement under sub-section (6) of section 250 to state points for determination, decision and reasons - remand for fresh adjudication after opportunity and reasoned order - Whether the CIT(A)'s order complied with the statutory obligation to state points for determination, the decision thereon and reasons in writing under sub-section (6) of section 250. - HELD THAT: - The Tribunal observed that under sub-section (6) of section 250 the appellate authority is obliged to dispose of an appeal by an order in writing setting out the points for determination, the decision thereon and the reasons for the decision. The impugned order did not satisfy these statutory requirements nor did it constitute a well-reasoned order. In view of this procedural deficiency coupled with the denial of opportunity, the Tribunal considered it appropriate in the interests of justice to remit the matter to the CIT(A) to decide the appeal afresh on merits after affording the assessee proper notice and hearing and by passing a reasoned order dealing with the points for determination. [Paras 5]

Impugned order held non-compliant with sub-section (6) of section 250 and remitted for fresh adjudication with directions to give opportunity and record points, decision and reasons.

Final Conclusion: The ex-parte appellate order dismissing the assessee's appeal for non-prosecution was set aside for breach of natural justice and statutory non-compliance; the matter is remitted to the CIT(A) for fresh disposal on merits after giving proper opportunity to the assessee and passing a reasoned order. The appeal is treated as allowed for statistical purposes.

Disallowance under section 14A while computing taxable income under the normal provisions - Applicability of section 14A to investments made out of non-interest-bearing funds - Attributability of interest and expenditure to investments in sister concerns - Remand for verification of source of funds and consequential deletion of addition

Disallowance under section 14A while computing taxable income under the normal provisions - Ld. CIT(A) erred in treating the appeal as infructuous and thereby did not decide the addition made under section 14A while computing taxable income under the normal provisions. - HELD THAT: - The Tribunal found that the appeal pending before the Ld. CIT(A) related to invocation of section 14A in computing taxable income under the normal provisions, whereas the assessee's separate proceedings under section 154 concerned computation of income under section 115JB; the two are distinct. The Ld. CIT(A)'s treatment of the appeal as infructuous therefore resulted in non-adjudication of the ground raised by the assessee. The Tribunal accepted the assessee's contention that the Ld. CIT(A) abstained from addressing the section 14A issue before him and held that such abstention was erroneous, warranting adjudication rather than dismissal as infructuous. [Paras 4, 5]

Ld. CIT(A)'s dismissal of the appeal as infructuous is unsustainable and the matter required adjudication; the Tribunal allowed the appeal for statistical purposes on this ground.

Applicability of section 14A to investments made out of non-interest-bearing funds - Attributability of interest and expenditure to investments in sister concerns - Remand for verification of source of funds and consequential deletion of addition - Whether the addition made under section 14A (notional disallowance) is sustainable where the assessee invested in sister concerns out of non-interest-bearing funds. - HELD THAT: - Relying on the bench's earlier decision in the cited ITA (Shalivahana Green Energy Limited, AY 2013-14), the Tribunal articulated that only interest on borrowed funds utilised for investment and direct or indirect expenses attributable to making the investment can be attributed under section 14A. If investments are made out of the assessee's own non-interest-bearing funds (share capital and reserves), no interest cost is attributable, and minimal clerical or stationery expenses, if any, would be negligible and to be ignored. Applying that ratio, the Tribunal did not decide the merits on facts but remitted the matter to the assessing officer to verify whether the assessee's entire investment in sister concerns was made from non-interest-bearing funds; if so, the addition is to be deleted, and if not, the AO is to pass an appropriate order on merits in accordance with law. [Paras 6, 7]

Matter remitted to the AO to verify source of funds; if investment was entirely from non-interest-bearing funds, delete the section 14A addition, otherwise decide afresh in accordance with law.

Final Conclusion: The Tribunal found that the Ld. CIT(A) erred in treating the appeal as infructuous and remitted the section 14A issue to the assessing officer for factual verification of the source of funds; if investments were made wholly from non-interest-bearing funds, the notional disallowance under section 14A is to be deleted, otherwise the AO shall pass a fresh decision in accordance with law. Appeal allowed for statistical purposes.

Violation of Article 14-Unreasonable classification in taxation - Right to health under Article 21-positive obligation in times of pandemic - Judicial review of exemption notifications issued under Section 25 of the Customs Act - Distinct and noticeable burdensomeness test for tax impugned under Article 21 - Interpretation of "drug" under the Drugs and Cosmetics Act to include medical equipment

Violation of Article 14-Unreasonable classification in taxation - Imposition of IGST on oxygen concentrators imported as gifts for personal use, as effected by the impugned notifications, discriminated unreasonably between identical classes and was arbitrary. - HELD THAT: - The notification dated 03.05.2021 created an exclusionary class by exempting IGST only for oxygen concentrators imported through a canalising agency while denying the same benefit to individuals who received identical goods as gifts. The Court found that this distinction lacked an intelligible differentia and adequate determining principle, rendering the classification manifestly arbitrary and violative of Article 14. The existence of prior notifications (notably the 24.04.2021 exemption of BCD) recognising public interest in facilitating import of oxygen concentrators reinforced that persons similarly circumstanced ought not to have been excluded merely on the mode of importation. Differential treatment in taxation is permissible only if reasonably related to the object; that nexus was absent here. [Paras 13, 14]

The distinction effected by the notification dated 03.05.2021 is arbitrary and in breach of Article 14; imposition of IGST on oxygen concentrators imported as gifts for personal use cannot be sustained.

Right to health under Article 21-positive obligation in times of pandemic - Distinct and noticeable burdensomeness test for tax impugned under Article 21 - Article 21 (right to life and health) bears on judicial scrutiny of taxation in extraordinary circumstances and the petitioner demonstrated that IGST imposed a distinct and noticeable burdensomeness on persons similarly placed during the pandemic. - HELD THAT: - The Court recognised that while taxation ordinarily attracts deference, in overwhelming public emergencies the impact of a tax on the right to health must be considered. In the pandemic context, the petitioner established that levy of IGST on imported oxygen concentrators produced a direct and immediate adverse effect on access to life saving medical equipment and therefore involved a "distinct and noticeable burdensomeness." The State was required to demonstrate, by broad brush figures or rationale, that collection of IGST in such cases served a public interest outweighing the burdens; the counter affidavit did not supply such justification. The Court emphasised that Article 21 can entail positive obligations and a humanistic approach in exceptional times. [Paras 15]

In the circumstances of the COVID-19 pandemic, the levy of IGST on oxygen concentrators imported as gifts imposes a burdensomeness directly affecting the right to health under Article 21 and the State failed to justify that burden in the public interest.

Judicial review of exemption notifications issued under Section 25 of the Customs Act - Interpretation of "drug" under the Drugs and Cosmetics Act to include medical equipment - Relief and remedial measures: the Court quashed the notification reducing IGST (notification no. 30/2021 dated 01.05.2021) insofar as it permitted imposition on gifted oxygen concentrators for personal use; preserved and read down the notification dated 03.05.2021 by interpreting General Exemption No. 190 to include oxygen concentrators as falling within the exemption for life saving drugs/medicines; and directed a simplified compliance regime pending designation of officers. - HELD THAT: - The Court held that it could not command the executive to issue an exemption but could judicially strike down or read down delegated exemption notifications that are arbitrary. It declared the imposition of IGST on imported oxygen concentrators received as gifts unconstitutional and quashed notification no. 30/2021 (01.05.2021). To avoid creating a lacuna and to serve public welfare, the Court interpreted entry no. 607A, Tariff Item no. 9804 of General Exemption No. 190 (issued under Section 25(1)) to include oxygen concentrators as "drugs"/medical equipment within the exemption for life saving drugs/medicines supplied free of cost by overseas suppliers. The Court found the formal certification condition (condition no. 104) impractical in an emergency and directed that a letter of undertaking that the device will not be put to commercial use shall suffice, to be furnished to the officer designated by the State (or provisionally to the Joint Secretary, Customs or nominee) until formal designation. The Court also directed release of deposits made by the petitioner with interest. [Paras 17, 19, 21]

Notification no. 30/2021 dated 01.05.2021 is quashed insofar as it permits IGST on oxygen concentrators imported as gifts for personal use; notification dated 03.05.2021 is preserved and read to operate so as to extend exemption to such imports by treating oxygen concentrators as life saving drugs/medical equipment under General Exemption No. 190, subject to a letter of undertaking in lieu of the certification procedure; deposit made by petitioner to be released with interest.

Final Conclusion: The High Court held that imposition of IGST on oxygen concentrators imported as gifts for personal use during the COVID 19 pandemic was arbitrary and violative of Article 14 and, having regard to Article 21, caused a distinct burdensomeness which the State failed to justify; notification no. 30/2021 (01.05.2021) was quashed insofar as it upheld such levy, and the exemption framework was interpreted to treat oxygen concentrators as covered by the nil rate exemption for life saving drugs/medicines, subject to a letter of undertaking and administrative directions for release of deposits.

Seizure under Section 110(1) of the Customs Act, 1962 - provisional release under Section 110A of the Customs Act, 1962 - confiscation under Section 111(o) of the Customs Act, 1962 - confiscation under Section 113(i) of the Customs Act, 1962 - show-cause notice and adjudication under Section 124 of the Customs Act, 1962 - adjudication and principles of natural justice - withholding of IGST refund pending adjudication

Seizure under Section 110(1) of the Customs Act, 1962 - provisional release under Section 110A of the Customs Act, 1962 - show-cause notice and adjudication under Section 124 of the Customs Act, 1962 - adjudication and principles of natural justice - Impugned seizure is central to the lis and requires prompt adjudication by the adjudicatory authority under the Customs Act; court directs issuance of notice under section 124(a) and completion of adjudication within specified timelines. - HELD THAT: - The seized consignment was initially put on hold, examined and thereafter seized by the Intelligence Officer under section 110(1) on suspicion of liability to confiscation under sections 111(o) and 113(i). Although the goods have been provisionally released under section 110A, seizure is not an end in itself and a seizure in contemplation of confiscation must be adjudicated promptly. Indefinite deferral of the show-cause process merely because of provisional release would be unreasonable. Having regard to the competing factual contentions which require fresh factual adjudication on whether the conditions of sections 111(o) or 113(i) are attracted, the matter is fit to be decided by the adjudicatory authority. The Court therefore relegates the petitioner to the adjudicatory forum and directs the Principal Commissioner to authorize issuance of the notice under section 124(a) within three weeks of receipt of this judgment and completion of the adjudication proceedings within eight weeks from issuance of that notice. No opinion is expressed on merits and all contentions remain open for adjudication. [Paras 21, 36, 38]

Petitioner relegated to adjudicatory authority; notice under section 124(a) to be issued within three weeks and adjudication completed within eight weeks; merits kept open.

Confiscation under Section 111(o) of the Customs Act, 1962 - confiscation under Section 113(i) of the Customs Act, 1962 - withholding of IGST refund pending adjudication - challenge to departmental circulars - Challenges to the legality of the departmental circulars and claims for refund are not adjudicated by this Court and are left to be decided in the adjudication proceedings. - HELD THAT: - The Court declines to decide the petitioner's separate challenges to the circulars relied upon by respondents or the petitioner's prayer for IGST refund because those issues are consequential upon and interlinked with the outcome of the adjudication on seizure and possible confiscation. Since adjudication on the seizure is directed to proceed expeditiously, the legality of withholding refunds and the question of circulars' validity are to be considered in, or following, that process. Accordingly, these contentions are left open for the adjudicatory authority; the Court expressly refrains from expressing any view on their merits. [Paras 37]

Challenge to circulars and refund claims not decided; left open for adjudication and consequential determination.

Final Conclusion: Writ petition disposed of by relegating the petitioner to the adjudicatory authority; notice under section 124(a) of the Customs Act to be issued within three weeks and the adjudication proceedings to be completed within eight weeks from that notice; no opinion expressed on merits and costs reserved (no order as to costs).

'actual user' condition in import licences - validity of licence conditions vis-a -vis Foreign Trade Policy - non-exercise of jurisdiction - administrative consistency and single voice of Government - penalty under section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 - remand for fresh adjudication after quashing

'actual user' condition in import licences - non-exercise of jurisdiction - validity of licence conditions vis-a -vis Foreign Trade Policy - Whether the adjudicating authority declined to decide the legality/mandatory nature of the 'actual user' condition and whether such refusal amounted to non exercise of jurisdiction requiring interference. - HELD THAT: - This Court held that its earlier direction dated 20.11.2013 required respondent No.1 to adjudicate the show cause notices on "all issues", which necessarily included the validity and mandatory versus directory nature of the 'actual user' condition contained in the two licences. Respondent No.1 refrained from deciding legality of the condition yet proceeded to find violation and impose penalty under section 11(2) of the Act. Such refusal to examine the central contention on the legality/mandatoriness of the licence condition amounted to non exercise of jurisdiction and was contrary to the Court's direction. The adjudication could not be sustained in law for failure to decide the determinative question whether the condition was authorised by or in conflict with the Foreign Trade Policy and related public notices. [Paras 33, 38, 39, 40]

Impugned order-in-original dated 14.02.2014 is set aside for non-exercise of jurisdiction and for failure to adjudicate the validity of the 'actual user' condition; matter remanded for fresh decision after hearing.

Administrative consistency and single voice of Government - 'actual user' condition in import licences - Effect of conflicting official stands regarding the non-mandatory nature of the 'actual user' condition and the requirement that Union/Directorate speak with one voice. - HELD THAT: - The Court noted contradictory positions taken by Union of India/DGFT in different High Courts: a counter affidavit before the Andhra Pradesh High Court stated that the 'actual user' condition had been non mandatory since 2003 and was only clarified by Public Notice No.47 dated 18.05.2011, whereas the reply in the present petition asserted non mandatoriness only from 18.05.2011. The Court held that Government authorities cannot adopt inconsistent stances in different proceedings to suit litigation positions; such contradiction undermines adjudication and must be resolved in the fresh proceedings. The inconsistency was a relevant factor militating in favour of remand so that the proper legal position may be authoritatively determined. [Paras 34, 37, 38]

Contradictory official stands were identified and taken into account; the matter is remanded for fresh adjudication where the correct legal position on the 'actual user' condition must be authoritatively determined.

Penalty under section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 - remand for fresh adjudication after quashing - Consequences for appellate and review orders following quashing of the order in original and directions as to further proceedings. - HELD THAT: - Since the order-in-original dated 14.02.2014 was set aside for the reasons stated, the appellate order dated 24.07.2015 and the review order dated 04.11.2015, which affirmed or sustained that adjudication, could not survive. The Court directed that the matter be remitted to respondent No.1 for fresh decision in accordance with law after giving the petitioner opportunity of hearing, and specified a time frame for disposal. [Paras 40, 41, 43]

Orders dated 24.07.2015 and 04.11.2015 are quashed as unsustainable; matter remanded to respondent No.1 to decide afresh within three months after hearing the petitioner.

Final Conclusion: Impugned orders dated 14.02.2014, 24.07.2015 and 04.11.2015 are set aside and quashed. The matter is remitted to respondent No.1 for fresh adjudication on all issues (including the legality and mandatory nature of the 'actual user' condition and the penalty claimed) after affording the petitioner an opportunity of hearing; such decision to be rendered within three months. No order as to costs.

Maintainability of company petition under Sections 241-244 of the Companies Act, 2013 - common area maintenance charges (CAM) and obligation of occupants under contractual and tribunal orders - distinct contractual regime for specialised occupier and modification of tribunal directions - court-appointed administrator - powers, duties and protection - police assistance to effect court orders and protect administrator - administrator's authority to manage parking and to float tender for parking contract

Maintainability of company petition under Sections 241-244 of the Companies Act, 2013 - Validity of the consent/authorisation given under Section 244(2) and consequent maintainability of the Company Petition - HELD THAT: - The Tribunal examined the letter of authority (Exhibit B) authorising one member to present the petition on behalf of the group and considered whether that authorisation fulfilled the requirements of Section 244(2). The Tribunal held that more than one hundred shareholders had in substance and with informed purpose authorised Mr. Nitin Bangera to present the petition and that the appointment of a vakalatnama and the conduct of the petitioners demonstrated they understood the object of the petition. Technical or minor defects (such as a few missing signatures or language differences) were insufficient to vitiate the authorization where substantial justice required allowing the petition to proceed. Reliance on procedural strictures was rejected in favour of allowing adjudication on merits in the interests of justice. [Paras 31, 35, 36, 37]

MA No. 2764 of 2019 challenging maintainability is dismissed; the Company Petition is held to be maintainable.

Common area maintenance charges (CAM) and obligation of occupants under contractual and tribunal orders - administrator's power to recover CAM contributions - Applicability and enforcement of the Tribunal's earlier direction fixing CAM at Rs.15 per sq. ft. to constituent members/shareholders/shop owners (other than R4) - HELD THAT: - Having found widespread default by shop owners and that non payment was detrimental to maintenance and safety, the Tribunal directed that constituent members/shareholders/shop owners (except R4) shall pay CAM at Rs.15 per sq. ft. per month for the period w.e.f. 01.09.2018 till 30.04.2021 within one month and continue current monthly payments thereafter. The Tribunal accepted the Administrator's need to realize contributions for proper upkeep, ordered status reports and quarterly returns of collections, and allowed limited enforcement measures subject to its directions. Applications challenging applicability (including CA No. 688 of 2020) were dismissed on contest where parties occupying without special contractual exception could not be exempted from the tribunal's earlier orders. [Paras 38, 39, 41]

CA No. 1069 of 2020 allowed in part: all constituent members/shareholders/shop owners except R4 to pay CAM at Rs.15 per sq. ft. for specified period and continue thereafter; CA No. 688 of 2020 dismissed.

Distinct contractual regime for specialised occupier and modification of tribunal directions - application of specific contractual CAM rate to specially arranged occupier - Whether R4 (hospital occupier) is bound by the Rs.15 CAM rate or entitled to the lower contractual rate and the consequent direction - HELD THAT: - The Tribunal examined the registered agreements and supplementary terms between the promoter and R4 which provided for independent maintenance of the hospital premises, separate services, and a contractual CAM rate of Rs.1.50 per sq. ft. from the date of possession/OC. Noting that provisional occupation certificate was granted w.e.f. 06.05.2020 and that R4 had exclusive arrangements for utilities and security, the Tribunal held that the general Rs.15 rate could be modified insofar as R4 was concerned. Accordingly, R4 was directed to pay CAM at Rs.1.5 per sq. ft. from 06.05.2020 to 30.04.2021 and thereafter to pay current CAM at that rate until further orders. [Paras 40]

R4 shall pay CAM at Rs.1.5 per sq. ft. from 06.05.2020 to 30.04.2021 and continue to pay the same current CAM thereafter until further orders.

Police assistance to court-appointed administrator - court-appointed administrator - powers, duties and protection - Whether the police authorities should be directed to assist the Administrator in implementing Tribunal orders and in removal of illegal occupants/vehicles - HELD THAT: - Given repeated difficulties faced by the Administrator in realizing CAM charges and in managing unauthorised occupation and parking, and in light of earlier directions and the need to prevent hazards to the public, the Tribunal directed the police authorities to provide necessary help/assistance to the Administrator to effectively carry out the Tribunal's prior orders. The Tribunal recorded its intention that such assistance include support for removal of illegal occupants and unauthorised vehicles to enable the Administrator to perform the functions limited to common area maintenance.

Police authorities directed to assist the Administrator in executing orders dated 10.12.2018, 11.02.2019, 10.10.2019 and 16.01.2020.

Administrator's authority to manage parking and to float tender for parking contract - handing over of parking areas to court appointed administrator - Whether the Administrator may be authorised to float a tender for parking contract and take control of parking areas - HELD THAT: - To ensure proper management of parking facilities and to facilitate realization of CAM and orderly administration, the Tribunal allowed the Administrator to float a tender for a parking contract. The Tribunal ordered that R7 (the then parking contractor) shall forthwith hand over the parking areas to the Administrator for this purpose, subject to the Administrator taking into account any separate agreements between the Company or promoter and other constituents regarding parking.

Administrator permitted to float tender for parking contract; R7 directed to hand over parking areas; Administrator to consider existing agreements regarding parking.

Final Conclusion: The Tribunal dismissed the maintainability challenge and certain interlocutory applications, upheld the Administrator's mandate to collect CAM for proper upkeep, directed all constituent members (except R4) to pay CAM at Rs.15 per sq. ft. for the specified period and continue payments, modified the CAM obligation of the hospital occupier (R4) to Rs.1.5 per sq. ft. from 06.05.2020, directed police assistance to the Administrator, authorised tendering and takeover of parking by the Administrator, ordered periodic status reports of collections, and refused the remaining prayers without costs.

Restoration of company name under Section 252(3) of the Companies Act, 2013 - Carrying on business / going concern as basis for restoration - Obligation on Registrar of Companies to verify statutory compliances before restoration - Verification of paid-up capital records and reconciliation with master data - Requirement to file pending Income Tax Returns and production of bank statements for specified periods - Conditional restoration subject to compliance and payment of costs

Restoration of company name under Section 252(3) of the Companies Act, 2013 - Carrying on business / going concern as basis for restoration - Restoration of the company's name on the Register of Companies was ordered on the ground that the company was in existence and a going concern at the time of strike off. - HELD THAT: - The Tribunal, after perusal of the material on record including the latest balance sheet and financial statements up to 31.03.2019 and hearing the applicant, found that the company had total assets and liabilities recorded and was in operation. Applying the test in Section 252(3) - whether the company was carrying on business or in operation or whether it is otherwise just to restore the name - the Tribunal was satisfied that restoration was warranted and exercised its powers to order restoration subject to specified conditions and verifications. The Tribunal recorded the existence of audited financial statements for the period relied upon by the applicant and accepted that the claim of inadvertence in non-filing could be remedied through post-restoration compliances. [Paras 8, 9]

The company's name is to be restored to the Register of Companies as it was a going concern at the time of striking off; restoration ordered subject to compliance with directions.

Obligation on Registrar of Companies to verify statutory compliances before restoration - Verification of paid-up capital records and reconciliation with master data - Requirement to file pending Income Tax Returns and production of bank statements for specified periods - Conditional restoration subject to compliance and payment of costs - The matter of reconciliation of paid-up capital, absence of revenue in P&L for 2018-19, filing of bank statements (2013-2017) and pending income-tax returns was not finally decided on merits but directed to be verified and complied with before ROC effects restoration. - HELD THAT: - The Tribunal directed the company to clarify and reconcile the mismatch between paid-up capital in the company's master data and the balance sheets for 31.03.2012 to 31.03.2019 and to submit bank statements for 2013-2017. The Tribunal also directed the company to file all pending income-tax returns forthwith and to submit proof to the ROC. ROC was ordered to satisfy itself about these matters and other observations in its report prior to restoring the name. Restoration was made conditional on such satisfactory compliance, filing of statutory documents with prescribed fees/fines within a specified time, payment of costs fixed by the Tribunal, and ROC publishing the order in the Official Gazette; the Tribunal further reserved ROC's power to take appropriate action for any other violations. [Paras 10]

The issues of reconciliation, documentary proof and statutory filings are remitted for verification and compliance; ROC to ensure satisfactory compliance before completing restoration, and restoration is subject to the specified conditions including payment of costs.

Final Conclusion: The Tribunal ordered restoration of the company's name under Section 252(3) on the finding that the company was a going concern, while directing detailed verification and compliance (paid-up capital reconciliation, bank statements, filing of pending ITRs and statutory documents, payment of costs) to be completed to the satisfaction of the Registrar of Companies before the restoration is effected.

Powers of Tribunal under Sections 241-242 to accept settlement and permit withdrawal - Exercise of wide equitable powers analogous to Section 402 for compounding/waiver of past transgressions - Inherent powers under Rule 11 of the NCLT Rules to meet ends of justice - Exemption from action by Registrar/Regional Director in respect of specified past irregularities - Rectification of statutory registers and marking filings as defective; rectification under Section 59

Powers of Tribunal under Sections 241-242 to accept settlement and permit withdrawal - Inherent powers under Rule 11 of the NCLT Rules to meet ends of justice - Settlement Agreement dated 20.01.2020 taken on record and leave granted to withdraw CP No. 11/JPR/2018 and CP No. 279/JPR/2019 in terms of the settlement. - HELD THAT: - The parties having voluntarily entered into a written Settlement Agreement and filed a joint application, the Tribunal, exercising its wide powers under Sections 241-242 of the Act and inherent powers under Rule 11 of the NCLT Rules, may take the settlement on record and permit withdrawal of the company petitions. Judicial precedents recognising the broad and discretionary remedial powers available to forums dealing with oppression and mismanagement were considered to support the exercise of such power in the interest of the company and its stakeholders. On the facts, the Tribunal concluded that a concluded mutual settlement brought about an appropriate and final resolution of the disputes between the parties and therefore granted liberty to withdraw the petitions in terms of the Agreement and recorded the Settlement Agreement dated 20.01.2020. [Paras 21, 23]

Settlement Agreement taken on record and withdrawal of the two Company Petitions permitted in terms of the Agreement.

Exercise of wide equitable powers analogous to Section 402 for compounding/waiver of past transgressions - Exemption from action by Registrar/Regional Director in respect of specified past irregularities - No action shall be taken by the Registrar of Companies, Regional Director, Ministry of Corporate Affairs or any other authority in respect of the specified past improper share allotments and irregular appointment of directors; exemption limited to those specific past issues. - HELD THAT: - Having regard to the antecedent circumstances of the cross-petitions and the mutual settlement, and applying the Tribunal's wide remedial jurisdiction in oppression and mismanagement matters (as reflected in precedents cited), the Tribunal exercised its authority to grant a limited compounding/exemption from action by statutory authorities in respect of the past irregular share allotments and appointments. The exemption is confined to the specific historical transgressions set out in the petitions and does not constitute a general immunisation beyond those matters. This exercise was directed at achieving finality between the parties and safeguarding the company's interests. [Paras 21, 23]

Limited exemption granted: no action to be taken by regulatory authorities in respect of the specified past transgressions.

Rectification of statutory registers and marking filings as defective; rectification under Section 59 - Petitioners permitted to seek marking as defective of previous filings with the Registrar of Companies relating to erroneous share allotments and incorrect director appointments; consequent rectifications in statutory registers and records to be effected. - HELD THAT: - The Tribunal allowed the parties to implement the practical consequences of their settlement by permitting the marking of earlier filings as defective and ordering that such returns/filings stand nullified, with appropriate modifications or rectification of statutory registers and related records. The relief aligns with the settlement terms and the Tribunal's power to fashion effective remedies to give effect to an agreement that resolves disputes under Sections 241-242. The Tribunal confined this relief to the corrective steps necessary to reflect the settlement in statutory records. [Paras 23]

Liberty granted to mark previous filings as defective and to effect rectification of registers and related records consequential to the settlement.

Final Conclusion: The Settlement Agreement dated 20.01.2020 is recorded; the two cross Company Petitions are disposed of in terms of the Agreement, with limited exemptions from action by regulatory authorities in respect of the specified past share allotment and director-appointment irregularities, and with liberty to carry out statutory rectifications consequential to the settlement.

Validity of notification under Section 1(3) of the Insolvency and Bankruptcy Code - selective commencement of statutory provisions - conditional legislation versus delegated legislation - treatment of personal guarantors to corporate debtors under the IBC - reading of Section 60(2) distributively with respect to insolvency, liquidation and bankruptcy - effect of approved resolution plan on guarantor's liability - rule against double recovery / "double dip" in insolvency

Validity of notification under Section 1(3) of the Insolvency and Bankruptcy Code - selective commencement of statutory provisions - conditional legislation versus delegated legislation - treatment of personal guarantors to corporate debtors under the IBC - reading of Section 60(2) distributively with respect to insolvency, liquidation and bankruptcy - Validity of the impugned notification S.O. 4126(E) dated 15.11.2019 bringing specified provisions into force only insofar as they relate to personal guarantors to corporate debtors. - HELD THAT: - The Court examined whether Section 1(3) permits staged or selective commencement of provisions and whether the impugned notification effected an impermissible legislative modification or an unlawful classification. The judgment finds that Parliament, by the 2018 amendment, carved out personal guarantors as a distinct category (Section 2(e)) and also amended Section 60 to provide for a common adjudicatory forum (NCLT) for corporate debtors and their guarantors. Those amendments, read with other provisions (including Sections 5(22), 60, 179, 234-235) and the parliamentary materials (Working Group and BLRC reports), provide sufficient legislative guidance and purpose to treat personal guarantors differently for operational reasons. The history of prior phased notifications shows a consistent scheme of staged enforcement to set up institutional and procedural machinery. Section 60(2) must be read distributively so that liquidation applies to corporate persons and insolvency/bankruptcy applies to personal guarantors. In that statutory and purposive context the Central Government's exercise of power under Section 1(3) to bring specified provisions into force from 01.12.2019 "only in so far as they relate to personal guarantors to corporate debtors" is within the authority conferred by Parliament and not an unconstitutional delegation or amendment of the statute. The impugned notification therefore does not amount to impermissible selective legislation or to an alteration of the Code's identity and is held valid. [Paras 82, 83, 99, 100, 101]

The impugned notification S.O. 4126(E) is valid and intra vires Section 1(3) of the Code; the selective commencement insofar as it relates to personal guarantors to corporate debtors is permissible.

Effect of approved resolution plan on guarantor's liability - rule against double recovery / "double dip" in insolvency - Whether approval of a resolution plan in respect of a corporate debtor operates automatically to discharge or extinguish the liability of its personal guarantors. - HELD THAT: - The Court reviewed Section 31(1) of the Code and the relevant principles of suretyship under the Indian Contract Act (Sections 128, 133, 134, 140). It reiterated established law that an involuntary discharge of the principal debtor (by liquidation or operation of law) does not ipso facto absolve the guarantor of liability; the guarantor's liability arises from an independent contract and continues unless discharged by contract or operation of law expressly applicable to the guarantor. Section 31 makes an approved resolution plan binding on guarantors, and the extent to which a guarantor's liability is affected depends on the terms of the resolution plan and the guarantee. The Court observed that safeguards against impermissible double recovery exist in substantive law and in the Code's scheme; creditors may pursue remedies against both principal and guarantor but cannot recover more than the debt due in aggregate. Consequently, approval of a corporate resolution plan does not automatically extinguish the guarantor's independent obligations. [Paras 103, 106, 107, 111]

Approval of a resolution plan for a corporate debtor does not, by itself, operate to discharge or extinguish the liabilities of personal guarantors; guarantor liability continues subject to the terms of the guarantee and the resolution plan.

Final Conclusion: The impugned notification bringing specified provisions of the Code into force, insofar as they relate to personal guarantors to corporate debtors, is valid; and an approved resolution plan in respect of a corporate debtor does not automatically discharge the liabilities of its personal guarantors. The writ petitions and transferred matters are dismissed accordingly.

Limitation under Article 31 of the Limitation Act, 1963 - operational debt - claim submission to the Resolution Professional / Liquidator and prescribed time limits - appeal under Section 42 of the Insolvency and Bankruptcy Code, 2016 - condonation of delay by exercise of inherent powers under Rule 11 of the NCLT Rules, 2016

Limitation under Article 31 of the Limitation Act, 1963 - operational debt - Whether the Applicant's claim for recovery was time barred under the Limitation Act and therefore not due and payable. - HELD THAT: - The Tribunal found that the promissory note executed on 27.05.2002 fell due on 25.11.2002. A later cheque in respect of the balance was presented to the Applicant's bank and dishonoured on 05.06.2003; thus the claim became due and payable with effect from 05.06.2003. Article 31 of the Limitation Act prescribes a three year limitation for suits on such instruments. The Applicant did not initiate any proceedings or make a demand within three years from 05.06.2003. The Tribunal therefore observed that the claim was barred by limitation and that the appeal under Section 42 (filed about ten months after receipt of the liquidator's rejection) was also time barred in the absence of a satisfactory explanation for delay. [Paras 5, 6, 7, 8, 10]

The claim was prima facie time barred under Article 31 and the appeal against the liquidator's decision was filed beyond the prescribed period.

Condonation of delay by exercise of inherent powers under Rule 11 of the NCLT Rules, 2016 - appeal under Section 42 of the Insolvency and Bankruptcy Code, 2016 - claim submission to the Resolution Professional / Liquidator and prescribed time limits - Whether, notwithstanding the delay and limitation-bar, the Tribunal should invoke its powers to condone delay and direct the Liquidator to consider the Applicant's claim. - HELD THAT: - Although the Tribunal recorded that the Applicant failed to proffer sufficient cause to justify the delay and that the claim was barred by limitation, it also took into account the salutary principle favouring adjudication on merits and the Applicant's status as a retired senior citizen. Invoking the Tribunal's inherent powers under Rule 11 of the NCLT Rules, 2016, the Bench concluded that interests of justice warranted condonation of the delay. The Tribunal therefore directed the Liquidator to consider the claim on its merits without being influenced by the observations in the order, despite the earlier time bar and procedural defects (including absence of a separate condonation application and belated filing under Section 42). [Paras 9, 11, 12, 13]

Delay in making the claim and in filing the present application is condoned; the Liquidator is directed to consider the Applicant's claim afresh and pass appropriate orders in accordance with law.

Final Conclusion: The Application under Section 42 was allowed: the Tribunal condoned the delay (invoking Rule 11 NCLT Rules, 2016) and directed the Liquidator to consider the Applicant's claim afresh notwithstanding the limitation and procedural defects; no order as to costs.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Code as a complete code and overriding effect under Section 238 - Prohibition on institution or continuation of proceedings against the corporate debtor including execution of any decree or order - Prohibition on recovery of property by an owner or lessor where such property is in possession of the corporate debtor - Operational debt as defined in the Code

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Prohibition on institution or continuation of proceedings against the corporate debtor including execution of any decree or order - Whether the Respondent may proceed with recovery or penalty proceedings against the Corporate Debtor after commencement of CIRP in view of the moratorium. - HELD THAT: - The Tribunal held that the Code is a self-contained code with overriding effect under Section 238, and that Section 14(1)(a) prohibits institution or continuation of suits or proceedings against the corporate debtor from the Insolvency Commencement Date until completion of the CIRP. The claims in the notices relate to dues and duty arising before the CIRP and constitute operational debts to be addressed within the Code and the IRP/CoC process. Consequently, neither coercive proceedings for recovery of dues nor proceedings for enforcement of orders can be sustained during the currency of CIRP, and the Respondent is restrained from proceeding with the notices challenged in the application. [Paras 5, 6, 7]

Respondent restrained from proceeding with the notices dated 08.09.2015, 18.12.2015 and 11.02.2019 or taking any action arising therefrom until completion of the CIRP.

Prohibition on recovery of property by an owner or lessor where such property is in possession of the corporate debtor - Operational debt as defined in the Code - Whether the Respondent can recover possession of premises or attach assets in the custody/possession of the Corporate Debtor during moratorium. - HELD THAT: - Section 14(1)(d) bars recovery of any property by an owner or lessor where such property is occupied or in the possession of the corporate debtor. The Tribunal observed that the explanation to Section 14 preserves licences etc. only for current dues during the moratorium, and that all attempts to recover possession or enforce rights over property occupied by the Corporate Debtor are prohibited while the moratorium subsists. The Respondent's attachment and any consequential steps therefore cannot be allowed to be pursued during CIRP. [Paras 6, 7]

No action for recovery of possession or enforcement against property in the Corporate Debtor's possession shall be taken during the CIRP.

Code as a complete code and overriding effect under Section 238 - Penalty under Section 74(2) of the Code - Whether a penal order under Section 74(2) of the Code can be imposed on the Respondent for alleged contravention of the moratorium. - HELD THAT: - The Tribunal noted that the Respondent has presented its claim before the IRP and that coercive proceedings are stayed by the moratorium. However, the Tribunal declined to exercise any power to impose a penal order under Section 74(2), observing that such relief is penal in nature and not appropriate in the circumstances. The application for initiation of penal proceedings under Section 74(2) was therefore refused. [Paras 9]

Prayer for imposition of penalty under Section 74(2) refused.

Final Conclusion: Application allowed on contest; Respondent restrained from proceeding with or acting upon the notices dated 08.09.2015, 18.12.2015 and 11.02.2019 until completion of the CIRP; prayer for penalty under Section 74(2) refused; no order as to costs.

Substantial justice over technical compliance - binding effect of approved resolution plan - statutory compliances and e-filing - liability of successor management for predecessors' defaults - acceptance of physical filings where e-filing incompatible - extension of implementation period of resolution plan

Statutory compliances and e-filing - binding effect of approved resolution plan - substantial justice over technical compliance - Permission to approve and file the Corporate Debtor's accounts and returns for the period prior to 16.10.2019 and waiver of penalty for delayed filing. - HELD THAT: - The Tribunal accepted that the successful resolution applicant faces genuine difficulty in collating pre-16.10.2019 records due to the malfeasance of former promoters and practical impediments in e-filing. Balancing technical filing requirements against substantial justice, and having regard to the binding nature of the approved resolution plan, the Tribunal directed that the present management be permitted to approve the accounts and return for the period prior to 16.10.2019 in its next meeting and file the relevant returns and statements within three months, without any penalty from the Registrar of Companies. The order recognises that procedural rules (including e-filing requirements) must yield where rigid application would defeat substantial justice and effective implementation of the resolution plan.

Pre-16.10.2019 accounts and returns may be approved and filed within three months without any penalty.

Statutory compliances and e-filing - substantial justice over technical compliance - Acceptance without penalty of accounts and returns for the period subsequent to 16.10.2019 within a specified timeline. - HELD THAT: - Recognising the difficulties arising from Covid-19, change of management and technical filing constraints, the Tribunal directed that the Corporate Debtor may file accounts and returns for the period subsequent to 16.10.2019 within three months and that such filings shall be accepted by the RoC without levy of penalty. The direction is aimed at facilitating implementation of the approved resolution plan and avoiding injustice to the new management who inherited deficient records.

Post-16.10.2019 accounts and returns to be filed within three months and accepted without penalty.

Liability of successor management for predecessors' defaults - binding effect of approved resolution plan - Non-attribution of prior defaults to the present management of the Corporate Debtor. - HELD THAT: - The Tribunal held that the present management shall not in any manner be held accountable for defaults committed by the Corporate Debtor or its promoters/directors prior to 16.10.2019. Reliance was placed on the principle that a successful resolution applicant takes over on a fresh slate and should not be saddled with past malfeasance which would frustrate the certainty required by an approved resolution plan.

The present management is not liable for defaults prior to 16.10.2019.

Acceptance of physical filings where e-filing incompatible - statutory compliances and e-filing - Direction to the RoC to consider accepting physical returns and statements where online submission is incompatible. - HELD THAT: - Given the technical incompatibilities (including issues arising from prior XBRL adoption and changed share capital) and the inability to populate certain historical board dates, the Tribunal directed the Registrar of Companies or the appropriate authority to consider accepting returns and statements in physical form in cases of incompatibility with online submission. This alleviates practical impediments to compliance while preserving statutory intent.

RoC or appropriate authority shall consider accepting physical filings where e-filing is incompatible.

Extension of implementation period of resolution plan - binding effect of approved resolution plan - Extension of the timeline for implementation of the approved resolution plan. - HELD THAT: - Taking into account delays caused by the pandemic, technical and regulatory hurdles, and the need to facilitate completion of the plan, the Tribunal extended the period for implementation of the resolution plan to 31.03.2022, directing all concerned to make all endeavours to facilitate implementation within that period.

Implementation of the resolution plan is extended till 31.03.2022.

Final Conclusion: The application is allowed: the new management is permitted to approve and file pre- and post-16.10.2019 accounts and returns within three months without penalty; it shall not be held liable for defaults before 16.10.2019; the RoC may accept physical filings where e-filing is incompatible; and the approved resolution plan's implementation is extended until 31.03.2022.

Financial Creditor - Financial Debt - Inter-corporate Loan - Default - Admission of petition under Section 7 and initiation of Corporate Insolvency Resolution Process - Moratorium - Appointment of Interim Resolution Professional

Financial Debt - Inter-corporate Loan - Default - The amounts advanced by the petitioner are a financial debt in the form of an inter corporate loan and there is a default by the corporate debtor. - HELD THAT: - The Bench found that the parties' agreement expressly treated the advances as an inter corporate loan bearing interest at 18% per annum and provided that, if NOCs from banks were not obtained and the sale did not materialise, the amounts would be refundable as a financial debt. The corporate debtor's balance sheet and the independent auditor's report recorded and described the liability as inter corporate/short term borrowings, and receipt of the funds was not disputed. The Tribunal rejected the corporate debtor's contention that the payments were part of a sale consideration or merely operational advances, observing that end use does not convert a loan into an operational debt and that the contractual terms demonstrating the time value of money and repayment obligation establish a financial debt. Reliance was placed on comparable authority where similar advances were held to constitute financial debt. On this basis the Bench held that a debt under Section 5(8) (financial debt) and a default under Section 3(12) of the Code existed. [Paras 39, 40, 41, 42, 43]

The advances are an interest bearing inter corporate loan constituting a financial debt and the corporate debtor is in default.

Admission of petition under Section 7 and initiation of Corporate Insolvency Resolution Process - Moratorium - Appointment of Interim Resolution Professional - The Section 7 petition is admitted, CIRP is initiated, moratorium is declared and an IRP is appointed. - HELD THAT: - Having found existence of a financial debt and default, and that requisite formalities in the petition were complied with (including Form 2 consent and no disciplinary bar against the proposed IRP), the Tribunal held the petition merited admission. The IRP proposed by the financial creditor was appointed. Consequential directions were issued: operation of moratorium under Section 14 from the date of order, requirement for the IRP to make the public announcement and perform duties under the Code, and reporting to the Bench within 30 days. The Bench allowed the Company Petition and declared commencement of the CIRP effective from the date of the order. [Paras 47, 48, 49, 50, 51]

The Section 7 petition is admitted; CIRP is commenced from the date of the order, moratorium applies and the proposed Interim Resolution Professional is appointed.

Final Conclusion: The Tribunal held the sums advanced to the corporate debtor were an interest bearing inter corporate loan constituting a financial debt and that default had occurred; accordingly the Section 7 petition was admitted, CIRP commenced, moratorium declared and the proposed Interim Resolution Professional appointed.

Claim admission in liquidation - payability as on liquidation commencement date under Regulation 16 - final list of stakeholders under Regulation 31(2) - time-barred/late claims and condonation under Section 60(5) of the IB Code, 2016 - statutory dues collected as tax payable

Time-barred/late claims and condonation under Section 60(5) of the IB Code, 2016 - claim admission in liquidation - payability as on liquidation commencement date under Regulation 16 - Claim for additional demand dated 30.11.2019 (for FY 2015-2016 and 2016-2017) filed after the deadline and after the liquidation commencement date could be condoned and admitted by directing the Resolution Professional/liquidator to accept it. - HELD THAT: - The Adjudicating Authority noted that the liquidation commencement date was 01.04.2019 and the last date for submission of claims was 30.04.2019; the final list of stakeholders was filed on 13.05.2019 under Regulation 31(2). The additional assessment and demand relied upon by the applicant arose on 30.11.2019 and the claim was filed on 14.12.2019, i.e., after the liquidation commencement date and long after the deadline for claims. Regulation 16 requires that claims be payable as on the liquidation commencement date, and the claim in question did not exist on that date. The applicant's earlier claim (for FY 2014-2015) had already been accepted by the liquidator; the impugned additional claim was therefore not admitable as it originated after the liquidation commencement date and was time-barred. The Tribunal thus refused to exercise power to condone delay so as to admit a post-commencement claim. [Paras 11]

Application for condonation of delay and admission of the additional claim was rejected because the claim originated after the liquidation commencement date and was filed after the prescribed deadline.

Final list of stakeholders under Regulation 31(2) - payability as on liquidation commencement date under Regulation 16 - claim admission in liquidation - Whether the liquidator erred in refusing to admit the additional claim and in not revising the stakeholders list to include the post-commencement demand. - HELD THAT: - The Tribunal observed that admitting a claim that arose after the liquidation commencement date would require revision of the final stakeholders list filed under Regulation 31(2), contravene Regulation 16's requirement regarding payability as on the liquidation commencement date, and risk delaying the liquidation process. Allowing such belated claims could encourage multiple similar applications and frustrate the object of the Insolvency and Bankruptcy Code. In these circumstances the liquidator's refusal to admit the additional claim was upheld as consistent with the liquidation regulations and the objectives of the Code. [Paras 12]

Liquidator did not err in rejecting the belated post-commencement claim and in not revising the finalized stakeholders list; the application was dismissed.

Final Conclusion: The application under Section 60(5) of the Code for condonation of delay and direction to accept the additional sales-tax claims was dismissed: the additional demands originated after the liquidation commencement date, were filed beyond the claim deadline and therefore could not be admitted without contravening the liquidation regulations and frustrating the liquidation process.

Exclusion of time from CIRP statutory period under proviso to Section 12(3) - power of Adjudicating Authority to exclude time in CIRP - inherent powers under Section 60 of the Insolvency and Bankruptcy Code, 2016 - non-cooperation of the corporate debtor as a ground for exclusion (contextual limitation) - preference for resolution over liquidation by limited time exclusion

Exclusion of time from CIRP statutory period under proviso to Section 12(3) - power of Adjudicating Authority to exclude time in CIRP - inherent powers under Section 60 of the Insolvency and Bankruptcy Code, 2016 - non-cooperation of the corporate debtor as a ground for exclusion (contextual limitation) - Application for exclusion of 60 days from the CIRP timeline of the Corporate Debtor was allowed. - HELD THAT: - The Tribunal examined the Resolution Professional's request to exclude 60 days from the CIRP period on account of non-cooperation of the corporate debtor and the CoC's resolution dated 16.02.2021. The Tribunal noted settled law recognising the Adjudicating Authority's power to consider exclusion of time (as discussed in Committee of Creditors of Essar Steel India Limited and in Quinn Logistics India Pvt. Ltd. v. Mack Soft Tech Pvt. Ltd.), and invoked its inherent powers under Section 60 to decide the present application. While observing that non-cooperation alone does not ordinarily constitute exceptional circumstances justifying exclusion, the Tribunal found that, in the factual matrix before it, progress achieved (including with police assistance) and the Resolution Professional's continued efforts made the limited exclusion appropriate to enable completion of the CIRP and to avoid an otherwise avoidable liquidation. The Tribunal further noted that the overall time post-exclusion would remain within permissible limits and directed expedited steps to finalise the process. [Paras 4, 5, 6]

IA No. 81 of 2021 is allowed; exclusion of 60 days from the CIRP period is granted with effect from the date of the order, the RP to take expeditious steps and to report on 20.04.2021.

Final Conclusion: The Tribunal, exercising powers under Section 60 and having regard to the circumstances and progress in the CIRP, allowed the CoC's resolution and granted a 60-day exclusion to facilitate completion of the resolution process and to avoid liquidation; the RP was directed to conclude the CIRP expeditiously and to report on the specified date.

Withdrawal of Resolution Plan after CoC approval - Reliance on Information Memorandum - Condition precedent in Resolution Plan - Right of Resolution Applicant not to be compelled to perform - Duty of Resolution Professional to prepare accurate Information Memorandum - Forfeiture and refund of bank guarantees upon withdrawal

Withdrawal of Resolution Plan after CoC approval - Reliance on Information Memorandum - Right of Resolution Applicant not to be compelled to perform - Condition precedent in Resolution Plan - Resolution Applicant permitted to withdraw the resolution plan after approval by the CoC and pending approval by the Adjudicating Authority. - HELD THAT: - The Tribunal held that a resolution plan is prepared largely on the basis of the Information Memorandum provided by the Resolution Professional and, although the plan is submitted on an "as is where is" basis, materially inaccurate or incomplete information in the IM that affects commercial viability may justify withdrawal. The applicant had expressly reserved a right to withdraw in the plan and included conditions precedent for free and uninterrupted use/transfer of project lands. Discovery of an undisclosed fourth land parcel and conflicting data about land use (confirmed by an independent consultant) created a reasonable apprehension of substantial loss and rendered the plan commercially unviable. In these circumstances, and having regard to precedents recognizing that an adjudicating authority cannot compel specific performance of a plan by an unwilling RA, the Tribunal concluded that the RA could not be compelled to perform and the withdrawal of the plan should be permitted. [Paras 7, 8, 9, 10]

I.A. No. 500/2020 allowing withdrawal of the resolution plan; I.A. No. 439/2020 (application for approval) disposed of as infructuous.

Forfeiture and refund of bank guarantees upon withdrawal - Duty of Resolution Professional to prepare accurate Information Memorandum - Disposition of EMD and performance bank guarantee following withdrawal of the resolution plan. - HELD THAT: - The Tribunal held that although the RA was permitted to withdraw, the RA should bear part of the CIRP expenses and potential loss to the CoC due to the withdrawal. Balancing these interests, the Tribunal directed partial forfeiture of the deposits: a total amount to be forfeited (towards costs/expenses/liquidation shortfall) and the balance to be refunded to the RA. The order reflects the Tribunal's view that some burden should be shouldered by the withdrawing RA while returning the remainder of the security. [Paras 12]

An aggregate sum was forfeited and the balance of the EMD and performance bank guarantee was ordered to be refunded to the Resolution Applicant as specified in the order.

Final Conclusion: The Tribunal allowed the Resolution Applicant to withdraw its resolution plan on grounds of materially deficient and misleading information in the Information Memorandum which rendered the plan commercially unviable, dismissed the approval application as infructuous, and directed partial forfeiture of the deposits with refund of the balance to the Resolution Applicant.

Section 9 petition limited to a single corporate debtor - Deletion of party from array of respondents under Section 60(5)(a) of the Insolvency and Bankruptcy Code, 2016 - Privity of contract under a Business Transfer Agreement - Maintainability of Section 9 petition against multiple corporate entities

Deletion of party from array of respondents under Section 60(5)(a) of the Insolvency and Bankruptcy Code, 2016 - Privity of contract under a Business Transfer Agreement - Respondent No. 2 (Capgemini Technologies Services India Limited) was removed from the array of respondents in the Company Petition. - HELD THAT: - The application under Section 60(5)(a) IBC sought deletion of Respondent No. 2 on the ground that Respondent No. 2 is not a party to the Business Transfer Agreement (BTA) which is the subject matter of the Section 9 petition and that all rights and liabilities under the BTA rest with Respondent No. 1. The petitioner's counsel expressly stated there was no objection to the removal. The Tribunal found that Respondent No. 2 had no privity of contract with the petitioner in respect of the BTA and that post-acquisition affiliate status did not make Respondent No. 2 liable under the agreement. Having considered the pleadings and the Code, the Tribunal was satisfied that deletion of Respondent No. 2 was justified and allowed the application, granting liberty to the petitioner to modify the petition if it desires to pursue it further. [Paras 4, 6, 7, 8]

I.A. No. 60 of 2021 is allowed; Respondent No. 2 is deleted from the array of respondents and the petitioner is granted liberty to modify the petition; no order as to costs.

Section 9 petition limited to a single corporate debtor - Maintainability of Section 9 petition against multiple corporate entities - A petition under Section 9 of the IBC is maintainable only against a single corporate debtor and cannot validly name more than one corporate debtor in the same Section 9 petition. - HELD THAT: - The Tribunal observed that Section 9 and the prescribed Form (Form-5) contemplate a petition by an operational creditor against a single corporate debtor. It relied on the reasoning in the cited NCLT Delhi order that an application under Section 9 in Form-5 can only be against a single corporate debtor (as indicated in Part-II, Column-1 of Form-5), and hence a Section 9 petition naming more than one debtor is not maintainable under the Code. That principle informed the view to remove Respondent No. 2 where the petition related to obligations under a BTA exclusively with Respondent No. 1. [Paras 5, 6, 7]

The Section 9 petition cannot be maintained against more than one corporate debtor in the same proceeding; naming multiple corporate debtors is not in conformity with the form and scheme of Section 9 and Form-5.

Final Conclusion: The application for deletion of Respondent No. 2 is allowed; Respondent No. 2 is removed from the array of respondents and the petitioner is permitted to modify the petition; the Tribunal reaffirmed that a Section 9 petition is to be filed against a single corporate debtor and is not maintainable as against multiple corporate entities in the same petition.

Pre-existing dispute - Section 9 of the Insolvency and Bankruptcy Code, 2016 - demand notice under Section 8 - debt and default - admissibility of petition - account confirmation - Official Liquidator reconciliation report - alteration of claim

Pre-existing dispute - demand notice under Section 8 - Official Liquidator reconciliation report - alteration of claim - Whether there existed a pre existing dispute between the parties prior to the receipt of the demand notice such as to render the application under Section 9 of the IBC not maintainable. - HELD THAT: - The Tribunal examined the contemporaneous communications and records and concluded that a dispute existed before the demand notice was issued. The respondent's letter dated 17.09.2018 and earlier interactions (including representatives' visit on 17.07.2018 and discussions about resumption of supplies on 90 days L.C.) were held to demonstrate a pre existing controversy. The report of the Official Liquidator, prepared after appointment of an independent chartered accountant to reconcile the invoices, recorded unresolved contentions regarding appropriation of payments, debit notes raised by the corporate debtor, and lack of concrete documentary support for certain payments, all of which indicated matters requiring further investigation rather than a clear undisputed debt. In addition, the Tribunal noted that the appellant had, at a late stage, altered its claim to include amounts alleged to be due from an independent entity, which affected the completeness and clarity of the statutory notice and pleadings. On this basis the Tribunal found no legal infirmity in the Adjudicating Authority's conclusion that a pre existing dispute existed and that the Section 9 application was therefore not maintainable. [Paras 21, 22]

The finding of the Adjudicating Authority that a pre existing dispute existed prior to issuance of the demand notice was upheld and the Section 9 application was dismissed.

Final Conclusion: The appeal is dismissed; the impugned order rejecting the Section 9 application on the ground of a pre existing dispute is affirmed and no costs are awarded.

Liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016 - commercial wisdom of the Committee of Creditors - cessation of moratorium - vesting of management powers in the liquidator - public announcement of liquidation - limitations on suits and proceedings during liquidation - appointment of the liquidator - discharge of the resolution professional

Liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016 - commercial wisdom of the Committee of Creditors - appointment of the liquidator - cessation of moratorium - vesting of management powers in the liquidator - limitations on suits and proceedings during liquidation - public announcement of liquidation - discharge of the resolution professional - Order for liquidation of the Corporate Debtor under Section 33 of the Code and ancillary directions including appointment of liquidator, cessation of moratorium and vesting of management powers. - HELD THAT: - The Committee of Creditors, in its 13th meeting dated 14.12.2020, rejected the resolution plan and resolved to liquidate the Corporate Debtor, authorising the resolution professional to file an application under Section 33. The Adjudicating Authority, having regard to the CoC's decision and the principle that the commercial wisdom of the CoC is not to be interfered with, allowed the application filed under Section 33 and ordered liquidation. Consequential directions were issued: the moratorium under Section 14 shall cease to have effect from the date of liquidation; the liquidator shall issue a public announcement and send certified copy of the order to the authority of registration; suits or proceedings shall not be instituted by or against the Corporate Debtor except as governed by Section 52 and except where instituted by the liquidator with prior approval of the Authority; the order operates as notice of discharge to officers, employees and workmen unless business is continued by the liquidator; all powers of the board, KMP and partners cease and vest in the liquidator who shall exercise duties under the specified provisions of the Code and the Liquidation Process Regulations; personnel must assist the liquidator; and the liquidator is entitled to charge fees as specified by the Board. The Adjudicating Authority appointed Mr. Nandish Sunilbbhai Vin (registration No. IBBI/IPA-001/IP-P02117/2020-2021/13270) as liquidator and discharged the IRP/RP from duties while directing the erstwhile CoC to clear dues of the IRP/RP as ratified by the CoC.

Application under Section 33 is allowed; the Corporate Debtor is ordered to be liquidated with the stated directions and Mr. Nandish Sunilbbhai Vin is appointed as liquidator; the IRP/RP is discharged.

Final Conclusion: The Adjudicating Authority allowed the Section 33 application, ordered liquidation of the Corporate Debtor, appointed a liquidator, directed cessation of the moratorium from the date of liquidation and issued routine consequential directions regarding the conduct of liquidation, vesting of powers, public announcement and communication of the order.

Maintainability of writ challenging show cause notice - prematurity of judicial intervention pending quasi judicial adjudication - remand to adjudicating authority for adjudication on merits - invocation of extended period of limitation alleged but not adjudicated - opportunity to file reply and proceed with adjudication

Maintainability of writ challenging show cause notice - prematurity of judicial intervention pending quasi judicial adjudication - Writ under Article 226 challenging the show cause cum demand notice is not maintainable at this stage and is premature. - HELD THAT: - The Court examined the nature of the impugned show cause cum demand notice and the availability of alternative efficacious remedies before the adjudicating authority. It observed that the adjudication process is quasi judicial, will afford full opportunity of hearing to the petitioner and that factual and documentary issues arising from the show cause notice require detailed consideration by the adjudicating authority rather than by a Writ Court. In view of these considerations the High Court concluded that interference by writ jurisdiction at this stage would not be appropriate and that the petitioner should first file its reply and seek adjudication by the statutory forum. The Court therefore declined to decide the merits of the contentions raised, keeping all contentions open for the adjudicating authority. [Paras 14, 18]

Writ petition dismissed as premature; petitioner to file reply to the show cause cum demand notice and pursue adjudication before the statutory authority.

Remand to adjudicating authority for adjudication on merits - opportunity to file reply and proceed with adjudication - invocation of extended period of limitation alleged but not adjudicated - The matter is remitted to the adjudicating authority for adjudication on merits after the petitioner files its reply; questions including invocation of extended limitation are left open for that forum. - HELD THAT: - Having declined to entertain the writ, the Court granted the petitioner a further period of 30 days to file its reply to the show cause cum demand notice and directed that thereafter the adjudicating authority would proceed in accordance with law. The Court expressly refrained from expressing any opinion on the merits, including on the contention regarding invocation of the extended period of limitation under the statute and the relevance of the Board's circular; those questions are to be considered and decided by the adjudicating authority in the normal course. [Paras 16, 18]

Petition remitted for adjudication; petitioner granted 30 days to file reply; merits including limitation left open for the adjudicating authority to decide.

Final Conclusion: The writ petition is dismissed as premature; petitioner directed to file reply to the show cause cum demand notice within 30 days and pursue adjudication before the statutory authority, with all contentions including limitation and merits reserved for that forum; no order as to costs.

Interest on delayed refunds under section 11BB - Refund under section 11B - Application of Central Excise provisions to service tax under section 83 of the Finance Act, 1994 - Mandatoriness of interest where refund is sanctioned beyond three months - Non distinction between intentional and unintentional delay for payment of interest - CENVAT credit refund entitlement of provider of exported services under rule 5 of the CENVAT Credit Rules, 2004 - Administrative circulars enforcing statutory entitlement (Circular No.670/61/2002-CX dated 01.10.2002)

Interest on delayed refunds under section 11BB - Refund under section 11B - Application of Central Excise provisions to service tax under section 83 of the Finance Act, 1994 - Entitlement to interest under section 11BB on refunds of service tax sanctioned after three months from receipt of refund applications. - HELD THAT: - The Court held that sections 11B and 11BB of the Central Excise Act apply to service tax by virtue of section 83 of the Finance Act, 1994. Section 11B prescribes the mechanism for claiming refund and section 11BB prescribes payment of interest where any duty ordered to be refunded under section 11B(2) is not refunded within three months from the date of receipt of the application. The Supreme Court authority in Ranbaxy Laboratories was applied to confirm that interest under section 11BB is attracted from the date immediately after expiry of three months from receipt of the application and continues until the date of actual refund. The Board's circular of 01.10.2002 was noted as emphasising that section 11BB operates automatically and that field formations must follow the statutory provision. The undisputed comparison of the petitioner's application dates and refund order dates showed that the refunds were sanctioned beyond three months; accordingly the statutory right to interest accrued and is payable as a matter of law. [Paras 18, 19, 20, 24, 25]

Petitioner is entitled to interest under section 11BB on the delayed service tax refunds granted after three months from the dates of receipt of the respective refund applications.

Mandatoriness of interest where refund is sanctioned beyond three months - Non distinction between intentional and unintentional delay for payment of interest - Administrative circulars enforcing statutory entitlement (Circular No.670/61/2002-CX dated 01.10.2002) - Whether the existence of administrative reorganisation or absence of intentional delay can negate the statutory obligation to pay interest under section 11BB. - HELD THAT: - The Court rejected the departmental contention that absence of intentional delay or organisational re arrangement could absolve the department from the statutory obligation to pay interest. Section 11BB makes no distinction between intentional and unintentional delay; the obligation to pay interest arises automatically once a refund is sanctioned after the three month period. The Board's circular reinforces that field authorities must not await superior instructions and must grant interest where statutory conditions are met. Consequently, administrative explanations about reorganisation or lack of intent do not defeat the statutory entitlement. [Paras 17, 19, 23, 25]

Departamental reorganisation or absence of intentional delay does not excuse payment of interest; section 11BB liability is mandatory once refunds are sanctioned beyond three months.

Computation and payment of interest - Mandamus to enforce statutory duty - Relief and direction to be afforded where interest is found payable. - HELD THAT: - Having concluded that interest is payable, the Court directed respondent authorities to compute the interest payable to the petitioner in respect of the sanctioned refunds for the relevant periods and to pay the computed amount within three months from receipt of the copy of the judgment. The Court exercised its writ jurisdiction under Article 226 to enforce the statutory obligation and granted consequential relief without imposing costs given the facts and circumstances. [Paras 26]

Respondents are directed to calculate interest payable under section 11BB for the refund claims and pay the same to the petitioner within three months of receipt of the judgment.

Final Conclusion: Writ petition allowed: petitioner entitled to interest under section 11BB of the Central Excise Act (as applied to service tax by section 83 of the Finance Act, 1994) on refunds sanctioned after three months from receipt of applications; respondents directed to compute and pay the interest within three months of receipt of this judgment; no order as to costs.