TaxTMI Updates e-Newsletter
Jun 11,2021

Faceless assessment - personal hearing under Section 144B(7)(vii) - request for personal hearing must be considered - variation proposed in draft assessment order - power to frame standards, procedures and processes for approval of personal hearing - setting aside proceedings for failure to accord/consider personal hearing

Faceless assessment - personal hearing under Section 144B(7)(vii) - request for personal hearing must be considered - variation proposed in draft assessment order - power to frame standards, procedures and processes for approval of personal hearing - Failure of the revenue to consider and deal with the petitioner's repeated requests for personal hearing in faceless assessment proceedings where variation to declared income was proposed. - HELD THAT: - The petitioner made repeated requests for personal hearing both before and after the show-cause notice-cum-draft assessment order dated 23.04.2021, in the context of proposed substantial variation to declared income. Clause (vii) of Section 144B(7) permits an assessee to request personal hearing where a variation is proposed in a draft or final draft assessment order. The usage of the word 'may' in clause (vii) does not absolve the revenue of the obligation to consider such a request. Clause (viii) and clause (xii)(h) confer power on the authorities to approve requests and to frame standards, procedures and processes for such approval; however, no such standards/procedures had been shown to exist. Given these facts and the absence of any dealing with the petitioner's requests for personal hearing, the respondent was obliged to accord or at least consider the request before completing assessment. The infraction of this obligation renders the impugned assessment order liable to be set aside. [Paras 11, 12]

Impugned assessment order set aside for failure to consider the petitioner's requests for personal hearing; writ petition disposed of.

Final Conclusion: The faceless assessment order dated 28.04.2021 concerning AY 2018-2019 is set aside because the revenue did not consider the petitioner's repeated requests for personal hearing as contemplated by Section 144B(7); the petitioner may seek appropriate remedies if the revenue proceeds afresh in accordance with law.

Non-compliance with Section 144B of the Income Tax Act - absence of show cause notice cum draft assessment order - validity of assessment passed under Section 143(3) - quashing of assessment order and consequential notices - liberty to pass fresh assessment subject to statutory limits

Non-compliance with Section 144B of the Income Tax Act - absence of show cause notice cum draft assessment order - validity of assessment passed under Section 143(3) - The assessment order dated 15.04.2021 is invalid because the statutory mandate of issuing a show cause notice cum draft assessment order under Section 144B was not complied with. - HELD THAT: - The Court accepted the uncontradicted assertions in the petition and noted absence of a counter affidavit by the revenue, thereby treating the petitioner's facts as admitted. Although the revenue contended that opportunities were granted to the petitioner, that factual stance does not cure the statutory non compliance. The Court held that the respondents' asserted conduct was contrary to the statutory scheme engrafted in Section 144B; consequently, the assessment issued under Section 143(3), read with the related provisions, could not stand in the face of the mandatory procedure set out in Section 144B. The determinative finding is that failure to issue the show cause notice cum draft assessment order violated the statutory procedure and rendered the assessment order invalid. [Paras 2, 3, 4, 5]

The Court found violation of Section 144B and held the assessment dated 15.04.2021 to be invalid.

Quashing of assessment order and consequential notices - liberty to pass fresh assessment subject to statutory limits - The appropriate relief is to set aside the impugned assessment order and consequential notices, while permitting the assessing officer liberty to act afresh if the law permits. - HELD THAT: - In view of the statutory violation, the Court set aside the assessment order dated 15.04.2021 along with the notice of demand and the notice initiating penalty proceedings. The order disposes of the writ petition and pending application. The Court recognised the revenue's submission seeking liberty for the concerned officer to pass a fresh assessment and, without creating any impediment to lawful action, expressly left open the possibility of a fresh assessment if allowable under law. The Court further made clear that the petitioner would retain its rights to seek appropriate remedies against any such future steps. [Paras 5, 6, 7, 8]

The impugned assessment, notice of demand and penalty initiation notice were set aside; liberty granted to the assessing officer to pass a fresh assessment if permissible by law.

Final Conclusion: The writ petition was allowed: the assessment order dated 15.04.2021, the notice of demand and the notice initiating penalty proceedings were quashed for non compliance with Section 144B. The assessing officer, if statute permits, may pass a fresh assessment, subject to the petitioner's right to pursue available remedies.

Breach of principles of natural justice - right to personal hearing - duty to consider request for adjournment - setting aside assessment, notice of demand and penalty notices and remand for fresh decision

Breach of principles of natural justice - duty to consider request for adjournment - Failure of the Assessing Officer to consider the petitioner's request for accommodation/adjournment and the consequences thereof. - HELD THAT: - The Court found that the petitioner had communicated difficulty in meeting the tight timeline for filing objections to the show cause notice-cum-draft assessment order because his wife and son were hospitalised and the petitioner was quarantined. Those factual assertions were undisputed and supported by affidavit, and no counter-affidavit was filed by the revenue. The AO did not deal with the petitioner's request for accommodation/adjournment. On these facts the Court concluded that there was a breach of principles of natural justice arising from the AO's failure to consider the adjournment request before proceeding to pass the assessment order. [Paras 5]

Impugned orders set aside on grounds of breach of natural justice for failure to consider the adjournment request.

Right to personal hearing - setting aside assessment, notice of demand and penalty notices and remand for fresh decision - Whether the assessment order, notice of demand and notices initiating penalty proceedings should be set aside and remitted for fresh consideration with a direction to afford personal hearing. - HELD THAT: - Because the AO had not considered the petitioner's request and the petitioner subsequently filed detailed replies, the Court held that the assessment order passed under Section 143(3) read with Section 144B, the notice of demand under Section 156 and notices for initiating penalty proceedings under the relevant provisions could not stand. The Court therefore set aside those orders and remitted the matter to the AO to pass a fresh order after considering the petitioner's replies/objections. In addition, the Court directed the AO to accord a personal hearing to the petitioner or his authorised representative and to communicate the date, time and electronic link via the petitioner's registered e-mail ID. [Paras 6]

Assessment order, notice of demand and penalty notices set aside; matter remitted to the AO for fresh decision after considering the petitioner's replies and after affording personal hearing.

Final Conclusion: The writ petition is allowed: the assessment order dated 22.04.2021, the notice of demand and the notices for initiation of penalty proceedings are set aside and remitted to the Assessing Officer to pass a fresh order after considering the petitioner's replies/objections; the AO is directed to afford a personal hearing (to the petitioner or authorised representative) and notify the petitioner of the date, time and link via his registered e-mail ID.

Permanent establishment - attribution of profits to a permanent establishment - force of attraction - taxability of offshore supply (place of transfer of title and risk) - supervision fees taxable under DTAA Article 12(2) - applicability of Rule 11UA for valuation vis-a -vis capital gains computation - computation of long term capital gains under Section 48 - set off of brought forward business and capital losses - credit of tax deducted at source (Form 26AS verification) - interest under Sections 234B and 234C - assessable on returned income vs assessed income

Permanent establishment - taxability of offshore supply (place of transfer of title and risk) - supervision fees taxable under DTAA Article 12(2) - Whether profits from offshore supplies made by the assessee from Japan to MSIL are taxable in India by reason of a permanent establishment or because the supplies and related activities constituted a composite contract. - HELD THAT: - The Tribunal examined the contractual terms, earlier Tribunal findings in the assessee's consolidated order for preceding years, and the position accepted by revenue for subsequent assessment years. It found that title and risk in the goods were transferred outside India, the supplies were effected from Japan, and supervisory services were separate and taxed under Article 12(2) of the Indo-Japan DTAA. The Tribunal also noted that the Assessing Officer himself recorded that facts are identical to preceding years and that subsequent assessments did not seek to tax such offshore supplies. The Revenue's contentions that contractual clauses on rejection/acceptance or alleged links to an Indian PE distinguish the year were not shown to be materially different. On these materials the Tribunal concluded that no profit from offshore supplies accrued to India and that the DRP's finding of a supervisory or composite PE was misplaced. [Paras 25]

Addition in respect of income from offshore supplies is deleted; Grounds Nos. 2 and its subgrounds are allowed.

Attribution of profits to a permanent establishment - force of attraction - Whether any portion of the assessee's global profits could be attributed to an alleged Indian permanent establishment and, if so, whether the percentage adopted by authorities was justified. - HELD THAT: - Revenue relied on Article 7 and the concept that profits directly or indirectly attributable to a PE may be taxed. The Assessing Officer had attributed 50% of global profit and the DRP reduced that to 35% by reference to a Tribunal decision. The Tribunal held that, having concluded offshore supplies were not taxable and no PE existed for those supplies, the authorities' attribution to a PE was unsupported on the record before it. Where attribution had been attempted, the basis for the percentages was not shown to be evidence based or specific to the assessee's functions and risks, and thus the addition based on such attribution could not be sustained. [Paras 25]

Attribution of profit to a PE in India was not sustained; related grounds are allowed.

Computation of long term capital gains under Section 48 - applicability of Rule 11UA for valuation vis-a -vis capital gains computation - set off of brought forward long term capital losses - Whether the Assessing Officer was justified in adopting a higher sale consideration and exchange/conversion rates (and in applying Rule 11UA) for computing long term capital gain on transfer of shares, and whether brought forward long term capital losses should be set off. - HELD THAT: - The assessee sold shares under a Share Purchase Agreement between two non residents for consideration in Japanese Yen; it computed a lower capital gain based on the agreed SPA consideration and contended set off against substantial brought forward long term capital losses. The Assessing Officer adopted a higher per share value (market value on date of transfer), applied Rule 11UA and used particular conversion rates; the DRP upheld that approach. The Tribunal observed that (i) the sale was between unrelated non residents with consideration agreed in Yen, (ii) Rule 11UA is primarily a provision used for valuation in other contexts and its application to substitute negotiated consideration in computing capital gains under Section 48 was at least contestable, and (iii) the conversion rate actually to be applied required verification. The Tribunal therefore directed the Assessing Officer to verify and adopt the correct conversion rate (noting 0.6252 as appropriate to be verified) and remanded the matter for proper adjudication, giving the assessee opportunity of being heard; the question of set off was left to be examined on remand. [Paras 35]

Capital gain computation remanded to the Assessing Officer for verification of the appropriate conversion rate and consequential computation and for adjudication on set off of brought forward long term capital losses; Grounds Nos. 3 and 4 are partly allowed for statistical purpose.

Credit of tax deducted at source (Form 26AS verification) - Whether the Assessing Officer should grant the assessee the full credit of TDS claimed in the return and reflected in Form 26AS. - HELD THAT: - The assessee claimed TDS credit as per Form 26AS which exceeded the credit allowed by the Assessing Officer. The Tribunal observed that the Assessing Officer's calculation and the lesser credit allowed were not properly explained in the order. It directed the Assessing Officer to verify Form 26AS, adjudicate the claim for full TDS credit and grant interest under Section 244A if appropriate, giving the assessee opportunity for hearing. [Paras 39]

Issue remanded to the Assessing Officer for verification of Form 26AS and grant of TDS credit (with interest if applicable); Ground No. 6 is partly allowed for statistical purpose.

Interest under Sections 234B and 234C - assessable on returned income vs assessed income - Whether interest under Section 234C (and Section 234B) was correctly levied by reference to assessed income rather than returned income. - HELD THAT: - The Tribunal held that interest under Section 234C is leviable for default in payment of advance tax instalments based on returned income and not on the assessed income. As the assessee had discharged tax liability as per its return (largely by TDS) and there was no default on returned income, the levy of interest under Section 234C on assessed income was unjustified; hence that ground was allowed. The question of interest under Section 234B was treated as consequential; the Tribunal directed the Assessing Officer to verify facts and recompute interest under Section 234B in the light of any adjustments on remand. [Paras 42, 45]

Interest under Section 234C deleted; Section 234B interest directed to be verified and recomputed by the Assessing Officer (Ground Nos. 7 and 8 partly allowed/ remanded as stated).

Final Conclusion: The appeal is partly allowed. Additions in respect of profit from offshore supplies (attributed to a PE) are deleted; computation of long term capital gain is remanded to the Assessing Officer for verification of the correct conversion rate and consequential treatment including set off of brought forward long term capital losses; claim of TDS credit is remanded for verification against Form 26AS (with interest if due); interest under Section 234C is deleted and interest under Section 234B is to be recomputed by the Assessing Officer in the light of the adjustments. The assessee is to be afforded opportunity of being heard on remanded matters.

Arm's Length Price - Comparability (CUP method) - Benchmarking of cross-border interest - Application of foreign country's prevailing interest rates - Libor-based benchmarking and markup (basis points) - Associated enterprises / wholly owned subsidiary - Capital risk adjustment

Arm's Length Price - Comparability (CUP method) - Application of foreign country's prevailing interest rates - Libor-based benchmarking and markup (basis points) - Capital risk adjustment - Whether the addition made by applying LIBOR + 700 basis points to interest received on a foreign currency loan to a wholly owned German subsidiary was justified, or whether the interest charged by the assessee was at arm's length under the CUP method using prevailing German rates. - HELD THAT: - The Tribunal found that the loan to the German wholly owned subsidiary was in foreign currency, the CUP method was undisputedly the most appropriate method, and the assessee had placed on record prevailing short term and long term interest rates in Germany which were not controverted by the Revenue. The assessee charged interest at 6% which exceeded the German short term and long term rates relied upon by the assessee. The CIT(A) had applied LIBOR with an additional markup of 700 basis points to cover capital risk. However, the Tribunal noted the decision of the Delhi High Court in Commissioner of Income Tax v. Cotton Naturals India Pvt. Ltd., which held that the financial position and credit rating of a wholly owned subsidiary will broadly mirror that of the holding company and that where money is lent in foreign currency to foreign subsidiaries, comparables should be foreign currency loans between unrelated parties; accordingly, a separate capital risk adjustment was not warranted. Applying these principles, and given that the assessee's contemporaneous German comparables showed that the rate charged was not lower than the prevailing rates in the country of the borrower, there was no basis for making an upward adjustment by applying LIBOR + 700 bps. The Tribunal therefore concluded that the adjustment to the assessee's return on account of benchmarking of interest ought to be deleted. [Paras 11, 12]

The adjustment made by applying LIBOR + 700 basis points to the interest on the loan to the German wholly owned subsidiary is unwarranted; the addition is deleted and the appeal is allowed.

Final Conclusion: The Tribunal allowed the sole ground of appeal, held that the interest charged by the assessee on the foreign currency loan to its wholly owned German subsidiary was at arm's length on the basis of CUP and prevailing German rates, rejected the upward adjustment of LIBOR + 700 bps as unjustified, directed deletion of the adjustment and allowed the appeal.

Notional consideration in intra family transfer and undervaluation - apparent sale consideration versus amount actually received (realisation/receipt principle) - role of evidence and valuation officer reference before making notional additions - condition linked retention of sale consideration and forfeiture - treatment of differential payment as gift where supported by material

Notional consideration in intra family transfer and undervaluation - role of evidence and valuation officer reference before making notional additions - treatment of differential payment as gift where supported by material - Validity of addition of Rs. 45.50 lakhs on account of alleged under valuation of 12.5% undivided share sold to son - HELD THAT: - The Tribunal examined whether the Assessing Officer could make a notional addition by adopting the price at which the purchaser (the assessee's son) acquired another undivided share in the same building. It was found that the assessee sold her 12.5% share to her son at prevailing circle rate, there is no material on record to show that the assessee received any amount over and above the sale deed consideration, the AO did not invoke or apply section 50C nor refer the matter to the DVO, and no evidence was produced to establish that other sellers necessarily received the same rate. The Tribunal accepted that intra family transactions and differences in location (back portion) and bargaining circumstances can explain different rates, and that absent evidence of additional receipts the AO's addition rested on presumption and surmise. The possibility that any excess payment might constitute a gift was noted but not treated as a basis to sustain the addition in absence of supporting material. For these reasons the addition made on presumed higher valuation was held unsustainable and deleted. [Paras 12]

Addition of Rs. 45.50 lakhs on account of alleged under valuation deleted.

Apparent sale consideration versus amount actually received (realisation/receipt principle) - condition linked retention of sale consideration and forfeiture - role of evidence in treating retained sums as part of sale consideration - Sustenance of addition of Rs. 1.30 crores alleged to have been forfeited by buyer and excluded by assessee from sale consideration - HELD THAT: - The Tribunal reviewed the sale deed and related correspondence and found that a specified portion of the contractual consideration (Rs. 2.50 crores) was expressly retained by the buyer to be released only upon fulfilment of certain obligations by the vendor. The assessee received part of that retained sum but failed to perform obligations in respect of the balance, which the buyer thereafter treated as forfeited. The buyer's statement produced under section 133(6) and correspondence recorded that the balance was conditional and ultimately forfeited. On these facts the Tribunal held that the unperformed obligation portion was not received by the assessee and therefore could not be treated as part of the apparent sale consideration for taxation; accordingly the CIT(A)'s confirmation of the AO's addition was set aside. The Tribunal however clarified that any amount actually received in future out of the forfeited sum would be taxable in the year of receipt. [Paras 18, 19]

Addition of Rs. 1.30 crores deleted; any future receipt from the forfeited amount to be taxed in year of receipt.

Final Conclusion: The appeal is partly allowed: the Tribunal deletes the additions of Rs. 45.50 lakhs (under valuation of intra family transfer) and Rs. 1.30 crores (forfeited, condition linked retained sum) and directs consequential action; jurisdictional challenge was not pressed.

Treatment of contractual receipts as business income - consistency in assessment across assessment years - deemed/provisional profit rate applied by analogy to presumptive provisions - application of amended DTAA rates for royalty and fees for technical services - chargeability of interest under section 234B where tax is deductible at source

Treatment of contractual receipts as business income - consistency in assessment across assessment years - deemed/provisional profit rate applied by analogy to presumptive provisions - Taxability and quantum of receipts from Bhakra Beas Management Board (BBMB) project - HELD THAT: - AO treated the entire contractual receipts from the BBMB onshore services contract as business income and assessed profit at 40% on the basis that submitted expenses appeared excessive and that an internal arrangement with a related supplier might have resulted in profit shifting. The Tribunal noted that for an earlier year (AY 2006-07) the CIT(A) had estimated profit at 10% of gross receipts and that the Revenue did not challenge that order; further, subsequent assessment years (AY 2010-11, 2012-13, 2013-14 & 2014-15) consistently taxed the BBMB receipts at 10%. No distinguishing facts or materials were placed on record by the Revenue to justify a departure in the year under appeal. In view of established consistency of treatment and absence of contrary material, the Tribunal sustained taxation of the BBMB receipts at 10% of gross receipts and directed the same to be adopted for the year under consideration. [Paras 10]

Receipts from the BBMB project to be taxed at 10% of gross receipts; appeal on this ground allowed.

Application of amended DTAA rates for royalty and fees for technical services - treatment of royalty and fees for technical services - Rate of tax applicable to receipts characterized as royalty and fees for technical services (Brakes India, TATA Motors and Sumitomo Corporation receipts) - HELD THAT: - AO taxed the receipts as royalty and fees for technical services at 20% of gross. The assessee pointed to an amendment to the India-Japan DTAA by Notification No. S.O. 1136(E) dated 19.7.2006 w.r.e.f. 28.6.2006, which caps tax on royalties and fees for technical services at 10%. The Revenue did not controvert the effect of the DTAA amendment before the Tribunal. In view of the treaty amendment and the factual contention raised, the Tribunal did not decide the quantum itself but restored the matter to the AO for verification and computation in accordance with the applicable DTAA and law, with opportunity to the assessee to be heard. [Paras 15]

Issue remitted to the AO to compute tax on these receipts in accordance with the amended DTAA and law; matter restored for verification and assessment.

Chargeability of interest under section 234B where tax is deductible at source - Levy of interest under section 234B on the assessee (a non-resident) where tax was deductible at source - HELD THAT: - Assessee contended, relying on the Delhi High Court decision in GE Packaged Power Inc., that as a non-resident it was not liable to pay advance tax because the payers were required to deduct tax at source on payments to it; consequently, interest under section 234B could not be levied. Revenue did not place any binding contrary authority or evidence showing that the High Court decision has been stayed by a higher forum. Applying the ratio of the cited decision and on the uncontested factual position that the assessee is a non-resident whose payments were subject to TDS, the Tribunal held that the AO erred in levying interest under section 234B and directed its deletion. [Paras 19]

Interest charged under section 234B deleted; appeal on this ground allowed.

Final Conclusion: The appeal is partly allowed: receipts from the BBMB project are to be taxed at 10% of gross receipts; taxation of specified receipts characterized as royalty/fees for technical services is remitted to the AO for computation in accordance with the amended India-Japan DTAA and law; interest under section 234B is deleted.

Penalty under section 271(1)(c) - Enhancement of income - Cancellation of enhancement by Tribunal - Effect of annulment of assessment/enhancement on consequential penalty

Penalty under section 271(1)(c) - Enhancement of income - Effect of annulment of assessment/enhancement on consequential penalty - Whether the penalty imposed under section 271(1)(c) survives where the appellate tribunal has annulled the enhancement of income on which the penalty was based. - HELD THAT: - The CIT(A) enhanced the assessee's income and, on that enhanced income, levied penalty under section 271(1)(c). The assessee appealed against the enhancement to the Tribunal, which, after consideration, quashed the enhancement order of the CIT(A). The Tribunal's cancellation of the enhancement effectively removed the basis on which the penalty was imposed. Given that the penalty was levied exclusively in respect of the additions confirmed by the CIT(A) and those additions were subsequently annulled by the Co ordinate Bench of the Tribunal, the impugned penalty could not subsist independently of the enhancement. The Tribunal's order setting aside the enhancement therefore renders the consequential penalty unsustainable and liable to be deleted. [Paras 8, 9]

Penalty imposed under section 271(1)(c) is deleted as the enhancement on which it was based was annulled by the Tribunal.

Final Conclusion: Appeal allowed; penalty under section 271(1)(c) deleted because the appellate Tribunal cancelled the enhancement of income on which the penalty was founded.

Computation of assessed income under section 143(3) - returned income - processing under section 143(1) by CPC - rectification under section 154 - limitation for rectification - apparent error - duty to consider pleadings

Computation of assessed income under section 143(3) - returned income - processing under section 143(1) by CPC - apparent error - Whether the Assessing Officer was correct in treating the CPC-processed figure under section 143(1) as the 'returned income' for computing assessed income under section 143(3) instead of the income declared in the original return filed by the assessee. - HELD THAT: - The Tribunal found that the assessee had originally declared a lower income in its return which was subsequently processed by the CPC under section 143(1) at a higher figure. In framing the scrutiny assessment under section 143(3), the AO used the CPC-processed assessed figure as the 'returned income' instead of the income declared in the original return. The Tribunal held that the figure declared in the original return is the correct 'returned income' for the purpose of computing assessed income under section 143(3) and that substituting the CPC's processed assessment figure in place of the return was a self-evident, apparent mistake on the face of the record. The Tribunal emphasised that the AO ought to have taken the income declared by the assessee in the original return while computing under section 143(3), and that the first appellate authority erred in not addressing this contention on merits. [Paras 5]

The AO was not justified in treating the CPC-processed figure as the returned income; the income declared in the original return must be taken as returned income for computing assessed income under section 143(3).

Rectification under section 154 - limitation for rectification - duty to consider pleadings - Whether the rectification application under section 154 filed by the assessee was time-barred and whether the AO and the first appellate authority properly rejected it without adjudicating the apparent mistake on merits. - HELD THAT: - The Tribunal noted that rectification under section 154 is maintainable within four years from the end of the financial year in which the order sought to be amended was passed. The assessee filed the rectification application within that statutory period. The AO rejected the application on the ground of limitation without inquiring into the substantive contention that an apparent mistake had occurred in the assessment order. The first appellate authority confirmed the rejection without considering the merits of the submissions. The Tribunal held that the limitation objection was unfounded in the facts of the case and that both authorities ought to have examined and adjudicated the rectification plea on merit given the apparent error on the face of the record. [Paras 5]

The rectification application was within the limitation period and the authorities erred in rejecting it without considering the apparent mistake; the matter requires correction by treating the returned income as declared in the original return.

Final Conclusion: Appeal allowed. The Tribunal directed the Assessing Officer to consider the income declared by the assessee in its original return while computing assessed income under section 143(3), and held that the rectification application under section 154 was within time and should not have been summarily rejected without adjudication on merits.

Addition under Section 68 (unexplained cash credit) - identity, creditworthiness and genuineness of investors - documentary proof through share application, bank evidence and corporate records - retracted statement and its evidentiary value - reopening of assessment under Section 148 - reasons to believe - penalty under Section 271(1)(c) - prematurity

Addition under Section 68 (unexplained cash credit) - identity, creditworthiness and genuineness of investors - documentary proof through share application, bank evidence and corporate records - retracted statement and its evidentiary value - Deletion of addition made by AO treating share capital and share premium as income under Section 68 - HELD THAT: - The Tribunal found that the assessee produced substantial documentary evidence - including share application forms, cheque copies and deposit slips, bank statements, share certificates, board resolutions, audited financials and company incorporation data - to discharge the primary onus under Section 68 as to identity, creditworthiness and genuineness of the five investor companies. Coordinate-bench decisions dealing with the same investor entities and the same assessment year established that those investor companies had positive net worth and that the amounts invested constituted a small percentage of their net worth. The Tribunal held that the AO relied unduly on an earlier recorded statement of an associate (Mr. Rajesh Agarwal) which was retracted and not corroborated by independent evidence, and that additions premised on surmise, conjecture or uncorroborated statements could not be sustained. Applying these determinative considerations, the Tribunal set aside the CIT(A)'s confirmation of the addition and directed deletion of the addition under Section 68. [Paras 6, 8]

Addition under Section 68 deleted and ground of appeal in favour of the assessee allowed.

Reopening of assessment under Section 148 - reasons to believe - principles of natural justice in reassessment proceedings - Challenge to validity of reassessment and alleged breach of natural justice - HELD THAT: - The Tribunal noted that the AO had recorded tangible information from investigation wings giving rise to reasons to believe that income had escaped assessment and that nothing more was required at the stage to initiate reassessment. Further, the appeal record shows that grounds relating to reopening, natural justice and related contentions were not pressed by the assessee. Having considered the legal position and the material placed on record, the Tribunal did not find merit in these legal grounds and dismissed them. [Paras 8]

Grounds challenging reopening/reassessment and alleged breach of natural justice dismissed.

Penalty under Section 271(1)(c) - prematurity - Challenge to initiation/levy of penalty under Section 271(1)(c) - HELD THAT: - The Tribunal observed that the penalty contention was prematurely raised and that the appeal did not require adjudication of the penalty issue at this stage. In view of the primary decision to delete the addition under Section 68, the Tribunal treated the penalty ground as not warranting separate adjudication. [Paras 8]

Penalty proceedings under Section 271(1)(c) dismissed as premature.

Final Conclusion: The Tribunal partly allowed the appeal: it set aside the CIT(A)'s confirmation of the addition under Section 68 in respect of the share capital and share premium and directed deletion of the addition; the challenges to reopening/reassessment and natural justice were dismissed (not pressed), the penalty ground was dismissed as premature, and interest issues were left as consequential.

Bogus purchases - estimation of additions on unexplained purchases - disallowance under Section 40A(3) - disallowance for payments not establishable from sources known - acceptance of primary purchase documents and banking evidence - reopening of assessment upon information from investigation agencies

Bogus purchases - estimation of additions on unexplained purchases - acceptance of primary purchase documents and banking evidence - Validity of CIT(A)'s order estimating additions at 25% of aggregate purchases instead of sustaining the Assessing Officer's disallowance treating purchases as bogus - HELD THAT: - The Tribunal examined the factual matrix recorded by the authorities, noting that the assessee's sales turnover was not in dispute and that primary purchase documents were in possession of the assessee with payments effected through banking channels. The AO had treated purchases from several parties as bogus and made near-total disallowances, with an alternative proposal of partial disallowance under Section 40A(3). The CIT(A), applying judicial precedent, estimated the addition at 25% of aggregate purchases to account for the profit element and potential leakage to revenue. The Tribunal held that, given the nature of the assessee's business (manufacture of engineering goods) and the existence of supporting documents and bank payments, the matter was suitable for estimation of the profit element rather than sustained full disallowance. The 25% estimation by the CIT(A) was held to be adequate and not unjustified, and there was no reason for interference with the appellate order. [Paras 4, 5]

Appeal dismissed; CIT(A)'s estimation of additions at 25% affirmed

Final Conclusion: The Tribunal dismissed the Revenue's appeal and upheld the Commissioner (Appeals)'s order estimating additions at 25% of the aggregate purchases for AY 2010-11, finding the estimation justified in view of primary documents, bank payments and the assessee's business nature.

Allocation of capital gains among co-owners - requirement of filing a revised return to rectify assessment disclosures - reference to District Valuation Officer under section 50C for determination of fair market value - admissibility of objections to DVO valuation and effect of failure to object - appellate authority's power to re-value property and compliance with rule 46A - remand to Assessing Officer for fresh adjudication

Allocation of capital gains among co-owners - requirement of filing a revised return to rectify assessment disclosures - remand to Assessing Officer - Allocation of sale proceeds and capital gains between the AOP and the three co-owners and whether such income can be treated in hands of co-owners without revised returns being filed - HELD THAT: - The Tribunal examined the CIT(A)'s conclusion that the sale proceeds and capital gains should be allocated to the three identified co-owners and not taxed in the hands of the AOP. Noting that the contention that the amounts were incorrectly declared in the original return was not raised before the Assessing Officer and that the assessee had filed only a revised computation (and not a revised return), the Tribunal applied the principle that claims to reallocate income require appropriate revision of returns in line with the ratio in Goetze (India) Ltd. v. CIT as relied upon by the Tribunal. The Tribunal held that the CIT(A), being an appellate authority vis-a -vis the AOP, cannot finally adjudicate the tax liability of the three co-owners in their separate capacities without the Assessing Officer first considering revised returns and making independent verification. For these reasons the Tribunal set aside the CIT(A)'s allocation and restored the matter to the file of the Assessing Officer for fresh adjudication, directing the assessee to file revised returns and for the AO to independently verify whether the co-owners have offered the gains and to provide adequate opportunity of hearing. [Paras 6, 7]

CIT(A)'s allocation to co-owners set aside; matter remitted to Assessing Officer for fresh adjudication and verification; assessee to file revised return(s).

Reference to District Valuation Officer under section 50C for determination of fair market value - admissibility of objections to DVO valuation and effect of failure to object - remand to Assessing Officer - Whether the fair market value determined by the DVO should be adopted notwithstanding the assessee's post DVO objections and whether the matter was correctly decided by CIT(A) - HELD THAT: - The Tribunal recorded that the Assessing Officer had relied on the DVO's valuation under the statutory mechanism and that the DVO had noted the opportunity given to the assessee to file objections within the stipulated time. The CIT(A) declined to adopt the DVO value on the assessee's contentions regarding tenant protections and other facts. The Tribunal did not decide the valuation issue on merits; instead it restored the question to the Assessing Officer to consider the assessee's claims, objections and the applicability of the DVO's valuation afresh and to adjudicate on the merits after affording opportunity of hearing. [Paras 6, 7]

Issue of adopting DVO determined FMV set aside from CIT(A)'s order and remitted to Assessing Officer for fresh consideration and adjudication on merits.

Appellate authority's power to re-value property and compliance with rule 46A - remand to Assessing Officer - Whether the CIT(A) had power to value the property as on 01.04.1981 and whether rule 46A procedural requirements were violated by CIT(A)'s approach - HELD THAT: - The Tribunal noted the contention that CIT(A) had effected valuation as on 01.04.1981 without referring the matter back to the DVO and that rule 46A may have been infringed. The Tribunal did not pronounce a final view on the correctness of CIT(A)'s valuation exercise. Instead, treating the valuation methodology and any related procedural non compliance as matters requiring fresh examination, the Tribunal restored these questions to the Assessing Officer to decide on merits and in accordance with applicable procedural rules. [Paras 6, 7]

CIT(A)'s valuation approach set aside; question remitted to Assessing Officer for fresh consideration including compliance with rule 46A and adjudication on valuation methodology.

Final Conclusion: The Tribunal allowed the revenue's appeal for statistical purposes by setting aside the CIT(A)'s findings on allocation of sale proceeds, adoption of DVO valuation and valuation as on 01.04.1981, and remitted all disputed issues to the file of the Assessing Officer for fresh adjudication; the assessee is directed to file revised return(s) and the AO shall independently verify and decide the matter after affording opportunity of hearing.

Bogus purchases - addition on estimate basis - profit element as basis for disallowance - onus of proof on the assessee - application of Simit P. Seth ratio

Bogus purchases - addition on estimate basis - profit element as basis for disallowance - onus of proof on the assessee - application of Simit P. Seth ratio - Whether the CIT(A) was justified in restricting the addition made by the AO in respect of alleged bogus purchases to 12.5% instead of 25% (as made by the AO). - HELD THAT: - The Tribunal examined the material on record and the reasoning of the CIT(A), who accepted that the onus lay on the assessee to prove genuineness of the purchases but, on facts, restricted the AO's disallowance to 12.5% by applying the principle in Simit P. Seth (Gujarat High Court) that, for bogus purchases, the profit element embedded in the transaction may be taken as the basis for estimating disallowance. The CIT(A) relied upon the DIT(Inv) report, the assessee's failure to produce parties despite opportunities, and findings of the Sales Tax investigation to conclude involvement of accommodation entries, but concluded that a part-disallowance measured by profit element was appropriate. The Tribunal found the CIT(A)'s approach and application of the said ratio to be well reasoned and factually distinguishable from the authorities relied upon by the revenue, and therefore upheld the restricted addition.

Appeal dismissed; order of the CIT(A) restricting the addition to 12.5% is upheld.

Final Conclusion: The revenue's appeal is dismissed and the CIT(A)'s order partly allowing the assessee by restricting the addition in respect of alleged bogus purchases to 12.5% is affirmed for AY 2011-12.

Penalty under section 271(1)(c) of the Income Tax Act, 1961 - addition on estimation basis - distinction between assessment additions and penalty proceedings - concealment of income or furnishing of inaccurate particulars - reliance on coordinate-bench precedents for deletion of penalty

Penalty under section 271(1)(c) of the Income Tax Act, 1961 - addition on estimation basis - distinction between assessment additions and penalty proceedings - Whether imposition of penalty under section 271(1)(c) was justified where additions were made on estimation basis in respect of alleged bogus purchases. - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that an addition made on an estimation basis does not ipso facto establish that the assessee concealed income or furnished inaccurate particulars within the meaning of section 271(1)(c). The CIT(A) had observed, and the Tribunal agreed, that penalty proceedings are distinct from assessment proceedings and that an estimation-based addition-particularly where non-cooperation of third parties impeded the assessee's ability to substantiate purchases-does not automatically establish culpable concealment. The CIT(A)'s view was supported by coordinate-bench decisions which held that plausible explanations and the circumstance of non-cooperative counter-parties disentitle the Revenue to levy penalty solely on the footing of an estimation addition. Applying these principles to the facts on record, the Tribunal found no reason to interfere with the deletion of the penalty. [Paras 7, 8, 9]

Appeal dismissed; order of the CIT(A) deleting the penalty under section 271(1)(c) is upheld and the AO is directed to delete the penalty.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and upheld the CIT(A)'s deletion of the penalty imposed under section 271(1)(c) where the addition was made on an estimation basis and did not, in the circumstances, demonstrate concealment or furnishing of inaccurate particulars.

Deduction under section 80P(2)(d) for a co-operative society on interest derived from investments made with other co-operative societies - Non-applicability of deduction under section 80P(2)(a)(i) to a co-operative society not engaged in banking operations - Allowability under section 57 of expenditure laid out wholly and exclusively for earning interest taxable as income from other sources

Deduction under section 80P(2)(d) for a co-operative society on interest derived from investments made with other co-operative societies - Entitlement of the assessee (a co-operative society) to deduction under section 80P(2)(d) in respect of interest earned on deposits with co-operative banks/ societies. - HELD THAT: - The Tribunal held that co-operative banks fall within the broader statutory and regulatory concept of a co-operative society, and that section 80P(2)(d) permits deduction of income by way of interest or dividends derived by a co-operative society from investments with any other co-operative society. The provision does not distinguish the origin of the invested funds (such as surplus funds) and requires no additional precondition as to the nature of the funds from which investment was made. Reliance was placed on the interpretive principle applicable to taxing statutes and on earlier consideration of the point in the impugned cited paras, leading to the conclusion that interest earned by the assessee from other co-operative societies is eligible for deduction under section 80P(2)(d). [Paras 16, 17, 18, 19, 20]

Assessee is eligible for deduction under section 80P(2)(d) on interest earned from other co-operative societies (including co-operative banks).

Non-applicability of deduction under section 80P(2)(a)(i) to a co-operative society not engaged in banking operations - Whether the assessee is entitled to deduction under section 80P(2)(a)(i) as a co-operative bank. - HELD THAT: - The Tribunal found that the assessee, although a co-operative society, is not engaged in banking operations. Consequently it does not meet the requirement for deduction under section 80P(2)(a)(i) which applies to co-operative societies carrying on banking business. This finding was addressed as part of the consolidated reasoning in the cited paras and formed the basis for rejecting the claim under section 80P(2)(a)(i). [Paras 23]

Assessee is not eligible for deduction under section 80P(2)(a)(i) because it is not involved in banking operations.

Allowability under section 57 of expenditure laid out wholly and exclusively for earning interest - Allowability of expenditure incurred in earning interest from commercial banks while computing income taxable under the head 'Income from other sources'. - HELD THAT: - On examination of section 57 and the nature of the claimed expenses, the Tribunal directed that the Assessing Officer allow expenditure incurred in relation to earning interest from commercial banks. The Tribunal treated such expenditure as allowable deductions (not being capital in nature) if laid out wholly and exclusively for the purpose of making or earning such income, and accordingly remitted direction to the AO to give effect to this allowance. [Paras 21, 22, 23]

Expenditure incurred in earning interest from commercial banks is allowable under section 57 and shall be allowed by the Assessing Officer.

Final Conclusion: The Tribunal allowed the appeals, deleting the addition; held that the assessee (a co-operative society not engaged in banking) is not entitled to deduction under section 80P(2)(a)(i) but is entitled to deduction under section 80P(2)(d) for interest from other co-operative societies, and directed the Assessing Officer to allow expenditure under section 57 in respect of interest earned from commercial banks.

Dispensation of meetings - consent by affidavit - approval of scheme of amalgamation - service of statutory authorities - filing of company petition - application allowed

Dispensation of meetings - consent by affidavit - approval of scheme of amalgamation - Dispensation of convening, holding and conducting meetings of all classes of shareholders and creditors of the Transferor Company for approval of the Scheme. - HELD THAT: - The Tribunal accepted the Transferor Company's representation that consents by way of affidavits have been obtained from the two Equity Shareholders, the sole Secured Creditor and all Unsecured Creditors, and further accepted the representation that the sole Preference Shareholder is the Transferee Company which has approved the Scheme and passed the necessary board resolution. On that basis the Tribunal dispensed with the necessity of convening meetings of Equity shareholders, Preference shareholder, Secured creditor and Unsecured creditors for the Transferor Company for purpose of considering and approving the proposed Scheme of Amalgamation. [Paras 4, 13]

Necessity of convening meetings of the Transferor Company's shareholders and creditors for sanctioning the Scheme is dispensed with.

Dispensation of meetings - consent by affidavit - approval of scheme of amalgamation - Dispensation of convening, holding and conducting meetings of all classes of shareholders and creditors of the Transferee Company for approval of the Scheme. - HELD THAT: - The Tribunal accepted the Transferee Company's representation that consents by way of affidavits have been obtained from its Equity Shareholders and from its Unsecured Creditors, and that there are no Secured Creditors. On that basis the Tribunal dispensed with the necessity of convening meetings of the Transferee Company's Equity shareholders and Unsecured creditors for the purpose of considering and approving the proposed Scheme of Amalgamation. [Paras 5, 13]

Necessity of convening meetings of the Transferee Company's shareholders and creditors for sanctioning the Scheme is dispensed with.

Service of statutory authorities - Direction to serve notices and required documents on prescribed statutory and regulatory authorities. - HELD THAT: - The Tribunal directed each Applicant company to individually send notice along with copies of the Scheme and required disclosures to the Regional Director, Ministry of Corporate Affairs, Income Tax Authorities, Registrar of Companies Chennai, Official Liquidator and other sectoral regulators who may have significant bearing on the operation of the companies or the Scheme, in compliance with the Companies Act, 2013 and the applicable Rules. [Paras 14]

Applicants directed to serve notices and required documents on the specified statutory and sectoral authorities.

Filing of company petition - application allowed - Permitting the Applicants to file the Company Petition(s) and allowing the Company Applications. - HELD THAT: - After considering the applications and the documents on record, and having dispensed with the requirement of convening meetings where appropriate and directed service on statutory authorities, the Tribunal directed the Applicant Companies to submit the Company Petition(s) within seven days from receipt of the order and allowed the Applications. [Paras 15]

Applications allowed; Applicant Companies to file Company Petition(s) within seven days of receipt of the order.

Final Conclusion: The Tribunal, having satisfied itself as to affidavits of consent and other supporting material, dispensed with convening meetings of shareholders and creditors where shown to be unnecessary, directed service of the Scheme on appropriate statutory and sectoral authorities, and allowed the Company Applications subject to the Applicants filing the Company Petition(s) within seven days.

Reduction of share capital under Section 66 of the Companies Act, 2013 - Approval of minutes for reduction under Section 66(5) - Compliance with creditors' certificate and auditors' certification - Regional Director report and directional filing of Form RSC-2 and e form GNL-1 - Filing of altered Memorandum of Association and e form INC 28 with Registrar of Companies - Proportional payment to shareholders on reduction

Reduction of share capital under Section 66 of the Companies Act, 2013 - Approval of minutes for reduction under Section 66(5) - Reduction of the company's authorised and paid up share capital and approval of minutes recording the reduction. - HELD THAT: - The Tribunal examined the petition filed under Section 66 seeking reduction of authorised and paid up capital and the minutes proposed to be registered under Section 66(5). The company passed a special resolution at its Extra Ordinary General Meeting and furnished auditor certificates and directors' confirmations regarding absence of secured and unsecured creditors and compliance with applicable accounting standards. The Regional Director's report raised procedural non compliance regarding service and directed filing of Form RSC 2 with relevant disclosures in e form GNL 1. The Income Tax Department's lone objection concerning an outstanding fringe benefit tax demand was discharged by the petitioner producing proof of payment. Having considered the statutory requirements, supporting certifications and the Regional Director's observations, the Tribunal allowed the reduction, approved the minutes as required by Section 66(5), and directed delivery of a certified copy of the order (including approved minutes) to the Registrar of Companies within thirty days.

Reduction of authorised and paid up capital allowed; minutes under Section 66(5) approved and certified copy to be delivered to the RoC within thirty days.

Compliance with creditors' certificate and auditors' certification - Regional Director report and directional filing of Form RSC-2 and e form GNL-1 - Filing of altered Memorandum of Association and e form INC 28 with Registrar of Companies - Proportional payment to shareholders on reduction - Satisfaction of statutory compliance and consequential directions following allowance of the reduction. - HELD THAT: - The Tribunal recorded that the company produced auditor certificates confirming nil secured and unsecured creditors and no arrears in repayment of deposits; the Accounting Standard adoption in the scheme was certified. The Regional Director noted non service in accordance with NCLT rules and directed the petitioner to file Form RSC 2 with requisite disclosures in e form GNL 1. The Income Tax Department's objection was resolved by payment. Consequentially, the Tribunal ordered alteration of the Memorandum of Association to reflect the reduced capital, directed filing of the altered Memorandum and minutes by E form INC 28 within thirty days of receipt of the order, and directed that the reduced amount be paid to shareholders in proportion to their shareholding.

Statutory compliance accepted subject to filing directions by the Regional Director; alteration of Memorandum and filing of INC 28 directed; reduced amount to be paid to shareholders proportionately.

Final Conclusion: The petition under Section 66 for reduction of authorised and paid up share capital of the company is allowed; minutes recording the reduction are approved, statutory and consequential filings with the Registrar of Companies are directed, and distribution to shareholders in proportion to their holdings is ordered.

Sanction of composite scheme of arrangement and amalgamation - reduction of share capital and adjustment against accumulated losses - vesting of assets and liabilities on amalgamation/demerger - transfer of employees on amalgamation/demerger - appointed date for scheme and disclosure of ante-dated appointed date - accounting treatment under Appendix C to Ind AS 103 for common-control combinations - filing of sanctioned order with Registrar of Companies and consequential dissolution - direction for payment of fees to Official Liquidator for auditors' inquiry

Sanction of composite scheme of arrangement and amalgamation - Sanction of the Composite Scheme of Arrangement and Amalgamation as between the petitioner companies. - HELD THAT: - After examining the Scheme, statutory compliance, reports and undertakings filed by the petitioner companies and the responses of statutory authorities, the Tribunal found the Scheme prima facie to be in compliance with the Companies Act, 2013 and that there were no objections indicating the Scheme would be detrimental to shareholders. The Tribunal therefore sanctioned the Composite Scheme appended as Annexure "A4" to the petitions and made the sanctioning order subject to the observations recorded in the order (including that sanction does not operate as exemption from payment of stamp duty/taxes and does not preclude action in law for any statutory violations). [Paras 10, 12]

The Composite Scheme of Arrangement and Amalgamation is sanctioned.

Reduction of share capital and adjustment against accumulated losses - Reduction of the paid up share capital of Transferor Company 2 and adjustment of the reduced amount against its accumulated losses. - HELD THAT: - The Tribunal authorised the capital reduction of Transferor Company 2 as set out in the Scheme, and directed that the reduced share capital shall be adjusted against the accumulated losses of the company. The Tribunal recorded that such reduction is brought under arrangement under Section 230 of the Act and shall operate without further application, act or deed by the company or its shareholders. [Paras 7, 11]

The reduction of the paid up equity share capital of Transferor Company 2 is sanctioned and the reduced amount shall be adjusted against its accumulated losses.

Vesting of assets and liabilities on amalgamation/demerger - transfer of employees on amalgamation/demerger - Vesting of properties, rights, liabilities and continuation of proceedings; and transfer of employees consequent to amalgamation and demerger. - HELD THAT: - Pursuant to the sanction, all properties, rights and interests of Transferor Companies 1, 2 and 3 stand transferred and vested in the Transferee Company without further act or deed, and all their liabilities, obligations and pending proceedings shall continue by or against the Transferee Company. Similarly, the Demerged undertaking's properties, rights and liabilities shall transfer to the Resulting Company. All employees in service in the Transferor Companies and in the Demerged undertaking immediately prior to the effective date shall become employees of the Transferee Company or Resulting Company respectively on the same terms, without interruption. [Paras 11]

Assets, liabilities, proceedings and employees of the Transferor Companies and the Demerged undertaking are transferred to and shall be continued by the Transferee Company and Resulting Company as specified in the Scheme.

Appointed date for scheme and disclosure of ante-dated appointed date - Fixing of the appointed dates for parts of the Scheme and requirement of disclosure in respect of ante dated appointed date. - HELD THAT: - The Tribunal fixed the appointed dates as specified in the Scheme: 1 April 2017 for Part B (capital reduction) and Part C (amalgamation), and 23 May 2019 for Part D (demerger). The Regional Director's observation regarding the ante dating of the appointed date was addressed by the petitioners' affidavit of undertaking explaining the commercial reasons and by the Transferee Company's undertaking to disclose in the first financial statements after giving effect to the Scheme that prior year figures for 2017 18 and 2018 19 are not comparable due to the Scheme being given effect from 1 April 2017. [Paras 7, 11]

Appointed dates are fixed as 1 April 2017 (for Part B and C) and 23 May 2019 (for Part D); petitioners to make the disclosures as undertaken concerning the ante dated appointed date.

Accounting treatment under Appendix C to Ind AS 103 for common-control combinations - Adoption of the accounting treatment for the amalgamation and demerger in accordance with Appendix C to Ind AS 103 and related undertakings. - HELD THAT: - The Tribunal recorded the petitioners' undertaking that the accounting treatment for the amalgamation of Transferor Companies into the Transferee Company and for the demerger into the Resulting Company shall follow Appendix C on 'Business Combination of entities under common control' to Ind AS 103 as prescribed under Section 133 of the Companies Act, 2013, with specified adjustments to capital reserve and book values. The Regional Director's query regarding whether AS or Ind AS would be followed was satisfied by the affidavit of undertaking, and the Tribunal treated the stated accounting treatment as forming part of the Scheme. [Paras 7, 9]

The accounting treatment set out by the petitioners, premised on Appendix C to Ind AS 103 for common control combinations, is accepted and forms part of the Scheme.

Direction for payment of fees to Official Liquidator for auditors' inquiry - Direction to Transferor Companies to pay the Official Liquidator for fees of the auditor who investigated the affairs of the Transferor Companies. - HELD THAT: - Having taken on record the report obtained by the Official Liquidator via a panel Chartered Accountant and the observations therein, the Tribunal directed Transferor Companies 1, 2 and 3 to jointly pay the sum specified to the Official Liquidator toward the remuneration of the auditor who investigated their affairs. [Paras 7]

Transferor Companies 1, 2 and 3 are directed to jointly pay the fees to the Official Liquidator for the auditor's investigation.

Filing of sanctioned order with Registrar of Companies and consequential dissolution - Requirement to file certified copy of the sanction order with the Registrar of Companies and effect of such filing on dissolution and consolidation of records. - HELD THAT: - The Tribunal ordered that within thirty days of receipt of the order, certified copies shall be delivered to the Registrar of Companies for registration; upon such filing, the Transferor Companies shall be dissolved and the RoC shall consolidate files and documents as directed. The order also required the Transferee and Resulting Companies to file revised Memorandum and Articles and make requisite payments for enhanced authorised capital after setting off fees paid by transferor entities. [Paras 11]

Petitioners to file certified copy of the order with the RoC, effect necessary filings for MOA/AOA and fee payments; on filing, Transferor Companies shall be dissolved and RoC records consolidated.

Final Conclusion: The National Company Law Tribunal, Chennai bench, after considering the Scheme, statutory reports and petitioners' undertakings, sanctioned the Composite Scheme of Arrangement and Amalgamation subject to stated undertakings and observations; authorised the specified reduction of capital of Transferor Company 2 and its adjustment against accumulated losses; directed vesting of assets, liabilities and employees as per the Scheme; fixed the appointed dates; accepted the accounting treatment under Appendix C to Ind AS 103 as part of the Scheme; directed payment to the Official Liquidator for the auditors' fees; and ordered filing of certified copy of the order with the Registrar of Companies with consequential dissolution of the Transferor Companies.

CIRP time extension - exclusion of time from CIRP period - Committee of Creditors' commercial evaluation - misuse of judicial discretion under Essar Steel precedent - judicial reprimand for undue delay in CIRP - administrative directions to financial stakeholders

CIRP time extension - exclusion of time from CIRP period - Committee of Creditors' commercial evaluation - misuse of judicial discretion under Essar Steel precedent - Application for extension of the Corporate Insolvency Resolution Process period from 01.05.2021 till 15.06.2021 was considered and determination made to extend the CIRP till 30.06.2021. - HELD THAT: - The Tribunal examined the Resolution Professional's request, the Committee of Creditors' meeting (where 93.07% voted for extension), the commercial negotiations with resolution applicants (notably NTPC's revised plan of 16.04.2021) and the promoters' restructuring proposal which the CoC found commercially unacceptable. The Bench noted earlier directions (order of 23.02.2021) that the CIRP was to be completed by 01.05.2021 and that no further extension would ordinarily be granted. The Tribunal criticised the repeated use of exclusions to extend the CIRP well beyond the outer limit of 330 days and observed that the Essar Steel principle allowing limited extension beyond 330 days was being misapplied to justify protracted delay. Balancing these observations against the material before it - including the likelihood of a viable resolution plan being finalised and the commercial preference of the CoC for NTPC's proposal - the Tribunal nonetheless granted a limited extension, extending the CIRP up to 30.06.2021 instead of the 15.06.2021 sought, while recording strong disapproval of the slow pace and misuse of exclusionary devices. [Paras 12, 13, 14, 15, 16]

IA No. 516/KB/2021 in CP(IB)/634(KB)/2017 is allowed and the CIRP period is extended up to 30.06.2021, with the Tribunal recording censure of the pace of the process and the misuse of exclusions while relying on the CoC's commercial decision.

Judicial reprimand for undue delay in CIRP - administrative directions to financial stakeholders - Whether communications should be sent to senior officials of the preferred resolution applicant and members of the CoC to draw attention to the slow progress. - HELD THAT: - Given the Tribunal's expressed displeasure at the repeated breaches of the prescribed CIRP timeframe and the apparent reliance on exclusionary orders to elongate the process, the Bench directed that a copy of the order be sent to the Chairman & Managing Director of NTPC Limited and to senior officials (Chief General Managers / Managing Directors) of the banking and other entities constituting the Committee of Creditors. This direction was intended to ensure that senior decision makers take note of the 'snail's pace' of the CIRP and to prompt more decisive action to complete the resolution process within the extended timeframe. [Paras 15, 17]

Order to be sent to the named senior officials of NTPC and the members of the CoC; registry to e mail copies to parties and counsel forthwith.

Final Conclusion: The application for extension is allowed and the CIRP period is extended to 30.06.2021; the Tribunal records a strong reprimand for the protracted and dilatory conduct of the CIRP and issues directions to senior officials of the resolution applicant and members of the Committee of Creditors to take note of the delay.

Operational Creditor - Admission of claims by Liquidator - Sanctioned scheme under the Companies Act being binding on stakeholders - Waterfall mechanism under a sanctioned scheme - Finality of a sanctioned scheme and protection of successful scheme proponent from undecided claims

Operational Creditor - Admission of claims by Liquidator - Claim of the appellant for admission as an Operational Creditor was rejected by the Liquidator and the appeal challenging that rejection is dismissed. - HELD THAT: - The appellant had entered into a purchase order and received part payments but the balance payment mechanism required the respondent to open an irrevocable Letter of Credit prior to dispatch. The appellant did not dispatch the goods because the Letter of Credit was not opened and the corporate debtor had put the equipment on hold. The claim filed in liquidation was rejected by the Liquidator on the ground that the manufactured compressor was not delivered at site. The respondent also relied on unfulfilled contractual obligations (failure to deliver by the delivery date, failure to furnish the performance bank guarantee and invoicing short of the purchase order value) and on the Resolution Professional's position that admission could be conditional on fulfillment of the purchase order terms. Having considered the parties' submissions and the contractual scheme of payments and delivery, the Tribunal upheld the Liquidator's rejection of the claim and dismissed the appeal.

Appeal dismissed as regards admission of the appellant's claim as Operational Creditor; the Liquidator's rejection is upheld.

Sanctioned scheme under the Companies Act being binding on stakeholders - Waterfall mechanism under a sanctioned scheme - Finality of a sanctioned scheme and protection of successful scheme proponent from undecided claims - Effect of the sanctioned scheme on the appellant's claim and on the viability of relief even if the claim were admitted. - HELD THAT: - The Tribunal noted that the scheme for the corporate debtor was sanctioned and the project assets vested in the scheme proponent, rendering the sanctioned scheme binding on stakeholders including the appellant. Reliance was placed on the principle in Committee of Creditors of Essar Steel (as applied in the reasons) that a successful scheme proponent should not be confronted with unresolved claims that would upset the finality of the sanctioned scheme. Further, the scheme's waterfall mechanism settled dues of financial creditors and, even if operational claims were admitted, operational creditors would not have been paid under the sanctioned scheme. In light of the sanctioned scheme's binding effect and the allocation under its waterfall, the Tribunal concluded that the appellant could not obtain the relief sought.

Sanctioned scheme binds the appellant and, given the waterfall and the protection of the scheme proponent, admission of the claim would not afford the appellant payment; this consideration supports dismissal of the appeal.

Final Conclusion: The appeal challenging rejection of the claim is dismissed: the Liquidator's rejection is upheld on the contractual and factual matrix, and in any event the sanctioned scheme vests assets in and protects the scheme proponent and, under its waterfall, the operational claim would not have resulted in payment.

Initiation of Corporate Insolvency Resolution Process against a corporate guarantor - limitation under Article 137 of the Limitation Act for Section 7 applications - date of default / date of NPA as accrual of right to apply - acknowledgement of debt and Section 18 of the Limitation Act - relevance of SARFAESI/DRT proceedings to limitation

Initiation of Corporate Insolvency Resolution Process against a corporate guarantor - relevant NCLAT precedents and binding treatment - Whether CIRP can be initiated against the corporate guarantor in the present proceedings - HELD THAT: - The Tribunal examined the question as to whether proceedings under the IBC can be initiated against a corporate guarantor in light of conflicting NCLAT decisions. It observed that the earlier NCLAT view relied upon by the corporate debtor was not followed by a subsequent, concordant NCLAT bench which took into account the Second Amendment to the IBC and later authorities and reports. The Tribunal held that the later NCLAT decisions have put the controversy to rest and are binding on this Bench, so that initiation of CIRP against a corporate guarantor in circumstances such as the present is permissible as per the later NCLAT jurisprudence relied upon by the Tribunal. [Paras 10]

CIRP can be initiated against the corporate guarantor; the Tribunal follows the later NCLAT decisions which resolve the earlier conflict.

Limitation under Article 137 of the Limitation Act for Section 7 applications - date of default / date of NPA as accrual of right to apply - acknowledgement of debt and Section 18 of the Limitation Act - relevance of SARFAESI/DRT proceedings to limitation - Whether the Section 7 application is barred by limitation and accordingly liable to be dismissed - HELD THAT: - The Tribunal applied the principles in the Supreme Court authorities that Article 137 of the Limitation Act governs Section 7 applications and that the right to apply accrues on the date of default (actual non-payment). The Financial Creditor failed to state the 'Date of Default' in Part IV of the application and did not place on record any documentary foundation that would bring the claim within limitation, such as an acknowledgment of debt by the principal borrower or balance-sheet entries of the guarantor. The record showed the account was classified as NPA on 31.12.2007 and the assignor-bank filed DRT proceedings only in 2012, which does not, on the material before the Tribunal, save the claim. Reliance was placed on the requirement to plead facts supporting any extension or acknowledgement under Section 18 of the Limitation Act and on authorities holding that SARFAESI/DRT steps do not, by themselves, extend limitation unless the factual foundation to exclude or extend time is pleaded and proved. On the documents filed by the Financial Creditor, the Tribunal concluded the debt was time-barred. [Paras 16, 17, 18, 21, 23]

The Section 7 application is dismissed as barred by limitation for want of a stated date of default and absence of documentary material to rebut the bar.

Final Conclusion: The Tribunal held that (a) initiation of CIRP against the corporate guarantor is permissible in view of later NCLAT decisions, but (b) the present Section 7 application is dismissed as barred by limitation because the Financial Creditor did not state the date of default nor adduce documents to show the claim falls within the prescribed period.

Application under Section 95 of the Insolvency and Bankruptcy Code, 2016 - Appointment and confirmation of Resolution Professional under Section 97 of the Insolvency and Bankruptcy Code, 2016 - Examination and report by Resolution Professional under Section 99 of the Insolvency and Bankruptcy Code, 2016 - Admission or rejection of application under Section 100 of the Insolvency and Bankruptcy Code, 2016 - Requirement of particulars and evidence for creditor's application under Section 95(4) - Obligation of Insolvency and Bankruptcy Board of India to share database of insolvency professionals under Rule 8 of the 2019 Rules

Application under Section 95 of the Insolvency and Bankruptcy Code, 2016 - Requirement of particulars and evidence for creditor's application under Section 95(4) - Examination and report by Resolution Professional under Section 99 of the Insolvency and Bankruptcy Code, 2016 - Completeness of the creditor's application under Section 95 of IBC, 2016 and entitlement to proceed to the stage of confirmation/appointment of the Resolution Professional. - HELD THAT: - The Tribunal examined the application and the material placed by the creditor against the tests in Section 95(4) - (a) existence of debt owed to the creditor by the principal borrower with the personal guarantor standing as guarantor; (b) service of a demand notice and failure to repay within the stipulated period; and (c) relevant evidence of default. The record showed the principal borrower had been declared NPA, a corporate insolvency process against the borrower had been initiated and liquidated, an arbitral award against the guarantors had been produced and the guarantor did not deny the payment obligation in his pleadings. The application was moved through a registered insolvency professional. On this basis the Tribunal held the application satisfies the requirements of Section 95(4) and is complete, and the matter must proceed to the stage of confirmation/appointment of the resolution professional for examination and report under Section 99. [Paras 9, 10, 11, 12]

The application under Section 95 is complete and the Tribunal directed the Board to confirm that there are no disciplinary proceedings pending against the nominated resolution professional so that appointment may follow.

Appointment and confirmation of Resolution Professional under Section 97 of the Insolvency and Bankruptcy Code, 2016 - Obligation of Insolvency and Bankruptcy Board of India to share database of insolvency professionals under Rule 8 of the 2019 Rules - Directions to the Insolvency and Bankruptcy Board of India regarding confirmation of the proposed resolution professional and sharing of the database of insolvency professionals with the Adjudicating Authority. - HELD THAT: - Under Section 97 the Adjudicating Authority must refer the proposed resolution professional to the Board for confirmation that no disciplinary proceedings are pending and then appoint the resolution professional. Rule 8 contemplates that the Board may share a database and information on disciplinary proceedings with the Adjudicating Authority. The Tribunal recorded that no such database or information has been made available to the Chennai Bench by the Board. Consequently, the Tribunal directed the Board to (a) confirm within seven days whether disciplinary proceedings are pending against the named resolution professional and (b) share the database of insolvency professionals, including details of any disciplinary proceedings, with the Adjudicating Authority to enable effective adjudication of Section 95 matters. The matter was listed for further hearing pending receipt of the Board's confirmation. [Paras 12, 13, 14, 15]

IBBI is directed to confirm the disciplinary status of the nominated resolution professional within seven days and to share the database of insolvency professionals (including disciplinary information) with the Adjudicating Authority; the matter is listed for further hearing awaiting that confirmation.

Final Conclusion: The Tribunal held the creditor's Section 95 application to be complete and fit to proceed to appointment and examination by a resolution professional; directed the Insolvency and Bankruptcy Board of India to confirm within seven days whether disciplinary proceedings are pending against the nominated resolution professional and to share the database of insolvency professionals (including disciplinary information) with the Adjudicating Authority; further hearing listed pending the Board's response.

Fraudulent or malicious initiation of insolvency proceedings - maintainability of Section 65 before initiation of CIRP - right to implead a third party under Rule 11/Section 60(1) - recording of allegations for later adjudication upon admission

Right to implead a third party under Rule 11/Section 60(1) - The applicant has not clearly established a relationship with the main Company Petition sufficient to justify impleadment. - HELD THAT: - After examining the facts and documents produced by the applicant, the Tribunal found that the applicant failed to demonstrably establish his connection with the main Company Petition or the nexus required for impleadment in the petition pending as C.P. (IB)-1248(PB) of 2018. The material on record was insufficient to show that the applicant's interests are directly affected in a manner that warrants his impleadment at this stage. [Paras 7]

Application for impleadment is not established on the material placed before the Tribunal.

Fraudulent or malicious initiation of insolvency proceedings - maintainability of Section 65 before initiation of CIRP - Section 65 cannot be invoked to dismiss or penalise until the insolvency resolution process has been initiated/admitted. - HELD THAT: - A plain reading of Section 65(1) shows that it addresses situations where a person 'initiates the insolvency resolution process' fraudulently or with malicious intent. In the present matter the petition C.P. (IB)-1248(PB) of 2018 has not been admitted and CIRP has not been initiated; therefore the statutory trigger for invoking Section 65 is not yet attracted. Consequently, the Tribunal cannot dismiss the Company Petition under Section 65 or impose penalties under that provision at this stage. [Paras 8]

Prayer to dismiss the petition or impose penalty under Section 65 is not maintainable prior to initiation/admission of CIRP.

Recording of allegations for later adjudication upon admission - Allegations of collusion/fraud by the applicant are recorded but will be considered only upon admission of the petition and initiation of CIRP. - HELD THAT: - The Tribunal recorded the information and documents submitted by the applicant regarding alleged fraud and collusion. However, since Section 65 and related penal consequences can only be applied after initiation of the insolvency resolution process, the Tribunal will take the recorded material into account at the time of passing the order in C.P. (IB)-1248(PB) of 2018 if and when the petition is admitted. [Paras 9]

The material submitted is taken on record for consideration at the time of final order in the main petition; no penalty or dismissal is imposed at this stage.

Final Conclusion: LA. 4971/2020 disposed. Applicant's request for impleadment not established; dismissal or penalty under Section 65 cannot be imposed before admission/ initiation of CIRP; allegations are recorded and will be considered if and when the main petition is admitted.

Antedating of assessment orders and demand notices - limitation for completion of assessment - service of demand notice as commencement of limitation for challenge - recovery of tax as arrear of land revenue and extended limitation for recovery - presumption of mala fides and burden of proof - prejudice from non-retention of records

Antedating of assessment orders and demand notices - presumption of mala fides and burden of proof - Impugned assessment orders and demand notices are not shown to be ante dated and the allegation of antedating is without merit. - HELD THAT: - The Court examined the order sheets, attendance records, production and examination of books of accounts and corresponding entries in Register VI and the dispatch/process registers. The respondents produced the assessment order sheets recording appearance of the petitioner's counsel, quantification of tax/penalty, direction for issuance of demand notices and entries in official registers. The respondents explained non service of demand notices as inadvertent clerical non dispatch and produced contemporaneous office entries and an explanation of administrative steps taken on discovery in 2018. The Court applied the settled principle that the burden of proving mala fides is heavy on the party alleging it and that mere delay in communication does not automatically establish antedating where the revenue furnishes a plausible contemporaneous record. On the material before the Court, there was no acceptable evidence of manipulation or interpolation of records; accordingly the presumption of ante dating was rejected and the allegation of mala fide antedating was not established. [Paras 17, 23, 24, 25]

Allegation of ante dating of assessment orders and demand notices is rejected.

Service of demand notice as commencement of limitation for challenge - limitation for completion of assessment - recovery of tax as arrear of land revenue and extended limitation for recovery - Limitation to challenge the assessment commences from service of the demand notice; assessments were within the prescribed limitation for recovery and there is no merit in contending that delay in service rendered the petitioner remediless. - HELD THAT: - The Court noted there is no separate statutory provision requiring separate prior communication of the assessment order; service of the demand notice conveys information of the assessment and starts limitation for filing statutory remedies. The law distinguishes between the three year limitation for making assessment and the longer period for recovery (twelve years under the statutory provision relied upon by respondents). The assessment orders were found to have been passed within the assessment limitation period on the basis of order sheets and the demand notices, though dispatched late, were issued within the recovery limitation. Further, records produced at assessment stage were examined by the assessing authority, and the Court held that even if the dealer no longer retained records after the statutory retention period, no prejudice sufficient to invalidate the assessments was shown because the assessing officer had already examined and accepted the records at that time. [Paras 27, 28, 29, 30, 31]

Limitation to challenge runs from service of demand notice; delay in communication did not render the assessments invalid or the petitioner remediless.

Final Conclusion: Writ petitions dismissed; impugned assessment orders and demand notices for the periods 2009 10 and 2010 11 are not set aside as ante dated or invalid and the explanations furnished by the respondents remove the cloud of mala fide antedating.

Consumption or use as raw materials, component parts and inputs in the manufacture of an intermediate or finished product - exemption under Explanation-I to the Notification dated 30.03.2002 - strict interpretation of exemption notifications and burden of proving applicability on the assessee - duty of the revisional authority to record factual findings and reasons - remand for fresh decision after affording opportunity of hearing

Consumption or use as raw materials, component parts and inputs in the manufacture of an intermediate or finished product - exemption under Explanation-I to the Notification dated 30.03.2002 - strict interpretation of exemption notifications and burden of proving applicability on the assessee - Whether the cutting tools used by the appellant qualify as goods brought for 'consumption' or 'use' as raw materials, component parts or inputs so as to attract the exemption in Explanation I to the Notification dated 30.03.2002 - HELD THAT: - The appellant asserted that cutting tools (drill bits, millers, inserts) were used and consumed in the manufacturing process of textile machinery and auto parts and therefore fell within the exemption. The first Appellate Authority examined samples and accepted that those items were consumed as inputs. The revisional authority, however, concluded they were not inputs without recording any factual findings or reasons. The Court reiterated the principle that exemption notifications are to be strictly interpreted and the burden to prove applicability lies on the assessee. Because the revisional authority failed to adjudicate the factual question whether the specified cutting tools were consumed as inputs, the Court could not decide the applicability of the Notification on the record before it and therefore directed fresh consideration. [Paras 9, 10]

Issue remanded to the revisional authority for fresh decision on the factual question of whether the cutting tools were consumed as inputs qualifying for exemption under Explanation I.

Duty of the revisional authority to record factual findings and reasons - remand for fresh decision after affording opportunity of hearing - Whether the revisional order dated 28.04.2017 could be sustained despite absence of recorded findings and reasons on the crucial factual issue - HELD THAT: - The Court found that the revisional authority set aside the appellate finding without assigning reasons and did not record any finding on whether the cutting tools were consumed as inputs. A revisional authority is required to record findings on such factual aspects before overruling the appellate conclusion. Given the absence of such findings and reasons, the Court concluded it could not uphold the revisional order and that the matter must be remitted for fresh consideration with opportunity to the parties to be heard. [Paras 10]

Impugned revisional order set aside and matter remitted to the revisional authority to decide afresh after affording an opportunity of hearing; the Court expressed no opinion on the merits of the exemption claim.

Final Conclusion: The order of the Additional Commissioner dated 28.04.2017 is set aside and the matter is remitted to that authority for fresh adjudication on whether the cutting tools were consumed as inputs attracting exemption under Explanation I to the Notification dated 30.03.2002; the High Court expressed no opinion on the merits and directed that parties be afforded an opportunity of hearing.

Summary order. Petition under Article 226 challenging Rule 6(1B) of the Maharashtra VAT Rules, 2005 noted; respondents directed to file reply by 12.02.2021, rejoinder if any by 17.02.2021; matter listed on board on 22.02.2021.

Bail in NDPS cases - Small quantity - Commercial quantity - Section 37 of the NDPS Act - bar on grant of bail - Notice under Section 50 of the NDPS Act - Statement under Section 67 of the NDPS Act - evidentiary value at bail stage

Small quantity - Commercial quantity - Section 37 of the NDPS Act - bar on grant of bail - Bail in NDPS cases - Whether petitioner is entitled to bail having allegedly been found in possession of one packet (10 gm) of contraband classified as 'small quantity', and whether the prohibition under Section 37 of the NDPS Act applies. - HELD THAT: - The court found on the material placed before it that the packet allegedly recovered from the petitioner contained 10 gm of contraband and thus fell within the category of 'small quantity'. The recovered substance in the case as a whole was not of commercial quantity. Applying the established principle that possession of a 'small quantity' does not attract the non-bailable bar under Section 37, the court held that the statutory bar was not applicable. In view of the pendency of trial, the filing of the charge-sheet without framing of charge, and the period of detention, the court concluded that the petitioner deserved bail without adjudicating the merits of the prosecution case. [Paras 27, 29, 30]

Petitioner granted bail on furnishing personal bond and surety, since the recovery falls within 'small quantity' and Section 37's bar is not attracted.

Notice under Section 50 of the NDPS Act - Statement under Section 67 of the NDPS Act - evidentiary value at bail stage - Bail in NDPS cases - Whether non-service of notice under Section 50 or alleged coercion in recording of statement under Section 67 precludes grant of bail at this stage. - HELD THAT: - The court recorded that the prosecution's case was that the packet in the petitioner's hand was recovered during an exchange and therefore a personal search under Section 50 was not required; this view had been adopted by the trial court. The court also held that the evidentiary value of the petitioner's statement under Section 67 and other material (such as call data and chats) could not be prejudged on a bail application and would be tested during trial. Accordingly, the court declined to resolve these contentions against the prosecution on the bail motion and proceeded on the limited question of bail entitlement. [Paras 25, 26]

Contentions regarding Section 50 notice and the probative value of the Section 67 statement left for trial; they do not by themselves bar grant of bail at this stage.

Final Conclusion: Without adjudicating the merits, the High Court directed release of the petitioner on bail upon furnishing bond and surety, observing that the recovery attributed to him was a 'small quantity' and the statutory bar under Section 37 did not apply; procedural and evidentiary disputes were left open for trial.

Leave to file affidavit-in-reply - removal of inaccurate online publication - apology to the Court - avoidance of conflict of interest in reportage by litigating counsel - uploading of Court order on website

Leave to file affidavit-in-reply - Permission granted to the respondent to file a response to the additional affidavit filed by the petitioner within a specified time. - HELD THAT: - The Court allowed the learned ASG to file a response to the additional affidavit received on the morning of the hearing and directed that the respondent's affidavit-in-reply be filed within two weeks. The Court further directed that copies of the affidavit-in-reply be shared with the petitioners' counsel and the amici curiae, ensuring that all parties have access to the material filed in rejoinder to the petitioner's additional affidavit. [Paras 1]

Respondent granted two weeks' time to file affidavit-in-reply and directed service of copies on petitioners' counsel and amici curiae.

Removal of inaccurate online publication - apology to the Court - The petitioner's counsel undertook that the contested blog post containing incorrect reporting of the Court's proceedings will be removed and an unconditional apology will be tendered to the Court and to the learned ASG. - HELD THAT: - The Court recorded the representation made on behalf of the petitioners that the disconcerting blog titled 'A Summer of Relief for Taxpayers', published on the site administered by ALA Legal, which contained incorrect reportage of the proceedings held on 25.05.2021, would be taken down and that an unconditional apology would be made both to the Court and to the affected counsel. The Court treated inaccurate public reportage of judicial proceedings as a matter warranting rectification by removal and apology in order to prevent prejudice and embarrassment to parties and counsel. [Paras 2]

Blog post to be removed and unconditional apology to be tendered to the Court and the learned ASG as represented.

Avoidance of conflict of interest in reportage by litigating counsel - uploading of Court order on website - Court indicated that a law firm prosecuting proceedings should not run a website/blog reporting on those same proceedings and recorded that the order of the Court would be uploaded on the site. - HELD THAT: - The Court observed that ALA Legal, which administers the referenced website/blog and is prosecuting the proceedings, ought not to run that website in respect of those proceedings because of the risk of losing objectivity in reportage. The Court noted that slanted reporting inconsistent with the Court's orders creates multiple problems, including embarrassment to counsels before their principals. The petitioners' counsel also stated that the Court's order dated 25.05.2021 would be uploaded on the website, and the Court recorded this undertaking while warning against lack of objectivity. [Paras 3, 4]

Recorded that the order will be uploaded; indicated that counsel/firm prosecuting proceedings should not run a website reporting on those proceedings to avoid loss of objectivity and resultant problems.

Listing for further hearing - The matter was listed for further hearing on a specified date. - HELD THAT: - After hearing the parties and recording the foregoing directions and undertakings, the Court fixed the next date of hearing to enable compliance with directions and further consideration of the matter. [Paras 5]

Matter listed on 22.07.2021.

Final Conclusion: The Court permitted the respondent two weeks to file an affidavit-in-reply (to be served on petitioners and amici), recorded the petitioners' undertaking to remove the impugned blog and tender an unconditional apology, admonished that a litigating firm should not run a website reporting on proceedings to avoid loss of objectivity, directed that the Court's order be uploaded on the site, and listed the matter on 22.07.2021.