TaxTMI Updates e-Newsletter
Jun 15,2021

Submission of explanation - opportunity of hearing - reasoned order - vacation of interim orders - notice issued by National Anti-Profiteering Authority

Submission of explanation - opportunity of hearing - notice issued by National Anti-Profiteering Authority - reasoned order - Writ petitions challenging notices issued by the National Anti-Profiteering Authority and the Director General of Anti-Profiteering were disposed of by directing petitioners to submit explanations and directing the Authority to consider and pass a reasoned order after permitting hearings and defences. - HELD THAT: - The Division Bench, following its earlier order in a similar writ petition, disposed of the present petitions by granting the petitioners eight weeks from the date of the order to file explanations to the notices dated 16.12.2019 and 24.12.2019. Petitioners were permitted to set out all defences available to them in those explanations. The National Anti-Profiteering Authority was directed to consider the explanations, afford a hearing (virtual or physical) if requested, and pass a reasoned order in accordance with law and communicate the same to the petitioners. The Court expressly refrained from making any observations on the merits of the contentions raised in the petitions and vacated any interim orders previously granted. [Paras 4, 5, 6]

Petitions disposed by directing filing of explanations within eight weeks, permitting hearings and defences, directing the Authority to consider and pass a reasoned order, and vacating interim orders.

Final Conclusion: Writ petitions disposed with directions to the petitioners to submit explanations within eight weeks, to be considered by the National Anti-Profiteering Authority which shall afford hearing if sought and pass reasoned orders; no observations on merits and interim orders vacated.

Assessment without jurisdiction - jurisdictional nullity - scheme for faceless assessment and dynamic jurisdiction - non-application of sub-sections (3A) and (3B) after 1st April, 2021 - mandatory applicability of Section 144B from 1st April, 2021 - opportunity to file response and personal hearing under Section 144B

Assessment without jurisdiction - non-application of sub-sections (3A) and (3B) after 1st April, 2021 - jurisdictional nullity - Validity of the assessment order dated 15.04.2021 passed under Section 143(3) read with Sections 143(3A) and 143(3B) insofar as it was passed after 01.04.2021. - HELD THAT: - The Court accepted the petitioner's contention that sub-sections (3A) and (3B) of Section 143 could not be invoked for assessments made on or after 1st April, 2021, having regard to Section 143(3D) which expressly provides that nothing contained in sub-section (3A) and sub-section (3B) shall apply to assessments made on or after that date. The CBDT notification dated 31.03.2021 issued under Section 144B(2) was held to be in consonance with that statutory position and to indicate that, after 01.04.2021, assessments could only be carried out in accordance with Section 144B. Where an assessment is thereby shown to have been made without jurisdiction, it is a nullity and liable to be set aside. Applying these principles, the Court found the impugned assessment order dated 15.04.2021 to have been passed without jurisdiction and therefore without legal effect. [Paras 9, 10]

Impugned assessment order dated 15.04.2021 set aside as without jurisdiction.

Assessment without jurisdiction - opportunity to file response and personal hearing under Section 144B - scheme for faceless assessment and dynamic jurisdiction - Validity of consequential notices (notice of demand under Section 156 and notice for initiating penalty proceedings under Section 274 read with Section 270A) and the course to be followed thereafter. - HELD THAT: - The Court set aside the notice of demand and the notice initiating penalty proceedings issued on 15.04.2021 as consequential to the assessment declared to be without jurisdiction. At the same time the Court granted the revenue liberty to proceed afresh under Section 144B of the Act. The Court directed that if a show-cause notice-cum-draft assessment order is served, the petitioner must be given an opportunity to file responses/objections and, where there is a proposed variation in income, an opportunity for personal hearing; accordingly the procedural safeguards under Section 144B are to be observed by the revenue in any fresh proceedings. [Paras 10]

Notice of demand and penalty notice dated 15.04.2021 set aside; revenue permitted to re-initiate assessment proceedings under Section 144B with the procedure and opportunities prescribed therein.

Final Conclusion: Writ petition allowed: impugned assessment order dated 15.04.2021 and consequential notices set aside as having been passed without jurisdiction; respondent authorised to proceed afresh under Section 144B of the Act, observing the procedural safeguards of show-cause/draft assessment, opportunity to file responses, and, where applicable, personal hearing.

Mandatory requirement of issuance of a show-cause notice-cum-draft assessment order under Section 144B - setting aside of assessment order for failure to comply with statutory procedure - notice of demand rendered unsustainable for defect in the assessment process - initiation of penalty proceedings set aside where impugned assessment is vitiated - liberty to pass fresh assessment subject to adherence to statutory requirements

Mandatory requirement of issuance of a show-cause notice-cum-draft assessment order under Section 144B - setting aside of assessment order for failure to comply with statutory procedure - notice of demand rendered unsustainable for defect in the assessment process - initiation of penalty proceedings set aside where impugned assessment is vitiated - liberty to pass fresh assessment subject to adherence to statutory requirements - Impugned assessment order dated 30.04.2021 and consequential notices were set aside for failure to issue the mandatory show-cause notice-cum-draft assessment order as required by Section 144B of the Act; respondents permitted to pass a fresh assessment after compliance with statutory requirements. - HELD THAT: - The petitioner challenged the assessment order for assessment year 2018-19 on the ground that no show-cause notice-cum-draft assessment order under Section 144B was issued prior to finalising assessment. The respondents did not dispute that the statutory procedure under Section 144B was not followed. The Court, noting the mandatory nature of the requirement, allowed the petition. Consequently the impugned assessment order dated 30.04.2021, the notice of demand issued under Section 156, and the notice for initiation of penalty proceedings under Section 270A of the Act of even date were set aside. The Court granted the revenue liberty to pass a fresh assessment order, provided the statutory requirements, inter alia those contained in Section 144B, are complied with before doing so. [Paras 6]

Impugned assessment order and consequential notices set aside for non-compliance with Section 144B; fresh assessment may be framed after adhering to statutory procedure.

Final Conclusion: Writ petition allowed: assessment order dated 30.04.2021 and attendant notices set aside for failure to issue the mandatory show-cause notice-cum-draft assessment order; revenue permitted to pass fresh assessment only after complying with the statutory requirements.

Classification of rental income as "Income from House Property" - classification of rental income as "Business Income" - principle of consistency in successive assessment years - res judicata and its inapplicability to separate assessment years

Classification of rental income as "Income from House Property" - classification of rental income as "Business Income" - The rental income earned by the assessee from letting out its steel unit premises and quarters is to be treated as income from house property and not as business income for the assessment year 2014-15. - HELD THAT: - The Tribunal noted that the assessee declared the rental receipts as income from house property, and a portion already treated as business income had corresponding expenses claimed. On examination of facts, the revenue did not demonstrate any change in the circumstances from earlier years. The Tribunal relied on the coordinate-bench finding in the assessee's own case for earlier assessment years where identical receipts from letting of the steel unit and quarters were held to be assessable under the head "income from house property." In the absence of any material change in facts or circumstances, there was no justification to reclassify the receipts as business income. Applying the determinative reasoning that consistent treatment in successive years, absent change, supports maintaining the same classification, the Tribunal found no illegality in the CIT(A)'s order deleting the addition and upheld the assessee's classification as income from house property. [Paras 5, 6, 7]

Tribunal dismissed the revenue's appeal and upheld the classification of the rental income as income from house property for AY 2014-15.

Principle of consistency in successive assessment years - res judicata and its inapplicability to separate assessment years - Reliance on prior decisions in the assessee's own case and the principle of consistency justified the treatment adopted; the contention invoking res judicata or change of classification was not accepted. - HELD THAT: - The Tribunal observed that earlier coordinate-bench orders for assessment years 2007-08, 2009-10, 2010-11 and 2011-12 had accepted the assessee's claim that rentals from the steel unit and quarters were income from house property. The revenue failed to point to any change in facts or circumstances warranting departure from that consistent treatment. While the revenue argued the ratio of a Supreme Court decision, the Tribunal applied the principle that where identical facts obtain and earlier departmental decisions in the assessee's own case have accepted a particular classification, consistency principles warrant maintaining that classification. The Tribunal therefore rejected the revenue's plea to revisit classification on the facts of AY 2014-15 and did not apply res judicata as a separate ground to alter the result. [Paras 6, 7]

Tribunal upheld the CIT(A)'s reliance on prior orders and the principle of consistency, rejecting the revenue's attempt to treat the receipts as business income.

Final Conclusion: The revenue's appeal is dismissed; the Tribunal upheld the CIT(A)'s order for AY 2014-15 treating the assessee's rental receipts from the steel unit and quarters as income from house property, applying the principle of consistency in view of unchanged facts and earlier favorable orders in the assessee's own case.

Reopening of assessment under Section 147 / notice under Section 148 - "reason to believe" test - intimation under Section 143(1) vis-a -vis assessment under Section 143(3) and applicability of "reason to believe" - valuation by registered valuer versus adoption of LDO/circle rates - reference to Departmental Valuation Officer - indexation and fair market value as on 1-4-1981 for cost of acquisition - deduction under Section 54 - scope of "a residential house" prior to amendment - deduction under Section 54EC - investment within six months and operation of proviso restricting quantum in a financial year - protective addition and double taxation - allocation between assessment years

Reopening of assessment under Section 147 / notice under Section 148 - "reason to believe" test - intimation under Section 143(1) vis-a -vis assessment under Section 143(3) and applicability of "reason to believe" - Validity of reopening assessment for AY 2010-11 (notice dated 1-3-2012) and whether tangible material was required where return was processed under Section 143(1). - HELD THAT: - The Tribunal considered the reasons recorded by the AO (investment in capital gain bonds claimed exceeding the proviso to Section 54EC and claim of deduction under Section 54 for more than one residential house) and the law laid down by the Supreme Court and the jurisdictional High Court. It held that where a return has been processed under Section 143(1) (and no assessment under Section 143(3) has been completed), reopening under Section 147 still requires the AO to have 'reason to believe' that income has escaped assessment, but such reason to believe need not be founded on fresh tangible material distinct from the return and documents themselves. The AO need only form a prima facie belief to issue a notice; whether escapement exists is to be tested in reassessment. Applying that principle, the Tribunal found the AO had prima facie reason to believe that (i) excess deduction under Section 54EC had been claimed and (ii) excessive deduction under Section 54 had been claimed for more than one property as reflected in the assessee's computation; accordingly reopening was valid. The Tribunal followed precedents including Rajesh Jhaveri, Zuari, and the jurisdictional authority referenced, and rejected the assessee's additional ground challenging reopening for lack of tangible material. [Paras 47, 48, 49, 50, 51]

Reopening of assessment for AY 2010-11 was valid; additional ground attacking reopening is dismissed.

Valuation by registered valuer versus adoption of LDO/circle rates - reference to Departmental Valuation Officer - indexation and fair market value as on 1-4-1981 for cost of acquisition - Whether fair market value as on 1-4-1981 should be adopted as per the registered valuer's report or as adopted by the AO for computing indexed cost of acquisition (AY 2010-11). - HELD THAT: - The Tribunal acknowledged that valuation is a technical matter and that ordinarily a report by a registered valuer (empanelled) carries weight and, if rejected by the AO, the AO should refer the matter to the Departmental Valuation Officer (DVO). The Tribunal compared the present facts with coordinate bench decisions where registered valuer reports were accepted in absence of a DVO reference. Noting, however, factual distinctions in this case (the registered valuer's bases, absence of corroboration, AO's specific reliance on notified LDO rates and other objections), the Tribunal found the valuer's report did not inspire full confidence on the record before it. Consequently, rather than deciding the correct rate itself, the Tribunal set aside the valuation determination and remanded the matter to the AO with a mandatory direction to refer the issue to the DVO for determination of fair market value as on 1-4-1981; the assessee to be given opportunity to adduce further evidence and to be heard thereafter. [Paras 52, 53]

Ground on fair market value is set aside and remitted to the AO with direction to obtain DVO report and recompute indexed cost accordingly; assessee to be heard.

Deduction under Section 54 - scope of "a residential house" prior to amendment - Whether the assessee is entitled to claim deduction under Section 54 for investment in two residential houses (flat in Mumbai and constructed unit in Delhi) for AY 2010-11. - HELD THAT: - The Tribunal examined the expression 'a residential house' as used in Section 54 prior to the 2015 amendment and followed binding and persuasive High Court and coordinate bench authorities holding that the phrase can include plural/composite acquisitions and that the restriction to one house was introduced prospectively by amendment effective from 1-4-2015 (applicable to AY 2015-16 onwards). Applying those precedents, and noting the legislative amendment was clarificatory and prospective, the Tribunal held that the assessee's acquisitions qualified for deduction under Section 54 as claimed. [Paras 54, 55]

Assessee entitled to deduction under Section 54 in respect of both residential acquisitions; the assessee's ground is allowed.

Deduction under Section 54EC - investment within six months and operation of proviso restricting quantum in a financial year - Validity of claim of deduction under Section 54EC aggregating Rs. 1 crore by investing Rs.50 lakhs in two different financial years but within six months of transfer (AY 2010-11); appeal by AO against CIT(A) deletion. - HELD THAT: - The Tribunal reviewed the statutory text and the Madras High Court decision relied upon, which interpreted the proviso to Section 54EC (as it stood prior to the 2015 amendment) to allow investments made within six months even if they fell in two financial years, so long as each year's investment respected the fifty-lakh ceiling applicable to that financial year. The Tribunal noted that the legislature later removed ambiguity prospectively from 1-4-2015, but that for earlier years the Madras High Court's decision is squarely applicable. The Tribunal therefore held the assessee's investment pattern entitled him to the claimed benefit. The Tribunal also observed that the tax effect raised by the AO's appeal was below the statutory threshold for maintainability. [Paras 57, 58, 59, 60, 61]

AO's appeal on disallowance under Section 54EC is dismissed; CIT(A)'s deletion of disallowance upheld and assessee's claim sustained.

Protective addition and double taxation - allocation between assessment years - Whether protective addition of capital gains made in AY 2007-08 (ITA 5767/Del/2015) is sustainable when the same transaction has been taxed in AY 2010-11. - HELD THAT: - The Tribunal noted that both parties accepted the impugned transfer related to AY 2010-11 and that the transaction was taxed in AY 2010-11. Since the same transaction had been offered to tax and assessed in AY 2010-11, the Tribunal found no justification to sustain the protective addition for AY 2007-08 in respect of the same transaction. On that basis the Tribunal allowed the assessee's appeal for AY 2007-08. [Paras 64, 65, 66, 67, 68]

ITA for AY 2007-08 is allowed insofar as the protective addition pertained to the transaction already taxed in AY 2010-11.

Final Conclusion: For AY 2010-11 the Tribunal: (a) upheld validity of reopening under Section 147 (additional ground dismissed); (b) remitted the question of fair market value as on 1-4-1981 to the AO with a direction to obtain a DVO report and afford the assessee an opportunity to be heard; (c) allowed the assessee's claim under Section 54 for both residential acquisitions; and (d) dismissed the AO's appeal on Section 54EC, upholding the CIT(A)'s deletion. For AY 2007-08 the Tribunal allowed the assessee's appeal by setting aside the protective addition because the transaction was taxed in AY 2010-11.

Taxability of on money under the project completion method - treatment of on money as business receipt and not unexplained cash credit under section 68 - binding effect of Settlement Commission's quantification on rate of profit element - estimation of profit element on on money at 12% as embedded income

Taxability of on money under the project completion method - method of accounting - On money receipts are to be taxed in accordance with the assessee's regular method of accounting (project completion method) and therefore assessed in the year in which the project is completed or substantially completed. - HELD THAT: - The Tribunal held that the receipts characterised as on money had a direct nexus with the assessee's construction project and the assessee follows the project completion method. Following the Tribunal's earlier decision in the sister group matters and authorities cited, the income embedded in on money must be assessed in the year when the regular income of the project is brought to tax under the accounting method followed by the assessee. The Tribunal relied on identical findings in group cases arising from the same search and seized material to conclude that on money is taxable as business income in the year of project completion rather than in the year of receipt. [Paras 3]

On money receipts to be taxed in the year of completion/substantial completion of the project as per the project completion method followed by the assessee.

Treatment of on money as business receipt and not unexplained cash credit under section 68 - Once the nature and source of the on money credit (receipt from sale of flats) is established and accepted, it constitutes business receipt and cannot be treated as unexplained cash credit under section 68. - HELD THAT: - The Tribunal recorded that the Assessing Officer, on remand, accepted that the on money receipts arose from sale of flats and recorded the parties' names in the remand report. Given that nature and source were thus established, the Tribunal held that the receipts could not be added as unexplained cash credit u/s 68. The CIT(A) had similarly found section 68 inapplicable and treated the receipts as business receipts, a conclusion which the Tribunal upheld on the facts and material emanating from the same search across group entities. [Paras 3]

Section 68 addition not sustainable; on money is business receipt once nature and source are established.

Binding effect of Settlement Commission's quantification on rate of profit element - estimation of profit element on on money at 12% as embedded income - Profit element embedded in on money is to be estimated at 12% and taxed as the undisclosed income of the assessee. - HELD THAT: - Relying on precedent and earlier orders in sister group cases and decisions where the Settlement Commission had accepted an estimate of profit on on money (notably application of 12% in related group matters), the Tribunal found it appropriate to direct the Assessing Officer to adopt a 12% rate to quantify the profit element. The Tribunal observed that coordinate rulings had followed the Settlement Commission's quantification and that identical facts and seized material across group entities warranted the same approach here; accordingly the CIT(A)'s estimate at 25% was modified to 12% and the addition confined to the profit element rather than the entire receipt. [Paras 3]

Assessing Officer directed to compute undisclosed income as 12% of on money receipts; CIT(A)'s 25% estimate modified to 12%.

Final Conclusion: Following Tribunal decisions in sister group matters on identical facts and seized material, revenue appeals are dismissed and assessee appeals are partly allowed; the Assessing Officer is directed to assess only the profit element at 12% of on money receipts, and to tax that profit in the year in which the project's regular income is assessed pursuant to the project completion method.

Deduction under section 80IB(11A) - processing, preservation and packaging of vegetables - classification of sweet corn as a vegetable - entitlement to deduction based on installation of plant and machinery - remand for computation of eligible profit

Deduction under section 80IB(11A) - classification of sweet corn as a vegetable - processing, preservation and packaging of vegetables - entitlement to deduction based on installation of plant and machinery - Assessee's entitlement to deduction under section 80IB(11A) for processing, preservation and packaging of sweet corn for AY 2016-17 - HELD THAT: - The Tribunal examined whether sweet corn falls within the ambit of fruits or vegetables and whether the assessee carried on the requisite business of processing, preservation and packaging with necessary plant and machinery. Relying on the material in the paper book, authoritative descriptions of sweet corn as a starchy vegetable when harvested immature, and a prior coordinate-bench decision in the assessee's own earlier years, the Tribunal held that sweet corn can properly be treated as a vegetable (or fruit) for the purpose of section 80IB(11A). The Tribunal also considered the assessee's balance sheet and details of fixed assets and additions, and found that the assessee possessed plant and machinery and facilities (processing units, boilers, spray driers, blast/freezing and cold rooms, packing machinery and vehicles) necessary for procurement, processing, preservation and packing. On these findings the Tribunal allowed the claim of deduction under section 80IB(11A) insofar as the deduction relates to profit derived from eligible processing, preservation and packaging activities. [Paras 7]

The assessee is entitled to claim deduction under section 80IB(11A) in respect of profit derived from processing, preservation and packing of sweet corn.

Remand for computation of eligible profit - deduction under section 80IB(11A) - Extent of profit eligible for deduction under section 80IB(11A) and direction for recalculation - HELD THAT: - While allowing entitlement in principle, the Tribunal observed that certain receipts shown in the financial statements (notably other income and non-operating receipts) are, prima facie, not eligible for deduction under section 80IB(11A). The Tribunal therefore did not accept the assessee's entire net profit as eligible without verification. It remitted the matter to the Assessing Officer for recomputation of the eligible profit element for deduction, directing the AO to exclude non-eligible receipts and to work out profit eligible under section 80IB(11A) after giving the assessee an opportunity to produce supporting details and cooperate in the verification. [Paras 7]

The issue of quantum of deduction is remitted to the Assessing Officer to recompute eligible profit under section 80IB(11A) excluding prima facie ineligible receipts, with directions to the assessee to furnish supporting particulars.

Final Conclusion: The appeal is partly allowed: the Tribunal held that sweet corn qualifies as a vegetable and that the assessee is in principle entitled to deduction under section 80IB(11A) for profits from processing, preservation and packing, but remitted computation of the eligible profit to the Assessing Officer for recalculation after exclusion of non eligible receipts and verification of supporting details.

Unexplained cash deposits - peak bank balance addition - presumptive taxation under section 44AF - burden of proof for source of cash - estimation of unexplained income - reconciling bank deposits with prior cash withdrawals and gifts - appellate power to modify additions

Unexplained cash deposits - peak bank balance addition - burden of proof for source of cash - estimation of unexplained income - Extent to which cash deposits in the bank account are to be treated as income from unexplained sources and the correct quantum of addition to be made to the returned income. - HELD THAT: - The Tribunal examined the cash deposits totalling Rs. 12,67,500 and the assessee's explanations that these arose from current year receipts, earlier cash withdrawals available for re-deposit, opening cash balance and gifts from parents. The AO had adopted peak balance and made addition of Rs. 4,79,369; the CIT(A) enhanced the unexplained deposit to Rs. 7,98,770. The Tribunal accepted that some part of the deposits could be explained by the current year turnover (accepted by AO) but found documentary substantiation for other components lacking because assessee had not maintained regular books under the presumptive scheme. Applying reasoned estimates, the Tribunal accepted an opening cash balance on estimate at Rs. 2,00,000 (out of claimed ~2,50,256), accepted gifts from parents to the extent of Rs. 2,00,000 (out of claimed Rs. 2,50,000) and allowed earlier cash withdrawals available for re-deposit at Rs. 3,50,000 (out of claimed Rs. 3,92,330). After reconciling accepted items against total deposits, the Tribunal held that an amount of Rs. 1,50,000 remained unexplained and required to be added to the returned income. The Tribunal thus modified the order of the CIT(A) and restricted the addition to Rs. 1,50,000, observing that limited estimation was appropriate where documentary evidence was absent but some sources could reasonably be accepted on an estimated basis. [Paras 11, 13, 14]

Addition by way of unexplained cash deposits reduced and restricted to Rs. 1,50,000; appeal partly allowed.

Presumptive taxation under section 44AF - reconciling bank deposits with prior cash withdrawals and gifts - appellate power to modify additions - Treatment of additions made by the AO in respect of investment in shares and income from business as reflected in the revised return and the appellate action thereon. - HELD THAT: - The Tribunal noted that the AO had made additions in respect of investment in shares (purchase amount and declared capital gain) and had treated business receipts on a basis different from the assessee's revised claim. The CIT(A) deleted the AO's addition of Rs. 6,36,004 (investment in shares) and did not sustain the AO's enhancement of business income determined by him; those aspects were either deleted or not disturbed because there was no cross-appeal by the Revenue against certain deletions. The Tribunal did not disturb the deletions made by the CIT(A) in respect of the investment in shares and the AO's enhancement of business income for which the Revenue had not appealed. [Paras 5, 11]

Deletions or adjustments made by the CIT(A) in respect of investment in shares and the AO's computation of business income were sustained/left undisturbed by the Tribunal.

Final Conclusion: The assessee's appeal is partly allowed: the Tribunal restricts the addition on account of unexplained cash deposits to Rs. 1,50,000 for AY 2008-09 and does not disturb the deletions/adjustments made by the CIT(A) in respect of investment in shares and the AO's computation of business income where the Revenue did not challenge those deletions.

Assessment u/s.153A/153C pursuant to search - no addition in concluded/unabated assessment without incriminating material found during search - unexplained cash credit / unexplained loans under section 68 - onus to prove identity, genuineness and creditworthiness - principles of natural justice - right to confrontation / cross-examination of third party witnesses

Assessment u/s.153A/153C pursuant to search - no addition in concluded/unabated assessment without incriminating material found during search - Validity of additions made in an assessment framed under section 153C / 153A for an assessment year which was concluded/unabated on the date of search where additions were based on books/regular returns without incriminating material seized during search. - HELD THAT: - The Tribunal examined the scope of sections 153A/153C and the proviso which treats pending proceedings as abating and limits the scope of reassessment in respect of concluded assessment years to income evidenced by incriminating material found during search. Citing binding and consistent judicial precedents, the Tribunal held that where an earlier assessment year is unabated/concluded as on the date of search, additions in proceedings initiated under section 153A/153C must be founded on incriminating material discovered as a result of the search in connection with those earlier years. On the facts, the Assessing Officer made additions towards unsecured loans by relying on the assessee's regular return, books and confirmation letters that formed part of the regular record; those documents could not be treated as incriminating material unearthed by the search. Therefore the additions were not sustainable under the statutory scheme and established authorities. [Paras 11, 12]

Additions made in the assessment year 2011-12 under section 68 in proceedings under section 153C/153A are deleted because they were not supported by incriminating material found as a result of the search.

Unexplained cash credit / unexplained loans under section 68 - onus to prove identity, genuineness and creditworthiness - principles of natural justice - right to confrontation / cross-examination of third party witnesses - Whether the Assessing Officer was justified in treating disclosed unsecured loans as unexplained credit under section 68 where the assessee produced identification, bank records, confirmations and other documentation and where adverse reliance was placed on third party statements without furnishing them or permitting cross examination. - HELD THAT: - The Tribunal reviewed the evidentiary position and relevant authorities. It noted that the assessee had filed name, address, PAN particulars, financial statements and bank records of the lenders, showed routing of transactions through banking channels, produced confirmations, evidence of repayment and security arrangements - thereby discharging the initial onus under section 68. Once that onus was discharged, the burden shifted to the department to establish that the lenders lacked creditworthiness or that the transactions were sham. The AO, however, relied on statements attributed to third parties without supplying those statements to the assessee or granting an opportunity for cross examination. Citing settled law that denial of the right to confront or cross examine third party witnesses used against an assessee vitiates the assessment, the Tribunal held that the AO's reliance on such material was a breach of natural justice and that, on the merits, the assessee had adequately explained the loans. [Paras 13, 14, 15]

Additions under section 68 and the consequential disallowance of interest were deleted: the assessee discharged its onus and the AO unlawfully and impermissibly relied on third party statements without providing copies or affording cross examination.

Final Conclusion: The Revenue's appeal is dismissed and the assessee's cross objection is allowed: additions made to income for A.Y. 2011-12 by treating disclosed loans as unexplained credit under section 68 (and the related disallowance of interest) are deleted because they were not supported by incriminating material found during the search and because the Assessing Officer relied on third party statements without supplying them or permitting cross examination, while the assessee had discharged the initial burden of proof.

Approval under section 153D - non-application of mind by approving authority - supervisory jurisdiction of designated authority in search assessments - validity of assessment framed under section 153A - quashing of assessment as non est for hollow approval

Approval under section 153D - non-application of mind by approving authority - validity of assessment framed under section 153A - quashing of assessment as non est for hollow approval - Validity of the statutory approval accorded under section 153D and consequence for the assessment framed under section 153A for AY 2016-17 - HELD THAT: - The Tribunal admitted the additional ground challenging the approval under section 153D as a pure question of law (paras 2, 6). The record shows the Assessing Officer submitted draft assessment orders to the Additional Commissioner on 29.06.2017 and the approval was granted the same day by a one line memo stating that "Necessary statutory approval u/s. 153D is given to pass the above assessment order as such" (paras 10-12). Applying established precedent and reasoning in co ordinate decisions (including Shreelekha Damani and Arch Pharmalabs Ltd.), the Tribunal held that section 153D imposes a supervisory statutory duty on the designated authority to objectively evaluate the draft order and the underlying seized material with due application of mind (paras 12-13). Where the approving authority records no process of satisfaction, gives blanket or consolidated approval on the same day the draft is submitted, and there is no indication that seized materials or appraisal reports were examined, the approval is a mere formal or mechanical act and lacks legal sanctity (paras 13-15). In the present case the Addl. CIT's approval contained no indication of objective consideration; it relied on the draft alone and returned the record, thereby abdicating supervisory function. Consequently the approval failed to meet the statutory requirement and the resulting assessment framed under section 153A is vitiated and non est (paras 14-15). Having quashed the assessment on this jurisdictional ground, the Tribunal did not adjudicate the merits of the additions (para 16). [Paras 13, 14, 15, 16, 17]

The approval accorded under section 153D was given without application of mind and is invalid; the assessment framed under section 153A for AY 2016-17 is quashed.

Final Conclusion: The appeal is allowed: the approval under section 153D is held to be perfunctory and the assessment for AY 2016-17 framed under section 153A is quashed for want of valid statutory approval; merits need not be decided.

Right to travel abroad subject to judicially imposed conditions - Security deposit by way of fixed deposit receipt to ensure attendance - Proportionality in imposing onerous financial conditions - Risk of foreign national absconding in criminal proceedings - Judicial supervision of surrender and use of passport

Right to travel abroad subject to judicially imposed conditions - Security deposit by way of fixed deposit receipt to ensure attendance - Proportionality in imposing onerous financial conditions - Risk of foreign national absconding in criminal proceedings - Whether the petitioner, a foreign national accused of an offence under the Customs Act, should be permitted to travel abroad and on what conditions. - HELD THAT: - The Court considered the factual matrix including the petitioner's residence in India for over one and a half years, her age and personal hardships, absence of earlier involvement in similar activities on record, and the Department's concession that foreign travel may be permitted subject to conditions. While recognizing the Department's concern about the risk of non-return, the Court found the condition proposed by the Department to deposit 50% of the recovered amount to be onerous. Balancing the competing interests of ensuring the petitioner's attendance in the trial and avoiding disproportionate conditions, the Court allowed travel for six months on furnishing a security by way of an FDR for a specified sum in the name of the Registrar General, together with ancillary conditions including undertaking to report back, furnishing address abroad, prohibition on seeking extension, authorization to counsel to receive notices, prohibition on tampering with evidence, surrender of passport on return, and a bar on repeating similar offences. The Court framed these conditions as supervisory measures calibrated to secure attendance without imposing an unduly burdensome monetary pre-condition. [Paras 9, 10, 11]

Petitioner permitted to travel to Taiwan from 12.06.2021 to 11.12.2021 on deposit of an FDR of Rs.15,00,000 in the name of the Registrar General and subject to specified conditions; revision petition disposed accordingly.

Final Conclusion: Revision petition disposed by allowing the petitioner limited foreign travel for six months on furnishing a court-monitored FDR security and complying with enumerated conditions to secure her appearance in the proceedings.

Exhaustion of statutory appellate remedy - prohibition on writ court conducting trial - appellate reappreciation of facts and evidence - right of appeal as valuable statutory remedy - appellate procedure under the Customs Act

Exhaustion of statutory appellate remedy - right of appeal as valuable statutory remedy - prohibition on writ court conducting trial - Whether the writ petition is maintainable despite the availability of a statutory appeal under the Customs Act. - HELD THAT: - The Court held that the existence of an efficacious statutory appeal requires the petitioner to exhaust that remedy before invoking writ jurisdiction. Disputed facts and documentary matters relied upon by the parties required reappreciation by the appellate forum which is empowered to summon documents, hear parties and adjudicate both facts and law. The High Court cannot, in exercise of powers under Article 226, undertake a trial or re adjudicate disputed factual issues that are amenable to scrutiny in the statutory appeal. The judgment reviewed prior divisional and bench precedents and observed that dispensing with the statutory appeal is exceptional and to be exercised sparingly; routine bypassing of the appellate remedy is impermissible. Consequently, the writ petition seeking adjudication of contested facts was held not maintainable while the appellate remedy remained available. [Paras 9, 10, 11, 12, 13]

Writ petition dismissed for non exhaustion of the statutory appellate remedy; disputed factual issues to be agitated before the appellate authority.

Appellate procedure under the Customs Act - appellate reappreciation of facts and evidence - What procedural relief should be afforded to the petitioner given the dismissal for non exhaustion of appeal. - HELD THAT: - While requiring exhaustion of the statutory appeal, the Court granted the petitioner liberty to approach the appropriate appellate forum. The Court directed that an appeal may be filed within 60 days from receipt of this order and that, if so filed, the Commissioner of Customs (Appeals) shall entertain the appeal without reference to limitation. The appellate authority is to adjudicate the matters on merits after affording opportunity to all parties and to dispose of the appeals expeditiously. [Paras 19]

Petitioner permitted to file appeal within 60 days; appeals to be entertained notwithstanding limitation and to be decided on merits.

Final Conclusion: The writ petition is dismissed; the petitioner is directed to exhaust the statutory appellate remedy and is permitted to file an appeal within 60 days from receipt of this order, which the appellate authority shall entertain without reference to limitation and decide on merits. No costs.

Exhaustion of statutory appellate remedy - availability of alternative remedy under the Customs Act - scope of writ jurisdiction under Article 226 - principles of natural justice - appellate competence of Commissioner of Customs (Appeals) - inadmissibility of trial of facts in writ proceedings

Exhaustion of statutory appellate remedy - availability of alternative remedy under the Customs Act - appellate competence of Commissioner of Customs (Appeals) - scope of writ jurisdiction under Article 226 - Whether the High Court should entertain the writ petition without the petitioner first availing the statutory appeal under the Customs Act. - HELD THAT: - The Court held that the statutory appellate remedy provided under the Customs Act is a valuable right which ordinarily must be exhausted before invoking writ jurisdiction under Article 226. The High Court emphasized that appellate authorities are institutionally competent to examine original documents, decide mixed questions of fact and law, grant interim relief and adjudicate merits after affording opportunity to parties. Entertaining writ petitions to bypass the prescribed appeal mechanism is not preferable and can be permitted only in extraordinary circumstances which were not shown to exist here. The Court relied on its earlier exposition that the High Court should not usurp the functions of the appellate authority by conducting a trial of facts in writ proceedings, and that allowing routine dispensation of the statutory remedy would encourage bypassing of the appellate forum and overburden the High Court. In consequence, the petition was dismissed with liberty to the petitioner to prefer the statutory appeal within the prescribed period, which the Court directed should be entertained without reference to limitation if filed within the stipulated time.

Writ dismissed; petitioner required to exhaust statutory appeal remedy before Commissioner of Customs (Appeals), with liberty to file appeal and for it to be entertained as directed by the Court.

Principles of natural justice - issuance of show cause notice - inadmissibility of trial of facts in writ proceedings - Allegation that the impugned order was passed without issuance of a show cause notice and in violation of principles of natural justice. - HELD THAT: - The petitioner contended no show cause notice was issued and hence principles of natural justice were violated. The respondents asserted a show cause notice dated 10.03.2017 had been issued and referred to proceedings of record. The Court did not adjudicate the factual dispute on the issuance or adequacy of show cause notice on merits within the writ petition, observing that such questions of fact and examination of documents are for the appellate authority to decide in the statutory appeal. Consequently, the contention regarding non-issuance or violation of natural justice was not finally decided on merits by the High Court but left to be addressed in the appellate proceedings.

The complaint about absence of show cause notice / violation of natural justice was not adjudicated in the writ; the petitioner is to raise and have this grievance considered in the statutory appeal before the competent appellate authority.

Final Conclusion: The writ petition was dismissed as the petitioner was required to exhaust the statutory appeal remedy under the Customs Act; factual/contentions regarding issuance of show cause notice and alleged breach of natural justice were not decided and are to be examined in the appeal before the Commissioner of Customs (Appeals).

Jurisdiction of DRI to issue show-cause notice under Section 28 - Section 28(11) deeming officers to have had power of assessment under Section 17 - remand to adjudicating authority versus decision on merits by appellate tribunal - keeping appeals pending and awaiting higher court decision - prohibition on coercive action pending final adjudication

Remand to adjudicating authority versus decision on merits by appellate tribunal - keeping appeals pending and awaiting higher court decision - The correctness of the Tribunal's order setting aside the appellate authority's orders and remanding the matters to the Adjudicating Authority, instead of keeping the appeals pending to await the Supreme Court's decision. - HELD THAT: - The Tribunal had set aside the orders of the First Appellate Authority and remanded the matters to the Adjudicating Authority after observing jurisdictional doubt arising from earlier High Court decisions on DRI's competence. This Court held that the Tribunal was not justified in remanding the matters to the Adjudicating Authority. Following an earlier Division Bench decision dealing with identical orders, the correct course is to set aside the impugned orders of the Tribunal and restore the appeals to the file of the Tribunal, directing that the appeals be kept pending and await the decision of the Honourable Supreme Court in the matter concerning DRI's jurisdiction. The Court applied this precedent to the present appeals and directed that the appeals remain pending rather than be remanded for fresh adjudication. [Paras 5, 6, 8]

Impugned orders of the Tribunal setting aside appellate orders and remanding to the Adjudicating Authority are set aside; appeals restored to the Tribunal to be kept pending awaiting the Supreme Court's decision.

Jurisdiction of DRI to issue show-cause notice under Section 28 - Section 28(11) deeming officers to have had power of assessment under Section 17 - Whether officers of the Directorate of Revenue Intelligence are proper officers empowered to issue show-cause notices under Section 28 (and the effect of Section 28(11) read with Section 17). - HELD THAT: - The Court observed that the controversy as to DRI's competence to issue show-cause notices-including the interpretative question arising from Section 28(11) that all persons appointed as officers of Customs before 6.7.2011 are deemed to have had power of assessment under Section 17-is pending consideration before the Honourable Supreme Court. Consequently, this Court declined to decide the question on merits and left the substantial question of law open for final determination by the Supreme Court. The Court therefore did not adjudicate the jurisdictional issue and directed that the appeals be kept pending in the meantime. [Paras 4, 5, 8]

Jurisdictional question as to DRI's competence and the effect of Section 28(11) is left open for the Supreme Court; no decision on merits was rendered.

Prohibition on coercive action pending final adjudication - Whether the Department may initiate coercive action against the respondents while the appeals are kept pending. - HELD THAT: - Having restored the appeals to the Tribunal and directed that they remain pending awaiting the Supreme Court's decision, the Court made it clear that the Department shall not initiate any coercive action against the respondents/assessees until the final decision is rendered. This protective direction follows from the order to keep appeals pending and is consistent with the relief granted in the earlier Division Bench decision applied to these matters. [Paras 6, 8]

The Department is restrained from initiating coercive action against the respondents while the appeals remain pending.

Final Conclusion: The appeals filed by the Commissioner of Customs are allowed to the extent that the Tribunal's orders remanding the matters are set aside; the appeals are restored to the Tribunal to be kept pending and to await the decision of the Honourable Supreme Court on the jurisdictional question, which is left open. The Department is directed not to take coercive action in the interim.

Validity of levy of Cost Recovery Charges (CRC) under the Handling of Cargo in Customs Areas Regulations, 2009 - Waiver/exemption of Cost Recovery Charges prospective in nature and criteria for grant of waiver - Power of Board/Government to make regulations and levy fees under the Customs Act - Absence of notification fixing rates/manner for collection of CRC renders retrospective/unspecified collection unsustainable - Compensatory character of Cost Recovery Charges; limitation on recovery of government employees' salaries from private parties - Regularisation of amounts already collected in absence of entitlement to refund

Power of Board/Government to make regulations and levy fees under the Customs Act - Validity of levy of Cost Recovery Charges (CRC) under the Handling of Cargo in Customs Areas Regulations, 2009 - Levy of Cost Recovery Charges is within the regulatory power of the Board/Government but requires specification of rates and manner by notification consistent with the Act. - HELD THAT: - The Court held that the Central Government and the Central Board have power under Section 157 and Section 158 to make regulations and provide for levy of fees for services rendered by customs officers, and that the Handling of Cargo in Customs Areas Regulations, 2009 traceably authorise levying CRC by the Commissioner subject to such rates and manner as may be specified. However, after the Regulations came into force there was no government notification brought to the court specifying the rates/manner for collection of CRC. In the absence of such a direct notification fixing rates and the proper machinery, collection of CRC from the petitioner was made contrary to the statutory scheme. The Court relied on the need for a proper notification/machinery and analogised the position to prior authority where demands were unsustainable in absence of proper machinery. [Paras 66, 67, 68, 69, 70]

Levy of CRC is authorised by the Act/Regulations but collection without a notification fixing rates/manner is unsustainable; Board must issue appropriate notifications.

Absence of notification fixing rates/manner for collection of CRC renders retrospective/unspecified collection unsustainable - Regularisation of amounts already collected in absence of entitlement to refund - Amounts already collected cannot be ordered refunded but should be regularised; unspecified retrospective collection is not sustainable absent proper notification. - HELD THAT: - The Court observed that the petitioner had paid amounts between July 2008 and March 2013 but, because no proper notification/orders specifying CRC rates under the 2009 Regulations were produced, the collections were made contrary to the Regulations. The Court held that refund cannot be directed since the petitioner would have passed on the burden to customers; accordingly, the appropriate course is to regularize the amounts already paid and collected rather than ordering refund. The Court therefore directed regularisation of past payments by the respondents. [Paras 69, 70, 71, 72, 76]

No refund ordered; past payments to be regularised by the respondents.

Waiver/exemption of Cost Recovery Charges prospective in nature and criteria for grant of waiver - Regularisation of amounts already collected in absence of entitlement to refund - Petitioner, having met the prescribed benchmark, is entitled to waiver/exemption prospectively from the date it achieved the benchmark and the respondents are directed to grant and regularize waiver accordingly. - HELD THAT: - The Court examined the CBEC guidance (F.No.434/17/2004 dated 12.9.2005 and subsequent Board deliberations) that waiver is prospective and tied to fulfillment of benchmarks for two consecutive years. The petitioner demonstrated fulfillment of the criteria during its initial two years of operation. In view of the Board's later clarifications and decisions (including the 18 June 2015 Board minutes), and the absence of discrimination among service providers, the Court directed the jurisdictional Commissioner/Chief Commissioner to grant waiver/exemption to the petitioner with effect from the date the petitioner met the CBEC benchmark and to regularize its case accordingly. [Paras 58, 71, 72, 73, 76]

Grant waiver/exemption prospectively from the date petitioner achieved the CBEC benchmark and regularize the petitioner's case.

Compensatory character of Cost Recovery Charges; limitation on recovery of government employees' salaries from private parties - Cost Recovery Charges are compensatory and do not permit recovery of the entire salaries payable to government employees from private parties; only reimbursement of excess/extra amounts for special deployment may be permissible. - HELD THAT: - The Court noted that under the constitutional scheme there is no scope for shifting the burden of ordinary government salaries to private parties. CRC can be charged only as compensatory reimbursement for additional amounts payable to officers (such as overtime or allowances) and not the entire salary. The mere implementation of the VI Pay Commission did not entitle the Department to recover entire salary increases from CFS/ICD operators. Consequently, full salary recovery from service providers is not justified unless statutory amendments within constitutional bounds are made. [Paras 60, 61, 62, 63]

CRC is limited to compensatory reimbursement; full recovery of salaries from service providers is not permissible under existing law.

Administrative practice of waiver by Circulars and need to amend Regulations - CBEC circulars granting waiver operated as administrative practice but the Regulations should be suitably amended and formal notifications issued to align practice with statutory scheme. - HELD THAT: - The Court observed that waiver/exemption had been granted historically by circulars and Board directions in aid of Regulation 7, but there is no direct provision in the 2009 Regulations for waiver. To remove uncertainty the Court directed the Central Board of Excise and Customs to issue appropriate notifications specifying CRC rates/manner within six months and to amend the Handling of Cargo in Customs Areas Regulations, 2009 to incorporate provisions for waiver/exemption. [Paras 73, 74, 75]

CBEC to issue notifications specifying rates/manner and to suitably amend the Regulations to incorporate waiver/exemption provisions.

Final Conclusion: Writ petitions allowed in part: levy of CRC recognised as within regulatory power but collection without statutory notification fixing rates/manner unsustainable; past collections to be regularised (no refund ordered); petitioner entitled to waiver prospectively from the date it met CBEC benchmarks and its case to be regularised; CBEC directed to notify rates/manner for CRC and to amend the Regulations to provide for waiver/exemption within six months.

Maintainability of an application under Section 439(1)(b) Cr.P.C. for modification of bail conditions - interim custody of property under Section 451 Cr.P.C. - finality of an order not challenged - modification/relaxation of bail conditions after filing of charge-sheet

Maintainability of an application under Section 439(1)(b) Cr.P.C. for modification of bail conditions - The petition under Section 439(1)(b) Cr.P.C. filed for interim custody of passport after investigation culminated in filing of charge-sheet is not maintainable. - HELD THAT: - The Court held that Section 439(1)(b) Cr.P.C. confers power on the High Court or Court of Session to set aside or modify conditions imposed by a Magistrate when releasing a person on bail. Once the respondent-authorities completed investigation and filed the charge-sheet (taken on file as C.C.No.14 of 2020), the appropriate remedy for seeking interim custody of property (passport) is an application under Section 451 Cr.P.C. before the Court seized of the trial (C.C.No.14 of 2020). Therefore the criminal petition filed under Section 439(1)(b) seeking return of the passport was correctly returned by the Court below on maintainability grounds, since interim custody after filing of charge-sheet is to be sought under Section 451 Cr.P.C. rather than under Section 439(1)(b). [Paras 15]

Dismissal of the petition under Section 439(1)(b) as not maintainable for seeking interim custody of passport after filing of charge-sheet was correct.

Finality of an order not challenged - The earlier order dated 18.02.2020 refusing interim custody of the passport attained finality as it was not challenged by the petitioner. - HELD THAT: - The Court recorded that the petitioner had filed an application under Section 451 Cr.P.C. at the crime stage which was dismissed by the learned Special Judge on 18.02.2020 on the ground of suppression of material facts; that order was not challenged before this Court and therefore attained finality. The fact that the petitioner subsequently sought reliefs by alternative petitions without directly challenging the dated order does not reopen the concluded order. [Paras 5, 9]

The order dated 18.02.2020 refusing interim custody of passport has attained finality.

Interim custody of property under Section 451 Cr.P.C. - modification/relaxation of bail conditions after filing of charge-sheet - After filing of the charge-sheet, the petitioner's remedy for custody of the passport is to file an application under Section 451 Cr.P.C. in the trial court; the High Court granted liberty to do so and dismissed the present petition. - HELD THAT: - Having found the petition under Section 439(1)(b) Cr.P.C. not maintainable for the purpose sought, the Court explained that the only appropriate statutory forum to seek interim custody of the passport once charge-sheet is filed is under Section 451 Cr.P.C. in C.C.No.14 of 2020. The Court noted that the trial court had, separately, relaxed the condition requiring weekly appearance (by its order dated 19.04.2021) but had not granted custody of the passport; accordingly the High Court dismissed the criminal petition while granting liberty to the petitioner to move the trial court under Section 451 Cr.P.C. [Paras 13, 15, 16]

Liberty granted to file application under Section 451 Cr.P.C. in the trial court; present petition dismissed.

Final Conclusion: The criminal petition seeking interim custody of the passport under Section 439(1)(b) Cr.P.C. after filing of the charge-sheet was not maintainable and was dismissed; the earlier order refusing interim custody dated 18.02.2020 stood final. The petitioner was granted liberty to seek interim custody of the passport by making an application under Section 451 Cr.P.C. before the trial court (C.C.No.14 of 2020).

Initiation of CIRP against corporate guarantor - application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - limitation governed by Article 137 of the Limitation Act, 1963 - date of default - acknowledgement of debt for extension under Section 18 of the Limitation Act, 1963 - effect of DRT/SARFAESI proceedings on limitation

Initiation of CIRP against corporate guarantor - application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Whether CIRP can be initiated against a corporate guarantor simultaneously with proceedings in respect of the principal borrower - HELD THAT: - The Tribunal considered the conflicting NCLAT precedents and observed that later NCLAT decisions (including State Bank of India vs. Athena Energy Ventures Pvt. Ltd. and Edelweiss ARC v. Sachet Infrastructure Ltd.) and the amendments to Sections 60(2) and 60(3) have resolved the issue. The Tribunal held itself bound by the later NCLAT pronouncements and treated the question of simultaneous initiation of CIRP against a corporate guarantor and the principal borrower as settled by those decisions. [Paras 10, 11]

The Tribunal accepted the later NCLAT position and proceeded on the basis that CIRP can be initiated against the corporate guarantor as per the subsequently settled NCLAT view.

Limitation governed by Article 137 of the Limitation Act, 1963 - date of default - acknowledgement of debt for extension under Section 18 of the Limitation Act, 1963 - effect of DRT/SARFAESI proceedings on limitation - Whether the Section 7 application is barred by limitation for want of a stated and supported date of default or other pleaded acknowledgement - HELD THAT: - The Tribunal applied the principles in Babulal Vardharji Gurjar and other authorities that the right to apply under Section 7 accrues on the date of default and that Article 137 prescribes a three year limitation from that date. The Financial Creditor did not state the date of default in Part IV of the application nor place on record any documents (such as balance sheets or written acknowledgements) which would constitute an acknowledgement under Section 18 of the Limitation Act. Although the Tribunal noted that time spent in SARFAESI/DRT proceedings may be excluded in certain circumstances, the assignor bank initiated DRT proceedings only on 04.06.2012, long after the stated NPA date of 31.12.2007, and the Financial Creditor did not plead facts to bring the claim within limitation or to show any binding acknowledgement by the principal borrower or guarantor. The Deed of Guarantee contained a clause regarding admission/acknowledgement, but no supporting documentary evidence of any such acknowledgement or balance sheet entries was produced. On the materials filed, the Tribunal found the claimed debt to be time barred. [Paras 16, 17, 18, 21, 23]

The application is dismissed as barred by limitation for failure to specify and substantiate the date of default or any acknowledged debt within the limitation period.

Final Conclusion: The Tribunal, while accepting the later NCLAT position on initiation of CIRP against a corporate guarantor, dismissed the Section 7 application on the ground that the claimed debt is time barred for want of a stated and supported date of default or any pleaded/recorded acknowledgement; no order as to costs.

Claim for recovery of receivables during Corporate Insolvency Resolution Process - contractual breach and cancellation of contract - summary nature of tribunal proceedings - valuation of supplied goods versus payments received - entitlement of Resolution Professional to pursue pre-CIRP disputes

Claim for recovery of receivables during Corporate Insolvency Resolution Process - entitlement of Resolution Professional to pursue pre-CIRP disputes - contractual breach and cancellation of contract - Whether the respondent is liable to pay the balance claimed by the Resolution Professional on behalf of the Corporate Debtor in respect of alleged supplies made prior to initiation of CIRP - HELD THAT: - The Tribunal examined the documentary record, in particular e-mails exchanged between the parties, which prima facie demonstrate repeated complaints by the respondent about delay in supply, alleged over-billing and non-compliance with contractual timelines. The respondent had repeatedly communicated defaults and ultimately cancelled the contract by e-mail dated 24.08.2019. Given the summary nature of proceedings before this Tribunal, it cannot undertake evidence-taking akin to a Civil Court to determine contested factual issues. The material on record also shows that the respondent had paid an amount exceeding the valuation placed by its own consultant on the goods supplied. The Resolution Professional, appointed after the events in dispute, was unable to explain the pre-CIRP conduct and communications between the parties. On the prima facie record, the Corporate Debtor appears to have failed to adhere to the purchase order terms, and therefore the claim for further payment is not sustainable. [Paras 26, 27, 28, 29, 30]

Application dismissed on merits; the Corporate Debtor is not entitled to the claimed balance payment.

Final Conclusion: The application by the Resolution Professional seeking directions for recovery of the claimed balance from the respondent is dismissed on the basis that the prima facie record shows breach of contract, prior complaint and cancellation by the respondent, and the Tribunal (acting in summary jurisdiction) declines the claim for further payment.

Offence of money-laundering - proceeds of crime - knowledge (mens rea) for money-laundering - scheduled offence - retrospective application of criminal law / ex post facto - quashing of complaint under Section 482 Cr.P.C. - abuse of process of court

Offence of money-laundering - proceeds of crime - knowledge (mens rea) for money-laundering - quashing of complaint under Section 482 Cr.P.C. - No material exists to proceed against the petitioner for the offence of money laundering under Sections 3 and 4 of the PML Act. - HELD THAT: - The complaint under the PML Act largely reproduces the CBI charge sheet and does not set out independent factual material attributing knowledge to the petitioner that the amounts received were proceeds of crime. The Court examined the allegations and the material relied upon (including statements recorded under the PML Act and the CBI materials) and accepted the earlier findings recorded by this Court in Crl.P. No.3935 of 2016 that the materials do not establish that the petitioner was privy to any conspiracy or had knowledge of the alleged taint in the funds. Mere entries in bank statements and the bare assertion that the petitioner 'knowingly' received proceeds, without factual foundation showing how knowledge is attributed, are insufficient. Applying the principles for exercise of jurisdiction under Section 482 Cr.P.C., and having regard to the established tests for quashing where, even on the face of the complaint, no prima facie offence is made out or the proceeding is an abuse of process, the Court concluded there is no basis to proceed against the petitioner under Sections 3 and 4 of the PML Act.

Proceedings under S.C.No.1 of 2019 insofar as they relate to the petitioner are quashed for want of material to constitute the offence of money laundering against him.

Scheduled offence - Offence of money-laundering - quashing of complaint under Section 482 Cr.P.C. - In view of this Court's earlier order quashing the CBI charge sheet against the petitioner, there are no scheduled offences established against him to sustain prosecution under the PML Act. - HELD THAT: - The complaint filed by the Enforcement Directorate bases its investigation on the CBI charge sheet and copies or relies upon the same material. This Court has previously quashed the CBI charge sheet against the petitioner on the ground that the necessary ingredients of the scheduled offences (criminal conspiracy, cheating and criminal breach of trust) were not made out. Given that the PMLA prosecution in this case depends on the existence of scheduled offences, the prior quashing of the charge sheet removes the foundation for proceeding under Sections 3 and 4 of the PML Act. The Court found it would be inconsistent to take a different view on the very same facts and material which another coordinate bench of this Court has already considered and decided in favour of the petitioner.

Because the CBI charge sheet against the petitioner has been quashed and no scheduled offences are thereby established, the PML Act complaint cannot be sustained and is quashed against the petitioner.

Retrospective application of criminal law / ex post facto - scheduled offence - Treatment of the 2009 amendment to the PML Act (expanding scheduled offences) as applicable to acts committed prior to the amendment is not accepted by this Court; several High Courts have held the amendment has no retrospective effect and the Court adopts that view, while recognising the final resolution is pending before the Supreme Court. - HELD THAT: - The Court examined the legal principle that criminal liability cannot be imposed retrospectively (Article 20 of the Constitution) and relied on precedent holding that provisions creating criminal liability which came into force after the alleged acts cannot be applied to those antecedent acts. The 2009 amendment that extended Part B of the Schedule (thereby including certain IPC offences for PMLA purposes) came into effect after the transactions complained of; the Court adopted the reasoning in the Delhi High Court's decision in Arun Kumar Mishra and Tech Mahindra and concluded that the 2009 amendment should not be applied to acts committed before it came into force. The Court, however, noted that contrary views have been taken and that the issue is pending final determination before the Supreme Court, which has passed interim orders in related matters; accordingly the broader controversy concerning retrospective effect awaits final adjudication at the apex level.

The Court holds that the 2009 amendment to the PML Act ought not to be applied retrospectively to acts committed prior to the amendment, but notes the ultimate question is pending before the Supreme Court.

Final Conclusion: The Criminal Petition is allowed. The proceedings against the petitioner in S.C.No.1 of 2019 under the Prevention of Money Laundering Act on the file of the Special Court are quashed insofar as they relate to the petitioner; ancillary petitions stand closed.

Anticipatory bail - twin conditions for grant of bail under Section 45(1) of the Prevention of Money Laundering Act - exercise of power under Section 438 Cr.P.C. in economic offences - custodial interrogation in economic/complex money laundering investigations - application of Section 420 IPC to alleged breach of statutory licence/terms of agreement

Twin conditions for grant of bail under Section 45(1) of the Prevention of Money Laundering Act - Whether the twin conditions in Section 45(1) of the PMLA, as amended by Act No.13 of 2018, govern the grant of anticipatory bail in the present petitions. - HELD THAT: - The Court held that the twin conditions relied upon by the Enforcement Directorate are to be ignored for present adjudication. The Supreme Court in Nikesh Tarachand Shah struck down the twin conditions as violative of Articles 14 and 21 and, although the Legislature substituted wording by Act No.13 of 2018, several High Court decisions and reasoning accepted by this Court indicate that the amendment did not revive the unconstitutional rigour of the twin conditions. Having regard to those decisions and the absence of any binding revival of the struck down conditions, this Court considered the petitions under the ordinary exercise of power under Section 438 Cr.P.C. and declined to apply the twin conditions pressed by the ED in these anticipatory bail applications.

The twin conditions in Section 45(1) PMLA, as urged by the ED, are not applied in these petitions and the matters are considered under Section 438 Cr.P.C.

Anticipatory bail - exercise of power under Section 438 Cr.P.C. in economic offences - custodial interrogation in economic/complex money laundering investigations - Whether anticipatory bail should be granted to the petitioners at the present stage of investigation. - HELD THAT: - The Court applied settled principles that Section 438 Cr.P.C. is an extraordinary remedy to be exercised sparingly, particularly in economic offences where custodial interrogation may be crucial to elicit information and trace the money trail. Having examined the allegations and materials collected by the ED (including the sequence of agreements, transfers and the alleged mis pricing of villas), and noting that investigation against the petitioners is still ongoing and their precise roles are under analysis, the Court observed that granting anticipatory bail at this stage would impede effective investigation. The Court also declined to conduct a mini trial on the merits (for example on whether Section 420 IPC is made out) while investigation is pending. In view of the nature and stage of investigation, and the potential prejudice to the investigating agency, the petitions for anticipatory bail were dismissed.

Anticipatory bail is refused and the petitions are dismissed, having regard to the seriousness of the economic allegations and the ongoing stage of investigation.

Application of Section 420 IPC to alleged breach of statutory licence/terms of agreement - Whether the question of applicability of Section 420 IPC to the facts should be decided at the anticipatory bail stage. - HELD THAT: - The Court refrained from deciding the applicability of Section 420 IPC at the anticipatory bail stage. Noting that the Haryana Police filed a supplementary charge sheet adding Section 420 IPC (which has not been challenged) and that ED's investigation into money laundering aspects is continuing, the Court held that a determination of whether Section 420 is attracted would amount to a mini trial and could prejudice fair investigation and trial. Accordingly, this factual and legal question is left to be examined in the course of continued investigation and trial rather than being adjudicated in the bail proceedings.

The issue whether Section 420 IPC applies is not decided and must be determined in the course of investigation/trial.

Final Conclusion: The petitions for anticipatory bail are dismissed. The Court treated the PMLA twin condition argument as inapplicable for present adjudication and considered the applications under Section 438 Cr.P.C.; however, on the facts and stage of the ongoing investigations into serious economic allegations, anticipatory bail was refused and questions such as applicability of Section 420 IPC are left to investigation and trial.

Bail under the Prevention of Money Laundering Act, 2002 - Interplay between predicate/scheduled offence and money laundering offence - Effect of voluntary declaration under the Income Declaration Scheme, 2016 on criminal proceedings - Requirement of custodial interrogation and completion of investigation for grant of bail - Assessment of flight risk and risk of tampering with evidence in economic offences - Stringent conditions upon grant of bail in economic offence cases

Bail under the Prevention of Money Laundering Act, 2002 - Requirement of custodial interrogation and completion of investigation for grant of bail - Stringent conditions upon grant of bail in economic offence cases - Grant of bail to the petitioner in the PMLA prosecution subject to conditions - HELD THAT: - The Court weighed the gravity of the economic offence alleged against the stage of investigation and the extent to which custodial interrogation remained necessary. Although conscious that the allegations are of large magnitude and may affect the economy, the Court noted that ED had completed investigation and filed the charge sheet and that continued detention without necessity would impinge Article 21. Considering the petitioner's medical condition, cooperation with summons, absence of criminal antecedents, earlier grant of anticipatory bail in the predicate FIR and the triple test factors (flight risk, tampering, influencing witnesses), the Court concluded that custodial custody was not necessary for further investigation. To address prosecutorial and public interest concerns, bail was granted on stringent conditions including furnishing of bonds/sureties, surrender of passport/leave country restriction, availability for investigation, and prohibition on influencing witnesses, and liberty to the prosecution to move for modification or recall on breach of conditions. [Paras 34, 35, 36, 37, 38]

Petitioner released on bail on furnishing bond and sureties and subject to conditions (passport surrender/leave country restriction, availability for investigation, no influencing witnesses), with liberty to prosecution to seek modification or recall.

Interplay between predicate/scheduled offence and money laundering offence - Effect of voluntary declaration under the Income Declaration Scheme, 2016 on criminal proceedings - Sufficiency of material that deposited cash constituted proceeds of a scheduled offence and effect of petitioner's IDS disclosure - HELD THAT: - The Court observed that ED's case rests on a money trail and the presumption under the PMLA, but also recorded that ED had not expressly stated that the money was arranged or collected by commission of any scheduled offence in a manner that conclusively established proceeds of crime. The petitioner had made voluntary disclosures under the Income Disclosure Scheme, 2016 for transactions from 2012 to 2016 and paid taxes and penalty; the predicate FIR in the police case had not resulted in a chargesheet even after several years. Those facts weighed in favour of bail, although the Court acknowledged that the questions of whether the deposits are proceeds of crime and the extent of undisclosed deposits require adjudication at trial. The Court did not finally pronounce on the merits of the money laundering charge but treated the state of investigation and disclosures as relevant to bail. [Paras 9, 10, 35]

Court did not finally decide that the deposits were proceeds of a scheduled offence; petitioner's IDS disclosures and the state of predicate proceedings were factors favouring bail but substantive issues to be adjudicated at trial.

Final Conclusion: The petition for regular bail is allowed: the petitioner is to be released on bail on furnishing prescribed bond and sureties and subject to specified conditions (including surrender/restriction of passport, availability for investigation, and non influence of witnesses), with liberty to the prosecution to apply for modification or recall of the order on any breach or for cogent reasons; substantive adjudication on money laundering and predicate offence issues remains for trial.

Twin conditions for bail under Section 45 of the PMLA Act - Proviso to Section 45 - exemption for sick persons and laundering below one crore - presumption of innocence and Article 21 - regular bail under Section 439 of the Code of Criminal Procedure, 1973 - conditions for grant of bail in PMLA cases

Twin conditions for bail under Section 45 of the PMLA Act - Proviso to Section 45 - exemption for sick persons and laundering below one crore - presumption of innocence and Article 21 - Legal effect of the twin conditions in Section 45 of the PMLA Act post the Supreme Court decision in Nikesh Tarachandra Shah and whether the amended provision overrides that decision. - HELD THAT: - The Court examined the conflict of authorities and the Supreme Court's reasoning in Nikesh Tarachandra Shah, noting that the twin conditions require satisfaction that there are reasonable grounds for believing the accused is not guilty of the scheduled/predicate offence and that he is not likely to commit any offence while on bail. The Court observed that the Legislature's subsequent amendment replacing the earlier textual reference with the words "under this Act" does not cure the defects identified by the Supreme Court, nor does it obliterate the binding effect of the Supreme Court's declaration that the twin conditions were unconstitutional. The Court reiterated that Section 45 is a drastic provision that inverts the presumption of innocence and affects Article 21 rights, and that mere textual amendment cannot nullify the Supreme Court's legal conclusion. Consequently, the Court declined to apply the twin conditions as a bar to considering bail and proceeded to decide the bail application on merits in light of Nikesh Tarachandra Shah and related precedents. [Paras 8, 9, 10, 11]

The twin conditions in Section 45 cannot be applied so as to preclude consideration of bail; the Court will determine bail without applying the twin conditions declared unconstitutional by the Supreme Court, while noting the Proviso remains on the statute.

Regular bail under Section 439 of the Code of Criminal Procedure, 1973 - conditions for grant of bail in PMLA cases - deposit as condition for bail - Whether the applicant should be released on regular bail in ECIR/01/STSZO/2020 and on what terms. - HELD THAT: - Applying the settled jurisprudence that grant of bail is the rule and refusal the exception, and having regard to (i) the nature of the allegations and documentary basis of the prosecution's case, (ii) interim factual findings that the applicant allegedly cheated Government agencies to the extent of a lesser amount and that private agencies have not lodged complaints, (iii) earlier bail granted in IPC offences subject to a deposit, (iv) the absence of contentions that the applicant is a flight risk or likely to tamper with evidence or influence witnesses, and (v) the Proviso to Section 45 permitting bail where laundering is less than one crore or the accused is sick, the Court concluded that further custody was not required. The Court therefore directed release on regular bail under Section 439 Cr.P.C., subject to specified conditions including personal bond with a local surety, surrender of passport, restrictions on travel, periodic attendance, furnishing of residence particulars, and monetary deposits to be made within stipulated timelines. The Court clarified that its observations are preliminary and shall not influence the trial court; breach of conditions will invite cancellation of bail. [Paras 14, 15, 16]

The applicant is released on regular bail in ECIR/01/STSZO/2020 on executing bond and upon compliance with specified conditions including staged deposits; breach of conditions will entail cancellation of bail.

Final Conclusion: The application is allowed: the Court held that the twin conditions in Section 45 of the PMLA Act cannot be applied so as to preclude consideration of bail in view of the Supreme Court's decision, and on merits granted regular bail under Section 439 Cr.P.C. subject to specified bonds, periodic reporting, travel restrictions, surrender of passport and deposit conditions; breaches will invite cancellation of bail.

Provisional attachment under PMLA - freeze of bank accounts - interim relief to operate accounts for limited funds - statutory prescription must be followed - jurisdiction and remit to Adjudicating Authority - merits not adjudicated by appellate court

Freeze of bank accounts - interim relief to operate accounts for limited funds - statutory prescription must be followed - Whether the Single Judge's interim order permitting the appellant to operate specified bank accounts and withdraw a limited sum should be interfered with - HELD THAT: - The High Court, after hearing both parties, declined to interfere with the learned Single Judge's order which allowed operation of two specified accounts and withdrawal subject to conditions to meet day to day needs. The Court noted that the Single Judge had granted substantial interim relief to ensure employees' salaries and day to day functioning, applied a limited withdrawal cap and fixed a period for investigation to be completed. While objections were raised about compliance with the statutory procedure under the PMLA, the Court observed that the question of compliance and the merits of the attachment are matters for the Adjudicating Authority to decide and that interim facilitation of limited funds was warranted on the facts before the Single Judge. The Court expressly refrained from adjudicating the merits of the attachment order. [Paras 11, 12]

The Single Judge's interim order permitting limited operation and withdrawal from specified accounts is not interfered with.

Provisional attachment under PMLA - jurisdiction and remit to Adjudicating Authority - merits not adjudicated by appellate court - Disposition of the challenge to the provisional attachment/order passed under PMLA and the forum for its adjudication - HELD THAT: - The Court recorded that a provisional attachment order under PMLA had been passed and that proceedings before the Adjudicating Authority were pending (including service of show cause and replies). The High Court declined to decide the merits of the provisional attachment, noting that the Adjudicating Authority is seised of the matter and is to pass appropriate orders in accordance with law. The appellant was granted liberty to press all grounds before that Authority; the High Court therefore left verification of statutory compliance and final determination of attachment to the Adjudicating Authority. [Paras 9, 12]

The challenge to the provisional attachment is left to the Adjudicating Authority for adjudication; the High Court does not express any opinion on the merits.

Final Conclusion: The High Court dismissed the plea to interfere with the Single Judge's interim directions permitting limited operation of specified accounts and withdrawal for immediate needs, and declined to adjudicate the merits of the provisional attachment under the PMLA, leaving the matter to be decided by the Adjudicating Authority with liberty to the appellant to urge all grounds.

Withholding of tax refund under statutory discretion - duty to record reasons when exercising withholding power - independent application of mind by prescribed authority - pendency of revision or appeal not a ground per se to withhold refund - abuse of process and malafide withholding - liability to pay interest on delayed refund

Withholding of tax refund under statutory discretion - independent application of mind by prescribed authority - duty to record reasons when exercising withholding power - Validity of respondents withholding the refund by invoking the prescribed authority's power under Section 40(2) of the TVAT Act. - HELD THAT: - The Court held that the power to withhold refunds under Section 40(2) must be exercised by the prescribed authority after forming an independent opinion that grant of refund is likely to adversely affect the revenue and such opinion must be supported by consideration of relevant material and reasons. The proceedings of 28.11.2020 did not demonstrate any independent application of mind by the Commissioner (3rd respondent) and merely recited the recommendation forwarded by the assessing authority (1st respondent) and the pendency of a Revision; no material facts or reasons were recorded to justify withholding. Reliance was placed on earlier Division Bench decisions which require recording of reasons and independent consideration before withholding refunds; mere approval of the assessing officer's recommendation or pendency of litigation is insufficient. The Court found the exercise of power in the present case to be without independent reasoning and therefore unsustainable. [Paras 15, 16, 19, 20]

Permission to withhold refund under Section 40(2) was invalid for want of independent consideration and recorded reasons; the withholding could not be sustained.

Pendency of revision or appeal not a ground per se to withhold refund - abuse of process and malafide withholding - Whether pendency of the Revision (TREVC) before the High Court justified non-payment of the refund to the petitioner. - HELD THAT: - The Court concluded that pendency of the Revision does not, by itself, justify withholding the refund. Authorities cannot, by unilateral inaction, stay the operation of a Tribunal's order merely because they have preferred further remedies; the statutory withholding power must be exercised on proper grounds and for reasons showing risk to revenue recovery. The timing and sequence of events indicated that the approval to withhold the refund was set in motion only after the petitioner filed the writ petition, suggesting an afterthought and mala fide intention to frustrate the petition. Established precedents were cited to emphasise that filing an appeal or revision alone does not permit the revenue to withhold amounts due to an assessee. [Paras 17, 23]

Pendency of the Revision was not a valid ground to withhold the refund and the respondents' reliance thereon was improper and mala fide.

Abuse of process and malafide withholding - liability to pay interest on delayed refund - withholding of tax refund under statutory discretion - Relief to be granted in view of the respondents' unlawful withholding and false or incomplete averments in counter affidavits. - HELD THAT: - The Court rebuked the practice of filing successive and contradictory counter affidavits without thorough verification, noting that the assessing officer had by oversight or omission failed to disclose that alleged dues had been recovered earlier by garnishee proceedings. Given the respondents' failure to exercise statutory power correctly, their apparent malafide in setting in motion withholding after the writ was filed, and the absence of recorded reasons by the prescribed authority, the Court held that the petitioner was entitled to immediate refund. The Court directed refund of the excess tax determined in the revised assessment, with interest as statutorily prescribed, ordered recovery of any further interest from respondents for delay, and imposed costs on the respondents to vindicate taxpayer rights and deter similar conduct. [Paras 11, 12, 25, 27]

Petitioner entitled to refund of the excess tax determined; respondents directed to refund with statutory interest and pay costs for the delay and misconduct.

Final Conclusion: Writ petition allowed. Respondents directed to credit the refund determined by the revised assessment for tax periods 2011-12 and 2012-13 to the petitioner's bank account within 15 days, with interest under the Act; further interest for delay to be recovered from respondents and costs awarded to the petitioner.

In charge of and responsible for the conduct of business - sufficiency of averments in complaint to arraign partners/directors - no particular form of words required to aver charge of business - mandatory enquiry under Section 202 of the Code of Criminal Procedure where accused resides beyond territorial jurisdiction - evidence on affidavit permitted for inquiry under Section 202 in proceedings under Section 138 of the Negotiable Instruments Act - remand for fresh inquiry where Section 202 inquiry not undertaken

In charge of and responsible for the conduct of business - sufficiency of averments in complaint to arraign partners/directors - no particular form of words required to aver charge of business - Whether the averments in the petition of complaint were sufficient to arraign the petitioners (partners) as accused under the Negotiable Instruments Act. - HELD THAT: - The Court applied the ratio of S.M.S. Pharmaceuticals Ltd. that a complaint must aver that the person accused was "in charge of, and responsible for" the conduct of the business of the concern at the relevant time. The Court further followed A.K. Singhania, holding that no specific form of words is prescribed and the substance of the complaint must disclose the necessary averments. Paragraph 3 of the petition alleged that all accused, including the petitioners, were partners "looking after its day to day business affairs and responsible for each and every business conduct" at the relevant time; the Court equated such averments with being in charge of and responsible for the concern's business and found that reading the complaint as a whole discloses sufficient factual averments to arraign the petitioners as accused. [Paras 7, 9, 12, 13]

The averments in the petition of complaint were sufficient to arraign the petitioners as accused; the prayer for quashing the proceedings was refused.

Mandatory enquiry under Section 202 of the Code of Criminal Procedure where accused resides beyond territorial jurisdiction - evidence on affidavit permitted for inquiry under Section 202 in proceedings under Section 138 of the Negotiable Instruments Act - remand for fresh inquiry - Whether the learned Magistrate was obliged to conduct an inquiry under Section 202 CrPC before issuing process against accused residing beyond the Court's territorial jurisdiction, and consequences of non-compliance. - HELD THAT: - Relying on the Constitution Bench decision in Re: Expeditious trial of cases under Section 138 of N.I. Act (2021 SCC Online SC 325), the Court held that where the accused resides outside the territorial jurisdiction of the Court, an inquiry under Section 202 CrPC is required to ascertain whether sufficient grounds exist to proceed. The Apex Court also permits taking complainant's witness evidence on affidavit and, in suitable cases, restricting the inquiry to documents. In the present case the Trial Court did not conduct any such inquiry in clear terms despite the accused being beyond its territorial jurisdiction; therefore the issuance of process and subsequent orders could not stand. [Paras 14, 15, 16, 18]

The orders issuing process and subsequent orders are set aside and the matter is remanded to the Trial Court to proceed afresh from the stage of inquiry under Section 202 CrPC; the enquiry may include affidavit evidence or document-only examination as appropriate.

Final Conclusion: The revisional petition is disposed of: the petitioners are not quashed from the proceedings because the complaint sufficiently averred that they were in charge of and responsible for the firm's business; however, since the Trial Court did not conduct the mandatory inquiry under Section 202 CrPC (accused residing beyond its jurisdiction), the order issuing process and subsequent orders are set aside and the matter is remanded to the Trial Court to hold the Section 202 inquiry and proceed afresh. No order as to costs.