TaxTMI Updates e-Newsletter
Jul 06,2021

Exhaustion of statutory appellate remedy - maintainability of writ petition where alternative remedy exists - scope of judicial review under Article 226 - supervisory scrutiny of process not merits - appellate authority as final fact-finding forum - condonation of delay and exercise of discretion by appellate forum

Exhaustion of statutory appellate remedy - maintainability of writ petition where alternative remedy exists - appellate authority as final fact-finding forum - Writ petition seeking to quash an assessment order is not maintainable without first exhausting the statutory appellate remedy; petitioner must prefer the prescribed appeal to the appellate forum. - HELD THAT: - The Court held that when the controversy involves mixed questions of fact and law and requires consideration of original records and evidence, the appellate authority constituted under the statute is the appropriate forum and its remedial process must ordinarily be availed of before invoking writ jurisdiction. Routine entertainment of writ petitions in place of statutory appeals undermines the institutional hierarchy and the role of specialised appellate forums as final fact-finding authorities. Judicial review under Article 226 is confined to scrutiny of the decision-making process and procedural compliance, not to re-adjudication of contested factual findings which require appraisal of evidence by the appellate body. Accordingly, dispensation of the appellate remedy is an exception warranted only by imminent threat or gross injustice; mere allegations of violation of principles of natural justice without such urgency are insufficient to bypass the appeal route. [Paras 3, 4, 5]

Writ petition is premature and not maintainable; petitioner directed to prefer the statutory appeal and to exhaust the appellate remedy.

Condonation of delay and exercise of discretion by appellate forum - entertainment of appeal and expeditious adjudication on merits - High Court directed the petitioner to file the statutory appeal within a specified short period and directed the appellate authority to entertain the appeal, condone delay if any, and decide the appeal on merits expeditiously after affording opportunity to the parties. - HELD THAT: - In view of the facts, the Court exercised supervisory discretion to permit the petitioner to approach the appellate authority rather than decide the matter on merits under Article 226. The Court imposed a limited timeline for filing the appeal and mandated that, upon receipt, the appellate authority should waive any delay and proceed to adjudicate the appeal on merits in accordance with law, observing the parties' right of hearing and disposing the matter as expeditiously as possible. This course preserves the statutory right of appeal while addressing any practical prejudice caused by the pendency of the writ petition. [Paras 7, 8]

Petitioner permitted to file appeal within two weeks; appellate authority to entertain, condone delay and decide the appeal on merits expeditiously; writ petition disposed of.

Final Conclusion: Writ petition challenging the assessment order is dismissed for want of exhaustion of statutory appellate remedy; petitioner is permitted to prefer the prescribed appeal within two weeks and the appellate authority is directed to entertain the appeal, condone any delay, and decide it on merits expeditiously; writ disposed of with no costs.

Exemption under Section 11(1)(a) - application of income for charitable or religious purposes in India - objects of the trust - public charitable trust - withdrawal of registration under Section 12AA(3) - Section 13 disqualifications for benefit to specified persons - charitable purpose as defined in Section 2(15) - proviso to Section 2(15) - commercial activities up to 20% of receipts

Objects of the trust - public charitable trust - Whether the Tribunal was correct in treating the assessee as a public charitable trust having educational activity and in relying on the trust deed dated 19.04.1984 for that conclusion. - HELD THAT: - The Court accepted the findings of the Commissioner (Appeals) and the Tribunal that the respondent is a public charitable trust engaged in educational services, noting the Trust-deed and supplementary deeds and the manner of activities carried out. The Tribunal's reliance on the Trust-deed to conclude the nature and objects of the Trust was not disturbed, and concurrent factual conclusions on this aspect were held not to be perverse. [Paras 6, 11, 20]

The Tribunal was right in treating the assessee as a public charitable trust engaged in education and in having regard to the Trust-deed dated 19.04.1984.

Exemption under Section 11(1)(a) - application of income for charitable or religious purposes in India - Whether income of the trust must be applied strictly to objects of the trust-deed or whether exemption under Section 11(1)(a) is available if income is applied or accumulated for charitable purposes in India irrespective of the precise wording of the trust objects. - HELD THAT: - Relying on the statutory text of Section 11(1)(a) and judicial authorities noted by the lower authorities, the Court held there is no bar to claiming exemption so long as the income is applied in India for charitable or religious purposes. The Court observed that the 15% accumulation permitted by Section 11(1)(a) is unfettered and that expenditures which are charitable or religious in nature are entitled to exemption even if not strictly within an enumerated object of the trust-deed, provided Section 13 disqualifications do not arise. [Paras 5, 6, 10, 19]

Exemption under Section 11(1)(a) is available where income is applied or accumulated for charitable or religious purposes in India, and the application need not be confined strictly to the literal objects of the trust-deed.

Withdrawal of registration under Section 12AA(3) - exemption under Section 11(1)(a) - Whether denial of exemption under Section 11 by the Assessing Officer required prior referral for withdrawal of registration under Section 12AA(3). - HELD THAT: - The Commissioner (Appeals) and the Tribunal held, and the High Court agreed, that the Assessing Officer was not required to first seek withdrawal of registration under Section 12AA(3) before denying exemption under Section 11. The High Court found no error in the lower authorities' rejection of the Assessing Officer's contention that withdrawal of registration was a prerequisite to denying exemption. [Paras 3, 12]

Denial of exemption under Section 11 is not contingent upon prior withdrawal of registration under Section 12AA(3), and the Assessing Officer need not await such withdrawal before adjudicating exemption claims.

Section 13 disqualifications for benefit to specified persons - charitable purpose as defined in Section 2(15) - Whether donations or expenditures made by the Trust to related individuals, political parties or others so as to benefit specified persons disentitle the Trust to exemption under Section 11. - HELD THAT: - The Court reviewed Section 13 and the statutory definition of charitable purpose under Section 2(15), observing that disallowance under Section 11 would arise only where the conditions in Section 13 are met. The Assessing Officer had accepted almost all donations on remand except a small sum; the Court found that the majority of payments were to charitable or religious institutions and that mere deviations not amounting to Section 13 disqualifications did not justify denial of exemption. The Tribunal's and Commissioner (Appeals)'s treatment of the disputed, minor amounts as not vitiating the exemption was upheld as not perverse. [Paras 3, 13, 19]

Exemption under Section 11 cannot be denied merely because some expenditures fall outside a literal reading of the trust objects unless the facts satisfy Section 13 disqualifications; the Tribunal rightly ignored the minor non-conforming payments for purposes of exemption.

Proviso to Section 2(15) - commercial activities up to 20% of receipts - charitable purpose as defined in Section 2(15) - Whether charging fees for running educational institutions defeats the character of the Trust as a public charitable trust under Section 2(15). - HELD THAT: - The Court noted the statutory position that a trust undertaking advancement of education may carry on activities in the nature of trade or business subject to the proviso to Section 2(15) limiting commercial activities to 20% of receipts. On the facts, the Tribunal's conclusion that conducting an educational institution with fee-charging did not negate the Trust's charitable character was acceptable and not interfered with. [Paras 11, 16, 17]

Running an educational institution by charging fees does not ipso facto preclude a trust from being a public charitable trust under Section 2(15), subject to the statutory proviso on commercial activities.

Final Conclusion: All substantial questions of law raised by the Revenue were answered against the appellant; the concurrent factual and legal conclusions of the Commissioner (Appeals) and the Tribunal that the Trust is a public charitable trust and entitled to exemption under Section 11 for the Assessment Year 2007-2008 were upheld, and the appeal is dismissed with no order as to costs.

Exhaustion of statutory appellate remedy - judicial review under Article 226 - entertainment of writ as an exception to appeal - condonation of delay by appellate authority

Exhaustion of statutory appellate remedy - judicial review under Article 226 - entertainment of writ as an exception to appeal - condonation of delay - Maintainability of writ petition challenging assessment order without first availing the statutory appellate remedy and the appropriate course when such a writ is filed. - HELD THAT: - The High Court held that the appellate authority is the primary fact-finding forum and that disputed factual questions arising from an assessment order ought ordinarily to be adjudicated by the statutory appellate mechanism before Article 226 relief is sought. Writ jurisdiction is an exception to the rule of preferring appeals and should be exercised only where there is an imminent threat or gross injustice that cannot be remedied by the appellate process. Mere allegations of violation of principles of natural justice or procedural irregularity do not, by themselves, justify bypassing the appellate remedy. The court emphasised that judicial review under Article 226 is concerned with the legality and the process by which a decision is reached rather than re-appreciation of evidence, and that routine entertaining of writ petitions in place of appeals would undermine the institutional role and expertise of appellate forums. While delay can be a ground for entertaining writs, the prevailing practice of filing writs to avoid statutory appeal requirements or pre-deposit obligations is discouraged. Applying these principles to the facts, the Court declined to adjudicate the petitioner's factual contention that the Section 148 notice was issued to a deceased person and treated the challenge as one to be raised and examined before the appellate authority. The petitioner was, however, granted limited relief in the form of liberty to prefer an appeal within a stipulated short period; the appellate authority was directed to admit, condone delay if necessary, and decide the appeal on merits after affording opportunity to the parties. [Paras 5, 6, 7, 8, 9]

Writ petition not entertained for adjudication on merits; petitioner permitted to file statutory appeal within four weeks and appellate authority directed to admit the appeal, condone delay if any, and decide on merits expeditiously.

Final Conclusion: The writ petition challenging the assessment order for AY 2010-11 is disposed of by directing the petitioner to invoke the statutory appellate remedy within four weeks; the appellate authority shall entertain the appeal, condone delay if necessary, and adjudicate the matter on merits. No costs.

Reopening of assessment - reasons for reopening - compliance with proviso to Section 147 regarding reasons for reopening beyond four years - non-speaking order - opportunity to be heard and procedural compliance in reassessment

Reopening of assessment - reasons for reopening - compliance with proviso to Section 147 regarding reasons for reopening beyond four years - non-speaking order - opportunity to be heard and procedural compliance in reassessment - Validity of the notice issued under Section 143(2) when the reopening under Section 147 (beyond four years and within six years) was not accompanied by adequate reasons and objections were not meaningfully considered. - HELD THAT: - The Court held that when reassessment is initiated under Section 147 beyond the four-year period (and within six years), the proviso to Section 147 requires the authority to record and furnish reasons sufficient to show compliance with the statutory conditions for reopening. The authority must apply its mind, dispose of objections in a meaningful manner and communicate the reasons for reopening; mere reproduction of statutory provisions without stating reasons amounts to a non-speaking order which cannot be sustained. In the present case the notice under Section 143(2) was issued without adequate reasons for reopening and without meaningful consideration of objections, contrary to the principles laid down by the Apex Court in GKN Driveshafts India Ltd. Consequently the notice was quashed and the matter remitted to the respondent for fresh consideration, directing compliance with the statutory procedure, reasons to be recorded and communicated, and that the petitioner be afforded opportunity in accordance with the stated principles; the exercise to be completed expeditiously. [Paras 7, 8]

Impugned notice dated 04.03.2016 issued under Section 143(2) quashed; matter remanded to respondent for fresh consideration in accordance with the provisions of the Act and the principles in GKN Driveshafts, with opportunity to the petitioner and expeditious disposal.

Final Conclusion: Writ petition allowed; impugned notice quashed and proceedings remitted for fresh consideration with directions to comply with statutory procedure, furnish reasons for reopening where required by the proviso to Section 147, consider objections meaningfully, and afford opportunity to the petitioner.

Effective appeal - subject of an appeal - power of revision - non-est in law - Circulars of the Central Board of Direct Taxes binding on Revenue

Subject of an appeal - effective appeal - non-est in law - Whether an appeal dismissed as void ab initio for non-payment of admitted tax can be treated as the order being the "subject of an appeal" so as to oust the Commissioner's power of revision under Section 264 of the Income-tax Act, 1961. - HELD THAT: - The Court held that an appeal not accompanied by mandatory payment required by the statute is not a validly presented appeal and is non-est in the eye of law. Such an appeal cannot result in adjudication on merits and therefore the order impugned in that appeal cannot be treated as having been made the "subject of an appeal". Reliance was placed on analogous decisions construing the phrase "subject of an appeal" to mean subject of an "effective appeal", including authorities which held that time-barred or otherwise ineffective appeals do not deprive the revisional forum of jurisdiction. The Court observed that disposal contemplated by Section 251(1)(a) requires adjudication on merits (confirmation, reduction, enhancement or annulment) and a dismissal as void ab initio does not amount to such disposal. The Court further noted that Circular No.367 of the CBDT supports the position that an appeal dismissed as incompetent does not attract the bar in the revisional provision, and that binding CBDT circulars must be followed by the Revenue. [Paras 12, 13, 15, 16, 17]

The rejection of the revision petition on the ground that the assessment order was "subject of an appeal" before the Commissioner (Appeals) cannot be sustained where the appeal was void ab initio for non-payment of admitted tax; such appeal is not an "effective appeal" and does not oust the revisional jurisdiction under Section 264.

Power of revision - reasoned order - Disposition of the revision application after holding that the appeal was ineffective. - HELD THAT: - Having concluded that the appeal before the Commissioner (Appeals) did not oust revisional jurisdiction, the Court set aside the impugned order refusing to exercise revisionary power and remitted the matter to the revisional authority. The Court directed that the revision petition be decided afresh by passing a reasoned order in accordance with law after affording personal hearing to the petitioner and communicating the decision. The Court imposed a time limit for disposal in view of the passage of time and change of jurisdiction. [Paras 18]

Impugned order set aside and the matter remitted to the Commissioner (or concerned Commissioner) to decide the revision petition afresh by a reasoned order after personal hearing within three months.

Final Conclusion: Writ petition allowed; order dated 30.09.2004 refusing to exercise revisional jurisdiction under Section 264 is set aside and the revision petition is remitted for fresh consideration and decision by a reasoned order after personal hearing within three months.

Eligibility under the Direct Tax Vivad Se Vishwas Act, 2020 - classification of adjustments under section 143(1)(a) of the Income tax Act - limits of executive circulars and administrative instructions - manifest arbitrariness and Article 14 - power and scope of CBDT circulars in aid of statutory scheme

Eligibility under the Direct Tax Vivad Se Vishwas Act, 2020 - classification of adjustments under section 143(1)(a) of the Income tax Act - limits of executive circulars and administrative instructions - manifest arbitrariness and Article 14 - Validity of Answer to Question No.71 in CBDT Circular No.21/2020 dated 04.12.2020 insofar as it excludes appeals arising from adjustments made under sub clauses (i) and (ii) of clause (a) of section 143(1) of the Income tax Act from the Vivad Se Vishwas scheme, and consequent entitlement of the petitioner to have its declaration under Form No.1 accepted. - HELD THAT: - The DTVSV Act was enacted to provide for resolution of disputed tax and defines 'appellant' and 'disputed tax' in broad terms which, on a plain reading, embrace cases such as the petitioner's where an order has been passed and the time for further appeal has not expired. Section 143(1)(a)(i)-(vi) of the Income tax Act groups various adjustments to total income under a single sub clause (a); those sub clauses indicate clerical or mechanical adjustments subject to the proviso. The CBDT, by Answer to Question No.71, segregated adjustments falling under sub clauses (iii)-(vi) as eligible and excluded adjustments under sub clauses (i)-(ii). That segregation is not grounded in the DTVSV enactment or its rules and there is no material or rationale on record showing any legitimate objective or intelligible differentia for such classification. Directions or circulars issued under the Act are meant to aid implementation, not to diverge from or frustrate statutory purpose. In the absence of any statutory basis or plausible justification, the circular's exclusion constitutes arbitrary classification and results in unequal treatment of taxpayers whose disputes fall under different sub clauses of section 143(1)(a). Consequently, Answer to Question No.71 (Circular No.21/2020) overreaches the legislative intent and is incompatible with the object and scheme of the DTVSV Act and is therefore invalid. Having set aside the impugned answer, the petitioner-whose case otherwise falls within the statutory scheme and does not fall within any exclusion under section 9-must have its rejected Form No.1 reconsidered and accepted under the DTVSV procedure. [Paras 19, 20, 21, 23, 24]

Answer to Question No.71 of CBDT Circular No.21/2020 dated 04.12.2020 is set aside; the petitioner's rejection of Form No.1 is quashed and the respondent is directed to issue Form No.3 accepting the petitioner's declaration under the DTVSV Act and rules.

Final Conclusion: The Court set aside the impugned clarification in Circular No.21/2020 (Q.71) as ultravires and arbitrary, quashed the rejection of the petitioner's Form No.1 under the DTVSV Act, and directed the revenue to accept the petitioner's declaration and issue the statutory acceptance form; no costs.

Priority of decree over subsequent tax attachment - voidness of transfer under Section 281 of the Income Tax Act, 1961 - proviso to Section 281 - adequate consideration or previous permission of Assessing Officer - bona fide purchaser under a decree - fruits of decree date back to the date of suit

Priority of decree over subsequent tax attachment - fruits of decree date back to the date of suit - bona fide purchaser under a decree - Whether the attachment of the property by the Income Tax Department on 27.03.2017 prevents perfection of title and delivery of the sale deed executed on 29.06.2018 pursuant to the court decree in favour of the petitioner. - HELD THAT: - The Court held that the petitioner's title derives from the sale agreement dated 30.06.1994 and the subsequent judicial decree and its execution, and that fruits of the decree relate back to the date of the suit. The tax liabilities of the fourth respondent and her husband arose subsequent to the original commitment under the 1994 sale agreement. Attachment effected on 27.03.2017 cannot override the pre-existing equitable and decreed rights of the petitioner who had diligently litigated since 2004. Consequently the attachment does not defeat the petitioner's right to have the sale deed released and her title perfected. [Paras 21, 22, 23, 28]

Attachment on 27.03.2017 does not prevent release of the sale deed executed pursuant to the decree; the petitioner's decree-derived title takes priority over the subsequent tax attachment.

Voidness of transfer under Section 281 of the Income Tax Act, 1961 - proviso to Section 281 - adequate consideration or previous permission of Assessing Officer - Whether the provisions of Section 281 render the transfer void as against the Revenue and whether any exception under the proviso applies. - HELD THAT: - The Court observed that Section 281 applies to transfers or charges created by an assessee during pendency or after completion of proceedings under the Act before service of notice under the Second Schedule. However, the sale deed in question was the culmination of litigation predating the tax arrears and traced to the 1994 sale agreement and subsequent decree. The proviso to Section 281 preserves transfers made for adequate consideration and without notice of the pendency of proceedings or with previous permission of the assessing officer. Given that the tax liability arose after the commitment in 1994 and the petitioner is a bona fide purchaser under a decree, there was no justification to treat the transfer as void qua the petitioner. [Paras 24, 26, 27, 28]

Section 281 does not render the transfer void against the petitioner; the proviso's exceptions and the chronology of rights favour release of the deed.

Remedial direction to release registered deed and cancel encumbrances - Relief to be granted in consequence of the findings on title and applicability of Section 281. - HELD THAT: - On the findings that the petitioner's decree-derived title is not defeated by the subsequent tax attachment and that the proviso to Section 281 is applicable in her favour as a bona fide purchaser under a decree, the Court directed that the second respondent release the sale deed registered on 29.06.2018 in favour of the petitioner within two weeks and cancel all encumbrances recorded against the property in respect of the tax arrears of the firms of the fourth respondent and her husband. The Court thus granted the consequential mandamus sought by the petitioner. [Paras 29, 30]

The second respondent shall release the sale deed and cancel encumbrances; writ petition allowed.

Final Conclusion: The writ petition is allowed: the court-held priority of the petitioner's decree-derived title over the subsequent tax attachment warrants release of the registered sale deed and cancellation of encumbrances recorded for the stated assessment years; directions issued for release of deed and removal of encumbrances within the specified time.

Deduction under section 54F - capital gains deposit scheme requirement - deposit in nationalised bank suffices - remand for verification

Deduction under section 54F - capital gains deposit scheme requirement - deposit in nationalised bank suffices - remand for verification - Whether the claim of deduction under section 54F can be sustained though the sale proceeds were not deposited in the capital gains deposit scheme account but were deposited in a nationalised bank and thereafter used for acquisition of new residential property. - HELD THAT: - The Tribunal noted that the assessee had admitted long term capital gain and claimed deduction under section 54/54F after purchasing a new house. The assessing officer and the Commissioner (Appeals) denied the deduction on the ground that the sale proceeds were not deposited in the capital gains deposit scheme account as prescribed. Relying on earlier Tribunal precedents, including decisions of the Hyderabad and Chennai Benches which held that deposit of sale proceeds in a nationalised bank (followed by utilisation for acquisition) may suffice despite non-transfer to the specific capital gains scheme, the Tribunal found merit in the assessee's contention that the lapse was a technical one. In the interest of justice and in view of the claim that the entire amount was deposited in a nationalised bank and thereafter utilised for purchase within the statutory period, the matter was remitted to the assessing officer for verification of the deposit and for decision in accordance with law and the cited precedents. The remand is for factual verification and consequential relief if all other statutory conditions for deduction are met. [Paras 5, 6]

Matter remitted to the file of the assessing officer to verify whether the entire sale proceeds were deposited in a nationalised bank and, if so, to allow the deduction under section 54F provided all other conditions of the Act are complied with; appeal allowed for statistical purposes.

Final Conclusion: The Tribunal remitted the issue to the assessing officer for verification of deposit of sale proceeds in a nationalised bank and directed grant of deduction under section 54F if all statutory conditions are satisfied; appeal allowed for statistical purposes.

Condonation of delay - Principle of substantial justice - Requirement to pay admitted tax before filing an appeal - Restoration of appeal for adjudication on merits

Condonation of delay - Principle of substantial justice - Whether the delay of 134 days in filing the appeal should be condoned. - HELD THAT: - The Tribunal found that the delay in filing the appeal was supported by cogent reasons, including inability to approach counsel due to circumstances beyond the assessee's control (noted COVID-19 pandemic and lockdown) and reliance on authorities recognizing that such delay, when adequately explained, may be condoned to secure substantial justice. Applying those principles, the Tribunal held the impugned delay to be neither intentional nor deliberate and accordingly condoned the delay, taking the case up for adjudication on merits. [Paras 2]

Delay of 134 days is condoned and the case is taken up for adjudication on merits.

Requirement to pay admitted tax before filing an appeal - Restoration of appeal for adjudication on merits - Whether CIT(A)'s dismissal of the appeal in limine for non-payment of admitted tax and short delay was sustainable, and what relief should follow on payment of the tax by the assessee. - HELD THAT: - The Tribunal recorded that the assessee, though originally defaulting in payment of self-assessment tax, subsequently paid the self-assessment tax amount and placed an affidavit on record evidencing such payment. In view of the payment made by the assessee, the Tribunal set aside the CIT(A)'s order which had dismissed the appeal in limine for non-payment and delay, and directed that the appeal be restored to the file of the CIT(A) for fresh adjudication on merits after affording the assessee a reasonable opportunity of being heard. The Tribunal also directed cooperation by the assessee for early disposal. [Paras 6, 8]

CIT(A)'s order is set aside; appeal is restored to CIT(A) for adjudication on merits after providing reasonable opportunity to the assessee.

Final Conclusion: Appeal allowed for statistical purposes: delay condoned; CIT(A)'s dismissal set aside on account of subsequent payment of self-assessment tax; matter remitted to CIT(A) for fresh adjudication on merits after affording opportunity of hearing.

Arm's length price - Transactional Net Margin Method (TNMM) - Benefit test in transfer pricing - reference to the Transfer Pricing Officer under transfer pricing framework - compliance with Rule 46A (confrontation of additional evidence) - disallowance under section 40(a) for failure to deduct tax at source - treatment of VSAT/lease line payments as royalty vis-a -vis treaty law - unilateral amendment in domestic law cannot be read into a DTAA - allowability of education cess and secondary & higher education cess - depreciation classification of computer accessories

Arm's length price - Transactional Net Margin Method (TNMM) - Benefit test in transfer pricing - Whether the royalty payments to the US parent were to be treated at nil ALP by the TPO or whether the additions should be deleted - HELD THAT: - The Tribunal examined the TPO/DRP finding that royalty payments were for incidental benefit and subsumed by the gross profit split, and that therefore ALP of the royalty was nil. The coordinate Tribunal decision for AY 2005-06 and the CIT(A) findings were considered: the TPO/DRP had not produced analysis or evidence to demonstrate that no material benefit was received or that the assessee's business could be operated excluding the technical, operating and strategic services from the AE. The CIT(A)'s consideration of the assessee's submissions (including a TNMM supplementary analysis undertaken at the CIT(A)'s behest) was not the sole basis for relief; rather, the CIT(A) relied on multiple factors and documentary evidence demonstrating business nexus and benefit. In light of identical facts across years and absence of any contrary higher court ruling, the Tribunal found no infirmity in the CIT(A)'s conclusions and held that the TPO/DRP erred in treating the royalty ALP as nil. [Paras 20, 21]

Addition made on account of ALP adjustment to treat the royalty at nil is deleted; the taxpayer's position is upheld.

Disallowance under section 40(a) for failure to deduct tax at source - Global Account Management (GAM) charges - VSAT/lease line expenses - Whether GAM charges and VSAT/lease line payments made to the US parent were disallowable under section 40(a) for non-deduction of tax at source - HELD THAT: - AO treated the GAM and VSAT payments as consultancy/technical fees and disallowed them under section 40(a) for failure to deduct tax. The Tribunal followed earlier coordinate-bench findings (and the Delhi High Court confirmations for prior years) that the payments were in the nature of reimbursement of expenses (GAM) and not consultancy/technical services (VSAT), and no distinguishing features were shown for the years under consideration. Pending SLPs in higher courts did not negate the effect of the existing High Court decisions in the assessee's favour. On that basis the Tribunal concluded that provisions of section 40(a) were not attracted to the GAM and VSAT payments and the AO/DRP orders confirming disallowance were unsustainable. [Paras 25]

Additions on account of non-deduction of TDS on GAM charges and VSAT charges are deleted and the taxpayer's claim is allowed.

Treatment of VSAT/lease line payments as royalty vis-a -vis treaty law - unilateral amendment in domestic law cannot be read into a DTAA - Whether VSAT uplinking charges could be treated as royalty in view of Explanation 6 to section 9(1)(vi) and thus taxed contrary to the Indo-US Treaty - HELD THAT: - The Tribunal considered the CIT(A)'s reliance on Explanation 6 to section 9(1)(vi) to treat VSAT uplinking charges as royalty. Applying the Supreme Court's principle that unilateral domestic amendments cannot be read into a DTAA, and noting earlier appellate decisions in the assessee's case where the addition was deleted following the same principle, the Tribunal held that Explanation 6 could not be read into the Indo-US DTAA and therefore the VSAT charges ought not to be treated as royalty for the purpose of disallowance under section 40(a). The addition confirmed by the CIT(A) in the relevant year was accordingly set aside. [Paras 27, 28]

The addition treating VSAT charges as royalty is deleted; Explanation 6 cannot be read into the Treaty and relief is granted to the taxpayer.

Depreciation classification of computer accessories - Whether UPS and printers integrated into computer systems are eligible for depreciation at 60% instead of 15% - HELD THAT: - Relying on coordinate-bench precedent in the assessee's earlier years, the Tribunal accepted that computer accessories such as UPS and printers are integral to computer operation and therefore qualify for higher depreciation. No distinguishing facts were pointed out by Revenue and earlier favourable orders remained unchallenged by a higher forum in a manner that would affect the present years. [Paras 29, 30]

Excess depreciation claimed is allowable; depreciation on UPS and printers accepted at 60%.

Allowability of education cess and secondary & higher education cess - disallowance under section 40(a) for TDS does not extend to cesses - Whether education cess and secondary & higher education cess paid on income-tax are allowable deductions for computing total income - HELD THAT: - The Tribunal allowed the assessee's application to raise the ground and, following the Bombay High Court decision in Sesa Goa and coordinating Tribunal authority, held that 'cess' is not included within the expression in section 40(a)(ii) so as to render such cesses non-allowable. The legislative history and precedent confirm that education cess and SHEC are not hit by section 40(a)(ii) and therefore are deductible in computing business income. [Paras 34, 35, 36, 37]

Education cess and secondary & higher education cess are allowable deductions; the AO is directed to give effect accordingly.

Final Conclusion: The Tribunal allowed the taxpayer's appeals for Assessment Years 2006-07, 2007-08 and 2008-09 to the extent set out above: deletions of ALP adjustments with respect to royalty, deletions of additions for non-deduction of TDS on GAM and VSAT charges, allowance of higher depreciation for computer accessories, and direction to allow education cess and SHEC; the Revenue appeals challenging these outcomes were dismissed.

Validity of assessment under Section 153C - Requirement of prior initiation under Section 153A for searched assessee - Recording of satisfaction before issuing Section 153C notice - Admission of additional grounds going to root of the matter - Condonation of delay in filing appeal

Condonation of delay in filing appeal - The tribunal condoned the delay of 73 days in filing the appeals. - HELD THAT: - The appeals were accompanied by condonation petitions/affidavits attributing the delay to reasons beyond the appellants' control. The departmental side did not rebut those explanations. The tribunal accordingly exercised its discretion to condone the delay and admit the appeals for adjudication on merits. [Paras 2]

Delay of 73 days in filing the appeals is condoned and the appeals are admitted.

Admission of additional grounds going to root of the matter - Additional grounds challenging the validity of proceedings under Section 153C were admitted as they went to the root of the matter and relied on facts already on record. - HELD THAT: - The assessee sought to raise, at the tribunal stage, a ground that the Assessing Officer had not recorded reasons before issuing the Section 153C notice. Relying on precedent that permits entertaining new grounds which go to the root of the matter provided relevant facts are on record, the tribunal held that the additional ground was supplementary to the grounds already raised in the earlier pleadings and admitted it for determination. [Paras 3, 5]

The tribunal admitted the additional ground challenging the validity of the Section 153C notice.

Validity of assessment under Section 153C - Requirement of prior initiation under Section 153A for searched assessee - An assessment completed under Section 153C was quashed as invalid where, on the crucial date, the Assessing Officer had initiated proceedings under Section 153A in respect of the searched assessee and therefore ought to have proceeded under Section 153A rather than under Section 153C against a third party. - HELD THAT: - The record showed that on 13-01-2012 the Assessing Officer issued notices under Section 153A and also issued a Section 153C notice. The tribunal found that where the assessing authority has initiated Section 153A proceedings for the searched assessee, it is a patent legal defect to initiate and complete assessment against a third party under Section 153C on the same factual footing. Applying a stricter construction and relying on the reasoning of higher authority, the tribunal held that the impugned assessment under Section 153C was invalid and therefore quashed it, rendering further merits irrelevant. [Paras 4]

Assessment completed under Section 153C is quashed as invalid where Section 153A proceedings had been initiated in respect of the searched assessee on the same date.

Recording of satisfaction before issuing Section 153C notice - Validity of assessment under Section 153C - The Section 153C notice and consequent assessment were quashed where the Assessing Officer failed to record the requisite satisfaction that the seized material belonged to the person proceeded against. - HELD THAT: - The Section 153C notice on the record did not make clear that the incriminating material found or seized belonged to the assessee, nor did it record the statutory satisfaction required before proceeding. The tribunal adopted a strict interpretation, observed that the requisite satisfaction was not recorded as prescribed, and held that the assessment under Section 153C therefore suffered from legal defect and was liable to be quashed. [Paras 7]

The Section 153C notice and assessment are quashed for failure to record the statutory satisfaction that the seized material belonged to the assessee.

Final Conclusion: Both appeals are allowed: the delay in filing the appeals is condoned; the additional grounds challenging validity of Section 153C proceedings are admitted; and the impugned assessments completed under Section 153C are quashed as invalid-in the one case because Section 153A proceedings had been initiated for the searched assessee on the same date, and in the other because the Assessing Officer failed to record the required satisfaction before issuing the Section 153C notice.

Validity of show cause notice under section 274 read with section 271(1)(c) requiring specification of limb ('concealment' or 'furnishing inaccurate particulars') - Notice vitiated if it does not specify which limb of section 271(1)(c) is invoked - Levy of penalty under section 271(1)(c) - quashing for invalid notice

Validity of show cause notice under section 274 read with section 271(1)(c) requiring specification of limb ('concealment' or 'furnishing inaccurate particulars') - Notice vitiated if it does not specify which limb of section 271(1)(c) is invoked - Levy of penalty under section 271(1)(c) - quashing for invalid notice - Whether the penalty under section 271(1)(c) could be sustained where the show cause notice under section 274 read with section 271(1)(c) did not specify whether proceedings were for concealment of income or for furnishing inaccurate particulars of income. - HELD THAT: - The Assessing Officer issued show cause notice dated 30/11/2015 under section 274 r.w.s. 271(1)(c) but the notice did not specify whether penalty proceedings were initiated for concealment of income or for furnishing inaccurate particulars of income. The Tribunal held that such omission renders the notice invalid. Applying the ratio of the Hon'ble Supreme Court in CIT v. SSA's Emerald Meadows, the failure to state the specific limb of section 271(1)(c) vitiates the notice and consequently the penalty order passed thereon cannot be sustained. On that basis the Tribunal set aside the CIT(A)'s confirmation and quashed the penalty order passed under section 271(1)(c). [Paras 8, 9]

The show cause notice was invalid for not specifying the limb of section 271(1)(c); the penalty order under section 271(1)(c) is quashed and the appeal is allowed.

Final Conclusion: The Tribunal allowed the assessee's appeal for AY 2013-14, holding that the show cause notice issued under section 274 read with section 271(1)(c) was invalid for not specifying whether it was for concealment of income or for furnishing inaccurate particulars, and accordingly quashed the penalty imposed under section 271(1)(c).

Deduction under section 80JJAA - Claim raised during assessment proceedings - Prohibition on admitting claims not in return (Goetze principle) - Appellate authority's power to admit fresh claims - Audit report in Form No.10DA as supporting material - Duty of assessing officer to assist taxpayer (CBR Circular) - Restoration to assessing officer versus summary allowance by appellate authority - Rule of consistency in successive assessments

Deduction under section 80JJAA - Claim raised during assessment proceedings - Prohibition on admitting claims not in return (Goetze principle) - Appellate authority's power to admit fresh claims - Audit report in Form No.10DA as supporting material - Admissibility and allowance by the appellate authority of a claim for deduction under section 80JJAA which was not made in the original return but was raised during assessment proceedings with supporting Form No.10DA. - HELD THAT: - The Tribunal accepted that the Assessing Officer was correct in declining to admit a claim not made in the original return (following the principle in Goetze India Ltd.). However, the embargo on entertaining fresh claims before the A.O. does not extend to appellate authorities. Reliance on precedents of the Bombay and Madras High Courts established that additional claims supported by material on record can be entertained on appeal. The assessee had filed a Chartered Accountant's audit report in Form No.10DA with notes during assessment proceedings and had substantiated the point-wise rebuttal of the A.O's adverse observations; later assessments for subsequent years had allowed the same claim. On that basis the CIT(A) correctly admitted and, after considering the materials, allowed the deduction under section 80JJAA. The Tribunal concurred with this reasoning and found no infirmity in the CIT(A)'s exercise of appellate power to admit and decide the fresh claim on merits rather than treating the Goetze embargo as a bar to appellate consideration. [Paras 7]

The CIT(A) rightly admitted and allowed the assessee's deduction under section 80JJAA despite the claim not being in the original return.

Restoration to assessing officer versus summary allowance by appellate authority - Audit report in Form No.10DA as supporting material - Rule of consistency in successive assessments - Whether the matter should have been remanded to the Assessing Officer for verification instead of the CIT(A) summarily allowing the deduction. - HELD THAT: - The Tribunal held that remand was unnecessary. The A.O. had not only declined to admit the claim but had also examined and rejected it on merits; the assessee had provided a detailed audit report in Form No.10DA and point-wise rebuttal before the CIT(A). Precedent of the Delhi High Court (International Tractors) and the fact that the A.O. allowed similar claims in subsequent assessment years undermined the need for a futile remand. Given that the appellate authority had material before it enabling a merits determination, restoring the matter to the A.O would have been an idle formality; the CIT(A)'s summary allowance was therefore upheld. [Paras 8, 9]

No remand was required; the CIT(A) permissibly and correctly allowed the claim without restoring the matter to the A.O.

Final Conclusion: The Tribunal upheld the CIT(A)'s admission and allowance of the deduction under section 80JJAA for A.Y. 2010-11 and dismissed the revenue's appeal.

Disallowance of business expenditure - deduction of tax at source under section 195 - disallowance under section 40(a)(i) - capitalization of interest attributable to capital advances (section 36(1)(iii)) - admission of additional evidence under Rule 29 of the Appellate Tribunal Rules

Disallowance of business expenditure - deduction of tax at source under section 195 - disallowance under section 40(a)(i) - Export commission disallowance of Rs. 5,75,929/- for A.Y. 2013-14 upheld and appeal dismissed without restoring the matter to AO. - HELD THAT: - The assessee failed to furnish documentary evidence establishing the identity of parties and nature of services in respect of the disputed portion of export commission despite multiple opportunities before the authorities below and repeated listings before the Tribunal. The assessee sought restoration to the AO and offered to supply documents at the hearing, but the Tribunal noted prolonged inaction (matter listed multiple times) and concluded it was unlikely the assessee would produce the required evidence. Consequently the Tribunal declined to remit the matter and, without examining the substantive merits of the tax-deduction point, dismissed the ground in the absence of documentary proof. [Paras 8]

Ground dismissed; disallowance of Rs. 5,75,929/- confirmed for AY 2013-14.

Capitalization of interest attributable to capital advances (section 36(1)(iii)) - Proportionate interest of Rs. 6,85,804/- attributable to advances for acquisition of technical know how for A.Y. 2013-14 shall not be capitalized; disallowance under section 36(1)(iii) deleted. - HELD THAT: - The audited financial statements showed the assessee's own funds exceeded the advances in question and, when combined with interest free loans and advances, amounted to an aggregate sum greater than the advance made for technical know how. On that factual basis the Tribunal drew the permissible presumption that the advances were funded from own funds (and interest free funds) rather than borrowed funds; accordingly the conditions for capitalizing interest under section 36(1)(iii) were not satisfied. The Tribunal relied on the factual comparison of funds and relevant judicial guidance to allow the ground. [Paras 15]

Assessee's ground allowed; interest not capitalized for AY 2013-14.

Disallowance of business expenditure - deduction of tax at source under section 195 - disallowance under section 40(a)(i) - admission of additional evidence under Rule 29 of the Appellate Tribunal Rules - Export commission disallowance of Rs. 2,94,852/- for A.Y. 2014-15 confirmed; additional evidence filed before the Tribunal refused admission. - HELD THAT: - The assessee filed additional documentary evidence before the Tribunal seeking admission under Rule 29. The Tribunal examined the conditions governing production of additional evidence and held that admission is discretionary and not a matter of right. The assessee's application merely stated delay in collection from third parties without supporting particulars and many documents related to periods prior to assessment; there was no showing that lower authorities had denied sufficient opportunity. In absence of sufficient cause for non-production earlier, the Tribunal exercised its discretion to refuse admission of the material and, without admitting the fresh evidence or examining merits, confirmed the disallowance. [Paras 22]

Additional evidence denied; disallowance of Rs. 2,94,852/- confirmed for AY 2014-15.

Capitalization of interest attributable to capital advances (section 36(1)(iii)) - Disallowance under section 36(1)(iii) in respect of interest attributable to advances for A.Y. 2014-15 is decided in the assessee's favour by applying the reasoning in the A.Y. 2013-14 decision (mutatis mutandis). - HELD THAT: - The Tribunal held that the legal and factual conclusion reached in the assessment year 2013-14 - namely that the assessee's own funds (augmented by interest free loans/advances) exceeded the advances and therefore borrowed funds were not used - applies mutatis mutandis to A.Y. 2014-15. On that basis the capitalization/disallowance under section 36(1)(iii) does not arise and the ground is allowed. [Paras 24]

Finding in AY 2013-14 applied mutatis mutandis; disallowance under section 36(1)(iii) deleted for AY 2014-15.

Final Conclusion: Both appeals are partly allowed: the assessments' additions for specified portions of export commission were confirmed (Rs. 5,75,929 for 2013-14; Rs. 2,94,852 for 2014-15) and the assessee's applications for restoration/admission of fresh evidence were refused; however, the capitalization/disallowance under section 36(1)(iii) in both years was deleted on the finding that own funds (together with interest free funds) funded the advances.

Under valuation of closing stock - corroborative evidence for damaged stock - insurance claim settlement as corroboration - audit of books of account under statutory audit - appellate interference standard

Under valuation of closing stock - corroborative evidence for damaged stock - insurance claim settlement as corroboration - audit of books of account under statutory audit - Validity of the addition made by the AO on account of alleged under valuation of closing stock of tea bags and deletion of that addition by the CIT(A). - HELD THAT: - The assessee, a wholesale dealer in tea bags, had audited books and submitted details of purchases, sales and closing stock. The books showed 7,517 kg of damaged tea bags arising from heavy rains in A.Y. 2006 07; the insurance claim in respect of the damaged stock had been settled in A.Y. 2006 07 and supporting documents (claim form, claim receipt, ledger entries) were produced. The damaged stock remained unsold in the impugned year and was subsequently sold in 2016 at Rs. 6/kg, with purchaser's confirmation placed on record. The AO made an addition for alleged under valuation of closing stock for A.Y. 2007 08 for lack of corroboration. The CIT(A) accepted the assessee's documentary evidence and deleted the addition. The Tribunal, on examination of the special facts - audited accounts, insurance settlement, documentary evidence and the subsequent sale with confirmation - found no infirmity in the CIT(A)'s conclusion and no reason to interfere with the deletion of the addition.

The addition made by the AO on account of alleged under valuation of closing stock is not sustainable and is deleted.

Final Conclusion: The Revenue's appeal is dismissed and the deletion of the addition relating to under valuation of closing stock for A.Y. 2007 08 is upheld.

Mandatory notice under section 143(2) - reassessment under section 147 - return filed in response to notice under section 148 treated as return under section 139 - procedural provisions of section 143 applicable to reassessment - section 292BB not curative for non-issuance of notice

Mandatory notice under section 143(2) - reassessment under section 147 - procedural provisions of section 143 applicable to reassessment - Validity of an assessment framed under section 143(3) read with section 147 in the absence of issuance of notice under section 143(2). - HELD THAT: - The Tribunal held that a return filed in response to a notice under section 148 is to be treated as a return under section 139 and, accordingly, the procedural provisions following section 139, including those in section 143, must be followed when framing an assessment under section 147. Reliance was placed on precedent establishing that the expression 'so far as may be' requires application of procedural provisions subsequent to section 139 to reassessments. Since the Assessing Officer did not issue the mandatory notice under section 143(2) prior to framing the assessment under section 143(3) read with section 147, the assessment was held to be invalid. [Paras 9]

Assessment framed under section 143(3) read with section 147 is invalid for want of issuance of the mandatory notice under section 143(2).

Section 292BB not curative for non-issuance of notice - mandatory notice under section 143(2) - Whether section 292BB cures the defect of non-issuance of the statutory notice under section 143(2). - HELD THAT: - The Tribunal examined section 292BB and observed that it operates as a deeming provision where a notice has been issued but may not have been served in time or in proper manner, or where the assessee has participated in proceedings and thus cannot object to service defects. Section 292BB does not address the situation where no notice has been issued at all. On the facts, since no notice under section 143(2) was issued, the deeming provisions of section 292BB could not validate the assessment. The Tribunal followed High Court authorities to the same effect and rejected the Revenue's contention that absence of an objection during assessment proceedings would attract section 292BB. [Paras 9]

Section 292BB does not cure non-issuance of the mandatory notice under section 143(2); it is inapplicable where no such notice was issued.

Final Conclusion: The Revenue's appeal is dismissed; the assessment framed under section 143(3) read with section 147 for Assessment Year 2008-2009 is invalid for want of the mandatory notice under section 143(2), and section 292BB does not cure that defect.

Interest on delayed refund of pre-deposit under section 129EE - Temporal operation of statutory amendment - Transitional proviso applying pre-amended law to earlier deposits - Interpretation of statutory proviso governing refunds - Correction/rectification of appellate order to cure an apparent error - Inapplicability of unrelated precedent

Interest on delayed refund of pre-deposit under section 129EE - Transitional proviso applying pre-amended law to earlier deposits - Interest on a pre-deposit made in 2006 is to be computed under the pre-amended provision of section 129EE, i.e., payable after expiry of three months from communication of the appellate order until actual refund, and not from the date of deposit. - HELD THAT: - The Court examined the statutory evolution of section 129EE. The original enactment (as inserted by Act 18 of 2008) provided interest at the rate in section 27A payable after three months from communication of the appellate authority's order until refund. The substituted provision (Act 25 of 2014) changed the rate and the period to run from the date of payment until refund but expressly contained a proviso preserving the pre-amended regime for amounts deposited under section 129E prior to commencement of the substituted provision. Consequently, deposits made before the 2014 substitution (including the 2006 deposit by the appellant) fall under the pre-amended section 129EE and attract interest only for the period after the three-month window from communication of the appellate order until refund, not from the date of deposit. The Court therefore affirmed that the interest entitlement must be determined in accordance with the pre-amended section 129EE for pre-2014 deposits. [Paras 6, 7, 8, 9]

Interest on the appellant's 2006 pre-deposit is governed by the pre-amended section 129EE and is payable for the period commencing after three months from communication of the appellate order until refund.

Correction/rectification of appellate order to cure an apparent error - Interpretation of statutory proviso governing refunds - The Tribunal's rectification of its earlier order to substitute the correct text of section 129E/129EE and to clarify the period from which interest is payable was permissible and merely corrected a wrong provision quoted in the original order. - HELD THAT: - The Tribunal had earlier held the deposit to be a pre-deposit and directed payment of interest but had quoted an incorrect (amended) version of the statutory provision in its final order. On the Department's rectification application, the Tribunal substituted the correct un-amended text for the relevant paragraph and clarified that interest on the pre-deposit is to be determined under the pre-amended section 129EE. The High Court observed that the rectified order simply clarified the applicable statutory provision and the period for interest, and upheld that clarification. [Paras 4, 9]

The Tribunal's rectification was a proper cure of an apparent error in the quoted provision and its clarification on the period of interest payable is upheld.

Inapplicability of unrelated precedent - The decision in Sandvik Asia Limited (Income Tax context) is not applicable to the statutory question arising under section 129EE of the Customs Act. - HELD THAT: - The Court noted that Sandvik Asia Limited dealt with refund under the Income Tax Act and did not address the effect of the amendment to section 129EE of the Customs Act. Therefore, reliance on that decision to contend entitlement to interest from the date of deposit was misplaced. [Paras 10]

Sandvik Asia Limited is not apposite to the present dispute and does not alter the statutory interpretation of section 129EE.

Final Conclusion: The appeal is dismissed. The Tribunal's rectification is upheld: interest on the appellant's 2006 pre-deposit is to be computed under the pre-amended section 129EE (i.e., from the expiry of three months after communication of the appellate order until refund) and not from the date of deposit; the cited precedent is inapplicable.

Finality of Orders-In-Original - recovery of arrears pursuant to final orders - procedural compliance under the Customs (Attachment of Property of Defaulters for the recovery Government Dues) Rules, 1995 - maintainability of writ against recovery founded on unchallenged final orders

Finality of Orders-In-Original - recovery of arrears pursuant to final orders - maintainability of writ against recovery founded on unchallenged final orders - procedural compliance under the Customs (Attachment of Property of Defaulters for the recovery Government Dues) Rules, 1995 - Validity of the recovery notice issued pursuant to Orders In Original that were not appealed and thus became final, and the jurisdiction of the High Court to entertain a writ challenging such recovery. - HELD THAT: - The recovery notice was issued on the basis of Orders In Original passed from 2011 onwards which were not appealed or otherwise challenged and therefore had attained finality. The impugned recovery proceedings record that the statutory procedure for raising demand and warning of attachment under the applicable Rules was followed. In these circumstances the Court held that a writ challenging the recovery could not be entertained against concluded original orders and that any grievance concerning the recovery must be pursued before the competent authorities in the manner known to law. The Court therefore confined itself to noting the finality of the original orders and the procedural steps taken in issuing the recovery notice and did not grant relief by quashing the notice.

Writ petition dismissed; petitioner directed to approach the competent authorities for redress and not entitled to have the recovery notice quashed in writ proceedings.

Final Conclusion: The petition seeking quashing of the recovery notice was disposed of by the Court which held that the underlying Orders In Original had become final and that the recovery notice was issued following the prescribed procedure; the petitioner was left to seek remedy before the appropriate authorities and the writ was not entertained.

Import prohibition pending phytosanitary suspension - injunction against auction of imported goods - destruction of imported goods following deterioration - academic/infructuous petition doctrine

Import prohibition pending phytosanitary suspension - injunction against auction of imported goods - destruction of imported goods following deterioration - academic/infructuous petition doctrine - Whether the writ petition seeking to restrain auction and to secure destruction of imported apples required further adjudication in view of the alleged phytosanitary suspension and the reported destruction of the consignment. - HELD THAT: - The petitioner relied on Government of India orders noting interceptions of quarantine pests and a provisional suspension of imports from China, contending that import of apples from China was impermissible and seeking interlocutory relief to prevent auction and to have the consignment destroyed. At admission an interim order was passed. Thereafter the respondents informed the Court that the apples had become rotten and were destroyed. Given that the subject matter of the petition (the apples identified in the auction notification) has been destroyed, the Court found there was no longer any effective relief that could be granted on the grounds advanced by the petitioner and that the petition had become academic. The Court therefore declined to proceed to a substantive determination on the merits of the claimed import prohibition or other submissions and disposed of the writ petition as not requiring further consideration. [Paras 4, 5, 6]

Petition rendered academic/infructuous by destruction of the consignment and disposed of; no further consideration of the substantive grounds.

Final Conclusion: The writ petition seeking to restrain auction and to direct destruction of the imported apples was disposed of as academic because the consignment had reportedly become rotten and was destroyed; consequently no merits determination was made.

Prima facie case for provisional release pending adjudication - Interpretation of "Stock Lot" under Trade Notice No.8/2020-2021 - Scope of writ relief vis-a -vis ongoing adjudicatory process - Release of detained imported goods subject to undertaking and initiation of adjudication - Obligation to issue show cause notice and afford opportunity for adjudication

Scope of writ relief vis-a -vis ongoing adjudicatory process - The writ court exceeded the limited relief sought and its findings on the merits of the seizure/detention were vacated. - HELD THAT: - The writ petitioner sought release of the detained consignments pending adjudication. The High Court held that the learned Writ Court went beyond the innocuous relief sought by the petitioner by rendering findings that directly impact the adjudicatory process. Such merit determinations could not be made in the writ proceedings where adjudication had not commenced. Consequently, all merits findings rendered by the Writ Court were set aside so that the appellant-Department may proceed with the statutory adjudicatory mechanism. [Paras 5]

Findings of the learned Writ Court on the merits vacated; writ relief confined to consideration of provisional release, not determination of substantive adjudicatory issues.

Prima facie case for provisional release pending adjudication - Interpretation of "Stock Lot" under Trade Notice No.8/2020-2021 - Release of detained imported goods subject to undertaking and initiation of adjudication - The importer established a sufficient prima facie case to warrant conditional release of the detained consignments pending initiation of adjudication. - HELD THAT: - The High Court examined the limited question whether the importer had made out a prima facie case for release. The factual matrix showed that paper under EXIM/ITC(HS) 4810 is generally freely importable and the real controversy was whether the particular import constituted a prohibited "Stock Lot" as clarified by Trade Notice No.8/2020-2021. Rather than adjudicating that controversy, the Court directed conditional release because it was premature to decide the substantive classification issue in writ proceedings. The Court imposed the condition that the importer give an undertaking to participate in the departmental adjudication and permitted the Department to issue show cause notice and adjudicate the matter on merits. [Paras 6, 10, 11]

Imported consignments to be released subject to the importer executing an undertaking to participate in adjudication and subject to commencement of departmental proceedings.

Obligation to issue show cause notice and afford opportunity for adjudication - The Department must commence adjudication by issuance of show cause notice within a specified time and may determine whether the import constitutes a prohibited "Stock Lot". - HELD THAT: - The High Court directed that the appellant-Department is at liberty to initiate the adjudicatory process by issuing a show cause notice on all issues and affording the importer an opportunity to respond. The Court fixed a timeline requiring issuance of the show cause notice within sixty days from receipt of the judgment and ordered release of the cargo within three weeks thereafter, while waiving detention charges given the prolonged detention since January 2021. This preserves the Department's statutory adjudicatory jurisdiction to examine classification and prohibition contentions. [Paras 11, 12]

Adjudication to be commenced by issuance of show cause notice within sixty days; detention charges waived; cargo to be released within three weeks.

Final Conclusion: The High Court vacated the Writ Court's merits findings as beyond the scope of the relief sought, granted conditional release of the detained consignments on the importer giving an undertaking to participate in departmental adjudication, and directed the Department to issue a show cause notice within sixty days and complete adjudication after affording opportunity to the importer; detention charges waived and cargo to be released within three weeks.

Refund under Section 27 of the Customs Act, 1962 - limitation bar to refund claims - statutory authority must act within the ambit of the provision

Refund under Section 27 of the Customs Act, 1962 - limitation bar to refund claims - statutory authority must act within the ambit of the provision - Whether the refund applications filed by the appellant under Section 27 of the Customs Act, 1962 are maintainable despite the delay - HELD THAT: - The Tribunal applied settled law that an application for refund under Section 27 must be filed within the time prescribed by the statute and that the adjudicating authority is bound to act within the statutory ambit. Relying on the ratio in Paros Electronics (P) Ltd. v. Union of India, the Court noted that a belated refund application falls foul of the limitation provision and therefore must be rejected. The Tribunal further observed that earlier decisions of the Tribunal benches consistent with this principle have been followed. In the present case the refund claims were rejected by the adjudicating authority on the ground of delay and that conclusion was upheld by the first appellate authority; there was no reason to interfere with those findings given the statutory limitation bar. [Paras 6, 7]

Refund applications are time-barred and the rejection of the refund claims is sustained; the appeals are dismissed.

Final Conclusion: The Tribunal dismissed the appeals, upholding the rejection of refund claims under Section 27 of the Customs Act, 1962 on the ground of limitation in accordance with Paros Electronics and related precedents.

Sanction of scheme of amalgamation - appointed date and vesting of assets and liabilities - transfer of proceedings, suits and appeals - compliance with statutory formalities for amalgamation - effect of regulatory no-objection and regulatory conditions - filing of certified copy with Registrar of Companies

Sanction of scheme of amalgamation - Sanction of the Scheme of Amalgamation of Aditya Marketing & Manufacturing Private Limited (Transferor) with Umang Commercial Company Private Limited (Transferee) with effect from the Appointed Date. - HELD THAT: - The Tribunal examined the petition under section 230(6) read with section 232(3) of the Companies Act, 2013, the approvals of the boards of both companies, the meetings of equity shareholders and unsecured creditors convened and held as directed, the report of the Official Liquidator, and the representations filed by statutory authorities including the Regional Director and the Reserve Bank of India. The petitioners produced requisite notices, affidavits of compliance, the valuation report for the exchange ratio, statutory auditor's certificate on accounting treatment, and the RBI 'no-objection' along with undertakings. Having regard to these materials and the submissions of the parties, the Tribunal found it appropriate to sanction the Scheme and ordered that the Scheme shall be binding with effect from 01 April, 2019 (Appointed Date). [Paras 10]

Scheme of Amalgamation sanctioned and declared binding with effect from 01 April, 2019.

Appointed date and vesting of assets and liabilities - Transfer and vesting of the Transferor Company's properties, rights, powers, debts, liabilities, duties and obligations in the Transferee Company from the Appointed Date. - HELD THAT: - The Tribunal directed that, pursuant to the Scheme and by operation of section 232(4) of the Companies Act, 2013, all properties (except those excluded under clause 4.2 of the Scheme), rights and powers of the Transferor Company shall, without further act or deed and subject to existing charges, be transferred to and vest in the Transferee Company from the Appointed Date. Similarly, all debts, liabilities, duties and obligations of the Transferor Company shall, from the Appointed Date and without further act or deed, become the debts, liabilities, duties and obligations of the Transferee Company. The petitioners had also specifically undertaken that liabilities, including any demand raised by the Income Tax Department, if any, shall be borne and dealt with by the Transferee Company in accordance with law. [Paras 10]

Assets, rights and liabilities of the Transferor Company stand transferred and vested in the Transferee Company from 01 April, 2019.

Compliance with statutory formalities for amalgamation - transfer of proceedings, suits and appeals - Requirements as to compliance with statutory formalities, minutes of meetings, filing of schedules and continuation of pending proceedings. - HELD THAT: - The Tribunal recorded that requisite notices under section 230(5) had been served and meetings (where directed) were convened and had approved the Scheme unanimously; the minutes of such meetings were placed on record. The Tribunal granted leave to file the Schedule of Assets in the prescribed Form No. CAA7 format within three weeks. It directed that all proceedings, suits and appeals pending by or against the Transferor Company shall be continued by or against the Transferee Company as provided in the Scheme. The order also directed the Transferee Company to issue and allot shares to the Transferor Company's shareholders in accordance with the Scheme, and provided for dissolution of the Transferor Company upon filing certified copies with the Registrar of Companies. [Paras 10]

Petitioners to comply with filing of schedule of assets, minutes on record are accepted, pending proceedings to continue against/for the Transferee Company and allotment of shares to be effected as per the Scheme.

Effect of regulatory no-objection and regulatory conditions - Recognition of the Reserve Bank of India's no-objection subject to petitioners' undertakings and related compliance. - HELD THAT: - The RBI's no-objection to the Scheme was placed on record and the petitioners furnished undertakings in compliance therewith, including surrender of the Transferor Company's Certificate of Registration post completion of amalgamation, intimating the RBI of the date of sanction with a certified copy of the order within one month, and approaching the RBI for conversion of the Transferee Company into a CIC NDSI within two months. The Tribunal, having considered the RBI's position and the undertakings, proceeded to sanction the Scheme subject to such regulatory compliance. [Paras 8, 10]

RBI's no-objection accepted and sanction granted subject to the undertakings and compliance specified by RBI.

Filing of certified copy with Registrar of Companies - Filing of certified copy of the sanction order with the Registrar of Companies and acceptance of digitally signed copy in view of COVID-19 constraints. - HELD THAT: - The Tribunal directed that each of the Transferor and Transferee Companies shall, within thirty days of receipt of the order, deliver a certified copy to the Registrar of Companies for registration; on such delivery the Transferor Company shall be dissolved and records consolidated. Acknowledging pandemic-related registry constraints, the Tribunal further directed that, if obtaining a certified copy from the Tribunal Registry is not possible, the Registrar of Companies, West Bengal is to accept a digitally signed copy of the order as if it were a certified copy. The Registry was directed to send e-mail copies of the order to the petitioners and to supply urgent certified copies on compliance with formalities. [Paras 10, 11, 12, 14, 15]

Certified copy to be filed with ROC; ROC may accept digitally signed copy in lieu of certified copy if necessary due to COVID-19; consequential dissolution and consolidation to follow on filing.

Final Conclusion: The Tribunal allowed the petition and sanctioned the Scheme of Amalgamation of Aditya Marketing & Manufacturing Private Limited with Umang Commercial Company Private Limited with effect from 01 April, 2019, directing transfer and vesting of assets and liabilities, continuation of pending proceedings by or against the Transferee Company, compliance with prescribed filings and regulatory undertakings (including those required by the RBI), and permitting Registrar of Companies to accept a digitally signed copy of the order where obtaining a certified copy is impracticable.

Vires of delegated legislation - delegated legislative power under Section 30 read with Section 11 - regulation of intermediaries including investment advisors - specification of manner and ceiling for charging professional fees by regulator - reasonable restriction on right to carry on profession under Article 19(1)(g) - arbitrariness and reasonableness under Article 14

Delegated legislative power under Section 30 read with Section 11 - regulation of intermediaries including investment advisors - specification of manner and ceiling for charging professional fees by regulator - vires of delegated legislation - Validity of Regulation 15A of the SEBI (Investment Advisors) (Amendment) Regulations, 2020 and the SEBI Circular dated 23.09.2020 insofar as they prescribe modes and ceilings for fees charged by Investment Advisors. - HELD THAT: - The Court held that SEBI possesses broad rule-making power under Section 30 read with the duty and powers in Section 11 to protect investors and regulate the securities market. The measures in Section 11 are couched in open-ended terms and the illustrative matters in Section 11(2) and Section 30(2) do not limit the general power to make regulations. Regulation 15A, which entitles SEBI to specify the manner of charging fees by Investment Advisors, falls within the Board's delegated authority; the 2013 Regulations already contemplated fair and reasonable charges and permitted ceilings to be specified by the Board. The Amendment Regulations inserting Regulation 15A were placed before Parliament pursuant to Section 31 and became law. In consequence, SEBI's Circular of 23.09.2020 prescribing two permissible fee modes and general conditions is a measure within the regulatory power of SEBI to regulate the working of Investment Advisors and to protect investors. Decisions relied upon by the petitioner (including cases on regulatory overreach in different statutory contexts and on fiscal imposition by delegated authorities) were distinguished on their facts and legal contours and found not to apply to the present statutory scheme. [Paras 16, 17, 18, 19, 23]

Regulation 15A and the SEBI Circular of 23.09.2020 prescribing modes and ceilings for fees charged by Investment Advisors are within SEBI's delegated legislative competence and are valid.

Reasonable restriction on right to carry on profession under Article 19(1)(g) - arbitrariness and reasonableness under Article 14 - Whether Regulation 15A and the Circular infringe the petitioner's fundamental right under Article 19(1)(g) or are arbitrary under Article 14. - HELD THAT: - The Court found that neither the Regulation nor the Circular prohibit Investment Advisors from practising; they impose regulatory restrictions on the manner and ceiling of fees as part of investor-protective regulation. Such stipulations are, in principle, reasonable restrictions on the right to carry on the profession and are ancillary to SEBI's statutory duty to protect investors and regulate the securities market. The petitioner did not place material demonstrating that the prescribed ceilings or conditions are so unreasonable or capricious as to render the measures arbitrary or to transgress Article 19(6) or Article 14. Authorities relied upon by the petitioner concerning traditional professions and fiscal imposition were distinguished on grounds that the statutory framework here specifically empowers SEBI and that investment advisory activity is a market-regulatory activity rather than a traditional self-contained profession governed by historical conventions. [Paras 24, 25, 26]

The impugned Regulation and Circular do not violate Article 19(1)(g) or Article 14; the restrictions are permissible regulatory measures and the challenge on these constitutional grounds fails.

Final Conclusion: The petition challenging Regulation 15A of the SEBI (Investment Advisors) (Amendment) Regulations, 2020 and the SEBI Circular dated 23.09.2020 is dismissed; the impugned regulation and circular are validly made within SEBI's delegated powers and do not offend Articles 14 or 19(1)(g).

Liquidation under section 33(2) of the Insolvency and Bankruptcy Code - Decision of the Committee of Creditors by the requisite voting share - Appointment of Liquidator under section 34(1) - Authorisation for Assignment (AFA) requirement for Insolvency Professional - Sale as a going concern and alternative modes of sale under liquidation regulations - Consolidation of liquidation proceedings for value maximization - Vesting of powers in the Liquidator and cessation of board powers - Restriction on institution of suits during liquidation - Public notice and filing of liquidation order with Registrar of Companies

Liquidation under section 33(2) of the Insolvency and Bankruptcy Code - Decision of the Committee of Creditors by the requisite voting share - Corporate Debtor ordered to be liquidated in terms of section 33(2) of the Code on the basis of the Committee of Creditors' resolution. - HELD THAT: - Section 33(2) requires the Adjudicating Authority to pass an order for liquidation where the resolution professional intimates that the Committee of Creditors has decided, by not less than sixty-six percent of the voting share, to liquidate the corporate debtor. The Committee of Creditors in this case passed a resolution by 100% voting share to liquidate the Corporate Debtor, and the Resolution Professional brought that decision to the Adjudicating Authority. Having considered the record and submissions, the Adjudicating Authority is satisfied that the statutory threshold is met and accordingly ordered liquidation under section 33(2) read with section 33(1). [Paras 11, 13]

Order for liquidation of Sarnamoy Plastic Sack Manufacturing Private Limited is passed under section 33(2) of the Code.

Appointment of Liquidator under section 34(1) - Authorisation for Assignment (AFA) requirement for Insolvency Professional - Resolution Professional Mr. Sanjeev Jhunjhunwala appointed as Liquidator, subject to possession of a valid AFA issued by his Insolvency Professional Agency. - HELD THAT: - The Resolution Professional consented to act as Liquidator and the Adjudicating Authority appointed him under section 34(1) of the Code. The appointment is made subject to the condition that he holds a valid Authorisation for Assignment (AFA) as required by regulation 7A of the Insolvency Professionals Regulations, 2019. This ensures compliance with the regulatory requirement for assignment authorization before the appointee exercises the functions of a liquidator. [Paras 9, 13]

Mr. Sanjeev Jhunjhunwala is appointed as Liquidator subject to his possession of a valid AFA.

Sale as a going concern and alternative modes of sale under liquidation regulations - Consolidation of liquidation proceedings for value maximization - Prayers for permitting sale as a going concern or alternative sale modes and for hearing/deciding another liquidation application together are not allowed at this stage. - HELD THAT: - The Applicant had sought, in addition to the liquidation order, directions permitting sale as a going concern and alternative sale modes, and requested that a separate liquidation application be heard together for value maximization. The Adjudicating Authority found that these additional reliefs do not pertain to the present petition for liquidation and cannot be allowed at this stage. Those specific prayers are refused without prejudice to consideration at the appropriate stage or in the appropriate lis. [Paras 12, 13]

Prayers for sale as a going concern/alternative sale modes and for joint hearing of another liquidation application are not allowed at this stage.

Vesting of powers in the Liquidator and cessation of board powers - Restriction on institution of suits during liquidation - Public notice and filing of liquidation order with Registrar of Companies - Directions issued for initiation of the liquidation process, vesting of powers in the Liquidator, issuance of public notice, restriction on suits, and filing of the order with the Registrar of Companies. - HELD THAT: - On initiation of liquidation the Adjudicating Authority directed the Liquidator to commence the liquidation process in accordance with Chapter III of the Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016. All powers of the Board of Directors and key managerial personnel cease and vest in the Liquidator. Personnel of the Corporate Debtor are directed to cooperate with the Liquidator. Subject to section 52, no suit or legal proceeding shall be instituted by or against the Corporate Debtor except as permitted with prior approval of the Adjudicating Authority or as allowed by section 33(5) and its proviso. The Liquidator is directed to issue public notice in the newspapers previously used and to file a copy of the liquidation order with the Registrar of Companies within whose jurisdiction the Corporate Debtor is registered. [Paras 13]

Liquidator to initiate the liquidation process with specified directions regarding vesting of powers, public notice, restrictions on suits, cooperation by personnel, and filing with the Registrar of Companies.

Final Conclusion: The Adjudicating Authority ordered liquidation of the Corporate Debtor under section 33(2) of the Code on the basis of the Committee of Creditors' resolution; appointed the consenting Resolution Professional as Liquidator subject to a valid AFA; refused additional reliefs relating to modes of sale and consolidation of another liquidation application at this stage; and issued consequential directions for initiating and conducting the liquidation process, public notice, vesting of powers, restrictions on suits and filing with the Registrar of Companies.

Approval of Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code - Statutory compliance with the requirements of Section 30(2) of the Code - Compliance with Regulations 37-39 of the CIRP Regulations - Extinguishment of crystallized and unclaimed liabilities upon approval of a Resolution Plan - Ceasing of moratorium on approval of Resolution Plan - Refusal to grant plan-specific waivers and requirement to seek statutory permits from competent authorities

Approval of Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code - Statutory compliance with the requirements of Section 30(2) of the Code - Whether the resolution plan submitted by RV Consulting Services Pvt. Ltd. and Sagar Power Limited meets the statutory requirements and is fit for approval under Section 30(6) of the Code. - HELD THAT: - The Tribunal considered the Form H submitted by the Resolution Professional and examined the resolution plan against the criteria in Section 30(2) and applicable Regulations. The plan was found to provide for priority payment of CIRP costs, treatment of operational creditors in priority to financial creditors, proposed management and implementation mechanisms, declarations required under Regulation 38 and related provisions, and a performance bank guarantee. The Tribunal applied the limited scope of judicial scrutiny prescribed by the Supreme Court, confined to matters specified in Section 30(2), and noted the commercial approval by the CoC with 97.63% voting in favour. On that basis the Tribunal concluded that the resolution plan conforms to the requirements of Section 30(2) and Regulations 37-39 and is not in contravention of Section 29A, warranting approval. [Paras 4, 7, 11, 16]

The resolution plan dated 19.05.2021 submitted by RV Consulting Services Private Limited and Sagar Power Limited is approved under Section 30(6) of the Code.

Compliance with Regulations 37-39 of the CIRP Regulations - Declarations under Regulation 38 - Whether the resolution plan is in compliance with Regulations 37-39 (including Regulation 38(1A) and 38(1B)) of the Insolvency and Bankruptcy Board of India (CIRP) Regulations, 2016. - HELD THAT: - The Tribunal reviewed the Applicant's compliance check and Form H filed under Regulation 39(4). The plan contained the requisite declarations that it considers the interests of all stakeholders, that the resolution applicant (and related parties) have not failed in implementation of any earlier approved plan, and provided for the priority payments and implementation modalities as required by Regulation 38. The Tribunal found these statutory and regulatory requirements satisfied and recorded that the plan is in compliance with the cited Regulations. [Paras 4, 9, 16]

The resolution plan complies with Regulations 37-39 of the CIRP Regulations, including Regulation 38(1A) and 38(1B).

Refusal to grant plan-specific waivers and requirement to seek statutory permits from competent authorities - Whether the Tribunal will grant the concessions and waivers sought by the Resolution Applicant as part of the resolution plan. - HELD THAT: - The Tribunal considered the reliefs and waivers sought in the plan but declined to grant such concessions as part of the approval. The Tribunal held that permits, licenses or statutory approvals sought by the Resolution Applicant must be obtained from the competent authorities in accordance with law and cannot be dispensed with by the Tribunal in the exercise of its powers under the Code. The Tribunal further recommended that the Resolution Applicant approach the relevant authorities and noted its own recommendation to the State and Central Government in respect of concessions, but emphasized that approval of the plan does not amount to waiver of statutory obligations. [Paras 15, 18]

The waivers and concessions sought in the plan are not granted by the Tribunal; statutory permits and approvals must be obtained from the competent authorities in accordance with law.

Extinguishment of crystallized and unclaimed liabilities upon approval of a Resolution Plan - Binding effect of approved Resolution Plan on all stakeholders - Effect of the Tribunal's approval of the resolution plan on existing liabilities and on the rights of creditors and other stakeholders. - HELD THAT: - On approving the resolution plan, the Tribunal expressly recorded that all crystallized and unclaimed liabilities of the Corporate Debtor as on the date of the order shall stand extinguished in accordance with the Code, and that the approved plan shall be binding on the Corporate Debtor, its employees, members, creditors (including Central/State/local authorities), guarantors and other stakeholders. The Tribunal further directed that no creditor can claim anything beyond the liabilities referred to in the approved plan. [Paras 17, 18, 20]

All crystallized and unclaimed liabilities as on the date of the order stand extinguished; the approved resolution plan is binding on the Corporate Debtor and all stakeholders and limits future claims to liabilities recognised under the plan.

Ceasing of moratorium on approval of Resolution Plan - Whether the moratorium under Section 14 of the Code continues after approval of the resolution plan. - HELD THAT: - The Tribunal recorded that upon approval of the resolution plan the moratorium under Section 14 shall cease to have effect from the date of the order, consistent with the implementation phase following approval. [Paras 21]

The moratorium under Section 14 of the Code ceases to have effect from the date of this order.

Final Conclusion: The Tribunal approved the resolution plan submitted by RV Consulting Services Pvt. Ltd. and Sagar Power Limited, holding that it satisfies Section 30(2) of the Code and relevant CIRP Regulations, declined to grant the plan-specific waivers (directing the applicant to obtain statutory approvals from competent authorities), declared that crystallized and unclaimed liabilities as on the date of the order stand extinguished, and recorded that the moratorium under Section 14 ceases with effect from the date of this order.

Binding nature of an approved resolution plan on all stakeholders - extinguishment of claims not provided for in an approved resolution plan - maintainability of a fresh Section 9 petition after approval of a resolution plan - timeliness of submission of proof of claim under Regulation 12(2) of the Insolvency Regulations - public announcement/notice in newspapers as mode of intimation to creditors

Binding nature of an approved resolution plan on all stakeholders - extinguishment of claims not provided for in an approved resolution plan - maintainability of a fresh Section 9 petition after approval of a resolution plan - Whether the Section 9 petition by the operational creditor is maintainable after approval of the resolution plan and whether the creditor's claim stands extinguished on such approval. - HELD THAT: - The Tribunal applied the settled position of law as explained in the cited Supreme Court decisions that upon approval of a resolution plan under Section 31 the claims provided for in the plan stand frozen and all claims not dealt with in the plan are extinguished and the approved plan is binding on all stakeholders. The CIRP in respect of the corporate debtor commenced on 01.05.2018 and the resolution plan was approved on 07.12.2018. Given the approval and implementation of the resolution plan, the petitioner's attempt to initiate fresh insolvency proceedings under Section 9 was considered impermissible because the claim asserted by the petitioner was not available for adjudication after the resolution plan approval. Relying on these principles, the Tribunal concluded that the present petition is non-maintainable and must be rejected. [Paras 10, 11, 12]

Petition under Section 9 rejected as the claim stood extinguished on approval of the resolution plan and the approved plan is binding on all stakeholders.

Timeliness of submission of proof of claim under Regulation 12(2) of the Insolvency Regulations - public announcement/notice in newspapers as mode of intimation to creditors - Whether the operational creditor's plea of non-knowledge of the CIRP and its belated filing of claim excused non-compliance with the time limit for submission of claims. - HELD THAT: - The Tribunal examined the facts that the IRP/RP had issued a public announcement and fixed the last date for submission of claims as 16.05.2018, whereas the operational creditor filed its claim on 20.11.2018. The RP had rejected the claim as submitted beyond ninety days after commencement of the CIRP in terms of Regulation 12(2). The petitioner had earlier challenged that rejection before the Tribunal and that challenge was dismissed. The present plea that the petitioner was unaware of the CIRP was rejected by the Tribunal on the basis that notice by publication in newspapers sufficed and that the petitioner had itself been prosecuting a civil suit against the corporate debtor and therefore could not claim ignorance. Consequently the Tribunal found that the late submission did not excuse the petitioner and reinforced the earlier rejection. [Paras 9, 10, 11]

The plea of non-knowledge and the late submission of proof of claim are not tenable; the late claim was rightly rejected and does not entitle the petitioner to maintain fresh Section 9 proceedings.

Final Conclusion: The petition under Section 9 is dismissed. The Tribunal held that the resolution plan approved on 07.12.2018 is binding on all stakeholders and extinguished claims not dealt with therein; the operational creditor's late claim was rightly rejected and its present petition is not maintainable. No costs.

Eligibility of input service credit - installation and assembling as part of manufacturing - post-manufacturing activity - denial of credit for absence of ISD registration

Eligibility of input service credit - installation and assembling as part of manufacturing - post-manufacturing activity - Credit on service tax paid for subcontracted assembling/installation of CKD furniture is allowable. - HELD THAT: - The Tribunal examined the Statement of Demand and earlier show cause notices and found the primary allegation to be that assembling/installation is a post-manufacturing activity disqualifying credit. The Tribunal relied on its earlier decision in the appellant's own case for the earlier period (Final Order No.41527/2016 dated 8.9.2016) in which the same contention was analysed and decided in favour of the appellant. Applying that precedent to the impugned period, the Tribunal concluded that the assembling/installation performed at the customer's premises as part of delivery of CKD furniture constitutes part of the manufacturing/supply process for purposes of input service credit and therefore the credit was wrongly disallowed. [Paras 6, 7]

Credit disallowance on the ground that assembling/installation is post-manufacturing is set aside; credit is allowable for the period in dispute.

Denial of credit for absence of ISD registration - Denial of credit on the ground of non-registration as an ISD or invoices being in the name of the centralized office was not a valid basis for denial because such allegations were not raised in the Statement of Demand or earlier SCNs. - HELD THAT: - The departmental representative argued before the Tribunal that credit should be denied because the appellant had not taken ISD registration and credit invoices were raised in the name of the centralized office. The Tribunal observed that these contentions do not appear in the Statement of Demand or the antecedent show cause notices and therefore cannot be used to deny credit in the impugned orders. A finding recorded in the adjudicating order on a ground not raised in the SCN/Statement of Demand is of no consequence to justify denial. [Paras 6]

Ground of non-ISD registration and centralized invoices cannot sustain denial of credit in the absence of allegation in the SCN/Statement of Demand.

Final Conclusion: The impugned orders for the period November 2016 to April 2017 are set aside and the appeals are allowed; the credit disallowance is reversed with consequential relief as per law.

Limitation period for refund claims - date of export as relevant date for refund - subordinate legislation cannot impose limitation contrary to parent enactment - interpretation of Notification No. 41/2012-ST to effectuate its purpose

Limitation period for refund claims - interpretation of Notification No. 41/2012-ST to effectuate its purpose - subordinate legislation cannot impose limitation contrary to parent enactment - Revised refund claim for the period 01.04.2016 to 22.08.2016 is not barred by limitation and denial of refund on that ground was set aside. - HELD THAT: - The Tribunal examined the Revenue's contention that the appellant's revised refund claim for the intervening period was made after lapse of one year and therefore barred by paragraph 3(g) of Notification No. 41/2012-ST. Relying on earlier Tribunal decisions under similar facts, the Bench held that limitation affecting refund claims, being an aspect of legislative policy with expropriatory consequences, cannot be imposed by subordinate legislation contrary to the parent enactment. The Tribunal further applied the established approach that a rebate notification must be interpreted so as to give effect to its object and purpose; a literal or narrow construction that would defeat refunds legitimately due to exporters (including in reverse charge situations) is inappropriate. Applying these principles to the facts, the Bench concluded that denial of the refund on time-bar grounds was not sustainable and accordingly set aside the impugned order, allowing the appeal with consequential reliefs as per law. [Paras 6, 7, 8, 9, 10]

Impugned order rejecting refund for 01.04.2016 to 22.08.2016 as time barred is set aside; appeal allowed with consequential reliefs.

Final Conclusion: The Tribunal allowed the appeal, holding that the revised refund claim was not hit by limitation and setting aside the appellate denial of refund for the period 01.04.2016 to 22.08.2016, with consequential benefits as per law.

Refund under Rule 5 of the CENVAT Credit Rules, 2004 - application of the period specified in Section 11B of the Central Excise Act, 1944 for refund claims - interpretation of Notification No. 27/2017-C.E.(N.T.) concerning limitation for refunds under Rule 5 - export turnover determination for refund claims - time-bar defence to refund claims

Refund under Rule 5 of the CENVAT Credit Rules, 2004 - interpretation of Notification No. 27/2017-C.E.(N.T.) concerning limitation for refunds under Rule 5 - application of the period specified in Section 11B of the Central Excise Act, 1944 for refund claims - time-bar defence to refund claims - Whether the refund claim filed by the appellant for the quarter July 2015 to September 2015 was time barred or within limitation in view of Notification No. 27/2017-C.E.(N.T.) and Section 11B of the Central Excise Act, 1944. - HELD THAT: - The facts being undisputed, the appellant made export clearances in the quarter July-September 2015 and filed a refund claim under Rule 5 on 22.09.2016. The Original Authority allowed a portion and rejected the bulk of the claim treating it as lapsed under the first proviso to Section 142(3) of the C.G.S.T. Act, 2017 and Section 11B read with the earlier notification. The Tribunal considered the construction of Notification No. 27/2017-C.E.(N.T.) which, in the context of refunds under Rule 5, applies the 'period' specified in Section 11B (one year) to the relevant quarter rather than the 'relevant date' prescription. Accepting the appellant's submission and following co ordinate and High Court decisions addressing the temporal linkage for export related refunds (including treatment of export turnover by reference to receipt/payment during the relevant period), the Tribunal found that the claim was filed within the one year period applicable to the quarter and therefore not barred by limitation. The denial on time bar grounds was held unsustainable. [Paras 4, 6]

Denial of the refund as time barred set aside; appeal allowed and refund claim held within limitation with consequential relief as per law.

Final Conclusion: The Tribunal allowed the appeal, holding that the refund claim for the quarter July 2015 to September 2015, filed within one year from the end of that quarter in terms of Notification No. 27/2017-C.E.(N.T.), was not time barred; the impugned order rejecting the refund on limitation grounds was set aside and consequential relief granted.

Penalty under section 11AC - ineligible Cenvat credit - wilful suppression - reversal of credit with interest upon departmental notice - extended period of limitation - bonafide belief - penalty cannot be sustained without proof of suppression

Penalty under section 11AC - ineligible Cenvat credit - wilful suppression - reversal of credit with interest upon departmental notice - Whether penalty imposed under section 11AC for availing ineligible input service credit can be sustained in absence of proof of wilful suppression where the assessee reversed the credit with interest after departmental audit observation. - HELD THAT: - The Tribunal found that the appellant had reflected the availment of the contested credit in its accounts and reversed the credit along with interest immediately upon being pointed out by the department. The question of eligibility of the credit was a legal issue and no positive evidence was produced to show fraudulent or wilful intention on the part of the appellant. The fact that the ineligible credit came to light through the audit and that the appellant took corrective steps when pointed out undermines the department's allegation of suppression. In these circumstances, invoking the extended period and imposing penalty under section 11AC on the basis of alleged suppression was not justified. Applying the principle that penalty for suppression requires proof of wilful concealment, the Tribunal held that such proof was absent and the penalty could not be sustained.

Penalty imposed under section 11AC set aside; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the penalty imposed under section 11AC because there was no evidence of wilful suppression where the appellant had shown the credit in its accounts and reversed it with interest on being pointed out by the department.

Availability of CENVAT credit on Outdoor Catering Services - Availability of CENVAT credit on Landscape/Gardening Services - input services - availability of CENVAT credit as part of cost of final products - remand for factual verification - penalty for wrongly availed CENVAT credit

Availability of CENVAT credit on Landscape/Gardening Services - input services - availability of CENVAT credit as part of cost of final products - CENVAT credit on Landscape/Gardening Services was allowable to the assessee. - HELD THAT: - The Tribunal applied the ratio of the jurisdictional High Court and the Division Bench of the Karnataka High Court in Millipore, holding that the definition of "input services" is broad and includes services relating to maintenance and modernization of factory premises. Where employer expenditure on maintaining factory premises is for business purposes and forms part of the cost of final products, the service tax paid on such services falls within input services and is admissible as CENVAT credit. On this basis the disallowance in respect of Landscape/Gardening Services was not sustained. [Paras 8]

CENVAT credit on Landscape/Gardening Services allowed in favour of the assessee.

Availability of CENVAT credit on Outdoor Catering Services - input services - remand for factual verification - Whether CENVAT credit on Outdoor Catering Services was admissible was remanded for factual verification. - HELD THAT: - Although the legal interpretation applicable to catering services aligns with that applied to other input services, the Tribunal found that admissibility turns on factual circumstances - specifically whether the catering was provided to employees generally (a business/employee welfare service) or to specific individuals (personal benefit). The Tribunal therefore directed a limited factual enquiry by the Adjudicating Authority to ascertain if the service was availed for employees in general; if so, denial of credit would not be warranted. [Paras 9]

Issue remanded to the Adjudicating Authority for factual verification; if catering was provided to employees in general, CENVAT credit to be allowed.

Penalty for wrongly availed CENVAT credit - The penalty imposed in consequence of the disallowance was set aside. - HELD THAT: - The Tribunal observed that the challenge to the disallowance was essentially one of mere disallowance of credit and that penalty could not be sustained on that basis. As the penalty was consequential to the disallowance and not independently justified, it was directed to be quashed. [Paras 10]

Penalty set aside; interest and other consequential aspects to follow the factual and adjudicatory outcome.

Final Conclusion: The appeal is partly allowed and partly remanded: CENVAT credit on Landscape/Gardening Services upheld in favour of the assessee; admissibility of credit on Outdoor Catering Services remanded to the Adjudicating Authority for factual verification (to be allowed if provided to employees generally); penalty imposed is set aside.

Availment of input tax credit - exemption notification - extended period of limitation - divergent views of Revenue

Availment of input tax credit - exemption notification - extended period of limitation - divergent views of Revenue - Whether denial of input credit for the period May 2012 to January 2014 is barred by limitation where Revenue has taken divergent views. - HELD THAT: - The Tribunal found that similarly placed assessees had been allowed the credit, although those orders were the subject of appeals by the Revenue. The existence of such appeals by Revenue demonstrated divergent views within the departmental authorities on the question of entitlement to credit under the exemption notification. In that factual matrix the Tribunal held that the extended period of limitation could not be invoked. As the show cause notice in the present case was issued invoking the extended period, the denial of credit was held to be barred by limitation. The Tribunal expressly did not decide the merits of entitlement to credit but rested the decision on the limitation point arising from departmental divergence.

Impugned order denying credit set aside; appeal allowed and relief granted on limitation grounds.

Final Conclusion: The appeal was allowed because the denial of input credit for May 2012 to January 2014 was held to be barred by limitation since Revenue had divergent views on the issue and had invoked the extended period of limitation in the show cause notice.

Applicability of exemption under Section 3(2) of the Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001 - Duty of appellate authority to decide pending appeals expeditiously - Requirement to prefer statutory appeal before contesting assessment by writ - Prohibition on coercive steps pending disposal of appeal

Applicability of exemption under Section 3(2) of the Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001 - Duty of appellate authority to decide pending appeals expeditiously - Pending appeal against Assessment Order No.200913 (AY 2016-17) to be considered and decided by the Appellate Joint Commissioner after hearing parties, with attention to the petitioner's contention regarding exemption under Section 3(2). - HELD THAT: - The High Court recorded that the Assessing Authority did not address the petitioner's legal plea that goods imported from outside the State and used in execution of works contracts had been taxed under the VAT regime as 'sale' and thus fell within the exemption under Section 3(2) of the Tax on Entry Act. As the petitioner has already preferred appeal No.VSP/13/2020-21 against the assessment order for 2016-17, the Court declined to entertain the writ and directed the 3rd respondent to consider the factual and legal points raised, hear both parties and pass an appropriate order in the appeal in accordance with law and rules expeditiously, but not later than three months from receipt of the order. The Court also permitted consolidation/hearing together of other similar pending appeals on the petitioner's request. [Paras 5, 6, 7]

The appeal No.VSP/13/2020-21 shall be decided by the Appellate Joint Commissioner within three months from receipt of this order after hearing parties, considering applicability of Section 3(2).

Requirement to prefer statutory appeal before contesting assessment by writ - Duty of appellate authority to decide pending appeals expeditiously - Prohibition on coercive steps pending disposal of appeal - Assessment Order No.200916 (AY 2017-18) must be contested by filing an appeal before the Appellate Joint Commissioner who shall admit and decide the appeal expeditiously if filed within the prescribed time. - HELD THAT: - The Court observed that the petitioner had not preferred an appeal against the assessment order for 2017-18 and therefore granted liberty to file an appeal within three weeks from receipt of the order. On filing, the 3rd respondent was directed to admit the appeal and, after hearing both sides, pass an appropriate order in accordance with law and rules expeditiously but not later than three months from the date of filing. As an interim protective measure, the Court restrained the revenue from taking coercive steps for recovery of the demanded tax for both assessment years until disposal of the directed appeals. [Paras 6, 7]

Liberty granted to the petitioner to prefer an appeal against Assessment Order No.200916 within three weeks; on filing the appeal shall be admitted and decided by the Appellate Joint Commissioner within three months, and no coercive steps shall be taken pending disposal.

Final Conclusion: Writ petitions disposed: (i) the pending appeal in respect of AY 2016-17 is directed to be decided by the Appellate Joint Commissioner within three months; (ii) petitioner given three weeks to prefer an appeal for AY 2017-18 which, once filed, shall be admitted and decided within three months; respondent restrained from coercive recovery measures until final orders in the appeals.

Direction to consider representation - opportunity of personal hearing - remand for reconsideration - revision of assessment under Section 27(1)(a) of the TNVAT Act and penalty under Section 27(3)(c) - deemed assessment under Section 22(2) of the TNVAT Act

Direction to consider representation - opportunity of personal hearing - remand for reconsideration - Respondent directed to consider the petitioner's representation dated 08.02.2021 and afford a personal hearing before passing any further order revising the assessment. - HELD THAT: - The Court noted that the original assessment for Assessment Year 2014-2015 had accepted a total/taxable turnover of Rs. 9,86,723/-. A subsequent departmental web report indicated higher purchases and the respondent issued a notice proposing revision of assessment under Section 27(1)(a) of the TNVAT Act with penalty under Section 27(3)(c). The petitioner filed a detailed representation (08.02.2021) explaining that the higher purchases included purchase returns and that actual sales matched the earlier assessed turnover. The Court observed that the respondent had not addressed that representation on the merits. In these factual circumstances the Court did not adjudicate the correctness of the proposed revision on merits but considered that proper consideration required fresh examination. Consequently the Court directed the respondent to consider the representation afresh, afford the petitioner a personal hearing, and pass an appropriate order within a stipulated period. [Paras 6, 7]

Respondent to consider the representation dated 08.02.2021, afford a personal hearing to the petitioner, and pass appropriate orders within twelve weeks from receipt of a copy of the order.

Final Conclusion: Writ petition disposed by directing the respondent to re-consider the petitioner's representation after affording a personal hearing and to pass appropriate orders within twelve weeks; no decision on the merits of the proposed revision was made.