TaxTMI Updates e-Newsletter
Jul 17,2024

Summary order. Special Leave Petition dismissed; delay condoned; pending applications disposed of.

Mismatch between e-way bill portal data and GSTR-3B returns - filing requirement of Form ITC-04 - remand for fresh consideration - interim conditional deposit - opportunity of personal hearing - payments to abide outcome of remanded proceedings

Mismatch between e-way bill portal data and GSTR-3B returns - filing requirement of Form ITC-04 - Whether the petitioner was entitled to have the alleged mismatch and the applicability of Form ITC-04 re-examined before confirming the tax proposal. - HELD THAT: - The show cause notice related to disparity between e-way bill portal data and the outward supply value in the petitioner's GSTR-3B returns. The petitioner explained that certain e-way bills related to non-taxable supplies and that supporting documents were not appended to the earlier reply but were furnished subsequently. The respondent's confirmation relied in part on returns filed in Form ITC-04, which were not specifically referred to in the show cause notice. Because the petitioner was put on notice only regarding the larger mismatch and did not have the opportunity to advance a comprehensive explanation including the relevance of Form ITC-04 and the newly produced supporting documents, the matter required fresh consideration. [Paras 6]

Matter remanded for fresh consideration so that the petitioner may put forward a comprehensive explanation, including documents and the question of applicability of Form ITC-04.

Interim conditional deposit - remand for fresh consideration - Whether the impugned order should be set aside and remitted on condition of an interim deposit by the petitioner. - HELD THAT: - The High Court set aside the impugned order dated 28.03.2024 on condition that the petitioner remit a specified sum within six weeks. The court formulated the conditional order to balance the need for compliance with the statutory process and the petitioner's opportunity to make a full reply. Upon receipt of the deposit and the petitioner's reply, the respondent is directed to consider the material, provide a reasonable opportunity including personal hearing, and pass a fresh order within a stipulated time-frame. [Paras 7]

Impugned order set aside on condition of the specified interim deposit; fresh adjudication directed upon receipt of the deposit and reply.

Opportunity of personal hearing - remand for fresh consideration - Obligation of the respondent to provide an opportunity of personal hearing and to decide the matter afresh within a time-bound period after receipt of the petitioner's reply and deposit. - HELD THAT: - The court directed that, upon satisfaction that the conditional deposit has been received and upon receipt of the petitioner's reply with supporting documents within the prescribed period, the respondent must provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter pass a fresh order within three months. This ensures that the petitioner's explanations and annexed documents are considered before confirmation of demand. [Paras 7]

Respondent to afford a reasonable opportunity including personal hearing and to pass a fresh order within three months of receipt of the petitioner's reply and deposit.

Payments to abide outcome of remanded proceedings - Whether amounts paid pursuant to the impugned order would be final or subject to the outcome of the remanded proceedings. - HELD THAT: - For clarity, the court recorded that any amounts paid by the petitioner pursuant to the impugned order shall abide by the outcome of the remanded proceedings. This preserves the petitioner's rights in the event the fresh adjudication alters the liability. [Paras 8]

Amounts paid pursuant to the impugned order shall abide the outcome of the remanded proceedings.

Final Conclusion: The writ petition is disposed by setting aside the impugned order subject to the petitioner's conditional deposit and by remanding the matters for fresh consideration; the petitioner may file a comprehensive reply with documents and shall be afforded a personal hearing, with any payments to abide the outcome of the remanded proceedings.

Best judgment assessment - opportunity to file return under Section 62(2) - failure to file returns - cancellation of registration

Best judgment assessment - opportunity to file return under Section 62(2) - failure to file returns - Validity of the assessment completed on best judgment basis in view of alleged non-issuance of notice under Section 62(1) and the effect of the assessee's failure to file returns within thirty days under Section 62(2). - HELD THAT: - The Court accepted that a formal notice under Section 62(1) may not have been issued prior to passing the best judgment assessment, but held that the statutory scheme affords the assessee an opportunity to file returns under Section 62(2) after receipt of the assessment order, which if availed within thirty days would nullify the assessment. It was found on the material that the appellant received the assessment order and did not file any return within thirty days thereafter. That omission entitled the assessing authority's best judgment assessment to stand, and the appellant's failure to take the statutory step foreclosed relief despite procedural irregularity as to prior notice. The Court therefore declined to interfere with the impugned assessment order on the ground of non-issuance of the pre-assessment notice because the assessee had the post-assessment remedy available and failed to avail it. [Paras 5]

Assessment completed on best judgment basis upheld as the appellant failed to file returns within thirty days of receipt of the assessment order under Section 62(2).

Cancellation of registration - Availability of remedy against cancellation of registration. - HELD THAT: - The Court observed that the order of cancellation of registration is a separate statutory action and, if aggrieved by such cancellation, the appellant is entitled to approach the statutory appellate authority provided under the relevant law. The challenge to cancellation was not sustained in this writ appeal, and the Court indicated the appropriate forum for contesting cancellation. [Paras 4]

Appellant may approach the statutory appellate authority against the order of cancellation of registration; the writ appeal does not provide relief against cancellation in these proceedings.

Final Conclusion: The writ appeal is dismissed; the best judgment assessment is upheld because the assessee did not file returns within thirty days of receipt of the assessment order under Section 62(2), and any grievance regarding cancellation of registration must be pursued before the statutory appellate authority.

GST on royalty - stay on recovery pending higher judicial determination - abeyance of implementation of adjudication orders - submission of objections/representations - adjudication on merits after opportunity of hearing

GST on royalty - stay on recovery pending higher judicial determination - abeyance of implementation of adjudication orders - Interim handling of notices seeking GST on royalty pending decision of the Nine Judge Constitution Bench / Supreme Court. - HELD THAT: - Having considered the submissions and the Division Bench directions in Tvl. A. Venkatachalam, the Court directed that although the respondent-authority may proceed with adjudication on merits, the implementation of any adjudication shall be kept in abeyance until the Nine Judge Constitution Bench of the Hon'ble Supreme Court decides the nature of royalty. The Court observed that recovery of GST on royalty is not to be effected during the pendency of that higher court determination and applied the Division Bench's protective regime to the present petitions. The Court noted the petitioner's contention that the Supreme Court has heard the matter and that orders are awaited, and treated the petitions as premature for execution of recovery in light of the pending higher authority determination. [Paras 7, 8]

Adjudication may proceed on merits but implementation (including recovery) shall be kept in abeyance pending the decision of the Nine Judge Constitution Bench / Hon'ble Supreme Court.

Submission of objections/representations - adjudication on merits after opportunity of hearing - Procedure to be followed by the petitioner and the authority in response to the impugned notices. - HELD THAT: - The petitioner was directed to file a reply/objection within four weeks from receipt of this order. Upon receipt of such objections/representations, the respondent-authority is to proceed with adjudication on merits and in accordance with law after affording a reasonable opportunity of being heard to the petitioner. The Court followed the timetable and procedural directions issued by the Division Bench and applied them to the present matters, observing that the petitions were premature as no reply had been filed to the impugned notices. [Paras 7, 8]

Petitioner to file objections within four weeks; authority to adjudicate on merits after hearing, subject to the abeyance of implementation ordered.

Final Conclusion: Writ petitions disposed of by directing the petitioner to file objections within four weeks and directing the authority to adjudicate on merits after hearing, while keeping implementation and recovery in abeyance pending further orders of the Hon'ble Supreme Court; no costs.

Validity of reopening of assessment u/s 147 - Notice beyond the period of 4 years - HC [2023 (1) TMI 1391 - GUJARAT HIGH COURT] decided reasons recorded for reopening were based on the same facts already scrutinized, indicating a mere change of opinion by the Assessing Officer - Delay filling SLP

HELD THAT:- There is a delay of 400 days in the filing of the present special leave petition. Even on merits, we are not inclined to interfere with the impugned judgment.

Recording the aforesaid, the application for condonation of delay and, consequently, the special leave petition are dismissed.

Validity of assessment u/s 153A - mechanical approval - allegation of non application of mind by the ACIT Tax in granting approval u/s 153D - As decided in HC [2023 (7) TMI 1214 - DELHI HIGH COURT] approval was granted without examining the assessment record or the search material. Tribunal was right that there was absence of application of mind by the ACIT in granting approval un/s 153D. It is not an exercise dealing with a immaterial matter which could be corrected by taking recourse to Section 292B, issue decided against revenue.

HELD THAT:- Having regard to peculiar facts of these cases, we are not inclined to interfere in the matters. Hence, the Special Leave Petitions are dismissed.

Pending applications shall stand disposed of.

Assessee-in-default under Section 201(1) - taxability of payment in hands of payee as prerequisite for TDS liability - time-bar for assessing payee and effect on validity of Section 201(1) order - assessment of non-resident payee as condition precedent to treating payer as assessee-in-default

High Court [2023 (9) TMI 555 - BOMBAY HIGH COURT] upheld the ITAT's view that an order under Section 201(1) against the payer is impermissible where the income is not capable of being lawfully assessed in the hands of the payee (or no assessment has been made within the permissible period); the Special Bench decision in Mahindra & Mahindra [2009 (4) TMI 207 - ITAT BOMBAY-H] was approved and applied.

HELD THAT:- Special leave petition is dismissed on account of low tax effect.

However, the question of law is left open.

Depreciation on revalued assets instead of WDV - conversation of firm to a company - depreciation on tangible assets or intangible assets allowable to the predecessor and the successor in the case of succession - As decided by HC [2023 (6) TMI 823 - BOMBAY HIGH COURT] assessee as per Section 32 r/w Rule 5 of the Act quoted above, will be entitled to claim depreciation in respect of any assets on the actual cost of the said assets. The actual cost of the said assets will be the actual cost which the assessee paid to the predecessor after revaluing the assets and certainly in our view assessee will be entitled to claim depreciation for the subsequent years on the basis of the actual cost paid.

HELD THAT:- Delay condoned.

We find no error in the impugned order. The Special Leave Petition is accordingly dismissed

Arm's length principle - Royalty payments to associated enterprises - Contract manufacturing - Intangibles and royalty for technical know-how - Re-characterisation of transactions / economic substance - Transfer Pricing Officer's jurisdiction and limits - Interpretation and application of OECD Guidelines in transfer pricing

Arm's length principle - Royalty payments to associated enterprises - Contract manufacturing - Intangibles and royalty for technical know-how - Re-characterisation of transactions / economic substance - Interpretation and application of OECD Guidelines in transfer pricing - Transfer Pricing Officer's jurisdiction and limits - Deletion by the ITAT of the transfer-pricing adjustment disallowing royalty paid on export sales to associated enterprises for A.Y. 2008-09 was justified. - HELD THAT: - The Court examined whether STI operated as a contract manufacturer thereby making royalty payments to the parent effectively payments to itself and justifying an ALP of nil. On facts, STI was a wholly owned subsidiary that manufactured and sold mobile handsets in India and overseas, using technological know how licensed by Samsung Korea. The Tribunal's earlier findings for A.Y. 2007-08 (followed by the ITAT in the present appeal) that STI functioned as a licensed manufacturer and not as a contract manufacturer were supported by the record: the FAR profile was unchanged across sales to group and unrelated parties; export sales were driven by market conditions; Samsung Korea exercised quality oversight but did not control production quantities or terms of sale; no assurance existed that STI's entire output would be purchased by the parent; and no material established that sales to AEs were under directives mandating compulsory purchase. The Court held that the TPO and DRP had not adduced evidence to demonstrate re characterisation was warranted or that independent enterprises would have acted differently; reliance on differences in gross profit ratios without specific transaction-level comparability was insufficient. The Court reiterated the limited role of the TPO - to determine ALP and evaluate comparables - and that questioning the commercial wisdom or necessity of entering into transactions falls beyond the TPO's remit. Applying the OECD Guidelines, the Court held that Samsung Korea, as owner/provider of the intangibles essential for STI's manufacturing, was entitled to an arm's length return and could not be deprived of royalty merely because the parties were related. Consequently, the ITAT did not err in deleting the addition and setting aside the ALP determination of nil for the royalty on export sales to AEs. [Paras 29, 31, 34, 36, 38]

The Tribunal rightly deleted the transfer pricing adjustment relating to royalty on export sales to associated enterprises and the ALP determination of nil was unwarranted.

Final Conclusion: The appeal is dismissed; the high court upholds the ITAT's deletion of the transfer pricing adjustment disallowing royalty paid on export sales to associated enterprises for A.Y. 2008 09.

Commercial activity - profit motive - nexus test between receipts and statutory/regulatory functions - ploughing back of interest/investment income for statutory objects - statutory control and directions of State Government under Section 41 of UPID Act - application of Section 10(46) of the Income tax Act - scope of funds and application of Fund under Section 20 of the UPID Act - comparative precedents: GNIDA and YEIDA; Shri Ramtanu

Application of Section 10(46) of the Income tax Act - commercial activity - profit motive - nexus test between receipts and statutory/regulatory functions - comparative precedents: GNIDA and YEIDA - Validity of CBDT's refusal to grant certification under Section 10(46) on the ground that NOIDA was engaged in commercial activity by advancing loans and investing funds - HELD THAT: - The Court held that the CBDT's conclusion treating NOIDA's loans, investments and related interest receipts as indicative of a commercial/profit seeking enterprise was unsustainable. Applying the tests articulated in precedents (including GNIDA, YEIDA and Shri Ramtanu), the determinative inquiry is whether the activity is carried on with a profit motive or whether receipts arise from activities intrinsically connected with the authority's regulatory and administrative functions. NOIDA was constituted to secure planned development of an industrial development area; many of the disbursements were made pursuant to directions of the State Government or were to further development works. The factual material showed that loans were advanced pursuant to State directions, some advances financed activities integrally related to development work, and overall financials did not demonstrate a trading/profit driven enterprise. On these grounds, the respondents erred in treating NOIDA's conduct as commercial activity disqualifying it under Section 10(46).

The CBDT's refusal on the ground of commercial activity is quashed; the view that NOIDA's loans/investments rendered it a commercial/profit making entity is rejected.

Statutory control and directions of State Government under Section 41 of UPID Act - scope of funds and application of Fund under Section 20 of the UPID Act - ploughing back of interest/investment income for statutory objects - Whether loans/investments made pursuant to State Government directions or under powers in the UPID Act, and interest earned thereon, could be treated as commercial activity disentitling NOIDA to Section 10(46) relief - HELD THAT: - The Court accepted that Section 41 empowers the State Government to issue directions to the Authority and Section 20 contemplates the Authority maintaining a Fund comprising grants, loans, sale proceeds and rents/profits, with surplus investible and applicable to discharge statutory functions. The Court emphasised that funds credited to the Authority become part of its corpus and may be prudently invested; earning and ploughing back interest to discharge statutory obligations is not, by itself, a commercial venture with profit motive. Where advances were made pursuant to State directions or to further development projects, they could not be characterised as activities undertaken with intent to earn profit. The respondents' reliance on Section 20(2) as prohibiting investment/advances or treating resulting interest as commercial receipts was misplaced.

Advances made pursuant to State directions and investment/interest income ploughed back for statutory purposes do not, per se, constitute commercial activity disqualifying NOIDA under Section 10(46).

Comparative precedents: GNIDA and YEIDA - nexus test between receipts and statutory/regulatory functions - application of precedent in similar statutory authorities - Whether differences in factual matrix between NOIDA and authorities already certified (GNIDA, YEIDA) warranted denial of the same treatment - HELD THAT: - The Court observed that GNIDA and YEIDA, constituted under the same UPID Act, had been granted certification and that the test applied in those decisions - whether receipts have immediate, direct and fundamental nexus with statutory/regulatory functions and are not pursued on commercial lines with profit motive - governs the present case. The respondents failed to distinguish NOIDA on any principled basis; some findings in the impugned order (for example, that loans were given to private parties) were factually incorrect. In light of similar statutory object, control and financial architecture, and having accepted NOIDA's explanations about State directives and use of receipts for statutory functions, parity of treatment was warranted.

NOIDA ought not to have been denied the same consideration as GNIDA and YEIDA; the impugned order's differential treatment is unsustainable.

Final Conclusion: Writ petition allowed. The order dated 24 December 2020 refusing certification under Section 10(46) is quashed. Respondents are directed to process NOIDA's application afresh in accordance with the Court's observations, having regard to State directions, the statutory scheme (Sections 20 and 41 UPID Act), the nexus test between receipts and statutory functions, and relevant precedents (including GNIDA and YEIDA).

Principles of natural justice - he who decides must hear / he who heard must decide - opportunity of being heard under Section 148A of the Income Tax Act - issuance of notice under Section 148 after compliance with Section 148A

He who decides must hear / he who heard must decide - principles of natural justice - opportunity of being heard under Section 148A of the Income Tax Act - Whether Ext.P6 proceedings under Clause (d) of Section 148A and the consequential Ext.P7 notice under Section 148 were valid where the order was passed by an officer different from the officer who heard the assessee - HELD THAT: - Section 148A mandates that an opportunity of being heard be afforded to the assessee before issuing a notice under Section 148 and contemplates that the authority deciding on whether to issue such a notice will do so after considering the material on record, including the assessee's reply and any hearing. The doctrine that the officer who decides must be the one who heard the party is an aspect of the principles of natural justice. In the present case the Assessing Officer who passed Ext.P6 did not hear the petitioner. That procedural defect violates the audi alteram partem principle embodied in Section 148A and renders Ext.P6 vitiated. Consequent action taken on the basis of the flawed order, namely Ext.P7, is also invalid. The proper course is to set aside the impugned proceedings and require the Assessing Officer to pass fresh orders pursuant to the original show cause notice after affording the petitioner a hearing, expeditiously. [Paras 3, 6]

Ext.P6 and Ext.P7 are set aside for breach of natural justice; Assessing Officer to pass fresh orders after hearing the petitioner.

Final Conclusion: The writ petition is allowed to the extent that Ext.P6 (proceedings under Section 148A) and Ext.P7 (notice under Section 148) are quashed for violation of the principle that the deciding officer must have heard the assessee; the Assessing Officer is directed to decide afresh on the basis of Ext.P3 after giving an opportunity of hearing, as expeditiously as possible.

Reopening of assessment - Notice under Section 148 - Preliminary inquiry under Section 148A - Declaration of income under earlier PAN - Requirement to prove that departmental information is declared in the return - Selection under Risk Management Strategy based on non-filing

Reopening of assessment - Notice under Section 148 - Preliminary inquiry under Section 148A - Declaration of income under earlier PAN - Requirement to prove that departmental information is declared in the return - Validity of reopening proceedings initiated by notice under Section 148 read with Section 148A where the Assessing Officer relied on non-filing under a PAN issued after the relevant assessment year despite a return having been filed under the earlier PAN. - HELD THAT: - The petition challenged notices under Section 148 and the order under Section 148A(d) for A.Y. 2017-18. The petitioner established that it had filed its return for A.Y. 2017-18 under the old PAN AAVFS6160N and produced the intimation under Section 143(1). The Assessing Officer's order proceeded on the premise that the petitioner had failed to file a return under a new PAN (AAPAS3755G) which was issued in 2020 - i.e., after the end of the assessment year in question - and therefore treated the case as one of escapement based on information obtained under RMS for non-filing. The court found this approach to be a misdirection: the AO ignored the fact of filing under the old PAN and based the reopening on non-filing under a PAN that did not exist during the relevant year. The order recorded that it is incumbent on the assessee to prove that the departmental information has been declared in the return filed under the other PAN; however, the AO did not give weight to the petitioner's documentary proof of filing under the old PAN and proceeded to treat unexplained bank transactions as escapement without first satisfying itself that such information was not already declared in the return that existed for the assessment year. Given these errors of fact and law, the impugned order and the consequent notices were unsustainable and were quashed. [Paras 4, 5, 6, 7]

Impugned order dated 30th March, 2024 under Section 148A(d) and notices under Section 148 are quashed and set aside.

Final Conclusion: The High Court allowed the petition, quashed the order under Section 148A(d) and the notices issued under Section 148 for A.Y. 2017-18, holding that the Assessing Officer misdirected himself by relying on non-filing under a PAN issued after the relevant year despite a return having been filed under the earlier PAN; Rule made absolute and no costs awarded.

Tax deduction at source on commission/discounts under section 194H - Assessee in default liability for non deduction of TDS under section 201 - Applicability of section 194H to distributor discounts on pre paid SIM cards and vouchers - Precedential effect of the Supreme Court decision in Bharti Cellular

Tax deduction at source on commission/discounts under section 194H - Applicability of section 194H to distributor discounts on pre paid SIM cards and vouchers - Precedential effect of the Supreme Court decision in Bharti Cellular - Whether the appellant was required to deduct tax at source under section 194H in respect of discounts allowed to distributors for pre paid SIM cards and pre paid vouchers/recharge coupons - HELD THAT: - The High Court accepted the parties' joint submission that the controversy is covered by the Supreme Court's decision in Bharti Cellular. The Supreme Court held that assessees providing cellular services were not under a legal obligation to deduct tax at source on the income/profit component in payments received by distributors or while selling/transferring pre paid coupons or starter kits to distributors, and that section 194H was not applicable to those facts. Applying that binding precedent to the facts before it, the Court concluded that section 194H does not apply to the discounts allowed to the appellant's distributors in respect of pre paid SIM cards and vouchers, and thus no obligation to deduct TDS arose on that account. [Paras 4, 5, 6]

Section 194H is not applicable to the discounts in question and the appellant was not required to deduct TDS thereon.

Assessee in default liability for non deduction of TDS under section 201 - Precedential effect of the Supreme Court decision in Bharti Cellular - Whether the appellant can be deemed an assessee in default under section 201 and be made liable for any tax or interest for non compliance with section 194H - HELD THAT: - Having concluded, by application of the Supreme Court's ruling in Bharti Cellular, that there was no legal obligation to deduct TDS under section 194H in respect of the distributor discounts, the Court held that there could be no consequent liability under section 201 for failure to deduct. The absence of a duty to deduct TDS negates the premise for treating the appellant as an assessee in default and for demanding tax or interest on that ground. [Paras 4, 5, 6]

The appellant cannot be treated as an assessee in default under section 201 for the non deduction of TDS in relation to the discounts at issue, and no tax or interest is exigible on that account.

Final Conclusion: Applying the Supreme Court's decision in Bharti Cellular, the High Court answered the substantial questions in favour of the assessee for assessment years 2012 13 and 2013 14, holding that section 194H did not apply to the distributor discounts and that the appellant could not be treated as an assessee in default; the appeal is dismissed.

Maintainability of departmental appeals - monetary limits for filing appeals by Revenue - binding effect of CBDT instructions on pending appeals - application of CBDT Circular No.5/2024 - exception for audit objections - deduction under section 80P(2)(a)(i)

Maintainability of departmental appeals - monetary limits for filing appeals by Revenue - application of CBDT Circular No.5/2024 - binding effect of CBDT instructions on pending appeals - exception for audit objections - Whether the departmental appeals are maintainable in view of the monetary limits prescribed by CBDT and the exceptions thereto - HELD THAT: - The Tribunal found that the tax effect in both appeals (A.Y. 2014-15 and A.Y. 2015-16) is below the monetary threshold prescribed by CBDT circulars. The latest instruction, CBDT Circular No.5/2024 dated 15.03.2024, supersedes earlier communications and prescribes exceptions to the monetary limits; those exceptions do not include audit objections. The Tribunal applied the settled proposition that CBDT circulars fixing monetary limits are applicable to pending appeals and relied on the reasoning in CIT v. Madhukar K Inamdar HUF that such circulars must be given effect to for pending cases. Consequently, the departmental appeals fall outside the scope for contesting on merits because they do not meet the prescribed monetary threshold and no applicable exception under the new circular is made out. The Tribunal therefore declined to adjudicate the substantive question regarding allowability of deduction under section 80P(2)(a)(i), as the appeals were dismissed on maintainability grounds. [Paras 4, 5, 6]

The appeals are not maintainable due to low tax effect in view of CBDT Circular No.5/2024 and the authorities applying it, and are therefore dismissed; the substantive issue under section 80P(2)(a)(i) is not adjudicated.

Final Conclusion: The departmental appeals for A.Y. 2014-15 and A.Y. 2015-16 are dismissed as not maintainable on account of tax effect being below the monetary limits prescribed by the CBDT (Circular No.5/2024); the merits of the claim for deduction under section 80P(2)(a)(i) were not decided.

Bar of limitation under Section 153C read with Section 153A - computation of ten-year block period with commencement from the end of the assessment year relevant to the previous year of handover - handing over/receipt date of seized material as the commencement point under the First Proviso to Section 153C - assessments initiated in absence of search on the assessee - jurisdictional invalidity of reopening where relevant assessment years fall outside the ten year block

Handing over/receipt date of seized material as the commencement point under the First Proviso to Section 153C - computation of ten-year block period with commencement from the end of the assessment year relevant to the previous year of handover - bar of limitation under Section 153C read with Section 153A - Whether assessments for AYs 2011-12 and 2012-13 could be validly reopened under Section 153C in view of the date of satisfaction/handing over of seized material - HELD THAT: - The Tribunal examined the record and noted that documents relating to the assessee, found during search of another person on 2.11.2017, were handed over and the satisfaction note was recorded on 24.09.2021, with the AO of the assessee recording his satisfaction on 24.03.2022 and issuing notice under Section 153C on 29.03.2022. Applying the legal principle affirmed by the High Court of Delhi in ITA No. 52/2024 (Ojjus Medicare), the date of receipt/handing over for the non-searched person fixes the relevant previous year and the assessment year from which the ten year block is to be computed; the ten year block is reckoned from the end of that assessment year. Where the handover/satisfaction falls within FY 2021-22 (or the period 01.04.2021-31.03.2022), AY 2022-23 is the relevant AY and the ten year block terminates at AY 2013-14. Consequently, AYs 2011-12 and 2012-13 fall outside the ten year outer limit and cannot be reopened under Section 153C read with Section 153A. [Paras 6, 7, 8]

Assessments for AY 2011-12 and AY 2012-13 are time barred and could not be validly reopened under Section 153C read with Section 153A.

Assessments initiated in absence of search on the assessee - jurisdictional invalidity of reopening where relevant assessment years fall outside the ten year block - Whether the assessment orders made pursuant to the satisfaction note are beyond jurisdiction and illegal because no search was conducted on the assessee and no incriminating material was found as a result of a search of the assessee - HELD THAT: - The Tribunal found on record that no search was conducted on the assessee; the material relied upon originated from the search of another person and was handed over to the assessee's AO. The Tribunal held that, in the circumstances and having concluded that the impugned AYs fall outside the permissible ten year block (and thus are time barred), the assessments completed on 26.12.2022 pursuant to the satisfaction note dated 24.09.2021 are beyond the AO's jurisdiction and illegal. The absence of a search on the assessee and the fact that no incriminating material was found as a result of any search on the assessee further underscores the invalidity of the reopening. [Paras 6, 8]

The impugned assessment orders are beyond jurisdiction and illegal; the appeals are allowed.

Final Conclusion: Applying the legal principles on computation of the ten year block (as explained by the High Court of Delhi), AYs 2011-12 and 2012-13 fall outside the ten year period reckoned from the relevant handover/satisfaction date; accordingly, the assessments completed on 26.12.2022 pursuant to the satisfaction note are time barred, beyond jurisdiction and illegal, and the appeals are allowed.

Characterisation of share transactions as business income or capital gains - principle of consistency in treatment across assessment years - relevance of books of account and memorandum of association in ascertaining nature of investments - objective/motive test (dividend yield v. profit motive) for classification of shares - verification of dividend linkage to shares to determine true character of transactions

Characterisation of share transactions as business income or capital gains - principle of consistency in treatment across assessment years - relevance of books of account and memorandum of association in ascertaining nature of investments - objective/motive test (dividend yield v. profit motive) for classification of shares - Short-term capital gains of the assessee for A.Y. 2006-07 are to be treated as capital gains and not as business income. - HELD THAT: - The Tribunal accepted the assessee's case that the shares were shown and valued as investments in the books and that the assessee had surrendered its NSE trading membership, facts which favour classification as investments rather than stock-in-trade. The Tribunal also placed weight on the consistent treatment of similar transactions as capital gains in earlier and later assessment years and on the absence of any material change in circumstances or accounting practice. Although frequency and volume of transactions were noted, the Tribunal observed that frequent dealing alone does not conclusively convert investment transactions into business activity where the objective is to earn dividend and capital appreciation. Reliance was placed on earlier judicial authorities recognising that an assessee may maintain separate portfolios and that entries in books, consistency of treatment and surrounding facts are relevant indicators. Applying these principles, the Tribunal concluded that the transactions should be taxed as capital gains and not as business income. [Paras 11, 12]

Appeal allowed; the short-term gains for A.Y. 2006-07 treated as capital gains.

Final Conclusion: The Tribunal allowed the assessee's appeal and set aside the AO/CIT(A) treatment, holding that the short-term gains for A.Y. 2006-07 are capital gains and not business income, having regard to the books, consistent past treatment and absence of change in circumstances.

Taxability of income from services rendered in India - Definition of "India" including Exclusive Economic Zone under section 2(25A) - Application of Notification No. GSR 304(E) to activities in the Exclusive Economic Zone - Freedom of navigation of foreign ships and its effect on place of rendition of services - Scope and time-limit of draft assessment under Section 144C and final assessment under Section 144C(4) - No obligation on successor Assessing Officer to issue fresh notice under Section 143(2) on change of incumbent

Scope and time-limit of draft assessment under Section 144C and final assessment under Section 144C(4) - Validity of assessment dated 22/10/2021 as within statutory time limit in view of draft assessment under Section 144C - HELD THAT: - The Tribunal concurred with the view that the draft assessment order issued under Section 144C(1) on 03.09.2021 gave the assessee an opportunity to file objections before the DRP and that the final assessment passed on 22.10.2021 was within the statutory timeline prescribed by Section 144C(4). The provision of draft assessment under Section 144C was held to be a beneficial mechanism for the assessee and the final order was therefore not time-barred. [Paras 6]

Assessment dated 22/10/2021 is within time; ground of time-bar dismissed.

No obligation on successor Assessing Officer to issue fresh notice under Section 143(2) on change of incumbent - Whether a successor Assessing Officer is required to issue a fresh notice under Section 143(2) upon change of incumbent - HELD THAT: - The Tribunal agreed with the appellate authority that issuance of the initial notice under Section 143(2) after selection for scrutiny satisfied procedural requirements and there is no statutory mandate requiring each successor AO to issue a fresh notice on change of incumbent. The assessee was afforded opportunity to be heard before completion of assessment, and procedural compliance was therefore held to have been met. [Paras 6]

No fresh notice required on change of AO; ground dismissed.

Taxability of income from services rendered in India - Definition of "India" including Exclusive Economic Zone under section 2(25A) - Application of Notification No. GSR 304(E) to activities in the Exclusive Economic Zone - Freedom of navigation of foreign ships and its effect on place of rendition of services - Whether salary earned by the assessee for work performed from a foreign ship operating beyond territorial waters but within the EEZ is taxable in India - HELD THAT: - The Tribunal analysed the statutory definitions and the Notification No. GSR 304(E) read with the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976. While section 2(25A) incorporates EEZ within the territorial ambit for certain taxation purposes, the Notification extends the Income-tax Act to the EEZ only insofar as specified activities (prospecting, extraction of mineral oils, provision of services or supply in connection therewith, and rendering of services as an employee engaged in those activities) are concerned. Sub section 9 of Section 7 of the 1976 Act preserves freedom of navigation for foreign ships. The Tribunal found that services performed onboard a foreign ship operating beyond territorial waters (12 nautical miles) but within the EEZ, which do not involve the specified activities directed at the seabed/subsoil or oil extraction infrastructure in the sense contemplated by the Notification, are not automatically services rendered in "India" for income tax purposes. Applying these principles to the facts, and having regard to the AO's verification of the assessee's Continuous Discharge Certificate and residential status as non-resident, the Tribunal concluded that the salary related to services performed outside territorial waters and thus constituted exempt income. [Paras 8]

Assessee's salary for services performed on the foreign ship within the EEZ but beyond territorial waters is exempt; addition deleted.

Final Conclusion: The appeal is partly allowed: the addition of salary was deleted on the ground that the services were rendered outside territorial waters and thus exempt for the AY 2018-19; procedural challenges to the assessment (time bar and notice under Section 143(2)) were rejected.

Arm's length price - Comparable Uncontrolled Price (CUP) method - transfer pricing adjustments - most appropriate method - duplication of risk adjustments - withholding tax liability under Section 195 - disallowance under Section 40(a)(i) - Fees for Technical Services (FTS) - product certification services not constituting FTS - DTAA taxability and permanent establishment - provision for royalty and withholding nexus to actual receipt

Arm's length price - Comparable Uncontrolled Price (CUP) method - most appropriate method - duplication of risk adjustments - transfer pricing adjustments - Deletion of TPO's upward transfer pricing adjustment of Rs. 2,26,243/- made by applying an increased interest rate of 5.42% instead of the assessee's Prime Lending Rate-based rate. - HELD THAT: - The Tribunal held that benchmarking the loan to AE in Bahrain using loan deals from US and Europe was inappropriate because of differing economic environments and sovereign risk profiles; the Prime Lending Rate of the Central Bank of Bahrain, adopted by the assessee, already reflects regional economic and foreign-exchange risks; therefore adding further spreads for country and foreign-exchange risk amounted to duplicative adjustments. Rule 10B requires adoption of the most appropriate method and permits adjustments only if they would have a material impact; the Prime Lending Rate was found to be reliable and consistently applied in earlier and subsequent years. On these conclusions the Tribunal upheld the CIT(A) and dismissed the TPO's upward adjustment. [Paras 7]

TPO's adjustment of Rs. 2,26,243/- is deleted and Revenue's Grounds Nos. 1 and 2 are dismissed.

Product certification services not constituting FTS - Fees for Technical Services (FTS) - DTAA taxability and permanent establishment - withholding tax liability under Section 195 - disallowance under Section 40(a)(i) - Deletion of disallowance of product certification expenses of Rs. 60,57,180/- charged to non-residents for lack of TDS. - HELD THAT: - The Tribunal held that payments for product certification-comprising evaluation and issuance of certificates-do not fall within the definition of 'Fees for Technical Services' under Section 9(1)(vii) and analogous DTAA provisions, relying on precedent distinguishing specialized/consultative technical services from facility-type or audit/certification services. In the absence of a fixed place of business of the foreign certifying entities in India, such receipts are not taxable in India and therefore no withholding obligation under Section 195 arose. The assessee had furnished invoices, certificates and agreements establishing the genuineness and business necessity of the expenses; the AO's finding of non-genuineness was not supported by contrary evidence. On these bases the Tribunal upheld the CIT(A)'s deletion of the disallowance under Section 40(a)(i). [Paras 9]

Disallowance of Rs. 60,57,180/- is deleted and Revenue's Ground No. 3 is dismissed.

Provision for royalty and withholding nexus to actual receipt - withholding tax liability under Section 195 - disallowance under Section 40(a)(i) - DTAA taxability and permanent establishment - Deletion of disallowance of provision for royalty expenses of Rs. 1,69,66,598/- on the ground that withholding tax was not deducted. - HELD THAT: - The Tribunal agreed with the CIT(A) that royalty accrues and becomes payable only upon activation of the software by the end user; there is a legitimate time gap between recording sales and actual payment to the vendor. Judicial precedents establish that withholding liability under Section 195 is contingent on the existence of tax liability in the hands of the payee and, under DTAA principles, on receipt by the non-resident. Since the royalty was a provision pending activation/payment and the embedded income would not be taxable until actually received by the non-resident, no withholding obligation arose at the time of provision. Accordingly the disallowance under Section 40(a)(i) was not sustainable. [Paras 12]

Provision for royalty expenses of Rs. 1,69,66,598/- is allowable and Revenue's Ground No. 4 is dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeal in full for AY 2011-12, upholding the CIT(A)'s deletions of the transfer pricing adjustment, the disallowance of product certification expenses, and the disallowance of the provision for royalty expenses.

Section 54F exemption for investment in residential property - Prospective operation of statutory amendment - Clarificatory versus substantive amendment

Section 54F exemption for investment in residential property - Prospective operation of statutory amendment - Clarificatory versus substantive amendment - Assessee entitled to claim exemption under section 54F for investment in a residential property located in Ontario, Canada for the assessment year 2013-14 because the amendment inserting the words 'in India' applies prospectively from 01.04.2015. - HELD THAT: - The Tribunal examined the legislative change that inserted the words 'in India' into section 54F and the authorities holding on whether that amendment is clarificatory or substantive. Following the decision of the Hon'ble Bombay High Court in Hemant Dinkar Kandlur (and other co-ordinate decisions), the Tribunal held that the pre-amendment text of section 54F was neither ambiguous nor vague and did not restrict investment to India. The amendment, which expressly came into force from 1st April 2015, imposed an additional condition and therefore must be treated as substantive and prospective. The Tribunal rejected the submission that section 5(2) or a purported clarificatory character could read the words 'in India' into the earlier provision for periods prior to 01.04.2015. Consequently, the investment made in the residential property in Ontario, Canada satisfied the pre-amendment conditions of section 54F and the exemption is allowable for A.Y. 2013-14. [Paras 6, 8]

Exemption under section 54F allowed in respect of investment in residential property in Ontario, Canada for A.Y. 2013-14; amendment inserting 'in India' is prospective and not applicable to the year under consideration.

Final Conclusion: Appeal allowed: the disallowance of deduction under section 54F is set aside and the assessee is entitled to the exemption in respect of the investment in the residential property in Ontario, Canada for A.Y. 2013-14; remaining technical grounds rendered academic.

Summary order. Special Leave Petitions dismissed as having been rendered infructuous; delay condoned; pending applications disposed of.

Confiscation versus re-export - re-export on payment of fine - penalty under Section 112 of the Customs Act, 1962 - goods unfit for human consumption - maintainability of appeal - precedential effect of coordinate Bench order

Confiscation versus re-export - re-export on payment of fine - penalty under Section 112 of the Customs Act, 1962 - precedential effect of coordinate Bench order - Whether the impugned order of absolute confiscation and penalties should be modified to permit re-export on payment of a fine and reduction of penalties in view of an earlier order of this Bench involving identical facts. - HELD THAT: - The Bench noted that an identical challenge arising from the same impugned orders had been decided by this Bench in Final Order No.60319-60320/2024 dated 07.06.2024 and that that order has not been stayed. Relying on and following the findings and ratio of that earlier order, the Bench set aside absolute confiscation and allowed re-export of the goods subject to conditions. The Bench exercised its discretion to substitute confiscation with a fine in lieu thereof and to reduce the penalty imposed under Section 112 of the Customs Act, 1962. The re-export permission is conditional on payment of the specified fine, submission of an undertaking that the goods will not be routed back to the country of origin, and an endorsement in export documents recording that the goods are being re-exported because they are unfit for human consumption as per Indian standards. Compliance is to be ensured within the time directed by the Bench. [Paras 4, 5]

Appeal No. C/60250/2024 is partially allowed: absolute confiscation set aside; re-export permitted on payment of a fine in lieu of confiscation; penalty under Section 112 reduced; conditions of re-export and compliance directed.

Maintainability of appeal - Whether the appeal filed by the Director (Appeal No. C/60251/2024) is maintainable before this Tribunal. - HELD THAT: - The Tribunal examined the procedural record and found that no appeal was filed by the Director before the First Appellate Authority. On that factual and procedural basis, the Tribunal held the appeal by the Director to be not maintainable. [Paras 5]

Appeal No. C/60251/2024 is non-maintainable for want of an appeal before the First Appellate Authority.

Final Conclusion: The Tribunal, following its earlier coordinate Bench order which is not stayed, modified the impugned orders by allowing re-export of the goods on payment of a substituted fine and reducing the penalty under Section 112, subject to specified conditions; the separate appeal filed by the Director was held non-maintainable.

Summary order. Delay in refiling condoned; no interference with the National Company Law Appellate Tribunal order dated 1 March 2024 in Company Appeal (AT)(Insolvency) Nos. 333 of 2024 and 334 of 2024; appeals dismissed and pending applications disposed of.

Summary order. Appeal dismissed; the order of the National Company Law Appellate Tribunal dated 16 April 2024 in Company Appeal (AT)(Insolvency) No. 509 of 2024 is upheld; pending application, if any, disposed of.

Condonation of delay - No substantial question of law - Interference with appellate tribunal order - Dismissal of appeal

Condonation of delay - Delay in refiling the appeal was condoned. - HELD THAT: - The Court recorded satisfaction with the explanation for delay and exercised its discretion to condone the delay in refiling the appeal. The order reflects a procedural decision to permit the appeal to proceed despite the initial delay, without additional qualification or limitation. [Paras 1]

Delay in refiling the appeal is condoned.

No substantial question of law - Interference with appellate tribunal order - Dismissal of appeal - No interference was warranted with the NCLAT order as the appeal did not raise any substantial question of law; the appeal was dismissed. - HELD THAT: - On examination, the Court found that the appeal did not present any substantial question of law warranting judicial interference with the order of the National Company Law Appellate Tribunal dated 9 February 2024. Having concluded that no determinative legal question arose for consideration, the Court declined to disturb the appellate tribunal's decision and disposed of the appeal on that basis. [Paras 2, 3]

The appeal is dismissed as no substantial question of law is involved and there is no reason to interfere with the NCLAT order dated 9 February 2024.

Final Conclusion: Delay in refiling was condoned, but on the merits the Supreme Court declined to interfere with the NCLAT order dated 9 February 2024, finding no substantial question of law and dismissing the appeal; pending applications, if any, are disposed of.

Summary order. Delay condoned; special leave petitions dismissed; pending applications, if any, disposed of.

Summary order. Special Leave Petition dismissed; delay condoned; pending applications, if any, disposed of.

Issue of estimate under SVLDRS and finality of estimate - Issuance of Form SVLDRS-3 and entitlement to settle on payment - Obligation to permit deposit and grant of benefit despite procedural time limits - Interest on delayed payment under SVLDRS

Issue of estimate under SVLDRS and finality of estimate - Section 126 and Section 127 of SVLDRS - Finality of the designated committee's estimate under Section 127 and its power to re examine an application after issuing an estimate in Form SVLDRS-2. - HELD THAT: - The Court examined the scheme provisions governing verification and issuance of estimates and statements by the designated committee under SVLDRS. It held that once an estimate is issued under the provisions of Section 127 (including issuance of Form SVLDRS-2/estimate), the designated committee cannot re examine or review its earlier estimate by rejecting the application of the declarant. The order dated 06.05.2020, by which the committee purported to re examine and reject the petitioner's application after issuing the estimate, was held to be contrary to the statutory scheme and thus impermissible. [Paras 11]

Order of the designated committee re examining and rejecting the application after issuance of the estimate was contrary to SVLDRS and set aside.

Issuance of Form SVLDRS-3 and entitlement to settle on payment - Obligation to permit deposit and grant of benefit despite procedural time limits - Interest on delayed payment under SVLDRS - Whether the petitioner, having accepted the estimate in Form SVLDRS-2, was entitled to be permitted to make the payment as per that estimate, to have Form SVLDRS-3 issued, and to settle the case subject to payment with interest. - HELD THAT: - The Court found it was undisputed that the petitioner was eligible under the Scheme and that Form SVLDRS-2 had specified the estimate payable by the petitioner. Since the petitioner subsequently communicated willingness to pay the amount specified in the estimate, the designated committee ought to have allowed payment and issued Form SVLDRS-3. The committee's refusal on the ground that amendment or acceptance was not possible after the extended cutoff date was held to be incorrect because there was no need to amend the estimate where the petitioner accepted it. Applying precedent and earlier decisions of the Court, the petition was allowed with a direction that the petitioner be permitted to deposit the amount as per the estimate and that Form SVLDRS-3 be issued; the Court also directed payment to be made with interest at the rate of 9% per annum from the due date till actual payment. [Paras 12, 13, 15, 16]

Respondent directed to permit payment as per Form SVLDRS-2, issue Form SVLDRS-3, accept payment with interest at 9% per annum, and consequent impugned orders and show cause notice set aside.

Final Conclusion: The petition is allowed: the designated committee's re examination and rejection after issuing an estimate was contrary to SVLDRS; the petitioner is permitted to pay the amount specified in Form SVLDRS-2 for settlement, the authority shall issue Form SVLDRS-3 and accept payment with interest at 9% per annum; consequential impugned orders and notices are set aside.

Setting aside tribunal order and restoration of appeal to tribunal - remand to await decision of higher court - precedential effect of a High Court decision stayed by the Supreme Court - following earlier High Court authority by the tribunal - appeal under Section 35G of the Central Excise Act, 1944

Precedential effect of a High Court decision stayed by the Supreme Court - following earlier High Court authority by the tribunal - setting aside tribunal order and restoration of appeal to tribunal - Whether the order of the Customs, Excise and Service Tax Appellate Tribunal allowing the assessee by following the High Court decision in Indsur Global Ltd. should stand. - HELD THAT: - The Tribunal had allowed the assessee's appeal by following the Gujarat High Court decision in Indsur Global Ltd., and it also relied upon the decision of this Court in Goyal MG Gases which took note of Indsur Global. However, the judgment in Indsur Global was stayed by the Hon'ble Supreme Court in SLP No.16523/2015. Consistent with this Court's earlier practice in similar matters (notably Commissioner of Central Excise, Bolpur v. M/s. KIC Metaliks Ltd.), the proper course is not to permit finality below by applying a High Court decision that has been stayed by the Supreme Court. The Tribunal's order is therefore set aside; the appeal is restored to the Tribunal's file and directed to be kept pending and taken up for decision after the Supreme Court disposes of SLP No.16523/2015 and other connected matters. [Paras 4, 5, 6]

Tribunal order set aside; appeal restored to Tribunal and directed to be kept pending to be taken up after the Supreme Court disposes of the connected SLP(s).

Final Conclusion: The revenue appeal is allowed; the Tribunal's order is set aside and the appeal is restored to the Tribunal to remain pending and be taken up after the Supreme Court disposes of the connected Special Leave Petition(s); the substantial questions of law raised are left open.

Principles of natural justice - departure from show-cause notice - residuary classification - remand for fresh adjudication - alternative remedy and exception

Principles of natural justice - departure from show-cause notice - residuary classification - Impugned assessment orders violate principles of natural justice by classifying AAC Blocks under a residuary entry different from that specified in the show cause notice. - HELD THAT: - The Court examined the show cause notice dated 17.04.2023 which proposed classification under a specified entry, and compared it with the assessment orders dated 01.06.2023 which ultimately classified the goods under the residuary entry (Entry 69/Commodity Code 301). The assessment reasoning confirmed levy under the residuary entry not indicated in the notice, thereby effecting a substantive departure from the case disclosed to the appellant. A notice must disclose the reasons to be met so that the noticee may reply; departure from those reasons without affording the noticee an opportunity to meet the new case infringes the principles of natural justice. Reliance was placed on established authority that the Revenue cannot build a new case not founded on the show cause notice. On this basis the Court found the impugned orders vitiated for want of fair notice and opportunity to meet the changed classification. [Paras 14, 15, 16]

Impugned assessment orders are invalid for violating principles of natural justice by departing from the show cause notice.

Remand for fresh adjudication - alternative remedy and exception - Procedure to be followed consequent to invalidation of the assessment orders. - HELD THAT: - Recognising that existence of an alternative statutory remedy is a relevant factor in judicial review but not an absolute bar where there is a breach of natural justice, the Court directed a remedial course rather than quashing with finality. The assessment orders dated 01.06.2023 were directed to be treated as show cause notices; the appellant is permitted to file objections within the stipulated period, and the adjudicating authority is directed to pass fresh orders within a prescribed timeline after considering those objections. The direction confines the remedy to re adjudication on notice rather than deciding merits afresh, thereby ensuring compliance with natural justice while preserving statutory appellate remedies. [Paras 16, 17]

Assessment orders to be treated as show cause notices; appellant to file objections within four weeks and authority to pass fresh orders within eight weeks thereafter.

Final Conclusion: The writ appeals are allowed to the extent that the assessment orders dated 01.06.2023 are held invalid for having departed from the show cause notice in breach of the principles of natural justice; the assessment orders are to be treated as show cause notices, the appellant is granted time to file objections, and the assessing authority is directed to reconsider and pass fresh orders within the time stipulated by the Court.

Interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 - Personal guarantor insolvency under Part III of the IBC - Overriding effect of Section 238 of the IBC - Applicability of SARFAESI Act where IBC moratorium operates - Prohibition on continuation of enforcement proceedings after moratorium - Exclusive statutory remedy under Section 17 of the SARFAESI Act and DRT jurisdiction - Possession and enforcement under Section 13 of the SARFAESI Act

Interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 - Personal guarantor insolvency under Part III of the IBC - Interim moratorium under Section 96 IBC applies to debts in relation to which insolvency proceedings against a personal guarantor have been initiated, and thus applies to the mortgage/security interest created by the guarantor. - HELD THAT: - The Court recorded commencement of insolvency proceedings against the petitioner as personal guarantor and applied Sections 95 and 96. Section 96(1)(b) stays any legal action or proceeding pending in respect of any debt from the date of filing. The Court followed Supreme Court authority distinguishing the moratorium under Part III (applying in relation to debts) from Part II, and held that the interim moratorium covers debts secured by property mortgaged by the personal guarantor. The moratorium therefore operates in respect of the debt underlying the SARFAESI proceedings initiated against the mortgaged property. [Paras 11, 14, 15, 16, 17]

Interim moratorium under Section 96 IBC is attracted and applies to the debts/ security interest created by the petitioner as personal guarantor.

Overriding effect of Section 238 of the IBC - Prohibition on continuation of enforcement proceedings after moratorium - Applicability of SARFAESI Act where IBC moratorium operates - Once the interim moratorium under the IBC is in force, the secured creditor cannot continue further action under the SARFAESI Act in respect of the mortgaged property until the moratorium is lifted. - HELD THAT: - Relying on the Code being a complete code and the overriding effect of Section 238, the Court held that further steps under the SARFAESI Act are prohibited once the interim moratorium has commenced, even if possession had been taken earlier and no sale has been completed. The Court referred to Supreme Court precedents that a sale/process not completed prior to moratorium cannot be continued thereafter, and applied that reasoning to bar continuation of SARFAESI proceedings in the present case while moratorium subsists. [Paras 17, 18, 19, 20, 21]

Respondent-bank cannot proceed further under the SARFAESI Act with respect to the mortgaged property while the interim moratorium under the IBC is in force.

Exclusive statutory remedy under Section 17 of the SARFAESI Act and DRT jurisdiction - Possession and enforcement under Section 13 of the SARFAESI Act - High Court should not entertain a writ under Article 226 where an effective remedy exists under Section 17 of the SARFAESI Act; questions as to the bank's authority or jurisdiction to invoke SARFAESI are to be agitated before the DRT. - HELD THAT: - The Court reiterated settled law that when a statutory forum (DRT under Section 17) is available for challenging actions under Sections 13/14 of SARFAESI, writ jurisdiction should ordinarily not be exercised. Authorities including recent Supreme Court pronouncements were applied to hold that the petitioner must raise challenges to the validity, authority or jurisdiction of the respondent-bank before the DRT. The Court emphasised that it has not decided the merits on those contentions and left all rights open. [Paras 26, 27, 28, 29]

Writ petition is not the appropriate forum for adjudication of the bank's authority to proceed under SARFAESI; the petitioner must pursue remedies before the DRT.

Applicability of SARFAESI Act where IBC moratorium operates - Exclusive statutory remedy under Section 17 of the SARFAESI Act and DRT jurisdiction - Jurisdictional and merit issues concerning the authority of respondent-bank (including contentions about loan disbursement in Dubai and governing law) are not decided on merits by this Court and are to be considered afresh by the DRT when the moratorium is lifted. - HELD THAT: - While the petitioner challenged the respondent-bank's competence to invoke SARFAESI on the ground that the lending branch was in Dubai and the agreement governed by foreign law, the Court declined to adjudicate those merits. The Court held that the DRT has the power to determine jurisdictional questions and left the said contentions open for determination by the statutory forum once the interim moratorium ceases. [Paras 26, 31]

Issues as to the bank's authority, jurisdiction and other merits concerning the SARFAESI proceedings are remitted to the DRT for fresh consideration when the moratorium is lifted; no merit finding given by this Court.

Final Conclusion: The writ petition is disposed of: the interim moratorium under Section 96 IBC applies to the debts/security interest of the petitioner as personal guarantor and, consequently, the respondent-bank cannot continue SARFAESI enforcement steps while the moratorium subsists; challenges as to the bank's authority or jurisdiction to invoke SARFAESI are to be raised before the DRT and were not decided on the merits by this Court.

Review jurisdiction - Explanation to Rule 1 of Order XLVII, CPC - person aggrieved - any other sufficient reason - finality of judgments (interest reipublicae ut sit finis litium) - inherent powers / Article 142 - remand for fact-finding - status quo and interim directions

Review jurisdiction - Explanation to Rule 1 of Order XLVII, CPC - finality of judgments (interest reipublicae ut sit finis litium) - Whether the last sentence of paragraph 217 of Shailendra (3-Judge) granted a general 'liberty' to apply for review of earlier final orders - HELD THAT: - The Court held that paragraph 217 of Shailendra cannot be read as granting a carte blanche liberty to filing of review petitions against judgments which had attained finality. The majority in Shailendra could at most have meant that review petitions then pending might be entertained; it did not, and could not, confer on acquiring authorities a general right to reopen final adjudications based on a subsequently expressed opinion. Allowing such a construction would subvert finality and natural justice by permitting reopening of concluded disputes without notice to affected parties. For these reasons the contention that paragraph 217 granted a freestanding liberty to apply for review was rejected. [Paras 81, 85]

Answered against the review petitioners; paragraph 217 of Shailendra does not grant the claimed liberty.

Explanation to Rule 1 of Order XLVII, CPC - any other sufficient reason - Review jurisdiction - Whether the review petitions are maintainable in view of the Explanation to Rule 1 of Order XLVII, CPC and the decision in Manoharlal (5-Judge) - HELD THAT: - The Court ruled that the Explanation precludes review merely because a previously relied-on proposition of law has been reversed or modified by a subsequent decision of a superior or larger Bench. Parliamentary intent embodied in the Explanation and consistent precedents require that a subsequent overruling is not a ground for review under Order XLVII. The Court declined to adopt the expansive readings of 'any other sufficient reason' in Netaji Cricket Club and similar cases for the facts here, and held that the overruling or recall of Pune Municipal Corporation does not furnish a statutory ground for review of final orders that were correct when made. [Paras 101, 104]

Review petitions not maintainable on the ground of subsequent overruling or recall of precedent; answered in the negative.

Person aggrieved - Review jurisdiction - Whether the review petitioners qualify as 'persons aggrieved' for maintaining review petitions - HELD THAT: - The Court observed that where the impugned judgments were correct when rendered (having applied the then-binding law), the acquiring authorities could not be regarded as 'persons aggrieved' for the purpose of invoking review based solely on subsequent developments. However, the Court also recognised that the petitioners might be considered persons aggrieved insofar as they have pleaded other grounds (factual or legal) in their review petitions; that recognition does not, however, confer merit or maintainability where the pleaded grounds do not satisfy the narrow statutory tests for review. The Court examined the grounds advanced and found no error apparent on the face of the record that would attract review. [Paras 108, 109, 110]

Partly negative and partly affirmative: petitioners are not persons aggrieved insofar as they rely solely on subsequent overruling, but may be treated as aggrieved for other pleaded grounds-none of which, on the materials, sufficed to sustain review.

Review jurisdiction - any other sufficient reason - Whether the review petitions should nevertheless be entertained on other grounds pleaded in the RPs - HELD THAT: - The Court considered the alternate grounds advanced in the RPs (largely factual and procedural) and found them either not pleaded with requisite particularity or not meeting the statutory thresholds (discovery of new matter, error apparent on face of record, or other sufficient reason analogous to those grounds). Consequently, the Court held there was no basis to entertain the RPs on those other grounds and rejected the contention for remittal for merits consideration. [Paras 110, 111]

Answered against the review petitioners; the alternate grounds do not justify review.

Miscellaneous applications - finality of judgments (interest reipublicae ut sit finis litium) - Whether miscellaneous applications styled as clarification/recall/modification are maintainable as a means to bypass Order XLVII review procedure - HELD THAT: - The Court held that miscellaneous applications which are in substance review applications cannot be used to circumvent the statutory and procedural regime for review (including circulation and rejection in chambers). Citing authorities and recent pronouncements discouraging the practice, the Court concluded that such miscellaneous applications are not maintainable where they amount to disguised review petitions. [Paras 113, 117]

Miscellaneous applications are not maintainable and are dismissed.

Inherent powers / Article 142 - remand for fact-finding - status quo and interim directions - Whether any exercise of inherent powers/Article 142 is appropriate and what consequential directions/remedies should follow in the batch - HELD THAT: - Although the Court found the RPs and miscellaneous applications not maintainable under Order XLVII, it invoked its plenary powers under Article 142 in the larger public interest to issue prospective, uniform directions to complete acquisition proceedings where necessary. The Court extended time for initiation of fresh acquisition proceedings, directed maintenance of status quo, dispensed with certain procedural compliances in light of the urban/semi urban nature of lands, fixed valuation and award timelines, and preserved remedies for enhancement of compensation. Separately, for a subset of cases involving disputes between original landowners and subsequent purchasers, the Court set aside certain High Court orders and remanded specified writ petitions for factual enquiry to determine the rightful claimant to compensation. [Paras 121, 124]

Article 142 directions issued (time extension, procedural dispensation, status quo, valuation/award timeline); specified matters remanded for fact-finding; miscellaneous applications and RPs otherwise dismissed.

Final Conclusion: The reference is answered against the review petitioners: review petitions and disguised miscellaneous applications are not maintainable insofar as they rely on subsequent overruling or recall of earlier precedent; no review is available on that ground under Order XLVII. The Court, however, exercised its plenary powers under Article 142 to issue prospective directions (time extension, status quo and procedural dispensation) for completing fresh acquisition proceedings and remanded specific matters for limited fact finding; all other RPs and miscellaneous applications are disposed of without costs.