TaxTMI Updates e-Newsletter
Oct 02,2020

Advance ruling obtained by suppression of material facts - proviso to section 98(2) - section 104 - power to declare advance ruling void ab-initio - definition of "supply" and requirement of consideration under section 7 - direct and immediate link between supply and consideration - input tax credit inadmissible where no taxable supply (section 17(2))

Advance ruling obtained by suppression of material facts - proviso to section 98(2) - section 104 - power to declare advance ruling void ab-initio - Sustainability of the impugned advance ruling in face of allegation that it was obtained by suppression of facts concerning an investigation - HELD THAT: - The Appellate Authority examined whether the AAR's ruling could be declared void ab-initio on the ground that the applicant suppressed existence of proceedings. Section 104 empowers the AAR or Appellate Authority to recall an advance ruling if it was obtained by fraud, suppression or misrepresentation, but the proviso to section 98(2) bars admission where a question is already pending under the Act. The record established that the investigation relied on by the Revenue related to the erstwhile service-tax regime and not to proceedings under the CGST Act. Consequently section 98(2) was not attracted and the allegation of suppression of a pending GST proceeding failed. The Appellate Authority further noted that recourse under section 104 is available to the authorities themselves to recall rulings; in any event no voiding was justified on the facts before it. [Paras 131, 132, 133]

The impugned advance ruling is not void ab-initio on the ground of suppression of proceedings, as the enquiry referred to related to service tax and section 98(2) is not attracted.

Definition of "supply" and requirement of consideration under section 7 - direct and immediate link between supply and consideration - Whether prize money/stakes received by horse owners from race clubs constitutes a "supply" taxable under the CGST Act - HELD THAT: - Applying section 7(1)(a), the Authority identified three essential ingredients for taxable supply: existence of supply of goods or services, it being for a consideration, and in course or furtherance of business. On the facts, the Authority found no service provided by horse owners to the clubs when horses win races: participation and winning are distinct events; only winning owners receive prize money, whereas mere provision of horses to enable the event (for which entry fees are paid) does not equate to a service that yields prize money to all participants. The requisite direct and immediate link between a supply by the owner and the prize payment was absent. The Authority rejected arguments treating the prize as consideration enriching the event, concluding that the element of consideration flowing from the club to all providers for a service was missing in the circumstances. [Paras 134, 135, 136, 137]

Prize money/stakes paid to owners on winning do not constitute a taxable "supply" under section 7 and therefore are not subject to GST.

Input tax credit inadmissible where no taxable supply (section 17(2)) - Entitlement of the respondent to claim input tax credit on expenses related to participation and training - HELD THAT: - Given the Authority's conclusion that the prize money is not a taxable supply by the horse owner, section 17(2) was applied to restrict input tax credit to inputs attributable to taxable supplies. Since there is no taxable outward supply by the respondent in relation to prize money, the input tax credit claimed on entry fees, training charges and similar expenses cannot be allowed. [Paras 138, 139]

The respondent is not entitled to avail input tax credit in respect of expenses connected to the prize-money activity.

Final Conclusion: The Appellate Authority sets aside the AAR order: the advance ruling was not void for alleged suppression (the referenced enquiry was under service tax, not GST), prize money received by horse owners on winning is not a taxable supply under section 7 of the CGST Act, 2017, and accordingly the respondent is not entitled to input tax credit for expenses attributable to that activity.

Composite supply - principal supply - supplies naturally bundled and supplied in conjunction - distinct persons by separate GST registrations (deeming fiction under Section 25(4)) - location of supplier of services where supply is from more than one establishment

Composite supply - principal supply - distinct persons by separate GST registrations (deeming fiction under Section 25(4)) - supplies naturally bundled and supplied in conjunction - Whether the supply of UPS systems and the erection, installation, commissioning and testing services to DMRC under the subject contract constitute a composite supply. - HELD THAT: - The Appellate Authority examined the definition of composite supply and its constituent requirements, namely that the supply must be made by a single taxable person to a recipient, comprise two or more taxable supplies which are "naturally bundled and supplied in conjunction with each other", and that one of the supplies be a principal supply. The Appellant demonstrated, and the Authority accepted, that the goods (UPS systems) were supplied by the Maharashtra GSTIN unit while the services (erection, installation, commissioning, testing) were supplied by the Delhi GSTIN unit, evidenced by separate invoices and the contractual and operational arrangements. Because separate GST registrations operating from different establishments are treated as distinct persons for GST purposes, the supplies were not made by a single taxable person as required for a composite supply. The Appellant's further contention that the services commence only after transfer of title to the goods and that the supplies are capable of being obtained independently supported the conclusion that the supplies are not "in conjunction" and no single supply can be regarded as the predominant or principal supply. The Advance Ruling Authority's earlier conclusion that the contract amounted to a composite supply merely because the supplies were recorded under one contract was found to overlook these legal requirements. Applying these determinative principles to the material facts, the Authority concluded that the essential conditions for composite supply were not satisfied. [Paras 46, 47, 48, 49, 50]

The impugned ruling is modified to hold that the supplies under the contract to DMRC do not constitute a composite supply in terms of the statutory definition, and therefore the finding of the AAR treating them as a composite supply is set aside.

Final Conclusion: The Appellate Authority modified the AAR ruling: the supply of UPS systems and the erection/installation/commissioning/testing services under the contract are not a composite supply under the CGST Act and the AAR's contrary conclusion is set aside.

Bail under Section 439 Cr.P.C. - Compoundable offence - Maximum sentence of five years - Absence of criminal antecedents - Pre-charge evidence not commenced - Adjudication for levy of penalty pending - Investigation continuing against multiple firms - Release on furnishing personal bond and sureties - Compliance with conditions under Section 437(3) Cr.P.C.

Bail under Section 439 Cr.P.C. - Compoundable offence - Maximum sentence of five years - Absence of criminal antecedents - Pre-charge evidence not commenced - Adjudication for levy of penalty pending - Investigation continuing against multiple firms - Release on furnishing personal bond and sureties - Compliance with conditions under Section 437(3) Cr.P.C. - Whether the petitioner is entitled to be released on bail in the case registered under the Rajasthan Goods and Services Tax Act, 2017. - HELD THAT: - The Court considered that the petitioner has been in custody since 5.02.2020, the offences are compoundable and attract a maximum sentence of five years, the petitioner has no criminal antecedents, adjudication in respect of penalty is yet to be completed and pre-charge evidence has not commenced. The Court noted that investigation against multiple firms is continuing and that no payment towards the alleged tax evasion had been made, but without expressing any opinion on the merits permitted bail. On this basis, balancing the custodial period, nature of the offences, absence of antecedents and the procedural posture of the case, the Court found it just and proper to enlarge the petitioner on bail subject to conditions.

Bail allowed and the petitioner is directed to be released on furnishing a personal bond and two sureties, subject to compliance with the conditions laid down under Section 437(3) Cr.P.C.

Final Conclusion: The bail application is allowed and the petitioner is enlarged on bail on the terms directed by the High Court, without expressing any opinion on the merits of the case.

Principles of natural justice - Opportunity of hearing - Violation of natural justice vitiating order - Quashing and remand for fresh consideration - Show cause notice preponement and prejudice to assessee - Non-compliance with Section 61 requirement for scrutiny of return - Fresh adjudication on merits after compliance with natural justice

Principles of natural justice - Opportunity of hearing - Violation of natural justice vitiating order - Quashing and remand for fresh consideration - Validity of the impugned adjudication dated 02.03.2020 and consequential recovery order dated 04.03.2020 in view of denial of opportunity of hearing. - HELD THAT: - The Court found that the adjudicating authority preponed the hearing and passed the final order without affording the petitioner the opportunity of hearing previously directed by the notice. The order produced civil and pecuniary consequences and thereby prejudiced the petitioner. For these reasons the impugned final order and the consequential recovery order were held to be tainted by violation of the principles of natural justice. The Court therefore quashed the impugned orders and remanded the matter to the authority for fresh consideration. The petitioner was permitted to appear before the authority and to raise all contentions previously urged, which the authority is obliged to decide after complying with principles of natural justice. Although the petitioner also alleged non-compliance with the procedural requirement under Section 61, the Court's decision for quash and remand rested on the breach of natural justice and directed fresh adjudication where such procedural contentions may be considered on merits by the authority.

Impugned orders dated 02.03.2020 and 04.03.2020 quashed and set aside; matter remanded for fresh adjudication after affording opportunity of hearing and deciding all issues afresh.

Final Conclusion: Writ petition allowed: the final adjudication and consequential recovery order were quashed for breach of natural justice and the matter remitted to the authority for fresh consideration after affording the petitioner an opportunity to be heard and for the authority to decide all issues afresh.

Anticipatory bail - custodial interrogation - prima facie evidence - connivance for tax evasion under GST - passer (mediator) facilitating evasion - investigation post-retirement - liberty versus sovereign function of tax collection

Anticipatory bail - custodial interrogation - prima facie evidence - Grant of anticipatory bail to the petitioner - HELD THAT: - The petition for anticipatory bail was considered in light of the material collected by the vigilance bureau, including call recordings and transcripts suggesting regular payment of money to the petitioner and an alleged scheme involving transporters, passers and departmental officials to facilitate evasion of GST. The Court observed that the allegations are serious, involve complex and multi-dimensional tax ramifications affecting the chain of input credit, and that custodial interrogation is necessary to investigate the matter fully. The Court declined to assess the ultimate evidentiary weight of the collected material at this stage, noting that deciding contested evidentiary questions now would adversely affect investigation and trial. Balancing personal liberty against the sovereign function of tax collection, the Court held that the latter prevails where arrest is imperative for a fair and full investigation. [Paras 11, 12, 13, 14]

No anticipatory bail; petition dismissed and custodial interrogation permitted for fair and full investigation.

Investigation post-retirement - connivance for tax evasion under GST - Effect of the petitioner's retirement on the investigation - HELD THAT: - The Court held that the petitioner's retirement (on 31st March, 2020) does not bar investigation into alleged offences which originated prior to retirement. The investigation relates to acts and material collected for a period prior to the FIR and for the preceding year, and therefore retirement is not a ground to preclude custodial interrogation or continued inquiry. [Paras 12]

Retirement does not debar investigation; it is not a reason to grant anticipatory bail.

Statement of witness and its reliability - custodial interrogation - Reliability of the statement of Sukhwinder Singh @ Shinda at the anticipatory-bail stage - HELD THAT: - The Court refrained from adjudicating the ultimate reliability or evidentiary value of the statement of Sukhwinder Singh @ Shinda or other investigative material at the anticipatory-bail stage. It held that determining the vagueness or weight of such statements at this stage would prejudice the ongoing investigation and trial; such matters are to be investigated and adjudicated in the course of the investigation/trial. [Paras 12]

Reliability of the witness statement not finally determined at this stage; left to investigation and trial.

Final Conclusion: The petition for anticipatory bail is dismissed; custodial interrogation and further investigation are permitted, the petitioner's retirement does not bar investigation, and disputed evidentiary questions (including the reliability of witness statements) are reserved for investigation and trial.

Reopening of assessment u/s 147 - original order u/s 143(3) - change of opinion - disallowance made of loss on sale of stores treating them to be revenue in nature - As per HC [2019 (6) TMI 615 - GUJARAT HIGH COURT] Department's appeal is dismissed. The reassessment proceedings were quashed as being based on an impermissible change of opinion without any fresh material, and the Tribunal's deletion of the disallowance in respect of loss on sale of stores is upheld.

HELD THAT:- No reason to interfere in the matter. The special leave petition is dismissed, leaving all the questions of law open.

Assessment u/s 153A - absence of any incriminating material in search - HC [2017 (10) TMI 1539 - DELHI HIGH COURT] allowed assessee appeal - HELD THAT:- Learned counsel for the petitioner, on instructions issued by the Department of Revenue, Ministry of Finance vide F. No. 390/Misc./116/2017-JC dated 22-8-2019, seeks permission to withdraw this special leave petition along with pending applications therein due to low tax effect.

Permission granted, subject to just exceptions. SLP and pending applications are dismissed as withdrawn, leaving question(s) of law open.

Summary order. All captioned tax appeals dismissed by the High Court as the substantial questions of law raised by the revenue were already authoritatively settled by this Court and the Tribunal had placed reliance on that earlier decision.

Re-opening of assessment under section 148 - reason to believe under section 147 - failure to disclose fully and truly all material facts - change of opinion - transfer by way of gift and exemption under section 47(iii) - capital gains chargeability under section 45

Re-opening of assessment under section 148 - reason to believe under section 147 - failure to disclose fully and truly all material facts - change of opinion - Validity of the notice dated 22.03.2019 under section 148 (re-opening beyond four years) on the ground that income had escaped assessment due to failure to disclose fully and truly all material facts - HELD THAT: - The Court examined whether the assessing officer had a live link between the reasons recorded and a bona fide belief that income had escaped assessment by reason of the assessee's failure to disclose fully and truly all material facts. The judgment reiterates that for issuance of a notice beyond four years the assessing officer must have reasons showing both a genuine 'reason to believe' and that such belief arises from non-disclosure of material primary facts, not from a mere change of view on the same disclosed facts. The facts show that the petitioner had made specific disclosures in the return, in notes to the profit and loss account, furnished detailed responses to notices under section 142(1), and produced board resolution and explanations during the scrutiny assessment which culminated in an assessment under section 143(3). The post-assessment material relied upon by the assessing officer consisted of departmental communications and an appellate order in respect of a different group entity; those materials did not supply primary facts which were not earlier disclosed by the petitioner. The Court held that the assessing officer's subsequent treatment of the same set of facts as indicating a colourable device amounted to a change of opinion, and that change of opinion on the same disclosed primary facts is not a permissible foundation for re-opening a concluded assessment. Consequently the notice under section 148 and the rejection of objections were held to be without jurisdiction and liable to be quashed. [Paras 19, 20, 21, 29, 32]

Impugned notice dated 22.03.2019 and order dated 09.09.2019 are invalid insofar as they re-open the assessment on the basis of an alleged non-disclosure; the re-opening is a forbidden change of opinion and is quashed.

Transfer by way of gift and exemption under section 47(iii) - capital gains chargeability under section 45 - Whether the transfer of ZEE shares to a related unlisted group entity was taxable as capital gains or was an exempt gift under section 47(iii), and whether subsequent departmental appellate findings justified reopening the petitioner's assessment - HELD THAT: - The Court considered the legal scheme: transfers ordinarily attract tax under section 45 but clause (iii) of section 47 excludes transfers under a gift from capital gains taxation. The petitioner had specifically disclosed the transfer as a nil-consideration transfer (gift), furnished supporting board resolution and explanations during scrutiny, and the assessing officer accepted that position in the assessment under section 143(3). The departmental material relied upon post-assessment comprised an appellate order in relation to another group entity which treated a similar transaction as a colourable device; however, the Tribunal in a later decision (Jayneer Infrapower and Multiventures Pvt. Ltd.) held such transfers by way of gift to be genuine and exempt under section 47(iii). The Court observed that the subsequent appellate view in a different file could not overturn the concluded assessment where the primary facts had been disclosed and accepted; given the Tribunal's categorical contrary finding that such transfers are gifts and not taxable capital gains, the very foundation for reopening in this case no longer survived. [Paras 27, 28, 30, 31, 32]

Transfer of shares as disclosed and accepted as a gift falls within section 47(iii) and is not a proper basis for re-opening; the departmental appellate material relied upon does not justify re-opening the petitioner's concluded assessment.

Final Conclusion: Writ petition allowed; the notice dated 22.03.2019 under section 148 and the order dated 09.09.2019 rejecting objections are set aside and quashed as re-opening amounted to impermissible change of opinion and lacked foundation in view of disclosure and the exemption under section 47(iii).

Treatment of divergent cash sale rates vis-a -vis sales to jewellers - disallowance of interest on account of alleged diversion of interest free funds - tax consequences of credit and debit notes pending finality of arbitration - repayment of debt as squaring off of earlier debit and not creation of fresh taxable credit

Treatment of divergent cash sale rates vis-a -vis sales to jewellers - Whether lower rates charged for cash sales compared to sales to jewellers can be regarded as suppression of income when both are not credit sales. - HELD THAT: - The Tribunal, after examining invoices, diary entries, statements and the absence of incriminating parallel books, accepted the assessee's commercial explanation that cash sales were offered at slightly lower rates to obtain immediate realization while sales to jewellers involved cheque collections and a short collection lag. The CIT(A)'s factual findings about pricing practice, market rates followed (LMB adjustments) and the assessee's need to know internal practice were affirmed by the Tribunal. On the material before it the Tribunal concluded there was no basis to treat the differentiated rates as suppression of sales, and the appellate courts upheld that factual conclusion.

Finding of the Tribunal/CIT(A) that lower cash sale rates did not amount to suppression of income is affirmed; Substantial Question of Law answered against Revenue and in favour of the assessee.

Disallowance of interest on account of alleged diversion of interest free funds - Whether disallowance of interest is warranted on the basis that interest free advances/loans represented diversion of interest bearing funds. - HELD THAT: - The Assessing Officer applied a uniform 12% rate and disallowed interest alleging diversion. The CIT(A) analyzed the assessee's capital structure, investments and the pattern of interest free advances received and given, finding no evidence that interest bearing funds were diverted to create interest free advances or investments. The Tribunal concurred with the CIT(A)'s examination of records for the assessment years 2006 07 to 2012 13 and found the Assessing Officer's conclusion to be unsupported by material showing diversion of interest bearing funds. On this factual and evidential basis the disallowance was set aside.

Disallowance of interest under the facts was not justified; Substantial Question of Law answered against Revenue and in favour of the assessee.

Tax consequences of credit and debit notes pending finality of arbitration - Whether additions can be made on account of credit notes raised by M/s.MMTC Ltd. before the arbitration between the parties attains finality. - HELD THAT: - The Assessing Officer had taken into account credit notes (and in part ignored corresponding debit notes) to make additions. The CIT(A) directed set off of debit notes against credit notes and to assess on the net. The Tribunal noted ongoing litigation and arbitration between the parties, including orders of this Court and the Supreme Court appointing an arbitrator and fixing timelines, and observed that the outcome of the arbitration would materially affect the reconciliation and quantum. In light of the pending arbitral proceedings and criminal proceedings earlier quashed, the Tribunal held that additions based on the disputed credit/debit adjustments could not be finally quantified and should await the arbitral award; Revenue's request to invoke Section 150 was declined as unnecessary. The appellate courts upheld the Tribunal's approach deferring taxation consequences until arbitration reaches finality.

Additions computed solely on the credit notes were set aside and the Tribunal's decision to defer recognition until arbitration is final upheld; Substantial Question of Law answered against Revenue and in favour of the assessee.

Repayment of debt as squaring off of earlier debit and not creation of fresh taxable credit - Whether a repayment by a debtor recorded as a credit in the assessee's books for the year ending 31.03.2012 (AY 2012 13) constitutes a fresh unexplained credit liable to addition. - HELD THAT: - The Assessing Officer added the amount for want of confirmation. The CIT(A) on remand accepted the assessee's explanation, supported by the remand report, that the credit in the company's books represented repayment of earlier advances made when the business was a proprietorship and thus merely squared off an earlier debit. The Tribunal verified that the later entries were repayment of earlier advances recorded in the proprietorship books and concluded that repayment by a debtor does not create a fresh taxable credit but extinguishes the earlier debit. The Court found the issue to be essentially factual and without perversity in the Tribunal's approach.

Tribunal's confirmation of CIT(A)'s finding that the entry was repayment squaring off earlier debit is sustained; no substantial question of law arises.

Final Conclusion: The appeals filed by the Revenue are dismissed. Substantial Questions of Law Nos.1 to 3 are answered against the Revenue and in favour of the assessee; Question No.4 raises no substantial question of law. No costs.

Characterisation of land as agricultural under Section 2(14)(iii) - capital gains liability under Section 45(1) consequent to classification of land - validity and effect of conversion/approval from agricultural to non agricultural use - weight of contemporaneous local revenue records and certificates in determining land character

Characterisation of land as agricultural under Section 2(14)(iii) - validity and effect of conversion/approval from agricultural to non agricultural use - weight of contemporaneous local revenue records and certificates in determining land character - The lands sold were agricultural lands within the meaning of Section 2(14)(iii) on the date of sale. - HELD THAT: - The Tribunal and the first appellate authority found on the facts that agricultural operations were being carried out on the lands (standing banana and coconut crops etc.), and contemporaneous local revenue records and certificates (Village Administrative Officer certificate dated 01.12.2008, Panchayat President certificate, Sub Registrar's note appended to the sale deed, statements of neighbouring landowners and revenue records) supported the conclusion that the land was used for cultivation. The DTCP approval relied on by the Revenue was held not to be decisive: the DTCP was not the final authority for reclassification under the statutory scheme and the procedure for conversion under the relevant Town and Country Planning law is elaborate, with ultimate decision resting with the Government. The first appellate authority applied the multi factor test from Smt. Sarifabibi Mohmed Ibrahim and found the majority of factors in favour of the assessees. On these findings of fact - which the High Court found unimpeachable - the lands retained their agricultural character on the date of sale. [Paras 10, 11, 12, 13, 14]

Findings of fact recorded by the CITA and the Tribunal that the lands were agricultural on the date of sale are upheld and the lands are agricultural within Section 2(14)(iii).

Capital gains liability under Section 45(1) consequent to classification of land - characterisation of land as agricultural under Section 2(14)(iii) - Sale consideration did not attract capital gains tax under Section 45(1) because the lands were agricultural on the date of sale. - HELD THAT: - The assessing officer treated the lands as capital assets and held the sale liable to capital gains tax, relying on the DTCP approval and the absence of agricultural operations as per the certificate before that authority. The CITA and the Tribunal, however, recorded contrary findings of fact - notably, evidence of cultivation, village and panchayat certificates, Sub Registrar's note, revenue records and previous declaration/payment of agricultural income - and applied the established test to conclude that the lands had not ceased to be agricultural. On that factual foundation the Tribunal set aside the addition. The High Court found no error in this approach or in the factual conclusions and therefore held that Section 45(1) did not apply to attract capital gains tax on the sale proceeds. [Paras 5, 6, 13, 18]

The Tribunal's conclusion that the sale did not give rise to chargeable capital gains under Section 45(1) is sustained.

Final Conclusion: The appeals by the Revenue are dismissed; the substantial questions of law are answered against the Revenue and the findings of the Tribunal and the Commissioner (Appeals) that the lands were agricultural and not chargeable to capital gains are upheld.

Disallowance under Section 40A(3) - first proviso to Section 40A(3) - exemption having regard to banking facilities, business expediency and other relevant factors - Rule 6DD - circumstances for exemption from payment by account-payee cheque - genuineness of transactions and identification of payees - business/commercial expediency - concurrent findings and substantial question of law under Section 260A

First proviso to Section 40A(3) - exemption having regard to banking facilities, business expediency and other relevant factors - Rule 6DD - circumstances for exemption from payment by account-payee cheque - business/commercial expediency - Whether payments in cash beyond the prescribed limit could be exempted from disallowance under the proviso to Section 40A(3) by falling within the circumstances of Rule 6DD or by showing business expediency - HELD THAT: - The Court examined the proviso to Section 40A(3) together with Rule 6DD and concluded that the relief under the proviso is confined to the circumstances prescribed by Rule 6DD. For the assessment years in question (2014-15 and 2015-16) the relevant clauses of Rule 6DD which previously afforded protection were not available; the appellants could not bring their cases within any clause of Rule 6DD. Business or commercial expediency is a question of fact to be judged in light of the surrounding circumstances; periodic cash payments where banking facilities were available, and continued use of cash despite awareness of the statutory limit, weigh against finding an exceptional circumstance. Accordingly the authorities were entitled to hold against the assessees on the question whether the payments fell within the proviso to Section 40A(3). [Paras 14, 15, 16, 17, 20]

Assessees could not invoke the proviso to Section 40A(3) or Rule 6DD for the payments in question; disallowance under Section 40A(3) was sustained.

Genuineness of transactions and identification of payees - disallowance under Section 40A(3) - concurrent findings and substantial question of law under Section 260A - Whether the Assessing Officer (and appellate authorities) erred in declining to accept the appellants' documentary explanations (lists, confirmations, PANs) and in not restoring the matter for verification of those documents - HELD THAT: - The Court noted that genuineness and identification of payees may be relevant factors when testing whether a case falls within the exceptions prescribed by Rule 6DD, but where the Rule's clauses do not apply (as in these assessment years) genuineness alone cannot displace the statutory prohibition. The authorities recorded concurrent factual findings - including the substantial quantum and periodicity of cash payments, availability of banking facilities at the assessee's place of business, and failure to demonstrate unavoidable circumstances - and the Court declined to reappraise these findings as a third appellate forum. There was no requirement to remit the matter solely to verify documents when the legal test (existence of prescribed exceptional circumstances) was not met and when factual conclusions adverse to the assessee had been recorded. [Paras 13, 15, 16, 17, 18]

No merit in the contention that the matter should have been restored for verification; the authorities were justified in rejecting the documents and upholding the addition.

Final Conclusion: Appeals dismissed; concurrent factual and legal findings upholding disallowance under Section 40A(3) affirmed and no substantial question of law arises under Section 260A for the assessment years 2014-15 and 2015-16.

Condonation of delay - power of the Commissioner (Appeals) to admit delayed appeal for sufficient cause under Section 249(3) - requirement to record satisfaction and reasons when exercising discretion to condone delay - remand for fresh decision with opportunity of hearing

Condonation of delay - power of the Commissioner (Appeals) to admit delayed appeal for sufficient cause under Section 249(3) - requirement to record satisfaction and reasons when exercising discretion to condone delay - The Commissioner of Income Tax (Appeals) failed to properly exercise and record satisfaction in refusing to condone delay in filing the appeal; the order rejecting the appeal on the ground of delay is set aside and the matter is remanded for fresh consideration. - HELD THAT: - The Court examined the condonation application and the impugned order and found that the Commissioner of Income Tax (Appeals) did not record the materials or reasons constituting the requisite satisfaction under Section 249(3) to refuse condonation. The impugned order simply concluded that the grounds for rectification under Section 154 had no connection with the issues in the appeal, without explaining the basis for that conclusion or identifying the materials relied upon. Because the statutory discretion to admit a delayed appeal requires a satisfaction arrived at after considering relevant facts and circumstances, the absence of articulated reasoning rendered the rejection unsustainable. In the interests of justice, the Court remanded the matter to the Commissioner of Income Tax (Appeals) to decide afresh the question of condonation of delay after issuing proper notice and affording the assessee a reasonable opportunity to be heard and to rely on any grounds or materials she wishes to place before the authority. The Court did not express any view on the merits of the appeal itself and specified a timeline for disposal on remand. [Paras 7, 10, 11, 12, 13]

Impugned order dated 21.05.2019 is set aside; matter remanded to the Commissioner of Income Tax (Appeals) to reconsider the condonation of delay after issuing notice and affording opportunity of hearing, and to pass a reasoned order within 60 days.

Final Conclusion: Writ petition allowed to the extent of setting aside the CIT(A)'s order rejecting the appeal as time-barred; matter remitted to the Commissioner of Income Tax (Appeals) for de novo consideration of the condonation application with issuance of notice and opportunity to the assessee, and disposal within 60 days.

Reopening/reassessment under Section 147/148 - limitation for reassessment - provision for giving effect to appellate or court orders (Section 150(1)) - rectification of mistake apparent from record (Section 254(2)) - change of stand by the assessee and competence to admit fresh grounds in appeal - year of chargeability for capital gains

Reopening/reassessment under Section 147/148 - limitation for reassessment - provision for giving effect to appellate or court orders (Section 150(1)) - Validity of the reassessment notice dated 10.06.2011 for AY 2001-02 and whether reassessment was barred by limitation or was maintainable under Section 150(1) in consequence of the ITAT order dated 31.05.2010. - HELD THAT: - The Court found that the learned Tribunal wrongly held the reassessment for AY 2001-02 to be time-barred without adequately applying the exception in Section 150(1), which permits issuance of notice notwithstanding Section 149 where assessment is to be made to give effect to a finding or direction contained in an appellate or court order. The High Court held that the Tribunal had misread Section 150(2) and had not gone to the root of whether the Tribunal's observations required the Assessing Officer to give effect by reopening for AY 2001-02. Given the interrelation between the Tribunal's order for AY 2003-04 & 2004-05 and the reassessment steps taken for AY 2001-02, the Court concluded that the matter required fresh consideration by the Assessing Authority under Section 150(1) so that limitation could not be invoked mechanically to defeat the operation of a direction to give effect to a higher forum's order. The Court therefore set aside the Tribunal's majority view on limitation and directed de novo reassessment in accordance with Section 150(1). [Paras 13, 17, 28, 36, 37]

The Tribunal's holding that reassessment for AY 2001-02 was barred by limitation is set aside and the matter is remitted to the Assessing Authority to re-examine and, if appropriate, undertake reassessment under Section 150(1); the Assessing Authority may give effect to the appellate observations and limitation cannot be invoked to preclude such action in the manner the Tribunal did.

Change of stand by the assessee and competence to admit fresh grounds in appeal - year of chargeability for capital gains - rectification of mistake apparent from record (Section 254(2)) - Whether the ITAT erred in allowing the assessee's altered contention (that capital gains arose in AY 2001-02) in appeals for AY 2003-04 and AY 2004-05, and whether the Tribunal should have remanded the fresh ground or corrected the apparent mistake instead of granting relief. - HELD THAT: - The Court criticised the Tribunal for permitting the assessee to take a 'U-turn' before it and for deciding, on that new ground, that no capital gains arose in AY 2003-04 and AY 2004-05 despite the admitted sales in March 2003. The High Court held that the Tribunal should not have admitted and decided a fresh ground which was not raised before the CIT(A), but should either have confined itself to the computation issue, remanded the fresh ground to the CIT(A) for consideration, or directed the Assessing Officer to give effect to any finding by initiating reassessment under Section 150(1). The Court further held that the Tribunal erred in refusing to rectify the mistake apparent on record under Section 254(2) when the Revenue pointed out the error, since the statutory power permits amendment to correct such mistakes (subject to the proviso where liability is increased). In view of these errors and the consequences of the Tribunal's orders (including withdrawal of Revenue appeals), the High Court set aside the ITAT order dated 31.05.2010 and remitted the whole question of taxability, year of chargeability and computation for fresh adjudication by the Assessing Authority. [Paras 6, 25, 26, 27, 36]

The Tribunal's order allowing the assessee relief for AY 2003-04 and AY 2004-05 on the basis of the changed stand is set aside; the Tribunal erred in not remanding or rectifying the apparent mistake, and the matter is restored to the Assessing Authority for de novo consideration of capital gains tax liability, year of chargeability and computation.

Final Conclusion: The High Court set aside the Tribunal's orders for AY 2001-02, AY 2003-04 and AY 2004-05 and restored the matters to the Assessing Authority for fresh adjudication de novo on taxability, year of chargeability and computation of capital gains; the Assessing Authority is directed to proceed under Section 150(1) to give effect to appellate observations, and the assessee cannot rely on limitation objections which were incorrectly sustained by the Tribunal.

Deduction under section 80IA(4) - Infrastructure facility - Inland port - Book profit under section 115JB - Disallowance under section 14A read with Rule 8D - Average value of investments yielding exempt income - Attribution of interest to exempt income - Use of self-owned funds versus borrowed funds - Precedence of Special Bench decision

Deduction under section 80IA(4) - Infrastructure facility - Inland port - Assessee entitled to deduction under section 80IA(4) in respect of CFS activities. - HELD THAT: - The Tribunal found that the assessee's Container Freight Station (CFS) activities constitute an "infrastructure facility" as contemplated by the Explanation to section 80IA(4) and qualify as an "inland port" for the purposes of that provision. That conclusion is supported by earlier Tribunal orders in the assessee's own cases, the Division Bench decision of the Delhi High Court (Container Corporation of India Ltd.), related communications from Central authorities classifying ICDs/CFSs as inland ports, and subsequent affirmation by the Bombay High Court and reliance on the Supreme Court authority in Container Corporation of India Ltd. Given the consistent judicial and administrative material, the Tribunal concluded the CIT(A) was correct in allowing the claim under section 80IA(4) and found no infirmity in that conclusion. [Paras 6]

Order of CIT(A) confirming allowance of deduction under section 80IA(4) for the CFS is upheld; revenue appeal on this ground dismissed.

Disallowance under section 14A read with Rule 8D - Book profit under section 115JB - Average value of investments yielding exempt income - Attribution of interest to exempt income - Use of self-owned funds versus borrowed funds - Precedence of Special Bench decision - Treatment and computation of disallowance under section 14A for the purpose of computing book profit under section 115JB. - HELD THAT: - Relying on the Special Bench decision in ACIT v. Vireet Investment Pvt. Ltd., the Tribunal held that while computing book profit under clause (f) of Explanation 1 to section 115JB(2) the Assessing Officer shall not apply the computation mechanism of section 14A read with Rule 8D. Further, for calculating any disallowance the average value of investments to be taken into account is limited to those investments which actually yielded exempt income in the year. The Tribunal accepted the assessee's contention that if investments in exempt-income yielding assets were made entirely out of self-owned funds (and not by utilising interest-bearing borrowed funds), then no part of interest expense need be disallowed; however, that factual claim requires verification by the AO and, if substantiated, will negate any 14A disallowance. The Tribunal therefore remitted computation/verification to the AO in accordance with the Special Bench ratio and directed recomputation of book profit. [Paras 7]

CIT(A)'s approach, following the Special Bench, is accepted; AO to recompute book profit under section 115JB without applying section 14A/Rule 8D methodology and to verify whether investments were funded by self-owned funds - if so, no 14A disallowance; assessee's ground partly allowed and revenue's ground dismissed.

Final Conclusion: The revenue's appeal is dismissed. The assessee's appeal is partly allowed: the Tribunal upholds allowance of deduction under section 80IA(4) for the CFS; on the section 14A disallowance for computing book profit under section 115JB the matter is remitted to the AO to recompute in accordance with the Special Bench ratio and to verify whether exempt-income investments were financed from self-owned funds (in which case no interest disallowance arises).

Treatment of interest on non-performing assets - mercantile vs cash system of accounting - recognition of income on realization basis for non-performing assets - binding precedent of the jurisdictional High Court - Vivad Se Vishwas Act, 2020 settlement - withdrawal of appeal

Treatment of interest on non-performing assets - mercantile vs cash system of accounting - recognition of income on realization basis for non-performing assets - binding precedent of the jurisdictional High Court - Deletion of addition of interest income accrued on non-performing assets confirmed in favour of the assessee. - HELD THAT: - The Tribunal examined whether interest accrued on assets classified as non-performing assets (NPAs) but not accounted for by the assessee ought to be brought to tax on accrual basis despite the assessee's hybrid accounting. Applying and following the binding decisions of the jurisdictional High Court in Canfin Homes Ltd. and the decision in Shri Siddeshwar Co-operative Bank Ltd., and the coordinate bench's earlier orders in the assessee's own case for earlier assessment years, the Tribunal held that once an asset is classified as NPA it is deemed not to be yielding income and income from such assets is to be recognised only when actually received. Consequently, the addition of interest income on NPAs was not sustainable and the order of the CIT(A) deleting that addition was affirmed. [Paras 11, 12]

Addition of interest income on non-performing assets deleted; appeal of the revenue dismissed on this issue.

Vivad Se Vishwas Act, 2020 settlement - withdrawal of appeal - liberty to seek recall - Assessee's appeal (challenging confirmation of additions relating to interest on standard assets, disallowance under section 40(a)(ia) and section 37(2B)) dismissed as withdrawn because the assessee opted for settlement under the Vivad Se Vishwas Act, 2020. - HELD THAT: - The assessee informed the Tribunal that it had initiated settlement under the Vivad Se Vishwas Act, 2020 by filing Forms 1 and 2 and would move to withdraw the present appeal. The Tribunal found that keeping the appeal pending served no purpose and dismissed the assessee's appeal as withdrawn. The Tribunal noted the assessee's stated concern about receiving Form No.3 and expressly granted liberty to apply for recall of the order in accordance with law if necessary. [Paras 13, 14, 15]

Assessee's appeal dismissed as withdrawn; liberty granted to move for recall if warranted.

Final Conclusion: For Assessment Year 2012-13 the Tribunal upheld deletion of the addition of interest on non-performing assets (in favour of the assessee) following binding High Court precedent; the assessee's separate appeal against other additions was dismissed as withdrawn pursuant to settlement under the Vivad Se Vishwas Act, 2020, with liberty to seek recall of the dismissal in accordance with law.

Arm's length price - Transfer pricing comparability analysis - Transactional Net Margin Method - Function, assets and risks (FAR) analysis - working capital and risk adjustments - reference to the Transfer Pricing Officer under section 92CA - exclusion of comparable for lack of opportunity to be heard

Arm's length price - Transactional Net Margin Method - Dismissal of grounds 1, 13 and 14 and preliminary contest on transfer pricing adjustment limited to grounds 2-12 - HELD THAT: - The Tribunal recorded that grounds 1 (general), 13 (chargeability of interest under sections 234B/234C) and 14 (initiation of penalty under section 271(1)(c)) had no specific arguments before it and were dismissed for lack of merit. Consequently the appeal proceeds only on transfer pricing issues raised in grounds 2-12 concerning arm's length pricing determined under TNMM. [Paras 3]

Grounds 1, 13 and 14 dismissed; appeal proceeds in part on grounds 2-12 relating to transfer pricing adjustment under TNMM.

Transfer pricing comparability analysis - Function, assets and risks (FAR) analysis - Treatability of Persistent Systems Ltd as a comparable - HELD THAT: - The Tribunal examined the standalone financial statements relied upon by the TPO and found Persistent Systems' revenue in the relevant year derived from software services with no product sales on standalone basis. The coordinate bench precedents relied upon by the assessee pertained to consolidated statements or different facts; the Tribunal held comparability must be tested by FAR of the assessee vis a vis the comparable for the same year. On that basis the Tribunal found no infirmity in the TPO/DRP conclusion that Persistent Systems Ltd was functionally comparable and refused the assessee's plea for exclusion. [Paras 15, 16, 20, 21]

Persistent Systems Ltd retained as a comparable; plea for exclusion rejected.

Transfer pricing comparability analysis - Larsen & Toubro Infotech Ltd (L&T Infotech) excluded from final selection pending consideration by DRP of assessee's objections - HELD THAT: - The assessee contended that its objections to inclusion of L&T Infotech were not considered by the DRP. The Tribunal found merit in that procedural complaint and set aside inclusion of L&T Infotech for reconsideration by the DRP so that the assessee's objections may be addressed. [Paras 22]

Comparable L&T Infotech remitted to the DRP for fresh decision on the assessee's objections.

Transfer pricing comparability analysis - Sasken Communication Technologies Ltd remitted to TPO to explain change in reported margin - HELD THAT: - The assessee pointed out an unexplained discrepancy between the margin shown for Sasken in the show cause notice (7.28%) and the margin applied in the TPO's order (33.20%). The Tribunal found no justification recorded for this change and accordingly set aside the inclusion of Sasken to the file of the TPO with direction to demonstrate the basis for the change in margin. [Paras 23, 25]

Inclusion of Sasken set aside; TPO directed to explain and justify the change in margin before finalising comparability.

Exclusion of comparable for lack of opportunity to be heard - Transfer pricing comparability analysis - Cybercom Datamatics Information Solutions Ltd excluded from comparability set for lack of prior inclusion in show cause notice - HELD THAT: - The Tribunal observed that Cybercom Datamatics did not appear in the TPO's show cause notice but was inserted in the final order under section 92CA(3) without giving the assessee an opportunity to contest that comparable. For want of proper opportunity to the assessee, the Tribunal directed the TPO to exclude Cybercom Datamatics from the comparability analysis. [Paras 26]

Cybercom Datamatics excluded from comparability as assessee was not given opportunity to contest it in the show cause proceedings.

Working capital and risk adjustments - Transfer pricing comparability analysis - Claim for working capital and risk adjustments rejected for lack of substantiation - HELD THAT: - The Tribunal noted that no specific arguments, workings or computations for working capital or other risk adjustments were furnished before the TPO, DRP or the Tribunal. The assessee had not pressed these quantifications before lower authorities either. In the absence of any substantiation or prior claim, the Tribunal found no merit in granting such adjustments. [Paras 28]

Claim for working capital and other risk adjustments dismissed for lack of supporting workings and failure to raise before lower authorities.

Final Conclusion: The appeal is partly allowed: the transfer pricing adjustments are remitted in part - Persistent Systems retained as comparable; L&T Infotech remitted to the DRP for reconsideration; Sasken remitted to the TPO for justification of margin change; Cybercom Datamatics excluded for failure to afford opportunity; working capital and risk adjustment claims dismissed for want of substantiation. Grounds 1, 13 and 14 dismissed.

Registration under section 12AA - retroactive registration - prospective grant of registration - benefits under sections 11 and 12 - issuance of duplicate registration certificate - assessment orders as evidence of charitable status

Registration under section 12AA - retroactive registration - assessment orders as evidence of charitable status - Whether the registration under section 12AA should be treated as effective from 13.8.1973 instead of being granted prospectively from Assessment Year 2019-20. - HELD THAT: - The Tribunal examined the record including Form No.10A filed in 1973 and a series of assessment orders (including for Assessment Years from 1975-76 onwards) in which the department had consistently accepted the assessee as a charitable trust and allowed benefits under sections 11 to 13. The Department failed to rebut the documentary evidence showing long-standing acceptance of the assessee's charitable status. In these circumstances the Tribunal held that the assessee's claim of registration w.e.f. 13.8.1973 had sufficient merit and that the registration which had been granted prospectively ought to be made effective from 13.8.1973 so as to enable the assessee to claim exemptions under sections 11 and 12 for preceding years where applicable. [Paras 11, 13, 14]

Registration under section 12AA is to be effective from 13.8.1973 and the order of the CIT (Exemption) dated 20.8.2019 shall be amended accordingly.

Prospective grant of registration - benefits under sections 11 and 12 - issuance of duplicate registration certificate - Consequences and further action following direction to make registration retrospective. - HELD THAT: - The Tribunal directed the CIT (Exemption) to amend the registration order to reflect effectiveness from 13.8.1973. It recognised that, once such retrospective registration is issued, the assessee will be entitled to seek rectification of past assessment orders and claim exemptions under section 11 where previously denied. The Tribunal thereby granted the assessee liberty to approach the assessing officer for rectification and computation for the relevant assessment years; the matter of quantification or adjustment of refunds/demands was left to the assessing officer to decide in accordance with the amended registration. [Paras 14]

CIT (Exemption) to issue fresh registration effective from 13.8.1973; assessee granted liberty to apply to the assessing officer for rectification/adjustment for earlier assessment years.

Final Conclusion: The appeal is allowed: the registration under section 12AA is to be treated as effective from 13.8.1973; the CIT (Exemption) is directed to amend the registration order dated 20.8.2019 accordingly and the assessee may pursue rectification before the assessing officer for prior assessment years to claim applicable exemptions under sections 11 and 12.

Deduction under clause (iii) of section 57 - Interest paid on borrowed funds as deduction against interest income - Nexus between loans advanced and interest paid - Mixed funds and allocation of borrowed funds - Remand for verification of factual nexus - Classification of interest receipts as Income from Other Sources

Deduction under clause (iii) of section 57 - Interest paid on borrowed funds as deduction against interest income - Nexus between loans advanced and interest paid - Mixed funds and allocation of borrowed funds - Remand for verification of factual nexus - Whether interest paid on term loans is allowable as deduction under clause (iii) of section 57 against interest income earned on loans advanced to associate concerns, and whether the matter requires remand for verification of nexus. - HELD THAT: - The assessee admitted that borrowed term loan funds were not actually applied to the business for which they were obtained and that the advances to associate concerns were made while the assessee had substantial partner capital. The AO treated the interest receipts as income from other sources but did not allow corresponding deduction under clause (iii) of section 57. The CIT(A) directed verification and computation of deduction under clause (iii) and indicated prima facie that borrowing was used to earn interest. The Tribunal observed that there is no concrete finding on record establishing that the interest paid was incurred for the purpose of earning interest and noted absence of documentary evidence about the conditions of the term loan. Given the admitted use of funds and the existence of mixed funds, the Tribunal held that the question of allowance under clause (iii) hinges on factual determination of nexus between loans advanced and interest paid. The Tribunal found the CIT(A)'s course of remitting the matter to the AO contrary to the scope of CIT(A)'s jurisdiction in the circumstances, but considered it proper to remit the issue back to the CIT(A) for verification of nexus and fresh decision after permitting the assessee to produce relevant evidence. The Tribunal set aside the CIT(A)'s order insofar as it directed computation by the AO and remanded the issue to the CIT(A) to examine and decide the claim in accordance with law. [Paras 6]

The matter is remitted to the CIT(A) to verify the nexus between loans advanced and interest paid for the purpose of allowance under clause (iii) of section 57, with liberty to the assessee to file evidence; the CIT(A)'s order is set aside to that extent.

Final Conclusion: The Revenue's appeal is allowed for statistical purpose; the Tribunal remanded the question of allowance of interest under clause (iii) of section 57 to the CIT(A) for verification of factual nexus between the loans advanced and the interest paid and for fresh decision in accordance with law.

Proportionate deduction under section 80IB(10) for eligible units - Separate residential units treated as distinct housing projects for deduction - Application of tribunal precedents

Proportionate deduction under section 80IB(10) for eligible units - Separate residential units treated as distinct housing projects for deduction - Whether proportionate (pro rata) deduction under section 80IB(10) is allowable in respect of eligible units of the housing project despite certain units exceeding the prescribed area limit. - HELD THAT: - The Assessing Officer denied the entire deduction under section 80IB(10) on the ground that certain bungalows/row houses exceeded 1500 sq. ft., relying on a Valuation Officer's report. The assessee alternatively sought deduction on a proportionate basis for eligible units and relied on earlier orders of the Tribunal. The Commissioner (Appeals) applied the Tribunal's consistent view that independent residential units or row houses, where other conditions are satisfied, can be treated as separate residential projects or eligible units for the purpose of section 80IB(10) and allowed pro rata deduction in respect of eligible units while disallowing the claim for ineligible bungalows/row houses. The Tribunal, after consideration of the material on record and the authorities followed by the Commissioner (Appeals), found no infirmity in that approach and affirmed the allowance of proportionate deduction for eligible units. [Paras 4, 5]

Proportionate deduction under section 80IB(10) is allowable in respect of eligible units of the assessee's housing project; the Commissioner (Appeals) order allowing pro rata deduction is upheld.

Final Conclusion: The Revenue's appeal is dismissed; the order of the Commissioner of Income Tax (Appeals) allowing proportionate deduction under section 80IB(10) in respect of eligible units for A.Y. 2011-12 is sustained.

Appealability of self-assessment orders - self-assessment as an assessment order - appeal under Section 128 of the Customs Act, 1962 - requirement of a reasoned/speaking order on verification and reassessment under Section 17 - remand for fresh adjudication on merits after affording opportunity and complying with principles of natural justice

Appealability of self-assessment orders - self-assessment as an assessment order - appeal under Section 128 of the Customs Act, 1962 - Self-assessment orders passed under the Customs Act, 1962 are assessment orders and are appealable under Section 128. - HELD THAT: - The Tribunal held that the Commissioner(Appeals) was wrong in rejecting the appeals on the ground that a self-assessment is not an assessment and therefore not appealable. The Tribunal followed the ratio of the Apex Court in ITC Limited v. CCE (para 43), which states that an order of self-assessment is nonetheless an order of assessment and falls within the wide expression "any order" under Section 128, making it appealable by any person aggrieved. The Tribunal rejected the narrower view that absence of a lis or of a speaking order precludes appeal, noting that Section 17 provides for a reasoned/speaking order on reassessment upon unsatisfactory verification but does not limit the appealability of self-assessment orders under Section 128. [Paras 6]

The Tribunal set aside the Commissioner's conclusion that self-assessment is not appealable and held that such orders are appealable under Section 128.

Remand for fresh adjudication on merits after affording opportunity and complying with principles of natural justice - Impugned orders set aside and matter remanded to Commissioner(Appeals) for fresh adjudication on merits after opportunity of hearing and compliance with principles of natural justice. - HELD THAT: - Having concluded that the appeals were wrongly rejected on the ground of non-appealability, the Tribunal found the impugned orders unsustainable in law. The Tribunal therefore allowed the appeals by setting aside the impugned orders and remanding the matters to the Commissioner(Appeals) to decide the claims on merits. The remand was directed to be undertaken after affording the appellants an opportunity of hearing and ensuring compliance with principles of natural justice. [Paras 7]

Impugned orders set aside and appeals remanded to Commissioner(Appeals) for fresh decision on merits after providing hearing and observing principles of natural justice.

Final Conclusion: The Tribunal set aside the Commissioner's orders that rejected the appeals on the ground that self-assessment is not appealable, held that self-assessment orders are appealable under Section 128 of the Customs Act, 1962 (following the Apex Court in ITC Ltd.), and remanded the matters to the Commissioner(Appeals) for fresh adjudication on merits after affording opportunity of hearing and complying with principles of natural justice.

Condonation of delay - limitation - mixed question of law and fact - rejection of plaint on ground of limitation as a preliminary issue - triability of limitation where facts are disputed

Mixed question of law and fact - triability of limitation where facts are disputed - rejection of plaint on ground of limitation as a preliminary issue - Whether the question of limitation in the present company petition can be decided as a preliminary issue without traversing the merits - HELD THAT: - The Tribunal held that the question of limitation in this case is a mixed question of law and fact and therefore cannot be decided as a preliminary issue. The Tribunal relied on authoritative principles that limitation can be determined summarily only where the question can be decided on admitted facts and no further evidence is necessary; where facts material to limitation are disputed, the question cannot be resolved as a preliminary issue. The Tribunal cited decisions establishing that mixed questions of law and fact require inquiry into evidence and therefore are not amenable to disposal at the threshold. [Paras 9, 10]

Limitation cannot be decided as a preliminary issue in the present proceedings because factual disputes render the question a mixed one requiring adjudication with the merits.

Condonation of delay - triability of limitation where facts are disputed - Whether the application seeking condonation of delay should be decided separately as a preliminary matter or together with the main company petition - HELD THAT: - Having concluded that the question of limitation is a mixed question of fact and law, the Tribunal directed that the condonation application should not be taken up as a preliminary issue. Instead, the Tribunal determined that the application for condonation must be heard along with the main Company Petition so that limitation and the merits can be adjudicated together. The Tribunal accordingly ordered administrative measures to ensure the matters are heard jointly for effective adjudication. [Paras 11]

The application for condonation of delay shall be heard together with the main Company Petition; the Registry was directed to tag the matters and list them for final hearing.

Final Conclusion: The Tribunal held that the limitation issue involves mixed questions of law and fact and therefore cannot be decided as a preliminary issue; the application to condone the delay is to be heard together with the main Company Petition, and the matters were ordered tagged and listed for final hearing on 19.06.2020.

Notice and opportunity to be heard before striking off under Section 248(5) of the Companies Act, 2013 - striking off from the register of companies without statutory notice is illegal - right to be heard / nemo judex in sua causa - remedy by appeal to the Tribunal under Section 252 of the Companies Act, 2013 - non computation of time spent in litigation for limitation

Notice and opportunity to be heard before striking off under Section 248(5) of the Companies Act, 2013 - striking off from the register of companies without statutory notice is illegal - right to be heard / nemo judex in sua causa - Validity of orders striking off the petitioners' companies where no notice under sub section (5) of Section 248 was issued and no opportunity of hearing was afforded. - HELD THAT: - The Court held that sub section (5) of Section 248 mandates issuance of notice and requires that any reply or defence by the company be examined before passing an order to strike off and before publication in the Official Gazette. The determinative legal principle is that no person or entity shall be condemned unheard; the Registrar must verify the grounds or defence raised in response to the notice prior to passing an order. Where, as pleaded by the petitioners, no notice was issued and no opportunity to be heard was given, the order of striking off is vitiated as contrary to the statutory procedure and the principle of natural justice. [Paras 4, 5, 8]

Orders striking off the petitioners' companies without issuing the mandatory notice and affording an opportunity to be heard are bad in law.

Remedy by appeal to the Tribunal under Section 252 of the Companies Act, 2013 - non computation of time spent in litigation for limitation - Appropriate remedy and procedural disposition after finding defects in the striking off process, and treatment of time spent in these proceedings for limitation. - HELD THAT: - The Court did not decide the merits of the striking off on facts but disposed of the writ petitions by reserving liberty to the petitioners to prefer an appeal under Section 252 to the Tribunal constituted for that purpose. The Court made clear that it is not expressing an opinion on merits and directed that the time spent by the petitioners in pursuing these writ petitions shall not be computed for limitation purposes, thereby enabling them to pursue the statutory remedy without loss of limitation. [Paras 7, 9]

Petitions disposed of with liberty to approach the Tribunal under Section 252; time spent in these proceedings shall not be counted for limitation.

Final Conclusion: The impugned striking off orders made without issuing the mandatory notice and affording an opportunity to the companies are held legally defective; the Court declined to adjudicate merits and disposed the writ petitions with liberty to the petitioners to pursue an appeal under Section 252, and directed that time spent in these proceedings shall not be computed for limitation.

Scheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - vestiture of assets and liabilities - dissolution without winding-up - transfer of pending proceedings - transfer of employees on existing terms - compliance with statutory requirements - role of Regional Director and Official Liquidator - income-tax objections and valuation timing

Scheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - role of Regional Director and Official Liquidator - Sanction of the Scheme of Amalgamation submitted by the petitioner companies. - HELD THAT: - The Tribunal considered the petition, the first-motion compliance (publication and service), the representation of the Regional Director and the report of the Official Liquidator. The Regional Director's observations regarding statutory compliance under the Act were noted and the petitioners gave undertaking to comply. The Official Liquidator reported no complaints and no indication of prejudicial conduct. Having regard to the approvals obtained from members and creditors and the affidavits and reports on record, the Tribunal found no impediment to sanctioning the Scheme. The Tribunal emphasised that its jurisdiction is limited to ascertaining fairness, justness and reasonableness and whether any law or public interest is violated, and it will not ordinarily interfere with commercial or entrepreneurial decisions of shareholders and creditors. [Paras 16, 17]

Sanction granted to the Scheme under Sections 230 to 232 of the Companies Act, 2013.

Income-tax objections and valuation timing - compliance with statutory requirements - Income Tax Department's observations on valuation methodology, audited balance sheet date and outstanding demands were addressed and found not to preclude sanction. - HELD THAT: - The Income Tax Department had observed that the valuation report used the audited balance sheet as at 31.03.2018 while the appointed date was 01.04.2019 and that the balance sheet for 31.03.2019 was not audited; it also pointed to outstanding demands for specified assessment years. The petitioners filed a rejoinder explaining that the valuation methodology and the date of valuation were disclosed in the valuer's report, that valuation may adopt methods appropriate to the case and need not be linked to the appointed date, and that liabilities and pending proceedings would transfer to the transferee company under the Scheme. Documentary proof and appeals in relation to outstanding demands were placed on record. On that basis the Tribunal held that the Income Tax observations were adequately addressed for purposes of sanctioning the Scheme. [Paras 6, 7, 8, 9]

Income Tax Department's objections are considered addressed and do not bar sanction of the Scheme.

Vestiture of assets and liabilities - dissolution without winding-up - transfer of pending proceedings - transfer of employees on existing terms - Legal consequences of the sanctioned Scheme as to transfer and vesting of property, liabilities, proceedings, employees and dissolution of transferor companies. - HELD THAT: - The Tribunal ordered that, upon filing of the certified copy of the order with the Registrar of Companies, all properties, rights and powers of the transferor companies shall be transferred to and vest in the transferee company without further act or deed; all liabilities and duties shall similarly transfer and become those of the transferee company; pending proceedings by or against the transferor companies shall continue by or against the transferee company; employees in service immediately prior to the effective date shall become employees of the transferee company on terms not less favourable; and the transferor companies shall stand dissolved without following the process of winding-up. The Tribunal directed delivery of a certified copy of the order to the Registrar for registration and consolidation of files. [Paras 21]

Transferor companies to be dissolved and assets, liabilities, proceedings and employees to stand transferred/vested in the transferee company on the terms stated; Registrar to be provided certified copy for registration.

Compliance with statutory requirements - Sanction does not relieve the petitioners from statutory obligations nor bar future action for any deficiency or violation. - HELD THAT: - The Tribunal expressly held that the petitioners remain bound to comply with statutory requirements and that if any deficiency or violation of any enactment, rule or regulation is found, the sanction will not preclude action being taken against concerned persons in accordance with law. The Tribunal further clarified that the order does not grant exemption from payment of stamp duty, taxes or other charges or from obtaining permissions or compliance required under any law. [Paras 18, 19, 20]

Petitioners must comply with statutory requirements; sanction does not confer exemptions and does not bar subsequent lawful action for violations.

Final Conclusion: The Tribunal, after noting compliance with procedural directions, the undertakings to the Regional Director, the report of the Official Liquidator and the petitioners' replies to Income Tax observations, sanctioned the Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013; consequential vesting of assets, liabilities, pending proceedings and employees in the transferee company was ordered, the transferor companies were directed to be dissolved without winding-up upon registration, and the petitioners remain bound to comply with statutory requirements and remedies for any deficiencies are preserved.

Sanction of scheme of amalgamation - Fairness, justness and reasonableness of scheme - Tribunal's limited jurisdiction to examine commercial decisions - Vesting of assets and liabilities on amalgamation - Dissolution without winding-up - Continuity of employment on amalgamation - Statutory compliance and obligation to file certified copy with Registrar - Sanction not a bar to action for statutory violations and not an exemption from taxes or duties

Sanction of scheme of amalgamation - Fairness, justness and reasonableness of scheme - Tribunal's limited jurisdiction to examine commercial decisions - Sanction of the proposed scheme of amalgamation was granted by the Tribunal after considering approvals, statutory safeguards and filings. - HELD THAT: - The Tribunal applied the principle that its jurisdiction on a scheme under Section 230-232 is confined to ascertaining the scheme's fairness, justness and reasonableness and ensuring no law or public interest is compromised, without re-evaluating the commercial decisions of shareholders. Having regard to the dispensation of meetings in the First Motion, the affidavits and the approvals recorded, the reports/affidavits of the Regional Director and Official Liquidator, the absence of objections from the Income Tax Department, and certificates of statutory auditors regarding accounting treatment, the Tribunal found no impediment to sanctioning the scheme. The Tribunal therefore sanctioned the scheme under Section 230 to 232 of the Companies Act, 2013. [Paras 10, 11, 13, 14, 15]

Sanction of the scheme granted.

Vesting of assets and liabilities on amalgamation - Dissolution without winding-up - Continuity of employment on amalgamation - Consequential legal effects of the sanctioned scheme - transfer and vesting of property, liabilities and continuation of proceedings, dissolution of transferor companies and continuity of employees - were ordered. - HELD THAT: - The Tribunal ordered that on the effective date all property, rights and powers of the transferor companies shall stand transferred to and vest in the transferee company, and all liabilities and duties shall become those of the transferee company. Proceedings pending by or against the transferors are to be continued by or against the transferee company. The transferor companies were directed to stand dissolved without following the process of winding-up, and employees in service immediately preceding the effective date shall become employees of the transferee company without break and on terms not less favourable than existing terms. [Paras 19]

Assets, liabilities and proceedings to vest in transferee; transferor companies to be dissolved without winding-up; employees to continue in service on existing terms.

Statutory compliance and obligation to file certified copy with Registrar - Statutory compliance and obligation to file certified copy with Registrar - Petitioners had complied with the Tribunal's directions regarding publication, service and statutory filings, and were directed to file the certified copy of the order with the Registrar of Companies within thirty days. - HELD THAT: - The record showed that the petitioners effected the newspaper publications and service to statutory authorities as directed and filed an affidavit of compliance. The Regional Director reported no prosecution, inspection or investigation, and the Official Liquidator reported no complaints and no apparent prejudice to members, creditors or public interest. In view of this compliance and the absence of adverse reports, the Tribunal found the statutory preconditions for sanction satisfied. The Tribunal further directed the petitioners to deliver a certified copy of the sanction order to the Registrar of Companies within thirty days for registration and consolidation of files. [Paras 4, 5, 6, 16, 19]

Compliance with publication and service directions recorded; certified copy of order to be filed with Registrar within thirty days.

Sanction not a bar to action for statutory violations and not an exemption from taxes or duties - Statutory compliance and obligation to file certified copy with Registrar - Sanction of the scheme does not confer immunity from statutory obligations, taxes or preclude action for any deficiency or violation discovered later. - HELD THAT: - The Tribunal expressly clarified that the sanction should not be construed as exemption from payment of stamp duty, taxes or other charges and that payment and other permissions required under law remain enforceable. It further stated that if any deficiency or violation of any enactment, statutory rule or regulation is found, the sanction will not stand in the way of action being taken, in accordance with law, against concerned persons, directors or officials of the petitioners. [Paras 17, 18]

Sanction subject to payment of taxes/dues and to future lawful action for any violations.

Final Conclusion: The Tribunal, after recording statutory compliance, reports of the Regional Director and Official Liquidator, absence of objection from the Income Tax Department and certificates from statutory auditors, sanctioned the scheme of amalgamation under Section 230-232 of the Companies Act, 2013 and directed consequential vesting, dissolution and filing requirements while preserving the right of enforcement of statutory obligations and actions for any violations.

Sanction of scheme of amalgamation under sections 230-232 of the Companies Act, 2013 - Appointed Date and retrospective effectiveness of scheme - Maintainability of objections by creditors - threshold of five percent of total outstanding debt - Protection of creditors' rights post-sanction - Compliance with directions of the Regional Director and filing of statutory forms - Dissolution of transferor companies without winding up

Sanction of scheme of amalgamation under sections 230-232 of the Companies Act, 2013 - Miheer H. Mafatlal test for sanction - Sanction of the Composite Scheme of Amalgamation of the transferor companies with the transferee company - HELD THAT: - The Tribunal examined whether the statutory requirements for sanction under sections 230-232 had been complied with, including approval by the requisite majorities and absence of any violation of law or public policy. Reliance was placed on the principles in Miheer H. Mafatlal v. Mafatlal Industries Ltd. that the court must ensure procedure has been complied with, the majority decision is just and fair to the class as a whole, members and creditors have acted bona fide, and the scheme is not opposed to law or public policy. The Regional Director's observations were met by undertakings and clarifications which were accepted. The Official Liquidator's report did not disclose any prejudicial conduct. The Tribunal found the scheme to be fair and reasonable and not in violation of any law or public policy and therefore sanctioned the scheme and made the petition absolute in terms of the prayers. [Paras 10, 17, 20, 21, 22]

The Composite Scheme of Amalgamation is sanctioned and the Company Petition CP (CAA) No. 4120/2019 is made absolute.

Appointed Date and retrospective effectiveness of scheme - Fixation of the Appointed Date for the scheme - HELD THAT: - The Scheme defined the Appointed Date as 01 April 2019 and the petitioners confirmed that the Scheme shall be effective from the date of filing the certified copy of the Tribunal's order with the Registrar of Companies while being deemed effective from the Appointed Date. The Tribunal accepted the appointed date as fixed and specified in the Scheme. [Paras 8, 9, 23]

The Appointed Date is fixed as 1st April 2019 and the Scheme shall be effective accordingly.

Maintainability of objections by creditors - threshold of five percent of total outstanding debt - Creditors' objections limited to recovery of debts and not to thwart sanction - Admissibility and sufficiency of objections filed by two creditors of the transferee company - HELD THAT: - Two creditors of the transferee company objected seeking assurance for payment or security for their debts. The Tribunal noted the statutory proviso to section 230(4) requiring that objections be by persons holding not less than ten percent of shareholding or having debt not less than five percent of total outstanding debt as per the latest audited statement. Calculating against the transferee company's audited total debt as on 31 March 2019, the aggregate objection fell well below the five percent threshold (0.11%). The Tribunal further observed that a scheme is not a device for creditors to recover money or coerce payment and that no diminution of liability towards any creditor arises from the Scheme; creditors retain remedies against the transferee company which continues post-amalgamation. [Paras 14, 15, 16, 18, 19]

The objections are not maintainable to block the sanction; they do not satisfy the statutory five percent debt threshold and do not prevent sanction of the Scheme.

Compliance with directions of the Regional Director and filing of statutory forms - Acceptance of undertakings regarding observations of the Regional Director and requirement to file statutory forms - HELD THAT: - The Regional Director had made observations including compliance with accounting standards (AS-14/Ind AS-103 and other applicable accounting standards), clarification of the Appointed Date, confirmation of dispensation of shareholder meetings where valid consents existed, and non-filing (initially) of Form GNL-1. The petitioners provided clarifications and undertakings, including that necessary accounting entries would be passed and that GNL-1 had in fact been filed with specified SRNs. The Regional Director and the Tribunal accepted these clarifications and undertakings. [Paras 8, 9, 10]

The undertakings and clarifications given to the Regional Director are accepted and petitioners must comply with the statutory requirements as undertaken.

Dissolution of transferor companies without winding up - Dissolution of the transferor companies consequent to sanction of the Scheme - HELD THAT: - The Official Liquidator reported that the affairs of the transferor companies were conducted properly and not prejudicial to shareholders' interests. On sanction of the Scheme and in terms thereof, the Tribunal directed that the transferor companies shall stand dissolved without the process of winding up. [Paras 20, 23]

The Transferor Companies are ordered to be dissolved without winding up.

Directions for lodging certified copies and statutory filings - Post-sanction compliances and filing directions - HELD THAT: - The Tribunal directed the petitioner companies to lodge a certified copy of the order and the Scheme with the Superintendent of Stamps for adjudication of stamp duty within 60 working days of receipt of the certified copy, and to file a certified copy of the order along with the Scheme electronically in Form INC-28 with the Registrar of Companies within 30 days of issue of the order by the Registry. Further, regulatory authorities were directed to act on certified copies furnished by the Tribunal's registry. [Paras 24, 25, 26]

Petitioners must comply with the specified lodging and filing directions and regulatory authorities shall act on certified copies.

Final Conclusion: The Tribunal, having accepted the Regional Director's clarifications and the Official Liquidator's report, sanctioned the Composite Scheme of Amalgamation with Appointed Date fixed as 1st April 2019; the transferor companies are dissolved without winding up; the objections by two creditors were held not to be maintainable under the five percent threshold and do not preclude sanction; and the petitioner companies were directed to complete the statutory post-sanction filings and compliance.

Default - Operational Creditor - Pre-existing dispute - Admission under Section 9(5) of the Insolvency and Bankruptcy Code, 2016 - Moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 - Appointment of Interim Resolution Professional - Jurisdiction of the Adjudicating Authority - Limitation

Default - Operational Creditor - Admission under Section 9(5) of the Insolvency and Bankruptcy Code, 2016 - The completeness of the Section 9 application and whether a default has occurred such as to warrant admission of the application under Section 9(5) of the IBC, 2016. - HELD THAT: - The Tribunal found that the applicant, an operational creditor, had furnished the demand notice and requisite affidavits and bank statements, and established that an operational debt remained unpaid. The record shows issue of invoices, partial payments by the corporate debtor, service of the demand notice and subsequent correspondence. Applying the statutory scheme and the material on record, the Tribunal concluded that a default had occurred and that the application under Section 9 was complete and maintainable. The Tribunal therefore admitted the application in terms of Section 9(5). [Paras 17]

Application under Section 9 admitted as a default has occurred and the application is complete.

Pre-existing dispute - Default - The existence of a pre-existing dispute between the parties and its effect on admission of the Section 9 application. - HELD THAT: - The Tribunal noted that the corporate debtor had asserted a pre-existing dispute regarding alleged substandard performance and furnished e-mail communications. The applicant controverted those averments, contending that the corporate debtor did not dispute the debt payable. While the Tribunal observed that there was material suggesting a dispute as to quality or performance, it also recorded that the corporate debtor had not effectively repudiated the liability for the operational debt. Balancing these facts and relying on the statutory scheme, the Tribunal treated the disputed quality issues as not preventing admission of the application for insolvency resolution in the present factual matrix.

A pre-existing dispute as to quality of services was recorded, but it did not preclude admission of the Section 9 application on the facts before the Tribunal.

Jurisdiction of the Adjudicating Authority - Whether the Tribunal has jurisdiction to entertain the Section 9 application. - HELD THAT: - The Tribunal observed that the registered office of the corporate debtor is situated in Delhi. On that basis, it held that the Tribunal has territorial jurisdiction to entertain and try the application. [Paras 19]

Tribunal has jurisdiction to entertain the application.

Limitation - Whether the application is time-barred. - HELD THAT: - The Tribunal identified the date of default as 16.01.2018 and found that the application was filed within the period of limitation. On this basis it held that the debt was not time-barred. [Paras 20]

The application is within limitation and the debt is not time-barred.

Appointment of Interim Resolution Professional - Moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 - Consequential orders following admission: appointment of an Interim Resolution Professional, security deposit by the Operational Creditor, and invocation of moratorium. - HELD THAT: - Upon admission under Section 9(5), the Tribunal appointed an Interim Resolution Professional named in the order, subject to usual disclosures and consent. The Tribunal directed the operational creditor to deposit a specified sum with the IRP to meet initial expenses, subject to adjustment by the Committee of Creditors. The Tribunal also directed that the moratorium under Section 14(1) shall apply in relation to the corporate debtor, with related provisions of Sections 14(2) to 14(4) to operate during the moratorium. [Paras 21, 22, 23]

IRP appointed subject to conditions; operational creditor to deposit funds for IRP's expenses; moratorium under Section 14(1) follows from admission.

Final Conclusion: The Section 9 application by the operational creditor was admitted: the Tribunal found a default and treated the application as complete, recorded but did not treat the asserted pre-existing dispute as barring admission, exercised jurisdiction, held the petition to be within limitation, appointed an Interim Resolution Professional with directions for initial deposit, and declared that the moratorium under Section 14(1) of the IBC follows from the admission.

Functus officio - maintainability of application under Section 60(5) of the IBC - effect of setting aside CIRP and validity of actions taken during CIRP - liability for CIRP costs and fees after remand to Adjudicating Authority - reimbursement of actual expenses to valuers - competence of Insolvency and Bankruptcy Board of India to deal with professional misconduct

Functus officio - effect of setting aside CIRP and validity of actions taken during CIRP - maintainability of application under Section 60(5) of the IBC - Maintainability of the application filed by the registered valuer after the Hon'ble NCLAT set aside the CIRP and remitted the matter to the Adjudicating Authority to decide CIRP costs. - HELD THAT: - The Hon'ble NCLAT set aside the admission order and declared actions taken in the CIRP by the IRP/RP and COC to be illegal, remitting the matter to the Adjudicating Authority to decide CIRP fees and costs. Consequent to that order, this Tribunal closed the company petition and fixed certain directions regarding fees and costs. Since the impugned CIRP admission and consequential actions were set aside, the present application seeking direct enforcement of the valuer's appointment and fee claim before this Tribunal became functuous. The Tribunal observed that the appointment of the valuers formed part of the actions set aside by the appellate order and that the scheme for determination and payment of CIRP costs was to be dealt with pursuant to the remand. In view of these circumstances the Adjudicating Authority cannot entertain the present application and the same is not maintainable before this Tribunal. [Paras 5, 6, 7, 8]

Application is not maintainable and is rejected as functuous.

Reimbursement of actual expenses to valuers - liability for CIRP costs and fees after remand to Adjudicating Authority - competence of Insolvency and Bankruptcy Board of India to deal with professional misconduct - Whether the Resolution Professional was required to pay the balance of the valuer's fees and the appropriate remedy for alleged failure to discharge statutory duties. - HELD THAT: - The record indicates that the Committee of Creditors reimbursed actual expenses incurred during the CIRP and that the respondent Resolution Professional had remitted the reimbursed expense amounts to the valuers. Given the appellate order setting aside CIRP actions and remitting the question of fees and costs, the Tribunal held that a direct prayer for payment of the valuer's professional fee before this Bench was not the proper forum. If the applicant alleges failure by the Resolution Professional to discharge statutory duties or professional misconduct, the Tribunal noted that the competent authority to entertain such complaints is the Insolvency and Bankruptcy Board of India, and the applicant remains free to pursue appropriate relief before that authority. [Paras 7, 8, 9]

Prayer for payment of balance fees is not tenable before this Tribunal; applicant may pursue allegations against the Resolution Professional with the IBBI.

Final Conclusion: I.A. No.192 of 2020 in C.P.(IB) No.244/BB/2018 is rejected as not maintainable and functuous in view of the order setting aside the CIRP; the applicant is not precluded from approaching the Insolvency and Bankruptcy Board of India for allegations against the Resolution Professional.

Maintainability of insolvency petition by allottees under a real estate project - amendment to Section 7 requiring joint initiation by minimum allottees for real estate projects - availability of alternative contractual remedies of specific performance and arbitration - Adjudicating Authority is not a recovery forum - relief directing delivery of possession on completion as alternative disposal

Maintainability of insolvency petition by allottees under a real estate project - amendment to Section 7 requiring joint initiation by minimum allottees for real estate projects - Whether the Section 7 petition filed by individual allottees is maintainable in view of the amendment requiring joint applications by specified minimum number/percentage of allottees. - HELD THAT: - The Tribunal held that the petition by the Petitioners, who are allottees under the real estate project, does not satisfy the minimum threshold introduced by the amendment to Section 7. The pleadings show that the project comprises 108 flats while only 39 allottees have entered into agreements; the Petitioners did not modify the application to comply with the amended requirement. On this basis the petition was treated as not maintainable under the amended dispensation governing applications by allottees.

The Section 7 petition filed by the individual allottees is not maintainable for failing to comply with the amended requirement prescribing joint initiation by the requisite number/percentage of allottees.

Availability of alternative contractual remedies of specific performance and arbitration - Adjudicating Authority is not a recovery forum - relief directing delivery of possession on completion as alternative disposal - Whether, notwithstanding maintainability objections, the petition should be admitted or disposed of by directing alternative relief in view of contractual remedies and the respondent's readiness to complete and deliver possession. - HELD THAT: - The Tribunal found from the agreements that the contractual remedy for disputes was specific performance and arbitration. The Petitioners' grievance related to delivery of the apartment rather than a straightforward claim against the corporate debtor's assets; the Adjudicating Authority is not a recovery forum and CIRP is not an appropriate substitute for contractual remedies where the corporate debtor remains a going concern. The Respondent had explained reasons for delay, showed steps taken to resume and continue construction, and expressed readiness to deliver the apartment on completion. In light of these factors and the availability of adequate alternative remedies, the Tribunal disposed of the petition by directing the Corporate Debtor to hand over possession of the apartment to the Petitioners upon its completion.

Instead of admitting the CIRP application, the petition is disposed of by directing the Corporate Debtor to deliver possession of the apartment to the Petitioners on its completion; the petition is not an appropriate recovery mechanism where contractual remedies and the debtor's ongoing ability to complete the project exist.

Final Conclusion: C.P. (IB) No. 408/BB/2019 disposed of: the insolvency petition by the individual allottees was held not maintainable under the amended Section 7 and, on merits and in view of available contractual remedies and the respondent's readiness to complete the project, the Tribunal directed delivery of possession of the apartment on its completion; no costs ordered.

Default - operational creditor - demand notice under Section 8 of the Insolvency and Bankruptcy Code - pre-existing dispute - initiation of corporate insolvency resolution process - limitation under Section 238A of the Insolvency and Bankruptcy Code - moratorium - appointment of interim resolution professional

Default - operational creditor - demand notice under Section 8 of the Insolvency and Bankruptcy Code - The operational creditor proved existence of debt and default and satisfied requirements for admission of a Section 9 petition to initiate CIRP. - HELD THAT: - The Adjudicating Authority examined the agreement, invoices and bank statements and found it to be an admitted fact that services were provided by the operational creditor to the corporate debtor and that only part payments were made. The demand notice under Section 8 was delivered and no payment or reply effecting the debt was made. The petitioner filed the supporting affidavits required by Section 9(3)(b) and 9(3)(c). On these facts the Authority concluded that default of the operational debt stood established and the petition was complete and liable to be admitted. [Paras 9, 10, 11]

The Section 9 petition is admitted as the operational creditor proved debt and default and complied with statutory requirements.

Pre-existing dispute - A mere dispute as to the quantum of the claim (without pre-existing suit, arbitration or other evidence) does not constitute a pre-existing dispute to defeat a Section 9 petition. - HELD THAT: - Relying on the legal principles extracted from precedents cited in the order, the Authority observed that a dispute as to quantum, unsupported by pre-existing suit, arbitration or other evidence, does not fall within the meaning of a pre-existing dispute under the Code. The corporate debtor's contention that the debt had already been paid or that the claimed amount was arbitrary was held to be a dispute regarding quantum not pre-existing before the demand notice, and therefore not a bar to admission of the petition. [Paras 9]

The objection based on a disputed quantum is rejected and does not preclude admission of the petition.

Limitation under Section 238A of the Insolvency and Bankruptcy Code - The invoices relied upon fall within the limitation period under Section 238A and the petition is not time-barred. - HELD THAT: - The Authority noted that invoices dated 13.09.2013 to 02.08.2016 and the renewal agreement dated 15.09.2016 were filed with the petition which was instituted on 23.05.2019. On perusal it was held that these documents fell within the limitation as prescribed by Section 238A, enabling initiation of CIRP in respect of the corporate debtor. [Paras 9, 13]

The petition is within the limitation period and is maintainable.

Initiation of corporate insolvency resolution process - moratorium - appointment of interim resolution professional - Upon admission, CIRP is to be initiated, moratorium to be declared and an interim resolution professional appointed. - HELD THAT: - Having admitted the Section 9 petition, the Adjudicating Authority directed initiation of the corporate insolvency resolution process and declared the moratorium operative from the insolvency commencement date as provided by the Code. As the applicant had not proposed an IRP, the Authority appointed Mr. Abhiman Singh as Interim Resolution Professional and directed him to make the public announcement and to carry out statutory duties under the Code. [Paras 13, 14, 15]

CIRP is initiated, moratorium declared and Mr. Abhiman Singh is appointed as Interim Resolution Professional.

Final Conclusion: The Tribunal admitted the Section 9 petition, holding that the operational creditor established debt and default, that the dispute over quantum did not amount to a pre-existing dispute preventing admission, and that the petition was within the limitation; CIRP was ordered, moratorium declared and an interim resolution professional appointed.

Corporate Insolvency Resolution Process - Operational creditor's application under Section 9 - Notice of dispute under Section 9(5)(2)(d) - Admission requirements under Section 9(5)(i) - Moratorium - Appointment of Interim Resolution Professional - Reference to the Board for recommendation of an insolvency professional - Verification of claims by Interim Resolution Professional

Notice of dispute under Section 9(5)(2)(d) - Operational creditor's application under Section 9 - Dispute raised by the corporate debtor regarding inflated pricing and absence of agreement to pay interest is not a bona fide dispute that bars admission. - HELD THAT: - The Tribunal examined the ledger entries produced by the corporate debtor and the operational creditor and found the balances shown to be almost identical, thereby constituting an acknowledgment of debt in the corporate debtor's books. Applying the test in Mobilox Innovations (quoted in the order), the Tribunal held that the purported dispute was a patently feeble assertion unsupported by evidence and was therefore spurious, hypothetical or illusory. Consequently the contention that a legitimate dispute existed which would disentitle the operational creditor to relief under Section 9 was rejected. [Paras 11, 12, 13]

The alleged dispute is rejected as spurious and does not preclude admission of the Section 9 petition.

Admission requirements under Section 9(5)(i) - Operational creditor's application under Section 9 - The Section 9 application is complete and satisfies the conditions for admission under Section 9(5)(i); the petition is admitted and CIRP is ordered to be initiated. - HELD THAT: - The Tribunal found the application otherwise complete, noted non-repayment of the unpaid operational debt, observed delivery of the demand notice, and (after rejecting the dispute raised by the corporate debtor) concluded that the conditions set out in Section 9(5)(i) were satisfied. The Tribunal therefore admitted the application and ordered initiation of the Corporate Insolvency Resolution Process. [Paras 16, 17, 18]

The petition under Section 9 is admitted and CIRP is initiated against the corporate debtor.

Moratorium - Corporate Insolvency Resolution Process - Moratorium under Section 14 is declared from the date of the order until completion of CIRP or as otherwise provided under the Code. - HELD THAT: - The Tribunal declared the statutory moratorium proscribing institution or continuation of suits, transfer or disposal of assets, enforcement of security interests and recovery of property occupied by the corporate debtor, and clarified exceptions concerning supply of essential goods or services as provided in the Code and regulations. The moratorium effectivity and scope were directed to operate as per the Code. [Paras 19, 20, 21]

Statutory moratorium is declared with effect from the date of the order until completion of the CIRP or further order.

Appointment of Interim Resolution Professional - Reference to the Board for recommendation of an insolvency professional - An Interim Resolution Professional is appointed after reference to and receipt of the Board's panel, since no IRP was proposed by the operational creditor. - HELD THAT: - Noting that the operational creditor had not proposed an IRP, the Tribunal made a reference to the Board in accordance with Section 16 and, on receipt of the approved panel, selected and appointed a candidate from that panel. The Tribunal directed the appointed Interim Resolution Professional to assume management powers, act in accordance with the Code and Regulations, cause the public announcement, collate claims, constitute the Committee of Creditors and file constitution report within prescribed timelines. [Paras 22, 23, 24, 25, 26]

An Interim Resolution Professional is appointed and directed to perform statutory duties in terms of the Code and Regulations.

Verification of claims by Interim Resolution Professional - The claim for contractual interest included in the operational debt is left to be examined and verified by the Interim Resolution Professional. - HELD THAT: - While admitting the petition, the Tribunal observed that the element of interest claimed by the operational creditor requires verification and ought to be examined by the IRP during the claims verification process; the Tribunal did not adjudicate the entitlement to interest on the merits at this stage. [Paras 15]

Determination of the claimed interest is remitted to the Interim Resolution Professional for verification during the claims process.

Final Conclusion: The Section 9 petition filed by the operational creditor is admitted; the corporate debtor's alleged dispute is rejected as spurious; moratorium is declared; an Interim Resolution Professional is appointed from the Board's panel; and the IRP is directed to verify claims (including the claim for interest) and proceed to constitute the Committee of Creditors and manage the CIRP in accordance with the Code and Regulations.

Maintainability of a Section 7 application by an allottee as a "financial creditor" - acceptance of delivery/possession of apartment disentitling allottee from claiming financial debt - role of Memorandum of Understanding and Sale/Construction agreements in determining nature of transaction - speculative home buyer principle in insolvency proceedings (Pioneer Urban Land ratio)

Maintainability of a Section 7 application by an allottee as a "financial creditor" - role of Memorandum of Understanding and Sale/Construction agreements in determining nature of transaction - The petitioner/allottee is not maintainable as a financial creditor under Section 7 once he has accepted delivery/possession of the apartment and the documents disclose a transaction by way of part financing and sale agreements. - HELD THAT: - The Tribunal examined the application, the Memorandum of Understanding dated 11.07.2016, the Sale Agreement and Agreement for Construction dated 20.06.2016 and other materials. The contractual matrix demonstrates that the petitioner had advanced consideration towards purchase of an undivided share and a flat, and the Memorandum provided that in the event of non payment the party of the first part could hand over the flat to the party of the second part or resubmit cheques on receipt of the amount. Paragraph 4 of the MOU expressly contemplated delivery of the flat as an alternative to monetary settlement. The Tribunal found that the respondent completed construction and interior works and the apartment was ready and handed over and accepted by the petitioner. Applying these facts, the Tribunal held that the right of an allottee to claim as a financial creditor under Section 5(8) arises principally where there is failure to deliver the apartment; acceptance of delivery precludes treating the allottee as a financial creditor for the purposes of initiating CIRP under Section 7. The Tribunal further applied the principle in Pioneer Urban Land (as cited) that a speculative home buyer cannot invoke insolvency proceedings and that, once a prima facie case of default is rebutted by showing the allottee is himself a defaulter or has accepted possession, the promoter may resist the claim. On this basis the petition was held not maintainable and no adjudication on debt quantum was made. [Paras 7, 8, 9, 10]

The Section 7 application by the petitioner/allottee is not maintainable and is dismissed.

Final Conclusion: The Tribunal dismissed the application under Section 7 filed by the petitioner seeking initiation of CIRP against the corporate debtor, holding that the allottee, having accepted delivery/possession of the apartment and on the contractual record before it, cannot maintain himself as a financial creditor for triggering insolvency proceedings.

Corporate insolvency resolution process - admission of petition under Section 7 of the Insolvency and Bankruptcy Code - default under the Insolvency and Bankruptcy Code - limitation for filing a Section 7 petition - banker's books of evidence certificate - NPA classification and applicability of RBI circular - appointment of Interim Resolution Professional - moratorium under the Insolvency and Bankruptcy Code - remedy in rem

Existence of debt - default under the Insolvency and Bankruptcy Code - CIBIL and account statements as evidence of default - The Corporate Debtor had availed credit facilities, a debt was due and a default occurred on 30/09/2017. - HELD THAT: - The Adjudicating Authority examined the loan sanction documents, statement of accounts, CIBIL report and the certificate filed under the Banker's Book of Evidence Act. On the basis of these material papers the Tribunal recorded that the cash credit and term loan facilities were sanctioned and availed, the accounts were in default, and the date of default is 30/09/2017. The Tribunal accepted the Financial Creditor's documentary evidence as establishing existence of debt and default. [Paras 23, 24]

Default on 30/09/2017 is established and the debt is due.

Limitation for filing a Section 7 petition - last payment and three year limitation - The petition was filed within the period of limitation. - HELD THAT: - The Tribunal noted the last payment credited to the account on 31/08/2018 and that the Section 7 petition was filed on 22/10/2018. On this basis the Adjudicating Authority concluded that the petition falls within the three year limitation period for initiation of CIRP. [Paras 23, 24]

The petition is within limitation and maintainable.

Completeness of Section 7 application - reliance on loan documents and bank certificate - The application under Section 7 was complete and supported by documents required to initiate CIRP. - HELD THAT: - The Tribunal observed that the petition was filed by an authorized officer in the prescribed format and annexed loan sanction documents, statements of account, search and valuation reports and a certificate under the Banker's Book of Evidence Act. The Tribunal held these records sufficient for admitting the petition under Section 7 for initiating CIRP. [Paras 23, 24]

Section 7 application is complete and prima facie sufficient for admission.

NPA classification and applicability of RBI circular - contention on wrong NPA classification - The contentions of the Corporate Debtor regarding incorrect NPA classification under the RBI circular were considered but did not prevent admission of the petition. - HELD THAT: - The Corporate Debtor contended that classification as NPA on 30/09/2017 was erroneous in view of the RBI circular and MSME status. The Tribunal recorded these contentions and the documentary material filed by both parties, but having accepted the Financial Creditor's evidence of default declined to treat the NPA classification issue as a bar to admission under Section 7. The Tribunal proceeded to admit the petition after assessing the material on record. [Paras 15, 23, 24]

Challenges to NPA classification did not preclude admission of the petition.

Appointment of Interim Resolution Professional - IRP duties under the Code - An Interim Resolution Professional was appointed and directed to perform statutory duties including public announcement and preservation of assets. - HELD THAT: - The Tribunal appointed the proposed Insolvency Professional as Interim Resolution Professional and directed her to make the public announcement of moratorium, carry out functions under Sections 15, 17, 18, 20 and 21 of the Code and adhere to the CIRP timelines. The IRP was also directed to act in accordance with statutory provisions and to protect the corporate debtor's assets. [Paras 25, 27]

Ms. Teena Saraswat Pandey appointed as Interim Resolution Professional with directions to discharge statutory functions.

Moratorium under the Insolvency and Bankruptcy Code - prohibition on enforcement actions including SARFAESI - A moratorium under Sections 13 and 14 of the Code was declared with immediate effect from the date of admission. - HELD THAT: - Upon admission of the Section 7 petition the Tribunal declared the statutory moratorium effective from 05/03/2020, prohibiting initiation or continuation of suits, encumbrance or transfer of assets, and enforcement actions (including proceedings under SARFAESI) against the corporate debtor for the CIRP period. The Tribunal also protected supply of essential goods and services as specified. [Paras 26]

Moratorium declared with effect from the date of admission (05/03/2020).

Disposal of interlocutory application regarding settlement - recording of no pending settlement before Financial Creditor - IA 249 of 2019 alleging misrepresentation and asserting pending settlement proposals was recorded and disposed of; Tribunal accepted the Financial Creditor's position that no settlement was pending. - HELD THAT: - The Financial Creditor sought recording that no settlement proposal was pending and apprehensions about damage to mortgaged property. The Tribunal took note of IA 249, recorded the Financial Creditor's submission that no settlement proposal was pending and disposed of the IA accordingly while admitting the main petition. [Paras 20, 24]

IA 249 of 2019 disposed of and the record notes no settlement pending with the Financial Creditor.

Final Conclusion: The Section 7 petition filed by the Financial Creditor was admitted on the basis of documentary evidence establishing existence of debt and default (dated 30/09/2017), the petition was within limitation and complete; an Interim Resolution Professional was appointed and the statutory moratorium declared with effect from the date of admission (05/03/2020).

Corporate insolvency resolution process - operational debt and default - service of demand notice - pre-existing dispute / notice of dispute - admission under Section 9(5)(i) of the Code - moratorium under Section 14 - appointment of Interim Resolution Professional

Service of demand notice - Demand notice in Form No.3 dated 08.03.2019 was duly delivered to the corporate debtor. - HELD THAT: - The Tribunal examined the mode and address of dispatch and found that the demand notice was sent to the registered office address as per the corporate debtor's master data and documentary proof of postal receipt, tracking report and e-mail were placed on record. The Tribunal recorded that the corporate debtor chose not to reply to the demand notice and held that the statutory demand notice had been properly served. [Paras 11, 15]

Demand notice dated 08.03.2019 was properly delivered to the corporate debtor.

Pre-existing dispute / notice of dispute - operational debt and default - No pre-existing dispute or notice of dispute was shown by the corporate debtor and the operational debt remained unpaid. - HELD THAT: - The operational creditor filed the affidavit required under Section 9(3)(b) stating that no dispute was raised by the corporate debtor prior to or after service of the demand notice. The corporate debtor did not file any reply to the petition and did not place any evidence of a plausible dispute on record. The Tribunal applied the test from Mobilox Innovations to ascertain that no genuine dispute existed and recorded that, after adjustment of amounts paid post-demand, an outstanding operational debt subsists. [Paras 6, 12, 15, 16]

There was no notice or record of dispute and the corporate debtor remained in default.

Admission under Section 9(5)(i) of the Code - corporate insolvency resolution process - The petition under Section 9 was complete and the conditions for admission under Section 9(5)(i) were satisfied; the petition was admitted and CIRP was initiated. - HELD THAT: - The Tribunal found the Form 5 application complete and that the statutory conditions in Section 9(5)(i) - completeness of application, existence of unpaid operational debt, delivery of invoice/notice and absence of dispute - were fulfilled. Applying the statutory tests and relevant precedent, it concluded that the operational creditor proved debt and default (exceeding the monetary threshold) and therefore admitted the application and ordered initiation of the corporate insolvency resolution process. [Paras 15, 16, 17]

Petition under Section 9 admitted and CIRP initiated against the corporate debtor.

Moratorium under Section 14 - Moratorium under Section 14 of the Code was declared from the date of the order until completion of CIRP or further order. - HELD THAT: - On admission of the Section 9 petition, the Tribunal declared the moratorium contemplated by Section 14(1), specifying the prohibitions on institution or continuation of suits, transfer or disposal of assets, enforcement of security interest and recovery of possession, and clarified exceptions concerning supply of essential goods or services and statutory notifications. [Paras 18, 19, 20]

Moratorium declared in terms of Section 14 with effect from the date of the order until completion of CIRP or further order.

Appointment of Interim Resolution Professional - An Interim Resolution Professional was appointed from the approved panel and directed to perform duties under the Code. - HELD THAT: - Noting that the operational creditor had not proposed a name, the Tribunal referred to the Board's panel and selected a panelist. The Tribunal checked credentials and appointed the named insolvency professional as Interim Resolution Professional, directing compliance with Sections 16(5), 17 and 18, public announcement obligations, constitution of the Committee of Creditors and periodic reporting to the Tribunal. [Paras 21, 23, 24, 25]

Mr. Anjum Goyal appointed as Interim Resolution Professional with directions to perform functions under the Code.

Final Conclusion: The Tribunal held that the statutory demand notice was duly served, no genuine dispute existed, and the operational creditor established debt and default; consequently the Section 9 petition was admitted, moratorium under Section 14 was declared and an Interim Resolution Professional was appointed to commence the corporate insolvency resolution process.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - overriding effect of Section 238 of the Insolvency and Bankruptcy Code, 2016 - physical filing of Goods and Services Tax returns during corporate insolvency resolution process - treatment of pre CIRP tax claims under the Insolvency and Bankruptcy Code - orders void ab initio for contravening the moratorium - obligation to cooperate with the Resolution Professional

Physical filing of Goods and Services Tax returns during corporate insolvency resolution process - moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Direction to accept and complete physical filing of GST returns for the period after commencement of CIRP and to ensure deposit of outstanding GST for that period within specified timelines. - HELD THAT: - The Tribunal directed the State Goods and Services Tax Department to accept physical filing of returns after the commencement of the corporate insolvency resolution process (CIRP). Where GST relating to the period after commencement of CIRP remains undeposited, the same must be deposited within two weeks if not already paid. The Resolution Professional is directed to complete physical filing of the returns for that post CIRP period within three weeks. These directions implement procedural compliance for post CIRP tax liabilities while recognising the continuing effect of the CIRP.

State GST to accept physical filing of returns for the post CIRP period; outstanding post CIRP GST to be deposited within two weeks; Resolution Professional to complete physical filing within three weeks.

Treatment of pre CIRP tax claims under the Insolvency and Bankruptcy Code - moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Entitlement and procedure for State GST to pursue claims relating to periods prior to commencement of CIRP. - HELD THAT: - The Tribunal observed that claims in respect of tax liabilities prior to the commencement of CIRP fall within the statutory framework of the Insolvency and Bankruptcy Code, 2016. The State GST is directed to consider such pre CIRP claims in accordance with the provisions of the IBC and to file their claim with the Resolution Professional in accordance with law, thereby placing pre CIRP claims within the insolvency claims process rather than permitting independent enforcement during moratorium.

State GST to file pre CIRP claims with the Resolution Professional and follow provisions of the IBC for their adjudication.

Orders void ab initio for contravening the moratorium - overriding effect of Section 238 of the Insolvency and Bankruptcy Code, 2016 - moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Validity of the execution order dated 06.12.2019 of the Court of Learned ADJ I, Behror, in view of the moratorium imposed by the IBC. - HELD THAT: - The Tribunal held that the trial Court failed to appreciate the effect of Section 238 and the moratorium under Section 14 of the IBC. Reliance was placed on the Supreme Court's decision in Alchemist Asset Reconstruction Company Ltd. v. Hotel Gaudavan Pvt. Ltd., which establishes that proceedings instituted or continued after the imposition of the moratorium are non est in law. Applying that ratio, the execution order of 06.12.2019 is void ab initio and is invalidated as being contrary to the moratorium and the overriding provisions of the IBC.

The execution order dated 06.12.2019 is void ab initio and invalid for contravening the moratorium and Section 238 of the IBC.

Obligation to cooperate with the Resolution Professional - moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Prohibition on coercive steps by the native Court Officer and duty to cooperate with the Resolution Professional. - HELD THAT: - Having declared the impugned execution order invalid, the Tribunal directed the native Court Officer not to take any coercive steps or act contrary to law, and to cooperate with the Resolution Professional by providing information and assistance as may be required. This ensures enforcement of the moratorium and facilitates conduct of the CIRP without interference from coercive process in subordinate fora.

Native Court Officer restrained from taking coercive action and directed to cooperate with the Resolution Professional.

Final Conclusion: The Tribunal directed acceptance and completion of physical filing of GST returns for the post CIRP period with specified timelines, required the State GST to present pre CIRP claims through the Resolution Professional under the IBC, declared the execution order of 06.12.2019 void ab initio for contravening the moratorium and Section 238 of the IBC, and restrained the native Court Officer from taking coercive measures while directing cooperation with the Resolution Professional.

Notice of dispute - pre-existing dispute - patently feeble or spurious defence - admission of application under Section 9(5)(i) of the Code - moratorium under Section 14 of the Code - appointment of Interim Resolution Professional under Section 16 of the Code

Notice of dispute - pre-existing dispute - patently feeble or spurious defence - The undated letter and subsequent correspondence from the corporate debtor did not constitute a pre-existing dispute sufficient to reject the Section 9 application. - HELD THAT: - The Tribunal examined whether the letter received in June 2018 and the reply to the demand notice constituted a notice of dispute that would mandate rejection of the application at the admission stage. The undated letter failed to identify the specific consignments or invoices allegedly defective, supplied dates, or supporting evidence of defect or prior complaints; clause 7 of the purchase order relied upon did not authorise the unilateral debit or the broad remedy asserted. The replication and materials showed that alleged deductions for difference of rates were first specifically pleaded only in the reply and not in the June 2018 communication. Applying the standard that a pre-existing dispute must be a plausible contention and not a patently feeble, hypothetical or illusory defence, the Tribunal held the asserted dispute to be spurious and unsupported by evidence and therefore not a bar to admission of the application. [Paras 13, 16, 17, 20, 21]

The purported pre-existing dispute was held to be spurious and not a ground to reject the application; the notice of dispute was not accepted.

Admission of application under Section 9(5)(i) of the Code - Whether the conditions for admission under Section 9(5)(i) were satisfied and the Section 9 application should be admitted. - HELD THAT: - The Tribunal considered completeness of Form No.5, delivery of the invoice/notice, non-payment, absence of a valid notice of dispute and pendency of any disciplinary proceeding against a proposed resolution professional. The initial defect in naming the operational creditor as a proprietorship concern was held to be curable; the applicant rectified the defect by filing an amended Form No.5. The demand notice dated 20.08.2018 was placed on record, the debt and default were evidenced by invoices and ledger entries, and no valid pre-existing dispute was shown. On these bases the Tribunal found the conditions in Section 9(5)(i) fulfilled and admitted the application for initiation of CIRP. [Paras 6, 7, 23, 24]

The application under Section 9 was admitted and CIRP was directed to be initiated.

Moratorium under Section 14 of the Code - Declaration and extent of moratorium consequent to admission of the Section 9 application. - HELD THAT: - On admission of the application and initiation of CIRP, the Tribunal declared the moratorium in terms of Section 14(1), restraining institution or continuation of suits and execution against the corporate debtor, transfers or encumbrance of assets, enforcement of security, and recovery of property occupied by the corporate debtor. The Tribunal clarified that supply of essential goods or services shall not be terminated during the moratorium subject to statutory exceptions and specified that the moratorium takes effect from the date of the order until completion of CIRP or approval of a resolution plan or liquidation. [Paras 25, 26, 27]

A moratorium in terms of Section 14 was declared with effect from the date of the order until completion of the CIRP or further order.

Appointment of Interim Resolution Professional under Section 16 of the Code - Appointment of an Interim Resolution Professional where the operational creditor did not propose a name. - HELD THAT: - Noting that the operational creditor did not propose an IRP, the Tribunal followed Section 16(3)(a) and made a reference to the Board's panel. Having received the panel and checked credentials and absence of adverse record, the Tribunal selected a named insolvency professional from the approved panel and appointed him as Interim Resolution Professional. Directions were issued detailing the IRP's term in accordance with the Code, suspension of board powers, duties under Section 18, public announcement, collation of claims, constitution of committee of creditors, reporting and cooperation obligations of the corporate debtor. [Paras 28, 29, 30, 31]

Mr. Davinder Singh Gandhi was appointed as Interim Resolution Professional and given directions consistent with the Code.

Final Conclusion: The Tribunal held that the alleged pre-existing dispute was spurious and did not bar admission; the Section 9 application was admitted, CIRP was initiated, moratorium declared, and an Interim Resolution Professional was appointed from the Board's panel with consequential directions.

Adjudicating authority's duty to ascertain default and decide Section 7 petitions within 14 days - prompt admission of Section 7 petition where requisite satisfaction is reached - application under Section 8 - reference to arbitration does not automatically stay adjudication under Section 7 - limited effect of interim orders staying remand of Section 8 application - proceeding with Section 7 petition despite a pending writ appeal on Section 8

Application under Section 8 - reference to arbitration does not automatically stay adjudication under Section 7 - proceeding with Section 7 petition despite a pending writ appeal on Section 8 - limited effect of interim orders staying remand of Section 8 application - Tribunal's competence to proceed with and decide the main petition filed under Section 7 notwithstanding a pending writ appeal concerning an application under Section 8 of the Arbitration and Conciliation Act. - HELD THAT: - The Tribunal examined the interlocutory history: the respondent's I.A. under Section 8 had been rejected by the Tribunal and that rejection was the subject-matter of a writ appeal before the High Court. The High Court's subsequent clarification limited the effect of its interim order so that the remand directing disposal of the Section 8 application remained stayed; there was no order preventing the Tribunal from proceeding with the main adjudication. The NCLAT directed that, in absence of a stay by the High Court and in view of the Supreme Court's decision in Innoventive, the application under Section 7 ought to be decided within the prescribed timeframe. On that basis the Tribunal concluded that the existence of the pending writ appeal did not bar adjudication of the Section 7 petition and therefore directed that the main petition be taken up for final hearing and disposal, subject to the writ appeal. [Paras 4, 6, 8]

Tribunal to proceed to hear and decide the main Company Petition filed under Section 7 on merits, subject to the pending writ appeal; matter posted for final hearing with no further adjournments.

Adjudicating authority's duty to ascertain default and decide Section 7 petitions within 14 days - prompt admission of Section 7 petition where requisite satisfaction is reached - Application of the principle in Innoventive that the Adjudicating Authority must ascertain existence of default within 14 days and admit a Section 7 petition if satisfied on the record. - HELD THAT: - Relying on the ratio in Innoventive Industries Ltd., the Tribunal restated that the speed with which the Adjudicating Authority ascertains the existence of default is material and that the stage under Section 7(5) requires satisfaction within 14 days of receipt of the application. If the Authority is satisfied with the requisites under the Code, the petition must be admitted. In view of the pendency and adjournments in the present petition, and the High Court's limited clarification, the Tribunal considered it necessary to take up the Section 7 petition for decision in accordance with this principle. [Paras 7, 8]

Tribunal directed to decide the Section 7 petition on merits in accordance with the Innoventive timeline and principles.

Final Conclusion: The Tribunal directed that the Company Petition under Section 7 be taken up for final hearing and decided on merits (subject to the writ appeal), applying the Innoventive principle of prompt adjudication and ordering no further adjournments.

Violation of the principles of natural justice (notice and hearing) - rectification of clerical/arithmetical error under Section 128 - verification of declaration by designated committee and final quantification in Form SVLDRS-3 - obligation to consider verification report and to pass a reasoned order - power and procedure of the designated committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme

Violation of the principles of natural justice (notice and hearing) - verification of declaration by designated committee and final quantification in Form SVLDRS-3 - Validity of issuance of Form SVLDRS-3 enhancing the payable amount without affording opportunity of hearing after issuance and acceptance of Form SVLDRS-2/2A. - HELD THAT: - The Court found that Form SVLDRS-2 had estimated the tax payable as the same amount as declared by the petitioner and that the petitioner accepted that estimate by filing Form SVLDRS-2A. Thereafter the Designated Committee issued Form SVLDRS-3 reflecting a substantially higher amount without furnishing the verification report of the jurisdictional divisional commissioner to the petitioner or affording any opportunity of hearing to deal with that report. Where adverse civil consequences (enhancement of dues) are visited upon a person, principles of natural justice-notice and hearing-must be complied with. The impugned action of issuing an enhanced Form SVLDRS-3 without notice or hearing in respect of the verification report was held to be a gross violation of natural justice and therefore vitiated the decision-making process. [Paras 21, 23]

Form SVLDRS-3 issued for the enhanced amount is quashed for breach of natural justice and for failing to afford an opportunity to the petitioner to consider and rebut the verification report prior to enhancement.

Rectification of clerical/arithmetical error under Section 128 - obligation to consider verification report and to pass a reasoned order - power and procedure of the designated committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme - Validity of the Designated Committee's failure to pass any order on the petitioner's rectification application under Section 128 and Rule 6(6) and the appropriate remedy. - HELD THAT: - The Court held that the Designated Committee cannot merely state in a reply that there was no change after certification by concerned authorities without passing an order as contemplated under Section 128 of the Finance Act and Rule 6(6) of the SVLDRS Rules. Rule 6(6) permits modification of Form SVLDRS-3 within thirty days only to correct an arithmetical or clerical error apparent on the face of the record, on such error being pointed out by the declarant or suo motu. The Respondents' failure to pass any formal order on the rectification application and to communicate reasoned conclusions to the petitioner was held to be contrary to the statutory procedure and impermissible. [Paras 22, 24, 25]

The Designated Committee's inaction is set aside; the rectification regime under Section 128/Rule 6(6) requires a formal order and, in absence thereof, the matter is remitted for reconsideration in accordance with law.

Final Conclusion: Form SVLDRS-3 No. L060320SV301216 dated 06-03-2020 and Form SVLDRS-4 No. L030720SV400980 dated 03-07-2020 are quashed. The matter is remitted to the Designated Committee to afford the petitioner an opportunity of hearing, consider the verification report and the petitioner's rectification application, and thereafter pass reasoned orders and, if appropriate, issue revised Form SVLDRS-3 and Form SVLDRS-4 within four weeks from the date of the order; no opinion expressed on merits.

Works Contract Service - inclusion of material cost in gross value - abatement under Notification No. 01/2006-ST - taxability of works contract service prior to 01.06.2007 - cum-tax benefit

Works Contract Service - inclusion of material cost in gross value - Characterisation of the appellant's activity as Works Contract Service - HELD THAT: - The Tribunal found on the materials of contract and commercial practice that the appellant supplied construction services together with materials (cement, metal, steel reinforcement, sand etc.), and that the recipient deducted Works Contract Tax. The Department itself computed the demand after allowing the abatement under Notification No. 01/2006-ST, thereby implicitly admitting that material cost was included in the gross value. On these facts the Tribunal concluded that the activity qualified as Works Contract Service. [Paras 7, 8, 9]

The appellant's activity is held to be Works Contract Service.

Taxability of works contract service prior to 01.06.2007 - Works Contract Service - cum-tax benefit - Whether the Works Contract Service rendered by the appellant was liable to service tax for the period October 2004 to March 2007 - HELD THAT: - The Tribunal applied the binding principle in COMMISSIONER v. LARSEN & TOURBO LTD. that works contract service was not leviable to service tax prior to 01.06.2007. Given that the entire disputed period falls before 01.06.2007, and having held that the appellant's activity was a Works Contract Service with material included in the gross value (as admitted by the revenue's computation allowing abatement), the Tribunal held that the demand for service tax for October 2004 to March 2007 was not sustainable. The earlier adjudications confirming the demand and penalties were therefore set aside to the extent they rested on taxability for that period. [Paras 5, 9, 10]

The demand for service tax for October 2004 to March 2007 is held unsustainable and is set aside.

Final Conclusion: The Tribunal held that the appellant rendered Works Contract Service with material included in the gross value and, applying the Supreme Court decision in Larsen & Tourbo, concluded such service was not taxable for the period October 2004 to March 2007; the impugned order confirming the demand was set aside and the appeal allowed.

Classification of motor vehicles by seating capacity under Chapter 87 - Distinction between Heading 87.02 and Heading 87.03 - Valuation under Rule 10A of the Central Excise (Valuation) Rules, 2000 - Verification of payment of differential duty

Classification of motor vehicles by seating capacity under Chapter 87 - Distinction between Heading 87.02 and Heading 87.03 - The ambulances fabricated by the appellant are classifiable under Heading 87.02 of the CETA, 1985. - HELD THAT: - Relying upon the Tribunal's earlier reasoning in the appellant's own reported decision, the determinative test is the sitting capacity of the vehicle. The Tribunal recorded that the vehicle in question can carry more than 12 persons excluding the driver (or 14 including the driver), and therefore falls within Heading 87.02. The earlier discussion rejected reliance on isolated registration-certificate entries indicating lesser seating where those vehicles were not manufactured by the appellant. Applying that precedent and the seating-capacity test, the Tribunal held the vehicles are properly classifiable under Heading 87.02 rather than under Heading 87.03. [Paras 5]

Vehicle in question is classifiable under Chapter heading No. 8702 of CETA, 1985.

Valuation under Rule 10A of the Central Excise (Valuation) Rules, 2000 - Verification of payment of differential duty - Duty is payable on value determined under Rule 10A, and verification is required as to whether any differential duty has already been paid. - HELD THAT: - The Tribunal applied its earlier precedent which held that valuation of such fabricated ambulances is to be made under Rule 10A of the Central Excise (Valuation) Rules, 2000. While the appellant contended that duty as per Rule 10A has already been paid, the Tribunal directed that the adjudicating authority verify whether differential duty remains payable - i.e., the question of actual payment is left for verification rather than being finally adjudicated on the present appeal. The liability to pay duty under Rule 10A is affirmed subject to this verification. [Paras 5]

The appellant is liable to pay duty as per Rule 10A and, if any differential duty is alleged, the same is subject to verification.

Final Conclusion: The appeal is disposed of by affirming classification of the ambulances under Heading 8702 and holding liability to duty calculated under Rule 10A, with a direction that the adjudicating authority verify whether any differential duty remains payable for the period December 2009 to September 2014.