TaxTMI Updates e-Newsletter
Oct 06,2020

Suppression of material facts - void ab initio - maintainability of advance ruling - proviso to Section 98(2) of the CGST Act - investigation under Section 67 as a proceeding - jurisdictional fact - invocation of Section 104 of the CGST Act - classification under Chapter 1905 vis-a -vis Chapter 2106 - residuary heading - nomenclature test versus ingredients/end-user test

Suppression of material facts - maintainability of advance ruling - proviso to Section 98(2) of the CGST Act - investigation under Section 67 as a proceeding - void ab initio - invocation of Section 104 of the CGST Act - Validity of the Authority for Advance Ruling's order in view of non-disclosure of an ongoing investigation and whether the AAR had jurisdiction to admit the application. - HELD THAT: - The Appellate Authority examined the Department's contention that the applicant had withheld the fact of an ongoing DGGI investigation into classification of the same products and that an investigation under Section 67 constitutes a 'proceeding' under the proviso to Section 98(2). The Authority rejected the appellant's submission that 'proceedings' exclude investigative steps, holding that investigation is a prescribed course of action that leads to adjudication and is therefore encompassed by the proviso to Section 98(2). The records showed summons and statements specifically addressing the manufacturing process and classification of the parotas, evidencing that the classification question was already the subject of proceedings. The applicant had declared to the AAR that the question was not pending in any proceeding despite being aware of the DGGI investigation. The Appellate Authority concluded that the AAR lacked jurisdiction to admit the application and that the AAR order was vitiated by suppression of material facts; accordingly Section 104 was invoked to declare the AAR order void ab initio. [Paras 15, 16, 17, 18, 19]

The AAR's order is void ab initio for having been rendered after admission of an application in circumstances of suppression of a pending investigation; the AAR lacked jurisdiction to admit the application under the proviso to Section 98(2).

Classification under Chapter 1905 vis-a -vis Chapter 2106 - residuary heading - nomenclature test versus ingredients/end-user test - Determination of the tariff classification of Whole Wheat Parota and Malabar Parota (whether classifiable under Chapter 1905 attracting 5% GST) was not finally decided. - HELD THAT: - Because the Appellate Authority has held the AAR order void on jurisdictional grounds arising from non-disclosure of the pending investigation, it did not adjudicate the substantive classification question. The Authority observed that classification arguments were fully contested by the parties but, given the finding that the matter was pending in proceedings under the Act, the question of classification did not arise for decision in this appeal and no conclusive ruling on Chapter 1905 v. 2106 was given. [Paras 20, 21]

No ruling on the classification question; the substantive issue is left undecided because the matter is pending in a proceeding under the Act.

Final Conclusion: The appeal is dismissed. The Authority for Advance Ruling's order dated 22.05.2020 is declared void ab initio for non-disclosure of a pending investigation; the substantive question of classification of the parotas under Chapter 1905 (and entitlement to the concessional rate or exemption) is not decided as the issue remains pending in proceedings under the Act.

Provisional attachment of bank account and property - provisional attachment under Section 83 of Punjab Goods and Service Tax Act and Central Goods and Service Tax Act, 2017 - writ in the nature of certiorari for quashing - defreezing of bank accounts subject to maintenance of balance - Order 1 Rule 10 impleadment

Order 1 Rule 10 impleadment - Application for impleading HDFC Bank Ltd. as respondent No.4 was allowed and amended Memo of Parties was taken on record. - HELD THAT: - The Court considered the petitioner's application under the civil procedural provision permitting impleadment. For the reasons recorded in the application the Court permitted impleadment of HDFC Bank Ltd. and directed that the amended Memo of Parties be taken on record. No further factual or legal controversy on impleadment was left open by the order.

Application under Order 1 Rule 10 allowed; HDFC Bank Ltd. impleaded as respondent No.4 and amended Memo of Parties recorded.

Provisional attachment of bank account and property - provisional attachment under Section 83 of Punjab Goods and Service Tax Act and Central Goods and Service Tax Act, 2017 - writ in the nature of certiorari for quashing - defreezing of bank accounts subject to maintenance of balance - Prayer for quashing confirmation of provisional attachment was disposed of by directing defreezing of all the petitioner's bank accounts subject to a condition. - HELD THAT: - The petitioner sought certiorari to quash orders confirming provisional attachment of his bank accounts and property. Counsel for the petitioner identified that seven bank accounts existed and requested that all accounts be defrozen to enable continuation of business, undertaking to maintain the balances that were present on the date of provisional attachment; it was noted that the petitioner had overdrawn the CC account beyond its limit. The respondent did not contest the practical logic of permitting limited access. Having recorded these facts and submissions, and in the exercise of its discretionary supervisory jurisdiction, the Court disposed of the writ petition by directing that all the petitioner's accounts be defrozen on the condition that the petitioner maintain the amount which was present in those accounts on the date of the provisional attachment. The order thereby allowed limited relief without adjudicating the merits of the underlying attachment orders.

All bank accounts of the petitioner are to be defrozen subject to the petitioner maintaining the balances that were present on the date of provisional attachment; petition disposed.

Final Conclusion: The application to implead HDFC Bank Ltd. was allowed and the amended Memo of Parties recorded; on the writ petition the Court directed that all of the petitioner's bank accounts be defrozen on the condition that the petitioner maintain the balances that existed on the date of the provisional attachment, and disposed of the petition and any pending applications.

Disallowance under Section 14A read with Rule 8D - remand for fresh hearing - representation of liquidator/administrator in liquidation proceedings - right to opportunity of hearing before the Tribunal

Disallowance under Section 14A read with Rule 8D - opportunity of hearing before the Tribunal - representation of liquidator/administrator in liquidation proceedings - remand for fresh hearing - Impugned Tribunal order set aside and matter remanded for fresh adjudication after giving opportunity to the Administrator representing the assessee-company in liquidation; substantial question of law left open. - HELD THAT: - The Court found that at the Tribunal hearing no one represented the assessee, whereas the assessee-company is under liquidation and an Administrator has since been appointed who is represented by counsel. Given that the Administrator (and the Office of the Official Liquidator) had not been heard before the Tribunal, the Division Bench concluded that the Tribunal should be afforded an opportunity to decide the controversy afresh on merits after hearing the Administrator and the Revenue. For this reason the Court did not adjudicate the admitted substantial question of law concerning whether disallowance under Section 14A read with Rule 8D should be restricted to the extent of exempt income; that question was expressly left open for determination by the Tribunal on remand. The Court therefore interfered only to set aside the impugned order and to direct fresh consideration, on the ground that the assessee (through its Administrator) must be given a hearing before final adjudication. [Paras 8, 9]

Appeal allowed in part; impugned Tribunal order set aside and matter remanded to the Tribunal to issue notice to and hear the Administrator and the Revenue and to pass fresh orders on merits; the substantial question of law is left open.

Final Conclusion: The High Court set aside the Tribunal's order and remanded the matter for fresh consideration after giving notice to and hearing the Administrator representing the assessee in liquidation; the substantial question of law regarding the scope of disallowance under Section 14A read with Rule 8D was left open for decision by the Tribunal.

Certificate under section 197 - order under section 119 - extension of limitation by Ordinance promulgated under Article 123 - overriding effect of the Ordinance over statutory time limits - obligation to intimate assessing officer about pendency of application - beneficial construction in exceptional pandemic circumstances

Extension of limitation by Ordinance promulgated under Article 123 - overriding effect of the Ordinance over statutory time limits - Applicability of the Ordinance extending time limits to applications under section 197 filed for the relevant period and whether the Ordinance could be curtailed by the CBDT order. - HELD THAT: - The Court held that the Ordinance promulgated under Article 123 extended time limits falling within 20.03.2020 to 29.06.2020 to 30.06.2020 (or beyond by notification) and, being legislative in character, has force notwithstanding provisions of the Income Tax Act. The second proviso to sub section (1) of section 3 of the Ordinance excludes only payment obligations dealt with in sub section (2) and cannot be read to deny the extension of time for furnishing replies, applications or documents under the Act. Therefore the Ordinance afforded an overriding extension of limitation applicable to the petitioner's application for a certificate under section 197 for the relevant period. [Paras 25]

Ordinance applied to extend limitation and could not be curtailed by the CBDT order.

Order under section 119 - obligation to intimate assessing officer about pendency of application - beneficial construction in exceptional pandemic circumstances - Validity of CBDT's order dated 03.04.2020 insofar as it required applicants to intimate the assessing officer and whether rejection of the petitioner's application for non intimation was sustainable. - HELD THAT: - The Court recognised the benevolent objective of the CBDT order but held that its application must not operate to the disadvantage of applicants in the extraordinary lockdown conditions. Placing an additional burden on applicants to intimate pendency, when the assessing officer was aware of the pending application (as evidenced by issuance of notice), cannot be used to defeat the benefit of the extended limitation; explanations based on lockdown restrictions for inability to produce voluminous documents were not to be treated as frivolous. Consequently, simpliciter rejection of the petitioner's application as infructuous for failure to intimate or for non compliance with the CBDT timeline was unsustainable. [Paras 27, 28]

Rejection of the application for non intimation and on limitation grounds was unjustified and unsustainable.

Certificate under section 197 - Relief and further adjudication required in respect of petitioner's application for a certificate under section 197 for the assessment year 2020-21. - HELD THAT: - Having found that the Ordinance applied and that the CBDT order could not lawfully operate to defeat the petitioner's rights in the circumstances, the Court set aside respondent No.2's rejection and remanded the application for fresh consideration on merits. The remand directed respondent No.2 to decide the petitioner's application in accordance with law and after affording opportunity, within a specified short period. [Paras 29]

Decision rejecting the application set aside; matter remanded for fresh decision on merits within six weeks.

Final Conclusion: Writ petition allowed; order rejecting the petitioner's application under section 197 dated 08.06.2020 set aside and matter remanded to the assessing officer to decide the application for assessment year 2020 21 on merits and in accordance with law within six weeks; no order as to costs.

Summary order. Appeal under Section 260A dismissed on account of low tax effect in terms of CBDT Circular No.17/2019; substantial question of law left open and liberty granted to restore the appeal if tax effect exceeds the threshold.

Deduction under section 80IA with regard to the choice of initial assessment year and ten consecutive years - initial assessment year as the first year opted for claiming the deduction - effect of CBDT clarification on assessment treatment - prior period depreciation included in book depreciation and prohibition of double disallowance

Deduction under section 80IA with regard to the choice of initial assessment year and ten consecutive years - initial assessment year as the first year opted for claiming the deduction - effect of CBDT clarification on assessment treatment - Validity of disallowance of deduction claimed under section 80IA(4)(iv)(a) in assessment year 2012-13 on the ground that the 'initial assessment year' was earlier than AY 2010-11. - HELD THAT: - The Tribunal held that the assessee had not claimed any deduction under section 80IA for AYs 2007-08 to 2009-10 and first claimed the deduction in AY 2010-11; consequently AY 2010-11 is the 'initial assessment year' for the ten year benefit. The decision relied on the CBDT Circular No.1/2016 which clarifies that the term 'initial assessment year' means the first year opted for by the assessee for claiming deduction under section 80IA and directs Assessing Officers to allow deduction accordingly. The Tribunal also noted that the Pune Bench in the assessee's own case for the preceding year reached a similar conclusion and that the Special Bench decision relied on by Revenue pre dated the CBDT clarification. Applying these authorities and the identical facts in the present assessment year, the Tribunal sustained the CIT(A)'s direction to treat AY 2010-11 as the initial assessment year and deleted the addition made by the AO. [Paras 5, 7]

Addition disallowing deduction under section 80IA(4)(iv)(a) was deleted and Revenue's Ground No.1 is dismissed.

Prior period depreciation included in book depreciation - prior period expenses and prohibition of double disallowance - Validity of the Assessing Officer's disallowance of prior period depreciation of Rs.9,84,391/- in AY 2012-13 as an additional disallowance. - HELD THAT: - The Tribunal accepted the assessee's showing that the amount characterized as 'Depreciation on investment in premises for prior period' was already included within the total book depreciation of Rs.5,30,66,886 as reflected in the audited accounts and Note No.24, and that the entire book depreciation had been added back in the computation of total income. The AO's separate disallowance of the prior period component therefore amounted to a double addition. The Revenue was unable to controvert the documentary evidence on record. On this basis the Tribunal sustained the CIT(A)'s deletion of the additional disallowance. [Paras 7, 12]

Addition on account of disallowance of prior period depreciation was deleted and Revenue's Ground No.2 is dismissed.

Final Conclusion: The Revenue's appeal is dismissed: the Tribunal upheld the CIT(A)'s allowance of the section 80IA deduction treating AY 2010-11 as the initial assessment year in line with the CBDT clarification and related precedents, and sustained deletion of the separate disallowance of prior period depreciation as constituting double addition; other grounds were general and not adjudicated.

Validity of reassessment - reassessment initiated on change of opinion - challenge to reassessment despite no objection during proceedings - deduction under section 80IB(10) - Computer Aided Scrutiny Selection (CASS) - reasons to believe for reopening

Challenge to reassessment despite no objection during proceedings - validity of reassessment - Assessee may challenge validity of reassessment before appellate forums notwithstanding that no objection was raised before the AO during reassessment proceedings. - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that absence of an objection by the assessee before the assessing officer does not preclude appellate scrutiny of the validity of reassessment. The determinative question is whether the reassessment itself was valid, not whether objections were made during the AO's proceedings. Consequently, the appellate forum may examine and set aside a reassessment that is legally unsustainable even if the assessee did not object at the reassessment stage. [Paras 4]

The ground challenging the CIT(A)'s quashing of reassessment on the basis that no objection was raised before the AO is dismissed; the validity of reassessment can be examined on appeal.

Reassessment initiated on change of opinion - reasons to believe for reopening - deduction under section 80IB(10) - Computer Aided Scrutiny Selection (CASS) - Reassessment initiated on account of a mere change of opinion by a new assessing officer, without any fresh material, is invalid and liable to be quashed. - HELD THAT: - The AO had originally examined the claim for deduction under section 80IB(10) during scrutiny selected under CASS and recorded findings after considering documents such as Form No.10CCB, commencement and completion certificates and ledgers. The reasons recorded for reopening relied on alleged inconsistencies in commencement dates and the Collector's orders, but no new material had come to the AO's possession after the original assessment. The Tribunal concurred with the CIT(A) that the reassessment stemmed from a review of existing material by a change of incumbent and hence amounted to a prohibited change of opinion, following the established principle that reopening cannot be based solely on a change of view. Accordingly, the reassessment was quashed. [Paras 5, 6, 7]

Reassessment quashed as it was founded on change of opinion without any fresh material.

Final Conclusion: The appeal is dismissed; the reassessment for Assessment Year 2009-10 is quashed as invalid (initiated on change of opinion), and the appellate forum may adjudicate the validity of reassessment notwithstanding absence of objections before the AO.

Special audit under section 142(2A) - extension under proviso to section 142(2C) - competent authority and exercise of statutory power - limitation under section 153B - assessment void ab initio where extension improperly granted

Special audit under section 142(2A) - extension under proviso to section 142(2C) - competent authority and exercise of statutory power - Validity of 60 day extension for completion of special audit granted by the Commissioner instead of the Assessing Officer under the proviso to section 142(2C). - HELD THAT: - The proviso to section 142(2C) vests the power to extend the time for completion of a special audit in the Assessing Officer who must apply his mind and record satisfaction of the statutory circumstances before granting any extension. While initial directions for special audit under section 142(2A) require prior approval of the Commissioner, the statute distinguishes that requirement from the extension power which is exclusively vested in the Assessing Officer. The Tribunal found on the facts that the 60 day extension was granted by the Commissioner and only communicated by the Assessing Officer, and therefore the extension was not granted by the competent authority as mandated by the proviso. The Tribunal applied the principle that a statutory power given to a specified authority cannot be validly exercised by another authority unless the statute permits such substitution; administrative approval by a higher officer cannot substitute for the exercise of the Assessing Officer's statutory power to extend under the proviso to section 142(2C). [Paras 10, 14]

Extension granted by the Commissioner (and merely conveyed by the Assessing Officer) was beyond the powers conferred by the proviso to section 142(2C) and therefore invalid.

Limitation under section 153B - assessment void ab initio where extension improperly granted - Consequences for assessments completed after the normal limitation period where the extension relied upon was invalid. - HELD THAT: - Because the extension relied upon to exclude the special audit period from the limitation computation was invalid, the assessments completed after the expiry of the statutory limitation (as governed by section 153B) were held to be beyond jurisdiction. The Tribunal concluded that assessments completed after the due date, where delay was cured only by an invalid extension, are void ab initio. Having decided the jurisdictional defect in favour of the assessee, the Tribunal declined to adjudicate merits of additions and disallowances as academic. [Paras 14, 17]

Assessments completed after the limitation period, relying on the invalid extension, are void ab initio; therefore the preliminary jurisdictional plea is allowed and merits become academic.

Final Conclusion: The grant of 60 days' extension for special audit by the Commissioner (instead of the Assessing Officer) was invalid under the proviso to section 142(2C); assessments completed relying on that extension were held void ab initio and the assessee's preliminary plea is allowed, with Revenue appeals dismissed.

Admission of additional evidence under Rule 46A - sufficient cause for non-production of evidence - interest of justice - prejudice to revenue - de-novo assessment after admission of evidence - Assessing Officer's opportunity to rebut - no-accounts assessment - compounding under Companies Act as proof of bona fides - reference to Transfer Pricing Officer

Admission of additional evidence under Rule 46A - sufficient cause for non-production of evidence - interest of justice - prejudice to revenue - de-novo assessment after admission of evidence - Assessing Officer's opportunity to rebut - Admissibility of audited financial statements, tax audit report, Form 3CEB and transfer pricing documentation as additional evidence and the consequent course of action. - HELD THAT: - The Tribunal found that the assessee had not filed audited accounts during assessment proceedings for reasons beyond its control, namely changes in management, a fact supported by the Company Law Board's compounding order. The failure to file audited accounts was therefore attributable to sufficient cause and did not attract any adverse inference. The Tribunal held that additional evidence generated after completion of assessment may be admitted at the appellate stage where admission would serve the interest of substantial justice, provided the Revenue is not prejudiced and the Assessing Officer is afforded a reasonable opportunity to rebut the material. Reliance was placed on departmental duty to assist taxpayers and on precedent permitting admission of such evidence. In view of these considerations, the Tribunal directed that the Assessing Officer should make a de-novo assessment after considering the audited financial statements and audit report and after giving the assessee and the Revenue an opportunity to present and rebut the evidence; the matter was remitted for fresh adjudication rather than being finally decided on issues of income, depreciation, transfer pricing, interest or penalty. [Paras 5, 6]

Audited accounts, audit report and related documents admitted for the purposes of fresh adjudication; matter remitted to the Assessing Officer for de-novo assessment after giving opportunity to the assessee and to the Revenue to rebut the evidence.

Final Conclusion: The appeal is allowed for statistical purposes; the Assessing Officer is directed to consider the admitted audited financial statements and accompanying reports and to re-assess the income de-novo after affording the assessee and the Revenue a proper opportunity to present and rebut evidence.

Service of notice - notice under section 143(2) of the Income Tax Act, 1961 - jurisdictional requirement - time limit for issuance of notice - last known address - onus on Revenue to prove service - void ab initio

Service of notice - notice under section 143(2) of the Income Tax Act, 1961 - last known address - onus on Revenue to prove service - void ab initio - Validity of the assessment where notice under section 143(2) was issued at an address different from the assessee's known address and alleged service within time. - HELD THAT: - The Tribunal examined the record and found that the return for the relevant year showed the assessee's address as 11/2A, Pusa Road, Karol Bagh and that the Assessing Officer (AO) had been intimated of this change by letter dated 06.06.2008 and had previously processed returns at that address. Despite this, the notice under section 143(2) dated 23.09.2013 was issued at the old address. The AO's subsequent remand report asserted personal service but no process-server report or corroborative evidence of personal service was produced. The assessment order itself contains inconsistent statements regarding mode of service (speed post versus personal service), and later notices were again issued at the old address, undermining the Revenue's claim of proper service at the new address. Relying on settled authorities that the issuance and service of such notice at the correct address are mandatory jurisdictional requirements and that the onus of proving service lies on the Revenue, the Tribunal held that issuance of the notice at the wrong address, without satisfactory proof of valid service at the known address within the stipulated period, vitiates the jurisdiction to make reassessment. Applying these principles, the Tribunal concluded that the notice was invalid and the resulting assessment was void ab initio.

Notice under section 143(2) was not validly issued/served within the prescribed time at the assessee's known address; assessment is void ab initio and quashed.

Final Conclusion: The appeal is allowed by quashing the assessment as the notice under section 143(2) was not validly issued or proved to have been served at the assessee's known address within the statutory time, and the remaining grounds are rendered infructuous.

Condonation of delay - Admission of appeals for hearing - Ex-parte dismissal for non-prosecution - Right to be heard and disposal on merits - Restoration and remand for fresh adjudication on merits

Condonation of delay - Admission of appeals for hearing - Delay of 71 days in filing appeals before the Tribunal was condoned and the appeals were admitted for hearing. - HELD THAT: - The Tribunal examined the affidavit and explanations for the delay, noting that the primary cause was mishandling of tax proceedings by the assessee's earlier consultant and a change of counsel which resulted in non-follow up of an appellate order communicated by e-mail. Taking into account the overall facts and circumstances and that the delay was beyond the assessee's control, the Tribunal exercised its discretion to condone the delay so that the issues could be decided on merits rather than on technical lapse. [Paras 5]

Delay condoned and appeals admitted for hearing.

Ex-parte dismissal for non-prosecution - Right to be heard and disposal on merits - Restoration and remand for fresh adjudication on merits - The ex-parte dismissal of the assessee's appeals by the CIT(A) was set aside and the appeals were restored to the file of the CIT(A) for fresh consideration on merits with an opportunity of hearing to the assessee. - HELD THAT: - Although it is settled that an appellant must appear and substantiate its appeal, the Tribunal found that the CIT(A)'s order dismissed the appeals in limine without discussing the issues on merits. The Tribunal held that authorities are obliged to dispose of appeals on merits insofar as materials on record permit. Because the CIT(A) did not address the substantive issues, the Tribunal directed restoration to allow the assessee one more opportunity to file evidence and for the CIT(A) to decide the matters on merits; the Tribunal cautioned that if the assessee again fails to appear, the appellate authority may proceed in accordance with law. [Paras 10]

Orders of the CIT(A) set aside; appeals restored to CIT(A) for fresh adjudication on merits after granting opportunity to the assessee.

Final Conclusion: Delay in filing the appeals for AYs 2013-14, 2014-15 and 2015-16 was condoned; the Tribunal set aside the ex-parte dismissals by the CIT(A) and restored the appeals to the CIT(A) for fresh consideration on merits, directing that the assessee be given an opportunity to file evidence.

Deductibility of belated Employees' Provident Fund contribution - Capitalisation of project expenses and revenue deduction - Interest on capital work in progress and proviso to the relevant provision - Foreign exchange loss on external commercial borrowings and its classification as revenue or capital - Applicability of section 43A to foreign exchange gains/losses on capital loans - Application of Woodward Governor principle regarding reinstatement of foreign currency loans - Precedent of the tribunal's decision in assessee's own case

Deductibility of belated Employees' Provident Fund contribution - CIT(A) following Karnataka High Court precedent - Revenue's appeal against deletion of addition for belated payment of employees' contribution to Provident Fund. - HELD THAT: - The tribunal found the issue squarely covered in favour of the assessee by the judgment of the Karnataka High Court in CIT vs. Sabari Enterprises and, applying that precedent, declined to interfere with the CIT(A)'s deletion of the disallowance in both assessment years. The revenue's challenge to the CIT(A)'s allowance was therefore rejected. [Paras 6]

Ground No. 2 in both years rejected; deletion by CIT(A) upheld.

Capitalisation of project expenses and revenue deduction - Precedent of the tribunal's decision in assessee's own case - Revenue's appeals against deletion of disallowance relating to project expenses capitalised by the AO. - HELD THAT: - The tribunal noted that the same issue was previously decided in the assessee's own case for A.Y. 2013 14 & 2014 15 in favour of the assessee. Respectfully following those tribunal decisions, the tribunal declined to interfere with the CIT(A)'s deletion of the additions and rejected the revenue's grounds challenging the capitalisation treatment in both years. [Paras 7]

Grounds Nos. 3 to 5 in both years rejected; CIT(A)'s deletion upheld.

Interest on capital work in progress and proviso to the relevant provision - Precedent of the tribunal's decision in assessee's own case - Revenue's appeal against deletion of disallowance of interest on capital work in progress. - HELD THAT: - The tribunal observed that tribunal orders in the assessee's own case for the immediately preceding year (A.Y. 2010 11) and the immediately succeeding years (A.Y. 2013 14 & 2014 15) decided the issue against the assessee. Given the availability of those directly relevant tribunal precedents, the tribunal found no reason to follow other authorities relied upon by the assessee and, respectfully following its own earlier orders, reversed the CIT(A)'s decision and restored the assessing officer's disallowance in both years. [Paras 8]

Ground No. 6 in both years allowed; order of AO restored on interest on CWIP.

Foreign exchange loss on external commercial borrowings and its classification as revenue or capital - Applicability of section 43A to foreign exchange gains/losses on capital loans - Application of Woodward Governor principle regarding reinstatement of foreign currency loans - Revenue's appeal against deletion of disallowance of foreign exchange loss in A.Y. 2012 13. - HELD THAT: - The tribunal examined the assessment record and the parties' submissions and observed that the AO himself had recorded that section 43A was not applicable. The assessee produced audited accounts showing imports of capital goods in certain earlier years but also substantial export proceeds; the revenue did not establish that ECB loans were utilised for import of capital goods. Relying on the Supreme Court's approach in Woodward Governor and Sutlej Cotton Mills regarding reinstatement and the classification of forex gain/loss as revenue or capital, and following the tribunal's own earlier decision in the assessee's case for A.Y. 2013 14 & 2014 15 which accepted those principles, the tribunal declined to interfere with the CIT(A)'s deletion of the disallowance for A.Y. 2012 13. [Paras 11]

Ground No. 7 in A.Y. 2012 13 rejected; CIT(A)'s deletion of the forex loss disallowance upheld.

Final Conclusion: Both revenue appeals were partly allowed: the tribunal upheld the CIT(A)'s deletions in respect of belated PF contributions, capitalised project expenses and the forex loss for A.Y. 2012 13, but restored the assessing officer's disallowance in respect of interest on capital work in progress in both assessment years.

Validity of penalty notice under section 274 r.w.s. 271 - Requirement to specify concealment of income or furnishing inaccurate particulars - Principles of natural justice in penalty proceedings - Binding precedent of the jurisdictional High Court (CIT v. Manjunatha Cotton and Ginning Factory) - Apparent mistake in a Tribunal order

Validity of penalty notice under section 274 r.w.s. 271 - Requirement to specify concealment of income or furnishing inaccurate particulars - Binding precedent of the jurisdictional High Court (CIT v. Manjunatha Cotton and Ginning Factory) - Apparent mistake in a Tribunal order - Whether the impugned Tribunal order contains an apparent mistake in holding the penalty order invalid where the penalty notice did not clearly state whether it was for concealment of income or for furnishing inaccurate particulars of income. - HELD THAT: - The Tribunal had deleted the penalty after applying the binding decision of the jurisdictional High Court in CIT v. Manjunatha Cotton and Ginning Factory, noting that the AO's notice under section 274 r.w.s. 271 did not make clear whether the allegation was concealment of income or furnishing inaccurate particulars. The Revenue's MP contended that this was an apparent mistake and relied on other authorities, but the MP Bench examined those decisions and found them inapplicable on facts or inferior to the binding Karnataka High Court precedent. The Bench reproduced the Karnataka High Court's conclusions that a notice under section 274 must specifically state the limb under section 271(1)(c) so that the assessee knows the precise grounds to meet, that penalty proceedings are distinct from assessment proceedings, and that defects in the penalty notice are not cured merely because the assessment order contains a specific allegation. Authorities relied upon by the Revenue were distinguished on their facts (e.g., where the relevant columns in the notice were marked or where the issue concerned a section 148 notice). Applying the binding jurisdictional precedent and the principles of natural justice, the Bench held there was no apparent mistake in the Tribunal's deletion of the penalty. [Paras 5, 9, 23, 24]

No apparent mistake found in the impugned Tribunal order; the MP is dismissed.

Final Conclusion: The Miscellaneous Petition is dismissed; the Tribunal correctly followed the binding jurisdictional authority and there is no apparent mistake in holding the penalty invalid where the penalty notice failed to specify whether it was for concealment of income or for furnishing inaccurate particulars.

Deferred revenue expenditure - capital versus revenue expenditure - current repairs - remand for verification and fresh consideration - taxability of interest on income tax refund - opportunity to be heard in reassessment/appellate proceedings

Deferred revenue expenditure - remand for verification and fresh consideration - opportunity to be heard in reassessment/appellate proceedings - Claim for deduction of expenditure treated as deferred revenue expenditure in respect of maintenance and overall check-up of leased helicopter was to be re-examined by Assessing Officer. - HELD THAT: - The Assessing Officer disallowed the expenditure on the ground that it related to prior periods and the CIT(A) upheld the disallowance noting absence of lease deed and vouchers. The assessee placed the lease agreement and bills before the Tribunal and stated that identical expenditures were allowed in earlier assessment years in 143(3) proceedings. Neither the AO nor the CIT(A) examined the lease deed and supporting vouchers in the year under consideration to determine the period and liability for the expenditure. In these circumstances the Tribunal held that the matter requires fresh consideration by the Assessing Officer after perusal of the lease deed and the relevant bills/vouchers, and after taking into account the fact of earlier allowances in Assessment Years 2010-11 and 2011-12. The Assessing Officer is directed to re-examine the claim and to afford the assessee a proper opportunity to present its case before passing a reasoned order.

Issue remanded to the Assessing Officer for fresh adjudication after verification of the lease deed and vouchers and after giving the assessee opportunity to be heard.

Capital versus revenue expenditure - current repairs - Replacement of Primary Adaptive Display and Tail Rotor Blade Assembly held to be revenue expenditure (current repairs) and the disallowance on capitalisation set aside. - HELD THAT: - The Assessing Officer and CIT(A) treated the replacements as capital/major repairs that enhanced the life or efficiency of the aircraft and capitalised the amounts. The Tribunal disagreed, observing that replacement of the Primary Adaptive Display and Tail Rotor Blade Assembly were necessary to keep the aircraft in running usable condition and did not enhance its useful life. The Tribunal also noted that the magnitude of expenditure is not determinative of the capital or revenue nature. Applying these principles, the replacements fall within current repairs and are revenue in nature. Accordingly the disallowance made on this ground was set aside.

Disallowance deleted; Assessing Officer directed to allow the expenditure as revenue (current repairs).

Taxability of interest on income tax refund - remand for verification and fresh consideration - Addition on account of interest on income tax refund restored to the file of the Assessing Officer for verification whether such interest was received by the assessee. - HELD THAT: - The assessee contended that it had never received the interest included by the Assessing Officer; the Department did not oppose verification. Both parties agreed that factual verification was required. The Tribunal therefore directed that the Assessing Officer verify the receipt of the refund and interest particulars and adjudicate the matter afresh after giving the assessee an opportunity to produce records and be heard.

Issue remanded to the Assessing Officer for verification and fresh adjudication after giving the assessee proper opportunity.

Final Conclusion: The appeal is allowed for statistical purposes: the Tribunal sets aside the disallowance on account of the specified replacements (held to be current repairs) and directs deletion; the claim treated as deferred revenue expenditure and the addition for interest on income tax refund are restored to the file of the Assessing Officer for fresh consideration and verification after giving the assessee proper opportunity to be heard.

Characterisation of compensation as capital receipt versus revenue receipt - treatment of government/ECGC/RBI compensation bonds as proceeds of project exports - accrual versus receipt (cash) system of accounting for contingent/gratuitous compensation - compensation received from United Nations Compensation Commission and taxability - treatment of compensation for loss or destruction of capital assets and applicability of capital gains provisions - allowability of prior period expenses and requirement of crystallisation/evidence - classification of interest on bank deposits as income from other sources versus business income - deductibility of employer's and employee's provident fund contributions and timing under Sec. 36(1)(va)/Sec.43B - application of Section 220(7) for amounts non-repatriable due to embargo

Characterisation of compensation as capital receipt versus revenue receipt - treatment of government/ECGC/RBI compensation bonds as proceeds of project exports - Whether the Rs. 297,46,41,205 credited as 'compensation from Government of India/ECGC' in A.Y.1995-96 is taxable as business (revenue) receipt or is a capital/ non taxable receipt. - HELD THAT: - The Tribunal examined the commercial character of the payment which arose from settlement of deferred contract dues through bonds issued/arranged by Government/ECGC/RBI consequent to war and UN sanctions. The sum represented settlement in lieu of dues under Deferred Payment Agreements and related bridging finance extended earlier; the bonds were issued to settle defaulted receivables and to adjust bank loans. Applying the established test of the nature of receipt and considering that the contracts could not be completed and that the receipt was essentially in lieu of loss of business assets/receivables arising out of extraordinary circumstances, the Tribunal held that the settlement amount did not constitute profits of a running business. Authorities and governmental instruments (including CBDT Circular No.711 and related notifications) were examined but the decisive inquiry was the commercial character of the payment in the hands of the assessee. On the material before it the Tribunal concluded that the settlement/compensation was not revenue arising from business activity but a capital receipt and therefore not exigible to tax as business income for A.Y.1995 96. [Paras 7]

Receipt of Rs. 297,46,41,205 is a capital receipt and not taxable as business income for A.Y.1995 96; Grounds 1-4 of the assessee's appeal are allowed.

Allowability of prior period expenses and requirement of crystallisation/evidence - Whether the prior period expenses of Rs. 8,90,796 claimed by the assessee for A.Y.1995 96 were allowable. - HELD THAT: - The CIT(A) had confirmed the addition because the assessee failed to produce evidence that the liabilities were crystallised or payable in the assessment year; on appeal the assessee could not demonstrate before the Tribunal how these expenditures were booked in the relevant assessment year. In absence of supporting documentation showing ascertainment of liability in the year under consideration, the addition was sustained. [Paras 8]

Addition relating to prior period expenses upheld; Ground No.5 of the assessee's appeal dismissed.

Classification of interest on bank deposits as income from other sources versus business income - Whether interest income of Rs. 7,29,95,567 for A.Y.1995 96 should be treated as business income or income from other sources. - HELD THAT: - The Tribunal accepted the reasoning that the interest was earned on fixed deposits with banks and was not integrally connected with the assessee's business operations; it relied on precedent recognising interest on deposits as income from other sources. On the facts, such interest could not be characterised as business income. [Paras 9]

Interest income treated as income from other sources; the assessee's plea to treat it as business income is rejected.

Treatment of compensation from United Nations Compensation Commission and taxability - accrual versus receipt (cash) system of accounting for contingent/gratuitous compensation - treatment of compensation for loss or destruction of capital assets and applicability of capital gains provisions - Whether the compensation from UNCC (partially received in A.Y.2001 02 and partially thereafter) is taxable as business income, capital receipt not exigible to tax, or chargeable as capital gains in A.Y.2001 02. - HELD THAT: - The Tribunal analysed the nature of the UNCC awards which compensated loss/damage and retention monies arising from abandonment of projects due to war. It considered the assessee's accounting policy (cash/receipt basis for contingent/gratuitous receipts), the dates when loss/abandonment occurred (January 1991) and the fact that the compensation was gratuitous and not a contractual commercial receipt from the debtor. The Tribunal concluded that the compensation related to capital assets and losses arising from war and, viewed commercially, was not revenue of a continuing business in the relevant year; even if capital gains provisions were argued, any transfer (if it could be so characterised) would have arisen at the time of abandonment in 1991. The Assessing Officer could not treat the entire UNCC award as accruing in A.Y.2001 02 merely because part was received in that year; the cash basis recognition adopted by the assessee for such contingent compensation was reasonable. On this basis the Tribunal held the compensation to be capital in nature and not taxable as business income for A.Y.2001 02. [Paras 31]

Compensation from UNCC is capital in nature and not taxable as business income for A.Y.2001 02; Grounds 1-3 of the assessee's appeal are allowed.

Application of Section 220(7) for amounts non-repatriable due to embargo - Whether the assessee was entitled to relief under Section 220(7) in respect of interest (Rs. 8,21,49,466) non repatriable due to embargo. - HELD THAT: - The Tribunal observed that, in view of its finding that the compensation was capital in nature, the separate question of relief under Section 220(7) became redundant. The point was therefore not adjudicated afresh on merits because the primary finding on characterisation disposed of the need for considering 220(7). [Paras 32]

Grounds relating to Section 220(7) rendered redundant and dismissed as unnecessary in light of the capital receipt findings.

Deductibility of employer's and employee's provident fund contributions and timing under Sec. 36(1)(va)/Sec.43B - Whether employees' and employer's provident fund contributions deposited after statutory due dates are allowable deductions for A.Y.2001 02. - HELD THAT: - For employees' contributions, the Tribunal upheld the Assessing Officer's finding that amounts collected from employees but deposited after due date were not allowable under Sec.36(1)(va). As to employer's contribution, the Tribunal found that the employer's contributions, though deposited after the statutory schedule, were made before the due date for filing the return; applying the Supreme Court precedents cited, the Tribunal held that such employer contributions would be allowable if deposited before the filing due date and therefore should not be disallowed under Sec.43B. [Paras 24, 25, 33]

Employee contributions disallowed (Sec.36(1)(va) sustained); employer's contributions deposited before return filing date allowed (Sec.43B); Ground No.7 of the assessee's appeal is allowed in respect of employer's contribution.

Allowability of prior period expenses and requirement of crystallisation/evidence - Whether prior period expenses pointed out in the tax audit report (Rs. 27,52,297) were allowable in A.Y.2001 02. - HELD THAT: - The Assessing Officer disallowed the claimed prior period expenses because the assessee failed to produce orders or documents to ascertain when the liabilities had been ascertained; the Tribunal noted the absence of supporting evidence and sustained the addition. [Paras 26]

Prior period expenses disallowed; Revenue's challenge to CIT(A)'s deletion on this point was rejected where CIT(A) had made findings, and Tribunal upheld the assessment addition where appropriate.

Treatment of remission of liabilities as income - Whether remission of liabilities (remission of Rs. 42,56,979 in the sale of subsidiary shares) is assessable as income. - HELD THAT: - The assessee admitted remission of liability; the Assessing Officer treated the admitted remission as income and added it to total income. On appeal, the CIT(A) deleted certain additions where reasoning supported deletion; the Tribunal examined the revenue appeal and, where the CIT(A)'s deletion was supported by findings, dismissed the Revenue's ground. Specific Revenue grounds were disposed as per the detailed findings in the order. [Paras 23, 35]

Where remission was admitted, it was treated as income by the AO; Revenue's appeal on deletion of certain items was partly dismissed and partly allowed as recorded in the order (ITA No.2200/Del/2005 partly allowed).

Final Conclusion: The Tribunal partly allowed the appeals: for A.Y.1995 96 the large compensation credited as 'compensation from Government of India/ECGC' is held to be a capital receipt (not taxable as business income) while certain disallowances (prior period expenses, guest house/ transit expenses) were sustained; for A.Y.2001 02 compensation from UNCC is held to be capital in nature and not exigible to tax as business income, Section 220(7) issues rendered redundant, employer's provident fund contributions deposited before return filing date were allowed whereas employee contributions and unsupported prior period expenses were disallowed; the Revenue's appeal was partly allowed in respect of specific grounds as recorded in the order. Order in the three appeals is accordingly partly allowed.

Disallowance under section 14A read with rule 8D - Allocation of interest and administrative expenses to exempt income - Use of interest free funds and borrowing linkage for investments - Requirement of factual inquiry and remand for verification

Disallowance under section 14A read with rule 8D - Allocation of interest and administrative expenses to exempt income - Use of interest free funds and borrowing linkage for investments - Requirement of factual inquiry and remand for verification - Whether the disallowance under section 14A read with rule 8D in respect of exempt income for AY 2013-14 is sustainable or requires fresh examination by the Assessing Officer. - HELD THAT: - The Tribunal noted the assessee's contention that majority of investments were made in earlier years, that investments in the relevant year were financed by interest free group funds and that loans on which interest was incurred were not utilised for making investments, thereby negating the basis for interest disallowance under rule 8D(2)(ii). The Tribunal recognised the principle that where interest free funds exceed the value of investments no interest disallowance would ordinarily follow, as illustrated by Reliance Industries, but observed that the factual matrix in this case required detailed examination. Similarly, the Tribunal found that the computation of administrative expense disallowance under rule 8D(2)(iii) by the AO appeared mechanical and that the assessee claimed identifiable and lower expenses attributable to exempt income. In the interest of natural justice and because these contentions raise factual questions of financing and expense allocation, the Tribunal set aside the CIT(A) order and remanded the matter to the AO for fresh adjudication and verification of records. [Paras 8, 9, 10]

Order of the CIT(A) set aside; issue restored to the file of the Assessing Officer for fresh examination and verification.

Disallowance under section 14A read with rule 8D - Allocation of interest and administrative expenses to exempt income - Requirement of factual inquiry and remand for verification - Whether the disallowance under section 14A read with rule 8D in respect of exempt income for AY 2015-16 is sustainable or requires fresh examination by the Assessing Officer. - HELD THAT: - The Tribunal held that the facts for AY 2015-16 are identical to those in AY 2013-14 and, applying the same reasoning, concluded that the question of interest and administrative expense disallowance under rule 8D requires fresh factual scrutiny by the AO. Consequently, the Tribunal set aside the CIT(A)'s confirmation of the disallowance and directed restoration to the AO for re examination in light of the discussions made in the preceding part of the order. [Paras 12]

Order of the CIT(A) set aside; issue restored to the file of the Assessing Officer for fresh examination and verification.

Final Conclusion: Both appeals (assessee and revenue) concerning disallowances under section 14A read with rule 8D for AY 2013-14 and AY 2015-16 are remitted to the Assessing Officer for fresh factual examination; the orders of the CIT(A) are set aside and the appeals are treated as allowed for statistical purposes.

Fee for default in furnishing statements - Section 234E - levy of fee for delayed TDS statements - Processing of statements - Section 200A - computation of fee on processing - Condonation of delay in filing appeals - Prospective effect of legislative amendment

Section 234E - levy of fee for delayed TDS statements - Processing of statements - Section 200A - computation of fee on processing - Prospective effect of legislative amendment - Condonation of delay in filing appeals - Whether delay in filing appeals before the CIT(A) should be condoned and the legality of levy of fee under section 234E in respect of TDS statements relating to periods prior to 1.6.2015 remitted for fresh consideration. - HELD THAT: - The Tribunal noted that section 234E imposes a fee for delayed furnishing of TDS statements and that clause (c) to (f) of section 200A(1), as substituted w.e.f. 1.6.2015, expressly provided for computation of fee at the time of processing statements. Relying on the decision of the Hon'ble Karnataka High Court in Fatehraj Singhvi (which held that the amended provisions permitting computation at processing operate only from 1.6.2015 and, hence, fee could not be computed while processing for periods prior to that date), the Tribunal observed that if that ratio is applied the levy of fee under section 234E for returns relating to periods prior to 1.6.2015 would be unsustainable. Noting the peculiar facts, the absence of a clear remedy prior to 1.6.2015 as recognised in other decisions, and in the interest of substantial justice the Tribunal exercised its discretion to condone the delay in filing the appeals. The Tribunal did not decide the substantive question on merits; instead it remanded the issue of validity of the levy under section 234E to the CIT(A) for fresh consideration in accordance with the observations in the order and relevant precedent. The Tribunal therefore directed fresh adjudication rather than finally determining legality of the fee for the periods in question. [Paras 10, 11, 12]

Delay in filing the appeals is condoned; the question as to levy of fee under section 234E in respect of TDS statements for periods prior to 1.6.2015 is remanded to the CIT(A) for fresh consideration in accordance with the Tribunal's observations.

Final Conclusion: All appeals are treated as allowed for statistical purposes; delay in filing the appeals is condoned and the question regarding levy of fee under section 234E for returns relating to periods prior to 1.6.2015 is remanded to the CIT(A) for fresh adjudication in accordance with the Tribunal's observations and relevant precedent.

Violation of principles of natural justice - show cause notice - end use certificate - concessional rate of duty - bypass of alternative statutory remedy - remand for fresh adjudication

Violation of principles of natural justice - show cause notice - Final order was vitiated by relying on a ground not stated in the show cause notice. - HELD THAT: - The Court found that the impugned order rested on a finding that the End Use Certificate had not been issued by the jurisdictional authority, whereas that specific allegation was not made in the show cause notice. It is a settled principle that matters not raised in the show cause notice cannot be introduced for the first time in the final order, since that would deprive the noticee of an opportunity to meet the case and would violate the principles of natural justice. Because the violation was apparent on the face of the order, the petitioner was permitted to seek relief in this Court despite the availability of an alternative statutory remedy.

Impugned order quashed on grounds of violation of principles of natural justice; petitioner permitted to bypass alternative statutory remedy.

End use certificate - concessional rate of duty - remand for fresh adjudication - Matter remitted for fresh consideration to enable the petitioner to place End Use Certificates and other materials before the adjudicating authority. - HELD THAT: - The petitioner has since obtained End Use Certificates in respect of the remaining entries and sought an opportunity to place those certificates and other materials before the authority. The Court declined to enter into merits concerning whether the imported goods were used only for own consumption or whether the concessional duty was wrongly availed. In the interest of justice, the Court quashed the impugned order and remitted the matter to the first respondent for fresh consideration, directing issuance of a fresh hearing notice and permitting the petitioner to produce the End Use Certificates and other relevant materials. The adjudicating authority is to pass fresh orders in accordance with law.

Writ allowed by quashing the impugned order; matter remitted for fresh hearing and adjudication on merits upon production of End Use Certificates.

Final Conclusion: The writ petition is allowed: the impugned order is quashed for violating principles of natural justice, and the matter is remitted to the first respondent for fresh hearing and adjudication after the petitioner places the End Use Certificates and other materials; no costs.

Restoration of company name under Section 252(3) - Strike off for non-filing under Section 248 - Requirement to file statutory returns and financial statements - Directions on compliance, filing of statutory documents and payment of costs - Restoration and reactivation of DINs for e filing - Prohibition on alienation of assets pending compliance - Publication of restoration order in Official Gazette - Preservation of Registrar's power to proceed for alleged late filings

Restoration of company name under Section 252(3) - Strike off for non-filing under Section 248 - Whether the Tribunal should restore the name of the Appellant Company to the Register of Companies - HELD THAT: - The Tribunal examined the materials placed on record including the latest balance sheet and financial statements for year ending 31 March 2019 and the Income tax return acknowledgment for Assessment Year 2019 20 and considered the statutory test in Section 252(3). Having regard to the appellant's explanation of inadvertent non filing, the existence of recent financial statements and tax filings, and the competence of the shareholder to prefer the appeal, the Tribunal was satisfied that it would be just and equitable to restore the company's name. The Tribunal found that the strike off under Section 248 had been effected after due process by the Registrar, but restoration is permissible where the Tribunal is satisfied that the company was carrying on business or in operation or that justice requires restoration; those conditions were met on the materials before the Tribunal. [Paras 10]

The Registrar is directed to restore the name and original status of the Appellant Company on the Register of Companies as if the name had not been struck off.

Directions on compliance, filing of statutory documents and payment of costs - Restoration and reactivation of DINs for e filing - Prohibition on alienation of assets pending compliance - Publication of restoration order in Official Gazette - Preservation of Registrar's power to proceed for alleged late filings - Terms and conditions on which restoration is to be effected and ancillary directions - HELD THAT: - While ordering restoration, the Tribunal imposed specific conditions to place the parties as nearly as may be in the position they would have occupied had the name not been struck off. The Registrar was directed to change the company's status to Active for e filing and to restore/activate DINs as applicable and to inform bankers to defreeze accounts. The company was required to file all pending statutory documents with prescribed/additional fees within 30 days of restoration, to furnish a joint undertaking that accounts were not used to transact tainted money during demonetisation, and to pay costs to the Central Government with proof within three weeks; failure to comply would cause the order to lapse. The company was restrained from alienating or disposing of valuable assets until compliance. The Tribunal also directed publication of the order in the Official Gazette and clarified that the order would not circumscribe the Registrar's power to proceed against the company or its directors for alleged late filings. [Paras 10]

Restoration is subject to the stated conditions: filing of pending documents with fees, furnishing the undertaking, payment of costs, non alienation of assets till compliance, restoration of DINs and publication in the Official Gazette; Registrar's prosecutorial powers for late filing remain preserved.

Final Conclusion: The appeal is allowed and the Registrar is directed to restore the company's name to the Register subject to specified compliance terms (filing of pending returns with fees, furnishing of undertaking, payment of costs, non alienation of assets, restoration of DINs and publication of the order); the Registrar's power to take action for alleged late filings is preserved.

Restoration under section 252(3) of the Companies Act, 2013 - Striking off for failure to file statutory documents and inactivity - Just and equitable restoration - Conditions for restoration including payment and filing of pending returns - Direction to Registrar to communicate for defreezing bank accounts upon restoration

Restoration under section 252(3) of the Companies Act, 2013 - Striking off for failure to file statutory documents and inactivity - Just and equitable restoration - Conditions for restoration including payment and filing of pending returns - Direction to Registrar to communicate for defreezing bank accounts upon restoration - Petition for restoration of the company's name in the Register of Companies following striking off under the statutory removal process was allowed subject to conditions. - HELD THAT: - The Tribunal found that the company's name had been struck off for continuous failure to file Financial Statements and Annual Returns and for alleged non operation. On consideration of the audited accounts, licence to industrial premises, existence of bank account and assets and liabilities on the books for the two years immediately preceding striking off, the Bench concluded that it would be just and equitable to permit restoration. The restoration was made conditional: payment of a specified cost to the PM CARES Fund and filing of all pending Financial Statements and Annual Returns with applicable fees and late fees within thirty days from receipt of the order; failure to comply would automatically vacate the order. Upon compliance and restoration, the Registrar was directed to inform bank authorities to defreeze the company's accounts. [Paras 12, 14, 15]

Company's petition for restoration is allowed on terms: payment to PM CARES Fund and filing of pending returns within thirty days, failing which the order stands vacated; ROC to communicate for defreezing bank accounts upon restoration.

Final Conclusion: The Tribunal allowed the petition to restore the company's name on the Register of Companies as a just and equitable remedy, subject to payment to the PM CARES Fund and filing of all pending statutory filings within the stipulated period, and directed the Registrar to effect communications to defreeze bank accounts upon compliance.

Stay of suits on winding up order - Leave of the Tribunal - Jurisdiction of NCLT vis-a -vis High Court in pending winding up - Appointment of Official Liquidator - Transfer of pending winding up proceedings

Jurisdiction of NCLT vis-a -vis High Court in pending winding up - Leave of the Tribunal - Appointment of Official Liquidator - Whether NCLT has jurisdiction to grant leave under Section 279 of the Companies Act, 2013 in respect of proceedings against a company in respect of which a winding up order has been passed by the High Court and an Official Liquidator has been appointed. - HELD THAT: - The Bench found that the Hon'ble High Court of Bombay, Bench at Goa had passed an order in CP No.24/2012 appointing an Official Liquidator and initiating the liquidation process. The process of liquidation, including realization and distribution of assets and filing of a report for dissolution, is an intermediate and ongoing stage and the final outcome of the winding up petition remains pending before the High Court. The Bench observed that the High Court has the primary competence to determine whether the winding up proceedings remain pending before it or should be transferred to the Tribunal; no transfer to the NCLT has been made by the High Court in this matter. In those circumstances the NCLT is not competent to entertain or grant leave under Section 279 of the Companies Act, 2013 in respect of suits pending against the company, and the petitioner must seek the appropriate leave from the High Court which made the winding up order. [Paras 16, 19, 20, 21, 22]

NCLT has no jurisdiction to grant leave under Section 279 in respect of the winding up matter pending before the Hon'ble High Court, Bombay Bench at Goa; petitioner directed to apply to the High Court for leave.

Final Conclusion: The petition is disposed of by directing the petitioner to seek leave to continue the pending civil suit before the Hon'ble High Court, Bombay Bench at Goa; the NCLT lacks jurisdiction to grant the relief sought while the winding up proceedings remain before the High Court.

Restoration of name to the Register of Companies under section 252(3) of the Companies Act, 2013 - effect of possession of company property on justness of restoration - consequences of non filing of statutory returns and role of Registrar's database migration (MCA21)

Restoration of name to the Register of Companies under section 252(3) of the Companies Act, 2013 - Restoration of the Petitioner Company to the Register of Companies was allowed subject to conditions. - HELD THAT: - The Tribunal examined the grounds for striking off (failure to file statutory documents and alleged non carrying on of business) and the material placed by the petitioner, including audited financial statements for Financial years 2015-16 to 2016-17 and other records. Although the Balance Sheet did not disclose active trading operations, the Tribunal found sufficient cause to grant restoration to enable the company to file pending returns and redeem its position. Restoration was made conditional on filing all pending financial statements and annual returns with applicable fees and late fees within thirty days of restoration, failing which the order would stand vacated. The Registrar was directed to restore the name and, upon compliance, to communicate for defreezing of bank accounts. [Paras 12, 15, 16]

Petition allowed; name restored on terms requiring filing of pending returns within thirty days and consequent administrative steps by the Registrar.

Effect of possession of company property on justness of restoration - Possession of immovable property by the company (land) was held to constitute a 'just' ground in favour of restoration under section 252(3). - HELD THAT: - The Tribunal placed weight on the fact that the company held tangible assets in the form of land in the Mira Road area, supported by a 7/12 extract. It observed that such property would become bona vacantia if restoration were refused, which militated against an equitable result. On this basis, the possession of the land was treated as satisfying the requirement of 'just' cause for restoration under section 252(3), contributing to the grant of relief. [Paras 13, 14]

Possession of the land was a determinative factor constituting a 'just' ground for restoration.

Consequences of non filing of statutory returns and role of Registrar's database migration (MCA21) - The Tribunal accepted prima facie the petitioner's contention that non filing was, at least in part, attributable to RoC's failure to upload directors' details during MCA21 migration and pending SRN request. - HELD THAT: - The petitioner averred that filings could not be made because director details were not uploaded in the MCA21 Master Data following migration in 2008 and that an online SRN request to restore directors' names remained 'in progress'. The RoC did not specifically controvert this averment in its report. Having regard to these undisputed assertions and the petitioner's attempts to get the data uploaded before receipt of notice, the Tribunal found prima facie cause to believe the petitioner could not file returns for this reason. On this basis, the Tribunal declined to make any order as to costs. [Paras 7, 8, 9, 17]

Petitioner's inability to file returns due to missing Master Data was accepted prima facie; no costs were awarded.

Final Conclusion: The Company Petition was allowed: the Registrar was directed to restore the company's name to the Register subject to the petitioner filing all pending financial statements and annual returns with applicable fees within thirty days of restoration; restoration was granted having regard to the company's immovable property and prima facie inability to file due to missing director data, and no costs were imposed.

Expeditious adjudication - interim restraint - maintain status quo - protective relief pending decision - no expression on merits

Expeditious adjudication - interim restraint - maintain status quo - protective relief pending decision - Direction to the Adjudicating Authority to urgently decide Misc. Application No. 21/KB/2020 in CP No. 49/2016 and interim protective measures to preserve the assets of the company until disposal of the application. - HELD THAT: - The Tribunal noted the existence of an interim order by the NCLT restraining the respondent company from alienating or encumbering its assets pending disposal of the execution application. Observing urgency and the potential prejudice to the appellant (whose properties form part of its stock-in-trade), the Tribunal considered it appropriate that the NCLT promptly adjudicate the pending miscellaneous application so that the settlement entered between the parties can be preserved or finally determined. On this basis the Tribunal directed the NCLT, Kolkata Bench, to take up and decide the Misc. Application preferably within one month, directed the parties to cooperate and to appear in virtual mode on the specified date, and thereby left the interim regime in place until the Adjudicating Authority decides the application. [Paras 5, 6]

Appeal disposed with a direction that the Learned NCLT urgently decide the Misc. Application preferably within a month, parties to cooperate and appear on the fixed date; interim restraint to operate until disposal.

No expression on merits - Whether the Tribunal expresses any view on the merits of the underlying dispute. - HELD THAT: - The Tribunal expressly recorded that it has not expressed any opinion on the merits of the dispute between the parties. The direction given was confined to expedition of the pending application and protective management of assets, and did not involve adjudication of substantive rights or liabilities arising from the settlement or the company petition. [Paras 7]

The Tribunal declined to express any opinion on the merits.

Final Conclusion: The appeal is disposed by ordering the NCLT, Kolkata Bench, to urgently decide Misc. Application No. 21/KB/2020 in CP No. 49/2016 preferably within a month, with parties to cooperate and appear in virtual mode; the Tribunal declined to express any view on the merits and preserved the interim protective position until the Adjudicating Authority's decision.

Striking off of company name for failure to file financial statements and annual returns - restoration of name to the Register of Companies subject to compliance - conditional restoration requiring filing of statutory documents with prescribed fees/additional fee/fine - payment of costs to Central Government as precondition for restoration - directors' disqualification preventing DIN reactivation while permitting filing for restoration - publication of restoration order in the Official Gazette - order confined to violations leading to striking off without prejudice to other actions

Restoration of name to the Register of Companies subject to compliance - Restoration of the appellant company's name in the Register of Companies - HELD THAT: - The Tribunal, having considered the appellant's submissions and the ROC's report, concluded that it would be just and proper to order restoration of the company's name. The Tribunal exercised its appellate power under Section 252(3) to direct restoration subject to the specified conditions set out in its order. The direction to restore follows the Tribunal's satisfaction with the reasons advanced in the appeal despite ROC having taken strike off action under the Act. [Paras 6]

The company's name is to be restored in the Register of Companies, subject to compliance with the conditions specified by the Tribunal.

Conditional restoration requiring filing of statutory documents with prescribed fees/additional fee/fine - payment of costs to Central Government as precondition for restoration - publication of restoration order in the Official Gazette - Conditions and modalities to be complied with for restoration - HELD THAT: - The Tribunal directed that the company must file all outstanding statutory documents and pay prescribed fees/additional fee/fine within 30 days from the date its name is restored. A declaration from the directors regarding deposits made during the demonetisation period must be submitted. The appellant was ordered to pay costs of Rs. 50,000 to the Central Government and produce proof of payment within three weeks when submitting documents; failure to do so will cause the order to lapse. Upon compliance, the ROC is to publish the Tribunal's order in the Official Gazette under its seal. [Paras 6]

Restoration is conditional on filing outstanding statutory documents with applicable fees/fines, submission of a directors' declaration, payment of directed costs with proof, and subsequent publication by the ROC.

Directors' disqualification preventing DIN reactivation while permitting filing for restoration - Effect of directors' disqualification on DIN reactivation and filing rights - HELD THAT: - The Tribunal clarified that if directors are disqualified, their Director Identification Numbers (DINs) are not to be reactivated. Notwithstanding such disqualification, the ROC was directed to permit the company to file Annual Returns and Financial Statements for the purpose of restoring the company's name. Thus the ability to file statutory documents to effect restoration is to be facilitated even if DIN reactivation is barred. [Paras 6]

Disqualified directors' DINs shall not be reactivated; however, the ROC must allow the company to file the necessary statutory returns and accounts to secure restoration.

Order confined to violations leading to striking off without prejudice to other actions - Scope and limitation of the restoration order - HELD THAT: - The Tribunal expressly confined its order to the violations that resulted in the striking off of the company. It stated that the order would not prevent the ROC or other authorities from taking any appropriate action under law for any other violations or offences committed by the company either prior to or during the period of striking off. The restoration thus does not operate as a bar to separate or subsequent proceedings for other alleged contraventions. [Paras 6]

The restoration order is limited to the grounds that led to striking off and does not preclude further legal action for other violations.

Final Conclusion: The Tribunal allowed the appeal and ordered restoration of M/s Rayn Skin Clinic Private Limited to the Register of Companies, subject to filing outstanding statutory documents with prescribed fees/fines, submission of a directors' declaration, payment of costs to the Central Government with proof within the stipulated time, publication of the order by the ROC, and with the clarification that DINs of disqualified directors shall not be reactivated and that the order is confined to the violations leading to striking off without prejudice to other actions.

Hand over control and access of company website - maintenance of website costs as consideration for transfer - direction for payment as condition precedent to relief - maintainability of interlocutory application by non-parties - exercise of Tribunal's discretion in the interest of justice

Hand over control and access of company website - direction for payment as condition precedent to relief - maintenance of website costs as consideration for transfer - Respondent directed to hand over control and access of the company website to the applicants upon payment of the remuneration and costs claimed by the respondent for development and maintenance. - HELD THAT: - The Tribunal, while addressing the applicants' claim for restoration and control of the company website, accepted that the respondent had developed and maintained the website and claimed unpaid remuneration and costs. Rather than denying relief outright, the Tribunal exercised its discretion and conditioned the grant of the relief on payment of the remuneration and costs demanded by the respondent for web designing, redevelopment and maintenance covering the period 2013-2017. The order permits negotiations between the parties on the payment; upon payment by the applicants, the respondent is directed to immediately hand over control and access of the website to the company. This dispositional remedy balances the applicants' interest in regaining operational control with the respondent's claim for compensation for his efforts and expenses. [Paras 15]

If the applicants pay the remuneration and costs claimed by the respondent (with liberty to negotiate), the respondent must immediately hand over control and access of the website to the company.

Maintainability of interlocutory application by non-parties - exercise of Tribunal's discretion in the interest of justice - The Tribunal noted that certain applicants to the IA were not parties to the main petition and that, on that ground, the IA was not strictly maintainable, but proceeded to dispose of the IA in the interest of justice. - HELD THAT: - The Tribunal observed that applicants 2, 3 and 4 were not parties to TCP/116/KOB/2019 and recorded that the interlocutory application was therefore not maintainable on that technical ground. Despite this finding, the Tribunal chose to resolve the dispute on its merits and grant relief subject to payment, invoking the interest of justice. The Tribunal thus exercised discretionary jurisdiction to adjudicate and frame a conditional order rather than dismiss the IA solely for want of maintainability. [Paras 14, 15]

Although the IA was technically not maintainable because some applicants were not parties to the main petition, the Tribunal disposed of the IA on merits in the interest of justice by issuing a conditional order.

Final Conclusion: The Tribunal directed transfer of website control to the company conditional on payment of the respondent's claimed remuneration and costs, permitting negotiation on payment; it recorded a maintainability objection regarding non-party applicants but, in the interest of justice, adjudicated the IA and issued the conditional relief.

Merger by absorption - Meetings under Section 230(1)(b) of the Companies Act, 2013 - Notice to unsecured creditors under Section 230(3) - Service on statutory authorities under Section 230(5) - Video conferencing and preservation of unedited footage - Quorum as per Section 103 of the Companies Act, 2013 - Powers of the chairperson under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - Appointment of scrutiniser - Hosting scheme on company website - Assistance to Official Liquidator and scrutiny of books

Merger by absorption - Meetings under Section 230(1)(b) of the Companies Act, 2013 - Video conferencing and preservation of unedited footage - Quorum as per Section 103 of the Companies Act, 2013 - Convening and conduct of shareholders' meetings (equity and preference) for consideration of the proposed scheme of merger by absorption and related procedural modalities. - HELD THAT: - The Tribunal directed that separate meetings of the equity shareholders of the First Transferor, Second Transferor and Transferee companies and of the preference shareholders of the Second Transferor company be convened on 10th August, 2020 at specified times, with the option to hold the meetings through video conferencing if Covid-19 restrictions continue. Notices of the meetings, copies of the Scheme, explanatory statement and prescribed proxy forms must be dispatched at least 30 clear days prior to the meetings. Where meetings are held via audio-visual means, the proceedings shall be recorded and the unedited raw footage preserved for verification. The quorum requirements shall follow Section 103 of the Companies Act, 2013, with the specified adjournment rule of half an hour and acceptance of valid proxies filed 48 hours before the meeting; the Chairperson is empowered to determine disputed entries in the register for voting purposes and to decide procedural questions and amendments at the meeting in accordance with the CAA Rules. [Paras 15, 16, 17, 18, 19]

Meetings to be convened and conducted in the manner and on the timeline directed, with video-conferencing permitted, recordings preserved, quorum and proxy rules as stated, and Chairpersons vested with procedural powers.

Notice to unsecured creditors under Section 230(3) - Requirement to notify unsecured creditors and permit them to make representations to the Tribunal. - HELD THAT: - The Tribunal found that the present scheme is an arrangement with shareholders under Section 230(1)(b) and not a compromise with creditors under Section 230(1)(a); notwithstanding, the Applicant Companies were directed to issue notice to all unsecured creditors to whom amounts were due and payable as on 31st March, 2020, by the modes prescribed, informing them of the scheme and inviting any representations to the Tribunal, with a simultaneous copy to be served on the Applicant Companies. The duty to ensure that every creditor is put on notice was placed on the Applicant Companies. [Paras 23]

Applicants to notify unsecured creditors as directed and accept representations for submission to the Tribunal.

Service on statutory authorities under Section 230(5) - Service of notice upon statutory authorities and the consequence of no response within 30 days. - HELD THAT: - The Applicant Companies were directed to serve notice of the meetings and a copy of the scheme upon the Regional Director (Western Region), Registrar of Companies, the Income Tax Authority within whose jurisdiction the companies are assessed (clearly indicating the PAN), the Reserve Bank of India and the Department of Pharmaceuticals, pursuant to Section 230(5) and rule 8 of the CAA Rules. The Tribunal declared that if no response is received within 30 days of receipt of such notice, it will be presumed that the authorities have no objection to the proposed scheme. [Paras 24]

Applicants to serve statutory authorities as directed; absence of response within 30 days will be treated as no objection.

Appointment of scrutiniser - Powers of the chairperson under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - Appointment of Chairpersons for the respective meetings and appointment and remuneration of the scrutiniser. - HELD THAT: - The Tribunal appointed named directors as Chairpersons for the meetings of equity and preference shareholders of the respective applicant companies, with designated persons to act as alternates. CS Yogesh Choudhary was appointed as the scrutiniser for each meeting and his remuneration fixed per meeting (exclusive of taxes). The Chairpersons were authorised to issue notices and exercise all powers under the CAA Rules in relation to conduct of the meetings, including deciding procedural questions and dealing with amendments to the Scheme or resolutions proposed at the meetings. [Paras 11, 12, 13, 14]

Chairpersons and scrutiniser appointed as directed; Chairpersons vested with rule-based powers to conduct the meetings.

Assistance to Official Liquidator and scrutiny of books - Hosting scheme on company website - Directions regarding the Official Liquidator's involvement, appointment of assisting chartered accountants, fee payment, hosting of notices on company websites and filing of compliance report in lieu of affidavit of service. - HELD THAT: - The Tribunal directed the Transferor Companies to serve notice of the meetings upon the Official Liquidator, High Court, Bombay, at least 30 clear days before the hearing. It appointed a specified firm of chartered accountants to assist the Official Liquidator in scrutinising the books of accounts of the Transferor Companies for the last five years and to submit a report, with the Transferor Companies directed to pay the appointed firm's fees as stated. The Applicant Companies were also directed to host notices and a copy of the Scheme on their respective websites, if any, and to file a compliance report with the Registry regarding the directions in this Order in lieu of the customary affidavit of service due to the prevailing lockdown. [Paras 25, 26, 27]

Official Liquidator to be served and assisted as directed; appointed CA firm to conduct scrutiny and submit report on payment of fees; notices to be hosted on websites and a compliance report filed in lieu of affidavit of service.

Undertakings regarding notice, explanatory statement, proxy and advertisement - Acceptance of the Applicant Companies' undertakings to issue notices, explanatory statements, proxy forms and advertise the meetings as per prescribed forms and rules. - HELD THAT: - The Applicant Companies undertook to issue the notice convening the meetings in Form CAA.2, to issue the explanatory statement required under Section 230, to issue the Form of Proxy in Form MGT-11 and to advertise the notice convening the meetings as per the CAA Rules. The Tribunal expressly accepted these undertakings. [Paras 10]

Undertakings recorded and accepted: Applicants to comply with prescribed forms and advertising requirements.

Final Conclusion: The Tribunal directed convening of the specified shareholder meetings for approval of the scheme of merger by absorption, prescribed the modalities for notice, proxy, quorum, video-conferencing and preservation of recordings, appointed Chairpersons and scrutiniser, required service on creditors and statutory authorities (with consequences for non-response), appointed a firm to assist the Official Liquidator in scrutinising books, directed hosting of documents on company websites and ordered filing of a compliance report in lieu of affidavit of service.

Sanction of scheme of arrangement - Demerger by scheme of arrangement - Sanction under Sections 230-232 of the Companies Act, 2013 - Maintainability of objection under proviso to section 230(4) - Locus standi of objector in company scheme proceedings - Increase of authorized share capital to enable issuance of shares - Effect of non-filing of objections by statutory authorities - Requirement to comply with statutory approvals and conditions - No bar to subsequent action for non-compliance or taxation liabilities

Sanction of scheme of arrangement - Sanction under Sections 230-232 of the Companies Act, 2013 - Sanction of the proposed demerger scheme between Super Cassettes Industries Pvt. Ltd. and Vijarshan Ventures Pvt. Ltd. - HELD THAT: - The Tribunal considered the statutory scheme compliance, meetings convened under its supervision, affidavits of service and publication, certificates from statutory auditors regarding accounting treatment, and the absence of any continuing statutory objection. Having noted that the Resulting Company increased its authorized share capital as required and that requisite approvals and procedural requirements under the Act and Rules were complied with, the Tribunal found no impediment to sanctioning the Scheme. The sanction was granted subject to the petitioners remaining bound to comply with statutory requirements and undertakings filed. [Paras 4, 5, 9, 15, 19]

Scheme of arrangement by demerger sanctioned under Sections 230-232 of the Companies Act, 2013, subject to statutory compliance and undertakings.

Maintainability of objection under proviso to section 230(4) - Locus standi of objector in company scheme proceedings - Maintainability and merit of the objection filed by Mr. Gopal Krishan to the proposed Scheme. - HELD THAT: - The Tribunal examined the objection which relied on prior litigation concerning earlier amalgamation orders. It noted that those earlier challenges had been dismissed at successive levels and were not then staying sanction of the present Scheme. Crucially, the objector was neither a shareholder nor a creditor of the petitioner companies and failed to produce evidence of any qualifying interest. In view of the proviso to section 230(4) requiring a minimum shareholding or debt threshold for lodging objections and the absence of any material showing locus, the Tribunal rejected the objection and recorded that no legal impediment existed to sanctioning the Scheme. [Paras 10, 12, 13, 16]

Objection by the objector rejected for want of locus and maintainability; objection does not bar sanction of the Scheme.

Increase of authorized share capital to enable issuance of shares - Requirement to comply with statutory approvals and conditions - Whether the Resulting Company had complied with the requirement to increase its authorized share capital to effect the share issuance under the Scheme. - HELD THAT: - The Regional Director had reported that the Resulting Company needed to increase its authorized share capital. Petitioners produced affidavits and records showing that the Resulting Company had already increased its authorized share capital and paid the requisite fee to the Registrar of Companies, with confirmations filed on record. With that compliance established, the Tribunal found the RD's concern addressed and no longer an impediment to sanction. [Paras 6, 7, 15]

Requirement to increase authorized share capital satisfied; RD's concern addressed and not an impediment to sanction.

Effect of non-filing of objections by statutory authorities - Requirement to comply with statutory approvals and conditions - Consequences of the Income Tax Department not filing comments within the prescribed period and whether that affected sanction. - HELD THAT: - The Tribunal noted that the Income Tax Department did not file comments despite service and that, under section 230(5) consequences, absence of comments after 30 days can be treated as no objection. Further, none of the petitioner companies was being dissolved by the Scheme, and therefore sanction would not adversely affect the department's interests. Accordingly, the non-filing did not preclude sanction. [Paras 5, 14]

Non-filing of comments by the Income Tax Department treated as no objection; this does not preclude sanction of the Scheme.

No bar to subsequent action for non-compliance or taxation liabilities - Requirement to comply with statutory approvals and conditions - Whether the sanction operates as immunity against subsequent statutory action or exemption from taxes and other charges. - HELD THAT: - The Tribunal expressly clarified that its sanction does not confer exemption from payment of stamp duty, taxes or other charges, nor does it bar action under any enactment, rule or regulation in case of any subsequent deficiency or violation. The sanction is without prejudice to lawful action against concerned persons in accordance with law. [Paras 17, 18]

Sanction does not grant immunity from taxes, duties or subsequent legal action for non-compliance; petitioners remain subject to all statutory obligations.

Final Conclusion: The Tribunal sanctioned the Scheme of Arrangement for demerger between the petitioner companies under Sections 230-232 of the Companies Act, 2013, having found procedural and statutory compliances satisfied, having rejected the objection for want of locus and maintainability, and having recorded that statutory authorities raised no subsisting impediment; the sanction is subject to compliance with undertakings and does not confer immunity from taxes or subsequent enforcement action.

Oppression and mismanagement - beneficial ownership of shares - rectification of register of members - share transfer and lodging of transfer forms - threshold shareholding for maintainability under Sections 241/244 - settlement agreement and board ratification - fiduciary duty of directors - investigation into company affairs

Share transfer and lodging of transfer forms - beneficial ownership of shares - settlement agreement and board ratification - Whether the petitioners, having paid amounts on behalf of certain shareholders and having documentary evidence of concord (conciliatory minutes, settlement agreement and board minutes), are entitled to the transfer of the agreed shares and to be treated as beneficial owners despite non-registration of transfer. - HELD THAT: - The Tribunal found on the facts that the petitioners paid amounts to discharge obligations of Respondents 2 to 8 and that transfer of shares in their favour was agreed in the conciliatory meeting dated 12.09.2015. The executed share certificates and signed transfer forms were handed over to the company's auditor and later taken by the Managing Director; a subsequent settlement agreement of 09.12.2017 was taken on record by the board on 12.12.2017. Relying on equitable principles and authorities recognizing that beneficial interest may pass prior to registration where there is an agreement and delivery of signed transfer forms, the Tribunal held that the petitioners acquired beneficial ownership and that respondents cannot now contend that transfer requests were not lodged. The Tribunal rejected respondent contentions characterizing the transaction as merely a loan or alleging non-compliance with internal valuation requirements, finding them untenable on the material on record. [Paras 19, 20, 21, 25, 26]

Petitioners are beneficial owners of the agreed shares; Respondents 2 to 8 must effect the transfers as agreed.

Threshold shareholding for maintainability under Sections 241/244 - oppression and mismanagement - Whether the company petition is maintainable despite the petitioners not holding ten percent of issued share capital on record when the petition was filed. - HELD THAT: - The Tribunal applied equitable considerations and precedents permitting wider construction of 'member' and the exercise of jurisdiction where a petitioner has been wrongfully deprived or marginalized from requisite shareholding by the respondents' conduct. Observing that the petitioners demonstrated that they were wrongfully deprived of their shareholding and, in any event, acquired beneficial interest by reason of payments, the Tribunal held that the requisite threshold could be waived and the petition maintained to consider allegations of oppression and mismanagement. [Paras 23, 24, 25, 26]

The Tribunal waived the strict threshold requirement and held the petition maintainable to adjudicate allegations of oppression and mismanagement.

Rectification of register of members - fiduciary duty of directors - investigation into company affairs - What reliefs and directions should be granted to give effect to the findings of oppression, including rectification of registers, investigation into affairs and costs. - HELD THAT: - Having concluded that the petitioners were entitled to the shares and that respondents had acted contrary to their obligations, the Tribunal directed immediate transfer of specified shares by Respondents 2 to 8 within 15 days, directed the company to rectify the register of members and comply with statutory filings within one month, and ordered an investigation into the company's accounts for a stated period by a chartered accountancy firm with costs of investigation to be borne by the company. The Tribunal also directed the Institute of Chartered Accountants of India to probe professional conduct of the firm's auditors and imposed cost payments by Respondents 2 to 8 to the petitioners. The directions were fashioned to give practical effect to the beneficial ownership finding and to ensure transparent management. [Paras 28, 29]

Ordered specific share transfers, rectification of register and RoC filings, appointed auditors to investigate company affairs, directed ICAI inquiry into the firm's conduct, and awarded costs to the petitioners.

Final Conclusion: The company petition alleging oppression and mismanagement is allowed: petitioners are recognised as beneficial owners of the agreed shares; respondents are directed to effect transfers and the company to rectify registers and filings; an investigation into company affairs and auditors' conduct is appointed and costs awarded to the petitioners.

Restoration of company name in Register of Companies - Appeal under section 252(1) of the Companies Act, 2013 - Striking off for continuous non-filing of statutory returns - Protection of legitimate interest of revenue - Continuing liability of directors after dissolution - Requirement of publication and compliance with statutory requirements upon restoration

Restoration of company name in Register of Companies - Appeal under section 252(1) of the Companies Act, 2013 - Striking off for continuous non-filing of statutory returns - Protection of legitimate interest of revenue - Tribunal's jurisdiction to entertain the appeal and entitlement to restoration where Registrar struck off the company's name for non-filing of statutory returns. - HELD THAT: - The appeal was filed by the Income Tax Department challenging the ROC's order striking off the company. Although the application was brought under section 252(3), the Tribunal found that the facts fell within the scope of removal by the Registrar for failure to file statutory returns and therefore treated the matter under section 252(1). The Tribunal accepted the Revenue's contention that restoration was necessary to protect the legitimate interest of revenue and facilitate pending income-tax proceedings. The ROC's representation showed no objection to restoration subject to compliance with statutory formalities, and the proviso concerning continuing liability of directors post-dissolution was noted. Applying these considerations, the Tribunal concluded that removal was not justified in a manner that should prevent restoration and that it was just and equitable to restore the company's name so that statutory and revenue processes may continue. [Paras 13, 14, 15, 16]

The Tribunal treated the application under section 252(1) and allowed restoration of the company's name in the Register of Companies to protect the legitimate interest of revenue and enable further proceedings.

Requirement of publication and compliance with statutory requirements upon restoration - Continuing liability of directors after dissolution - Reliefs and conditions attached to the restoration order. - HELD THAT: - The Tribunal directed restoration of the name of the company subject to conditions: publication of notice in two leading district newspapers and the Official Gazette in the form approved by the ROC, at the cost of the petitioner, and directed the company to comply with requirements under the Companies Act and other statutory obligations. The Tribunal also ordered that the time consumed in disposal of the application be exempted for the purposes of initiation of Income Tax and legal proceedings against the company, thereby preserving the Revenue's ability to proceed. The Tribunal recorded the continuing enforceability of liabilities of directors and officers as provided by the Companies Act. [Paras 17, 18, 19]

Restoration granted subject to publication as per ROC-approved draft at the petitioner's cost, compliance by the company with statutory requirements, and exemption of time consumed for Income Tax/legal proceedings.

Final Conclusion: The Company Appeal is allowed: the Tribunal directed restoration of M/s. Airticket Online (India) Pvt. Ltd. to the Register of Companies under section 252(1) of the Companies Act, 2013, subject to publication and statutory compliance, and preserved the Revenue's ability to proceed by exempting the time consumed in disposal of the application.

Validity of share transfer agreement executed under coercion - Oppression and mismanagement - Interim orders and status-quo - Illegality of subsequent share transactions - Invalid removal of director

Validity of share transfer agreement executed under coercion - The agreement dated 08.04.2010 transferring shares is valid and binding on the parties. - HELD THAT: - The Tribunal found that the agreement of 08.04.2010, executed between the relevant shareholders including Mr. N.A. Nayar and the respondent, is a lawful instrument and not vitiated by coercion as alleged by the appellants. The NCLT's conclusion that both parties acquired shares as per that agreement was upheld after considering the pleadings, the antecedent shareholding pattern and related transactions. The appellant's challenge to the authenticity and enforceability of the 08.04.2010 agreement was rejected and the agreement was declared binding on all concerned. [Paras 11]

The agreement dated 08.04.2010 is valid and binding.

Oppression and mismanagement - Illegality of subsequent share transactions - The actions of the appellants constituted oppression and mismanagement and the subsequent transactions effected by the appellants are illegal and liable to be set aside. - HELD THAT: - The Tribunal held that the appellants undertook various measures - including transfers and other acts affecting corporate control - contrary to interim directions and to the prejudice of the respondent and his group. Those actions were characterised as oppressive and as mismanagement of the company's affairs. The NCLT's findings that such later transactions were illegal and should be set aside were affirmed, having regard to the conduct of the appellants, the existing interim orders and the absence of lawful compliance with those directions. [Paras 9, 11, 13]

Appellants' conduct amounted to oppression and mismanagement; subsequent transactions are illegal and set aside.

Interim orders and status-quo - Illegality of subsequent share transactions - Actions taken by the appellants in breach of the CLB interim order maintaining status-quo were illegal. - HELD THAT: - The Tribunal noted that the Company Law Board had passed an interim order directing maintenance of the then shareholding pattern and share capital. The appellants, without permission of the Tribunal and despite those interim directions, effected transfers and other steps adverse to the respondents. Such actions were held to be in violation of the CLB order and therefore illegal; the NCLT's declaration of illegality in respect of those transactions was sustained. [Paras 9, 10, 11]

Actions in breach of the CLB interim order were illegal and cannot be sustained.

Invalid removal of director - The removal of the respondent from the post of director was invalid for failure to follow lawful process. - HELD THAT: - The Tribunal recorded that the respondent had been removed from the post of director without compliance with the required procedures. Having examined the manner in which the removal was carried out, the NCLT's finding that the removal was not in accordance with law was upheld. [Paras 12]

The removal of the respondent as director was invalid.

Final Conclusion: The NCLT's order directing equal division of shareholding and setting aside the appellants' subsequent transactions, and its findings of oppression, mismanagement and invalid removal of the respondent as director, are upheld; the appeal is dismissed and interlocutory applications stand disposed of, with no order as to costs.

Maintainability of insolvency petition - authority of Power of Attorney holder to represent financial creditor - authorized representative filing under the IBC - representation before judicial and quasi-judicial bodies

Authority of Power of Attorney holder to represent financial creditor - authorized representative filing under the IBC - Whether the Insolvency Bankruptcy Application (IBA/25/KOB/2020) filed by the Financial Creditor through its Power of Attorney holder is maintainable in the absence of a specific, separate authorization to institute proceedings under the IBC. - HELD THAT: - The Tribunal examined the Power of Attorney produced by the Financial Creditor and noted clause 16 which expressly empowers the Power of Attorney holder to appear before judicial and quasi-judicial bodies, represent the Bank, institute suits, applications or other proceedings and sign pleadings. The Tribunal relied on the reasoning in the cited NCLAT decision which holds that a general authorization by a financial creditor in favour of its officers to do needful in legal proceedings, even if described as a 'Power of Attorney', amounts to sufficient authorization for filing applications under sections 7, 9 or 10 of the IBC and that such officer can be treated as the authorized representative. Applying that principle to the present facts, where the Financial Creditor's Assistant Vice President/Branch Head presented and verified the IBA pursuant to the Power of Attorney, the Tribunal concluded that no further specific authorization was required for filing the insolvency application under the IBC. Consequently, the objection to maintainability based on alleged lack of specific authorization was rejected. [Paras 7, 8, 9]

IA/105/KOB/2020 challenging the maintainability of IBA/25/KOB/2020 for want of specific authorization is dismissed; the Power of Attorney holder was competent to file the IBA.

Final Conclusion: The application challenging maintainability is dismissed: the Power of Attorney produced vested the holder with authority to represent the Financial Creditor and to institute the insolvency proceedings, and no specific additional authorization was necessary for filing the IBA under the IBC.

Interpretation of financial debt under section 5(8) of the Code - time value of money - financial creditor vs operational creditor - onus of proof in a Section 7 petition - customer supplier transactions - maintainability of a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016

Interpretation of financial debt under section 5(8) of the Code - time value of money - customer supplier transactions - onus of proof in a Section 7 petition - maintainability of Section 7 petition - Whether the amount claimed by the petitioner constitutes a financial debt under section 5(8) of the Insolvency and Bankruptcy Code, 2016 and whether the petition under Section 7 is maintainable. - HELD THAT: - The ledger and surrounding commercial dealings demonstrate a buyer-seller relationship in which payments by the petitioner were recorded in the course of purchases from the corporate debtor. There is no separate accounting or documentary evidence presented by the petitioner showing that the payments were advanced as a loan or that they were disbursed for consideration for the time value of money. Established authorities require the presence of consideration for time value of money to characterise a claim as a financial debt under section 5(8). As the dominus litis, the petitioner bore the burden to establish that the transaction was a financial advance entitling him to treat the claim as a financial debt; the petitioner failed to discharge this onus. In these circumstances, and having regard to the absence of loan documentation or other evidence demonstrating a financial return element, the claim falls within commercial dealings for supply of goods and does not qualify as a financial debt for the purposes of initiating CIRP under Section 7. [Paras 11, 12, 13, 14]

The claimed amount is not a financial debt as defined in section 5(8) of the Code; the petition under Section 7 is dismissed.

Final Conclusion: The Section 7 petition is dismissed for failure to establish that the claimed sums constitute a financial debt; no costs.

Validity of explanation in Notification No.1/2006-ST - Service tax liability under Finance Act, 1994 - Reliance on precedent - Remand for adjudication - Right to be heard

Validity of explanation in Notification No.1/2006-ST - Service tax liability under Finance Act, 1994 - Reliance on precedent - Whether the challenge to the explanation in Notification No.1/2006-ST and the proposed service tax demand should be adjudicated in light of the Supreme Court decision in Bhayana Builders and the factual contentions raised by the petitioner. - HELD THAT: - The Court declined to determine the substantive question on the validity of the explanation vis-a -vis the Finance Act, 1994 on writ petition, noting that the petition arises from a show cause notice and involves factual aspects. The petitioner was permitted to invoke the Supreme Court decision in Commissioner of Service Tax v. Bhayana Builders and to raise all objections by way of reply to the show cause notice. The matter is remitted to the appropriate adjudicating authority for fresh consideration on merits. The adjudicating authority is directed to decide the objections, including those based on the cited precedent, after giving the petitioner an opportunity of personal hearing and to proceed in accordance with law and on its own merits, expeditiously. [Paras 4, 5]

Writ petition disposed by remitting the matter to the adjudicating authority with liberty to the petitioner to file a reply within 15 days and with a direction to the authority to decide the matter on merits after hearing.

Remand for adjudication - Right to be heard - The procedural directions governing further adjudication following remand. - HELD THAT: - The Court granted the petitioner liberty to file objections by way of a reply to the show cause notice within fifteen days from receipt of the order. On receipt of the objections, the concerned adjudicating authority is to take further action on its merits and in accordance with law, after affording due opportunity of personal hearing to the petitioner, which may be conducted through video conferencing if necessary. The Court emphasized expedition in disposing of the matter but did not express any view on the merits of the demand. [Paras 5]

Liberty granted to file reply within 15 days; adjudicating authority directed to afford hearing and decide expeditiously on merits.

Final Conclusion: The writ petition is disposed by remanding the matter to the appropriate adjudicating authority for fresh adjudication on merits; the petitioner may file objections (including reliance on Bhayana Builders) within 15 days, and the authority shall give opportunity of hearing and decide the show cause notice in accordance with law, expeditiously.

Offence under Section 138 of Negotiable Instruments Act - Section 482 Cr.P.C. - holder in due course - dishonour of cheque for insufficiency of funds - tendering cheque with a covering letter for appropriation - quash petition at threshold versus trial on merits

Holder in due course - tendering cheque with a covering letter for appropriation - Offence under Section 138 of Negotiable Instruments Act - quash petition at threshold versus trial on merits - Whether the complaint under Section 138 of the Negotiable Instruments Act filed by the bank is liable to be quashed at the threshold on the ground that the cheque was issued in favour of the accused himself and the bank is neither the payee nor shown to be a holder in due course. - HELD THAT: - The cheque in question was issued by the petitioner as authorised signatory of M/s. Sri Constructions in favour of the petitioner individually, to be credited to his SB account with the respondent bank; the cheque was presented and subsequently dishonoured for insufficiency of funds. The respondent bank claims that the cheque was tendered to it along with a covering letter requesting credit and appropriation towards the petitioner's dues, and that by such tendering and appropriation it became the holder in due course entitled to institute proceedings under Section 138. The covering letter which is said to effect this transfer was not placed before this Court. The factual matrix-whether the covering letter was tendered, and if so whether it effected vesting of holder-in-due-course rights and appropriation of the cheque proceeds in satisfaction of the debt-raises disputed questions of fact and necessary inferences which cannot be appropriately resolved on a petition under Section 482 Cr.P.C. at the threshold. These are matters for determination after evidence is led at trial. In consequence, the Court declined to quash the complaint and directed that the trial Court proceed to decide these contentions after full trial, with liberty to both parties to adduce evidence and argue their respective versions. [Paras 7, 8]

Petition to quash dismissed; the trial Court directed to proceed with C.C.No.284 of 2012, permitting both parties to adduce evidence and to conclude the trial expeditiously within four months from receipt of copy of this order.

Final Conclusion: The High Court refused to quash the complaint under Section 138 N.I. Act at the threshold because key factual questions-principally whether the bank became holder in due course by virtue of a covering letter and appropriation of the cheque-require adjudication after a full trial; the trial Court is directed to proceed and conclude the trial within four months.

Revisionary interference in absence of jurisdictional error - Presumption under Section 139 of the Negotiable Instruments Act - Rebuttal of presumption by evidence of non-liability or misuse of cheque - Dishonour of cheque under Section 138 of the Negotiable Instruments Act

Revisionary interference in absence of jurisdictional error - Whether the High Court in exercise of revisional jurisdiction should disturb concurrent findings of conviction in absence of perversity or jurisdictional error. - HELD THAT: - The High Court held that a revisional court will not, in the absence of perversity or a jurisdictional error, upset concurrent factual findings of the trial and first appellate courts. Reliance was placed on precedent establishing that even if an order is arguably wrong, revisionary interference is not justified where the court below had jurisdiction and there is no error of law or jurisdiction. The High Court observed that the trial court and the appellate court reached concurrent findings on facts and evidence and there was no ground of perversity to warrant interference; it is not the function of the revisional court to reanalyse and re-interpret evidence on record.

Revisionary interference refused; concurrent factual findings upheld and not disturbed.

Presumption under Section 139 of the Negotiable Instruments Act - Dishonour of cheque under Section 138 of the Negotiable Instruments Act - Whether the complainant was entitled to the statutory presumption that the cheque was issued for discharge of a debt or liability and whether the ingredients of Section 138 were satisfied. - HELD THAT: - The Court applied Sections 138 and 139 of the Negotiable Instruments Act and observed that the trial court found (and the appellate court confirmed) that the cheque was issued by the accused in favour of the complainant; the cheque was presented within its validity period and was returned unpaid for insufficient funds; statutory notice was sent and received and there was no payment within the statutory period. The Court reiterated that Section 139 creates a presumption of issuance of the cheque for discharge of debt or liability, which is rebuttable only by cogent evidence. In the absence of adequate evidence to rebut the presumption, and having regard to the evidence of the complainant (agreement to sell, cheque, bank memo, legal notice and acknowledgments), the courts below rightly held that the ingredients of Section 138 were made out.

Presumption under Section 139 applies and was not successfully rebutted; ingredients of Section 138 established.

Rebuttal of presumption by evidence of non-liability or misuse of cheque - Whether the accused's defence - that the cheque was a blank signed leaf misused by the complainant or that the liability was lesser/for the son - successfully rebutted the presumption or vitiated the conviction. - HELD THAT: - The Court examined the defences: that the cheque was a blank signed leaf misused to obtain loan, that some cash payments had been made, and that liability was only partly of the accused (son's liability). It noted absence of cogent evidence showing threat, coercion, theft of the cheque, or circumstances establishing that the cheque was not issued in discharge of a debt. Witness evidence and documentary exhibits (agreement to sell, cheque, bank memo, RPAD notice and acknowledgments) were held to support prosecution case. The trial and appellate courts had rejected the pleaded defences on facts; there was no legal or factual basis shown to overturn those findings in revision. The Court therefore declined to accept the contention that the presumption was rebutted or that the conviction should be set aside on those grounds.

Defences of misuse of a blank cheque, partial cash payment, or shifted liability were rejected; presumption remained unrebutted and conviction sustained.

Final Conclusion: Criminal Revision dismissed; the convictions and sentences recorded by the Trial Court and confirmed by the Appellate Court are upheld. Interim relief previously granted is vacated; records to be returned to the Trial Court and the request to continue interim relief further refused.