TaxTMI Updates e-Newsletter
Oct 20,2022

Government entity - works contract service - concessional rate of GST for works contracts supplied to a Government entity - exception where civil structure is meant predominantly for use other than for commerce, industry or any other business or profession - civil structure meant for commerce or industry falls outside concessional 12% slab and attracts standard works contract rate

Government entity - works contract service - concessional rate of GST for works contracts supplied to a Government entity - Whether the works contract executed by the applicant for TSIIC qualifies for the concessional GST rate of 12% applicable to works contracts supplied to a Government entity. - HELD THAT: - The Authority examined the definition of Government entity as inserted in the notifications and found that TSIIC, being wholly owned by the Government of Telangana, falls within that definition. The Authority then considered the entry at Sr. No. 3(vi) of the notification which provides a concessional rate for works contract services supplied to a Government entity, subject to the nature of the civil structure. However, the concessional rate applies only where the civil structure is meant predominantly for use other than for commerce, industry or any other business or profession. The work undertaken by the applicant was construction of an IT Incubation Centre for TSIIC, which the Memorandum of Association shows is aimed at implementing schemes for industrial development and furthering government policy for industries. The Authority held that an IT Incubation Centre is a civil structure meant for commerce/industry or other business use and therefore falls outside the scope of the concessional entry for non-commercial civil structures. [Paras 7]

The works contract does not qualify for the concessional 12% GST rate for supplies to a Government entity.

Exception where civil structure is meant predominantly for use other than for commerce, industry or any other business or profession - civil structure meant for commerce or industry falls outside concessional 12% slab and attracts standard works contract rate - If the concessional rate is not available, what rate and classification of GST applies to the applicant's works contract service? - HELD THAT: - Having held that the IT Incubation Centre is a civil structure meant for commerce/industry or other business, the Authority applied the notified tariff structure for works contract services. The exception to the concessional entry excludes such commercial/industrial structures, and therefore the supply is taxable at the standard rate applicable to works contract services in such cases. The Authority concluded that the appropriate tax treatment is to apply the standard rate for works contract services as prescribed by the relevant notifications. [Paras 7, 8]

The works contract service is taxable at the standard rate for such services and not at the concessional 12%; the applicable rate is 9% under CGST and 9% under SGST.

Final Conclusion: TSIIC is a Government entity, but the construction of an IT Incubation Centre is a civil structure meant for commerce/industry and thus does not attract the concessional 12% rate for works contracts to Government entities; the supply is taxable at the standard works contract rate, viz., 9% CGST and 9% SGST.

Exemption under section 10(38) - long-term capital gains from sale of shares - transactions in penny stocks and price manipulation - preponderance of probabilities - onus of proof on the assessee to prove genuineness of transactions - treatment as unexplained cash credit u/s. 68 - reliance on Directorate of Investigation report - binding precedent of the jurisdictional High Court

Exemption under section 10(38) - long-term capital gains from sale of shares - transactions in penny stocks and price manipulation - reliance on Directorate of Investigation report - preponderance of probabilities - onus of proof on the assessee to prove genuineness of transactions - Whether long term capital gains claimed as exempt under section 10(38) in respect of sales of thinly traded/penny stocks could be denied by treating the transactions as bogus and the gains as income from undisclosed sources. - HELD THAT: - The Tribunal, applying the reasoning of the jurisdictional High Court in Swati Bajaj & others, held that where shares of little known companies record a steep rise in price in a short period and investigative material from the Directorate of Investigation points to a modus operandi of price rigging, the test is one of preponderance of probabilities. In such cases the onus is on the assessee to prove the genuineness, identity and creditworthiness, and to rebut the surrounding circumstances indicating manipulation. The Assessing Officer and the Commissioner (Appeals) have been held to be justified in drawing inferential conclusions from proximate facts such as volume of trade, proximity between buy and sell operations, steep price rise inconsistent with market trends, and other surrounding circumstances. The Tribunal, following the binding High Court precedent, concluded that the LTCG claims in the present appeals were fabricated/engineered and therefore not entitled to exemption under section 10(38).

Claims of exemption under section 10(38) for the LTCG in the stated AYs are rejected because the transactions were held to be tainted by manipulation and not proved genuine by the assessees.

Treatment as unexplained cash credit u/s. 68 - transactions in penny stocks and price manipulation - reliance on Directorate of Investigation report - Whether the Assessing Officer could treat the sale proceeds/claimed gains as unexplained and make additions (including under section 68) where the transactions were held to be non-genuine. - HELD THAT: - The Assessing Officer made additions by treating the sale consideration/gains as unexplained cash credits or undisclosed income based on the investigative inputs and surrounding circumstances. The Tribunal upheld the departmental approach by applying the High Court's finding that, on the preponderance of probabilities and having regard to the totality of circumstances disclosed by the investigation (including patterns of trading and abnormal price movements), such treatment and consequential additions were sustainable. The Tribunal found that the assessees failed to discharge the burden of proving that the transactions were genuine, thereby justifying the AO's and CIT(A)'s additions.

Additions treating the gains/sale consideration as unexplained (including under section 68) are sustained and upheld.

Binding precedent of the jurisdictional High Court - Whether the Tribunal should follow the decision of the Calcutta High Court in Swati Bajaj & others in adjudicating these appeals. - HELD THAT: - The Tribunal observed that the factual matrix of the present appeals is identical to those considered by the Calcutta High Court in Swati Bajaj & others and that the High Court's decision carries binding force in the jurisdiction. The assessees' counsel conceded that the decision covers the present issues. Accordingly, the Tribunal applied and followed the High Court's reasoning when disposing of these appeals, including where the matters were proceeded with ex parte for assessees who did not appear.

The Tribunal followed and applied the binding Calcutta High Court precedent and dismissed the appeals.

Final Conclusion: The Tribunal, following the binding Calcutta High Court decision, dismissed the appeals and restored the orders of the Assessing Officers as affirmed by the respective Commissioners (Appeals), rejecting the exemption claims and sustaining additions in respect of the long term capital gains or sale proceeds in the stated assessment years.

Mandatory implementation of Dispute Resolution Panel directions under section 144C(13) - rectification of mistake apparent on record - Dispute Resolution Panel powers under rule 13 of the DRP Rules - reasonable time for rectification of orders - rectification of assessment order under section 154 - non-application of mind

Mandatory implementation of Dispute Resolution Panel directions under section 144C(13) - non-application of mind - Validity of the assessment order challenged as passed without application of mind because the Assessing Officer gave effect to DRP directions that pertained to another assessee. - HELD THAT: - The Tribunal held that an Assessing Officer is obliged to give effect to the directions issued by the DRP under section 144C(13) and it is not open to him to refuse implementation on the ground that the directions appear prima facie incorrect or pertain to another taxpayer. Implementing such directions and then seeking rectification from the DRP is the proper course; doing so does not demonstrate non-application of mind by the Assessing Officer. A cut paste error in DRP directions, standing alone, does not vitiate the assessment where a statutory mechanism for rectification exists and is availed of. [Paras 7]

The plea that the assessment order is vitiated for lack of application of mind is rejected; implementing the DRP directions does not amount to non-application of mind and does not itself invalidate the assessment.

Dispute Resolution Panel powers under rule 13 of the DRP Rules - reasonable time for rectification of orders - Whether the DRP's rectification dated 22nd April 2021 was competent and time barred. - HELD THAT: - Rule 13 of the DRP Rules permits the DRP to rectify mistakes apparent in its directions and to direct the Assessing Officer to modify the assessment accordingly. Because no specific time limit for such rectification is prescribed by the DRP Rules, a reasonable time must be inferred to give the provision practical effect. The Tribunal adopted six months from the end of the month in which the order was passed as the reasonable outer limit (analogous to section 254(2) for ITAT), and held that a rectification effected within one month of the original DRP directions is well within that reasonable period. Consequently the rectification dated 22nd April 2021 is sustainable in law. [Paras 9]

The rectification dated 22nd April 2021 is valid and not time barred; rule 13 empowers the DRP to rectify mistakes and such rectification within a reasonable time (held to be up to six months) is permissible.

Rectification of assessment order under section 154 - rectification of mistake apparent on record - Whether the appropriate remedy is remand to the Assessing Officer to give effect to the rectified DRP directions and whether the AO can rectify the assessment under section 154. - HELD THAT: - The Tribunal found that the Assessing Officer remains empowered to rectify his assessment under section 154 within the statutory period (four years from the end of the financial year in which the order was passed). Quashing the entire assessment would preempt the rectification process contemplated by the DRP and by section 154. Given that the DRP has rectified its directions within a permissible time and that the AO has time under section 154 to amend the assessment, the proper course is to remit the matter to the Assessing Officer to modify the assessment in conformity with the rectified DRP directions; merits of the rectified directions are premature and can be considered after effect is given to them. [Paras 9, 10]

The matter is remitted to the Assessing Officer for rectification of the impugned assessment in accordance with the rectified DRP directions; quashing the assessment is refused.

Final Conclusion: The appeal is allowed in part for statistical purposes: the Tribunal rejects the contention of non application of mind, upholds the DRP's rectification dated 22nd April 2021 as made within a reasonable period, and restores the matter to the file of the Assessing Officer to give effect to the rectified DRP directions and, if necessary, to make consequential rectification under section 154.

Reopening of assessment - change of opinion - tangible material - reason to believe - failure to disclose fully and truly all material facts - proviso to section 147 - quash reopening notice

Reopening of assessment - change of opinion - tangible material - reason to believe - Validity of reopening assessment under section 147 where no new material was brought on record and the reassessment proceeded on the same facts - HELD THAT: - The Tribunal found that the Assessing Officer reopened the assessment under section 147 on the same set of facts and materials which were earlier examined while completing the original assessment under section 143(3). No fresh information or tangible material was placed on record to establish escapement of income. Reopening on identical material, absent any new tangible material or omission by the assessee, amounted to a mere change of opinion by the Assessing Officer. Following the principle in CIT v. Kelvinator of India Ltd., section 147 cannot be used as a cloak for review and reassessment must be founded on tangible material having a live link with the formation of belief. Consequently, the reopening was held to be bad in law. [Paras 5]

Reopening of assessment was invalid as it constituted a mere change of opinion in the absence of any new tangible material.

Proviso to section 147 - failure to disclose fully and truly all material facts - quash reopening notice - Validity of reopening beyond four years from the end of the relevant assessment year where the proviso to section 147 is attracted and whether the Assessing Officer proved failure to disclose by the assessee - HELD THAT: - The Tribunal held that because the reassessment was initiated beyond four years from the end of the relevant assessment year, the proviso to section 147 applied and the Assessing Officer was obliged to demonstrate that the assessee had failed to disclose fully and truly all material facts. The Assessing Officer did not establish any such failure. Reliance was placed on decisions of the High Courts and Supreme Court holding that mere escapement of income is insufficient after four years; there must be an omission or failure by the assessee to disclose material facts. In absence of any finding or recorded material showing such failure, the notice under section 148 and consequent reassessment were held to be without jurisdiction and liable to be quashed. [Paras 6]

Reopening beyond four years was invalid because the Assessing Officer failed to prove that the assessee had not truly and fully disclosed material facts; the notice and reassessment were quashed.

Final Conclusion: The Tribunal allowed the appeal, holding the reassessment under section 147/148 to be invalid - first because it amounted to a mere change of opinion in the absence of new tangible material, and secondly because, being initiated beyond four years, the proviso to section 147 required proof of failure to disclose which the Revenue did not establish; the reassessment and notice were quashed.

Processing of income tax returns under section 143(1) - incorrect claim apparent from any information in the return (Explanation to Section 143(1)) - disallowance of expenditure indicated in the audit report - quasi-judicial duty to give reasons when disposing objections - binding effect of jurisdictional High Court decisions - tax audit report is an opinion and does not bind the assessee

Disallowance of expenditure indicated in the audit report - processing of income tax returns under section 143(1) - incorrect claim apparent from any information in the return (Explanation to Section 143(1)) - Validity of adjustment under section 143(1) based on tax-auditor's report recording delayed provident fund contributions where payments were made before filing of return. - HELD THAT: - The Court held that the present statutory scheme of section 143(1) is materially different from the earlier scheme and now permits a broader range of adjustments, including disallowance indicated in the audit report, provided the procedure in section 143(1) (including provisos) is complied with. Nevertheless, an adjustment under clause dealing with "disallowance of expenditure indicated in the audit report" cannot be mechanically applied where the audit observation conflicts with binding judicial precedents of the jurisdictional High Court. Where payments were made before the due date for filing the return, decisions of the jurisdictional High Court holding such payments deductible must prevail and the audit report indication cannot, by itself, sustain a disallowance under section 143(1). Applying these principles to the facts, the coordinate-bench reasoning (which the Tribunal follows) establishes that the proposed disallowance of provident fund dues was not sustainable. [Paras 5, 8, 9]

The impugned adjustment under section 143(1) based on the tax audit report was not sustainable and is deleted.

Quasi-judicial duty to give reasons when disposing objections - processing of income tax returns under section 143(1) - Whether the Assessing Officer (CPC) is required to dispose of objections to proposed adjustments under section 143(1) by a reasoned order. - HELD THAT: - The Court held that the procedure under section 143(1) is interactive: the provisos require that intimations of adjustments be given and that any response from the assessee be considered before making adjustments. Disposal of objections by the Assessing Officer-CPC is a quasi-judicial act and thus must be accompanied by specific, cogent reasons. Template or non-specific statements (e.g., standard text saying no response or response unacceptable without striking inapplicable parts) do not satisfy the requirement of a reasoned disposal and frustrate effective appellate review. [Paras 6, 7]

Assessing Officer-CPC must record specific reasons when rejecting objections to proposed adjustments under section 143(1); mere template responses are inadequate.

Tax audit report is an opinion and does not bind the assessee - binding effect of jurisdictional High Court decisions - Whether observations in the tax audit report bind the assessee or override binding decisions of the jurisdictional High Court. - HELD THAT: - The Tribunal emphasized that a tax audit report is the opinion of an independent professional and cannot bind the auditee. Where the audit report's conclusion on legal admissibility of a claim conflicts with binding decisions of the jurisdictional High Court, the audit observation cannot justify disallowance. Section 143(1)(a)(iv) must be read sensibly so that audit indications do not prevail over binding judicial law; the Assessing Officer-CPC cannot ignore jurisdictional High Court precedents in favour of audit observations. [Paras 7, 8, 9]

Audit observations do not bind the assessee and cannot prevail over binding jurisdictional High Court precedent; the disallowance based solely on such observation is unsustainable.

Final Conclusion: Following the coordinate-bench decision and applying the above principles, the Tribunal upheld the order of the CIT(A) and dismissed the Department's appeal, deleting the impugned adjustment made under section 143(1) in respect of the provident fund payments for assessment year 2019-20.

Rectification under Section 254(2) of the Income Tax Act - mistake apparent from the record - retroactive effect of an overruling judicial decision - maintainability of appeal under Section 260A against orders on rectification - application of the principle in Section 154 to Section 254(2)

Maintainability of appeal under Section 260A against orders on rectification - appeal as 'every order passed in appeal' - Whether an appeal under Section 260A is maintainable against the Tribunal's order rejecting an application for rectification under Section 254(2). - HELD THAT: - The Court rejected the respondent's contention that an order refusing rectification under Section 254(2) is not an "order passed in appeal" within Section 260A(1). The expression "appeal" in Section 260A was given a wider interpretation as conferring a substantive right; an order allowing rectification would amend the Tribunal's appellate order and be amenable to appeal, and parity requires that an order refusing rectification similarly be appealable. The Court also noted practical considerations-an appeal admitted in 2001 should not be dismissed on maintainability after a long lapse. The Court observed that the respondent remains free, under Section 260A(4) and its proviso, to contend that the formulated substantial questions are not involved in the case. [Paras 16, 18, 19, 20]

An appeal under Section 260A is maintainable against the Tribunal's order rejecting a rectification application under Section 254(2); the respondent may still argue that the formulated substantial questions are not involved.

Rectification under Section 254(2) of the Income Tax Act - mistake apparent from the record - retroactive effect of an overruling judicial decision - application of the principle in Section 154 to Section 254(2) - Whether a subsequent Supreme Court decision overturning earlier decisions relied upon by the Tribunal can constitute a "mistake apparent from the record" justifying rectification under Section 254(2). - HELD THAT: - The Court held that when a Tribunal's order is founded on earlier Supreme Court decisions which have since been overruled by a later binding Supreme Court decision, the foundation of the earlier order no longer survives. Relying on authoritative precedents (including Saurashtra Kutch and a coordinate bench decision applying the principle to Section 154), the Court accepted that overruling by a later decision operates retrospectively and 'discovers' the correct law to be applied from the beginning; such a change can form the basis for rectification where the error is discernible without prolonged argument. The Court expressed agreement with the coordinate Bench view that the principle applicable under Section 154 equally applies to Section 254(2), and therefore the Tribunal was not justified in refusing rectification in the facts of this case. [Paras 26, 28, 29, 30, 31]

A subsequent overruling Supreme Court decision can supply the basis for rectification under Section 254(2) as a "mistake apparent from the record"; the Tribunal's refusal to rectify was set aside.

Rectification under Section 254(2) of the Income Tax Act - remand for fresh consideration - Disposition following setting aside of the Tribunal's order refusing rectification. - HELD THAT: - Having set aside the Tribunal's order dated 23.02.2001, the Court remanded the matter to the Tribunal for fresh hearing and decision in the pending miscellaneous petition in M.P.No.2/Hyd/2001 in Interest Tax Appeal No.9/Hyd/1992 for assessment year 1985-86. The remand contemplates reconsideration of the rectification application in light of the legal principles articulated by the Court. [Paras 33]

The matter is remanded to the Tribunal for fresh hearing and decision on the rectification application.

Final Conclusion: The Tribunal's order dated 23.02.2001 refusing rectification under Section 254(2) was set aside; the High Court held that (i) an appeal under Section 260A is maintainable against such an order, and (ii) a subsequent overruling Supreme Court decision can constitute a "mistake apparent from the record" warranting rectification. The case is remanded to the Tribunal for fresh hearing and decision in respect of assessment year 1985-86.

Reopening of assessment under Section 147 - Proviso to Section 147 - failure to disclose fully and truly all material facts - Accounting treatment - cash basis versus accrual basis - Change of opinion not permissible as a valid reason to believe - Notices under Section 148 invalid where Section 147 order is without jurisdiction

Proviso to Section 147 - failure to disclose fully and truly all material facts - Accounting treatment - cash basis versus accrual basis - Validity of reopening assessments beyond four years where the assessee had disclosed in audited accounts that delayed payment surcharge and interest were accounted on cash basis - HELD THAT: - The proviso to Section 147 circumscribes the Assessing Officer's power to reopen assessments after four years by requiring that income must have escaped assessment by reason of the assessee's failure to disclose fully and truly all material facts. The audited accounts and accompanying notes plainly recorded that delayed payment surcharge and interest were accounted on a cash (realisation) basis and not on accrual. That disclosure negates any finding of non-disclosure of material facts necessary for assessment. The expression 'reason to believe' cannot be used to justify reopening where it amounts merely to a change of opinion by a superior officer about the accounting methodology previously accepted in the original assessment; a mere difference of view does not equate to failure to disclose material facts and therefore cannot satisfy the proviso for reopening after four years. [Paras 15, 16, 17]

Reopening of the assessments for AY 2012-13 and AY 2013-14 is not permissible under the proviso to Section 147 because there is no allegation or basis that the assessee failed to disclose fully and truly material facts; the cash-basis treatment was disclosed in the audited accounts.

Reopening of assessment under Section 147 - Notices under Section 148 invalid where Section 147 order is without jurisdiction - Consequences for the notices issued under Section 148 consequent to a Section 147 order found to be without authority - HELD THAT: - An order under Section 147 that does not comply with the statutory condition in its proviso is without jurisdiction. Where the foundational Section 147 order is vitiated for lack of the applicable statutory predicate, any consequential notice issued under Section 148 has no foundation to stand on. The Court therefore examined the reasons recorded for reopening and found them bereft of any allegation of suppression or non-disclosure of material facts, rendering the Section 147 orders and consequent Section 148 notices unsustainable. [Paras 17, 18]

The notices issued under Section 148 in respect of AY 2012-13 and AY 2013-14 are set aside; the writ petitions succeed on this ground.

Final Conclusion: Writ petitions in respect of assessment years 2012-13 and 2013-14 are allowed by setting aside the Section 147 orders and consequent Section 148 notices for failing to satisfy the proviso to Section 147; petitions relating to AY 2015-16 and AY 2016-17 were dismissed as not pressed. No order as to costs.

Reopening of assessment based on change of opinion - assumption of jurisdiction for reassessment under section 147 read with section 148 - reopening beyond four years under the first proviso to section 147 - requirement of failure to disclose fully and truly all material facts - distinction between disclosure of primary facts and secondary facts

Reopening of assessment based on change of opinion - assumption of jurisdiction for reassessment under section 147 read with section 148 - reopening beyond four years under the first proviso to section 147 - requirement of failure to disclose fully and truly all material facts - Validity of reopening the concluded assessment and framing of assessment order dated 31.03.2015 for A.Y. 2008-09 - HELD THAT: - The reasons recorded for reopening show that the Assessing Officer proceeded on the basis that deductions earlier allowed were wrongly or excessively granted by his predecessor, relying on the same material that was available at the time of the original assessment. The Tribunal found that such reasons amount to a mere change of opinion and do not constitute fresh tangible material justifying reassessment. Further, the original assessment had been completed by an order under section 143(3) dated 06.12.2010. The first proviso to section 147 permits reopening beyond four years only if there was failure by the assessee to make a return or to fully and truly disclose all material facts necessary for assessment; neither condition is satisfied in this case. The assessee had filed a return and had sought that the original return be treated in response to the section 148 notice; there is no allegation or record of non-disclosure of material facts. The Tribunal therefore concluded that the reassessment was invalid both because it was founded on change of opinion and because the proviso to section 147 did not permit reopening beyond four years in the absence of failure to disclose material facts. The Tribunal relied on binding and persuasive authorities regarding the impermissibility of reopening on change of opinion and the limits of the first proviso, and applied those principles to the reasons recorded by the AO, finding them insufficient to sustain jurisdiction. [Paras 10, 11, 12, 13]

Assessment framed on 31.03.2015 under section 144 read with section 147 is quashed for want of valid assumption of jurisdiction.

Final Conclusion: The appeal is allowed; the reassessment framed on 31.03.2015 for A.Y. 2008-09 is quashed for invalid assumption of jurisdiction (reopening based on change of opinion and not covered by the first proviso to section 147). The Tribunal refrains from adjudicating other substantive additions, leaving them open.

Validity of proceedings under section 153C - requirement of recording satisfaction before issuance of notice under section 153C - distinction between section 153A and section 153C in relation to warrant/authorization - remand for collection and verification of satisfaction note / miscellaneous records

Distinction between section 153A and section 153C in relation to warrant/authorization - Proceedings under section 153A could not be invoked in the assessee's case where the warrant of authorization was not issued against the assessee-company. - HELD THAT: - The Tribunal examined the warrants of authorization and the scheme of sections 132, 153A and 153C. It accepted the Revenue's contention that issuance of a warrant in the name of a person is sine qua non for assumption of jurisdiction under section 153A against that person, and held that where the warrant was issued only in the names of the two directors and not in the name of the company, the right recourse was not section 153A. The Tribunal applied the Supreme Court decision in Tapan Kumar Datta to the facts and found the assessee's contention that proceedings should have been under section 153A unsustainable. [Paras 16]

Proceedings under section 153A cannot be invoked; framing under section 153C was not vitiated on that ground.

Requirement of recording satisfaction before issuance of notice under section 153C - validity of proceedings under section 153C - Whether the assessment under section 153C was valid in absence of a traceable satisfaction note was not finally adjudicated on merits and was remanded for fresh consideration. - HELD THAT: - The Tribunal recognised that recording of satisfaction by the Assessing Officer of the searched person (or an equivalent satisfaction where the same AO covers both searched person and other person) is an essential requirement under section 153C as clarified by the Supreme Court in Super Malls. The Revenue, however, informed the Tribunal that the satisfaction note could not be located in the miscellaneous records and that files had been transferred/merged between offices. Given that the satisfaction note was not traceable on the record before the Tribunal, the Bench admitted the assessee's additional ground challenging jurisdiction and remanded the matter to the file of the CIT(A) with a direction to collect the relevant documents/records from the offices of the Assessing Officer/Investigation/Central Circle and decide the additional ground after affording the assessee an opportunity of being heard. [Paras 17, 18, 19]

Additional ground admitted; matter remanded to CIT(A) to decide validity of proceedings under section 153C after collection and verification of satisfaction note and related records.

Remand for collection and verification of satisfaction note / miscellaneous records - Scope and direction of remand to CIT(A). - HELD THAT: - The Tribunal directed that the CIT(A) shall decide the admitted additional ground after collecting the documents/records from the relevant offices of the Assessing Officer/Investigation/Central Circle in accordance with law and after affording the assessee an opportunity of being heard. The remand was prompted by the Revenue's inability to trace the satisfaction note on the record before the Tribunal and the centrality of that note to the jurisdictional question under section 153C. [Paras 19]

Matter remanded to CIT(A) with specific direction to collect records and adjudicate the additional ground after giving the assessee a hearing.

Validity of proceedings under section 153C - Outcome of appeals for assessment years 2007-08 to 2012-13. - HELD THAT: - Because the additional jurisdictional ground challenging the section 153C proceedings was admitted and remanded for fresh consideration by the CIT(A), the Tribunal allowed the appeals for the assessment years 2007-08 to 2012-13 for statistical purposes pending that decision. [Paras 20]

Appeals for AY 2007-08 to 2012-13 allowed for statistical purposes and remitted as directed.

Validity of proceedings under section 153C - Outcome of appeal for assessment year 2013-14. - HELD THAT: - The assessee's counsel conceded that there was no case on merits for AY 2013-14. The Revenue sought to uphold the orders of the lower authorities for that year. The Tribunal accordingly upheld the CIT(A)'s order and dismissed the assessee's appeal for AY 2013-14. [Paras 21]

Appeal for AY 2013-14 dismissed; order of CIT(A) upheld.

Final Conclusion: The Tribunal held that section 153A was not attracted as the warrants were not issued against the company; admitted the assessee's additional ground challenging jurisdiction under section 153C and remanded that jurisdictional issue to the CIT(A) for collection and verification of the satisfaction note and fresh adjudication after hearing the assessee; accordingly allowed the appeals for AY 2007-08 to 2012-13 for statistical purposes and dismissed the appeal for AY 2013-14.

Ad-hoc disallowance of expenses - Disallowance of sundry creditors - Genuineness and substantiation of claims - Reliance on remand report - Reliance on audited accounts - Best judgment assessment

Disallowance of sundry creditors - Genuineness and substantiation of claims - Reliance on remand report - Validity of 25% ad-hoc disallowance of sundry creditors made by the AO - HELD THAT: - AO disallowed 25% of sundry creditors on the ground that the assessee did not substantiate the creditors, having recorded that no details were filed. On appeal, CIT(A) obtained and considered the remand report and found the sundry creditors to be explained; the AO in the remand report accepted the creditors as genuine. The Tribunal observed that where the AO has, on remand, accepted the creditors as explained, an earlier ad-hoc disallowance of 25% lacks justification and cannot be sustained. Revenue did not point to any flaw in CIT(A)'s finding that creditors were explained. [Paras 6, 8, 11]

Tribunal upheld deletion of the 25% ad-hoc disallowance of sundry creditors and dismissed Revenue's ground in respect thereof.

Ad-hoc disallowance of expenses - Genuineness and substantiation of claims - Reliance on audited accounts - Sustainability of 25% ad-hoc disallowance of other expenses where accounts were audited - HELD THAT: - AO disallowed 25% of purchases, expenses and depreciation on an ad-hoc basis, treating them as unestablished because the assessee allegedly failed to produce supporting evidence. CIT(A) found that the assessee's accounts were audited and the AO had not identified any particular expense that was not vouched, nor established any personal element or the basis and quantum of such element. Relying on the audit and the absence of specific findings by the AO, CIT(A) deleted the ad-hoc disallowance (placing reliance on the precedent noted in the order). The Tribunal found no reason to interfere, observing that Revenue did not demonstrate any error in CIT(A)'s conclusion that the AO had not pointed to specific non-vouched or non-business expenses. [Paras 7, 8, 11]

Tribunal upheld deletion of the 25% ad-hoc disallowance of other expenses and dismissed Revenue's ground in respect thereof.

Final Conclusion: Revenue's appeal is dismissed in respect of both the ad-hoc disallowance of sundry creditors and the ad-hoc disallowance of other expenses for AY 2016-17; the CIT(A)'s deletions are sustained and the assessee's cross-objection requires no adjudication.

Income from other sources - section 56(2)(vii)(b)(ii) - stamp duty value as defined in Explanation F to section 56(2)(vii) - fair market value - circle rate / guideline value - valuation by District Valuation Officer (DVO) - remand to Assessing Officer for fresh consideration

Section 56(2)(vii)(b)(ii) - stamp duty value as defined in Explanation F to section 56(2)(vii) - circle rate / guideline value - valuation by District Valuation Officer (DVO) - fair market value - remand to Assessing Officer for fresh consideration - Whether the subsequent downward revision of guideline (circle) rates should be considered by the DVO in estimating the fair market value for the purpose of making addition under section 56(2)(vii)(b)(ii), and whether the matter should be remanded for fresh valuation. - HELD THAT: - The Tribunal noted that the stamp duty (circle) value adopted by the registration authority and the valuation ultimately arrived at by the DVO exceed the documented consideration; Explanation F to section 56(2)(vii) treats "stamp duty value" as the value adopted or assessable by the authority for payment of stamp duty and the provision aims to capture the fair market value where consideration is substantially lower. The Tribunal observed that the State Registration Department effected a downward revision of circle rates w.e.f. 2017 and that this subsequent reduction is material to the estimation of fair market value. Having regard to the purpose of section 56(2)(vii)(b)(ii) and the DVO's role in determining market value, the Tribunal held that the DVO should be directed to take into account the downward revision of guideline (circle) values when estimating the fair market value and to give appropriate weightage to that revision in preparing the valuation report. Accordingly, the Tribunal set aside the orders of the authorities below on this narrow point and remitted the matter to the Assessing Officer with specific directions to refer the case again to the DVO for reconsideration of valuation in the light of the downward revision of guideline values, so that the correct extent (if any) of addition under section 56(2)(vii)(b)(ii) can be recomputed. [Paras 5, 6, 7]

Matter remanded to the Assessing Officer with direction to refer to the DVO to reconsider fair market value taking into account the downward revision of guideline (circle) values; orders below set aside on this point.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, set aside the orders of the lower authorities on the limited question of valuation, and remanded the matter to the Assessing Officer with a direction to obtain a fresh valuation from the DVO that takes into account the downward revision of guideline (circle) rates so that the addition, if any, under section 56(2)(vii)(b)(ii) may be recomputed.

Territorial jurisdiction - deduction under Section 80C - remand for fresh adjudication - opportunity of hearing - speaking order

Territorial jurisdiction - opportunity of hearing - remand for fresh adjudication - Territorial jurisdiction of the assessing officer was not adjudicated and is remanded to the first appellate authority for fresh consideration. - HELD THAT: - The assessee contended that he was resident in New Delhi and that the assessment completed at Amritsar was beyond the territorial jurisdiction of the AO. The record shows no prior challenge to jurisdiction was raised before the AO and no petition for change of jurisdiction was filed during assessment proceedings or before the first appellate authority. The CIT(A) did not address the jurisdictional ground in the appeal. Given these circumstances and in view of the assessee's written submissions on record, the Tribunal considered it appropriate to remit the question of territorial jurisdiction to the CIT(A) for adjudication after affording the assessee an opportunity of hearing and by way of a speaking order. [Paras 4, 5]

Jurisdictional issue remitted to the CIT(A) for fresh adjudication after hearing and by a speaking order.

Deduction under Section 80C - remand for fresh adjudication - speaking order - Allowability of deduction claimed under Section 80C (PPF contribution) was not finally decided and is remanded to the first appellate authority for fresh consideration. - HELD THAT: - The assessee produced a copy of a PPF receipt evidencing payment claimed as eligible for deduction under Section 80C. The CIT(A) did not take cognisance of this claim in the appellate proceedings. The Tribunal found that the question of allowability of the Section 80C deduction requires adjudication on the material placed on record and therefore directed that the claim be considered afresh by the CIT(A), after hearing the assessee, and decided by a speaking order. [Paras 4, 5]

Claim for deduction under Section 80C remitted to the CIT(A) for fresh adjudication after hearing and by a speaking order.

Final Conclusion: The Tribunal remitted the issues of territorial jurisdiction and the allowability of deduction under Section 80C to the CIT(A) for fresh adjudication after affording an opportunity of hearing and by a speaking order; the appeal is allowed for statistical purposes.

Application of provisions of section 115BBE - invocation of provisions of section 69 - excess stock versus shortage of stock - taxability as profit and gains from business or profession - survey under section 133A - entries in books of account and voluntary surrender of income - admissibility and evidentiary value of statements

Excess stock versus shortage of stock - survey under section 133A - taxability as profit and gains from business or profession - Whether the difference in stock found during survey was an excess stock taxable under deemed income provisions or a shortage/ business discrepancy taxable as business income. - HELD THAT: - The Tribunal found on the material on record that the total stock inventoried by the department included stock of a sister concern and that the physical stock attributable to the assessee during the survey was Rs.41,07,259/-, not Rs.54,94,959/-. Consequently there was a shortage of stock of Rs.7,61,200/- compared to books and not an excess stock as computed by the AO. The excess/shortfall was part of mixed lots and not separately and clearly identifiable as unexplained investments; the difference was thus connected with the assessee's business operations. On these facts and by reference to relevant precedents, the Tribunal held that the difference should be treated as business income taxable under the normal head "profit and gains from business and profession" and not as a separate deemed investment or unexplained income under the special provisions applicable to deemed income. [Paras 9, 16, 17, 18, 19]

Difference in stock is a business discrepancy (shortage) and is taxable as business income under normal provisions, not as excess stock/deemed income.

Application of provisions of section 115BBE - invocation of provisions of section 69 - entries in books of account and voluntary surrender of income - admissibility and evidentiary value of statements - Whether provisions of section 115BBE (and related deeming provisions) could be invoked by the AO on the basis of accounting entries and the assessee's voluntary offer in the return where no excess stock was actually found. - HELD THAT: - The Tribunal observed that the AO invoked section 115BBE treating the surrendered amount as unexplained investment on the basis that the assessee had offered the sum in the return and that entries in books reflected the amount. The Tribunal disagreed: where no actual excess stock is substantiated by the inventory (and the purported excess included third party stock) and where the difference has direct nexus with business transactions, the special deeming provisions cannot be invoked merely on accounting entries or a voluntary offer to avoid dispute. The Tribunal also noted that admissions or book entries are important but not conclusive and that the surrendered amount, given the factual matrix and precedents, must be computed and taxed under normal business provisions rather than under chapter XII special rates. Accordingly, application of section 115BBE was held to be perverse to the facts and bad in law. [Paras 10, 16, 18, 19, 21]

Provisions of section 115BBE/related deeming provisions cannot be applied where no excess stock was actually found and the amount relates to business transactions; the surrendered amount must be taxed under normal provisions.

Final Conclusion: The appeal is allowed: the addition made by invoking section 115BBE is set aside and the surrendered income is to be computed and taxed as business income under normal provisions for AY 2019-20.

TDS credit for tax deducted by employer but not deposited - assessee's entitlement to credit despite employer's non-deposit - recovery from employer as alternative to debiting assessee - verification and grant of set-off by Assessing Officer - application of decision in Kartik Vijaysinh Sonavane

TDS credit for tax deducted by employer but not deposited - assessee's entitlement to credit despite employer's non-deposit - verification and grant of set-off by Assessing Officer - application of decision in Kartik Vijaysinh Sonavane - Whether the TDS shown in the assessee's wage/salary slips and claimed as deducted by the employer, but not deposited in Government account, should be allowed as credit or remanded for verification and reconsideration by the Assessing Officer. - HELD THAT: - The Tribunal noted that CPC/Assessing Officer created a demand because the employer had not deposited the full TDS; Form 26AS reflected a lesser amount than the TDS shown in the assessee's wage/salary slips. The assessee relied on decisions of the Tribunal and the Hon'ble Gujarat High Court in Kartik Vijaysinh Sonavane holding that where tax has been deducted by the employer the department may recover from the employer and the assessee should not be denied credit solely because the employer did not deposit the tax. Having considered the parties' submissions and the cited precedents, the Tribunal did not decide the merit of the credit claim itself but found the matter required fresh factual and legal consideration in light of the authorities relied upon. Accordingly, the Tribunal restored the issue to the file of the Assessing Officer with a direction to verify the facts, consider tax shown in Form 26AS as well as tax deducted and reflected in the wage/salary slips, apply the law in accordance with the decision in Kartik Vijaysinh Sonavane, and pass an order afresh. [Paras 4]

The issue is remanded to the Assessing Officer for verification and fresh decision in accordance with law and the cited High Court authority; appeal allowed for statistical purposes.

Final Conclusion: The Tribunal set aside the appellate order and restored the matter to the Assessing Officer to verify the claimed TDS (as per Form 26AS and wage/salary slips), apply the decision in Kartik Vijaysinh Sonavane, and pass a fresh order; the appeal is allowed for statistical purposes.

Allowability of employees' contribution to PF/ESI before the due date of filing return - interaction between section 36(1)(va) and section 43B - prospective effect of Finance Act, 2021 amendment (Explanation 5) - binding effect of jurisdictional High Court and coordinate Benches' precedents

Allowability of employees' contribution to PF/ESI before the due date of filing return - interaction between section 36(1)(va) and section 43B - prospective effect of Finance Act, 2021 amendment (Explanation 5) - binding effect of jurisdictional High Court and coordinate Benches' precedents - Deductibility under section 36(1)(va) of employees' contributions to PF/ESI paid after statutory due dates but before the due date for filing return of income for Assessment year 2018 - 19. - HELD THAT: - The Tribunal held that for the assessment year before the Finance Act, 2021 amendment (i.e., AY 2018-19) the law prior to Explanation 5 governs the allowability of employees' contributions. Reliance was placed on a series of coordinate-bench and High Court decisions which have consistently held that deposits of employees' PF/ESI made after the statutory due date but before filing the return under section 139(1) are deductible under section 36(1)(va). The Revenue's contention that the Finance Act, 2021 amendment should be read retrospectively was not accepted in the present facts because the assessment year under adjudication predates the amendment which has been clarified to apply with effect from 01.04.2021. In view of binding decisions of the jurisdictional High Court and consistent Tribunal precedents on identical facts, the impugned addition made in the intimation under section 143(1) was deleted and the claim by the assessee allowed.

The disallowance in respect of employees' PF/ESI contribution deposited prior to filing the return but after the statutory due dates is deleted; the appeal is allowed.

Final Conclusion: The appeal is allowed: the addition made in the intimation under section 143(1) for non-deposit of employees' PF/ESI (where deposits were made before filing the return) is deleted for Assessment year 2018 - 19, having regard to pre-2021 law and binding coordinate and High Court precedents.

Penalty under section 271(1)(c) - Notice under section 274 read with section 271(1)(c) - Concealment of particulars of income - Furnishing inaccurate particulars of income - Requirement to specify limb of section 271(1)(c) in notice - Non-application of mind in issuance of statutory notice

Notice under section 274 read with section 271(1)(c) - Requirement to specify limb of section 271(1)(c) in notice - Non-application of mind in issuance of statutory notice - Validity of penalty imposed under section 271(1)(c) where the notice under section 274 r.w.s. 271(1)(c) did not specify which limb-concealment of particulars of income or furnishing inaccurate particulars-was invoked. - HELD THAT: - The Tribunal examined whether the AO's notice and subsequent penalty were valid when the notice under section 274 read with section 271(1)(c) did not specify which of the two distinct limbs in section 271(1)(c) was being invoked. The Court noted the settled position that the two limbs-concealment of particulars of income and furnishing inaccurate particulars-carry different meanings and, therefore, the assessee must be informed which limb is charged so as to present an appropriate defence. The Tribunal relied on precedents treating a proforma or unmarked notice as indicative of non-application of mind by the AO and therefore bad in law (reference to Manjunatha Cotton & Ginning Factory and SSA's Emerald Meadows ; the Delhi High Court decision in Sahara India Life Insurance Company Ltd. was also noted). Applying that principle, the Tribunal held that issuance of the notice in a stereotyped manner without specifying the relevant limb demonstrated non-application of mind and rendered the notice invalid; accordingly, the penalty levied under section 271(1)(c) could not be sustained. Having decided the legal issue in favour of the assessee and deleted the penalty, the Tribunal declined to examine the merits of the underlying additions as that would be an academic exercise. [Paras 7, 8, 9]

Penalty under section 271(1)(c) deleted because the notice under section 274 r.w.s. 271(1)(c) failed to specify which limb was invoked, demonstrating non-application of mind and invalidating the penalty.

Final Conclusion: The appeal is allowed: the penalty imposed under section 271(1)(c) is deleted because the notice under section 274 read with section 271(1)(c) did not specify which limb was invoked and was issued in a stereotyped manner; merits of the underlying assessment additions were not adjudicated.

Penalty under section 114 of the Customs Act, 1962 - Confiscation under section 113/119 of the Customs Act, 1962 - Abetment in export smuggling - Freight forwarder's liability - Remand for reconsideration of penalty - Export policy amendment Notification No.56/2015-2020

Remand for reconsideration of penalty - Penalty under section 114 of the Customs Act, 1962 - Validity of the Commissioner (Appeals) order remanding the matter to the adjudicating authority to reconsider non-imposition of penalty under section 114. - HELD THAT: - The Appellate Tribunal examined the Commissioner (Appeals) direction which set aside the finding of non-imposition of penalty and remanded the case for reconsideration of penalty under section 114. The Tribunal noted the adjudicating authority had earlier absolved the appellant (freight forwarder) from penalty after finding that the appellant's role was limited to arranging the container and that there was no evidence of his wilful abetment in the smuggling plan. The Tribunal observed the Commissioner (Appeals) took a contrary view based on facts indicating a sophisticated smuggling plan and the possibility that the appellant had abetted misuse of the exporter's IEC. The Tribunal found no infirmity in remanding the matter since the Commissioner (Appeals) directed reconsideration of penalty and the appellant would be afforded further opportunity to place documents and arguments. The Tribunal therefore declined to interfere with the remand order and upheld the Commissioner (Appeals) direction, while requiring the adjudicating authority to provide personal hearing and allow production of further documents. [Paras 8, 12, 13]

The Commissioner (Appeals) order remanding the matter for reconsideration of penalty under section 114 is upheld; the adjudicating authority must grant personal hearing and allow production of further documents.

Freight forwarder's liability - Confiscation under section 113/119 of the Customs Act, 1962 - Penalty under section 114 of the Customs Act, 1962 - Whether the appellant's limited role (arranging the container) and non-confiscation of the container preclude imposition of penalty. - HELD THAT: - The Tribunal recorded the adjudicating authority's factual findings that the container was arranged by the appellant, transportation was effected by the alleged mastermind, and there was no order confiscating the container. The Tribunal also noted the Commissioner (Appeals) reliance on other material suggesting misuse of documents and prior clearances to infer possible abetment. The Tribunal did not decide the substantive question whether the appellant's limited role or non-confiscation of the container legally precludes penalty; instead, it accepted the appeal bench's approach that these factual and legal contentions require fresh consideration by the adjudicating authority upon remand. Consequently, the legal issue as to whether the appellant's role absolves it from penalty was left to be examined afresh. [Paras 3, 7, 9, 10, 11]

The question whether the appellant's limited role and non-confiscation of the container preclude imposition of penalty is not finally decided and is to be reconsidered by the adjudicating authority on remand with opportunity to the appellant.

Final Conclusion: The appeal is dismissed. The Appellate Tribunal upholds the Commissioner (Appeals) order remanding the matter for reconsideration of penalty under section 114, directing the adjudicating authority to afford the appellant personal hearing and permit production of further documents; the substantive liability of the appellant is to be examined afresh on remand.

Improper export - penalty under Section 114 of the Customs Act - sourcing requirement under Note 6 of Chapter 2 of Schedule 2 of the ITC (HS) Classification - production capacity as basis for liability - mis-declaration - mathematical variation not a ground for penalty

Penalty under Section 114 of the Customs Act - sourcing requirement under Note 6 of Chapter 2 of Schedule 2 of the ITC (HS) Classification - production capacity as basis for liability - mathematical variation not a ground for penalty - mis-declaration - Validity of confirmation of penalty under Section 114 for alleged improper export based on departmental computation of supplier's production capacity confined to frozen meat - HELD THAT: - The Tribunal examined the export conditions under Chapter 2 of Schedule 2 of the ITC (HS), including Note 6 requiring exporters to furnish declarations and APEDA registration certificates showing sourcing from APEDA-registered plants. The Department based its demand on a comparison between total exports and the supplier's production capacity taken as 62 MT of frozen meat per day, thereby alleging export in excess of plausible production and treating the excess as improper export. The record showed that the APEDA certificate for the processing unit recorded capacity for both frozen meat (62 MT/day) and chilled meat (40 MT/day). The adjudicating authorities, however, repeatedly referred only to 'frozen' meat capacity and did not account for chilled meat capacity when computing total permissible production. Further, the show-cause notice and appellate material did not rely upon or annex shipping bills showing any mis-declaration of goods; the Department did not initiate any action specifically for mis-declaration in the shipping bills. In these circumstances, imposing penalty on the basis of a mathematical variation arising from a partial view of the supplier's combined production capacity was held unsustainable. The Tribunal concluded that Note 6 did not restrict exports to frozen meat alone and that the Department's confinement to the frozen-meat figure, without addressing or establishing any mis-declaration, did not justify confirmation of the penalty. Consequently, the confirmation of penalty at the reduced rate was set aside. [Paras 4, 6]

Confirmation of penalty under Section 114 of the Customs Act (reduced to Rs.15,00,000 by Commissioner (Appeals)) set aside; penalty unsustainable where departmental computation ignored chilled-meat capacity and rested on mathematical variation without proof of mis-declaration.

Final Conclusion: The appeal is allowed; the order confirming penalty at the reduced rate is set aside because the Department's reliance on frozen-meat capacity alone and on a mathematical variance, without establishing mis-declaration, was unsustainable.

Condonation of delay - limitation - extension of limitation due to COVID-19 - laxity of counsel as ground for condonation - requirement of specific evidence to substantiate delay - liberal approach to condoning delay

Condonation of delay - extension of limitation due to COVID-19 - laxity of counsel as ground for condonation - requirement of specific evidence to substantiate delay - Application for condonation of delay of 715 days in filing the appeal dismissed. - HELD THAT: - The claim that the Supreme Court's suo motu extension of limitation during the COVID-19 pandemic applies was rejected because the due date for filing the appeal was June 10, 2019, which precedes the commencement of the COVID-19 period and therefore does not fall within the coverage of that extension. The principal substantive ground urged for condonation - that the appellant's counsel had drafted the appeal but an associate left without notice causing delay - was found to be unsubstantiated. The record did not name the earlier counsel or the associate blamed for the delay, contained no contemporaneous Vakalatnama showing prior engagement by any other counsel, and there was no affidavit or letter from the alleged defaulting counsel. On specific query, counsel for the appellant could not identify those persons. In the absence of specific evidence or particulars to support the asserted lapse of counsel, the tribunal found no reasonable ground to exercise discretion in favour of condoning the extensive delay. Although a liberal approach to condonation is recognized, it does not permit condonation where the asserted grounds are not supported by any material or verified particulars.

Miscellaneous applications for condonation of delay are dismissed; consequently the appeal is dismissed.

Final Conclusion: The applications for condonation of delay were refused because the COVID-19 extension did not apply to a June 2019 due date and the asserted counsel-related lapse was unproven; as a result the appeal was dismissed for want of condonation of delay.

Preferential claim under Section 530(1)(a) of the Companies Act, 1956 - secured creditor priority under Section 530(5) of the Companies Act, 1956 - claim verification by Chartered Accountants for adjudication under Section 530 - encashment of premature FDRs for disbursement to secured creditor

Preferential claim under Section 530(1)(a) of the Companies Act, 1956 - claim verification by Chartered Accountants for adjudication under Section 530 - Consideration and admission of the claim of Gujarat Commercial Tax (GST) as a preferential claim under Section 530(1)(a) of the Companies Act, 1956 in light of the claim verification report. - HELD THAT: - The Court, having heard parties and examined the Official Liquidator's report and the claim verification and supplementary reports furnished by M/s. Naimish N. Shah & Co., directed that the Official Liquidator is to consider the claim of Gujarat Commercial Tax (GST) as a preferential claim in light of the Chartered Accountants' report. The Court noted the exchange of communications including IDBI Bank's objections and the Chartered Accountants' clarifications, but accepted that the matter should be dealt with pursuant to the verification report and accordingly authorised consideration and admission of the GST claim as preferential. [Paras 4]

The Official Liquidator is directed to consider the Gujarat Commercial Tax claim as a preferential claim under Section 530(1)(a) in light of the Chartered Accountants' report.

Secured creditor priority under Section 530(5) of the Companies Act, 1956 - disbursement from company-in-liquidation funds by Official Liquidator - Permission to disburse specified amounts to Gujarat Commercial Tax (GST) and to IDBI Bank Ltd. out of the available funds of the company in liquidation. - HELD THAT: - After considering the Official Liquidator's report and the adjudicated claims (as per the Chartered Accountants' reports and subsequent correspondence), the Court permitted the Official Liquidator to disburse specified sums to the respective claimants from the funds available in the company's liquidation account. The Court recorded that if the respondent (IDBI Bank) had any grievance regarding the claims of the other respondent, it remained open to move an appropriate application in accordance with law, thereby leaving contested reliefs open to further appropriate proceedings. [Paras 4, 5]

The Official Liquidator is permitted to disburse the adjudicated amounts to Gujarat Commercial Tax and to IDBI Bank Ltd. out of the available liquidation funds, subject to the court's directions and without prejudice to any appropriate application by interested parties.

Encashment of premature FDRs for disbursement to secured creditor - authority of Official Liquidator to realize assets for payment - Permission for the Official Liquidator to encash premature fixed deposit receipts (FDRs) to make disbursement to the secured creditor. - HELD THAT: - Having regard to the fund position in the company's liquidation account and the need to satisfy permitted disbursements, the Court expressly authorised the Official Liquidator to encash premature FDRs so as to generate funds necessary to disburse amounts to the secured creditor. This direction enables the Official Liquidator to realise assets in hand to effect the court-permitted payments. [Paras 4]

The Official Liquidator is permitted to encash premature FDRs to disburse the amounts due to the secured creditor.

Final Conclusion: The Official Liquidator's report is allowed: the Court directed consideration of the Gujarat Commercial Tax claim as preferential per the Chartered Accountants' report, authorised payment of the adjudicated amounts to Gujarat Commercial Tax and to IDBI Bank Ltd. from the liquidation funds, and permitted encashment of premature FDRs to meet the disbursements; any grievance by a respondent against another's claim may be raised by appropriate application.

Violation of Section 3(1) read with Section 3(3)(b) of the Competition Act, 2002 - Appreciable adverse effect on competition - Concerted action / meeting of minds - Use of trade association platform for anti competitive boycott - Reliance on electronic evidence with Section 65B certification - Imposition of penalty for anti competitive conduct

Violation of Section 3(1) read with Section 3(3)(b) of the Competition Act, 2002 - Imposition of penalty for anti competitive conduct - The Appellant and the Opposite Parties engaged in anti competitive conduct limiting production, supply and screening of dubbed films in Karnataka and the Commission's finding and penalty were sustainable. - HELD THAT: - The Tribunal reviewed the Director General's investigation and the Commission's order and found sufficient evidence of a tacit agreement and common purpose among the Opposite Parties to prevent dubbed films from being released and exhibited in the State. The Commission's conclusion that such conduct limited production and supply of dubbed movies and caused appreciable adverse effect on competition was affirmed. The Tribunal accepted the Commission's application of Section 3(1) read with Section 3(3)(b) of the Act and held that the order imposing penalty on the Appellant did not warrant interference. [Paras 23, 35, 37, 38]

Findings of anti competitive conduct under Section 3(1) read with Section 3(3)(b) and the penalty imposed by the Commission are upheld; appeal dismissed.

Reliance on electronic evidence with Section 65B certification - Concerted action / meeting of minds - The DG's collection and the Commission's reliance on evidence including tweets, YouTube videos and media reports (accompanied by Section 65B certificates) and witness statements sufficed to establish concerted anti competitive action. - HELD THAT: - The Tribunal noted that electronic materials were obtained from the public domain and were accompanied by certificates under Section 65B of the Indian Evidence Act read with the Information Technology Act, and their veracity was not controverted by the parties. Witness statements and public communications surrounding the press meet demonstrated organization, participation and common purpose. On that basis the Tribunal found the evidentiary foundation adequate for the Commission's inferences of a meeting of minds and organized campaign to foreclose competition. [Paras 30, 31, 35]

Electronic evidence and witness statements relied upon by the DG and the Commission are admissible and adequate to support the findings of concerted anti competitive conduct.

Use of trade association platform for anti competitive boycott - Appreciable adverse effect on competition - The Appellant, as an association, and its office bearers used the platform of the Appellant to organise and publicise protests which were held to have anti competitive effect, and the Appellant could not disown those actions. - HELD THAT: - The Tribunal recorded that the press meet was organised with participation of the Appellant and its President and that the content and conduct at the press meet were used to threaten distributors and exhibitors. Prior Commission findings on similar conduct attained finality and were binding on the Appellant. Given the role of the association and its office bearers in organising and publicising the protest, the Tribunal accepted the Commission's view that the Appellant could not be absolved by claiming personal capacity of participants or benign objectives. [Paras 26, 33, 34, 35]

The Appellant, as an association, is accountable for the organised protest and related conduct that had an appreciable adverse effect on competition; prior final Commission findings reinforced this conclusion.

Final Conclusion: The Tribunal affirmed the Competition Commission's finding that the Appellant and the Opposite Parties engaged in concerted anti competitive conduct in relation to dubbed films, upheld the Commission's reliance on electronic and witness evidence, ratified the applicability of Section 3(1) read with Section 3(3)(b) of the Act, and dismissed the appeal; no order as to costs.

Binding effect of authorised representative's vote under Section 25A(3A) - Majoritarian decision of a class of financial creditors/homebuyers - Project-wise voting requirement for approval of resolution plan - Procedural irregularities as ground for setting aside approval of resolution plan - Enforceability of resolution plan terms as protection for homebuyers

Binding effect of authorised representative's vote under Section 25A(3A) - Majoritarian decision of a class of financial creditors/homebuyers - Authorised representative's vote, cast in accordance with the majority of voting share of the financial creditors he represents, binds the entire class and validates approval of the resolution plan. - HELD THAT: - The Tribunal found that Section 25A(3A) mandates that the authorised representative shall cast his vote in accordance with the decision taken by a vote of more than fifty per cent. of the voting share of the financial creditors he represents who have cast their vote. The record showed the Resolution Plan was approved by 99.97% of the voting share of the CoC. Reliance was placed on the law articulated in Jaypee Kensington (paragraphs 426-427 of that judgment) that, once a class decision is taken by the requisite majority, minority dissent within that class cannot undermine the binding effect of the authorised representative's vote. Accordingly, homebuyers who did not vote in favour are bound by the majority decision of their class. [Paras 7, 8, 9]

The authorised representative's majority-backed vote binds the class; the CoC approval (99.97%) stands.

Project-wise voting requirement for approval of resolution plan - The contention that voting ought to have been conducted project-wise and that failure to do so vitiates the approval was rejected. - HELD THAT: - The Appellant's contention that voting should have been project-wise was considered and rejected. The Tribunal observed that the statutory mechanism contemplates voting by classes through their authorised representative and that the majority decision of the class is determinative. Given the overwhelming approval of the plan by the CoC and the binding effect of the authorised representative's vote, the alleged error of not conducting project-wise voting was not a ground to set aside the approval. [Paras 4, 9]

The challenge based on absence of project-wise voting is repelled and does not vitiate the plan approval.

Procedural irregularities as ground for setting aside approval of resolution plan - Alleged procedural violations by the Resolution Professional and Authorised Representative were held insufficient to interfere with the approval of the Resolution Plan. - HELD THAT: - Although procedural objections were raised by the Appellant, the Tribunal found that they did not materially affect the determinative majority decision of the class of homebuyers or the integrity of the CoC's approval. In view of the statutory scheme and the binding effect of the authorised representative's majority-backed vote, the Tribunal concluded that the specified procedural irregularities did not justify setting aside the impugned order approving the plan. [Paras 5, 9]

Procedural violations alleged do not warrant interference with the plan approval.

Enforceability of resolution plan terms as protection for homebuyers - Specific clauses of the Resolution Plan providing for completion of construction and satisfaction of admitted claims were taken on record and regarded as affording substantial justice to homebuyers, reinforcing the decision to dismiss the appeal. - HELD THAT: - The Tribunal considered clauses of the approved Resolution Plan (notably clauses 2.5 and 4.1 of Part-III for Project Earth Copia and analogous provisions for other projects) which state that admitted claims will be satisfied by completing pending construction activities and handing over possession, subject to re-verification of claims and other stated terms. The plan also disclaims liability for interest/assured returns while providing mechanisms for satisfaction of admitted claims and transfer provisions. These substantive protections for allottees were held to provide substantial justice to homebuyers and were material in the decision to uphold the approval. [Paras 10, 11, 12]

The plan's terms adequately protect homebuyers' interests; this supports dismissal of the appeal.

Final Conclusion: The appeal is dismissed; the Adjudicating Authority's order approving the Resolution Plan is upheld, the majority-backed vote of the authorised representative binds the class of homebuyers and alleged procedural defects do not warrant interference, and the plan's terms afford substantive protection to the allottees.

Admission of section 7 petition under the Insolvency and Bankruptcy Code, 2016 - Fresh limitation period by successive acknowledgements under Section 18 of the Limitation Act, 1963 - One Time Settlement (OTS) lapse on default and effect on cause of action - Record of default under section 7(3) satisfied by alternative evidence - Validity of power of attorney as authorization to institute proceedings - Pendency of recovery proceedings before DRT not a bar to initiation of CIRP - Appointment of Interim Resolution Professional and initiation of moratorium

Fresh limitation period by successive acknowledgements under Section 18 of the Limitation Act, 1963 - Whether the petition under section 7 is barred by limitation or is saved by acknowledgements by the corporate debtor. - HELD THAT: - The Tribunal held that multiple written acknowledgements by the corporate debtor (dated 31.03.2014, 01.04.2014, 06.08.2014, 12.08.2014, 22.01.2015, 31.08.2017, 01.09.2017 and 17.02.2018) operate under Section 18 of the Limitation Act to revive the limitation period successively. Consequently, the last acknowledgement dated 17.02.2018 reset the limitation period which extended to 17.02.2021; the petition filed on 11.03.2019 therefore falls within the revived limitation period. The Tribunal relied on the Supreme Court authority recognizing applicability of Section 18 to section 7 applications and accepted the financial creditor's contention that the petition is within time. [Paras 11]

The petition is not barred by limitation and is within time by virtue of successive acknowledgements restarting the limitation period.

One Time Settlement (OTS) lapse on default and effect on cause of action - Operation of statutory suspension provisions during Covid-19 (Section 10A) - Whether the OTS subsisted so as to preclude initiation or revival of CIRP and whether Covid-19 related suspension (Section 10A) prevented initiation of the petition. - HELD THAT: - The Tribunal found that the OTS expressly provided that any default in stipulated instalments would cause the OTS to lapse. The corporate debtor defaulted in payment due on 31.12.2019 and the creditor rejected a proposed revised schedule on 06.12.2019. Thus the OTS lapsed on the date of default and was not revived by subsequent events. The Tribunal further observed that the alleged relevant default occurred prior to the Covid-19 relief and the statutory suspension could not validate continuation of the OTS to defeat the petition. The order restoring the petition (IA No.11/KB/2021) recorded the corporate debtor's admission of default under the OTS, supporting reinstatement. [Paras 11]

The OTS had lapsed on default and did not preclude initiation or revival of the section 7 petition; Covid-19 suspension did not render the petition invalid.

Record of default under section 7(3) satisfied by alternative evidence - Whether absence of a record of default in an information utility renders the section 7 petition defective and not maintainable. - HELD THAT: - The Tribunal referred to the requirement in section 7(3) to furnish the record of default recorded with an information utility or such other record or evidence of default as may be specified. It concluded that the financial creditor had furnished sufficient evidence of debt and default by way of CIBIL report, acknowledgements of debt and documents relating to the OTS. On that basis the Tribunal was satisfied that the existence of debt and default had been established for the purposes of admission. [Paras 11]

Absence of an information-utility record did not render the petition invalid; alternative evidence of default furnished was sufficient.

Validity of power of attorney as authorization to institute proceedings - Whether the petition was filed without valid authorization because it was instituted by a holder of a general power of attorney and not by a board resolution. - HELD THAT: - The Tribunal examined the authorization contained in pages 20-31 of the petition and observed that the general power of attorney conferred powers to grant letters of credit and to file legal proceedings; since the attorney had authority to disburse loans it concomitantly had authority to recover them. The Tribunal therefore held that the general authorization granted to the officer of the financial creditor was sufficient to entitle him to file the section 7 petition. [Paras 11]

The petition was properly authorized and the contention of lack of authorization was rejected.

Pendency of recovery proceedings before DRT not a bar to initiation of CIRP - Whether pending recovery proceedings before the Debt Recovery Tribunal preclude initiation of CIRP under the Code. - HELD THAT: - The Tribunal noted that proceedings under the Code are not merely recovery proceedings but are aimed at revival of the corporate debtor. It held that pendency of separate recovery proceedings before the DRT does not operate as a bar to initiation of insolvency proceedings under the Code. Consequently, multiplicity of proceedings or forum overlap did not render the section 7 petition non-maintainable. [Paras 11]

Pendency of DRT proceedings does not bar initiation of CIRP under section 7.

Admission of section 7 petition under the Insolvency and Bankruptcy Code, 2016 - Appointment of Interim Resolution Professional and initiation of moratorium - Whether, on the materials before it, the adjudicating authority should admit the section 7 petition and appoint an IRP with consequential moratorium. - HELD THAT: - Applying the settled test in Innoventive, the Tribunal concluded that the petition was complete, the debt was due and payable, and default had been established on the basis of documents and admissions. The Tribunal found no merit in the interlocutory application seeking rejection and penalty. Accordingly, the Tribunal admitted the petition, directed publication of the CIRP, imposed moratorium under section 14, appointed Mr. Anil Agarwal as Interim Resolution Professional subject to production of a valid authorisation of assignment as required by regulation 7A, and directed consequential actions including communication of the order and deposits towards initial expenses. [Paras 11]

CP (IB) No. 376/KB/2019 is admitted under section 7; moratorium is declared and an IRP is appointed; I.A. No.1022/KB/2022 is dismissed.

Final Conclusion: The Tribunal admitted the financial creditor's section 7 application, holding that the petition was within revived limitation by successive acknowledgements, that the OTS had lapsed on default and did not bar initiation, that alternative evidence satisfied the record-of-default requirement, and that the petition was properly authorised; consequent moratorium was imposed, an IRP appointed, and the interlocutory application seeking rejection and penalty was dismissed.

Continuation of resolution professional after CIRP expiry - professional fees as insolvency resolution process cost - priority of distribution under Section 53 - power of Adjudicating Authority to fix fees where Committee of Creditors is defunct

Continuation of resolution professional after CIRP expiry - professional fees as insolvency resolution process cost - entitlement to professional fees for the period during which the resolution professional continued to manage the corporate debtor after the expiry of the CIRP period despite absence of express ratification by the CoC - HELD THAT: - The Tribunal held that the resolution professional's continuation in managing the corporate debtor after the expiry of the corporate insolvency resolution process period, in the absence of an order appointing a liquidator, is not in contravention of the Code. Reliance was placed on the statutory provision allowing the resolution professional to continue until an order approving a plan or appointing a liquidator is passed and on NCLAT authority treating fees incurred during such continued management as payable. Consequently, the respondent's plea that no fees are payable for the extended period merely because the CoC did not expressly ratify them was rejected and the claim for fees for the period 21.12.2018 to 12.02.2019 was accepted as part of CIRP cost. [Paras 5]

The claim for professional fees for the period 21.12.2018 to 12.02.2019 is maintainable and payable as insolvency resolution process cost.

Power of Adjudicating Authority to fix fees where Committee of Creditors is defunct - priority of distribution under Section 53 - the forum and manner for determination and payment of the resolution professional's fees where the CoC has not ratified the claim and the company is under liquidation - HELD THAT: - The Tribunal noted NCLAT precedent recognizing the Adjudicating Authority's power to fix fees where the Committee of Creditors cannot act (for example, after initiation of liquidation). Applying that reasoning, and given that the company is under liquidation, the Tribunal directed the liquidator to disburse the professional fee at the rate previously approved by the CoC for the relevant period. The Tribunal further held that such fee constitutes insolvency resolution process cost and must be paid before any other distribution under Section 53 of the Code. [Paras 6, 7]

The liquidator is directed to pay the erstwhile resolution professional the fee at the CoC-approved rate for 21.12.2018 to 12.02.2019, and such payment shall be made before any other distribution under Section 53.

Final Conclusion: Application allowed; respondent-liquidator directed to disburse the resolution professional's fees for the period 21.12.2018 to 12.02.2019 at the rate approved by the CoC, treating the sum as insolvency resolution process cost to be paid prior to other distributions under Section 53.

Existence of a pre-existing dispute - plausible contention test - admission of company petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 - moratorium under Section 14 - appointment of Interim Resolution Professional

Existence of a pre-existing dispute - plausible contention test - Whether a material dispute existed between the parties prior to issuance of the Demand Notice such as to bar initiation of CIRP under Section 9. - HELD THAT: - The Tribunal examined contemporaneous communications and the notices exchanged between the parties and found no evidence of dissatisfaction or complaint about the quality of work prior to the Legal Notice dated 7th March 2018. The Corporate Debtor's Letter dated 17th March 2018 raising disputes was held to be an afterthought. Applying the standard that the adjudicating authority must see whether a plausible contention requiring further investigation exists and reject spurious defences, the Tribunal concluded that the Corporate Debtor failed to produce evidence of a pre-existing, bona fide dispute before the Demand Notice. Consequently, the defence of a pre-existing dispute was not available to the Corporate Debtor. [Paras 7, 8]

No material pre-existing dispute existed prior to the Demand Notice; the defence of dispute is rejected.

Admission of company petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 - appointment of Interim Resolution Professional - moratorium under Section 14 - Whether the Company Petition filed under Section 9 should be admitted and CIRP initiated, and consequential orders to be passed. - HELD THAT: - Having held that no pre-existing dispute barred the petition, the Tribunal admitted the Section 9 petition and ordered initiation of the Corporate Insolvency Resolution Process against the Corporate Debtor. The Tribunal appointed an Interim Resolution Professional to perform functions under the Code, directed the Operational Creditor to deposit initial CIRP cost, and imposed the moratorium with attendant prohibitions and protections as specified under the Code. Ancillary directions, including public announcement, vesting of management in the IRP/RP, and communication to the Registrar of Companies, were also issued to give effect to the CIRP admission. [Paras 9]

Company Petition admitted; CIRP ordered, IRP appointed, and moratorium and related consequential directions issued.

Final Conclusion: The Tribunal found no bona fide pre-existing dispute prior to the Demand Notice, admitted the Section 9 petition, directed initiation of CIRP against the Corporate Debtor, appointed an Interim Resolution Professional, and directed the statutory moratorium and ancillary measures to take effect.

Operational debt - operational creditor - admission of company petition - corporate insolvency resolution process - interim resolution professional appointment - moratorium

Operational debt - operational creditor - Advance payment made to the corporate debtor falls within the definition of operational debt and supports admission of the company petition by the operational creditor. - HELD THAT: - The Tribunal found that the corporate debtor admitted receipt of the advance and the value of the purchase order, and the corporate debtor did not dispute the legal contention after the Supreme Court's authoritative pronouncement that advance payments for goods or services can give rise to an operational debt. Relying on the ratio in the cited Supreme Court decision, the Tribunal held that an amount given as advance falls within the scope of operational debt under the Code. In view of the admission of receipt of the advance and the binding precedent, the Company Petition was held to be maintainable and merited admission.

Company Petition admitted and CIRP initiated against the corporate debtor.

Interim resolution professional appointment - moratorium - corporate insolvency resolution process - Appointment of an Interim Resolution Professional and invocation of moratorium consequent to admission of the petition. - HELD THAT: - Upon admission of the petition, the Tribunal directed commencement of the CIRP and appointed an Interim Resolution Professional, noting there were no disciplinary proceedings against him on the IBBI website. The Tribunal directed the IRP to assume control and carry out functions in terms of the Code and Rules, and declared the moratorium under the Code, while directing cooperation from the directors and stakeholders and communication of the order to relevant parties.

Interim Resolution Professional appointed; moratorium declared; IRP to take charge and proceed with CIRP.

Final Conclusion: The petition was admitted: the Tribunal held that the advance paid by the operational creditor constitutes an operational debt (on the authority of the Supreme Court), directed commencement of CIRP to be completed within 180 days, appointed an Interim Resolution Professional and declared the moratorium.

Maintainability of Section 7 application against struck off company - effect of company notified as dissolved under Section 250 of the Companies Act, 2013 - assets of corporate debtor surviving after striking off - power of Adjudicating Authority/Tribunal to place company and persons in prior position for CIRP - restoration for initiation of Corporate Insolvency Resolution Process within twenty years

Maintainability of Section 7 application against struck off company - effect of company notified as dissolved under Section 250 of the Companies Act, 2013 - Whether an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable against a corporate debtor whose name has been struck off the register of companies. - HELD THAT: - The Tribunal considered Section 250 of the Companies Act, 2013 which preserves a struck off company's status notwithstanding the cancellation of its certificate of incorporation "except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company." The Tribunal relied on earlier NCLAT decisions, including Mr. Hemang Phophalia Vs. The Greater Bombay Co Operative Bank Limited & Ors. and Elektrans Shipping Pvt. Ltd. vs Pierre D'Silva , which hold that a company whose name has been struck off may still have assets and that applications under Sections 7 and 9 of the IBC are maintainable where the creditor files within the statutory period; the Adjudicating Authority has power to give directions to place the company and persons in the same position as if the name had not been struck off and to permit initiation of CIRP. Applying Section 250 and the precedent, the Tribunal concluded that the corporate debtor cannot be treated as dissolved for the limited purpose of realising unpaid dues and that the Section 7 application is maintainable against a struck off company; whether assets exist can be examined by the Interim Resolution Professional/Resolution Professional during CIRP. [Paras 5, 6, 7, 8]

The Section 7 application filed against the struck off company is maintainable; the company is not to be treated as dissolved for the purpose of realising dues and initiating CIRP.

Final Conclusion: The Tribunal admitted that a company struck off under the Companies Act is, by virtue of Section 250 and consistent NCLAT precedents, not dissolved for the purpose of realising dues or initiating insolvency proceedings; accordingly the Section 7 petition against the struck off corporate debtor is maintainable and CIRP may be initiated.

Operation of Section 33(5) of the Insolvency and Bankruptcy Code, 2016 - preclusion of suits or other legal proceedings after liquidation order - priority and applicability of the Insolvency and Bankruptcy Code over the Income Tax Act - application of Regulation 4(3) of the IBBI (Liquidation Process) Regulations, 2016 for determination of liquidator's fee - entitlement to professional fees for services rendered during liquidation - authority to order audit of CIRP/liquidation costs and inclusion of audit expenses in liquidation cost

Operation of Section 33(5) of the Insolvency and Bankruptcy Code, 2016 - preclusion of suits or other legal proceedings after liquidation order - priority and applicability of the Insolvency and Bankruptcy Code over the Income Tax Act - Validity of Income Tax Department's initiation of assessment and penalty proceedings after the liquidation order. - HELD THAT: - The Corporate Debtor was ordered to be liquidated on 08.08.2018 and the Income Tax Department initiated assessment and penalty proceedings for A.Y. 2018-19 and A.Y. 2019-20 thereafter. Section 33(5) of the Code, subject to section 52, bars the institution of suits or other legal proceedings by or against the corporate debtor after a liquidation order, except with prior approval of the Adjudicating Authority. The Tribunal found that amendments effected by Section 247 and the Third Schedule exclude the operation of statutory provisions giving tax priority under the Income-tax Act for companies liquidated under the Code, and therefore the Income Tax Department cannot bypass the Code and initiate proceedings that would operate outside the liquidation framework and waterfall under Section 53. Reliance on pre-IBC authority construing Companies Act provisions was held inapposite in view of the Code's overriding effect. Consequently, the assessment order dated 13.05.2021 and the show-cause/penalty notices dated 13.05.2021 and 29.09.2021 were held to be contrary to Section 33(5) and the Code. [Paras 11, 12, 13, 14, 15]

Assessment order and notices issued by the Income Tax Department for A.Y. 2018-19 and A.Y. 2019-20 after the liquidation order were held violative of the Code; the applications complaining of those actions were allowed.

Application of Regulation 4(3) of the IBBI (Liquidation Process) Regulations, 2016 for determination of liquidator's fee - entitlement to fee where Committee of Creditors has not fixed fees - Claim of the erstwhile liquidator for remuneration for his tenure as liquidator (08.08.2018 to 31.10.2019). - HELD THAT: - Regulation 4(2) provides that liquidator's fee may be fixed by the CoC before liquidation; in the absence of such fixation, Regulation 4(3) prescribes entitlement as a percentage of amounts realized net of liquidation costs or distributed. The IBBI disciplinary order required deposit with liberty to claim fees in accordance with regulations. On the facts, only one asset (a Toyota car) was sold during the erstwhile liquidator's tenure yielding a negligible realisation and no distributions were made to stakeholders; therefore, calculation under Regulation 4(3) yields no fee due for the period in question. Reliance on NCLAT precedent confirming operation of Regulation 4(3) where CoC has not fixed fees was applied. The ex-liquidator's broad claim based on hypothetical realizations was not sustained. [Paras 23, 24, 25, 26, 27]

The claim for remuneration by the ex-liquidator for the specified period was rejected; no fee was held due under Regulation 4(3) and the application was dismissed.

Entitlement to professional fees for services rendered during liquidation - requirement of satisfactory performance and record of assignments - Claim by a professional (proprietor of M/s Aditya Goel & Associates) for payment of fees for services rendered during the liquidation period. - HELD THAT: - The claimant had no written contract with the corporate debtor and had been appointed by the erstwhile liquidator. On change of liquidator, communications show that work assigned remained incomplete, records were not handed over fully, and deficiencies in accounts and reconciliations were pointed out. The new liquidator engaged other professionals to complete pending work, and the claimant failed to identify any specific assignment satisfactorily completed for which payment remained due. Given the unsatisfactory performance, lack of contractual documentation, and subsequent engagement of other professionals, the Tribunal found the claim for outstanding professional fees unsubstantiated. [Paras 30, 31, 33, 34, 35]

The claim for professional fees was dismissed and the application was disposed of accordingly.

Authority to order audit of CIRP/liquidation costs and inclusion of audit expenses in liquidation cost - power to appoint independent auditor and to retrieve computerized records - Prayer by State Bank of India for audit of CIRP costs and verification of claimed liquidation/CIRP expenses for the period 29.09.2017 to 31.10.2019. - HELD THAT: - The Tribunal noted discrepancies in valuations, non-production of books prior to 01.04.2018, and large CIRP cost figures asserted by the erstwhile liquidator which were not approved by the CoC. IBBI disciplinary findings against the erstwhile liquidator reinforced concerns about irregularities. In these circumstances the Tribunal concluded that an independent audit of the books and CIRP costs was warranted to ascertain actual costs. The liquidator was directed to appoint an independent auditor to conduct the audit, the audit expenses to be borne as liquidation cost, and to take steps to retrieve computerized data including digital forensic assistance if necessary. [Paras 39, 40, 43, 44, 45]

The application was allowed; the liquidator was directed to appoint an independent auditor to audit CIRP costs for the stated period and include audit expenses in the liquidation cost, with directions to retrieve electronic records as needed.

Final Conclusion: The Tribunal held that post-liquidation assessment and penalty actions by the Income Tax Department for A.Y. 2018-19 and A.Y. 2019-20 were contrary to Section 33(5) of the IBC and not permissible outside the Code's liquidation mechanism; the erstwhile liquidator's claim for fees for his tenure was dismissed under Regulation 4(3) (no fee due on the facts); the professional's claim for unpaid fees was rejected for unsatisfactory performance and lack of contract; and State Bank of India's prayer for an independent audit of CIRP/liquidation costs (29.09.2017 to 31.10.2019) was allowed with directions to appoint an auditor and include audit expenses in liquidation cost.

Voluntary liquidation - dissolution of the company - declaration of solvency - distribution of liquidated assets in accordance with Section 53 - compliance with IBBI (Voluntary Liquidation Process) Regulations, 2017 - public announcement and absence of claims - submission of final report and Form GNL-2 to Registrar of Companies - Registrar of Companies' concurrence / no objection

Voluntary liquidation - declaration of solvency - compliance with IBBI (Voluntary Liquidation Process) Regulations, 2017 - submission of final report and Form GNL-2 to Registrar of Companies - distribution of liquidated assets in accordance with Section 53 - public announcement and absence of claims - Registrar of Companies' concurrence / no objection - Dissolution of the company on completion of voluntary liquidation upon compliance with statutory requirements. - HELD THAT: - The Tribunal recorded that the company made a declaration of solvency, the shareholders approved voluntary liquidation and appointed a voluntary liquidator; the liquidator carried out statutory steps under the IBBI (Voluntary Liquidation Process) Regulations, 2017 including publication of notice, submission of a preliminary and final report, and that no stakeholder claims were received in response to the public announcement. The liquidator opened and thereafter closed a bank account after distribution of assets in the manner provided by Section 53. The Form GNL-2 was submitted to the Registrar of Companies and the ROC filed a status report expressing no objection to acceptance of the application. Having noted these compliances and the ROC's concurrence, the Tribunal concluded that the statutory requirements for voluntary liquidation and dissolution were satisfied and ordered dissolution of the company. [Paras 4, 5, 6]

The petition for voluntary liquidation is allowed and M/s. Lonely Planet India Private Limited stands dissolved with effect from the date of the order.

Final Conclusion: The Tribunal allowed the voluntary liquidation petition and ordered dissolution of M/s. Lonely Planet India Private Limited, directing filing of the order with the Registrar of Companies within the statutory period.

Option under Rule 6(3) - proportionate reversal of Cenvat credit - trading activity as exempted service - Rule 6(3A) compliance - procedure lapse not to deny substantive option

Option under Rule 6(3) - Rule 6(3A) compliance - Whether Revenue can insist on application of the 5%/6% formula under Rule 6(3)(i) when the assessee has opted to reverse actual credit under Rule 6(3)(ii) and has reversed credit with supporting Chartered Accountant certificate. - HELD THAT: - The Tribunal noted that Rule 6(3) offers distinct alternative options to an assessee who does not maintain separate accounts, including (i) payment at a specified percentage of value of exempted goods/services and (ii) payment equal to Cenvat credit attributed to input services as determined under sub-rule (3A). The rule does not mandate that Revenue choose or impose a particular option on the assessee, nor does it provide that failure to exercise one option within a specific time automatically triggers application of the percentage option. The assessee in this case had reversed credit and produced a Chartered Accountant certificate in support. While the Tribunal observed that expressing the option earlier is sensible, delay in intimating the option is a procedural lapse and, standing alone, cannot convert an exercisable option into one unavailable to the assessee. Consequently Revenue could not compel the assessee to be taxed under the 5%/6% formula when the assessee had exercised the alternative option under Rule 6(3)(ii). [Paras 4]

Revenue could not insist on applying the 5%/6% option; the assessee's choice to reverse actual credit under Rule 6(3)(ii) must be respected.

Proportionate reversal of Cenvat credit - trading activity as exempted service - procedure lapse not to deny substantive option - Whether the demand confirmed on the basis of applying the percentage formula to total trading turnover is sustainable, and what relief is available. - HELD THAT: - The Tribunal emphasised the object of Rule 6 is to prevent availment of Cenvat credit in respect of inputs or input services used for exempted goods/services. Therefore recovery cannot exceed the Cenvat credit attributable to the exempted activity. Given that the appellant has agreed to and undertaken reversal of credit relatable to the exempted trading activity, the demand based on applying 5%/6% to total trading turnover is legally incorrect. The Tribunal held that Rule 6 is not intended to extract an amount larger than the credit attributable to exempted supplies. As the appellant had reversed proportionate credit (supported by documents), the matter requires calculation of the proportionate reversal rather than confirmation of the percentage-based demand. Accordingly the Tribunal set aside the impugned order and remanded the matter for computation of the proportionate reversal, directing the adjudicating authority to pass a fresh order after giving reasonable opportunity of hearing. [Paras 4]

Demand confirmed on the basis of applying 5%/6% to total trading turnover is unsustainable; matter remanded for limited purpose of calculating and giving effect to proportionate Cenvat-credit reversal attributable to the exempted trading activity.

Final Conclusion: The Tribunal set aside the adjudicating authority's orders confirming demands based on the percentage formula and remitted the matters for limited computation of proportionate Cenvat-credit reversal attributable to the exempted trading activity for the periods in dispute, directing fresh orders after affording the assessee reasonable opportunity of hearing.

Value of taxable service as the gross amount charged by the service provider for such service (Section 67) - distinct taxable event at each stage - MSO to LCO and LCO to subscriber - principal to principal revenue sharing and tax liability on respective parties - interpretation of 'for such service' following Intercontinental Consultants and Technocrats - Cenvat credit admissibility and remand for fresh consideration - extended period of limitation

Value of taxable service as the gross amount charged by the service provider for such service (Section 67) - interpretation of 'for such service' following Intercontinental Consultants and Technocrats - distinct taxable event at each stage - MSO to LCO and LCO to subscriber - principal to principal revenue sharing and tax liability on respective parties - Whether the MSO was required to pay service tax on the gross amount collected from subscribers or only on the gross amount received from LCOs. - HELD THAT: - The Tribunal held that the taxable event must be determined with reference to the service actually provided by the service provider and its consideration. Applying Section 67 as interpreted by the Hon'ble Supreme Court in Intercontinental Consultants and having regard to the TRAI mandated interconnection/revenue sharing agreements and Board circulars, the MSO and LCO are separate service providers engaged in different taxable activities. The MSO provides service to the LCO; the LCO provides service to the subscriber using its own last mile infrastructure and collects subscription from subscribers. The invoices and revenue sharing arrangements placed on record show the MSO invoiced LCOs for its share and the LCOs invoiced subscribers. Consequently the MSO is liable to pay service tax only on the gross amount received by it from LCOs (its consideration for the service it actually provided), while LCOs are separately liable on amounts received from subscribers. The Tribunal found no record based manipulation warranting a contrary conclusion and relied on the statutory definitions, Board circulars and the functional distinction in the DAS era to reach this conclusion. [Paras 7, 8, 10, 11, 12]

The respondent MSO is liable to pay service tax only on the gross amount received from LCOs and not on the entire subscription collected by LCOs from subscribers.

Cenvat credit admissibility and remand for fresh consideration - extended period of limitation - remand for fresh consideration - Whether the Adjudicating Authority rightly confirmed the short payment demand and denied Cenvat credit and whether the extended period of limitation was correctly invoked. - HELD THAT: - The Tribunal found that the learned Commissioner had confirmed the short payment and denied Cenvat credit without adequate discussion or reasoning. The findings on denial of credit (including disallowance on the ground that the statutory auditor was an employee) and on invocation of the extended period were not dealt with sufficiently. In view of these lacunae the Tribunal set aside that part of the impugned order and remanded the matters to the Adjudicating Authority for fresh adjudication. The respondent was directed to produce all documents in support of its claims and be given a proper opportunity of being heard on both the credit claims and the question of limitation. [Paras 13]

Part of the impugned order confirming short payment and denying Cenvat credit is set aside and remanded to the Adjudicating Authority for fresh decision, including the issue of extended period of limitation, after affording opportunity to the respondent to produce documents.

Final Conclusion: The Revenue's appeal is rejected on the core issue: the MSO is liable to pay service tax only on the gross amount received from LCOs; the Tribunal set aside and remanded the adjudication on confirmed short payment and denied Cenvat credit (and the question of extended limitation) for fresh consideration by the Adjudicating Authority after giving the respondent an opportunity to produce supporting documents.

Classification as Intermediary Services - export of services - refund of un-utilised Cenvat Credit - Guidance Note of CBEC dated 20.6.2012 on intermediary - agency test - res judicata / issue already decided in earlier period

Classification as Intermediary Services - Guidance Note of CBEC dated 20.6.2012 on intermediary - agency test - refund of un-utilised Cenvat Credit - export of services - Whether the services provided by the respondent fall within the category of intermediary services and thereby disentitle the respondent to refund of un-utilised Cenvat Credit for the stated periods. - HELD THAT: - The Tribunal examined the contractual arrangements and applied the CBEC Guidance Note dated 20.6.2012 which frames the characteristics of an intermediary - arranging or facilitating a main supply between parties while providing a separate agency service identifiable by a commission or fee, without altering the nature or value of the main service, and subject to documentary mandate from the principal. On the facts and agreement earlier considered by the Tribunal for a prior period, the respondent's activity amounted to routine back-office process outsourcing undertaken on instructions from ENSIL/AEs, not an arrangement or facilitation of a main service between two parties. The Tribunal recorded that liaison/coordination and processing equipment supply orders in the factual matrix did not satisfy the criteria of an intermediary because the respondent did not act as agent of the main service provider, did not charge a separately identifiable commission for arranging a main supply, and did not alter or facilitate the main supply in the manner contemplated by the Guidance Note. The Appellate Authority had allowed the respondent's refund for an earlier period on these grounds, and that decision was upheld by this Tribunal in Final Order No. A/60543/2019-CU(DB) dated 05/04/2019 after detailed consideration. The present Bench found that the earlier Tribunal decision remains binding and unreversed, and consequently there was no reason to take a contrary view for the present periods; hence the respondent is not an intermediary and is entitled to the refund of un-utilised Cenvat Credit claimed for the stated periods. [Paras 3, 4]

The respondent's services are not intermediary services; the Commissioner (Appeals) order allowing the refund is upheld and the Revenue's appeal is dismissed, entitling the respondent to consequential relief.

Final Conclusion: The Revenue's appeal is dismissed; following the earlier Tribunal ruling applying the CBEC Guidance Note, the respondent is held not to have provided intermediary services and is entitled to the refund of un-utilised Cenvat Credit for the periods October 2016 to June 2017.

Proof of export - bond or letter of undertaking - technical/procedural violation without revenue implication - remand for verification and de novo adjudication - principles of natural justice - opportunity of hearing

Proof of export - bond or letter of undertaking - technical/procedural violation without revenue implication - principles of natural justice - opportunity of hearing - Whether the confirmed demand and penalty in respect of four ARE I (Nos. 002, 003, 008 and 001) could be sustained without production/verification of original/duplicate ARE 1s and other proof of entry into the SEZ, and whether the matter required fresh adjudication. - HELD THAT: - The Tribunal recorded the contentions of the appellant that consignee certificates, invoice endorsements and Customs acknowledgements (in sealed cover) supported that the goods were received in the SEZ or returned as claimed, and that non execution of Bond was at best a procedural lapse with no revenue implication where actual receipt by the SEZ is proved. The ld. Commissioner (Appeals) had noted absence of original/duplicate ARE 1s duly certified by SEZ Customs for some consignments and questioned the invoice showing return (discrepancy in values), and observed that sealed cover containing Customs signed copies was received by the range officer but was not considered at adjudication. Having considered these competing factual contentions and documentary material, the Tribunal found that the facts and documents necessary to decide whether the confirmed demand and penalty were sustainable had not been adequately verified or addressed. Consequently the Tribunal did not decide the substantive merits on whether the absence of Bond amounted only to a technical violation in each case; instead it directed remand so that the Adjudicating Authority may verify the relevant documents, consider the appellant's explanations, and pass a speaking, reasoned de novo order after affording a reasonable opportunity of hearing. [Paras 7, 8]

Remand to the Adjudicating Authority to verify relevant documents and pass a speaking, reasoned de novo order after granting the appellant a reasonable opportunity of hearing.

Final Conclusion: Appeal allowed by way of remand; matter directed to be re adjudicated by the Adjudicating Authority in accordance with law after verification of documents and affording opportunity of hearing.

Strike off defence - deposit of tax to cure default - Section 13(6) of the M.P. Accommodation Control Act, 1961 - tenant's obligation to pay GST as part of lease charges - restoration of defence on compliance - periodical enhancement of rent agreed in lease - expeditious disposal

Strike off defence - deposit of tax to cure default - restoration of defence on compliance - Order striking off the defence of the tenant for non-deposit of GST was set aside and the tenant was permitted to defend the suit after deposit of the outstanding tax. - HELD THAT: - This Court had directed the tenant to deposit the balance GST and stayed further proceedings (order dated 31.08.2018). The tenant complied by depositing the balance GST. Since the defence had been struck off solely on the ground of non-deposit/non-payment of the tax liability, and that liability has now been discharged, the orders of the Trial Court and the High Court striking off the defence were quashed and set aside and the tenant was permitted to defend the eviction suit. The Court's relief is conditional upon the reported deposit which cured the specific default that had occasioned the strike-off. [Paras 4, 5, 8]

Strike-off orders set aside and defence restored on deposit of the outstanding GST.

Periodical enhancement of rent agreed in lease - tenant's obligation to pay GST as part of lease charges - expeditious disposal - Directions for payment of rent in specified slabs following contractual 15% periodic enhancement were issued and the High Court was directed to decide the suit expeditiously within six months. - HELD THAT: - The Court accepted the landlord's request to give effect to the contractual periodic increase of rent and directed payment of rent for the historical slabs as reflected in the lease (specified amounts for periods up to September 2023 and continuation at the last specified rate thereafter) to be paid within six weeks. The High Court was directed to finally decide and dispose of the suit on its merits expeditiously and within six months from receipt of this order. [Paras 6, 7, 8]

Tenant directed to pay rent as per the specified enhanced slabs and High Court directed to decide the suit within six months.

Section 13(6) of the M.P. Accommodation Control Act, 1961 - tenant's obligation to pay GST as part of lease charges - Question whether rent includes tax liability and whether non-deposit of such tax permits striking off defence under Section 13(6) was left open for consideration by the appropriate forum. - HELD THAT: - Counsel for the respondent requested consideration of the legal question whether rent includes the liability to pay tax and whether non-deposit/non-payment of the tax liability justifies striking off the tenant's defence under Section 13(6) of the Act, 1961. The Supreme Court did not decide this question of law; it noted the request and did not adjudicate the point in the present proceedings, leaving such legal determination to be considered in the suit and by the courts below as necessary. [Paras 6]

Legal question on inclusion of tax in rent and the consequence of non-payment under Section 13(6) left open for determination.

Final Conclusion: The orders of the Trial Court and the High Court striking off the defence for non-payment of GST are quashed and set aside following the tenant's deposit of the outstanding tax; the tenant is permitted to defend the suit, directed to pay rent as per the agreed periodic enhancements for the specified periods and to continue paying the last specified rent rate pending disposal, and the High Court is directed to decide the suit expeditiously within six months; the substantive legal question whether rent includes tax and whether non-payment permits striking off under Section 13(6) remains undetermined and to be considered by the appropriate forum.

Money Bill - Article 110(1)(g) - matters incidental to Money Bill - Article 110(3) - finality of Speaker's certification - receipt of money into the Consolidated Fund of India - judicial review of Speaker's certification - incidental provisions to enable IPO

Money Bill - Article 110(1)(g) - matters incidental to Money Bill - receipt of money into the Consolidated Fund of India - incidental provisions to enable IPO - Validity of amendments to the Life Insurance Corporation Act, 1956 (Sections 128-146 of the Finance Act, 2021) as having been validly enacted by a Money Bill under Article 110 of the Constitution of India - HELD THAT: - The court held that the core object of the amendments - enabling an IPO of LIC and thereby receiving money into the Consolidated Fund of India - falls within the matters contemplated by Article 110(1)(c)/(f). Consequential and facilitative provisions (changes to corporate governance, share-capital structure, funds, surplus distribution, transferability and related regulations) are incidental to that core object and therefore fall within Article 110(1)(g). The word "only" in Article 110(1) must be read in conjunction with clause (g) so as not to render it redundant; a Bill that substantially deals with receipts into the Consolidated Fund may contain incidental provisions necessary to achieve that object without losing its character as a Money Bill. The court also relied on and applied the principle of deference in Justice K.S. Puttaswamy (Retd.) and Rojer Mathew, observing that the Speaker's certification that the Finance Bill, 2021 was a Money Bill is final under Article 110(3) unless that certification is challenged; the petitioner had not challenged the Speaker's certificate. In addition, the legislative Notes on Clauses expressly recorded that the amendments were made to enable receipt of money into the Consolidated Fund via IPO, supporting the conclusion that the impugned provisions are within Article 110. The court found no constitutionally fraudulent process, nor any illegality in the certification procedure, and concluded that the procedural steps for certification and enactment were complied with. [Paras 43, 44, 46, 47, 48]

The amendments in Sections 128-146 of the Finance Act, 2021 (Part III of Chapter VI) and the consequential changes to the Life Insurance Corporation Act, 1956, fall within the definition of a Money Bill under Article 110 read with clause (g) and are not constitutionally invalid on that ground.

Article 110(3) - finality of Speaker's certification - judicial review of Speaker's certification - Effect of failure to challenge the Speaker's certificate in proceedings under Article 226 - HELD THAT: - The court observed that Article 110(3) makes the Speaker's decision final as to whether a Bill is a Money Bill. Judicial review in the context of a Money Bill certification is extremely limited and ordinarily presumes legality in favour of the Speaker; challenge to the validity of the certification must be expressly raised. The petitioner did not challenge the Speaker's certificate and, when invited to do so, declined to amend the writ petition to implead or contest the Speaker's certification. In the absence of such challenge, the certification stands and the court would not overturn the legislative process on the present grounds. [Paras 43, 44, 48, 49]

Because the petitioner did not challenge the Speaker's certification that the Finance Bill, 2021 was a Money Bill, the certification must be treated as final for the purposes of these proceedings and the challenge to the Act on Money Bill grounds fails.

Final Conclusion: Writ petition dismissed on merits: the Finance Act, 2021 amendments to the Life Insurance Corporation Act, 1956 were validly enacted as a Money Bill (incidental provisions falling under Article 110(1)(g)), the Speaker's certification was not challenged and is final, and no constitutional illegality or fraud was established; no order as to costs.