TaxTMI Updates e-Newsletter
Nov 10,2021

Summary order. Notice issued returnable in eight weeks; dasti permitted; counter-affidavit to be filed within four weeks from date of service of notice; matter tagged with SLP(C) No. 6977 of 2021.

Summary order. Special Leave Petitions dismissed; impugned High Court order upheld and pending interlocutory application disposed of.

Transitional input tax credit - one-time filing of revised Form GST TRAN-1 and TRAN-2 - acceptance of transitional credit through GSTR-3B - speaking order requirement - transitional credit under Section 140 of the CGST Act

Transitional input tax credit - one-time filing of revised Form GST TRAN-1 and TRAN-2 - acceptance of transitional credit through GSTR-3B - transitional credit under Section 140 of the CGST Act - Direction to the respondent authority to decide the petitioner's representation dated 19.3.2020 concerning non-reflection of claimed transitional input tax credit and requests for alternate modes of adjustment. - HELD THAT: - The petitioner sought directions to permit one-time filing of revised TRAN-1/TRAN-2, to accept physical revised forms, or to allow transitional credit claimed through GSTR-3B so as to enable claiming of legitimate transitional credit under Section 140 of the CGST Act. Counsel for the petitioner represented that a representation dated 19.3.2020 had already been submitted to the concerned Commissioner. The Court regarded a request for a decision on that representation as fair and refrained from adjudicating the merits of the claimed credit or the alternatives sought. Instead, the Court directed respondent No.5 to consider and decide the representation by passing a speaking order within three months from receipt of a certified copy of the order, thereby leaving substantive determination to the competent authority after reasoned consideration. [Paras 5, 6, 7]

Respondent No.5 is directed to decide the representation dated 19.3.2020 by passing a speaking order within three months from receipt of a certified copy of this order; the petition is disposed accordingly.

Final Conclusion: Writ petition disposed with a direction to respondent No.5 to decide the petitioner's representation of 19.3.2020 by a speaking order within three months; no adjudication on the merits of the claimed transitional credit was undertaken.

Initiation of recovery proceedings under GST - notice under Section 79 of the HGST Act - withdrawal of petition with liberty to pursue alternate remedy - petition dismissed as withdrawn

Withdrawal of petition with liberty to pursue alternate remedy - petition dismissed as withdrawn - Petition challenging the notice was permitted to be withdrawn and dismissed as withdrawn with liberty to avail alternate remedy. - HELD THAT: - Learned counsel for the petitioner sought permission to withdraw the petition which challenged a notice issued for initiation of recovery proceedings under the GST enactments. The Court allowed the prayer for withdrawal and granted the petitioner liberty to pursue any alternate remedy available under law. Consequentially, the petition was dismissed as withdrawn and the pending miscellaneous application, if any, was disposed of. [Paras 3, 4]

Prayer to withdraw the petition allowed; petition dismissed as withdrawn with liberty to seek alternate remedy; pending applications disposed of.

Final Conclusion: The petition challenging the GST recovery notice was withdrawn with the Court's permission; it is dismissed as withdrawn while liberty is granted to the petitioner to pursue alternate legal remedies.

Maintainability of writ against assessment orders - availability of alternative statutory remedy - extraordinary writ jurisdiction under Article 226 - appeal under Section 107 - procedure under Section 73 - principles of natural justice - exclusion of time for limitation

Maintainability of writ against assessment orders - availability of alternative statutory remedy - extraordinary writ jurisdiction under Article 226 - appeal under Section 107 - principles of natural justice - procedure under Section 73 - exclusion of time for limitation - Writ petitions challenging assessment and demand orders dismissed as not maintainable in view of existence of an effective statutory appeal remedy. - HELD THAT: - The Court held that the impugned assessment and demand orders were subject to an appellate remedy under the statute and the petitioner offered no plausible reason for bypassing that remedy; mere grievance that replies or objections were not properly considered does not amount to want of jurisdiction, statutory violation or denial of principles of natural justice which would justify exercise of extraordinary jurisdiction under Article 226. The Court noted that the assessing authority followed the procedure under the statute, including issuance of intimation, show cause notice, opportunity to file replies and personal hearing, and that disputed factual and evidentiary matters are appropriately ventilated before the appellate authority. Consequently, the writ petitions were rejected as not maintainable, but the petitioner was granted liberty to file the statutory appeal; time consumed in prosecuting the writ petitions was ordered to be excluded for computing limitation for such appeal. [Paras 8, 9, 11, 12]

Writ petitions dismissed with liberty to file appeal under the Act; time spent in filing writ petitions to be excluded for limitation.

Final Conclusion: The High Court dismissed the writ petitions challenging assessment orders for lack of maintainability because an adequate and effective statutory appeal remedy exists, while granting liberty to the petitioner to file the statutory appeal and ordering exclusion of the time spent in filing the writ petitions for limitation purposes.

Input Tax Credit - cancellation of registration under Section 29(2)(a) of CGST Act - opportunity of being heard / personal hearing - effect of change in legal position under Section 50 of CGST Act on demand - conditional stay pending part deposit - de novo reconsideration of cancellation

Cancellation of registration under Section 29(2)(a) of CGST Act - opportunity of being heard / personal hearing - Whether the cancellation of the writ petitioner's GST registration under Section 29(2)(a) was valid when no personal hearing was afforded before issuance of the cancellation order. - HELD THAT: - The Court noted the first proviso to Section 29(2)(a) of the CGST Act which requires that the proper officer shall not cancel registration without giving the person an opportunity of being heard. The petitioner contested that no personal hearing was granted before the impugned cancellation. Revenue relied on multiple notices but it was not clear that any amounted to a personal hearing. Applying the statutory proviso and the parties' submissions, the Court held that the impugned cancellation could not stand without affording the petitioner a personal hearing and therefore set aside the II impugned order solely for the limited purpose of granting the opportunity of personal hearing, without expressing any opinion on the merits of the underlying demand or cancellation. [Paras 10, 11]

II impugned notice dated 13.08.2021 cancelling registration is set aside solely to enable a personal hearing to be afforded to the writ petitioner.

Conditional stay pending part deposit - effect of change in legal position under Section 50 of CGST Act on demand - Whether the Court should grant interim relief and on what conditions pending the personal hearing and reconsideration of the cancellation. - HELD THAT: - After observing that the earlier demand had been scaled down in consequence of the changed legal position regarding Section 50 of the CGST Act, the Court directed interim relief conditioned on a partial deposit by the petitioner. The Court ordered that the writ petitioner deposit a specified portion of the demand into the regular CGST account within a fixed period; upon such compliance the impugned cancellation would be kept in abeyance and a personal hearing would be granted on a specified date. The Court made clear that if the deposit condition was not complied with, the authority would have no obligation to afford personal hearing and the set-aside cancellation would be revived. [Paras 11]

Petitioner to make the prescribed conditional deposit within the stipulated time; on compliance personal hearing and interim abeyance of the cancellation are directed, otherwise the set-aside order will revive.

De novo reconsideration of cancellation - Whether the matter is to be reconsidered afresh by the authority after affording personal hearing and, if so, the manner and timeline for such reconsideration. - HELD THAT: - The Court directed that if the petitioner complies with the deposit condition and is afforded personal hearing, the respondent-authority shall undertake de novo decision making on the II impugned order and conclude the exercise expeditiously. A specific timeframe was fixed for completion of the de novo exercise and communication of the decision to the petitioner under due acknowledgement. The Court expressly refrained from expressing any opinion on the merits, confining its order to procedural directions for fresh consideration and finalisation. [Paras 11]

Respondents to reconsider the cancellation de novo after personal hearing and pass a reasoned order within the time directed; the Court expressed no view on the merits.

Final Conclusion: The High Court set aside the cancellation order dated 13.08.2021 solely to secure the writ petitioner's statutory right to a personal hearing, imposed a conditional interim regime (part deposit to secure stay and entitlement to hearing), and directed the respondent to undertake de novo reconsideration and pass a reasoned order within the stipulated period; no opinion was expressed on the merits.

Proviso to Section 98(2) of the CGST/TGST Acts - meaning of "proceedings" in Section 83(1) after amendment - Chapter XIV investigations (Inspection, Search & Seizure) - rule of statutory interpretation that identical words bear identical meaning throughout a statute

Proviso to Section 98(2) of the CGST/TGST Acts - meaning of "proceedings" in Section 83(1) after amendment - Chapter XIV investigations (Inspection, Search & Seizure) - Whether the application for advance ruling was admissible where an investigation under Chapter XIV by DGGI in respect of the same question was pending. - HELD THAT: - The Authority applied the proviso to Section 98(2) which disallows admission of an application where the question raised is already pending or decided in any proceedings in the case of the applicant. The Finance Act, 2021 amendment to Section 83(1) expanded the meaning of "proceeding" to include Chapter XIV (Inspection, Search & Seizure). Applying the interpretive principle that identical expressions in the same statute should be given the same meaning, the Authority held that an ongoing investigation under Chapter XIV constitutes pending "proceedings" for the purpose of the proviso to Section 98(2). The DGGI confirmed that an investigation concerning alleged short payment of GST on supplies to joint ventures under the relevant notifications was pending and not concluded. In those circumstances the question in the advance ruling application was found to be the subject matter of pending proceedings and therefore not admissible for advance ruling. [Paras 6, 7]

Application for advance ruling rejected as not admissible under the proviso to Section 98(2) because the same question is pending in investigation proceedings under Chapter XIV.

Final Conclusion: The Authority refused to admit the applicant's request for advance ruling and rejected the application because the issue raised was the subject of pending Chapter XIV investigation proceedings by the DGGI, rendering the application inadmissible under the proviso to Section 98(2).

Renting of immovable property - pure services - exemption under Notification No. 12/2017-C.T. (R) - functions entrusted under Articles 243G and 243W of the Constitution - Tax Deducted at Source under section 51 - applicability of TDS to an unregistered supplier - advance ruling under section 97

Renting of immovable property - pure services - exemption under Notification No. 12/2017-C.T. (R) - functions entrusted under Articles 243G and 243W of the Constitution - Whether the applicant's supply of residential accommodation to the State Social Welfare Department is exempt from GST under Entry No. (3) of Notification No. 12/2017-C.T. (R) dated 28.06.2017. - HELD THAT: - Schedule II treats leasing/renting of immovable property as a supply of service; the applicant's leasing is therefore a service and, on the face of it, a 'pure service' since no goods are supplied. The Notification confers exemption where (i) the supply is a pure service, (ii) supplied to the Government, and (iii) supplied by way of any activity in relation to a function entrusted to Panchayats or Municipalities under Articles 243G/243W. While conditions (i) and (ii are satisfied on the material before the Authority, the applicant failed to furnish sufficient evidence or submissions to demonstrate that the supply was rendered by way of an activity in relation to a function entrusted under Articles 243G/243W. In absence of material connecting the impugned leasing to a constitutionally entrusted Panchayat/Municipal function, the Authority could not allow exemption under Entry No. (3). [Paras 5]

Answered in the negative - the leasing/renting services are not held exempt under Entry No. (3) of Notification No. 12/2017-C.T. (R) for want of material to link the supply to functions under Articles 243G/243W.

Tax Deducted at Source under section 51 - applicability of TDS to an unregistered supplier - Whether TDS under section 51 is applicable in the subject case and whether the TDS notification issued under section 51 would apply notwithstanding that the applicant is unregistered under GST. - HELD THAT: - Because the Authority has held that the impugned leasing services are not exempt, they are taxable supplies. Section 51 and the TDS notification apply to payments made or credited for taxable goods or services supplied to government entities. The Authority therefore concluded that the TDS provisions and the notification under section 51 are attracted in the facts of this case; the applicant's lack of GST registration (claimed on threshold grounds) does not preclude applicability of TDS where the supply is taxable. The Authority did not accept the applicant's contention that TDS cannot be deducted because the recipient is unregistered, noting that the exemption claim failed and consequently TDS provisions are applicable. [Paras 5]

TDS provisions under section 51 are applicable in the subject case and the TDS notification under section 51 is applicable for deduction of TDS.

Advance ruling under section 97 - Whether the applicant is entitled to a refund of any TDS deducted. - HELD THAT: - The Authority observed that entitlement to refund is a matter not covered under Section 97 (subjects on which advance ruling may be sought) and involves mechanisms of refund outside the scope of the present advance ruling application. Consequently the Authority declined to adjudicate the refund question and refrained from answering it. [Paras 5]

Not answered - refund entitlement is not decided by the Authority in this advance ruling.

Final Conclusion: The Authority rules that the applicant's leasing of immovable property to the State Social Welfare Department is not exempt under Entry No. (3) of Notification No. 12/2017-C.T.(R) for lack of material linking the supply to functions under Articles 243G/243W; accordingly, TDS under section 51 and the TDS notification are held applicable in the facts of the case; the question of refund of any TDS deducted is not answered as it falls outside the scope of the advance ruling.

Eligibility for input tax credit - blocked credit for construction of immovable property (works contract and capitalisation) - apportionment of input tax credit between taxable and exempt supplies - requirement of registration and threshold/exemption for Resident Welfare Associations (RWAs) - maintainability of advance ruling on surrender/cancellation of registration

Maintainability of advance ruling on surrender/cancellation of registration - requirement of registration and threshold/exemption for Resident Welfare Associations (RWAs) - The question whether the society can stop paying GST and surrender its registration is not maintainable before the Authority for Advance Ruling and is therefore not answered. - HELD THAT: - Section 97(2) of the CGST Act enumerates the categories of questions on which an advance ruling may be sought, including whether the applicant is required to be registered. The applicant, however, sought a ruling on surrendering an existing registration - a matter outside the scope of questions permitted under Section 97(2). The Authority therefore lacks jurisdiction to decide whether registration should be surrendered or cancelled and has declined to answer the question. [Paras 5]

Not answered - the question on surrender/cancellation of registration is not maintainable before the Authority for Advance Ruling.

Blocked credit for construction of immovable property (works contract and capitalisation) - eligibility for input tax credit - Input tax credit on works contract services and on goods/services used for construction, reconstruction, renovation, additions or alterations of immovable property is not available to the extent of capitalisation. - HELD THAT: - Section 16 sets out the general entitlement to ITC subject to conditions. Section 17(5)(c) bars ITC in respect of works contract services supplied for construction of immovable property (other than plant and machinery), and Section 17(5)(d) bars ITC for goods or services received for construction of immovable property on one's own account. The Explanation to Section 17(5) clarifies that 'construction' includes re-construction, renovation, additions, alterations or repairs to the extent of capitalisation. Accordingly, where repair or works contract services result in capitalisation of the immovable property, ITC on such works contract services or goods/services used in that construction activity is not available to that extent, even if used in the course or furtherance of the society's business. [Paras 5]

ITC on GST paid on works contract services and related goods/services is disallowed to the extent of capitalisation as provided in the Explanation to Section 17(5) of the CGST Act, 2017.

Apportionment of input tax credit between taxable and exempt supplies - eligibility for input tax credit - Where goods or services are used partly for taxable supplies and partly for exempt supplies, the society may claim input tax credit only proportionately in accordance with Section 17(2). - HELD THAT: - Section 17(1)-(3) provides that when inputs are used partly for business and partly for other purposes, or partly for taxable and partly for exempt supplies, the amount of credit available must be restricted to that attributable to taxable supplies. Section 17(2) specifically governs apportionment where goods/services are used partly for taxable (including zero-rated) and partly for exempt supplies; the credit must be restricted to the portion attributable to taxable supplies and the prescribed method of valuation applies. Thus, in the present case of mixed supplies by the society, ITC can be availed only proportionately as per the provisions and rules under Section 17. [Paras 5]

The society may claim input tax credit proportionately in respect of inputs/services used partly for taxable supplies and partly for exempt supplies, in terms of Section 17(2) of the CGST Act, 2017.

Final Conclusion: The Authority declined to answer the question on surrender of registration as not maintainable under the advance ruling provisions; ITC on works contract services and goods/services used for construction/repair of immovable property is disallowed to the extent of capitalisation under Section 17(5) (c) and (d) read with the Explanation; and where supplies are partly taxable and partly exempt the society may avail ITC only proportionately in accordance with Section 17(2).

Composite supply - mixed supply - principal supply - highest rate applicable to mixed supply - classification under tariff heading / HSN - noscitur a sociis - end use test - jurisdictional limitation - place of supply outside State

Composite supply - mixed supply - principal supply - highest rate applicable to mixed supply - Whether the supplies made to Integrated Coach Factory under the purchase order constitute a composite supply or a mixed supply and the applicable rate principle. - HELD THAT: - The contract is for a bundled supply of multiple goods supplied as a "complete rake set" with single payment terms, warranty, repair/replace obligations and performance guarantee. Applying the statutory definitions, a composite supply requires elements that are naturally bundled with a principal supply; a mixed supply is a single-price bundle of distinct supplies not forming a composite supply. The authority held that the supplies, as contracted and invoiced, fall within the definition of a mixed supply rather than a composite supply. Consequently, the rate of tax applicable is the highest rate applicable to the goods comprising the mixed supply. [Paras 7]

Supplies to Integrated Coach Factory are a mixed supply; rate applicable is the highest rate applicable to the constituent goods.

Classification under tariff heading / HSN - end use test - noscitur a sociis - Whether the items supplied to Integrated Coach Factory qualify as 'parts of Railway or Tramway' under tariff heading 8607 irrespective of item description by applying an end user test. - HELD THAT: - Notification entry for parts of railway rolling stock under tariff heading 8607 must be interpreted by reference to the rules and chapter notes of the First Schedule to the Customs Tariff. A 'part' must be an essential component without which the whole cannot function. Applying noscitur a sociis to the purchase order and the relevant chapter context, the authority found that the goods in the purchase order do not fall within the entry for 8607 and are not essential components of the whole so as to qualify as 'parts of Railway or Tramway'. [Paras 7]

The supplies do not fall under HSN code 8607.

Jurisdictional limitation - place of supply outside State - Whether the Authority can decide the nature and rate of tax for the contract entered with Krishna Bhagya Jala Nigam Limited (KBJNL) for SCADA and GIS works located in Karnataka. - HELD THAT: - The contract with KBJNL was executed after the application and the place of supply lies outside the State of Telangana. The Advance Ruling Authority for Telangana is therefore not competent to decide on supplies where the place of supply falls outside its territorial jurisdiction. Consequently, the Authority declined to issue a ruling on the KBJNL contract. [Paras 7, 8]

Clarification cannot be issued by this Authority for supplies made in Karnataka.

Final Conclusion: The Authority ruled that the Integrated Coach Factory supplies constitute a mixed supply taxable at the highest applicable rate and do not qualify under HSN 8607; the Authority declined to rule on the KBJNL contract because the place of supply is outside its territorial jurisdiction.

Opportunity of being heard - cancellation of registration under Section 29 of the U.P. GST Act, 2017 - show cause notice requirements under Rule 22(1) and Form GST REG-17 - applicability of sub-section (1) of Section 29

Opportunity of being heard - show cause notice requirements under Rule 22(1) and Form GST REG-17 - Validity of cancellation where the show cause notice did not specify date and time for personal hearing and no hearing was afforded. - HELD THAT: - The show cause notice issued to the petitioner did not specify the date and time for personal hearing as required by the Form GST REG-17 prescribed under Rule 22(1). The first proviso to sub-section (2) of Section 29 mandates that the proper officer shall not cancel registration without giving the person an opportunity of being heard. Paragraph 11 of the writ petition averred that no hearing was granted and that averment was not denied in the counter affidavit, which the Court treated as admitted. The statutory procedure in the notice format must be followed; absence of the appointed date and time and denial of hearing vitiates the cancellation proceedings. Consequently, the cancellation order and the appellate order upholding it are set aside for want of compliance with the mandated opportunity of hearing.

The cancellation order dated 28.5.2021 and the appellate order dated 17.7.2021 were quashed for failure to afford the opportunity of hearing as required by Section 29(2) read with Rule 22(1)/Form GST REG-17.

Applicability of sub-section (1) of Section 29 - Whether proceedings under sub-section (1) of Section 29 applied to the petitioner's case. - HELD THAT: - The respondents relied on sub-section (1) of Section 29 to justify the proceedings. The Court examined the scope of sub-section (1), which applies only where the business has been discontinued, transferred, amalgamated, demerged or there is change in constitution or the person is no longer liable under sections 22 or 24. The Standing Counsel failed to show that any of those circumstances existed in the present case. Hence sub-section (1) was not applicable and could not cure the procedural deficiency in the cancellation under sub-section (2).

The contention that sub-section (1) of Section 29 governed the proceedings was rejected; it does not apply to the facts of this case.

Final Conclusion: The writ petition was allowed: the order cancelling the petitioner's GST registration dated 28.5.2021 and the appellate order dated 17.7.2021 were quashed for failure to comply with the mandatory requirement of affording an opportunity of hearing as prescribed under Section 29(2) read with Rule 22(1)/Form GST REG-17; sub-section (1) of Section 29 was held inapplicable.

Penalty under section 271B - Tax audit requirement under section 44AB - Verification of electronic filing/upload of tax audit report - Remand for limited verification - Opportunity of hearing in set-aside proceedings

Tax audit requirement under section 44AB - Verification of electronic filing/upload of tax audit report - Penalty under section 271B - Set aside the penalty order and remit to the assessing officer for verification of the assessee's claim of having got accounts audited and uploaded Form 3CB/3CD along with the return filed on 17.09.2011; if claim is found in order, vacate the penalty. - HELD THAT: - The assessee claimed that accounts were audited under the mandate of section 44AB and that the tax audit report in Form 3CB and Form 3CD dated 05.08.2011 was uploaded along with the return filed on 17.09.2011. The assessing officer imposed penalty under section 271B for non-furnishing of the audit report during assessment proceedings, and the CIT(A) upheld the penalty observing that Form 3CD was not produced. The Tribunal found that the assessee's claim of electronic filing/upload of the tax audit report and the explanation for non-participation in proceedings have some substance and that the appellate authority did not take cognisance of the letter dated 14.01.2020 which purportedly supported the claim. In view of these facts the Tribunal did not decide the penalty on merits but held that the matter must be reconsidered by the AO: the AO is directed to verify whether the audit report was duly uploaded and to give the assessee a reasonable opportunity of being heard; if the AO finds the assessee's claim to be in order, the penalty under section 271B would be vacated. The remand is limited to verification of the claimed compliance and consequential action on the penalty. [Paras 9, 10]

Matter is set aside to the assessing officer for limited verification of the claimed upload of Form 3CB/3CD and to afford the assessee a reasonable opportunity of hearing; if the claim is established, the penalty under section 271B shall be vacated.

Final Conclusion: Appeal allowed for statistical purposes by setting aside the orders below and remitting the matter to the assessing officer for limited verification of the assessee's claim regarding audit and upload of Forms 3CB/3CD; the AO to afford a reasonable hearing and vacate the penalty if the claim is found in order.

Deduction under section 80IC - Binding effect of earlier assessment/tribunal orders - Prohibition on relitigation where identical facts and claims previously adjudicated

Deduction under section 80IC - Binding effect of earlier assessment/tribunal orders - Prohibition on relitigation where identical facts and claims previously adjudicated - Allowability of deduction under section 80IC for Assessment Year 2011-12 in view of identical claims having been allowed in earlier assessment years pursuant to Tribunal directions. - HELD THAT: - The only issue adjudicated is whether the claim for deduction under section 80IC for AY 2011-12 could be disallowed when identical claims for AYs 2007-08 to 2010-11 had been allowed following directions of the Tribunal. The record shows that the Assessing Officer had earlier allowed the deduction for AYs 2007-08 to 2010-11 pursuant to this Tribunal's directions, and the Commissioner (Appeals) followed those earlier orders in allowing the deduction for AY 2011-12. The Tribunal held that where a deduction has been allowed in earlier years on the same set of facts and on a similar claim, the Assessing Officer cannot adopt a fresh contrary view in a subsequent year; the Assessing Officer and the appellate authority were bound to follow the earlier adjudication on the identical issue. Applying that principle, the Tribunal found no error in the CIT(A)'s approach of following the earlier orders and hence upheld the allowance of the deduction for AY 2011-12.

The CIT(A)'s deletion of the addition and allowance of the deduction under section 80IC for AY 2011-12 upheld; Revenue's appeal dismissed.

Final Conclusion: Revenue's appeal dismissed; deduction under section 80IC allowed for AY 2011-12 following earlier years' adjudication and Tribunal directions, and the Assessing Officer was not permitted to take a fresh contrary view.

Estimation of gross profit on rejection of books - Assessment based on earlier years' benchmark percentage of gross profit - Reliability and verifiability of books of accounts as basis for rejection - Requirement to decide grounds and record reasons by first appellate authority under section 250(6) - Penalty under section 271(1)(c) on additions based on estimation

Estimation of gross profit on rejection of books - Assessment based on earlier years' benchmark percentage of gross profit - Reliability and verifiability of books of accounts as basis for rejection - Validity of the assessing officer's rejection of books and estimation of gross profit for A.Y. 2013-14 - HELD THAT: - The Tribunal noted that the assessee declared gross profit of 8.38% for A.Y. 2013-14 whereas gross profit had been consistently estimated at 10.31% in earlier years. The assessee relied on increased turnover and higher raw material/incidental costs and asserted maintenance of routine records; the AO had issued a show cause and relied on alleged defects to reject books and apply the earlier benchmark. The Tribunal observed that turnover rose substantially and that, in the absence of effective countering of the assessee's pleaded reasons by the AO, estimating gross profit at the prior benchmark percentage would guard against revenue leakage and meet the ends of justice. For those reasons the Tribunal directed the AO to adopt gross profit at 10% for assessment purposes and partly allowed the appeal. [Paras 5, 6]

Partly allow the assessee's appeal for A.Y. 2013-14 and direct the AO to estimate gross profit at 10%.

Requirement to decide grounds and record reasons by first appellate authority under section 250(6) - Whether the CIT(A)'s ex parte order for A.Y. 2014-15 complied with the mandate to decide grounds and record reasons - HELD THAT: - The Tribunal found that the order of the CIT(A) did not comply with the statutory mandate to pass a reasoned order dealing with the grounds of appeal as required by section 250(6) of the Act. Rather than resolving the factual controversy whether the assessee defaulted in appearing, the Tribunal restored the appeal to the file of the CIT(A) for fresh adjudication on merits and reasons. The assessee was directed to attend and furnish evidence when the hearing is fixed, with a caution against frivolous adjournments. [Paras 10, 11]

Restore the assessee's appeal for A.Y. 2014-15 to the CIT(A) to decide all grounds on merits in accordance with law; allow for statistical purpose.

Penalty under section 271(1)(c) on additions based on estimation - Whether penalty under section 271(1)(c) is leviable where additions arise from estimated gross profit for A.Y. 2012-13 - HELD THAT: - The Tribunal recorded that the assessing officer rejected books and made additions by estimating gross profit, and imposed penalty under section 271(1)(c) on those estimated additions. Having regard to the consistent appellate treatment in earlier years and the settled legal position that penalties under section 271(1)(c) are not leviable where additions are based on estimation (rather than demonstrable concealment or inaccuracies in particulars), the Tribunal upheld the deletion of the penalty by the CIT(A) and dismissed the revenue's appeal. [Paras 16, 17]

Dismiss the Revenue's appeal for A.Y. 2012-13 and uphold deletion of penalty under section 271(1)(c).

Final Conclusion: The Tribunal partly allows the assessee's appeal for A.Y. 2013-14 by directing the AO to adopt gross profit at 10%; restores the assessee's appeal for A.Y. 2014-15 to the CIT(A) for fresh, reasoned adjudication; and dismisses the Revenue's appeal for A.Y. 2012-13 by upholding deletion of the penalty under section 271(1)(c).

Revision under section 263 - erroneous and prejudicial to the interest of Revenue - applicability of section 56(2)(viib) to receipt of share premium - Rule 11UA(2) valuation requirements - requirement of valuer being a fellow member of the ICAI - discounted free cash flow method - Explanation 2 to section 263(1) - inquiries or verification

Revision under section 263 - erroneous and prejudicial to the interest of Revenue - Explanation 2 to section 263(1) - inquiries or verification - Validity of the Principal Commissioner's order under section 263 setting aside the assessment on the ground that the assessing officer's order was erroneous and prejudicial to the interest of Revenue. - HELD THAT: - The Tribunal examined whether the AO's order was rendered erroneous and prejudicial to revenue for purposes of invoking section 263. The PCIT held that the AO had failed to make proper inquiries/verification regarding large share premium and therefore the assessment was prejudicial to revenue. The Tribunal analysed the substantive outcome of the AO's verification: the assessee had submitted a valuation by an accountant showing a fair market value above the issue price, and on revision the assessee produced a merchant banker's valuation which also showed fair market value above the issue price. There was no adverse finding as to the valuation methodology (discounted free cash flow) or the data used; the variation between reports arose from differing illiquidity discounts, a matter of technical judgment among experts. Given that even the merchant banker's report (obtained during revision) confirmed a fair market value higher than the issue price, the Tribunal concluded that the AO's acceptance of the valuation/report did not cause loss to revenue and therefore was not prejudicial. Accordingly, the essential condition for exercise of jurisdiction under section 263 was not satisfied. [Paras 14, 15]

The PCIT's order under section 263 was not sustainable; the AO's order was not prejudicial to revenue and the section 263 action was set aside.

Rule 11UA(2) valuation requirements - requirement of valuer being a fellow member of the ICAI - discounted free cash flow method - applicability of section 56(2)(viib) to receipt of share premium - Whether the technical defect in the valuer's qualification (valuation initially provided by an associate member instead of a fellow member of ICAI) vitiated the assessment or required reopening under section 263. - HELD THAT: - The Tribunal acknowledged the statutory requirement under Rule 11UA(2) regarding the persons competent to determine fair market value. It found, however, that the alleged technical breach in the qualification of the first valuer did not undermine the substance of valuation: the merchant banker's subsequent valuation, obtained and placed on record during revision, used the same underlying data and still produced a fair market value above the issue price. There was no challenge to the chosen valuation method or the core data, and the differences arose from a discretionary illiquidity discount. As the merchant banker's report confirmed the same legal consequence (that section 56(2)(viib) did not become applicable), the technical non-compliance did not render the AO's order erroneous in a manner prejudicial to revenue. [Paras 14]

The technical defect in the valuer's qualification did not vitiate the assessment or justify cancelling the assessment under section 263; the valuation basis was acceptable and section 56(2)(viib) remained inapplicable.

Final Conclusion: The Tribunal allowed the assessee's appeal, set aside the order of the Principal Commissioner under section 263, and sustained the assessing officer's order for A.Y. 2016-17 because the AO's order was not shown to be prejudicial to the interest of Revenue.

Arm's length price - Comparable Uncontrolled Price (CUP) method - Internal CUP versus external CUP - Transfer pricing of captive power and steam - Appropriateness of Indian Energy Exchange (IEX) rates as external CUP - Cost determination of utilities (steam) under cost accounting standards - Disallowance under section 14A and rule 8D - Computation of book profits under section 115JB - Deemed consideration under section 50C and reference to District Valuation Officer - Deductibility of education cess under section 37

Arm's length price - Comparable Uncontrolled Price (CUP) method - Internal CUP versus external CUP - Appropriateness of Indian Energy Exchange (IEX) rates as external CUP - Benchmarking of transfer price of power from eligible unit (Kota, Rajasthan) to non eligible unit and use of IEX rates - HELD THAT: - Tribunal examined whether the assessee could rely on an internal CUP (rates at which it transacted with SEBs) or whether the IEX spot exchange rates were a proper external CUP to be averaged under the first proviso to section 92C(2). It found that an internal CUP exists only where the assessee itself engages in uncontrolled sales; Kota unit purchased from SEB and did not have comparable uncontrolled sales, so those SEB purchase rates constitute an external comparable, not an internal CUP. The Tribunal analysed product and market comparability, observed that IEX is a spot exchange representing a very small proportion of total traded power, that IEX rates are bid based and not continuous supply rates, require adjustments for levies/transmission/landing costs, and that the IEX data used by the TPO (obtained under section 133(6)) produced rates materially divergent from SEB rates without adequate reconciliation. Where external comparables are irreconcilably divergent the more reliable external comparable should be used. On these grounds the Tribunal held IEX rates were not a proper external CUP for the Kota transaction and accepted the assessee's benchmarking against the relevant SEB rate for that unit, deleting the TPO/DRP adjustment. [Paras 30, 31, 32, 33, 34]

Transfer pricing adjustment in respect of power (Kota, Rajasthan) deleted; assessee's comparable (SEB rate) accepted.

Transfer pricing of captive power and steam - Cost determination of utilities (steam) under cost accounting standards - Arm's length price - Determination of arm's length price for transfer of low pressure steam from eligible units to non eligible units - HELD THAT: - Tribunal considered whether steam could be treated as having nil cost (as held by TPO/DRP) or whether it has ascertainable cost and market value. It relied on the Guidance Note / Cost Accounting Standard on Cost of Utilities (CAS 8) showing utilities (including steam) are distinct cost objects with methodology for separately measuring generation and distribution costs. The assessee had submitted cost statements certified by cost/accounting/engineering professionals. The Tribunal found that steam is commercially valuable, has production cost and methods to determine that cost, and that the lower authorities erred in rejecting certificated cost without reason. The Tribunal also noted consistent treatment in the assessee's subsequent year and decisions in related cases recognizing steam's value. Accordingly the TPO/DRP determination of ALP as nil was reversed and the addition deleted. [Paras 43, 44, 45, 46, 47]

Adjustment relating to transfer of steam deleted; arm's length price accepted at cost as certified (deletion of the nil value adjustment).

Disallowance under section 14A and rule 8D - Computation of book profits under section 115JB - Extent of disallowance under section 14A and consequent impact on book profits under section 115JB - HELD THAT: - Tribunal examined the claim that interest free funds and surplus reserves exceeded investments, and the assessee's computation of administrative disallowance (0.5% of average investment) leading to an offered disallowance of Rs. 6,399,219. It held that where surplus funds exceed investments, disallowance under section 14A is not warranted in excess; it followed precedents and directed the AO to retain only the disallowance offered by the assessee (Rs. 6,399,219) and delete the balance. With respect to book profits under section 115JB, Tribunal applied the Special Bench precedent (Vireet Investments) that clause (f) of Explanation 1 to section 115JB(2) must be computed without resort to section 14A/read with rule 8D, and directed deletion of the imputed addition, noting the assessee had already made a relevant adjustment. [Paras 50, 56]

Disallowance under section 14A restricted to Rs. 6,399,219 (amount offered by assessee); corresponding addition to book profits under section 115JB deleted.

Deemed consideration under section 50C and reference to District Valuation Officer - Addition under section 50C by adopting stamp valuation as deemed consideration for sale of land and obligation to refer to District Valuation Officer (DVO) - HELD THAT: - Tribunal found the assessee objected that stamp duty valuation exceeded fair market value and that the AO failed to refer the matter to the DVO under section 50C(2). Although DRP noted delay, Tribunal held that where the assessee raises objection to stamp duty value, AO is duty bound to refer to DVO. Accordingly the Tribunal set aside the issue and remitted it to the AO with a direction to refer the matter to the DVO for determination of fair market value, and to give the assessee opportunity to substantiate the character (agricultural vs commercial) and valuation. [Paras 51, 52, 53]

Matter remitted to AO to refer the valuation to the District Valuation Officer and to afford the assessee opportunity to substantiate its objections.

Deductibility of education cess under section 37 - Allowability of education cess as deductible business expenditure under section 37 - HELD THAT: - Tribunal admitted the additional legal ground and considered High Court authorities (Bombay, Rajasthan) and ITAT precedents relied upon by the assessee. After weighing arguments, Tribunal followed the cited High Court decisions and directed the AO to allow the education cess claimed as a deduction under section 37(1). [Paras 57, 60, 61, 63]

Claim for education cess allowed as a deduction under section 37(1).

Initiation of penalty proceedings - Grounds contesting mere initiation of penalty proceedings under section 271(1)(c) - HELD THAT: - Tribunal observed that challenge to mere initiation of penalty proceedings is premature as the assessee will have opportunity to contest at the penalty stage; accordingly such ground does not sustain as a separate relief at this stage. [Paras 20]

Grounds challenging initiation of penalty proceedings dismissed as premature.

Final Conclusion: Appeal partly allowed. Transfer pricing adjustments in respect of power (Kota, Rajasthan) and steam transfers deleted; disallowance under section 14A limited to the amount offered by the assessee (retain Rs. 6,399,219), and related addition to book profits under section 115JB deleted; addition under section 50C set aside and remitted to the AO for reference to the District Valuation Officer with opportunity to the assessee; claim for education cess admitted and allowed as deductible under section 37; challenge to mere initiation of penalty proceedings dismissed.

Revision jurisdiction under section 263 of the Income-tax Act - reassessment under section 147 of the Income-tax Act - verification/enquiry requirement under Explanation 2 to section 263 - characterisation of income as capital gains or business income - application of CBDT Circular No. 6 of 2016 as clarificatory guidance

Revision jurisdiction under section 263 of the Income-tax Act - verification/enquiry requirement under Explanation 2 to section 263 - Validity of exercise of revision jurisdiction by the Principal Commissioner under section 263 in setting aside the assessment order passed under section 143(3)/147. - HELD THAT: - The Tribunal found that the PCIT mechanically adopted the AO's proposal and did not apply independent mind to the material on record. The reassessment order under section 147 had itself resulted from a detailed inquiry by the AO during which the assessee furnished explanations, documents and demat records and the AO accepted the returned income after verification. The PCIT failed to point out any specific discrepancy or error in the AO's reasoned findings or in the explanations placed on record, and did not demonstrate that the AO omitted the required enquiry under Explanation 2(a) to section 263. In these circumstances the exercise of revision jurisdiction was held to be unjustified and the order under section 263 was quashed. [Paras 16, 17]

Impugned order passed under section 263 is quashed; appeal allowed.

Characterisation of income as capital gains or business income - application of CBDT Circular No. 6 of 2016 as clarificatory guidance - Whether the AO failed to determine the character of share transactions (capital gains v. business income) and whether application of CBDT Circular No. 6 of 2016 required fresh adjudication. - HELD THAT: - The Tribunal noted that CBDT Circular No. 6 of 2016 provides clarificatory guidance on distinguishing listed shares held as capital assets and stock-in-trade and that the circular, as relied upon by the PCIT, in fact supported the assessee's position where separate portfolios and demat accounts were maintained. The AO had considered and verified the nature of transactions during reassessment, examined separate demat portfolios for trading and investments, and recorded findings accepting the assessee's explanations. The PCIT did not identify any omission in that factual enquiry or contradict the AO's findings; hence no fresh adjudication on this ground was warranted by exercise of section 263. [Paras 7, 16]

No failure by the AO to determine character of income that would justify revision; reliance on CBDT Circular did not sustain revision.

Final Conclusion: The Tribunal held that the Principal Commissioner's order under section 263 was actuated by a mechanical adoption of the AO's proposal without independent application of mind, and since the AO had conducted the requisite enquiry and recorded reasoned findings (including consideration of the CBDT circular and the assessee's separate demat portfolios), the section 263 orders for A.Y 2011-12 and A.Ys 2012-13 to 2014-15 were quashed and the appeals allowed.

Revisional jurisdiction under Section 263 of the Income tax Act - Scope of reassessment proceedings under Section 147 and the expression 'and also any other income' - Limitation on raising new issues in reassessment where no addition is made on the original ground

Revisional jurisdiction under Section 263 of the Income tax Act - Scope of reassessment proceedings under Section 147 and the expression 'and also any other income' - Limitation on raising new issues in reassessment where no addition is made on the original ground - Whether the Commissioner exercising powers under Section 263 can take up a new issue in revision when the Assessing Officer, in reassessment under Section 147, made no addition on the original ground for reopening. - HELD THAT: - The Assessing Officer reopened assessment on the basis that capital gain on transfer of an industrial plot to a firm had escaped assessment. In the reassessment order the AO made no addition on that issue and the reassessment thus stood finally concluded. The Commissioner, invoking revisional powers under Section 263, proceeded to examine an unrelated alleged long term capital gain from sale of shares and claimed exemptions-an issue not raised or determined by the AO in the reassessment. The Tribunal held that the scope of reassessment under Section 147, as understood in judicial precedents, permits consideration of "any other income" which comes to the AO's notice during reassessment only when an addition is in fact made on the original point for which reassessment was initiated. Where no addition is made on the reopened ground (and the reassessment is final), neither the AO in reassessment nor the Commissioner in revision can legitimately entertain a different, new issue. The Commissioner could have assailed the reassessment insofar as it related to the original reopened issue, and only if an addition had been made on that issue could other related points be examined; absent that, the revisional order that takes up a new issue was beyond permissible scope and unsustainable. [Paras 6, 7, 8]

The revisional order under Section 263 quashing the assessment on a new ground (long term capital gain on shares) was quashed because the AO had made no addition on the original ground of reopening; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, quashed the order passed under Section 263, and held that the Commissioner could not, in revision, take up a new issue where the reassessment (reopened for a different ground) resulted in no addition on that original ground.

Reopening of assessment on account of escapement of income - scope of reassessment under section 147 - examination of other incomes after reassessment only if addition on the reopened issue is sustained - deletion of addition on reopened issue precludes fresh additions beyond reasons recorded for reopening - penalty under section 271(1)(c) contingent on sustaining the assessment addition

Reopening of assessment on account of escapement of income - examination of other incomes after reassessment only if addition on the reopened issue is sustained - Whether, after reopening assessment for a specific escapement relating to difference between stamp valuation and registered sale consideration, the Assessing Officer could make an independent addition of unexplained cash deposits when the addition for which the assessment was reopened was deleted by the first appellate authority. - HELD THAT: - The assessment was reopened on the basis of escapement of income equal to the difference between stamp-value and documented sale consideration. The CIT(A) examined the evidence (registered sale deed and submissions) and deleted the addition originally made on that specific ground, holding there was no difference between the registered sale value and stamp valuation. The Tribunal applied the settled construction of the provision governing reassessment - that the AO may "assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently" only where other issues come to the AO's notice as a consequence of, or after, addition on the issue for which reassessment was initiated. Since the primary addition (the ground recorded for reopening) was deleted by the CIT(A), no addition survived on that reopening-ground and therefore the AO could not validly examine or make the subsequent addition of unexplained cash deposits. Reliance was placed on the jurisdictional High Court authority to the same effect; on that basis the Tribunal deleted the addition of unexplained cash deposits. [Paras 5, 8]

Addition of unexplained cash deposits made by the AO after reopening the assessment was deleted because the addition for the specific ground of reopening was itself deleted by the CIT(A), precluding examination of other additions.

Penalty under section 271(1)(c) contingent on sustaining the assessment addition - Whether penalty under section 271(1)(c) could be sustained where the assessment addition on which the penalty was based has been deleted. - HELD THAT: - The penalty order was predicated on the addition of unexplained cash deposits. As the Tribunal deleted that addition in the quantum proceedings, there remained no consequential income against which the penal provision could operate. Following the deletion of the impugned addition, the Tribunal held that the vigour of the penal provision could not be invoked and therefore the penalty must be cancelled. [Paras 10]

Penalty under section 271(1)(c) imposed on account of the deleted addition is cancelled.

Final Conclusion: Quantum appeal is partly allowed by deleting the addition of unexplained cash deposits; penalty appeal is allowed and the penalty under section 271(1)(c) is cancelled.

Ad-hoc disallowance - Verifiability of sundry creditors - Bogus or unverified creditors - Burden on revenue to establish bogus nature of claimed creditors - Distinguishing precedent on factual matrix - Notices under Section 133(6)

Ad-hoc disallowance - Verifiability of sundry creditors - Burden on revenue to establish bogus nature of claimed creditors - Distinguishing precedent on factual matrix - Notices under Section 133(6) - Whether the ad-hoc disallowance of 25% of certain sundry creditors was justified or liable to be deleted. - HELD THAT: - The Tribunal found that an ad-hoc disallowance of 25% cannot be sustained without a firm conclusion that the creditors or the claimed liabilities are bogus. The Assessing Officer's reliance on an earlier Tribunal decision was misplaced because that precedent arose on a materially different factual foundation, where purchases were shown but the actual source of goods was in dispute and a profit-embedded quantification was appropriate. Here, the creditors in question appeared in the assessee's books with opening balances, partial payments in the year, and TDS deduction; one creditor (Globe Trade) filed return under the presumptive scheme and therefore was not required to maintain detailed records. The mere non-response of some creditors to summons and the existence of certain bank entries, without further investigation or conclusive evidence, did not permit treating the stated balances as bogus or justifying a fixed percentage disallowance. The proper course for the revenue was to make further inquiry and reach a definite finding on the genuineness of the liabilities rather than apply a blanket ad-hoc percentage. Applying these principles, the Tribunal concluded that the disallowance was not warranted and deleted the addition.

Disallowance deleted and the assessee's appeal allowed.

Final Conclusion: The Tribunal deleted the ad-hoc 25% disallowance of certain sundry creditors for AY 2015-16, holding that the revenue failed to establish that the liabilities were bogus and that a blanket percentage disallowance was unjustified; the appeal was allowed.

Allowability of write off of customs/excise duty carried as receivable as revenue expenditure - application of Section 43B where payment preceded allowance as expenditure - treatment of CENVAT/custom duty credit on closure or non availment of benefit - reopening of assessment - validity of notice and sustainment on merits

Allowability of write off of customs/excise duty carried as receivable as revenue expenditure - application of Section 43B where payment preceded allowance as expenditure - treatment of CENVAT/custom duty credit on closure or non availment of benefit - Whether the amount of customs duty earlier paid and shown as 'custom duty receivable' and subsequently written off could be allowed as revenue expenditure in the year of write off and whether Section 43B mandates disallowance where payment preceded the year of claim - HELD THAT: - The Tribunal accepted the reasoning of the CIT(A) that the assessee had paid the customs duty in earlier years and had carried the amount as a receivable expecting special benefits under the relevant rules; when those benefits were not received the amount was written off and debited to profit and loss in the year under appeal. Relying on coordinate bench decisions relating to write off of excise/CENVAT credits where credits became incapable of being adjusted (for example on closure of manufacturing or non availment of statutory benefit), the Tribunal held that such write off is allowable as business expenditure under the Act. The Tribunal further held that Section 43B did not mandate disallowance because that provision does not operate to disallow an expenditure which was actually paid earlier and later claimed as revenue expenditure by way of write off when the related benefit could not be realized; consequently the addition made by the Assessing Officer was not sustained. [Paras 3, 5]

Addition of Rs. 3,22,561 made by the Assessing Officer in respect of customs duty was deleted; the claim of write off was allowed as revenue expenditure.

Reopening of assessment - validity of notice and sustainment on merits - Whether the reopening of assessment upheld by the CIT(A) was liable to be set aside in the assessee's cross objection - HELD THAT: - The Tribunal considered the well reasoned findings recorded by the CIT(A) at the referenced paragraphs and found no infirmity in the view taken to sustain the reopening of assessment. The assessee did not appear or place any material before the Tribunal in support of its cross objection. On perusal of the CIT(A)'s reasoning, the Tribunal found no ground to interfere with the validity of reopening and therefore rejected the cross objection. [Paras 2, 7]

Cross objection challenging reopening of assessment dismissed; reopening upheld.

Final Conclusion: The Revenue's appeal was dismissed on merits (the deletion of the addition in respect of customs duty was upheld) and the assessee's cross objection challenging reopening of assessment was rejected; both the appeal and cross objection stand dismissed.

Registration under section 12AA of the Income Tax Act - principles of natural justice - audi alteram partem - opportunity of hearing - treatment of voluntary contributions as income prior to registration - tax compliance as condition for registration - remand for fresh adjudication after opportunity of hearing

Principles of natural justice - audi alteram partem - opportunity of hearing - registration under section 12AA of the Income Tax Act - Whether the order rejecting the application for registration under section 12AA was passed without affording the assessee adequate opportunity of being heard, and the appropriate relief. - HELD THAT: - The Tribunal noted that the assessee's primary grievance was non compliance with the audi alteram partem rule. The record did not make it clear whether the queries noted by the Ld. CIT(E) were raised after receipt of the assessee's replies, and the Ld. CIT(E) proceeded to reject the application without a clear finding that the assessee had been afforded a reasonable opportunity to explain entries in the balance sheet. Applying the well settled principle that no one should be condemned unheard, the Tribunal found that in view of the procedural deficiency the matter could not be finally adjudicated on merits and therefore directed that the file be placed back before the Ld. CIT(E) for fresh adjudication after providing due and reasonable opportunity of hearing to the assessee. [Paras 7, 8]

Impugned order set aside and the matter remitted to the Ld. CIT(E) for fresh adjudication after affording the assessee a due and reasonable opportunity of being heard.

Treatment of voluntary contributions as income prior to registration - tax compliance as condition for registration - registration under section 12AA of the Income Tax Act - Whether the factual and tax compliance findings recorded by the Ld. CIT(E) regarding corpus/voluntary contributions and non filing of tax should be finally upheld in the absence of an opportunity of hearing. - HELD THAT: - The Ld. CIT(E) had recorded that voluntary contributions (including those directed to corpus) received before grant of registration are income of the trust and observed that amounts shown as corpus in specified years were not reflected in the ITRs, concluding that tax liability remained unpaid and therefore registration could not be granted. The Tribunal did not decide these factual and substantive contentions on merits; instead it observed that since the impugned order was rendered without clear compliance with audi alteram partem, the Ld. CIT(E)'s conclusions on treatment of corpus and tax compliance require fresh consideration. The matter was remitted to permit the Ld. CIT(E) to examine these contentions on the merits after hearing the assessee and, if necessary, to coordinate with the assessing officer for remedial action. [Paras 3, 8]

Findings regarding corpus being income and unmet tax liability not adjudicated on merits; remitted to the Ld. CIT(E) for fresh consideration after affording opportunity of hearing.

Final Conclusion: The appeal is allowed for statistical purposes; the impugned order rejecting registration under section 12AA is set aside and the matter is remitted to the Ld. CIT(E) to be adjudicated afresh in accordance with law after providing the assessee a due and reasonable opportunity of hearing.

Revisionary jurisdiction under Section 263 - Explanation 1(c) to sub section (1) of Section 263 - Scope of revisional powers where assessment order is subject matter of appeal - Doctrine of merger - Order erroneous in so far as prejudicial to the interest of the revenue

Revisionary jurisdiction under Section 263 - Explanation 1(c) to sub section (1) of Section 263 - Doctrine of merger - Whether the Principal Commissioner of Income tax could exercise revisional jurisdiction under Section 263 in respect of matters that had been considered and decided by the Commissioner (Appeals). - HELD THAT: - Explanation 1(c) to sub section (1) of Section 263 narrows the revisional power where an assessing officer's order has been the subject matter of an appeal: the revisional jurisdiction extends only to matters not considered and decided in such appeal. The Tribunal held that when an addition, disallowance or any other issue emanating from an assessment order has been considered and decided by the appellate authority, the doctrine of merger applies and the revisional authority is divested of jurisdiction to re examine those matters. The Tribunal applied this principle to the facts: the two grounds on which the Pr.CIT invoked Section 263 (treatment of entire sale proceeds under section 68 and quantification of commission under section 69C vis a vis capital gains) had been considered and decided by the CIT(A). Citing the approach in Shri Arbuda Mills Ltd. and subsequent High Court decisions, the Tribunal concluded that Explanation 1(c) excludes from revisional scrutiny those matters already decided in appeal, while the revisional power survives only for matters not so considered. [Paras 10, 11]

The Pr.CIT was divested of jurisdiction to revise the assessment under Section 263 in respect of matters that had been considered and decided by the CIT(A); the Section 263 order dated 05.02.2021 is set aside and the assessing officer's order dated 29.12.2017 is restored.

Final Conclusion: The Tribunal allowed the appeals: the orders passed by the Principal Commissioner under Section 263 dated 05.02.2021 for the listed assessment years are quashed insofar as they revisit issues already considered and decided by the Commissioner (Appeals), and the assessing officer's order dated 29.12.2017 is restored; the appeals are allowed accordingly.

Explanation of cash deposits - cash book/cash flow statement as evidence in non-business cases - unexplained cash additions - deletion of addition - non-pressed grounds dismissed

Explanation of cash deposits - cash book/cash flow statement as evidence in non-business cases - unexplained cash additions - deletion of addition - Validity of addition of Rs. 13,50,000 as unexplained cash deposits - HELD THAT: - The Tribunal examined the source of cash deposits of Rs. 13,50,000 made during the year and the material placed before the authorities, including cash book and cash flow statements for the preceding two financial years, declared salary, retirement benefits and the sale proceeds received through banking channels. The assessee had furnished contemporaneous bank records and cash-book entries showing withdrawals, household expenditures and balances carried forward, together with explanation of retirement receipts and sale consideration. The Tribunal found that, on the entirety of the evidence and circumstances, the assessee had sufficiently explained availability of cash in hand at the beginning of the year and the subsequent deposits; the authorities had proceeded on suspicion and had not rebutted the cash-book explanations. Consequently the Tribunal directed the Assessing Officer to delete the addition made as unexplained cash deposits.

Addition of Rs. 13,50,000 treated as unexplained cash is deleted; ground allowing deletion is allowed.

Non-pressed grounds dismissed - Disposition of grounds 1.1 and 1.2 not pressed before the Tribunal - HELD THAT: - The grounds challenging jurisdictional aspects (grounds 1.1 and 1.2) were not pressed by the appellant at hearing. The Tribunal recorded that these grounds were not pressed and accordingly dismissed them as not pressed.

Grounds 1.1 and 1.2 dismissed as not pressed.

Final Conclusion: The appeal is partly allowed: the addition of Rs. 13,50,000 by the Revenue as unexplained cash deposits is deleted and remitted to the Assessing Officer for compliance with the direction; grounds 1.1 and 1.2 are dismissed as not pressed.

Depreciation on intangible assets (goodwill, technical know-how, non-compete fees) - depreciation on other tangible and identifiable assets - transfer pricing adjustment and determination of arm's length price (ALP) - acceptance of receipt of intra group services as factual basis - principles of natural justice in transfer pricing proceedings - remand for recomputation and verification by Assessing Officer/TPO

Depreciation on intangible assets (goodwill, technical know-how, non-compete fees) - remand for recomputation and verification by Assessing Officer/TPO - Allowability of depreciation on intangible assets claimed by the assessee in assessment year 2013-14 - HELD THAT: - The Tribunal noted that in the assessee's earlier years the Tribunal had allowed depreciation on intangible assets but had qualified that the value allocation must give effect to its earlier direction (para 69 of the Tribunal's order) which increased the attributed value of the Panki land and correspondingly reduced the value allocable to intangibles. The CIT(A) had allowed depreciation without applying that qualification. The facts in the present appeal are unchanged from the earlier decisions relied upon. Following parity with the Tribunal's earlier orders, the matter is set aside to the file of the Assessing Officer to allow depreciation on intangible assets only after giving effect to the direction in the earlier Tribunal order (i.e., recompute values taking into account the revised allocation to the Panki land) and after providing the assessee an opportunity of hearing in the fresh proceedings. [Paras 6, 8, 9]

Issue restored to the Assessing Officer for recomputation and allowance of depreciation on intangible assets only after giving effect to the earlier Tribunal direction regarding valuation of Panki land.

Depreciation on other tangible and identifiable assets - precedent in assessee's own case - Claim for depreciation on other tangible and identifiable assets and on technical know-how for assessment year 2013-14 - HELD THAT: - The Tribunal recorded that in the assessee's own earlier decisions the Tribunal had allowed depreciation on technical know how and other assets (including detailed reasoning in the cited earlier orders). No contrary material was placed before this Bench. Applying the same parity of reasoning, the Tribunal held that the claim for depreciation on other assets and technical know how is allowable for the assessment year under consideration and therefore the Revenue's grounds insofar as they challenge these allowances are partly allowed for statistical purposes. [Paras 10, 11]

Depreciation on other tangible and identifiable assets and on technical know how allowed (followed as per earlier Tribunal precedent); grounds insofar as they challenge these allowances are partly allowed for statistical purposes.

Transfer pricing adjustment and determination of arm's length price (ALP) - acceptance of receipt of intra group services as factual basis - principles of natural justice in transfer pricing proceedings - remand for recomputation and verification by Assessing Officer/TPO - Validity of TPO's transfer pricing adjustments in respect of CCR divisional costs, IT support services and royalty (including procedural fairness and ALP determination) - HELD THAT: - The CIT(A) had held that the TPO's order did not exhibit service of a show cause notice and therefore principles of natural justice were not followed; the Tribunal observed that the record before it did not contain the TPO file but, on the merits of materials in the paper book, found that there was no dispute as to receipt of services by the assessee (email correspondence and other documents were placed on record and the Revenue could not contradict receipt). However, the Tribunal agreed with the parties that the method used to benchmark the royalty (aggregating it with purchase of raw materials) was not correct and that royalty ALP must be determined separately. Consequently, the Tribunal restored the TP issues to the Assessing Officer/TPO for fresh adjudication consistent with these observations, including separate benchmarking of royalty and allowing the assessee an opportunity to be heard. [Paras 12, 13, 15, 17]

Grounds relating to transfer pricing adjustments (CCR costs, IT services, royalty and related procedural objections) are restored to the Assessing Officer/TPO for fresh adjudication - receipt of services accepted as fact for present record, but ALP/benchmarking (including separate benchmarking of royalty) to be determined afresh and in accordance with law after affording opportunity of hearing.

Final Conclusion: The Revenue's appeal is partly allowed for statistical purposes: issues on depreciation are restored to the Assessing Officer for recomputation and allowance consistent with earlier Tribunal directions (intangible assets to be recalculated giving effect to prior valuation direction; other assets/technical know how are allowed following precedent), and transfer pricing adjustments (CCR, IT, royalty) are remitted to the Assessing Officer/TPO for fresh determination of ALP and adjudication after affording the assessee opportunity to be heard.

Disallowance under section 14A - Rule 8D computation of disallowance - Objective satisfaction of the Assessing Officer to invoke Rule 8D - Disallowance under section 36(1)(iii) in respect of interest on capital borrowed - Rebuttal by sufficiency of own funds - presumption of utilisation of own funds - Remand to Assessing Officer for fresh computation in terms of coordinate Bench orders

Disallowance under section 14A - Rule 8D computation of disallowance - Objective satisfaction of the Assessing Officer to invoke Rule 8D - Remand to Assessing Officer for fresh computation in terms of coordinate Bench orders - Whether the disallowance under section 14A read with Rule 8D should be sustained or the matter should be remitted to the Assessing Officer for fresh consideration. - HELD THAT: - The Tribunal examined the identical issue decided by a coordinate Bench in the group company case and found that the Assessing Officer had not recorded any objective dissatisfaction with the assessee's accounts before applying Rule 8D. The coordinate Bench had computed a restricted disallowance by adopting the assessee's proportionate method after including personnel and other expenses, and held that Rule 8D cannot be applied mechanically without recording objective satisfaction as to the incorrectness of the assessee's claim. Applying those conclusions to the present facts, the Tribunal set aside the CIT(A)'s findings and remitted the issue to the Assessing Officer to decide afresh in terms of the coordinate Bench order in Oswal Woolen Mills Ltd., after affording the assessee a reasonable opportunity of being heard. [Paras 6, 7]

Findings of the CIT(A) set aside; issue remitted to the Assessing Officer for fresh decision in terms of the coordinate Bench order.

Disallowance under section 36(1)(iii) in respect of interest on capital borrowed - Rebuttal by sufficiency of own funds - presumption of utilisation of own funds - Remand to Assessing Officer for fresh computation in terms of coordinate Bench orders - Whether interest disallowance under section 36(1)(iii) on working capital/CC account should be sustained or reconsidered in light of availability of own funds. - HELD THAT: - The Tribunal followed the coordinate Bench decision in Monte Carlo Fashions Ltd., which directs the Assessing Officer to examine the assessee's fund position (capital, interest-free advances, reserves and surplus) to determine whether borrowed funds were utilised in excess of available own funds. Where sufficient own funds exist, no disallowance is called for. Observing that the facts in the present appeals are materially similar and that the coordinate Bench has dealt with the issue, the Tribunal set aside the CIT(A)'s confirmation and remitted the matter to the Assessing Officer to decide in accordance with the said coordinate Bench direction. [Paras 10, 11]

Findings of the CIT(A) set aside; matter remitted to the Assessing Officer to decide in terms of the coordinate Bench order (examine sufficiency of own funds).

Rebuttal by sufficiency of own funds - presumption of utilisation of own funds - Disallowance under section 36(1)(iii) in respect of interest on advances to related parties - Whether the disallowance made in respect of proportionate interest on loan/advance to a sister concern should be deleted. - HELD THAT: - The Tribunal considered its earlier decision in the assessee's own case for an earlier assessment year where the balance sheet showed large reserves and surplus and the advances were small. The coordinate Bench applied precedents holding that where an assessee's own funds are sufficient to meet advances/investments, the presumption is that such advances were made from own funds and not borrowed money. Relying on those conclusions and the facts presented, the Tribunal found no justification for the disallowance and deleted it. [Paras 14, 15]

Ground allowed; disallowance deleted and findings of the CIT(A) set aside.

Final Conclusion: Both appeals are partly allowed: disallowances under section 14A/Rule 8D and under section 36(1)(iii) in respect of interest on working capital/CC account are set aside and remitted to the Assessing Officer for fresh decision in terms of the coordinate Bench orders cited; the disallowance in respect of interest on loans/advances to the sister concern is deleted.

Import without Importer-Exporter Code (IEC) - restricted import vis-a -vis absolute prohibition - permanent IEC for personal use under DGFT Handbook - import of personal use goods subject to value limit under Foreign Trade (Exemption) Order, 1993 - confiscation and redemption fine for breach of foreign trade regulations - penalty for contravention of customs/foreign trade requirements

Import without Importer-Exporter Code (IEC) - permanent IEC for personal use under DGFT Handbook - restricted import vis-a -vis absolute prohibition - confiscation and redemption fine for breach of foreign trade regulations - penalty for contravention of customs/foreign trade requirements - Lawfulness of order of confiscation, redemption fine and penalty imposed for import of a piano for personal use without IEC where a permanent IEC for persons importing for personal use was available and used in the Bill of Entry. - HELD THAT: - The Tribunal found as admitted that the imported item falls under HSN 9804900 and is a restricted item subject to a CIF value limit of Rs. 2,000 under the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993; restriction does not amount to an absolute prohibition. The DGFT Handbook and Circular No. 33/2010-Cus. permit use of a permanent IEC issued for persons importing for personal use, and evidence on record shows the permanent IEC number was entered in the Bill of Entry. The appellant paid duties at a rate higher than that applicable to commercial importers of such items. In view of the statutory scheme, administrative instructions and precedents recognising that restrictions of this nature are not absolute prohibitions, the imposition of confiscation with redemption fine and penalty solely for absence of an IEC (when a permanent IEC applicable to personal import was available and used) was held unsustainable. The Tribunal accepted the authority favouring the appellant and observed that restrictions may be partial and subject to the conditions and exemptions provided by the Foreign Trade Order and DGFT guidance, thereby negating the basis for confiscation and the attendant monetary penalties in the present facts.

Order of confiscation, redemption fine and penalty imposed for import without IEC is set aside; impugned appellate order is quashed.

Final Conclusion: Appeal allowed. The order-in-appeal upholding confiscation and imposing reduced redemption fine and penalty is set aside; confiscation and penalties imposed for alleged import without IEC are held unsustainable on the facts and law.

Scheme of Arrangement by way of amalgamation - scheme under Section 230-232 of the Companies Act, 2013 - Dispensing with convening of meetings of shareholders and creditors - unanimous board approval of the scheme - consent by affidavit of all equity shareholders, secured and unsecured creditors - appointed date

Dispensing with convening of meetings of shareholders and creditors - consent by affidavit of all equity shareholders, secured and unsecured creditors - Dispensation of convening and holding meetings of the equity shareholders, secured creditor and unsecured creditors of the Transferor Company - HELD THAT: - The Tribunal considered the application for sanction of the Scheme of Arrangement and the documentary record for the transferor company, including board resolution approving the scheme, statutory auditor certificates as to accounting compliance, audited and provisional balance sheets, and affidavits of consent from all 46 equity shareholders and from the sole secured creditor and all unsecured creditors. Having regard to the unanimous consent affidavits demonstrating 100% voting support and the other supporting documents placed on record, the Tribunal concluded that it was appropriate to dispense with calling, convening and holding separate meetings of the equity shareholders, the secured creditor and the unsecured creditors of the transferor company.

Meetings of the equity shareholders, the sole secured creditor and the unsecured creditors of the Transferor Company are dispensed with.

Dispensing with convening of meetings of shareholders and creditors - consent by affidavit of all equity shareholders, secured and unsecured creditors - Dispensation of convening and holding meetings of the equity shareholders, secured creditor and unsecured creditors of the Transferee Company - HELD THAT: - The Tribunal examined the corresponding filings for the transferee company - including board resolution approving the scheme, auditor certificates, audited and provisional financial statements, and affidavits of consent from all 21 equity shareholders and from the sole secured creditor and all unsecured creditors. Because the record established unanimous consent by affidavit representing 100% voting share of each relevant class and other requisite documents were placed before the Tribunal, it found that convening and holding meetings of the equity shareholders, the secured creditor and the unsecured creditors of the transferee company could be dispensed with.

Meetings of the equity shareholders, the sole secured creditor and the unsecured creditors of the Transferee Company are dispensed with.

Scheme of Arrangement by way of amalgamation - appointed date - scheme under Section 230-232 of the Companies Act, 2013 - Recording of the appointed date and sanction procedure in respect of the Scheme - HELD THAT: - The Tribunal noted that the Scheme specifies an appointed date of 30.06.2021 subject to the Tribunal's directions. In view of the Tribunal's directions dispensing with convening the meetings of the shareholders and creditors of both companies and having considered the material placed on record authorising the applicants to proceed, the Tribunal allowed the application and disposed of it in terms of the directions given, permitting the scheme process to proceed with the appointed date as specified.

The appointed date of 30.06.2021 as specified in the Scheme is recorded subject to the Tribunal's directions and the application is allowed and disposed of in terms of the directions.

Final Conclusion: The application under Section 230-232 of the Companies Act, 2013 for sanction of the Scheme of Arrangement by way of amalgamation is allowed insofar as the Tribunal dispensed with convening meetings of the equity shareholders, the secured creditor and the unsecured creditors of both the Transferor and Transferee companies and recorded the appointed date of 30.06.2021; the application stands disposed of in terms of the directions given.

Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013 - Appointed Date and Effectiveness of Scheme - Dissolution of transferor companies without winding up - Filing of certified order and scheme with Registrar of Companies (e form INC 28) - Compliance with Regional Director's observations and undertakings - Protection of creditors' interests - Adjudication of stamp duty by Superintendent of Stamps - Regulatory authorities to act on certified order and scheme

Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013 - Compliance with Regional Director's observations and undertakings - Protection of creditors' interests - Sanction of the Scheme of Amalgamation and acceptance of the clarifications and undertakings given by the petitioner companies in response to the Regional Director's report. - HELD THAT: - The Tribunal considered the petition for sanction of the Scheme of Amalgamation and the Regional Director's report which contained observations (paragraph IV (a) to (h)). The petitioner companies filed an affidavit-in-rejoinder addressing each observation and gave undertakings to comply with applicable accounting standards, procedural requirements and statutory provisions. The Official Liquidator reported that the affairs of the transferor companies were conducted properly and not prejudicial to shareholders. Having noted that no objector contested the petition and that the petitioners furnished the required clarifications and undertakings, the Tribunal accepted those clarifications and held that the requisite statutory compliances had been fulfilled, thereby making the company application absolute and sanctioning the Scheme. [Paras 10, 12, 13]

The Scheme is sanctioned; the Tribunal accepted the petitioners' clarifications and undertakings and found statutory compliance satisfied.

Appointed Date and Effectiveness of Scheme - Fixation of the Appointed Date for the Scheme. - HELD THAT: - The Scheme defined an "Appointed Date" and the Tribunal, after considering the Scheme and related filings, sanctioned the Scheme with an Appointed Date. The Tribunal expressly fixed the Appointed Date of the Scheme as 1 April 2020. [Paras 14]

Appointed Date is fixed as 1 April 2020.

Dissolution of transferor companies without winding up - Whether the transferor companies are to be dissolved without winding up upon sanction of the Scheme. - HELD THAT: - On sanction of the Scheme and having accepted the Official Liquidator's report that the affairs of the first to fourth transferor companies were properly conducted, the Tribunal ordered that the First to Fourth Transferor Companies shall stand dissolved without the process of winding up, in accordance with the Scheme and applicable statutory provisions. [Paras 12, 16]

First to Fourth Transferor Companies are dissolved without winding up.

Filing of certified order and scheme with Registrar of Companies (e form INC 28) - Requirement to file the certified copy of the Tribunal's order and the Scheme with the Registrar of Companies. - HELD THAT: - The Tribunal directed the petitioner companies to file a copy of the sanction order together with the Scheme electronically with the concerned Registrar of Companies using e form INC 28 within thirty days from receipt of the certified copy of the order, thereby prescribing the procedural step necessary to give effect to the Scheme under the Companies Act. [Paras 15]

Petitioner companies must file the certified order and Scheme with the Registrar of Companies electronically via e form INC 28 within 30 days of receipt of the certified copy.

Adjudication of stamp duty by Superintendent of Stamps - Direction to lodge the sanctioned order and Scheme with the Superintendent of Stamps for adjudication of stamp duty, if any. - HELD THAT: - The Tribunal directed the Transferee Company to lodge a copy of the order and the Scheme, duly authenticated, with the concerned Superintendent of Stamps for adjudication of stamp duty within sixty days of receipt of the certified order, thereby allocating responsibility for stamp duty adjudication post sanction. [Paras 17]

Transferee Company to lodge the sanctioned order and Scheme with the Superintendent of Stamps for stamp duty adjudication within 60 days of receipt of certified order.

Regulatory authorities to act on certified order and scheme - Obligation of concerned regulatory authorities to act upon the certified order and Scheme. - HELD THAT: - The Tribunal ordered that all concerned regulatory authorities shall act upon a copy of the certified order and the Scheme as may be necessary, and permitted any person or authority to approach the Tribunal for further directions or clarifications, thereby ensuring administrative implementation and continued jurisdiction of the Tribunal for ancillary matters. [Paras 18, 19, 20]

Regulatory authorities to act on the certified order and Scheme; liberty granted to interested persons or authorities to seek further directions from the Tribunal.

Final Conclusion: The Tribunal sanctioned the Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013, fixed the Appointed Date as 1 April 2020, accepted the petitioners' clarifications and undertakings including protection of creditors' interests, ordered dissolution of the transferor companies without winding up, and directed filing of the certified order and Scheme with the Registrar of Companies (e form INC 28) and lodging with the Superintendent of Stamps for adjudication; regulatory authorities are directed to act on the certified documents and the Tribunal remains available for further directions.

Approval of Resolution Plan under Section 31 - Compliance with Section 30(2) and CIRP Regulations (Regulations 36 to 39) - Eligibility and related party bar under Section 29A - Extinguishment of claims upon approval of resolution plan - Non granting of prospective exemption from Section 29A - Implementation, monitoring and supervisory mechanism for resolution plan - Cessation of moratorium on approval of resolution plan - Claims of Government/Statutory Authorities and statutory reliefs outside IBC

Compliance with Section 30(2) and CIRP Regulations (Regulations 36 to 39) - Approval of Resolution Plan under Section 31 - Resolution plan approved by the Committee of Creditors complies with the requirements of Section 30(2) of IBC, 2016 and Regulations 36-39 of the CIRP Regulations and is fit for approval under Section 31. - HELD THAT: - The Tribunal examined the materials on record, including the resolution plan, statutory compliance certificates and Form H, and noted that the Committee of Creditors approved the plan by 100% voting at its 18th meeting. The Adjudicating Authority observed that the resolution plan addresses feasibility and viability and contains provisions for effective implementation. On this basis the Tribunal held that the plan meets the requirements of Section 30(2) read with the relevant CIRP Regulations and is eligible for approval under Section 31. The Tribunal further recorded the admitted outstanding claims and the proposed realization percentage but based its approval on compliance and implementability of the plan. [Paras 9]

Resolution plan approved under Section 31 as complying with Section 30(2) and Regulations 36-39; plan found feasible, viable and implementable.

Eligibility and related party bar under Section 29A - Non granting of prospective exemption from Section 29A - Resolution Applicant is not a related party and has filed affidavit of eligibility; however, prayer for prospective exemption from ineligibility under Section 29A is rejected at this stage. - HELD THAT: - The Tribunal noted the Resolution Applicant filed an affidavit certifying non status as a related party and compliance with Section 29A. The Adjudicating Authority recorded that an application under Section 43 remained pending but, on the material before it, accepted that the Resolution Applicant was not a related party and was eligible to submit the plan. Separately, the Tribunal considered the Resolution Applicant's request for an anticipatory exemption from Section 29A that might arise on implementation and held that such a request cannot be granted now and must be considered if and when the situation arises under the statutory provisions. [Paras 6, 9, 10]

Resolution Applicant held eligible and not a related party; prayer for prospective exemption from Section 29A rejected.

Extinguishment of claims upon approval of resolution plan - Claims of Government/Statutory Authorities and statutory reliefs outside IBC - On approval and payment as per the resolution plan, all liabilities of stakeholders (including contingent/unconfirmed dues) and claims of suspended management/erstwhile directors/shareholders shall stand extinguished; claims of Government/Statutory Authorities to be dealt with by those authorities under their statutes. - HELD THAT: - The Tribunal directed that upon payment per the approved plan, stakeholders' liabilities shall stand permanently extinguished and that contingent or unconfirmed dues are likewise extinguished. It further provided that claims of suspended management and erstwhile office bearers shall be extinguished on the effective date. However, where reliefs or concessions from Government or statutory authorities are sought, the Tribunal directed the Resolution Applicant to approach the concerned authorities who will decide under the respective statutes; the Tribunal did not itself grant statutory reliefs under other enactments. [Paras 10]

Liabilities of stakeholders and certain erstwhile claims extinguished on approval and payment; statutory authorities to decide claims/reliefs under their laws.

Implementation, monitoring and supervisory mechanism for resolution plan - Accounting and corporate compliances on approval - Resolution plan shall be implemented with monitoring and supervisory committees as provided; RP to complete accounting entries and management to be handed over to directors nominated by Resolution Applicant. - HELD THAT: - The Tribunal recorded that the resolution plan contains specific provisions for implementation and constituted monitoring and supervisory mechanisms for effective execution. It directed the Resolution Professional to effect necessary accounting entries in the books of the Corporate Debtor as per applicable Accounting Standards and Companies Act provisions. The Tribunal further directed reconstitution of the board and handing over management to directors nominated by the Resolution Applicant, with procedural compliances to be completed. [Paras 9, 10, 11]

Monitoring and supervisory committees to be formed; RP to complete accounting entries; management and board to be reconstituted and handed to nominees of the Resolution Applicant.

Cessation of moratorium on approval of resolution plan - The moratorium under Section 14 ceases to have effect from the date of the order approving the resolution plan. - HELD THAT: - The Tribunal expressly directed that the moratorium earlier imposed by the Adjudicating Authority shall cease on the date of this order, thereby permitting steps necessary for implementation of the approved resolution plan to proceed. [Paras 11]

Moratorium terminated from the date of the approval order.

Final Conclusion: The Adjudicating Authority allowed the application and approved the Resolution Plan submitted by the Resolution Applicant as complying with Section 30(2) and applicable CIRP Regulations; the Resolution Applicant was held eligible (not a related party), the plan's implementation mechanisms and extinguishment of specified claims were directed, the prayer for prospective exemption under Section 29A was rejected, and the moratorium ceased from the date of the order.

Liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - appointment of liquidator under Section 34(1) of the Insolvency and Bankruptcy Code, 2016 - entitlement to fees under Regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016 - powers of liquidator superseding board of directors and key managerial personnel - bar on institution of suits during liquidation subject to Section 52 of the Insolvency and Bankruptcy Code, 2016 - requirement of public notice and intimation to Registrar of Companies on initiation of liquidation

Liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - Liquidation of the Corporate Debtor was ordered under Section 33(1) of the Code in absence of any approved resolution plan. - HELD THAT: - The Tribunal examined the CIRP timeline, the publication of EoIs, the single resolution plan received and its rejection by the Committee of Creditors, and the CoC's resolution (with requisite voting share) recording that liabilities far exceed assets and revival is not feasible. The Tribunal found that the Resolution Professional complied with the Code and regulations and that the CoC's reasons for liquidation were convincing. In view of no approved resolution plan and the CoC's decision, the Tribunal exercised the power to pass a liquidation order under Section 33(1).

Application for liquidation allowed and the Company ordered to be liquidated under Section 33(1).

Appointment of liquidator under Section 34(1) of the Insolvency and Bankruptcy Code, 2016 - The Resolution Professional was appointed as Liquidator under Section 34(1). - HELD THAT: - On the application and the consent of the Resolution Professional who had conducted the CIRP, the Tribunal appointed Mr. Adesh Kumar Gupta as Liquidator under Section 34(1). The appointment follows the CoC's authorisation and the RP's agreement to act as Liquidator.

Mr. Adesh Kumar Gupta appointed as Liquidator under Section 34(1).

Entitlement to fees under Regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016 - The Liquidator is entitled to fees as provided in Regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016. - HELD THAT: - The Tribunal directed that the Liquidator shall be entitled to fees in accordance with the prescribed regulation, thereby fixing the basis of remuneration for conduct of the liquidation proceedings in line with the Liquidation Process Regulations.

Liquidator's fees to be as provided in Regulation 4(2)(b) of the Liquidation Process Regulations.

Powers of liquidator superseding board of directors and key managerial personnel - Upon commencement of liquidation, the powers of the board, KMP and partners cease and vest in the Liquidator. - HELD THAT: - The Tribunal recorded that on initiation of liquidation the statutory consequences follow: board, KMP and partners' powers cease and all such powers vest in the Liquidator, who shall exercise those powers for the liquidation process as envisaged under the Code and applicable regulations.

All managerial and board powers cease and vest in the Liquidator for the liquidation process.

Bar on institution of suits during liquidation subject to Section 52 of the Insolvency and Bankruptcy Code, 2016 - No suit or other legal proceeding shall be instituted by or against the Corporate Debtor save as permitted under Section 52 and except with leave for the Liquidator to sue on behalf of the Corporate Debtor with prior approval. - HELD THAT: - The Tribunal applied the statutory bar on proceedings during liquidation, subject to the Code's provisions, and preserved the liberty for the Liquidator to institute proceedings on behalf of the Corporate Debtor with prior approval of the Adjudicating Authority, consistent with the liquidation framework.

Bar on suits during liquidation subject to Section 52; Liquidator may institute proceedings on behalf of the Corporate Debtor with prior approval.

Requirement of public notice and intimation to Registrar of Companies on initiation of liquidation - The Liquidator was directed to issue public notice of liquidation and to send the liquidation order to the Registrar of Companies where the Company is registered. - HELD THAT: - The Tribunal ordered that the Corporate Debtor be liquidated in accordance with the Code and Liquidation Process Regulations, including issuance of public notice that the Company is in liquidation and directing the Liquidator to intimate the Registrar of Companies, thereby effectuating statutory communication and notice requirements for the liquidation process.

Direction to issue public notice and to intimate the ROC regarding initiation of liquidation.

Cooperation of corporate personnel with Liquidator during liquidation - Personnel of the Corporate Debtor were directed to extend cooperation to the Liquidator in managing the liquidation process. - HELD THAT: - Recognising practical necessities for conducting liquidation, the Tribunal directed employees and other personnel to cooperate with the Liquidator as required, ensuring effective implementation of the liquidation process under the Code.

Corporate Debtor's personnel directed to cooperate with the Liquidator.

Final Conclusion: The Tribunal allowed the liquidation application under Section 33(1), appointed the Resolution Professional as Liquidator under Section 34(1), directed that liquidation proceed in accordance with the Code and Liquidation Process Regulations (including public notice and ROC intimation), recognised the Liquidator's entitlement to fees under Regulation 4(2)(b), vested managerial powers in the Liquidator, directed cooperation from corporate personnel, and preserved the statutory bar on suits subject to Section 52 and leave for the Liquidator to sue on behalf of the Corporate Debtor.

Limitation Act applicability to proceedings under the Insolvency and Bankruptcy Code, 2016 - time-barred petition under section 9 of the Insolvency & Bankruptcy Code, 2016 - date of last part payment/acknowledgement as triggering the limitation period - demand notice under section 8 of the Insolvency & Bankruptcy Code, 2016

Limitation Act applicability to proceedings under the Insolvency and Bankruptcy Code, 2016 - time-barred petition under section 9 of the Insolvency & Bankruptcy Code, 2016 - date of last part payment/acknowledgement as triggering the limitation period - Whether the petition under Section 9 of the IBC was barred by limitation and liable to be dismissed - HELD THAT: - The Tribunal applied the Limitation Act, 1963 to proceedings under the Insolvency and Bankruptcy Code, 2016 and examined the payment history. The invoices related to supplies made in 2013-14 and bore interest on overdue payments. The last part payment from the Corporate Debtor was on 04.04.2014, and there was neither any subsequent part payment nor any acknowledgement of debt on record. The demand notice was issued on 16.10.2019 but the petition was filed on 16.02.2021, more than six years after the date of the last part payment/acknowledgement. Applying the Limitation Act, the Tribunal held that the petition was filed beyond the permissible period and was therefore time barred. The absence of any later acknowledgment or payment meant the cause of action accrued, for limitation purposes, from the last part payment date and the subsequent filing could not cure the delay. [Paras 14, 15, 16, 17]

Petition under Section 9 dismissed as heavily time barred.

Final Conclusion: The petition under Section 9 of the IBC was dismissed by the Tribunal as barred by limitation, the last part payment/acknowledgement having been on 04.04.2014 and no subsequent acknowledgement or payment having been made.

Operational Creditor's Demand Notice under Section 8 - pre-existing dispute under Section 8(2)(a) - admission of application under Section 9(5) - moratorium under Section 14 - appointment of Interim Resolution Professional - supply of essential goods during moratorium

Operational Creditor's Demand Notice under Section 8 - The Demand Notice sent in Form 4 and accompanying documents establish the existence of an operational debt payable by the Corporate Debtor and satisfy the statutory requirements for proceeding under Section 8. - HELD THAT: - The Tribunal considered the application documents, including purchase orders, invoices, export promotion copy and the Form 4 demand notice filed by the operational creditor. The record showed supply of goods (enamelled copper wires) and invoices raised between 02.05.2018 and 27.06.2019. The Tribunal found that the Demand Notice in Form 4 was accompanied by relevant supporting documents and did not suffer from legal infirmity. Having regard to Rule 5 permitting a demand notice by way of Form 3 or a copy of invoice with Form 4, and to the documentary material on record, the Tribunal concluded that the operational creditor had furnished a sufficient basis to demonstrate an operational debt and compliance with the procedural requirements for initiation of proceedings under the Code. [Paras 4, 11, 15]

Demand Notice in Form 4 and the attached documents are valid and demonstrate existence of the operational debt.

Pre-existing dispute under Section 8(2)(a) - Mobilox standard for plausible dispute - There is no pre-existing dispute in respect of the supply of goods or the amount claimed that would bar admission under Section 9. - HELD THAT: - Applying the test in Mobilox (that the Adjudicating Authority must see whether a plausible contention requiring further investigation exists and a dispute must be real and not spurious), the Tribunal examined the email correspondence and the counter. The corporate debtor's communications sought time to pay and raised issues concerning currency (INR/USD) and exchange rate variations, but did not contest the supply of goods or the claimed amount with supporting documentary evidence. The Tribunal held that the alleged prior dispute was not shown to be a bona fide dispute capable of defeating the Section 9 application. [Paras 6, 12, 13, 15]

Alleged pre-existing dispute is not established; it is not a bar to admission of the Section 9 application.

Admission of application under Section 9(5) - appointment of Interim Resolution Professional - moratorium under Section 14 - supply of essential goods during moratorium - The Section 9 application is admitted; an Interim Resolution Professional is appointed and the moratorium under Section 14 is declared, subject to the protections and exceptions in the Code. - HELD THAT: - Having found compliance with the demand notice requirements and absence of a pre-existing dispute, the Tribunal proceeded to admit the petition under Section 9(5). The Tribunal appointed the named Interim Resolution Professional from the IBBI list, subject to disclosures and absence of disciplinary proceedings. Consequent to admission, the moratorium under Section 14(1) follows with the statutory exceptions and protections (including continuance of essential supplies under Sections 14(2) and 14(2A)). The Tribunal also directed the operational creditor to deposit a contribution toward IRP expenses, and ordered communication of the order to parties, IBBI and the Registrar of Companies as required. [Paras 16, 17, 18, 19, 20]

Section 9 petition admitted; Interim Resolution Professional appointed; moratorium under Section 14 declared; directions given for IRP expenses and communications.

Final Conclusion: The Tribunal admitted the Section 9 application after finding the Form 4 demand notice and supporting documents sufficient and rejecting the plea of a pre-existing dispute; an Interim Resolution Professional was appointed and moratorium under Section 14 was imposed, with directions regarding IRP expenses and statutory communications.

Order of liquidation - appointment as liquidator under Section 34(1) of the I.B. Code - cessation of moratorium upon initiation of liquidation - liquidator's authority to institute proceedings with prior approval of the Adjudicating Authority - sale as a going concern - assessment of liquidation costs and shortfall to be borne by members of the committee of creditors - Committee of Creditors' resolution to liquidate

Order of liquidation - Committee of Creditors' resolution to liquidate - Liquidation of M/s. RJVS Traders Private Limited was ordered and declared effective from the date of the order. - HELD THAT: - The Adjudicating Authority considered the record that the Committee of Creditors (COC), by 100% voting in the meeting dated 02.06.2021, resolved to liquidate the corporate debtor and that the corporate debtor had neither physical nor intelligible assets nor funds to meet liabilities. The COC had therefore not published an expression of interest and had assessed likely liquidation costs. On these findings the Tribunal allowed the Interlocutory Application and passed the order of liquidation, making the liquidation effective from the date of the order. [Paras 7]

Order of liquidation of the corporate debtor was passed and made effective immediately.

Appointment as liquidator under Section 34(1) of the I.B. Code - sale as a going concern - The Resolution Professional, who gave consent, was appointed as Liquidator and directed to complete the liquidation process and endeavour to sell the corporate debtor as a going concern. - HELD THAT: - The Tribunal recorded that the COC confirmed the applicant as Resolution Professional and resolved to appoint the same person as Liquidator; the applicant furnished consent. Consequently, relying on the statutory power to appoint a liquidator, the Adjudicating Authority appointed the applicant as Liquidator to carry out the liquidation in accordance with the Code and Liquidation Process Regulations, with a direction to first endeavour to sell the corporate debtor as a going concern, notwithstanding the COC's view that no assets existed. [Paras 4, 5, 7]

The Resolution Professional was appointed as Liquidator and directed to conduct the liquidation, including endeavouring to sell the corporate debtor as a going concern.

Cessation of moratorium upon initiation of liquidation - liquidator's authority to institute proceedings with prior approval of the Adjudicating Authority - The moratorium declared earlier ceased on the date of the liquidation order; further suits by or against the corporate debtor are barred except that the liquidator may institute proceedings with prior approval of the Adjudicating Authority. - HELD THAT: - The Tribunal declared that the moratorium earlier imposed in the CIRP order would cease from the date of the liquidation order. It also reiterated that, once liquidation is initiated, and subject to the Code (including Section 52), no suit or other legal proceedings shall be instituted by or against the corporate debtor, save that the liquidator may institute suits or proceedings on behalf of the corporate debtor with prior approval of the Adjudicating Authority as provided under the Code. [Paras 7]

Moratorium ceases from the date of the liquidation order; suits are barred except those instituted by the liquidator with prior approval of the Adjudicating Authority.

Assessment of liquidation costs and shortfall to be borne by members of the committee of creditors - liquidation costs and remuneration under CIRP Regulations - The COC's assessment of liquidation costs and the position that any shortfall shall be borne by members of the COC was recorded and accepted as part of the liquidation direction. - HELD THAT: - The Tribunal noted the COC's assessment of liquidation costs, including remuneration contemplated under Regulations 39B and 39C of the CIRP Regulations. The record shows the COC assessed liquidation costs and stated that any shortfall in meeting liquidation costs would be borne by the members of the COC. Having recorded these assessments and resolutions, the Tribunal proceeded to order liquidation subject to those assessments and directions. [Paras 6, 7]

The COC's assessment of liquidation costs was recorded and the shortfall was directed to be borne by COC members.

Final Conclusion: The Tribunal allowed the application and ordered liquidation of M/s. RJVS Traders Private Limited effective immediately, appointed the incumbent Resolution Professional as Liquidator to complete the liquidation (with a direction to endeavour to sell as a going concern), declared the earlier moratorium ceased, restricted suits against the corporate debtor except by the liquidator with prior Adjudicating Authority approval, and recorded the COC's assessment of liquidation costs with any shortfall to be borne by the COC members.

Cognizance and summoning in criminal proceedings - requirement of application of mind by the magistrate when issuing summons - special statute (Mines and Minerals (Development and Regulation) Act) vis-a -vis general criminal law - PMLA jurisdiction and scheduled offences including offences under the IPC - continuing offence under PMLA - abuse of process and exercise of inherent jurisdiction under Section 482 CrPC - territorial jurisdiction of the trial court

Cognizance and summoning in criminal proceedings - requirement of application of mind by the magistrate when issuing summons - Validity of the order dated 20.05.2021 taking cognizance and issuing summons under the PMLA against the petitioner - HELD THAT: - The High Court examined whether the Special Judge (PMLA) had applied his mind and whether the cognizance/summons issued were vitiated by non-application of mind or routine exercise. The Court noted admissions in the complaint and statements of the petitioner's officers conceding export of ore and receipt of proceeds, the existence of provisional attachment confirmed by the Adjudicating Authority, and that the complaint relied upon materials including statements and documents. Applying settled principles that at the stage of issuance of summons the court must be satisfied there are sufficient grounds to proceed and that strict proof is not required, the Court found the summoning order to be reasoned and not a mechanical act. The Court further observed that extraordinary interference under Section 482 CrPC requires caution and should not be exercised to stall trial where prima facie materials exist. Having considered the materials and precedent emphasising restraint, the petition seeking quashing of the cognizance and summons was rejected. [Paras 25, 26, 28, 32]

The order taking cognizance and issuing summons dated 20.05.2021 is not vitiated and is not liable to be quashed; the petition is dismissed insofar as it challenges the summons.

Special statute (Mines and Minerals (Development and Regulation) Act) vis-a -vis general criminal law - PMLA jurisdiction and scheduled offences including offences under the IPC - continuing offence under PMLA - Whether the existence of the MMDR Act as a 'special law' excludes investigation/prosecution under PMLA or offences in the IPC schedule relied upon by the Enforcement Directorate - HELD THAT: - The Court considered the petitioner's contention that the MMDR Act is a complete code and therefore bars prosecution under other statutes. Having regard to the PMLA schedule (which includes offences such as 120B and 420 IPC) and authoritative precedents distinguishing the effect of a special statute, the Court held that the existence of a special statute does not ipso facto preclude prosecution under other laws where the ingredients of separate offences are alleged. The Court also noted the Explanation to Section 3 PMLA (continuing nature of proceeds-related activity) and accepted that PMLA proceedings can legitimately run where scheduled offences are alleged and prima facie materials exist. On the facts, given admissions and material placed before the trial court, the special-law argument did not warrant quashing of the PMLA complaint at this stage. [Paras 19, 25, 26]

The contention that the MMDR Act ousts investigation/prosecution under the PMLA or scheduled IPC offences is rejected on the material before the Court; PMLA proceedings are maintainable.

Abuse of process and exercise of inherent jurisdiction under Section 482 CrPC - territorial jurisdiction of the trial court - Whether extraordinary relief under Section 482 CrPC should be exercised to quash the complaint as an abuse of process, including on territorial jurisdiction grounds - HELD THAT: - The petition alleged abuse of process and invoked earlier orders (including the Patna High Court's order quashing a Patna complaint for lack of jurisdiction) to contend the present filing was harassment. The High Court recognised the scope of Section 482 as confined to preventing abuse of process and reiterated the need for caution before interfering with cognizance. The Court observed that the Patna complaint had been returned and the ED filed the complaint at Ranchi; on the present record the trial court examined materials and reached a prima facie satisfaction. Given that the trial court had addressed the allegations and there existed prima facie material, the High Court declined to exercise inherent jurisdiction to quash the proceedings. The Court emphasised that interference at summons stage is inappropriate where the magistrate's satisfaction is not shown to be perverse or devoid of reasons. [Paras 28, 29, 32]

Extraordinary relief under Section 482 is refused; the present complaint is not quashed as an abuse of process and territorial objections do not warrant interference at this stage.

Final Conclusion: The petition challenging the cognizance and summons issued in the PMLA complaint is dismissed. Interim relief is vacated and the trial court proceedings shall continue; incidental applications are disposed of.

Anticipatory bail under Prevention of Money Laundering Act, 2002 - Non-bailable offences and cognizance under PMLA - Enforcement Case Information Report (ECIR) and its status vis-a -vis FIR - Requirement of complaint in writing for Special Court to take cognizance - Custodial interrogation and attachment of proceeds of crime

Anticipatory bail under Prevention of Money Laundering Act, 2002 - Non-bailable offences and cognizance under PMLA - Custodial interrogation and attachment of proceeds of crime - Grant of anticipatory bail to the petitioner in proceedings under the Prevention of Money Laundering Act, 2002. - HELD THAT: - The court considered the seriousness of the allegations that the petitioner, as a director, received proceeds of crime and laundered such funds; noted that the Public Prosecutor opposed bail; and accepted the Enforcement Directorate's contention that there was no material demonstrating reasonable grounds to believe the petitioner is not guilty or is not likely to commit an offence while on bail. The court also recorded the Enforcement Directorate's submission that custodial interrogation was required for further attachment of alleged laundered money. In view of these factors and the statutory regime under the PMLA which treats offences as non-bailable subject to the safeguards in the Act, the court found that the balance did not favour granting anticipatory bail to the petitioner.

Prayer for anticipatory bail rejected.

Enforcement Case Information Report (ECIR) and its status vis-a -vis FIR - Requirement of complaint in writing for Special Court to take cognizance - Whether the Enforcement Case Information Report (ECIR) must be forwarded to the magistrate like an FIR and whether failure to do so disentitles the Enforcement Directorate to take steps under the PMLA. - HELD THAT: - The court addressed the petitioner's contention that non-transmission of the ECIR to the magistrate deprived him of rights akin to those arising on filing of an FIR. Having examined the statutory scheme, the court accepted the Enforcement Directorate's submission that while Section 65 of the PMLA makes the CrPC applicable insofar as not inconsistent, Section 45(1) and its provisos manifest a departure from the CrPC scheme by stipulating that the Special Court shall not take cognizance of offences under Section 4 except upon a complaint in writing by the Director or an authorised officer. The court therefore held that the legislature did not intend the ECIR to operate in the same manner as an FIR for magistrate action, and the petitioner's plea based on laches in forwarding ECIR to the magistrate was not tenable.

Contention that ECIR must be forwarded to the magistrate like an FIR rejected; requirement of complaint in writing to the Special Court is material to cognizance under the PMLA.

Final Conclusion: Having regard to the serious nature of the allegations, the opposition by the Public Prosecutor and the absence of material to show reasonable grounds for believing the petitioner not guilty or not likely to offend while on bail, anticipatory bail was refused; the court also held that an ECIR is not equivalent to an FIR for magistrate cognizance and that the Special Court requires a complaint in writing under the PMLA to take cognizance.

Classification as non-commercial educational service (not commercial training or coaching) - pre-deposit for pursuit of appeal against tax demand - exercise of plenary powers under Article 142 to efface a demand - effacement of tax demand and setting aside Order in Original

Classification as non-commercial educational service (not commercial training or coaching) - The appellant is not engaged in commercial training or coaching services and therefore is not liable to pay the tax charged in the Assessment Order. - HELD THAT: - The Court accepted the appellant's contention that the Assessment Order taxed the appellant on an erroneous understanding of its status as a commercial trainer or coach. The Department did not dispute before this Court that the appellant was not covered by the category of assessee engaged in commercial training and coaching services. Further, the Tribunal decisions cited in support of the appellant's position (decisions in M/s. ITM International Pvt. Ltd. and IILM Undergraduate Business School) have answered the issue on merits in favour of entities in similar circumstances and have attained finality. On this basis the Court treated the underlying tax demand as unsustainable. [Paras 4, 5, 6]

The assessment finding that the appellant was engaged in taxable commercial training or coaching services was rejected and the appellant held not liable to the subject tax.

Pre-deposit for pursuit of appeal against tax demand - exercise of plenary powers under Article 142 to efface a demand - effacement of tax demand and setting aside Order in Original - In exercise of its plenary jurisdiction under Article 142 the Court ordered the tax demand to be effaced and the Order in Original to be set aside, thereby obviating any requirement for the appellant to make a pre-deposit to pursue appeal. - HELD THAT: - Given that the assessment was founded on an erroneous classification and that controlling Tribunal decisions favour the appellant, the Court exercised its constitutional plenary power to do complete justice. The Court ordered that the demand raised in the Order in Original dated 31 12 2015 be effaced from the record, declared that no demand towards the subject tax could be levied or collected against the appellant in the facts of the case, and directed that the Order in Original be treated as set aside and non est in law. The consequence is that the appellant need not be subjected to the pre deposit obligation to pursue an appeal against that Order in Original. [Paras 7, 8]

The demand was effaced, the Order in Original set aside, and the appellant relieved from any pre deposit obligation in respect of that demand.

Final Conclusion: The appeal succeeds; the tax demand in the Order in Original dated 31 12 2015 is effaced and the Order in Original is set aside, with the consequence that no tax demand may be levied or collected against the appellant and the appellant is not required to make the pre deposit in relation to that order. Civil appeals in the companion matters are disposed of on the same terms.

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - time-bound scheme - payment deadline - no power to extend or relax scheme conditions - writ jurisdiction to direct performance contrary to scheme - operation of law / restraint by NCLT

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - time-bound scheme - payment deadline - no power to extend or relax scheme conditions - writ jurisdiction to direct performance contrary to scheme - Whether the High Court can direct respondents to consider the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 despite the petitioner's failure to make the payment within the scheme period. - HELD THAT: - The Court examined the Scheme of 2019 as a time-bound mechanism which required payment within the prescribed timeframe to avail its benefits. Although the petitioner contends that an order of the NCLT and consequent operation of law restrained payment before the deadline, the Court held that it cannot make the Scheme operational beyond the period for which it was formulated or relax conditions of the Scheme for a single person. The committee constituted under the Scheme no longer exists, and the Court lacks jurisdiction to direct respondents to accept belated compliance or to extend the scheme's operation. Consequently, the petitioner's failure to pay within the Scheme's time-frame precludes entitlement to its benefits and the court will not direct consideration contrary to the Scheme's terms. [Paras 6, 7, 8]

Prayer for direction to consider the petitioner under the Scheme of 2019 is refused; the Court will not direct belated acceptance or extension of the time-bound scheme.

Final Conclusion: Writ petition dismissed - the Court declined to direct respondents to admit the petitioner to the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 where the payment was not made within the scheme period and the scheme and its committee are no longer operative.

Cenvat credit - capital goods - provider of output service - Rule 3 of the Cenvat Credit Rules (entitlement of provider of output service to credit on inputs or capital goods) - definition of capital goods including components, spares and accessories - utilisation of inputs for providing taxable output service - distinction between movable accessories and immovable tower structures

Cenvat credit - provider of output service - Rule 3 of the Cenvat Credit Rules (entitlement of provider of output service to credit on inputs or capital goods) - utilisation of inputs for providing taxable output service - Allowance of cenvat credit on items such as M.S. angles, G.I. sheet, bolts, shelter cabins, fabricated and galvanized structures, etc., taken by the assessee for providing taxable output service. - HELD THAT: - The Tribunal found that the respondent, a provider of taxable services (maintenance and provision of uninterrupted power to telecom towers by integrated solar/diesel systems), did not own the telecom towers and had procured and used the disputed items in the fabrication and installation of solar power systems to render the contracted output service. Applying Rule 3 of the Cenvat Credit Rules, the Tribunal held that a provider of output service is entitled to take credit of duty paid on inputs or capital goods used for providing taxable output service. The adjudicating authority and Commissioner (Appeals) correctly recorded that the disputed items were used in fabrication/support of capital goods (solar mounting structures, batteries, control panels, etc.) and thus were utilised in the production of the taxable service. The Tribunal distinguished earlier decisions relied upon by Revenue (which concerned towers owned by telecom operators and the question whether tower components or immovable structures could be capital goods or accessories) on the factual difference that the respondent here did not own towers and the items were integral to the solar power systems used to provide the output service. Consequently, the show cause raising disallowance on the ground that the items were not capital goods was found to be misconceived and the credit rightly allowed. [Paras 9, 10]

Revenue's appeal dismissed; cenvat credit on the disputed items upheld and respondent entitled to consequential benefit in accordance with law.

Final Conclusion: The Tribunal dismissed the revenue appeal and upheld the allowance of cenvat credit on the disputed items for the tax periods 2013-14, 2014-15 and 2015-16, holding that under Rule 3 a provider of output service is entitled to credit on inputs or capital goods used in rendering taxable output service; earlier decisions concerning tower ownership and immovable tower structures were distinguished on facts.

Cenvat credit - time barred claim of cenvat credit - applicability of Notification No. 21/2014 CE(NT) to invoices issued prior to 01.09.2014 - limitation period for taking credit - verification of invoice dates by original adjudicating authority

Cenvat credit - applicability of Notification No. 21/2014 CE(NT) to invoices issued prior to 01.09.2014 - time barred claim of cenvat credit - Limitation of six months introduced by Notification No. 21/2014 CE(NT) does not apply to cenvat credit claimed on invoices issued prior to 01.09.2014; such claims are not time barred by that notification. - HELD THAT: - The Tribunal examined whether the proviso inserting a six month bar in sub rule (7) of Rule 4 of the Cenvat Credit Rules, by Notification No.21/2014 CE(NT) dated 11.07.2014 (effective 01.09.2014), operates to bar claims in respect of invoices issued before 01.09.2014. The Tribunal followed earlier decisions, including the Division Bench decision relying on the Delhi High Court judgment in Global Ceramics Pvt. Ltd., and several Tribunal precedents, which held that the six month limitation introduced with effect from 01.09.2014 does not apply to invoices issued prior to that date. Applying that settled principle, the Tribunal concluded that the appellant is entitled to take cenvat credit in respect of invoices issued before 01.09.2014 and that the limitation in the notification is not applicable to such invoices.

Allowed the appeal on the ground that the six month limitation in Notification No.21/2014 CE(NT) does not bar cenvat credit on invoices issued prior to 01.09.2014.

Verification of invoice dates by original adjudicating authority - Requirement for factual verification of whether the invoices on which credit was claimed were issued prior to 01.09.2014. - HELD THAT: - Although the legal position was held in favour of the appellant, the Tribunal noted that entitlement depends on proof that the invoices in question were indeed issued prior to 01.09.2014. Therefore, the matter was remanded to the Original Adjudicating Authority to verify the dates of the invoices. The remand is limited to factual verification, and the appellant is to be associated and given an opportunity in that process.

Remitted to the Original Adjudicating Authority for verification of invoice dates, with opportunity to the appellant to be associated.

Final Conclusion: The appeal is allowed on the legal ground that the six month limitation introduced by Notification No.21/2014 CE(NT) does not apply to invoices issued before 01.09.2014; matter remitted for factual verification of the invoice dates by the Original Adjudicating Authority with opportunity to the appellant.

Interest on refundable pre-deposit under Section 35FF - mode of pre-deposit (cash or cenvat credit) not material - rate and period of interest

Interest on refundable pre-deposit under Section 35FF - mode of pre-deposit (cash or cenvat credit) not material - Whether interest under Section 35FF is payable on the pre-deposit when the pre-deposit was made by debiting cenvat credit account. - HELD THAT: - The Tribunal examined Section 35FF and held that the provision grants interest on amounts refundable to an assessee upon success in appeal without distinguishing the mode by which the pre-deposit was made. The Commissioner (Appeals) had denied interest on the ground that the pre-deposit was made through cenvat credit and not by cash. The Tribunal found that such a distinction is not mandated by the statute and that the Commissioner (Appeals)'s conclusion was erroneous. Consequently the appellant is entitled to interest on the refunded pre-deposit notwithstanding that the pre-deposit had been made by debiting the cenvat credit account. [Paras 5, 6]

Interest under Section 35FF is payable on the refunded pre-deposit even where the pre-deposit was made by debiting cenvat credit account; the Commissioner (Appeals) was in error in denying interest.

Rate and period of interest - What rate and period of interest is to be paid on the refundable pre-deposit and the manner of disbursement. - HELD THAT: - The Tribunal directed disbursement of interest at the rate of 12% per annum on the refund amount from the date of deposit until the date of refund, following the approach adopted in Parle Agro (P) Ltd. (D.B.). The Tribunal also observed that the appellant is entitled to consequential benefits if any, in accordance with law, and remitted the matter for disbursement by the Adjudicating Authority in accordance with this direction. [Paras 7]

Interest to be paid at 12% per annum from date of deposit until date of refund; Adjudicating Authority to disburse interest and give consequential benefits as applicable.

Final Conclusion: The appeal is allowed to the extent that interest under Section 35FF is payable on the refunded pre-deposit even when the pre-deposit was made by debiting the cenvat credit account; the Commissioner (Appeals)'s denial of interest is set aside and the Adjudicating Authority is directed to disburse interest at 12% per annum from the date of deposit until the date of refund, with consequential benefits as applicable.