TaxTMI Updates e-Newsletter
Dec 31,2022

Condonation of delay - non-speaking appellate order - remand for fresh consideration after personal hearing - retrospective cancellation of registration and its effect on past transactions - reliance on external enquiries without case-specific adjudication

Condonation of delay - Application to condone delay of 33 days in filing the appeal. - HELD THAT: - The Court examined the affidavit in support of the application and found the reasons assigned satisfactory. Having heard learned counsel for both sides, the Court exercised its discretion to condone the delay in filing the appeal. The application I.A. No. CAN 1 of 2022 was allowed and no order as to costs was made. [Paras 1, 2, 3, 4]

Delay of 33 days in filing the appeal is condoned and the application is allowed.

Non-speaking appellate order - reliance on external enquiries without case-specific adjudication - retrospective cancellation of registration and its effect on past transactions - remand for fresh consideration after personal hearing - Validity of the appellate authority's order dated 30th June, 2022 and whether the matter should be remitted for fresh consideration. - HELD THAT: - The Court reviewed the appellate order and observed that, although the appellate authority recorded aspects of the transaction and noted documentation, it harboured doubt about genuineness based on payload of vehicles and proceeded to rely on enquiries conducted by another tax authority after the transaction date. The Court held that to conclude the other dealer was non-existent on the transaction date there must be material showing lack of registration as of that date, and that retrospective cancellation raises a separate question as to effect on the appellants' transaction, particularly where payment through banking challans was produced. Finding that the appellate order did not independently adjudicate the contentions raised by the appellants and was therefore non-speaking, the Court set aside the appellate order and remanded the matter to the appellate authority to consider the appellants' specific contentions (including the effect of any retrospective cancellation and the payments evidence) and to afford an opportunity of personal hearing to the authorised representative. [Paras 7, 8, 9, 10, 11]

Appellate order dated 30th June, 2022 is set aside and the matter is remitted to the appellate authority for fresh consideration after affording personal hearing; no order as to costs.

Final Conclusion: Application to condone delay is allowed. The appellate order dated 30th June, 2022 is set aside as non-speaking and the matter is remanded to the appellate authority for fresh consideration of the appellants' contentions, including the effect of any retrospective cancellation of registration and the payments evidence, after affording personal hearing; no order as to costs.

Custom milling of paddy - exemption under Entry No. 3A / Notification No. 12/2017 Central Tax (Rate) - function entrusted to a Panchayat / public distribution system - composite supply - job work / intermediate production process in relation to agricultural produce - milling changes essential characteristics - GST at reduced rate of 5% on processing charges

Custom milling of paddy - function entrusted to a Panchayat / public distribution system - exemption under Entry No. 3A / Notification No. 12/2017 Central Tax (Rate) - composite supply - job work / intermediate production process in relation to agricultural produce - milling changes essential characteristics - GST at reduced rate of 5% on processing charges - Whether custom milling of paddy carried out by the applicant is exempt from GST - HELD THAT: - The Authority held that the applicant's contention that custom milling is a function entrusted to a Panchayat and therefore falls within Entry No. 3A/Notification No.12/2017 is misconceived because the applicant performs the milling for monitory consideration as a commercial entity and does not form part of the State's public distribution system or a panchayat body. The Authority further relied on the Central clarification in Circular No.19/19/2017 GST which states that milling of paddy into rice is not an intermediate production process in relation to cultivation of plants, that processing of paddy into rice is carried out by rice millers (not cultivators), and that such milling changes the essential characteristics of the produce; accordingly milling is not eligible for exemption under the notification entry relating to job work for agricultural produce. Applying that reasoning, the Authority concluded that the claimed exemption under Entry No.3A (and related notifications/circular) does not apply, and that the activity is taxable. The Authority noted the applicable concessional treatment that milling on job work basis is taxable at the reduced rate of 5% on the processing charges, and answered the ruling request accordingly. [Paras 5, 6]

Custom milling of paddy by the applicant is not exempt from GST and is taxable at 5% (2.5% CGST + 2.5% CGGST).

Final Conclusion: The Advance Ruling Authority rejected the applicant's claim of exemption under the cited notification/circular and ruled that custom milling of paddy by the applicant is taxable at the reduced GST rate of 5% (2.5% CGST and 2.5% CGGST).

Qualification of a body as a local authority - classification as a governmental authority - applicability of concessional notification for works contracts supplied to Government/Union territory/local authority - rate of tax on construction services where concessional entry is not applicable

Qualification of a body as a local authority - definition of local authority under the CGST Act and General Clauses Act - Whether Uttar Pradesh Jal Nigam (UPJN) qualifies as a "local authority" for the purpose of Entry 3(iii) of Notification No.11/2017 (as amended by Notification Nos.15/2021 and 22/2021). - HELD THAT: - The Authority examined the statutory constitution, functions and control of UPJN under the U.P. Water Supply and Sewerage Act, 1975 and applied the factors laid down by the Supreme Court in Union of India v. R.C. Jain for determining whether a body is a "local authority" - including separate corporate existence, election by inhabitants, degree of autonomy, entrustment of municipal functions, power to raise and control local/municipal funds and control/management of such funds. UPJN is a body corporate established by State legislation and entrusted with water and sewerage functions; however, the UPWSS Act provides for appointment of its Chairman and members by the State Government, pervasive State supervision and directions, constraints on borrowing and fund management subject to State sanction, and absence of a municipal/local fund entrusted to UPJN under State control. On these cumulative criteria the Authority concluded that UPJN does not satisfy the essential features of a "local authority" as understood under Section 3(31) of the General Clauses Act and Section 2(69) of the CGST Act; conversely, UPJN does satisfy the criteria of being a "Governmental Authority" (being set up by State enactment, majority government participation and carrying out functions entrusted to municipalities under Article 243W). The Authority therefore held that UPJN is not a "local authority" but is a "governmental authority" for the purposes of the notification regime (reasoning set out in paras 15-21, 24-29). [Paras 21, 24, 28, 29, 33]

UPJN does not qualify as a "local authority"; it qualifies as a "governmental authority". The supply is not covered by Notification No.15/2021 r/w No.22/2021 insofar as the concessional reference to "local authority" is concerned (answered in negative).

Applicability of concessional notification for works contracts supplied to Government/Union territory/local authority - rate of tax on construction services - Where the recipient (UPJN) is not a "local authority", what is the applicable rate of GST on the composite supply of works contract made w.e.f. 01-01-2022? - HELD THAT: - Having determined that UPJN is not a "local authority" but a "governmental authority", the Authority considered the scope of Entry 3(iii) of Notification No.11/2017 as amended by Notifications Nos.15/2021 and 22/2021 which restricted the concessional entry to supplies to Central Government, State Government, Union territory or a local authority with effect from 01.01.2022. Consequently, supplies to UPJN no longer fall within the concessional Entry 3(iii) and must be taxed under the residual entry for construction services. The Authority noted that subsequently Entry 3(iii) was omitted by Notification No.03/2022 with effect from 18.07.2022, but, for the period and question before it (w.e.f. 01-01-2022), the applicable rate where the concessional entry does not apply is the rate provided by the residual entry for construction services (as reflected in Entry 3(xii) of the Notification). (Reasoning and statutory references appear in paras 13, 29-33.) [Paras 13, 29, 31, 32, 33]

As the supplies to UPJN are not covered by the concessional Entry 3(iii) w.e.f. 01-01-2022, the applicable rate is CGST 9% and SGST 9% (i.e., total 18%).

Final Conclusion: The Authority ruled that Uttar Pradesh Jal Nigam is not a "local authority" for the purposes of Notification No.11/2017 as amended by Notifications Nos.15/2021 and 22/2021; supplies of works contract by the applicant to UPJN are therefore not covered by the concessional entry and, for supplies w.e.f. 01-01-2022, attract CGST 9% and SGST 9%. The Authority also noted the subsequent omission of Entry 3(iii) effective 18.07.2022, which renders the specific question academic from that later date.

MAT credit under section 115JAA - inclusion of surcharge and cess in tax credit computation - rectification of intimation under section 154 - intimation under section 143(1)

MAT credit under section 115JAA - inclusion of surcharge and cess in tax credit computation - Whether MAT credit carry forward under section 115JAA is to be computed including surcharge and cess and whether the rectification to allow the balance credit should be permitted. - HELD THAT: - The Tribunal examined the rectification sought by the assessee of the intimation under section 143(1), which sought allowance of the balance MAT credit of Rs.14,657 claimed by including surcharge and cess components. The Tribunal noted that the AO had allowed MAT credit excluding surcharge and cess, whereas the assessee's original computation and the returned MAT credit included surcharge and cess. Having considered precedent from High Courts and ITAT Benches (including the decision relied upon by the assessee), the Tribunal found a consistent judicial view that tax credit allowable under section 115JAA includes surcharge and cess components. The denial of the surcharge and cess component was therefore a mistake apparent on the record susceptible to rectification under section 154, and the rectification application deserved to be allowed to grant the claimed balance credit. [Paras 6, 7, 8]

Rectification under section 154 is allowed and MAT credit is to be adjusted including surcharge and cess; the balance credit of Rs.14,657 is directed to be granted.

Rectification of intimation under section 154 - intimation under section 143(1) - Whether the Commissioner (Appeals) erred in dismissing the appeal as ex parte without considering the assessee's written submissions and whether the Tribunal should proceed to decide the substantive rectification claim. - HELD THAT: - The Tribunal observed that the assessee placed on record written submissions said to have been filed before the CIT(A) on the last hearing date. Irrespective of the procedural contention, the Tribunal considered the assessee's substantive contentions on merit because the rectification application under section 154 raised the single issue of inclusion of surcharge and cess in the MAT credit. Having examined the merits and applicable precedent, the Tribunal proceeded to decide in favour of the assessee and allowed the rectification. The Tribunal therefore addressed the substantive controversy despite the CIT(A)'s dismissal for non prosecution. [Paras 4, 8]

The Tribunal considered the assessee's submissions and decided the substantive rectification claim in favour of the assessee; the CIT(A)'s ex parte dismissal did not preclude allowing rectification on merit.

Final Conclusion: The assessee's appeal is allowed: the rectification under section 154 of the intimation issued under section 143(1) is directed to be made to grant the MAT credit including surcharge and cess (balance of Rs.14,657), and the appeal is accordingly allowed.

Eligibility for deduction under section 80P(2)(d) and section 80P(2)(a)(i) - Registration under cooperative law as determinative of cooperative status - Treatment of cooperative banks as cooperative societies for exemption under section 80P(2)(d)

Registration under cooperative law as determinative of cooperative status - Mavilayi Service Co-operative Bank Ltd. - Assessee's status is that of a credit cooperative society and not a cooperative bank for the purposes of claiming section 80P benefits. - HELD THAT: - The Tribunal accepted the assessee's registration as a credit cooperative society as the decisive factor in determining its status. Relying on the recent apex court precedent cited in the judgment, the registration under the relevant cooperative law governs whether an entity is to be treated as a cooperative society for tax purposes. On the facts recorded, the assessee is registered only as a credit cooperative society; Revenue's contention that it should be treated as a cooperative bank was rejected. [Paras 5]

Assessee held to be a credit cooperative society; Revenue's contention that it is a cooperative bank rejected.

Eligibility for deduction under section 80P(2)(d) and section 80P(2)(a)(i) - Treatment of cooperative banks as cooperative societies for exemption under section 80P(2)(d) - Interest income earned by the assessee on deposits with cooperative banks is eligible for deduction under section 80P(2)(d) where those banks are treated as cooperative societies. - HELD THAT: - The Tribunal reviewed the coordinate bench reasoning reproduced in the order, which held that cooperative banks are to be regarded as cooperative societies for the purposes of section 80P(2)(d), and that interest earned on investments with such banks is exempt. Having determined that the assessee is an eligible society, the Tribunal found Revenue's denial of the deduction unsustainable and directed the Assessing Officer to make necessary computations allowing the impugned deduction(s). The Tribunal rejected the Revenue's alternative contention and applied the coordinate bench conclusion to the facts of this appeal. [Paras 6]

Interest income on deposits with cooperative banks allowed as deduction under section 80P(2)(d); Assessing Officer directed to compute accordingly.

Final Conclusion: The appeal is allowed: the assessee is held to be a credit cooperative society and, accordingly, interest income on deposits with cooperative banks is allowable as deduction under section 80P(2)(d); Assessing Officer to compute the claim as per law.

Reopening of assessment - reason to believe - change of opinion - tangible material - re-assessment versus review - limitation period for filing cross objections

Reopening of assessment - reason to believe - change of opinion - tangible material - re-assessment versus review - Validity of reopening assessment under section 147 of the Income Tax Act for AY 2013-14 - HELD THAT: - The Tribunal held that the Assessing Officer's reasons for reopening show reliance only on material that was available and considered during the original assessment proceedings, and therefore the purported formation of belief was nothing more than a change of opinion. The record demonstrates that the Assessing Officer had specifically enquired about interest-free loans/advances during the original assessment and the assessee had furnished the relevant details before completion under section 143(3). In light of authoritative precedents emphasizing that reopening requires "tangible material" forming a live link with the belief that income has escaped assessment and that mere change of opinion cannot justify reassessment, the Tribunal found the reopening impermissible. Applying these principles, the Tribunal declined to interfere with the CIT(A)'s factual conclusion that the reassessment was founded on a change of opinion and therefore unjustified. [Paras 11, 12, 15, 16, 17]

Reopening of assessment was invalid as it amounted to a change of opinion based on material already available at the time of the original assessment; the CIT(A)'s order allowing the assessee's appeal is upheld.

Limitation period for filing cross objections - Maintainability of the assessee's cross objections filed 18/07/2022 - HELD THAT: - The Tribunal found that the assessee's cross objections were filed with a delay of 498 days beyond the prescribed period. Although reference was made to the Supreme Court's suo motu order affecting limitation between 15/03/2020 and 28/02/2022, the extended period did not validate the filing date of 18/07/2022. The assessee did not provide any explanation to the Registry regarding the delay. Consequently, the cross objections were held to be time barred and dismissed. [Paras 2, 3]

Cross objections dismissed as barred by limitation.

Final Conclusion: The Revenue's appeal is dismissed for lack of merit as the reassessment was held to be an impermissible change of opinion; the assessee's cross objections are dismissed as time barred.

Deduction under Section 54B for reinvestment in agricultural land - Availability of deduction where substituted asset is purchased in the name of spouse - Apportionment of capital gain among co-owners on sale of joint-owned immovable property - Reopening of assessment and best judgment assessment under Section 147 and Section 144

Deduction under Section 54B for reinvestment in agricultural land - Availability of deduction where substituted asset is purchased in the name of spouse - Assessee entitled to claim deduction under Section 54B notwithstanding that the agricultural land was purchased in the name of the assessee's wife. - HELD THAT: - The learned Commissioner (Appeals) denied the claim solely because the substituted agricultural land was registered in the name of the assessee's wife. The Tribunal noted that the factual position about reinvestment was not in dispute and relied on precedents of various High Courts (including decisions of the High Court of Delhi) holding that deduction under Section 54B (and analogous provisions) is available where the investment is made in the name of the spouse. Applying those authorities, the Tribunal held that the technicality of title being in the wife's name does not defeat the statutory entitlement to deduction and directed the Assessing Officer to allow the deduction under Section 54B. [Paras 9]

Deduction under Section 54B allowed; Assessing Officer directed to give effect to the deduction.

Reopening of assessment and best judgment assessment under Section 147 and Section 144 - Apportionment of capital gain among co-owners on sale of joint-owned immovable property - Legal grounds challenging initiation of proceedings under Section 147 were not pressed and are dismissed; the apportionment by the Assessing Officer and the quantified long-term capital gain were considered on merits by the First Appellate Authority and partially sustained. - HELD THAT: - The assessee initially raised grounds impugning the validity of reopening under Section 147, but at hearing the counsel limited submissions to the merits; consequently those legal grounds were deemed not pressed and dismissed. On the merits, the Assessing Officer apportioned the sale consideration among four co-owners and added the assessee's share as income; the Commissioner (Appeals) accepted the assessee's share and found a resultant long-term capital gain which he directed the Assessing Officer to sustain. The Tribunal's decision on deduction under Section 54B operates after the admitted apportionment/quantification of gain. [Paras 2, 3, 5]

Grounds attacking reopening under Section 147 dismissed as not pressed; apportionment and resultant long-term capital gain considered and sustained to the extent quantified by the First Appellate Authority, subject to allowance of Section 54B deduction.

Final Conclusion: Appeal partly allowed: procedural legal grounds on reopening dismissed as not pressed; assessee entitled to deduction under Section 54B despite the substituted agricultural land being registered in the name of his wife, and the Assessing Officer is directed to give effect to the deduction for the assessment year 2009-10.

Disallowance of administrative and export expenses estimated as a percentage of expenses - reduction of percentage disallowance by reference to coordinate-bench precedent - assessment adjustment on the basis of audit report and remand report - deemed dividend assessed under section 2(22)(e) where loan is for the benefit of a shareholder - treatment of other income already reflected in audited net profit - remand reports and compliance with Rule 46A of the IT Rules - allowability of peripheral development and maintenance expenses as business expenditure - penalty leviable under section 271AAA vis-a -vis section 271(1)(c) - withdrawal of grounds of appeal

Withdrawal of grounds of appeal - Ground challenging addition of Rs.50,000/- for AY 2008-09 withdrawn by the assessee - HELD THAT: - The assessee, through its authorised representative, expressly declined to press the ground challenging the estimate-based addition and endorsed the withdrawal in the grounds of appeal. The Tribunal recorded that the ground was dismissed as withdrawn and no adjudication on merits was undertaken. [Paras 4, 5]

Appeal in respect of the withdrawn ground for AY 2008-09 dismissed as withdrawn.

Disallowance of administrative and export expenses estimated as a percentage of expenses - reduction of percentage disallowance by reference to coordinate-bench precedent - Whether disallowance made by CIT(A) at 10% of administrative and export expenses for AY 2009-10 should be sustained - HELD THAT: - The Tribunal noted that the issue was squarely covered by earlier decisions of the coordinate Bench (M/s. Serajuddin & Co. and Aliza International Pvt. Ltd.) which held that a 10% disallowance was excessive and reduced it to 5%. Respectfully following those coordinate-bench precedents, the Tribunal reduced the disallowance confirmed by the CIT(A) from 10% to 5%. The Tribunal applied the same reasoning to both the assessee's appeal and the corresponding ground in the revenue's cross-appeal. [Paras 8, 10, 16, 17]

Disallowance at 10% reduced to 5%; assessee's appeal partly allowed and corresponding revenue ground dismissed.

Assessment adjustment on the basis of audit report and remand report - Validity of the CIT(A)'s reduction of total income (before depreciation) by relying on the audit report and the Assessing Officer's remand report for AY 2009-10 - HELD THAT: - The Tribunal observed that the CIT(A) considered the remand report filed by the Assessing Officer and the audit report produced by the assessee. The remand report was extracted in the CIT(A)'s order and no adverse comment by the AO in the remand report was shown to displace the CIT(A)'s findings. On this basis the Tribunal found no reason to interfere with the CIT(A)'s reduction of the assessed income. [Paras 18, 20, 21]

Findings of the CIT(A) reducing the assessed income were upheld; revenue grounds challenging that reduction dismissed.

Deemed dividend assessed under section 2(22)(e) where loan is for the benefit of a shareholder - Whether addition on account of deemed dividend under section 2(22)(e) could be sustained where the assessee was not a shareholder of the lending company - HELD THAT: - The Tribunal analysed the language of section 2(22)(e) and emphasised that the deemed dividend is chargeable in the hands of the shareholder 'on whose behalf, or for the individual benefit' the loan was given. In the present case the assessee was not a shareholder of the lending company; accordingly the statutory nexus required for invoking the provision was absent. The CIT(A)'s deletion of the addition was therefore held to be on correct footing. [Paras 22, 24]

CIT(A)'s deletion of the deemed dividend addition upheld; revenue ground dismissed.

Treatment of other income already reflected in audited net profit - Whether other income of the assessee ought to be added in addition to net profit already reflected in audited accounts for AY 2009-10 - HELD THAT: - The Tribunal accepted that the amount representing other income had been taken into account while arriving at the net profit as per the audited accounts filed under section 44AB. Since the audited accounts already included that other income, further addition was not warranted and the CIT(A)'s approach was sustained. [Paras 25, 27]

No further addition of the other income; revenue ground dismissed.

Remand reports and compliance with Rule 46A of the IT Rules - Allegation of violation of Rule 46A in respect of multiple remand reports for AY 2009-10 - HELD THAT: - The Tribunal noted the presence of multiple remand reports from the Assessing Officer but found no question of violation of Rule 46A of the Income-tax Rules. No interference with the CIT(A)'s findings on this point was called for. [Paras 28]

No violation of Rule 46A established; revenue's challenge dismissed.

Allowability of peripheral development and maintenance expenses as business expenditure - Whether peripheral development and maintenance expenses incurred (AY 2011-12) were allowable business expenditure or required to be disallowed as non-business peripheral development costs - HELD THAT: - Following the coordinate-bench decision in Aliza International Pvt. Ltd., the Tribunal observed that the assessee was not in the business of mining and the expenditures (including beautification work done at the direction of the municipal authority and paid through contractors) were incurred at the direction of the civic authority and formed part of business expenditure/advertisement. On that basis, the Tribunal deleted the additions relating to peripheral development and maintenance expenses. [Paras 31, 33]

Additions in respect of peripheral development and maintenance expenses for AY 2011-12 deleted; assessee's appeal allowed.

Penalty leviable under section 271AAA vis-a -vis section 271(1)(c) - Whether penalty levied and confirmed under section 271(1)(c) for AY 2009-10 in a case where search falls within specified period should stand, or penalty should have been levied under section 271AAA - HELD THAT: - The Tribunal examined the statutory scheme and the different bases and rates of penalty under the two provisions. For searches conducted in the period specified (search on 28.05.2008), the Tribunal followed coordinate-bench precedent holding that the statutory regime contemplates penalty under section 271AAA for the specified years and excludes section 271(1)(c). The Assessing Officer had levied penalty at 100% of tax sought to be evaded (the rate under section 271(1)(c)), which the Tribunal concluded could not be treated as a mere typographical error. Respectfully following the coordinate-bench decision, the Tribunal deleted the penalty imposed under section 271(1)(c). [Paras 35, 36, 38]

Penalty levied under section 271(1)(c) for the specified year deleted; assessee's appeal allowed on this ground.

Final Conclusion: The Tribunal recorded dismissal of the withdrawn ground for AY 2008-09; for AY 2009-10 it reduced the percentage disallowance of administrative and export expenses from 10% to 5%, upheld the CIT(A)'s reductions based on remand and audit reports, sustained deletion of deemed dividend addition and non-addition of other income, and deleted the penalty levied under section 271(1)(c) in favour of the statutory scheme under section 271AAA; for AY 2011-12 the Tribunal deleted additions relating to peripheral development and maintenance expenses.

Deduction under section 80P(2)(d) - Interest income from cooperative banks - Cooperative banks as cooperative societies - Distinction between cooperative credit society and cooperative bank - Remand for computation

Deduction under section 80P(2)(d) - Interest income from cooperative banks - Cooperative banks as cooperative societies - Distinction between cooperative credit society and cooperative bank - Assessee entitled to deduction in respect of interest income from deposits with cooperative banks for the assessment years concerned. - HELD THAT: - The Tribunal accepted the assessee's contention that the legal position established by the Supreme Court in Mavilayi Service Co-operative Bank Ltd. (as relied upon) and the Tribunal's coordinate-bench precedents treat cooperative banks as cooperative societies for the purpose of deduction under section 80P. Having regard to those decisions, the Tribunal rejected the Revenue's contention that interest earned from deposits with cooperative banks is not eligible for deduction, and held that such interest qualifies for deduction under section 80P(2)(d) (and insofar as the claim was pressed, under the relevant sub-clause relied upon by the assessee) for both assessment years. The Tribunal therefore allowed the assessee's claim of deduction in principle. [Paras 4, 5, 7]

Claim for deduction in respect of interest earned from cooperative banks is allowed in principle under section 80P for AYs 2013-14 and 2014-15.

Remand for computation - Direction to Assessing Officer - Matter remanded to the Assessing Officer for framing necessary computations and giving effect to the claim allowed. - HELD THAT: - Having allowed the deduction in principle, the Tribunal directed the Assessing Officer to carry out requisite computations in accordance with law and to give consequential effect to the allowance granted. The order does not finally quantify the relief but instructs the Assessing Officer to compute the taxable income after allowing the deduction as indicated by the Tribunal. [Paras 6]

Directed the Assessing Officer to frame necessary computations and give effect to the deduction allowed.

Final Conclusion: The assessee's twin appeals for AYs 2013-14 and 2014-15 are allowed: the interest income from deposits with cooperative banks is held eligible for deduction under section 80P, and the matter is remanded to the Assessing Officer for computation and consequential compliance with this order.

Reopening of assessment after earlier completed assessment - change of opinion not a ground for reassessment - distinction between reopening under section 148 and revision under section 263 - validity of assessment despite procedural omissions under section 292B - annulment of reassessment passed without fresh information

Validity of assessment despite procedural omissions under section 292B - Whether the first assessment order dated 25-07-2019 was a valid order despite alleged procedural omissions - HELD THAT: - The Tribunal accepted the view recorded by the first assessing officer that the assessee's contentions had been examined and the returned income accepted after verification of material on record. The assessee was not obliged to ensure that administrative documents such as ITNS form, demand notice under section 156 or penalty show-cause notices accompanied the assessment order; omissions in such formalities do not render an assessment invalid where the order is in substance and effect in conformity with the intent and purpose of the Act. Applying the principle embodied in the statutory provision relied upon by the assessee, the first assessment order was held to be valid and effective for the purposes of determining whether a subsequent reopening was permissible. [Paras 2]

The first assessment order dated 25-07-2019 is valid and not vitiated by the alleged procedural omissions.

Reopening of assessment after earlier completed assessment - change of opinion not a ground for reassessment - distinction between reopening under section 148 and revision under section 263 - annulment of reassessment passed without fresh information - Whether the second reassessment and the order dated 08-12-2019 could be sustained when it proceeded on the same facts as the earlier completed assessment and without new information - HELD THAT: - The Tribunal concurred with the assessing officer at first appeal that the successor assessing officer reopened the assessment on the same grounds and facts which had already been examined and adjudicated by the earlier officer. There was no new material or information to justify reopening; the change of incumbent alone cannot be a reason to reopen an assessment. The Bench emphasised that where an issue has been scrutinised and decided in an earlier assessment, a change of opinion is not a permissible basis for reassessment and, if there is a factual defect leading to underassessment, the correct remedy is revision under the statutory provision for revision (section 263), not reopening under the reassessment provision. On these grounds the second assessment was found to be unsustainable and liable to be annulled. [Paras 2]

The second reassessment and the order dated 08-12-2019 cannot be sustained and are annulled for lack of fresh information and impermissible change of opinion.

Annulment of reassessment passed without fresh information - Whether additions made by the second assessing officer (unexplained investment in shares and unexplained cash deposits) survive where the reassessment order itself is quashed - HELD THAT: - The additions recorded by the successor assessing officer were founded on the impugned reassessment order. Having held that the reassessment was invalid for being based on the same facts already examined and absent any new material, the Tribunal agreed with the first appellate authority in annulling the second order and thereby deleting the additions. The effect of annulling the reassessment is to set aside the additions made exclusively in that order. [Paras 2, 3]

Additions made by the second assessing officer are quashed consequent to annulment of the reassessment order.

Final Conclusion: The order of the CIT(A) annulling the second assessment order dated 08-12-2019 is upheld; the appeal filed by the Revenue is dismissed and the additions made in the reassessment are deleted.

Principle of mutuality - interest on security deposit - income from other sources - set off against expenditure - allowability of income incidental to objects of an association

Principle of mutuality - interest on security deposit - set off against expenditure - income from other sources - Whether the interest earned on security deposits made with CESC by the apartment owners association is covered by the principle of mutuality and therefore not taxable as "income from other sources" but available for set off against expenditure. - HELD THAT: - The Tribunal examined whether deposits made with CESC Ltd. for obtaining electricity connection by the association were made in furtherance of the association's objects or were investments of surplus funds. The assessee, an association of apartment owners, was required to make such deposits to secure electricity supply; the interest earned thereon has a direct nexus with the expenditure on electricity consumption. Applying the principle of mutuality and following the Coordinate Bench decision in Manipal Centre Apartment Owners Association vs. ACIT, the Tribunal held that the interest is incidental to the association's objects and is appropriately set off against the related expenditure rather than being taxable as income from other sources. Consequently the appellate authority's finding to the contrary was reversed and the additions were deleted. [Paras 8, 9]

Interest on the security deposits for AYs 2014-15 and 2015-16 is covered by the principle of mutuality and is allowable for set off against electricity expenditure; the additions treated as income from other sources are deleted.

Final Conclusion: Both appeals for Assessment Years 2014-15 and 2015-16 are allowed: the Tribunal reversed the CIT(A)'s finding and deleted the additions by holding that interest on deposits with CESC falls within the principle of mutuality and may be set off against the related expenditure.

Deduction under section 80IB - engaged in manufacturing - manufacturing by third party under supervision or control - binding precedent of Coordinate Bench - penalty under section 271(1)(c) - deletion of penalty where foundation addition is deleted (sublato fundamento cadit opus) - remand for fresh adjudication - unexplained cash credit under section 68

Deduction under section 80IB - engaged in manufacturing - manufacturing by third party under supervision or control - binding precedent of Coordinate Bench - Assessee entitled to deduction under section 80IB for the relevant assessment years where manufacturing was carried out by a third party using its machinery under the assessee's specifications, supervision and quality control. - HELD THAT: - The Tribunal found that on the material on record the assessee executed customer orders by getting cables manufactured by M/s Nangalwala Chemical Industries under the direct supervision of the assessee's partner, applying the assessee's technology, specifications, raw materials and quality control. The Coordinate Bench's earlier order in the assessee's own case for AY.2004-05, which the Tribunal respectfully followed, held that manufacturing effected by a third party under the assessee's supervision and control qualifies as manufacturing by the assessee for purposes of relief. On that basis the Tribunal concluded that the lower authorities erred in rejecting the claim and allowed the appeals for the specified assessment years. [Paras 11, 12]

Appeals in ITA Nos. 323 to 327/SRT/2018 allowed and deduction under section 80IB directed to be granted.

Penalty under section 271(1)(c) - deletion of penalty where foundation addition is deleted (sublato fundamento cadit opus) - Penalty under section 271(1)(c) for AY.2007-08 deleted because the assessment addition on which penalty was founded was set aside. - HELD THAT: - The Tribunal recorded that the quantum addition for AY.2007-08 was deleted by the Coordinate Bench; consequently the penalty based on that addition could not stand. Applying the principle that once the foundational assessment disallowance is deleted the consequential penalty fails (sublato fundamento cadit opus), the Tribunal set aside the penalty. [Paras 16]

Penalty imposed under section 271(1)(c) for AY.2007-08 is deleted; appeal in ITA No.689/SRT/2018 allowed.

Remand for fresh adjudication - unexplained cash credit under section 68 - Issue regarding addition on account of unsecured loans/unexplained cash credits for AY.2005-06 is remanded to the learned CIT(A) for fresh adjudication as earlier directed by the Tribunal. - HELD THAT: - The Tribunal noted that in an earlier order it had directed the learned CIT(A) to verify confirmations and creditworthiness of creditors and adjudicate the addition afresh. As that adjudication has not yet been completed, the Tribunal directed the learned CIT(A) to decide the matter promptly and the additional ground raising this issue is allowed for statistical purposes. [Paras 20]

Additional ground relating to unsecured loans/unexplained cash credits in ITA No.323/SRT/2018 (AY.2005-06) is allowed for statistical purposes and the matter is remanded to the learned CIT(A) for fresh adjudication.

Final Conclusion: The Tribunal allowed the appeals concerning entitlement to deduction under section 80IB for AY.2005-06, 2006-07, 2007-08, 2009-10 and 2011-12 by following the Coordinate Bench's decision that manufacturing executed by a third party under the assessee's supervision qualifies as manufacturing by the assessee; it deleted the penalty under section 271(1)(c) for AY.2007-08 as the underlying addition was vacated; and it remanded the disputed unsecured-loan/unexplained-credit issue for AY.2005-06 to the learned CIT(A) for fresh adjudication.

Burden of proof under section 68 - Genuineness, identity and creditworthiness of investors - Deeming provision under section 56(2)(viib) - valuation methods (DCF/NAV) and acceptability - Assessing Officer's power to reject valuation under Rule 11UA - Requirement of notice under section 250(1) for enhancement by appellate authority - Allowability of business expenditure where business is set up though no income is earned

Burden of proof under section 68 - Genuineness, identity and creditworthiness of investors - Deletion of addition made under section 68 in respect of share capital and share premium - HELD THAT: - The Tribunal found that the assessee furnished bank evidence, returns and books of account of the subscribers and other documents to discharge the initial onus under section 68. Once the assessee proved identity, creditworthiness and genuineness of the transactions, the burden shifted to the revenue to produce contrary material, which it failed to do. Relying on the reasoning that issuing shares at a premium is a commercial decision and that revenue cannot sit in the armchair of businessmen, the Tribunal held that no addition could be sustained in absence of contrary evidence and therefore deleted the addition made under section 68. [Paras 11, 12, 13]

Addition of Rs. 49,00,000/- made under section 68 deleted.

Deeming provision under section 56(2)(viib) - valuation methods (DCF/NAV) and acceptability - Assessing Officer's power to reject valuation under Rule 11UA - Vacating the protective addition under section 56(2)(viib) which invoked valuation based on the premium received on issue of shares - HELD THAT: - The Tribunal held that the assessee adopted a valuation method (Discounted Cash Flow) permitted under Rule 11UA(2) and obtained valuation from a qualified valuer. Valuation by DCF necessarily involves projections and is not an exact arithmetic exercise; the Assessing Officer or CIT(A) cannot substitute their own view or reject a valuation carried out by a prescribed expert without bringing contrary material or statutory power to re-value. Earlier coordinate-bench rulings recognising the acceptability of DCF valuations and that revenue cannot rework commercial projections were followed. In view of these principles, the protective addition under section 56(2)(viib) based on rejection of the assessee's valuation was vacated. [Paras 30, 31, 32, 33, 34]

Protective addition of income under section 56(2)(viib) vacated; valuation accepted.

Requirement of notice under section 250(1) for enhancement by appellate authority - Validity of enhancement of assessed income by the CIT(A) without issuance of statutory notice under section 250(1) - HELD THAT: - The Tribunal recorded that when the appellate authority proposes to enhance the assessed income, a mandatory notice under section 250(1) must be given to the assessee so as to satisfy principles of natural justice. In the present case no such notice was issued before enhancement, rendering the enhancement procedurally invalid. [Paras 18, 19]

Enhancement made by the CIT(A) set aside for want of notice under section 250(1).

Allowability of business expenditure where business is set up though no income is earned - Allowability of business expenses disallowed on the ground that business was not carried on during the year - HELD THAT: - The Tribunal accepted the assessee's submission that the business was set up and that incurring expenditure post-setup is allowable under sections 30 to 38 even if the business did not yield income in that year. The absence of revenue in a year does not preclude allowance of business expenditure where the business exists and expenses are incurred for carrying on or setting up the business. [Paras 20]

Disallowance of business expenditure of Rs. 4,84,407/- reversed; expenses allowed.

Final Conclusion: The appeal is allowed: the addition under section 68 is deleted, the protective addition under section 56(2)(viib) based on rejection of the assessee's valuation is vacated, the enhancement by the CIT(A) is set aside for lack of notice under section 250(1), and the disallowance of business expenses is reversed.

Genuineness of business expenditure - allowability of business expenses during temporary lull - third party documentary evidence - relevance of statements recorded after the tax period - failure to respond to information called under section 133(6) - onus of proving non-genuineness of claimed deduction

Genuineness of business expenditure - third party documentary evidence - relevance of statements recorded after the tax period - failure to respond to information called under section 133(6) - allowability of business expenses during temporary lull - Deletion of addition made on account of disallowance of electricity/power and fuel expenses claimed by the assessee for the year under consideration. - HELD THAT: - The Tribunal found that the Assessing Officer and the CIT(A) erred in disallowing the electricity expenses despite contemporaneous bills and receipts from the State Electricity supplier, which constitute third party documentary evidence and cannot be treated as self created. Several other business expenses were allowed by the AO, indicating the business was treated as a going concern undergoing a temporary lull rather than permanently closed. Statements of two security guards recorded in February 2016 related to the factual position at that later date and have limited relevance to the position in the 2012 13 year; moreover, those statements were not confronted to the assessee. The non response of the State Electricity Corporation to a requisition under section 133(6) is a lapse of the revenue and cannot be visited upon the assessee. On the totality of the record and the assessee's consistent explanation that efforts were made to keep the business going, the addition on account of electricity expenses could not be sustained and was therefore deleted. [Paras 5, 6]

The addition disallowing electricity/power and fuel expenses is deleted and the appeal is allowed.

Final Conclusion: The Tribunal allowed the assessee's appeal for AY 2013 14 (Financial Year 2012 13), deleted the addition made in respect of electricity/power and fuel expenses, and directed relief to the assessee.

Reopening of assessment as valid where income has escaped assessment - taxability on transfer by development agreement under transfer principles including possession and operation of deemed transfer - deemed sale consideration to be the cost of construction (including parking) received in consideration for land - allowability of conversion and property taxes as part of cost of construction - apportionment of common deviation charges in proportion to land-owner's share - exemption under section 54F and the bar where assessee owns other house yielding income from house property - recomputation of interest consequential to revised tax computation

Reopening of assessment as valid where income has escaped assessment - Validity of notice issued under reassessment proceedings and reopening of assessment - HELD THAT: - The assessee failed to respond to notices and had not filed return for the year in which capital gains arose. The Assessing Officer, after requisite internal permission, concluded that income had escaped assessment and issued notice. The Tribunal found no infirmity in the reopening of assessment proceedings and held the reassessment valid in law. [Paras 6]

Reopening of assessment upheld; ground seeking quashing of proceedings dismissed.

Taxability on transfer by development agreement under transfer principles including possession and operation of deemed transfer - Year of chargeability of capital gains arising from development agreement and supplementary deed - HELD THAT: - The original development agreement executed on 14/03/2016 granted possession to the developer and the supplementary deed of 18/05/2016 only extended the original agreement by adding additional area. Since possession had been handed over pursuant to the original agreement, the Tribunal held that the transaction was chargeable to tax in AY 2016-17 and not AY 2017-18. [Paras 7]

Capital gains chargeable in AY 2016-17; grounds contesting year of taxability dismissed.

Deemed sale consideration to be the cost of construction (including parking) received in consideration for land - Appropriate measure of consideration for relinquishment of land to developer for computing capital gains - HELD THAT: - The consideration for the part-conveyance of land was the receipt of super built-up area including parking. Neither party disputed the AO's per-square-yard valuation. The Tribunal directed that the deemed sale consideration for computation of capital gains shall be the cost of construction of super built-up area including parking as adopted by the AO and directed recomputation on that basis. [Paras 9]

Consideration determined as cost of construction including parking; matter remitted to AO for recomputation adopting that deemed sale consideration.

Allowability of conversion and property taxes as part of cost of construction - apportionment of common deviation charges in proportion to land-owner's share - Allowability and quantum of expenses (NALA conversion charges, property tax, deviation charges) as deduction from capital gains - HELD THAT: - Documentary evidence showed the assessee paid NALA conversion charges and property tax; the Tribunal accepted these as qualifying for inclusion in cost of construction and directed the AO to allow them. Deviation charges (a fine for building setback) were incurred for the entire building; the Tribunal held they are not exclusively attributable to the assessee and directed apportionment in accordance with the land-share ratio (46%), directing the AO to allow 46% of the deviation charges as deduction. [Paras 11]

NALA charges and property tax allowed as deduction; deviation charges allowed only to the extent of 46% of the total; ground partly allowed.

Exemption under section 54F and the bar where assessee owns other house yielding income from house property - Claim for exemption under section 54F and verification of eligibility concerning ownership of other residential house - HELD THAT: - Assessee claimed exemption treating the entire built-up area as a single residential unit. The Tribunal held the built-up area could not be treated as one unit as claimed and directed the Assessing Officer to verify whether the assessee owns any other house the income of which is chargeable under the head 'Income from house property'. The AO was directed to afford the assessee a reasonable opportunity of being heard and to allow deduction under section 54F in accordance with law based on that verification. [Paras 12]

Claim under section 54F remitted for verification by the AO; deduction to be allowed in accordance with law after enquiry.

Recomputation of interest consequential to revised tax computation - Validity and computation of interest under sections relating to delayed payment as consequential to tax recomputation - HELD THAT: - Interest charged under the relevant provisions is consequential upon the tax computation. The Tribunal directed the AO to recompute interest in accordance with the directions given in the order following recomputation of income and tax. [Paras 13]

Interest to be recomputed by the AO consequentially.

Final Conclusion: The appeal is partly allowed for statistical purposes: reopening of assessment upheld; capital gains held chargeable in AY 2016-17; deemed sale consideration fixed as cost of construction including parking and case remitted for recomputation by the AO; conversion and property taxes allowed, deviation charges allowed at 46%, section 54F eligibility remitted for verification, and interest to be recomputed consequentially.

Section 56(2)(viib) - valuation of shares / fair market value - Discounted Cash Flow method - intrinsic / net book value - excess share premium taxable - burden of substantiation for valuation

Section 56(2)(viib) - Discounted Cash Flow method - intrinsic / net book value - burden of substantiation for valuation - excess share premium taxable - Validity of addition made under Section 56(2)(viib) on account of share premium where assessee adopted DCF valuation substantially higher than book value - HELD THAT: - The Tribunal upheld the approach of the lower authorities in treating premium in excess of the face value as taxable under Section 56(2)(viib) because the discounted cash flow (DCF) valuations furnished by the assessee were not substantiated by reasonable estimations or independent verification. The valuer had primarily adopted management projections without adequate justification and there were significant and unexplained variances between two valuation reports, rendering the forecasts unreliable. The Assessing Officer's computation of intrinsic/net book value under the relevant rule produced a per-share value materially lower than the DCF figures; since the assessee failed to establish the reasonableness of the higher valuation, the excess premium could properly be brought to tax. The Tribunal further recognised that DCF is an acceptable method but stressed that its application requires reasonable assumptions and corroboration, which were absent in this case; hence the CIT(A)'s partial allowance (accepting that shares cannot be valued below face value but sustaining taxation of unsubstantiated premium) was correct and sustainable. [Paras 2, 3, 4]

Addition under Section 56(2)(viib) upheld; appeals dismissed.

Final Conclusion: The Tribunal dismissed both cross-appeals and upheld the taxation of the unsubstantiated excess share premium received by the assessee for AY 2015-16, holding that DCF valuation was unreliable in the absence of reasonable, corroborated projections.

Moratorium under the Insolvency and Bankruptcy Code - prohibition on institution or continuation of proceedings against the corporate debtor - overriding effect of the Code - maintainability of appeals during corporate insolvency resolution process - necessity to implead Interim Resolution Professional and replacement of management during CIRP

Moratorium under the Insolvency and Bankruptcy Code - prohibition on institution or continuation of proceedings against the corporate debtor - overriding effect of the Code - maintainability of appeals during corporate insolvency resolution process - Continuation or prosecution of appeal against the corporate debtor during the moratorium period is prohibited and therefore not maintainable. - HELD THAT: - The Tribunal held that once the Corporate Insolvency Resolution Process was admitted and moratorium under the Code commenced, institution or continuation of proceedings against the corporate debtor is prohibited. The Tribunal relied on the Supreme Court and High Court authorities upholding the non-obstante and overriding effect of the Code and the scope of section 14(1)(a) which bars continuation of suits or proceedings during moratorium. Applying those principles, the cross-appeals before the Tribunal were treated as continuation of proceedings against the corporate debtor and thus fell within the prohibition; the appeals could be revived only subject to further orders of the NCLT or upon completion/cessation of the moratorium as indicated in the authorities cited. [Paras 4, 5, 6, 8]

Cross-appeals are not maintainable during the moratorium and are dismissed with liberty to revive after moratorium subject to NCLT orders.

Necessity to implead Interim Resolution Professional and replacement of management during CIRP - maintainability of appeals during corporate insolvency resolution process - Appeals filed by the erstwhile managing director without impleading the Interim Resolution Professional after commencement of CIRP are not maintainable. - HELD THAT: - The Tribunal found that after initiation of CIRP the powers of the erstwhile management (including the Managing Director who filed the appeals) become functus officio and litigation involving the corporate debtor must be pursued by the Interim Resolution Professional appointed by the NCLT. Because the IRP was not impleaded by filing a revised authorized representation, the appeals in their present form were not maintainable. The Tribunal therefore dismissed the appeals in that form while granting liberty to the parties to seek recall or revival by impleading the appropriate representative or upon completion/cessation of the moratorium. [Paras 7, 8]

Appeals filed by the erstwhile management without impleading the IRP are not maintainable and are dismissed with liberty to revive on proper impleadment or on cessation of moratorium.

Final Conclusion: Cross-appeals dismissed for want of maintainability: continuation of proceedings against the corporate debtor during the moratorium is prohibited and the appeals filed by the erstwhile management without impleading the Interim Resolution Professional cannot be maintained; liberty granted to revive or seek recall after cessation of moratorium or on impleadment as appropriate.

Unexplained cash credits u/s 68 - onus of proof under section 68 - entries in books of account as admissible evidence - presumption under section 292C - CFSL forensic electronic evidence and reliability of computer logs - legal tender status and RBI Notification S.O.3407(E) (demonetisation) - voidness/illegality of contracts defeating public policy - retraction of statements and evidentiary value - confession recorded in police custody and section 26 of the Evidence Act

Unexplained cash credits u/s 68 - onus of proof under section 68 - entries in books of account as admissible evidence - presumption under section 292C - Validity of additions made by Assessing Officer treating cash deposits as unexplained credits under section 68 - HELD THAT: - The Tribunal upheld the Assessing Officer's finding that cash credits aggregating to the amounts added were unexplained. The assessee had book entries showing advance receipts from purported customers, seizure of invoices and KYC documents at survey, and admitted statements and affidavit under PMGKY; CFSL report negated the claim that receipts were generated on the night of 08-11-2016. Onus under section 68 lay on the assessee to prove identity, genuineness and creditworthiness; the assessee failed to discharge this burden. The Tribunal relied on the entries in books (section 34/Evidence Act and section 292C presumptions) and contemporaneous documentary and forensic evidence to sustain the addition and restored the AO's assessment in respect of the unexplained credits.

Addition under section 68 upheld and AO's assessment restored; appeals of assessees dismissed and Revenue appeals allowed.

CFSL forensic electronic evidence and reliability of computer logs - entries in books of account as admissible evidence - Evidentiary weight of CFSL report and computer records vis-a -vis assessee's oral explanations - HELD THAT: - The Tribunal accepted the CFSL findings that the impounded systems did not record activity on 08-09.11.2016, undermining the assessee's claim that cash-receipt vouchers were generated on those dates. The court held that book entries and seized invoices, corroborated by forensic evidence and other investigative material (including KYC/receipts and neighbour statements), could not be displaced by later inconsistent oral assertions. Therefore the electronic forensic evidence and contemporaneous book records were treated as strong corroboration of the AO's conclusions.

CFSL and documentary evidence accepted as convincing; assessee's contrary oral assertions rejected.

Confession recorded in police custody and section 26 of the Evidence Act - retraction of statements and evidentiary value - Reliability and admissibility of confession/statements recorded by police/ED and value of the letter dated 17.01.2017 as retraction - HELD THAT: - The Tribunal held that confessional statements made to police while in custody are not admissible against the declarant under section 26 of the Evidence Act and thus cannot form the basis to negate other evidence. The purported retraction/confessional letter relied upon by the assessee was not addressed to revenue authorities, was not made within a reasonable time before the AO or investigating wing, and was inconsistent with earlier admissions (including PMGKY affidavit and deposit of tax). Consequently, the Tribunal found the alleged retraction to be afterthought and insufficient to discharge the assessee's burden.

Police confessions in custody not admissible to supplant other evidence; the claimed retraction was not accepted as displacing earlier admissions.

Legal tender status and RBI Notification S.O.3407(E) (demonetisation) - voidness/illegality of contracts defeating public policy - Effect of demonetisation and RBI Notification on acceptance of SBNs and on the character of alleged sale transactions - HELD THAT: - The Tribunal analysed the Notification and related statutory scheme and concluded that specified bank notes ceased to be legal tender from 09.11.2016 except as permitted by the Notification (including deposit/exchange procedures). The facts showed no genuine sale contract subsisting on 08.11.2016 (no stock, no definite terms), and receipts were found to have been generated after the notification. The Tribunal found the assessee's conduct - routing SBNs into its account and using the funds to procure bullion - to be contrary to the regulatory scheme and to public policy, undermining the claim that these were bona fide sale advances. That illegality fortified the characterisation of the credits as unexplained for tax purposes.

Acceptance/deposit of SBNs post-notification in the circumstances negated the claim of valid prior sale; such receipts treated as unexplained credits taxable in assessee's hands.

Unexplained cash credits u/s 68 - onus of proof under section 68 - entries in books of account as admissible evidence - Whether ld. CIT(A) correctly deleted part of the addition (Rs.28.37 crores) based on third party statements - HELD THAT: - The Tribunal found the CIT(A)'s deletion to be erroneous. The CIT(A) relied upon certain third party statements and alleged lack of AO enquiries; however the AO had documentary and forensic material, seized invoices/KYC and contemporaneous statements corroborating the book entries. The police/ED confessional statements invoked by CIT(A) were either inadmissible (if in custody) or inconsistent with the evidence before the AO. The Tribunal held there was no requirement that the AO re examine third parties where the assessee had not discharged its primary burden and where independent incriminating evidence existed. On this basis the CIT(A)'s deletion was set aside.

CIT(A)'s deletion of the part addition was set aside; AO's addition in full restored.

Final Conclusion: The Tribunal restored the Assessing Officer's additions treating the cash deposits as unexplained credits under section 68 for A.Y. 2017-18, rejecting the assessee's reliance on subsequent retractions and third party custodial confessions, accepting CFSL and documentary evidence and holding that the assessee failed to discharge the onus; the appeals of the assessees were dismissed and the Revenue appeals allowed.

Detention of goods - Country of Origin Certificate - investigation by DRI - no objection to release - petition rendered infructuous

Detention of goods - Country of Origin Certificate - no objection to release - Whether the petition challenging detention of the consignments should be adjudicated or disposed of in view of the respondent authority's communication that the Country of Origin Certificate is genuine and that there is no objection by DRI to release the goods. - HELD THAT: - The Court recorded the respondent's communication that, following enquiries and receipt of documents on 14.12.2022, the Country of Origin Certificate for the consignments appears genuine and DRI has no objection to release of the detained goods. In view of the respondent authority's position that no further evidence exists to justify continued detention and its consent to release the consignments subject to the Court's decision, there remained no unresolved adjudicatory controversy requiring the Court's determination on the merits. Accordingly, continued adjudication was unnecessary and the petition became infructuous. [Paras 5]

Petition disposed of as having become infructuous in view of respondent/DRI's communication that the Country of Origin Certificate is genuine and there is no objection to release of the detained goods.

Final Conclusion: The petition under Article 226 is disposed of as infructuous since the respondent/DRI, after receipt of documents, indicated the Country of Origin Certificate is genuine and raised no objection to release of the detained consignments; no further adjudication was required.

Regulation 17 procedure for revocation of customs broker licence - Limitation period under Regulation 17 of CBLR Regulations - Circular No.9/2010 paragraph 7.1 nine months overall time limit - Computation of limitation using date of suspension when date of offence report is unavailable - Mandatory nature of statutory time-limits

Regulation 17 procedure for revocation of customs broker licence - Limitation period under Regulation 17 of CBLR Regulations - Circular No.9/2010 paragraph 7.1 nine months overall time limit - Computation of limitation using date of suspension when date of offence report is unavailable - Mandatory nature of statutory time-limits - Impugned revocation order dated 21.10.2019 was barred by limitation and liable to be set aside. - HELD THAT: - The Court analysed the staged procedure under Regulation 17 of the CBLR Regulations which prescribes time-limits for (i) issuance of notice within 90 days of receipt of the offence report, (ii) enquiry and submission of the enquiry report within 90 days from the date of issue of the notice, and (iii) decision by the Principal Commissioner within 90 days from submission of the enquiry report. The enquiry report in this case was dated 28.02.2019; the time-limit for deciding under Regulation 17(7) therefore expired on 27.05.2019, whereas the personal hearing was fixed on 20.09.2019 and the impugned order was passed on 21.10.2019, both beyond the Regulation 17 timeline. Independently, Circular No.9/2010 (para 7.1) prescribes an overall time-limit of nine months from the date of receipt of the offence report for completion of suspension/revocation proceedings. Since the date of the offence report was not on record, the Court applied the established practice (A.M.Ahamed & Co. v. Commissioner of Customs (Imports), Chennai) of adopting the date of suspension as the legally appropriate substitute; the suspension date here was 20.09.2018, and nine months from that date expired on 19.06.2019. The impugned order dated 21.10.2019 was thus barred by the nine month limit as well. The Court rejected the contention that delay attributable to the broker could extend or cure non-compliance with the prescribed timelines, holding that the statutory and circular time-limits must be observed even in the absence of co-operation by the noticee. Finally, relying on binding authority of this Court (Santon Shipping Services) that such limitation periods are mandatory and not merely directory, the Court held that the delay was fatal to the impugned order and set it aside. [Paras 16, 18, 20, 21, 24]

Impugned order dated 21.10.2019 is barred by limitation under Regulation 17 and Circular No.9/2010 (para 7.1) and is set aside; writ petition allowed.

Final Conclusion: The revocation order passed on 21.10.2019 was held time barred under the prescribed Regulation 17 timelines and the nine month limit in Circular No.9/2010 (para 7.1); the impugned order is quashed and the writ petition is allowed, with no costs.

Manipulation of test reports - classification of petroleum product as Superior Kerosene Oil (SKO) versus Industrial Composite Mixture Plus (ICMP) - obligations of a customs broker under Regulation 10 of CBLR, 2018 - standard of proof required to sustain disciplinary action against a customs broker

Manipulation of test reports - classification of petroleum product as Superior Kerosene Oil (SKO) versus Industrial Composite Mixture Plus (ICMP) - standard of proof required to sustain disciplinary action against a customs broker - Sustainability of the adjudicating authority's order confirming charges, suspending the broker's licence and proposing forfeiture/penalty based on alleged manipulation of laboratory test reports and misclassification of imported goods. - HELD THAT: - The tribunal examined the fundamental charge that the appellant induced or procured officers of the Kandla customs laboratory to alter the reported final boiling point so that goods declared as ICMP would not be classified as SKO (a restricted item). The adjudicating order rests on the alleged manipulation of the final boiling point. The tribunal noted that, as per the reproduced CRCL (Delhi) test parameters, the maximum final boiling point for SKO is 300 C, and a lower reported final boiling point (for example below 240 C) would not remove an item from the SKO specification; indeed, reporting a lower final boiling point is consistent with SKO characteristics. The impugned order fails to explain this fundamentally inconsistent premise-how reducing the final boiling point to below 240 C would serve the objective of taking the goods out of the SKO description. Because the charges, findings and consequential disciplinary measures flow from that unexplained and self-contradictory foundation, the tribunal concluded that the adjudicating authority's reasoning is incomplete and cannot be sustained without clarifying and reconciling the dichotomy in the factual/legal premise underlying the charges. The matter must therefore be re-examined by the original authority after affording the appellant an opportunity to be heard and to meet the allegations on a coherent factual and legal basis. [Paras 4, 5]

Impugned order set aside and matter remanded to the original adjudicating authority for fresh decision after giving the appellant an opportunity to defend; appeal allowed by way of remand.

Final Conclusion: The tribunal allowed the appeal by setting aside the impugned order and remanding the matter to the original adjudicating authority for fresh adjudication after affording the appellant an opportunity to be heard, because the foundational charge regarding manipulation of the laboratory test report was based on an unexplained and self-contradictory premise.

Intervention - extension of bank guarantee - invocation and encashment of bank guarantee - permission to terminate facility agreement - liberty to approach the adjudicating authority for claim adjudication - applications dismissed as infructuous - condonation of delay in refiling - continuation of interim order - listing and case management directions

Intervention - Permission to intervene granted to certain applicants - HELD THAT: - The Tribunal allowed intervention applications by Kudremukh Iron Ore Company Employees Provident Fund Trust, Kandla Special Economic Zone, and East India Udyog Limited, permitting each to be joined in the appeal for the reasons stated in their respective applications and recorded by the Tribunal. Intervention was granted as a procedural relief to enable participation in the proceedings. [Paras 2, 14, 19]

I.A. No. 735 of 2019, I.A. No. 336 of 2022 and I.A. No. 1745 of 2022 are allowed insofar as intervention is sought.

Permission to terminate facility agreement - Permission to terminate facility and derivative agreements by a secured creditor - HELD THAT: - Central Bank of India sought directions permitting termination of its Facility Agreement and Derivative Deals entered with RMGSL and clarification that prior Tribunal orders do not restrict such termination. IL&FS did not oppose the prayers. In these circumstances the Tribunal allowed the prayers and granted the requested liberty to terminate the facility agreement. [Paras 5]

I.A. No. 2074-2075 of 2020 are allowed to the extent prayed.

Extension of bank guarantee - invocation and encashment of bank guarantee - Direction to extend validity of bank guarantees for a limited period; invocation not permitted at present - HELD THAT: - Applications by National Highway Infrastructure Development Corporation Limited and National Highway Authority of India sought invocation/encashment or extension of bank guarantees. The Tribunal observed that invocation was prohibited by its earlier orders, but directed the concerned banks to extend the validity of the bank guarantees for six months from the date of the order. The prayer for encashment was declined insofar as it conflicted with the existing orders of the Tribunal. [Paras 6, 7, 21]

I.A. No. 1796 of 2020 and I.A. No. 1628 of 2020 disposed of by directing six month extension of the bank guarantees; encashment prayer not accepted as on date.

Liberty to approach the adjudicating authority for claim adjudication - Claimants given liberty to seek adjudication before the Adjudicating Authority - HELD THAT: - Applicants who complained of rejection or referral of their claims by the Claims Management Advisor were permitted to file applications before the Adjudicating Authority for adjudication of their claims. The Tribunal declined to adjudicate those claims in the instant proceedings and afforded the parties the procedural remedy of approaching the competent forum for determination in accordance with law. [Paras 9, 17]

I.A. No. 2104 of 2021 and I.A. No. 706 of 2022 disposed of by granting liberty to file before the Adjudicating Authority.

Applications dismissed as infructuous - Certain interlocutory applications dismissed as infructuous - HELD THAT: - Multiple interim applications which had been rendered otiose by prior orders or by the listing of related matters were held to be infructuous and dismissed. The Tribunal identified those applications and disposed of them on that basis without further adjudication on their substantive merits. [Paras 10, 11, 12, 15, 16]

I.A. No. 2412 of 2021, I.A. No. 2903 of 2021, I.A. No. 2404 of 2021, I.A. No. 345 of 2022 and I.A. No. 430 of 2022 are dismissed as infructuous.

Condonation of delay in refiling - Refiling delay condoned in specified application - HELD THAT: - An application seeking condonation of 49 days' delay in refiling was considered and the Tribunal found sufficient cause to condone the delay. The related application which was the subject of the refiling was directed to be listed on the next specified date. [Paras 13]

I.A. No. 785 of 2021: refiling delay condoned; I.A. No. 786 of 2021 disposed of.

Continuation of interim order - Interim order in a related appeal to continue - HELD THAT: - On request, the Tribunal listed a pending I.A. along with a connected Company Appeal and ordered that the interim order previously passed in that Company Appeal shall continue until further orders, thereby preserving the status quo in respect of that appeal. [Paras 4, 22]

I.A. No. 2966 of 2020 listed with C.A.(AT) No. 177 of 2022; interim order in Company Appeal (AT) No. 177 of 2022 to continue. I.A. No. 557 of 2022 listed and interim order to continue.

Listing and case management directions - Comprehensive listing and case management directions issued - HELD THAT: - The Tribunal directed extensive case management steps: a list of numerous I.As to be placed on specified dates; counsel for IL&FS to prepare a year wise chart of pending applications; parties to serve outstanding applications on IL&FS and Union of India within two weeks; and timelines for filing replies and rejoinders were fixed. These directions are intended to streamline the remaining interlocutory matters. [Paras 26, 27, 28, 29, 30]

All listed applications to be placed on 19th and 20th January, 2023 at 2:00 PM with timelines and case management steps as recorded.

Final Conclusion: The Tribunal disposed of multiple interlocutory applications by granting interventions where appropriate, directing six month extensions of certain bank guarantees while declining encashment presently, permitting a creditor to terminate specified facility agreements, condoning a refiling delay, continuing specified interim orders, dismissing several applications as infructuous, granting liberty to claimants to seek adjudication before the Adjudicating Authority, and issuing case management and listing directions for remaining I.As to be taken on 19th-20th January, 2023.

Impleadment of creditors in CIRP proceedings - Necessary and proper party - Scope of interlocutory relief - Fraud allegation in insolvency proceedings - Right to pursue alternative legal remedies

Impleadment of creditors in CIRP proceedings - Necessary and proper party - Fraud allegation in insolvency proceedings - Scope of interlocutory relief - Right to pursue alternative legal remedies - Whether Vitol S.A. could be impleaded as a party in the Liquidator's application and be treated as a necessary or proper party in the CIRP-related proceedings. - HELD THAT: - The Appellate Tribunal agreed with the Adjudicating Authority's conclusion that the Insolvency and Bankruptcy Code, 2016 contains no provision permitting impleadment of an operational creditor other than the creditor who triggers the CIRP. The Tribunal noted the appellant's assertions of fraud (including prior arbitral findings and a forensic report) but found those contentions insufficient to override the absence of a statutory mechanism for impleadment at this stage. The Tribunal observed that the execution of the arbitral award relied upon by the appellant is the subject of a pending appeal before the Supreme Court, and held that the appellant remains at liberty to pursue other legal remedies outside the present liquidator's application. On this basis, the Tribunal declined to entertain the impleadment application and did not consider it necessary to examine the extensive authorities and submissions on fraud and forgery. [Paras 7, 8]

Appeal dismissed; impleadment refused for want of statutory provision, appellant free to pursue other remedies.

Final Conclusion: The Tribunal dismissed the appeal and upheld the Adjudicating Authority's refusal to permit impleadment of Vitol S.A., holding that the Code does not provide for impleading creditors other than those who initiate CIRP; the appellant may pursue other available remedies.

Health care services exemption under Notification No. 25/2012 - taxability of cosmetic and plastic surgery services - clinical establishment - extended period of limitation - penalty for suppression and penalty for late filing

Health care services exemption under Notification No. 25/2012 - clinical establishment - Services for Melasma and Birth Mark treatment provided by the assessee fall within exempted health care services under Notification No. 25/2012 and are not taxable as cosmetic or plastic surgery. - HELD THAT: - The Tribunal accepted that the appellant operates as a clinical establishment staffed by qualified dermatologists and that the processes for Melasma and Birth Mark treatment involve diagnosis and treatment of skin disorders (including use of topical agents and Q-switched Nd:YAG laser) directed at underlying pathological conditions rather than merely aesthetic enhancement. Applying the definition of health care services exemption under Notification No. 25/2012, the Tribunal held these activities to be predominantly healthcare in nature and therefore exempt both before and after 01.07.2012. [Paras 13, 15]

Melasma and Birth Mark treatments are exempt health care services under Notification No. 25/2012 and not taxable as cosmetic or plastic surgery.

Taxability of cosmetic and plastic surgery services - Hypertrichosis treatment and Hair Laser Comb treatment are taxable as services in relation to cosmetic and plastic surgery. - HELD THAT: - On the facts, the Tribunal found that these specific services are predominantly cosmetic in character and fall within the taxable category of cosmetic and plastic surgery. The appellant conceded hypertrichosis, and the Tribunal concluded that both hypertrichosis treatment and Hair Laser Comb treatment do not qualify for exemption under the health-care notification and are liable to service tax for the normal period applicable, with interest. [Paras 13, 15]

Hypertrichosis treatment and Hair Laser Comb treatment are taxable as cosmetic and plastic surgery services; service tax and interest are payable for the normal period.

Extended period of limitation - The extended period of limitation is not invocable against the assessee. - HELD THAT: - The Tribunal observed that the assessee maintained proper books and records, was registered and making regular compliances, had reasonable explanation for delayed filing (staff unavailability), and had deposited admitted taxes and filed pending returns during investigation. The demand arose from the assessee's own records and therefore the conditions for invoking the extended period of limitation were not satisfied in the facts of the case. [Paras 14, 15]

Extended period of limitation is not invocable and cannot be applied to the demand in this case.

Penalty for suppression and penalty for late filing - Penalty under Section 78 for suppression is set aside; penalty under Section 77 for late filing is upheld. - HELD THAT: - The Tribunal found no evidence of suppression with mala fide intent to evade tax and accordingly set aside the penalty imposed under Section 78. However, the Tribunal upheld the penalty imposed under Section 77 for late filing of ST-3 returns, concluding that the procedural default attracting Section 77 liability remained. [Paras 15]

Penalty under Section 78 is quashed for lack of suppression with mala fide intent; penalty under Section 77 for late filing is upheld.

Final Conclusion: Revenue's appeal dismissed; Melasma and Birth Mark treatments held exempt as health care services, Hypertrichosis and Hair Laser Comb treatments held taxable as cosmetic/plastic surgery with service tax and interest for the normal period, extended limitation not invocable, penalty under Section 78 set aside and penalty under Section 77 sustained.

Voluntary Compliance Encouragement Scheme (VCES) - completion and immunity upon issuance of Form VCES-3 - Effect of acknowledgment in VCES (VCES-2) and Revenue's duty to reject declaration within prescribed procedure - Section 111 notice required to reopen VCES declaration where declaration is alleged to be false - Ineligibility for VCES where an audit or inquiry has been initiated (VCES exclusions) - Benefit of payment prior to issuance of show cause notice under Section 73(3) of the Finance Act, 1994 - Proviso to Section 73(1) - extended period recovery where suppression discovered by audit

Voluntary Compliance Encouragement Scheme (VCES) - completion and immunity upon issuance of Form VCES-3 - Section 108 immunity and conclusiveness under VCES upon issuance of acknowledgement of discharge - Section 111 notice required to reopen VCES declaration - Whether the departmental demand and penalties could be sustained in respect of the period covered by the appellant's VCES declaration when VCES-3 had not been issued by the designated authority but VCES-1 was filed, VCES-2 acknowledged and payment intimated. - HELD THAT: - The Tribunal found that once the declarant filed VCES-1 and received VCES-2, and thereafter made the declared payment and intimated the designated authority, the appellants acted in accordance with the statutory scheme. The Revenue had not rejected the declaration nor issued any notice under Section 111 disputing the declaration. The scheme envisages that the designated authority must either reject the declaration (for reasons recorded) or proceed to issue discharge in VCES-3; failure by the Department to initiate rejection or Section 111 proceedings means the declarant cannot be penalised on the basis that VCES-3 was not issued. The Tribunal relied on the procedural safeguards and Board guidance that rejection must be communicated (including time limits), and held that absence of any notice of rejection or any Section 111 action precluded reopening the admitted liability covered by the VCES declaration. [Paras 4]

Demand and penalties insofar as they related to the period covered by the VCES declaration could not be sustained in the absence of departmental rejection or a Section 111 notice; the appellants could not be faulted for non-issuance of VCES-3 by the Department.

Ineligibility for VCES where an audit or inquiry has been initiated (VCES exclusions) - Proviso to Section 73(1) - extended period recovery where suppression discovered by audit - Whether the Revenue was entitled to invoke extended period of limitation and impose penalty on the ground that audit had been initiated and suppression was thereby detected. - HELD THAT: - The Tribunal examined the Revenue's assertion that audit initiation made the appellants ineligible for VCES and justified extended-period demand and penalty. It observed that the Revenue did not show that the VCES declaration had been rejected or that proceedings under Section 111 had been taken; mere initiation of audit, without following the scheme's rejection procedure, did not permit the Department to treat the VCES process as incomplete and then proceed to impose extended-period demand and penalty. The Tribunal noted that extended-period invocation and penalty for suppression require the Department to establish the statutory prerequisites; here the procedural steps contemplated by the VCES provisions and Section 111 were not followed by the Revenue. [Paras 4]

Extended-period demand and penalties based on the Revenue's contention of audit-initiated suppression could not be sustained where the Department had not acted to reject the VCES declaration or issued requisite notices under the VCES provisions.

Benefit of payment prior to issuance of show cause notice under Section 73(3) of the Finance Act, 1994 - Whether the appellants were entitled to the benefit of Section 73(3) (i.e., no notice to be issued where tax has been paid before notice) in respect of the period January 2013 to March 2013 for which tax and interest were paid before issuance of the show cause notice. - HELD THAT: - The Tribunal held that the appellants had paid the tax (and interest) for January-March 2013 prior to issuance of the departmental show cause notice. In such circumstances Section 73(3) precludes issuance of a notice demanding the same tax and therefore the proceedings in respect of that period could not be sustained. The adjudicatory authorities should have recognised and applied Section 73(3) to the payments made before the show cause notice. [Paras 4]

Proceedings in respect of January 2013 to March 2013 were unsustainable as the tax (with interest) had been paid prior to the issuance of the show cause notice and the benefit of Section 73(3) applied.

Final Conclusion: The appeal is allowed. The departmental demand and penalties relating to the period covered by the VCES declaration cannot be sustained in the absence of rejection of the declaration or issuance of a Section 111 notice, and the demand for January-March 2013 is untenable as tax and interest were paid before issuance of the show cause notice; the impugned order is set aside.

Excisability of by-product, waste or scrap - marketability test for excise duty - twin tests under Section 2(d) and Section 2(f) to be satisfied conjunctively - binding precedent of the Hon'ble Supreme Court - perverse order vitiated by error of law apparent on the face of the record

Excisability of by-product, waste or scrap - marketability test for excise duty - twin tests under Section 2(d) and Section 2(f) to be satisfied conjunctively - binding precedent of the Hon'ble Supreme Court - Dutiability of aluminium dross and skimming arising during manufacture after 10th May 2008 - HELD THAT: - The Tribunal's Larger Bench had held that aluminium dross and skimming were excisable after the amendment inserting the Explanation deeming marketable goods as 'goods'. The Tribunal's conclusion was examined in light of the decision of the Bombay High Court in Hindalco Industries Ltd, which held that the conditions under Section 2(d) and Section 2(f) must be satisfied conjunctively and that the Tribunal's approach disregarded binding Supreme Court precedents. The High Court found the Tribunal's reasoning - treating by-products/waste as necessarily excisable because they are marketable or referred to in the Tariff - to be contrary to the Supreme Court's twin-test jurisprudence. The High Court's conclusion was thereafter affirmed by the Supreme Court, leaving no substantive controversy for the Revenue to advance. Applying those authoritative decisions, the Tribunal's conclusion that the impugned goods were liable to excise duty post-amendment was held not to survive. [Paras 4]

Aluminium dross and skimming arising in the course of manufacture are not taxable as excisable goods under the impugned reasoning; the Tribunal's contrary conclusion is inconsistent with binding Supreme Court authority.

Perverse order vitiated by error of law apparent on the face of the record - binding precedent of the Hon'ble Supreme Court - Validity of the recovery and penalty orders issued for the specified periods - HELD THAT: - In view of the High Court's decision in Hindalco (affirmed by the Supreme Court), the impugned recovery and penalty orders, which proceeded on the basis that the aluminium dross and skimming were excisable, do not survive. The appellate tribunal recorded that the impugned orders were rendered perverse and vitiated by an error of law apparent on the face of the record because they disregarded the binding precedents. Having regard to the authoritative pronouncements, the recovery, interest and penalty demands challenged in these appeals were set aside. [Paras 5]

The impugned orders of demand, interest and penalties for the stated periods are quashed and set aside; the appeals are allowed.

Final Conclusion: The appeals are allowed; impugned orders of demand, interest and penalties premised on the excisability of aluminium dross and skimming are quashed and set aside in view of the Bombay High Court decision (affirmed by the Supreme Court) applying the conjunctive twin-test for excisability.

Remand of appeals - appellate court as last fact finding authority - power to determine appeal finally where evidence on record is sufficient - Order 41 Rules 23, 23 A, 24 and 25 CPC - framing of point(s) for determination under Rule 63(5) U.P. Value Added Tax Rules - prohibition against routine remand

Remand of appeals - appellate court as last fact finding authority - power to determine appeal finally where evidence on record is sufficient - prohibition against routine remand - Whether the Tribunal erred in remanding the matter to the assessing authority despite all material being on record and thus failed to decide the appeal finally on merits. - HELD THAT: - The Court examined the scope of remand under Order 41 Rules 23, 23 A, 24 and 25 CPC and held that remand is permissible only within those contours. Rule 24 empowers an appellate court to determine the matter finally where evidence on record is sufficient; Rules 23/23 A/25 permit remand when the trial court has omitted to try or determine issues essential to the decision. The Tribunal, while being the last fact finding authority in the tax appeal, set aside the assessment and the first appeal and remanded the matter to the assessing authority merely by directing production of documents which, as found by this Court, were already on record and had been placed before the assessing authority. The Tribunal did not record a finding that an essential issue had been omitted by the assessing authority such as would warrant remand under Order 41. The practice of routine remand without applying the stated principles was criticised as prolonging litigation and contrary to the Tribunal's duty to decide on merits when material is available. For these reasons the Tribunal's remand was held to be unjustified and its order set aside. [Paras 23, 24, 25, 30, 31]

Tribunal erred in remanding the matter back to the assessing authority when all relevant material was on record; its order dated 08.08.2022 is set aside and the matter is remitted to the Tribunal to decide the appeals on the material available.

Framing of point(s) for determination under Rule 63(5) U.P. Value Added Tax Rules - appellate court as last fact finding authority - Whether the Tribunal complied with sub rule (5) of Rule 63 of the U.P. Value Added Tax Rules in framing points for determination and giving reasons while deciding the appeal. - HELD THAT: - Sub rule (5) of Rule 63 requires the appellate authority or Tribunal to state the point(s) for determination, the decision thereon and reasons. The Court found that the Tribunal failed to frame the mandated point(s) for determination and did not adjudicate them, instead remanding the matter for production/consideration of documents. That failure to frame and decide points deprived the parties of a reasoned appellate determination and contributed to an improper remand. The Court directed adherence to Rule 63(5) and required the Tribunal to decide the appeals in accordance with law on the material before it. [Paras 19, 26, 31]

Tribunal did not comply with Rule 63(5) by failing to frame points for determination and give reasons; the deficiency contributed to the improper remand and the Tribunal is directed to decide the appeals in accordance with law.

Final Conclusion: The Tribunal's order dated 08.08.2022 is set aside; the matter is remitted to the Tribunal to decide both second appeals on the material already on record in accordance with law, expeditiously. Both revisions are partly allowed and the question of law is decided in favour of the assessee and against the revenue.