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Case Laws GST
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School affiliation services fall outside educational exemption without a direct nexus to admissions or examination conduct.
Consolidated show cause notices may combine financial years governed by Sections 73 and 74 where liabilities are segregated period-wise, each component independently meets limitation and notice requirements, the additional ingredients for fraud-based proceedings are satisfied, and no actual prejudice arises. School affiliation and affiliation-form processing charges are independent taxable supplies where they concern institutional eligibility and compliance, rather than directly and immediately relating to student admission or the conduct of examinations. A broad connection with education does not satisfy the educational-services exemption.
Case Laws GST
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Fraudulent input tax credit requires proof of fictitious supplies, absent goods receipt, and fraud-linked self-assessment, not cancellation alone.
Input tax credit from allegedly non-existent suppliers depends on proof of genuine supply and actual receipt of goods or services, not merely invoices, accounting entries, or banking-channel payments. Section 155 places the burden of establishing ITC eligibility on the claimant. Section 74 requires more than ineligible credit: the wrongful availment must be linked to fraud, wilful misstatement, or suppression to evade tax. Retrospective supplier-registration cancellation is relevant evidence but is not conclusive. A fraud-based notice must disclose facts showing fictitious suppliers, absence of supply, and a basis for inferring the recipient's knowledge or participation.
Case Laws Money Laundering
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Prolonged pre-trial incarceration may justify conditional PMLA bail when delayed trials make continued detention constitutionally disproportionate.
Section 45 of the Prevention of Money-Laundering Act remains the stringent ordinary bail threshold, requiring prosecutorial opportunity and, on opposition, reasonable grounds to believe that the accused is not guilty and unlikely to offend while on bail. Article 21 nevertheless requires a separate, fact-sensitive inquiry where prolonged pre-trial detention and an unrealistic trial timetable make custody disproportionate. Relevant factors include custody length, trial progress, remaining witnesses, secured documentary evidence, source of delay, predicate-case status, and risks of absconding or witness interference. Conditions such as passport surrender, attendance, non-contact directions, and residence disclosure may safeguard the trial.
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Prospective operation of stamp-value taxation prevents retrospective application where property agreements and substantial payments predate the charging provision.
Section 56(2)(x)(b) applies to immovable property received for inadequate consideration only where its temporal and valuation conditions are satisfied. A stamp-value difference alone does not establish taxability. Where consideration was fixed and substantial payments or contractual performance occurred before the charging provision commenced, later conveyance or registration does not by itself attract the later charge. Agreement-date valuation is available only for covered transactions where consideration was fixed and paid, wholly or partly, through prescribed banking or electronic modes on or before the agreement date. The tax authority must identify the correct statutory basis and provide a meaningful opportunity to respond.
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GST cash seizure limits require statutory relevance and restitutionary interest for unlawfully retained currency following searches.
GST seizure powers cannot be used to take cash as a general investigative measure or security for a possible tax demand. Currency is excluded from goods, and "things" is confined contextually to articles useful or relevant as evidence in GST proceedings. Valid seizure and retention require recorded statutory reasons, procedural compliance and observance of return timelines. Unauthorised retention engages property protections; later return does not cure the deprivation, and accrued interest is restitutionary rather than delayed-refund interest.
Case Laws Income Tax
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Salary expense genuineness requires proof of actual services, business purpose, and fair testing of adverse third-party statements.
Under Section 37(1), salary expenditure is deductible only where it is actually incurred wholly and exclusively for business purposes and is supported by proof of genuine employment, services rendered, business nexus, and payment. Bank transfers and accounting entries alone are not conclusive. Where a third-party statement is central to an allegation of non-genuine salary, the taxpayer should receive disclosure and a meaningful opportunity to rebut it, including cross-examination where appropriate. A retracted and uncorroborated statement is vulnerable as the sole basis for disallowance.
Case Laws Income Tax
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Discounted cash flow valuation remains taxpayer-selected under prescribed rules, while tax scrutiny must identify specific valuation-date defects.
The taxpayer may elect a prescribed DCF valuation for unquoted equity shares, and scrutiny of that method does not permit substitution with Net Asset Value merely because it produces a lower fair market value. The Assessing Officer may examine projections, discount rates, terminal assumptions, computations and source data, but rejection requires demonstrably wrong facts, material errors, a wholly erroneous basis or objectively unsupported assumptions. Subsequent financial performance cannot alone invalidate a bona fide DCF valuation; the relevant inquiry remains the reasonableness of valuation-date information.
Case Laws GST
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Excess IGST on exports remains refundable when later correction triggers automated refund and reconciliation proves duplicate payment.
Refund of excess IGST paid on zero-rated exports may arise where turnover and tax are mistakenly entered under non-zero-rated supplies in FORM GSTR-3B while export invoices and shipping bills are correctly reported in FORM GSTR-1. If the exporter then pays the same IGST in the correct zero-rated field and the automated refund is credited against that later payment, the earlier payment remains a separately identifiable potential excess; its claim is not a repeat request for the same export-tax refund.
Case Laws GST
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GST registration revocation requires timely application, return compliance, payment of dues, and a reasoned statutory decision.
GST registration revocation after cancellation for return default is a conditional, time-bound process. An application under Section 30 and Rule 23 must ordinarily be filed within ninety days, subject to prescribed extension, and cannot be made until pending returns are filed and tax, interest, penalty and late fee are paid. Portal non-acceptance may permit online or physical submission where technically unavailable, but does not condone delay or ensure revocation. The competent authority must assess statutory eligibility, sufficient grounds and compliance while following notice and hearing requirements before rejection.
Case Laws Income Tax
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Reassessment limitation under TOLA requires final notices to issue within surviving time and satisfy statutory safeguards.
Reassessment limitation under TOLA is a jurisdictional restraint. Transitional notices issued between 1 April 2021 and 30 June 2021 are treated as Section 148A(b) show-cause notices, but only the surviving time remaining until 30 June 2021 is available for completing the reassessment process. Periods for supply of material and the assessee's response are excluded, but the Section 148A(d) decision, statutory approval and final Section 148 notice must issue within the remaining period. For Assessment Year 2015-16, post-1 April 2021 notices are treated as time-barred.
Case Laws Customs
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Unseized food consignments cannot face indefinite detention without lawful seizure, valid sampling, and prompt assessment.
Provisional release of an unseized imported food consignment is not mechanically governed by Section 110A, which applies to goods seized under Section 110. Customs may examine, test, verify and reassess imports, but indefinite retention without a seizure memorandum or disclosed reasons connecting the goods with confiscation is not justified. Food sampling should follow the specialised food-safety process through an authorised officer. A valid food-safety report may support conditional clearance, while classification, duty liability, confiscation and adjudication remain open. Revenue may be protected through proportionate security.
Case Laws Customs
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Anti-dumping duty recovery permits post-clearance demands and consequential import IGST where self-assessment omitted an applicable levy.
Unpaid anti-dumping duty omitted during self-assessment may be pursued through the customs recovery procedure without prior appellate modification of the self-assessment. The recovery framework applies to anti-dumping duty through statutory incorporation of provisions concerning assessment, non-levy, short-levy, interest and recovery. Where anti-dumping duty is chargeable, it forms part of the aggregate value used to compute IGST on imports, potentially creating a consequential IGST short-payment. Recovery requires accurate assessment of notification coverage, product, origin, rate, valuation, limitation and procedural safeguards.
Case Laws GST
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Project-wise anti-profiteering requires actual input tax credit measurement and area-based allocation of benefits to real-estate purchasers.
Real-estate anti-profiteering under Section 171 requires project-level identification of additional input tax credit and allocation of the saving across total project area on a per-square-foot basis. Purchase value may quantify credit attributable to project expenditure, but turnover or collections cannot serve as the allocation basis. The comparison must use pre-GST credit actually availed rather than merely available credit. GST collected on consideration inflated by an undistributed benefit forms part of the amount not passed on and remains distinct from statutory interest.
Case Laws Income Tax
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Retirement leave encashment exemption applies under the enhanced notified ceiling while preserving non-government employee classification and statutory conditions.
Section 10(10AA)(ii) governs retirement leave-encashment exemption for non-Government employees, subject to the ten-month earned-leave measure, average-salary computation, and the notified monetary ceiling. Notification No. 31/2023 specifies an enhanced ceiling of Rs. 25,00,000, is deemed effective from 1 April 2023, and certifies that retrospective effect causes no adverse effect. The enhanced ceiling is treated as a remedial rationalisation of an existing exemption and may govern pending earlier-period matters, while preserving the distinction between Government and non-Government employees.
Case Laws GST
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Transit GST jurisdiction limits detention penalties for documented inter-State supplies lacking a local taxable nexus.
Transit-State jurisdiction under GST permits interception, document production, e-way bill verification and authorised physical inspection of goods moving through an intermediate State. It does not, in a pure transit movement, support detention-related penalty for an external inter-State supply where origin and destination lie outside the intercepting State, no tax is payable there, and there is no evidence of diversion, local supply, fictitious or mismatched documents, or mismatch of goods. Cross-empowerment is administrative and does not create an independent territorial taxable nexus.
Case Laws SEBI
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Shareholder ratification cannot cure preferential-issue fund diversion when disclosed objectives are abandoned, triggering securities-market fraud and disclosure concerns.
Post-facto shareholder approval cannot retrospectively validate diversion of preferential-issue proceeds contrary to issue-specific objects disclosed to shareholders and the market. A special resolution authorises the issue but does not permit unrestricted use of proceeds. Periodic deviation reporting, audit-committee review and utilisation disclosures promote transparency; they do not enable diversion followed by later regularisation. Immediate diversion, inadequate commercial justification and missing documentation may indicate that disclosed objects were not genuinely intended to be performed. Later amendment of corporate objects or shareholder ratification cannot cure a completed securities-market disclosure breach.
Case Laws Income Tax
Show AI Summary
Cross-border software payments require copyright-right, technical-service, and permanent-establishment analysis before withholding obligations are determined under applicable treaties.
Section 195 requires withholding only from a remittance to a non-resident that includes income chargeable in India. For software, royalty depends on transfer of copyright rights, not merely the right to install, access, use, or distribute a copyrighted article under restrictive terms. Where a DTAA is more beneficial, its royalty and FTS definitions control; treaty FTS may require technology to be made available. Amounts that are neither royalty nor FTS require consideration as business profits, ordinarily taxable only where profits are attributable to a permanent establishment. Composite payments require component-wise allocation and analysis.
Case Laws GST
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Personal GST penalty requires proof that the beneficiary retained benefit and directed a covered invoice or credit transaction.
Section 122(1A) may impose personal GST penalty on a registered or unregistered person only for a covered invoice or input tax credit transaction. Liability requires cumulative proof that the individual retained an identifiable personal benefit and that the transaction was conducted at that person's instance. Directorship, employment, registration, signature authority, or association with the taxable entity neither independently establishes nor excludes liability. Proceedings require transaction-specific and person-specific allegations and findings. The provision operates prospectively for underlying acts or transactions occurring on or after 01.01.2021.
Case Laws IBC
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Proof of tenancy rights governs insolvency recovery of corporate-debtor premises from occupants lacking enforceable possessory interests.
Where premises form part of the corporate debtor's assets, Sections 18 and 25 of the Insolvency and Bankruptcy Code, 2016 require the resolution professional to take custody, control, preservation and protection measures. An occupant resisting recovery must prove a subsisting tenancy, leasehold interest or enforceable licence through reliable evidence of the parties' intended relationship and its essential terms. Permission to stock goods or conduct limited business activity, prolonged occupation, and business or utility records do not independently create rights in the premises. Section 60(5)(c) supports insolvency jurisdiction over asset-recovery measures connected with the insolvency estate.
Case Laws GST
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GST portal service requires statutory validity and practical accessibility before ex parte adjudication can fairly proceed.
GST portal service is a statutory method under Section 169, but its use in an ex parte demand proceeding depends on effective accessibility and a meaningful opportunity to reply and be heard. Rule 142 requires electronic DRC-01 and DRC-07 summaries to operate alongside the underlying show-cause notice and reasoned order. Portal placement, complete communication, e-mail transmission, technical reliability and proof of actual access may determine whether service is effective, whether waiver applies, and whether appellate limitation begins.

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Comparison of section 395 "Certificates." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

15 September, 2025

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Section 395 Certificates.

Income-tax Act, 2025

At a Glance

The Document under commentary is Clause 395 of the Income Tax Bill, 2025 (Old Version) titled "Certificates." It sets out procedures for applications to the Assessing Officer for certificates permitting lower deduction or collection of tax at source, and for issuance of certificates evidencing deduction/collection. It matters to payees, payors, buyers/licensees/lessees, employers and non-residents; the effective date or enactment timing is Not stated in the document.

Background & Scope

Statutory hooks: the provision is part of the Chapter dealing with "Deduction and collection at source" in the Income Tax Bill, 2025. The clause provides a statutory mechanism for obtaining certificates from the Assessing Officer that alter the rate or quantum at which tax is deducted or collected at source. The clause contains five sub-sections that address (1) payee applications for lower deduction, (2) special procedure for payments to non-residents (proportionate determination), (3) applications by buyers/licensees/lessees for lower collection, (4) mandatory issuance of certificates by deductors/collectors (and employer-specific certificate requirements), and (5) cancellation of AO-issued certificates. Definitions of terms used in the clause (for example, "Assessing Officer", "payee", "person responsible for paying") are Not stated in the document.

Statutory Provision Mode

Text & Scope

The clause applies where tax is required to be deducted or collected under the Chapter. Key ingredients: (i) an eligible applicant (payee; buyer/licensee/lessee; person responsible for paying to a non-resident) may apply to the Assessing Officer; (ii) the application must be made "in such form and manner as prescribed"; (iii) the Assessing Officer must be "satisfied" about the applicant's total income justifying a lower deduction/collection (or in the case of the Bill, a "lower deduction" / "lower collection"); (iv) the AO may issue a certificate specifying the rate at which tax shall be deducted/collected "till its validity"; (v) for certain payments to non-residents (other than salary), the payer may seek a determination of the proportion of the sum chargeable to tax, and tax is to be deducted only on that proportion; (vi) persons deducting/collecting must issue certificates to deductees/collectees specifying amount, rate and other prescribed particulars within prescribed period; and (vii) the AO may cancel issued certificates after giving reasonable opportunity.

Interpretation

The text indicates a legislative intent to provide administrative relief and certainty to withholding and collection regimes by enabling assessment-level certificates that modify withholding/collection obligations. The recurring phrase "subject to the rules made under this Act" and "in such form and manner as prescribed" evidences that detailed procedure, forms, timelines and the content of certificates are intended to be governed by delegated legislation (rules/notifications). The AO's power is conditioned on satisfaction as to the payee's/collectee's income which implies an income-driven standard for relief. The Bill focuses on "lower" deduction/collection; it does not expressly contemplate "no deduction" relief in the operative phrase, which may inform a narrower interpretive approach unless clarified by rules.

Exceptions/Provisos

No explicit exceptions or provisos are set out besides the parenthetical exclusion in sub-section (2) that excludes salary from the non-resident proportionate-determination procedure. Temporal limits, validity periods, appeal mechanisms, or conditions for issuance (other than AO satisfaction) are Not stated in the document and are left to prescribed rules.

Illustrations

  • Illustration 1: A resident payee who anticipates low total income applies to the AO for a certificate for lower deduction on interest receipts. If the AO is satisfied, a certificate is issued specifying a reduced withholding rate which the payer must apply until the certificate expires. (This is consistent with clause text.)
  • Illustration 2: A buyer procuring goods who is statutorily liable to collect tax at source believes its total income justifies collection at a lower rate; it applies to the AO and, upon satisfaction, obtains a certificate specifying the lower collection rate to be applied during the certificate's validity. (This follows clause (3).)
  • Illustration 3: A payer to a non-resident (other than salary) considers that only a portion of a payment is taxable; it applies for a determination of the chargeable proportion, and tax is withheld only on the determined taxable proportion. (This paraphrases clause (2).)

Interplay

The clause expressly defers details to rules under the Act ("subject to the rules made under this Act", "in such form and manner as prescribed", "as prescribed"). Interaction with other provisions in the Chapter is implied (references to section 392 and 393 appear elsewhere in the Chapter), but cross-references or procedural interlocks (appeal to AO, review, scope of AO's satisfaction, or relation to assessment proceedings) are Not stated in the document. The clause imposes obligations on persons responsible for deduction/collection that will operate in conjunction with other statutory provisions on tax payment, return filing and crediting; specifics of those interactions are Not stated in the document.

Differences between Document 1 (Section 395 of the Income-tax Act, 2025) and Document 2 (Clause 395 of the Income Tax Bill, 2025 (Old Version))

  • Document 1 (Act) expressly permits the payee to apply for "deduction of income-tax at a lower rate or no deduction of income-tax, as the case may be" (i.e., includes expressly the possibility of no deduction). Document 2 (Bill) refers only to application "for deduction of tax at a lower rate" (no explicit reference to "no deduction").
    • Practical impact: The Act text broadens the express relief available to payees to include certificates for nil deduction; the Bill text is narrower on its face and may be read as not authorising certificates of nil deduction. This affects taxpayers seeking a certificate for no deduction - under the Bill text that position is not explicitly available.
  • Terminology consistency: Document 1 consistently uses "income-tax" and "income or sum" and in sub-section (2) refers to "any sum as mentioned in section 393(2) (Table: Sl. No. 17)". Document 2 uses "tax" and in sub-section (2) says "any sum chargeable under this Act (other than salary)".
    • Practical impact: The Act version narrows the cross-reference to a specific table entry (section 393(2) Table Sl. No. 17) while the Bill uses a broader phrase but excludes salary expressly. Depending on interpretation, the Act's wording may limit the special procedure to the specific listed sum; the Bill may appear broader but excludes salary. This difference can affect which non-resident payments qualify for the proportionate determination procedure.
  • Sub-section (1)(b) standard of satisfaction: Document 1 states the Assessing Officer is to be "satisfied that the total income of the payee justifies deduction of income-tax at a lower rate or no deduction of income-tax"; Document 2 states the AO is to be "satisfied that the total income of the payee justifies a lower deduction".
    • Practical impact: The Act text reiterates both lower rate and nil deduction as possible outcomes; the Bill text only contemplates a lower deduction. The practical standard of satisfaction is similar but the outcome set contemplated differs.
  • Sub-section (2) scope and wording differences: Document 1 sub-section (2)(a) refers to "any sum as mentioned in section 393(2) (Table: Sl. No. 17)"; Document 2 refers to "any sum chargeable under this Act (other than salary)". Document 1's (2)(a) includes prescribed form and manner "where he considers that the whole of such sum would not be chargeable"; Document 2 similar but adds "(other than salary)".
    • Practical impact: The Act text ties the provision to a specific listed sum (Table Sl. No. 17) whereas the Bill text appears to target any sum chargeable (excluding salary). This can change which categories of non-resident receipts can seek proportionate determination for withholding purposes.
  • Typographical/grammatical variations: Document 2 has a stray duplicated semicolon in sub-section (3)(a) ("and;") and slightly different phrasing like "such income or amount" vs "such income or sum". Document 1 cleans up some language and explicitly includes "no income-tax" phrasing in (1)(c) and "(3)(c)".
    • Practical impact: Minor; Act wording is clearer and more explicit on nil deduction/collection and on the objects to which the certificate may apply.

Practical Implications

  • Compliance and risk areas: Persons responsible for deducting/collecting must implement processes to accept and act upon AO-issued certificates; failure to deduct/collect at the certified rate may attract liability. Payees/collectees seeking relief must ensure accurate disclosure of total income to the AO since the AO's satisfaction is income-based. The Bill text's omission of explicit authorization for "nil deduction" certificates may create additional risk or administrative friction for taxpayers seeking complete exemption from deduction unless rules clarify otherwise.
  • Record-keeping/evidence: The clause requires issuers of certificates (deductors/collectors and employers) to issue documentary certificates specifying amounts and rates within prescribed periods; accordingly, taxpayers should retain certificate copies, AO orders, correspondence, and records demonstrating reliance on certificates and corresponding withholding/collection actions. Specific retention periods and form content are Not stated in the document and are expected to be prescribed.

Key Takeaways

  • Clause 395 establishes an AO-based certificate mechanism to vary withholding/collection rates where the AO is satisfied about the applicant's total income.
  • It provides a special procedure for payers to non-residents (excluding salary in the Bill) to determine the proportion of sums chargeable and limit withholding accordingly.
  • Deductors/collectors and certain employers must issue certificates to deductees/collectees specifying amounts, rates and other prescribed particulars within prescribed periods.
  • Details of forms, manner, validity, timelines and other procedural rules are left to subordinate legislation and are not specified in the clause.
  • The Bill text does not expressly mention certificates for "no deduction" (nil deduction), which narrows the express relief compared with later Act wording that does include nil deduction; this may affect taxpayers seeking complete exemption from withholding unless clarified by rules.
  • The Assessing Officer may cancel issued certificates after giving reasonable opportunity; grounds and procedure for cancellation beyond opportunity to be heard are Not stated in the document.

Full Text:

Section 395 Certificates.

Topics

Acts Income Tax