Loading...

⚠ ✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 Filters / Advanced Search ❯
TEXT

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws---- ❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    News Bill
    Providing definition of “authorised person”
    News Bill
    Correction of referencing error
    News Bill
    Correction of referencing error
    News Bill
    Correction in provisions relating to Income from House Property and Permanent Account Number
    News Bill
    Guidelines to be binding on income-tax authorities and person liable to deduct or collect income-tax
    News Bill
    Clarifying repeal and savings clause where amount allowed as deduction earlier is to be treated as i...
    News Bill
    Amendment in the definition of the specified fund
    News Bill
    Amendment in the provision relating to merger of non-profit organisations (NPOs)
    News Bill
    Amendment in the provisions relating to the violations by a registered NPO
    News Bill
    Amendment of section 332(1)(f) of the Income-tax Act, 2025 to remove certain funds from the requirem...
    News Bill
    Amendment in section 349 of the Income-tax Act, 2025 to provide for filing of belated return by NPO
    News Bill
    Non-allowability of Interest as a deduction against Dividend Income
    News Bill
    Rationalisation of Schedule XI relating to Provident Funds
    News Bill
    Exemption for Sovereign Gold Bond
    News Bill
    Increase in tax rates of Securities Transaction Tax
    News Bill
    Taxation of buyback of shares
    News Bill
    No tax to de deducted at source in respect of interest income credited or paid to any co-operative s...
    News Bill
    AMENDMENT TO THE CUSTOMS ACT, 1962
    News Bill
    AMENDMENTS TO THE CUSTOMS TARIFF ACT, 1975
    News Bill
    AMENDMENT TO RULES UNDER CUSTOMS ACT, 1962
❮
❯
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

Notes
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
News Bill
Show AI Summary
Definition of authorised person clarified as the payor for non resident payments for foreign exchange asset transfers.
Adds a statutory definition of authorised person to identify the person responsible for paying when consideration is paid to a non resident for transfer of a foreign exchange asset, aligning the 2025 Act with earlier income tax law and amending the provision governing the person responsible for paying to clarify payor identification and related withholding and reporting obligations.
News Bill
Show AI Summary
Union Budget amendment corrects a cross reference to ensure spouse income from transferred assets is properly attributed.
Section 99(2) currently misreferences the provision governing spouse income from transferred assets by citing the clause on salary or commission, and the Finance Bill proposes to correct section 99(2) to cite the clause dealing with income arising from transferred assets; the Bill also proposes an amendment to section 402(27), both taking effect from 1 April 2026.
News Bill
Show AI Summary
TDS on sale of immovable property reference corrected to Table 3(i); amendment effective 1st April 2026.
Note 3 to section 393(1) [Table: Sl. No. 3(i)]-which applies TDS on sale of immovable property where sale consideration or stamp duty value meets the prescribed threshold-erroneously referred to Table Sr. No. 3(iii). The Finance Bill, 2026 proposes to amend Note 3 to correct the reference to Table Sl. No. 3(i) so the TDS provision operates as intended; the amendment takes effect from 1st April, 2026 (Clause 72).
News Bill
Show AI Summary
Income from house property and PAN rules amended to include prior-period interest and expand PAN quoting rules.
The amendments provide that annual value of property held as stock-in-trade is nil for up to two years after completion certificate; that the aggregate deduction ceiling for interest on borrowed capital for self-occupied property shall include prior-period interest; and that the tax board may make rules requiring PAN quoting in documents for transactions not related to business or profession, effective 1 April, 2026.
News Bill
Show AI Summary
Guidelines for TDS/TCS will be binding on persons required to deduct or collect tax from April 1, 2026.
The amendment expressly makes guidelines issued to remove difficulties in giving effect to the TDS/TCS chapter binding on income-tax authorities and on the person liable to deduct or collect income-tax, correcting an omission and aligning the provision with the intent of existing law; the amendment takes effect from 1 April 2026.
News Bill
Show AI Summary
Tax treatment: previously allowed deductions or excluded amounts will be treated as income under the new Act from 2026 27 onward.
Amendment to section 536(2)(h) provides that sums allowed as deductions or not included under the repealed Income-tax Act, 1961 will be deemed income under the Income-tax Act, 2025 if they would have been includible under the 1961 Act, even without any violation of prior conditions, effective 1 April 2026 for tax year 2026-27 onward.
News Bill
Show AI Summary
Specified fund definition aligned with income tax provision, effective April 1, 2026 for tax year 2026 27 onward.
Amendment aligns the definition of specified fund in Note 1(g) to Schedule VI with the income tax provision definition, so that existing Sl. Nos. 1-4 of Schedule VI apply to any entity that meets the aligned specified fund definition; the amendment takes effect from 1 April 2026 and applies to the tax year 2026-27 and thereafter.
News Bill
Show AI Summary
Merger of non-profit organisations exempt from accreted-income tax if same or similar objects and prescribed conditions are met.
A new provision exempts registered non-profit organisations from accreted-income tax on merger when the transferee and transferor are registered non-profit organisations with the same or similar objects and the merger meets prescribed conditions; the merger-liability rule is amended to make tax payable where the merging entity is non-registered, where a registered non-profit's merger fails to satisfy prescribed conditions despite similar objects, or where objects are not the same or similar.
News Bill
Show AI Summary
Registered non-profit organisations: commercial activity for public utility no longer treated as a specified violation risking registration cancellation.
The amendment removes commercial activities by registered non-profit organisations carried out for advancement of General Public Utility from the category of specified violation in section 351, preventing such activity from triggering registration cancellation, and aligns the treatment with other violation provisions; effective 1 April 2026 for tax year 2026-27 and thereafter.
News Bill
Show AI Summary
Registration requirement removed for certain Schedule VII funds to align exemption rules under the Income-tax regime.
Amendment excludes persons listed in Schedule VII (Table Sl. No. 10-16) from section 332(1)(f) of the Income-tax Act, 2025, removing their obligation to register under section 332 to claim income-tax exemption and aligning registration requirements with the Income-tax Act, 1961; effective 1 April 2026 for tax year 2026-27 onwards.
News Bill
Show AI Summary
Belated filing by registered non-profit organisations is permitted under amended section 349 referencing belated-filing provision.
The amendment enables registered non-profit organisations to file belated income-tax returns by adding a cross-reference to the belated-filing provision within the statutory rule governing return filing by such organisations, restoring the belated-filing ability previously available and applying from 1 April 2026 to the 2026-27 tax year and thereafter.
News Bill
Show AI Summary
Dividend income: interest deductions disallowed for earning dividend or mutual fund unit income from April 1, 2026.
The Finance Bill amends the law to disallow any deduction for interest expenditure incurred in earning dividend income or income from units of mutual funds, removing the earlier deduction that had been permitted up to a twenty per cent ceiling of gross dividend or mutual fund income; the change applies prospectively from the Bill's implementation date and affects income taxed under Income from other sources.
News Bill
Show AI Summary
Provident fund tax rules are realigned to the EPF framework, removing legacy contribution limits and investment cap.
Align recognised provident fund tax provisions with the EPF framework by omitting parity and percentage-based restrictions that duplicate the Rs.7.5 lakh unified employer contribution cap, restrict recognition to funds exempt under section 17 of the EPF Act, remove the fifty per cent statutory limit on Government securities investment, and retain regulatory oversight via subordinate EPF instruments; effective 1 April 2026 for tax year 2026-27 onward.
News Bill
Show AI Summary
Sovereign Gold Bond exemption limited to original subscribers who hold until maturity, effective for tax year 2026-27 onward.
The capital gains exemption for Sovereign Gold Bonds is confined to bonds subscribed at original issue and held continuously until redemption on maturity, to ensure uniform application across all Reserve Bank of India issuances.
News Bill
Show AI Summary
Securities Transaction Tax rates for options and futures increased; revised rates apply to transactions on or after April 1, 2026.
A calibrated revision raises STT on derivatives: sale of an option in securities from 0.1% to 0.15% of the premium; sale of an exercised option from 0.125% to 0.15% of the intrinsic price; and sale of a future in securities from 0.02% to 0.05% of the traded price. The changes aim to curb disproportionate speculation in futures and options trading, take effect from 1 April 2026, and apply to transactions in options and futures entered into on or after that date.
News Bill
Show AI Summary
Taxation of share buybacks reclassified as capital gains; higher tax rates apply to promoters and promoter companies.
Consideration received on buy-back of shares is recharacterised from dividend income to taxable capital gains, with cost of acquisition of extinguished shares remaining separately recognised. Promoters will face an effective tax liability of thirty per cent on buy-back gains (tax at applicable rates plus an additional tax) and promoter companies will face an effective tax liability of twenty-two per cent. These amendments apply from the first day of the relevant financial year and to the tax year 2026-27 and subsequent years.
News Bill
Show AI Summary
Interest paid to co operative societies carrying on banking exempt from TDS under Finance Bill amendment effective April 1, 2026.
The Act is amended to align with the Income tax Act, 1961 by providing that deduction of tax at source shall not be made on interest income (other than interest on securities) credited or paid to any co operative society engaged in carrying on the business of banking, including a co operative land mortgage bank; the amendment takes effect from 1 April 2026.
News Bill
Show AI Summary
Indian-flagged fishing vessels beyond territorial waters get specific customs rules, including duty-free landing and entry procedures.
Amendments extend Customs Act jurisdiction for fishing activities beyond territorial waters, define Indian-flagged fishing vessel, and insert section 56A to permit duty free importation of fish harvested beyond territorial waters and to treat fish landed at foreign ports as exports while authorising rules on entry, declaration, custody, examination, assessment, clearance, transit and transhipment. Other amendments deem certain penalties a charge for non payment of duty, fix advance rulings' validity at five years with transitional extensions, allow removal of warehoused goods between warehouses without prior officer permission, and enable regulations for custody of imported or export bound goods.
News Bill
Show AI Summary
Customs tariff amendments adjust basic customs duty rates, create new tariff lines, and reclassify import items effective Feb-May 2026.
The First Schedule to the Customs Tariff Act, 1975 is amended to change Basic Customs Duty rates and to create new tariff items: immediate BCD increases effective 02.02.2026 (via provisional declaration), targeted BCD decreases effective 01.04.2026, and a comprehensive reclassification and rate migration from exemption notifications into the Tariff Act effective 01.05.2026, preserving applied duty levels while enabling better product identification and monitoring.
News Bill
Show AI Summary
Baggage rules updated; deferred import duty payments shifted to monthly for eligible importers, creating a new eligibility class.
The baggage regime is replaced by Baggage Rules, 2026 to clarify temporary carriage of goods, avoid unnecessary detention, and restructure Transfer of Residence benefits by duration of stay, effective 02.02.2026; deferred import duty payment frequency is changed from 15 days to monthly and a new class of eligible importers is created by amending the Deferred Payment of Import Duty Rules, 2016.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Back

All TMI Notes

Locus Standi - Intervention by Homebuyer Societies in Insolvency Proceedings: Statutory Limits under Sections 5(7), 5(8)(f) and 21(6A) of the IBC

4 February, 2026

Contents
Acts
Rules & Regulations
Plus +
Summary
Note

Note

-

Bookmark

Print

Print

This article undertakes a comparative analysis of multiple judicial decisions on the same legal issue, highlighting points of convergence and divergence. The judgment is analysed in the context of its factual background, issues framed, and conclusions reached by the Court.

2026 (1) TMI 902 - Supreme Court

1. Overview of the Issue

Proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) often impact stakeholders beyond the immediate applicant financial creditor and the corporate debtor. This raises a recurring procedural question: who has a right of audience (or locus standi) to intervene, oppose, or appeal in proceedings arising from an application under Section 7 of the IBC?

The issue becomes particularly sensitive in real estate insolvencies, where allottees are treated as financial creditors by virtue of Explanation (i) to Section 5(8)(f). Even then, disputes arise when an entity such as a housing society or welfare association seeks to intervene (especially at the appellate stage) on the premise that it represents homebuyers whose interests may be affected by admission of a Section 7 application.

The decisions compared below converge on a stage-based framework: pre-admission Section 7 proceedings are treated as essentially in personam between the applicant and the corporate debtor, while post-admission proceedings assume an in rem character affecting the creditor body at large. The locus consequences differ materially across these stages.

2. Cases Considered

  • Decision A (pre-admission is in personam; hearing can be confined): The Court explained that before admission of an application under Sections 7/9/10, proceedings are still in personam; a structured withdrawal framework (including Rule 8 of the NCLT Rules and Section 12A read with Regulation 30A of the CIRP Regulations) supports limiting participation at this stage to the applicant and the corporate debtor.

  • Decision B (post-admission is in rem; "any person aggrieved" can be wider): The Court held that once CIRP is initiated, proceedings become collective in rem, and the statutory phrase "any person aggrieved" in Sections 61 and 62 may not be read as confined only to the applicant creditor and the corporate debtor, provided the appellant demonstrates a legally cognizable grievance connected with the CIRP.

  • Decision C (stage-sensitive locus reaffirmed in a different context): While dealing with locus of a participant in the insolvency ecosystem (not a creditor), the Court reaffirmed that participatory rights depend on the nature and stage of the insolvency proceedings; a party must show it is not a complete stranger and that it suffers cognizable prejudice.

  • Decision D (strict statutory approach to "financial creditor" status): The Court reiterated that the status of a financial creditor must be tested with reference to the statutory definition (Section 5(7) read with Section 5(8)) and the underlying transaction; creditor status cannot be conferred by implication, association, or form.

  • Decision E (inherent powers cannot create substantive rights): The Court clarified that inherent powers preserved in tribunal rules (including Rule 11 of the NCLAT Rules, 2016 and the parallel rule for NCLT) mirror Section 151 of the Code of Civil Procedure in principle: they supplement express powers but cannot override an exhaustive statutory framework or create substantive participatory rights not contemplated by the IBC.

  • Decision F (exceptional participation of homebuyer group under constitutional power): In an exceptional real estate context, a homebuyer group was permitted to participate; however, the participation was treated as context-driven and not as a general rule that automatically confers locus upon societies/associations in statutory insolvency proceedings.

3. Points of Convergence

(a) Locus is statutory, not equitable. A consistent theme across the decisions is that rights to participate in IBC processes flow from the IBC's defined categories and mechanisms, and not merely from the fact that a person may be commercially or contractually affected. This aligns with the IBC's design as a self-contained code with defined roles for stakeholders such as "financial creditors" (Section 5(7)) and "operational creditors" (Section 5(20)).

(b) Stage matters: in personam pre-admission; in rem post-admission. The decisions accept a clear conceptual distinction: prior to admission, the adjudicatory task in a Section 7 matter is confined and bipartite, whereas after admission the process affects the whole creditor body and stakeholders. This distinction is used to justify narrower participation at the pre-admission stage and broader standing in appropriate post-admission contexts.

(c) Homebuyers' participation is channelled through the Code's representation architecture. Even while recognising allottees as financial creditors via Explanation (i) to Section 5(8)(f), the decisions converge on the proposition that collective representation is not ad hoc. Once CIRP begins, allottees are represented through the statutory mechanism of an authorised representative under Section 21(6A) read with Regulation 16A of the CIRP Regulations.

(d) Inherent powers cannot be used to circumvent IBC structure. The inherent power under Rule 11 of the NCLAT Rules, 2016 (and its NCLT counterpart) is treated as residual. It cannot be deployed to grant participatory rights at the admission stage contrary to the IBC's scheme, or to introduce additional layers of audience that the statute does not provide.

4. Points of Divergence

(a) Breadth of the phrase "any person aggrieved" in insolvency appeals. While there is convergence that "any person aggrieved" in Sections 61 and 62 is not rigidly restricted, the decisions diverge on the operational threshold of what constitutes being "aggrieved". Some formulations emphasise a broader reading once proceedings are in rem, whereas others insist on a demonstrable, legally cognizable prejudice and non-stranger status to the insolvency process.

(b) The extent to which representative entities can claim to speak for homebuyers. A divergence emerges between (i) exceptional contexts where a collective of homebuyers is permitted to participate and (ii) the general statutory rule that societies/associations are separate juristic entities and cannot automatically assert the rights of members in insolvency proceedings unless authorised in a legally valid manner and recognised by the IBC structure.

(c) Natural justice framing: "right to be heard" versus "right to participate". The decisions reflect different emphases on how audi alteram partem operates in IBC settings. One line of reasoning stresses that natural justice cannot be invoked to create participatory rights where the statute does not recognise them; another recognises heightened sensitivity where rights of vulnerable stakeholders (such as homebuyers) may be practically impacted, albeit still within statutory limits. The divergence is not resolved into a universal rule permitting intervention; rather, it is reconciled by emphasising statutory channels and the stage of proceedings.

5. Analytical Observations

(a) Why the pre-admission restriction is doctrinally coherent. The in personam character at the pre-admission stage is not merely a procedural convenience. It is linked to the IBC's gatekeeping function: a Section 7 admission order has system-wide consequences (including the moratorium under Section 14, and the transition into a collective process). The statute therefore prescribes a focused inquiry at admission, and then broadens stakeholder involvement after CIRP commences.

(b) Societies and associations face a structural hurdle in creditor status. A society is treated as distinct from its members. Even where individual allottees are financial creditors under Explanation (i) to Section 5(8)(f), a society does not become a "financial creditor" under Section 5(7) merely by representing allottees, unless it is itself owed a financial debt or is recognised through the authorised representative mechanism. This distinction also prevents strategic delays in admission by inserting additional audiences in what is intended to be a swift threshold proceeding.

(c) Inherent powers are not a backdoor for stakeholder expansion. Reading Rule 11 of the NCLAT Rules, 2016 as a basis for intervention at the admission stage would effectively allow tribunals to redesign IBC participation beyond the Code, undermining predictability and timelines. The compared decisions stress that where the IBC provides an exhaustive route (such as authorised representatives, claims verification, CoC processes, and statutory appeals), inherent powers should not be used to create alternative participatory regimes.

(d) The homebuyer-protection narrative is accommodated through post-admission safeguards. The framework accommodates homebuyer interests through (i) their recognition as financial creditors, (ii) CoC participation through authorised representatives (Section 21(6A), Regulation 16A), and (iii) real-estate-specific regulatory provisions cited in the discourse, including Regulation 4E of the CIRP Regulations and Regulation 46A of the Liquidation Process Regulations. The jurisprudence channels homebuyer concerns into these statutory mechanisms rather than pre-admission intervention by non-creditor entities.

6. Practical Implications

(a) For homebuyers and their collectives. Individual allottees (or the statutorily prescribed minimum group, where applicable under Section 7 filing requirements) must typically pursue participation through the IBC mechanisms rather than through intervention applications by maintenance societies. Post-admission, filing claims and engaging through authorised representatives under Section 21(6A) and Regulation 16A becomes the central pathway.

(b) For financial creditors and corporate debtors in Section 7 litigation. At the admission stage, the litigation framework remains primarily bilateral; attempts to widen participation through third-party intervention are likely to be resisted on locus grounds. Parties alleging mala fide invocation are directed toward the statutory pathway under Section 65 (requiring pleadings and proof), rather than procedural participation by third parties as a substitute for the Code's safeguards.

(c) For insolvency professionals and CoC decision-making. Once CIRP begins and proceedings are in rem, the authorised representative model becomes critical for legitimacy and stakeholder management. Real-estate CIRPs require careful compliance with the CIRP Regulations, including the handling of possession/registration issues under Regulation 4E and liquidation estate exclusions under Regulation 46A, as applicable.

(d) For appellate strategy under Sections 61 and 62. The phrase "any person aggrieved" can support broader standing post-admission, but appellants should be prepared to demonstrate a direct nexus with the CIRP and a legally cognizable prejudice. Appeals framed as generalised grievances, or by entities structurally outside the creditor/participant categories, face heightened locus scrutiny.

7. Key Takeaways

  • Section 7 pre-admission proceedings are generally treated as in personam; third-party intervention at this stage is ordinarily inconsistent with the IBC's structure.

  • After CIRP admission, proceedings are in rem; standing under Sections 61 and 62 may expand, subject to showing real and cognizable prejudice and a non-stranger relationship to the insolvency process.

  • Homebuyers are financial creditors by virtue of Explanation (i) to Section 5(8)(f), but collective representation is statutorily channelled through Section 21(6A) read with Regulation 16A of the CIRP Regulations, rather than ad hoc society-based intervention.

  • Rule 11 of the NCLAT Rules, 2016 does not create substantive rights; inherent powers cannot be used to override the IBC's exhaustive participatory framework.

  • Exceptional participatory permissions in real estate matters do not automatically generalise into a rule granting locus to societies/associations in Section 7 admission or appellate proceedings.

 


Full Text:

2026 (1) TMI 902 - Supreme Court

Topics

Acts Income Tax