Tribunals and Commissions judgments

The NCLAT has ruled that interest charged in invoices cannot be included in the operational debt threshold under Section 9 of the IBC unless there is a clear contractual provision or established past practice of accepting such interest. This sets a critical precedent for operational creditors relying on invoice terms alone, requiring explicit consent for interest to count toward the ₹1 lakh threshold.

ITAT Agra rules that revisional powers under Section 263 cannot be invoked merely to substitute the Assessing Officer's reasoned view unless new evidence proves the assessment erroneous or prejudicial to revenue. The ruling protects assessees from arbitrary reopening of settled assessments based on mere differences of opinion.

CESTAT Chennai ruled that the sale of an undivided share of land, without the transfer of a constructed flat, does not attract service tax under the 'construction of residential complex' service for periods prior to July 1, 2012. This decision clarifies the tax liability for developers and buyers in real estate transactions involving land shares alone.

CESTAT Chennai rules that reimbursed expenses like freight, labour, and stationery do not form part of the taxable value for clearing and forwarding agents when they act as pure agents, reinforcing the strict application of Rule 6(1)(viii). This clarifies a critical boundary for service providers who pass through third-party costs, shielding them from unintended tax liability on non-income receipts.

The Central Administrative Tribunal holds that cancelling a finalized promotion panel for Junior Engineers on grounds of belated objections and minor procedural irregularities violates natural justice and undermines legitimate expectations. This ruling protects candidates who have completed mandatory training and reinforces that administrative finality must prevail absent gross misconduct or fraud.

The Competition Commission of India found that the solar power bidding process did not constitute abuse of dominance because the tender design permitted open participation, the relevant market was properly defined to exclude non-solar energy sources, and no anti-competitive conduct was demonstrated by Adani or SECI. This sets a critical precedent for renewable energy procurement, affirming that market structure and transparent bidding protocols can preclude dominance concerns even with major players.

Delhi ITAT rules that reassessment proceedings beyond three years from the assessment year are void if sanctioned by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT). The ruling underscores strict compliance with Section 151, invalidating reassessment notices issued without proper authority.

SAT ruled that minor technical omissions in financial disclosures under Regulation 33 of SEBI LODR Regulations do not warrant punitive fines if intent is absent. The decision underscores proportionality in regulatory penalties, offering relief to listed entities for genuine errors.

NCLAT rules that directors can be held liable under Section 66 of the IBC for fraudulent trading if they fail to deposit salary deductions meant for employee welfare, even without personal benefit. The ruling underscores directors' fiduciary duty to creditors during insolvency, expanding liability beyond traditional fraudulent intent.

ITAT Pune rules that Rs. 7.84 crore paid as compensation for cancelled share sale agreements qualifies as a deductible business expense under Section 48 of the Income Tax Act, provided the recipients have paid tax on the amount. The ruling clarifies that contractual compensation, even for failed transactions, is not a colourable device if properly taxed, offering relief to taxpayers in similar disputes.

CAT Principal Bench holds that transfer orders under service law must comply with DoPT guidelines on spouse posting and personal hardship, requiring reasoned justification. The tribunal stayed an arbitrary transfer order pending consideration of the employee’s representation, reinforcing natural justice in administrative discretion.

The ITAT Delhi has ruled that Section 14A cannot be invoked to disallow expenses unless there is actual exempt income earned. Notional gains from foreign currency translation or interest on capital loans, even if hypothetically linked to exempt activities, do not trigger disallowance. This shields multinational entities from speculative tax adjustments based on accounting entries rather than real income.

NCLAT rules that shareholders who actively consent to private placements or share sales cannot later challenge the same transactions as oppressive under Sections 397-398 of the Companies Act, 1956. The judgment reinforces estoppel as a bar to oppression claims where parties have knowingly participated in the impugned transactions.

NCLAT reinforces the primacy of the Committee of Creditors' commercial wisdom under the Insolvency and Bankruptcy Code, holding that the Adjudicating Authority cannot remand a resolution plan unless statutory grounds under Sections 30(2) or 31 are violated. The ruling clarifies the limited scope of judicial review over CoC-approved plans, impacting insolvency practitioners and creditors.

The NCLAT has clarified that the three-year limitation period under Section 95 of the IBC to initiate insolvency against a personal guarantor begins from the date the corporate debtor defaults, not from the date the creditor issues a demand notice under the guarantee. This resolves ambiguity affecting creditors and guarantors alike, ensuring consistency with the IBC’s statutory framework and preventing tactical delays.

CESTAT Chennai rules that only the penalty amount-not confiscated goods or duty-determines appeal maintainability under CBIC Instruction 390/Misc/30/2023-JC. The Revenue’s appeal was dismissed as the Rs. 30 lakh penalty fell below the Rs. 50 lakh threshold, setting a precedent for future customs litigation strategy.

CESTAT Chandigarh rules that Revenue cannot invoke Rule 12 of the CENVAT Credit Rules, 2001, to disallow MODVAT credits availed before 01.07.2001 without concrete evidence of suppression or clandestine removal. The demand of ₹1.01 crore was quashed, reinforcing that procedural fairness requires proof of wrongdoing, not mere stock discrepancies.

The ITAT Delhi has ruled that once a taxpayer files Form 68 seeking penalty immunity under Section 270AA, the tax officer cannot proceed with or finalize a penalty order until the immunity application is adjudicated. This establishes a mandatory procedural pause, protecting taxpayers from premature penal action and reinforcing statutory due process in income tax assessments.

The ITAT Delhi has ruled that any assessment order issued under e-proceedings must be digitally signed as mandated by CBDT Instruction 1/2018; manual signatures render the order legally void. This sets a binding precedent for all tax officers conducting online assessments, reinforcing procedural integrity in digital tax administration and protecting assessees from invalid orders.

The ITAT Delhi has ruled that any income tax assessment conducted by an officer lacking a valid Section 127 transfer order is void from the outset, regardless of the assessee’s delay in challenging it or the merits of the case. This reinforces that jurisdictional compliance is non-negotiable in tax proceedings, affecting all assesses subject to inter-office transfers.

ITAT Mumbai holds that penalty under Section 271(1)(c) cannot be imposed when the tax dispute involves a substantial question of law already admitted by the High Court, recognizing such claims as bona fide and not constituting concealment. This shields taxpayers from punitive action when legal uncertainty exists at the appellate level, reinforcing the principle that penalty requires deliberate intent, not mere disagreement with tax authorities.

The Central Administrative Tribunal quashed the abrupt reversion of an Income Tax Officer to a lower post just one day before retirement, holding that such action without a show-cause notice or hearing violates Article 311 and the foundational principles of natural justice. This ruling reinforces that procedural fairness cannot be bypassed even at the twilight of service, protecting pensioners from retaliatory or arbitrary administrative actions.

The ITAT Kolkata ruled that the Assessing Officer cannot disallow purchases and make a blanket addition merely because the assessee failed to respond to Section 133(6) notices. The burden lies on the department to identify concrete discrepancies in the books, not to penalize silence. This protects taxpayers from arbitrary assessments and reinforces procedural fairness in income tax scrutiny.

The ITAT Kolkata has ruled that when taxpayers submit credible documentary evidence establishing the identity, creditworthiness, and genuineness of share subscribers, non-compliance with summonses under Section 131 cannot justify treating share capital as unexplained cash credit. This clarifies that procedural lapses cannot override substantive proof, offering critical relief to companies relying on legitimate equity infusions.