Tribunals and Commissions judgments

NGT upholds Maharashtra Pollution Control Board’s calculation of Rs.64.8 lakh environmental damage compensation against a slaughterhouse for prolonged untreated effluent discharge, reinforcing strict liability for pollution control violations. The ruling mandates deposit of the amount for remedial measures, setting a precedent for polluters' financial accountability under environmental laws.

ITAT Bangalore rules that interest earned by co-operative societies on surplus funds parked in banks is attributable to their credit business under Section 80P(2)(a)(i), entitling them to tax exemption. The ruling overturns the revenue's restrictive interpretation, clarifying that such income cannot be reclassified as 'income from other sources' for co-operatives engaged in lending operations.

CESTAT Chennai rules that sorting, crushing, and washing waste PET bottles into flakes does not qualify as 'manufacture' under the Central Excise Act, exempting such recycling units from excise duty. The ruling clarifies the legal threshold for 'manufacture' in waste processing, impacting PET recycling businesses and excise compliance.

ITAT Ahmedabad rules that additions under Section 145(3) of the Income Tax Act cannot be sustained based solely on VAT discrepancies without verifying rectified reports. The tribunal emphasises that bona fide errors must be reconciled before imposing tax additions, protecting taxpayers from arbitrary penalties.

ITAT Ahmedabad ruled that cash deposits backed by documented bank withdrawals and marriage gifts cannot be treated as unexplained under Section 69A. The tribunal reduced the addition by Rs.7.46 lakh, emphasizing the need for corroborative evidence rather than mere suspicion in tax assessments.

CAT Jammu ruled that the statutory limit of Child Care Leave under Rule 41-A of the J&K Civil Services Leave Rules applies to the two eldest surviving children, treating twins as a single unit. The decision underscores that welfare legislation must be interpreted strictly, leaving no room for judicial relaxation even in cases of multiple births.

The ITAT Delhi has ruled that failure to file Form 67 by the due date under Section 139(1) is a procedural lapse, not a substantive bar to claiming Foreign Tax Credit. This decision affirms that Rule 128(9) is directory, not mandatory, protecting taxpayers who meet all other eligibility criteria despite technical delays.

NCLAT reinforces that dissenting financial creditors under Section 30(2)(b) of the IBC must receive at least the liquidation value approved by the Committee of Creditors (CoC). The ruling underscores the statutory minimum payout floor, ensuring dissenters are not shortchanged in resolution plans, even if the CoC's commercial wisdom prevails.

The Central Administrative Tribunal quashed a second charge sheet and penalty imposed for the same alleged misconduct, holding that re-prosecution under CCS (CCA) Rules violates the ancient common law principle of nemo debet bis vexari pro uno delicto and fundamental rights under Articles 14 and 21. This ruling reinforces that even in administrative disciplinary actions, finality of proceedings is sacrosanct - protecting public servants from harassment through repeated investigations for identical allegations.

ITAT Delhi sets aside a ₹2.23 crore addition under Section 68, ruling that unexplained income additions cannot stand if an identical addition in the co-party’s case has been deleted. The decision reinforces consistency in tax adjudication and limits arbitrary additions based on demonetization-era cash deposits.

ITAT Mumbai rules that the 10% tolerance band under Section 56(2)(x)(b) of the Income Tax Act applies retrospectively, deleting additions where the fair market value excess is below the threshold. This holding clarifies the retrospective applicability of the tolerance band, impacting tax assessments involving stamp duty valuations.

The ITAT Delhi has ruled that tax authorities cannot impose a mechanical 2% income estimation on businesses with a demonstrably lower and consistent gross profit margin of just 0.29%. This sets a binding precedent for traders and pass-through entities, ensuring estimated income assessments must reflect commercial reality, not arbitrary benchmarks, and deletes penalties imposed on such taxpayers.

The ITAT Delhi has ruled that any reassessment notice issued under Section 148 after three years from the end of the assessment year is void unless prior approval is obtained from the Principal Chief Commissioner of Income Tax, as mandated by Section 151(ii). This reinforces strict procedural compliance, protecting taxpayers from arbitrary reopening of closed assessments and setting a binding precedent for all assessing officers handling delayed reassessments.

The ITAT Mumbai ruled that a 140-day delay in filing an income tax appeal is excusable when the assessee received no intimation of the assessment order from either the department or their chartered accountant. This reinforces that procedural fairness under the Income Tax Act requires active communication - not passive vigilance - from taxpayers, protecting individuals from punitive dismissal due to administrative silence.

The Central Administrative Tribunal ruled that employees denied timely appointment due to unlawful administrative action are entitled to notional seniority, retrospective pay fixation, and Old Pension Scheme benefits as a matter of constitutional equity under Articles 14 and 16. This sets a critical precedent for thousands of similarly situated candidates across government services facing delayed regularization.

Non-residents earning no income in India cannot be held liable for advance tax obligations, and the ITAT Mumbai has ruled that dismissing appeals under Section 249(4) without examining the merits is procedurally illegal. This decision protects NRIs from arbitrary tax enforcement and reinforces due process in income tax appeals, setting a critical precedent for foreign taxpayers with minimal India ties.

ITAT Mumbai has ruled that corporate social responsibility donations qualify for deduction under Section 80G of the Income Tax Act if made to an approved entity, regardless of whether the expense was claimed as a business deduction under Section 37. This clarifies that CSR spending can be treated as charitable contribution for tax purposes, opening a critical pathway for companies to optimize compliance without double-counting expenditures.

CESTAT Chandigarh has ruled that exporters availing service tax exemption under Notification 42/2012 cannot be denied benefits due to technical non-compliance with procedural formalities, provided they demonstrate actual export activity through bank certificates and payment records. This sets a vital precedent for exporters facing tax demands over documentation gaps, reinforcing that substance trumps form in exemption claims.

ITAT Kolkata rules that prior period expenses crystallising in the current assessment year are deductible under the mercantile system if evidence of crystallisation is furnished. The ruling clarifies that disallowance is unwarranted where the liability becomes certain during the year, impacting tax assessments for businesses with deferred liabilities.

ITAT Delhi clarifies that income from Renewable Energy Certificates (RECs) is directly linked to the eligible business of power sale and qualifies for deduction under Section 80IA. The ruling sets a precedent for infrastructure financing, ensuring tax benefits for renewable energy projects where RECs are part of the revenue stream.

ITAT Dehradun rules that State Public Works Department rates must replace Central PWD rates for property valuation under Section 69 of the Income Tax Act, and a 15% self-supervision deduction is compulsory. The ruling eliminates additions for negligible variances, impacting tax assessments for construction costs across states.

CESTAT Hyderabad rules that repair and maintenance services for Indian Navy ships and dockyards are exempt from service tax because they serve sovereign, non-commercial governmental functions, not commercial activities. This clarifies the scope of exemption for defence-related infrastructure contractors and reinforces the principle that state functions, even when outsourced, do not trigger indirect tax liability unless commercial in nature.

CESTAT Hyderabad rules that importers cannot be held liable for additional customs duty under CVD when independent distributors later alter MRP labels after clearance. The decision shields importers from retrospective liability arising from downstream commercial actions, reinforcing the separation between importation and post-clearance pricing decisions under the Customs Tariff Act.

The ITAT Delhi has ruled that an investigation wing’s report identifying a company as bogus is insufficient to sustain additions under Sections 68 and 69C unless corroborated by independent, verifiable evidence such as bank trails, stock records, or third-party confirmations. This reinforces the burden of proof on the Revenue and protects taxpayers from speculative assessments based solely on departmental assertions.