Department had not been able to show any arrangement to have been made by assessee in the course of selling its shares of M/s. HCL Technologies Pvt. Ltd. amounted to Impermissible Avoidance Arrangement (for short, ‘IAA’) and it was a pure trading done by assessee with no knowledge.
Application filed by Canara Bank under Section 7 of the Code read with Rule 4(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating CIRP citing the default payment of a debt amount beyond Rs. 1 Crore as evident from the Form-C and Form-D of the NeSL certificate, from the loan account statement of S.S. Aluminium Private Limited, Corporate Debtor maintained by the Financial Creditor and from the acknowledgement of debt instrument executed by the Respondent was admitted.
Corporate Debtor had defaulted in repayment of financial debt to the Applicant and such default was well over the minimum threshold of Rs. 1 crore, as prescribed u/s 4 of the Code. The application filed u/s 7 of the Code was complete and there were no disciplinary proceedings pending against the proposed resolution professional.
Disallowance of ₹28,99,56,987/- towards finance costs on securitization transactions had no basis, as the interest income rightly belonged to the SPVs and not the assessee. Likewise, the addition of ₹1,61,82,000/- under section 69A read with section 115BBE was unjustified since the cash deposits in Specified Bank Notes represented genuine loan repayments from microfinance borrowers and could not be treated as unexplained.
AO was bound to follow the CBDT circular 19/2019 (F. NO.225/95/2019-ITA.II], DATED 14-82019 and the omission/dereliction was anathema to the basic feature of our Constitution “Rule of Law”, so his impugned action of passing the assessment order without quoting the DIN was held to be arbitrary exercise of power and therefore, invalid.
Notice issued by a non-jurisdictional AO was invalid rendering the addition under Section 69A void ab initio. It directly impacted the validity of the assessment under Section 69A, leading to the complete annulment of the additions.
There was no reason to interfere with the order of the Commissioner enhancing the value of the touch media device by including the value of the licence software imported subsequently and confirmed the differential duty demanded with interest and imposition of penalty.
NCLT had no discretion to appoint an IRP other than the one proposed by the applicant, unless disciplinary proceedings were pending. As the NCLT’s order substituting the recommended IRP lacked statutory support, it was quashed and the matter remitted for fresh consideration.
Consequently, the petition was admitted, moratorium under Section 14 of the IBC was declared and Interim Resolution Professional was appointed to conduct the Corporate Insolvency Resolution Process of corporate debtor.
The final order passed by CESTAT dated 22nd March, 2024 did not deserve interference. Nonetheless, the Court observed that revocation of courier registration for the entire period till 2031 was ‘disproportionate’ as though assessee was complicit, it was not the ultimate beneficiary.
