Case Details: S.G. Mittal Enterprises (P.) Ltd. vs. Satara Sahakari Bank Ltd. - [2026] 182 taxmann.com 566 (HC - Bombay)

Judiciary and Counsel Details

• Milind N. Jadhav, J.
• Amit Singh, Ms. Shivani Deshmukh & Ms. Shraddha Nagaonkar for the Petitioner.

Facts of the Case

In the instant case, the petitioner/Corporate Debtor and the respondent No. 1/Bank agreed to settle the dispute amicably and thereafter settled it by agreeing to pay a certain amount and, in that regard, executed and signed the Consent Terms.

The NCLT took Consent Terms on record and disposed of the proceedings filed by respondent No. 1/Bank against petitioner vide order in terms of the Agreement. The petitioner made payment of the entire consideration in accordance with the schedule set out in the Consent Terms.

However, despite receiving the full agreed-upon settlement amount, the respondent No. 1/Bank, by letter, demanded payment of the alleged balance, thereby disregarding the Consent Term and the NCLT’s order. Thereafter, the petitioner filed the present Contempt petition.

It was noted that the NCLT and NCLAT have independent and effective jurisdiction to punish for contempt of their own orders, including orders passed while exercising jurisdiction under IBC and once such contempt jurisdiction is vested in the Tribunal, the High Court ought not to exercise parallel contempt jurisdiction under section 10 of the Contempt of Courts Act, 1971.

Further, it was noted that contempt jurisdiction is plenary and self-contained and once contempt powers are conferred by statute, they vest in the Tribunal as an institution and apply to all proceedings before it, irrespective of whether the Tribunal is exercising jurisdiction under the Companies Act, IBC, or any other law for the time being in force.

High Court Held

The High Court observed that contempt proceedings cannot be used as a substitute for the execution or enforcement of orders, nor for resolving disputes arising from Consent Terms, especially when compliance depends on disputed facts or interpretation; in such cases, contempt jurisdiction may not be appropriate.

The High Court held that any supervisory intervention, if required, can be exercised only under Articles 226 and 227 of the Constitution of India, and such supervisory jurisdiction is distinct from contempt jurisdiction and cannot be invoked by filing a Contempt Petition. Therefore, the present Contempt Petition was not maintainable at the threshold and was liable to be dismissed.

List of Cases Referred to

• Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta [2021] 125 taxmann.com 150 (SC)/[2021] 167 SCL 241 (SC) (para 10.3)
• Delhi Judicial Service Association, Tis Hazari Court, Delhi v. State of Gujarat (1991) 4 SCC 406 (para 10.4)
• L. Chandra Kumar v. Union of India 1997 taxmann.com 1023 (SC) (para 10.5)
• S.K. Sarkar, Member, Board of Revenue, U.P. v. Vinay Chandra Misra (1981) 1 SCC 436 (para 10.6)
• Shailendra Singh v. Nisha Malpani (Resolution Professional) [2021] 133 taxmann.com 346 (NCL-AT) (para 10.7)
• Tinsukhia Electric Supply Company Limited v. State of Assam (1989) 3 SCC 709 (para 24)
• Dr. Subramanian Swamy v. Arun Shourie (2014) 12 SCC 344 (para 25).

The post NCLT Alone Can Punish Contempt Of Its Orders | HC appeared first on Taxmann Blog.

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Case Details: D. Bhuvaneswara Reddy vs. Assistant Commissioner ST - [2026] 182 taxmann.com 462 (Andhra Pradesh)

Judiciary and Counsel Details

• R. Raghunandan Rao & T.C.D. Sekhar, JJ.
• Y. Sreenivasa Reddy for the Petitioner.

Facts of the Case

The assessee, being the petitioner, was subjected to an assessment in which an assessment order was passed and served in Form GST DRC-07. The assessee challenged the assessment order solely on the ground that it did not bear the signature of the Assessing Officer. It was contended that, in the absence of such signature, the assessment order was invalid in law and that service of an unsigned order could not amount to valid service. On this basis, the assessee questioned the legal sustainability of the assessment proceedings initiated through the said order. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that an assessment order must necessarily bear the signature of the Assessing Officer and that such authentication cannot be dispensed with. The Court held that an unsigned assessment order is invalid and unenforceable in law and that service of a notice or order without signature does not amount to service at all. It was further held that, where there is no valid service of the assessment order, the question of delay in approaching the High Court does not arise. Applying Section 160 read with Section 168A of the CGST and the corresponding provisions of the Andhra Pradesh GST Act, the Court set aside the impugned assessment order and directed the authority to conduct a fresh assessment after issuing due notice and passing a duly signed assessment order.

List of Cases Reviewed

• A V Bhanoji Row v. Asstt. Commissioner (ST) [2025] 170 taxmann.com 799/94 GSTL 430 (A.P.) (para 8)
• SRK Enterprises v. Asstt. Commissioner (ST) [2023] 157 taxmann.com 93/[2024] 102 GST 450/82 GSTL 142 (A.P.) (para 8)
• SRS Traders v. Asstt. Commissioner (ST) [2024] 162 taxmann.com 430 (A.P.) (para 8)
• Tvl. Deepa Traders v. Deputy Commissioner (ST) [2024] 166 taxmann.com 81/106 GST 584/90 GSTL 411 (Mad) (para 9), followed

List of Cases Referred to

• A V Bhanoji Row v. Asstt. Commissioner (ST) [2025] 170 taxmann.com 799/94 GSTL 430 (A.P.) (para 6)
• SRK Enterprises v. Asstt. Commissioner (ST) [2023] 157 taxmann.com 93/[2024] 102 GST 450/82 GSTL 142 (A.P.) (para 6)
• SRS Traders v. Asstt. Commissioner (ST) [2024] 162 taxmann.com 430 (A.P.) (para 7)
• Tvl. Deepa Traders v. Deputy Commissioner (ST) [2024] 166 taxmann.com 81/106 GST 584/90 GSTL 411 (Mad) (para 9).

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Case Details: M J George vs. Deputy Commissioner of Income-tax - [2026] 182 taxmann.com 243 (Kerala) 

Judiciary and Counsel Details

• DR. A.K.jayasankaran Nambiar & Easwaran S., JJ.
• Nisha John, Adv. for the Appellant.
• Jose Joseph, SC for the Respondent.

Facts of the Case

The appellant-assessee sold an extent of 5.21 Acres of land at Kakkanad village for Rs.977.10 Lakhs vide registered Sale Deed dated 13.2.2006. He reported the income from the sale of land as agricultural income and claimed it to be exempt from tax. However, the Assessing Officer (AO) rejected the assessee’s claim and taxed the income as capital gains.

The assessee preferred an appeal to the CIT(A), and the CIT(A) granted relief to the assessee. Aggrieved by the order, an appeal was filed to the Tribunal. The Tribunal reversed the order of CIT(A) and confirmed the additions made by the AO. The matter then reached the Kerala High Court.

High Court Held

The High Court held that the assessee did not produce any evidence other than a certificate from the Village Officer that the land in question was agricultural land, which certificate went against the revenue records itself, which pointed to the land being in the nature of ‘Purayidam’, which translates as dry land suitable for the construction of houses.

In addition, the assessee also produced copies of some returns showing that he had returned an amount slightly over Rs. 1 lakh as agricultural income derived from the property over many years prior to the sale of the land. The appellant, however, did not produce any other cogent evidence such as wages paid to agricultural labourers, purchase invoices in respect of manure, fertilizers etc., purchase invoices pertaining to agricultural implements, if any, used in connection with the agricultural operations, the details regarding the source of water for irrigation purposes, etc.

It is on account of the absence of any cogent evidence adduced by the appellant that the appellate tribunal proceeded to hold, based on the evidence on record, that the appellant had not established that the land sold by him was agricultural in nature. The above findings of the appellate tribunal are entirely factual and, in the absence of any evidence adduced by the assessee, cannot be said to be arbitrary or perverse for the purposes of maintaining an appeal under Section 260A of the Income Tax Act.

List of Cases Reviewed

• CIT v. M.J. George IT Appeal No. 525 (Coch) of 2011, dated 31-10-2023 (para 10) affirmed

List of Cases Referred to

• CIT v. M.J. George [IT Appeal No. 117 of 2013, dated 3-7-2015] (para 5).

The post Agricultural Land Claim Rejected For Lack Of Proof | HC appeared first on Taxmann Blog.

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1. Introduction

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2026 vide Notification No. SEBI/NRO-GN/2026/295 dated 20 January 2026. The amendments introduce targeted changes to the LODR framework with a specific focus on High Value Debt Listed Entities (HVDLEs) and further strengthen the regulatory push towards complete dematerialisation of securities. The Amendment Regulations come into force from the date of their publication in the Official Gazette.

2. Revision of Threshold for High Value Debt Listed Entities (HVDLEs)

One of the most significant changes introduced by the Amendment Regulations is the upward revision of the threshold for identifying HVDLEs. Earlier, entities with listed non-convertible debt securities of Rs. 1,000 crores or more were classified as HVDLEs.

Under the amended Regulation 15(1A) of the LODR Regulations, an entity shall now be classified as an HVDLE only where the outstanding value of listed non-convertible debt securities is Rs. 5,000 crores or more. This change follows SEBI’s consultation proposal dated 27 October 2025 and is aimed at rationalising compliance requirements by limiting enhanced governance obligations to truly large debt-listed entities. Consequential amendments have been made across the LODR framework to align references with the revised threshold.

3. Mandatory Dematerialisation for Credit of Securities

SEBI has also strengthened investor service norms by amending Regulation 39 of the LODR Regulations. As per the amendment, the credit of securities pursuant to investor service requests—such as subdivision, split, consolidation, exchange, or issuance of duplicate securities—shall be effected only in dematerialised form.

Further, such credit must be completed within thirty days from the receipt of the request, along with all requisite documents. This move seeks to eliminate risks associated with physical securities and ensure faster, safer, and more transparent processing of investor requests.

3. Restriction on Transfer of Securities in Physical Form

To further reinforce the dematerialisation framework, Regulation 40 has been amended to prohibit the processing of transfer requests unless the securities are held in dematerialised form. Additionally, transmission and transposition of securities are also required to be effected only in demat form.

However, limited exceptions have been provided for transfers executed prior to 1 April 2019, recognising legacy transactions that were lawfully completed before the mandatory dematerialisation regime came into effect.

4. Conclusion

The SEBI (LODR) Amendment Regulations, 2026 mark a significant regulatory refinement by easing compliance for mid-sized debt-listed entities while simultaneously strengthening investor protection and operational efficiency through compulsory dematerialisation. The revised HVDLE threshold of Rs. 5,000 crores narrows the scope of enhanced obligations, while the demat-only regime for credit and transfer of securities reinforces market integrity, transparency, and security. Collectively, these amendments reflect SEBI’s continued focus on proportionate regulation and a fully digital securities ecosystem.

Click here to read the full notification

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Case Details: Sarwar Hussain vs. Managing Director U.P. Rajkiya Nirman Nigam Ltd. - [2025] 181 taxmann.com 283 (HC - Allahabad)

Judiciary and Counsel Details

• Abdul Moin, J
• Manish Jauhari, Mohit Jauhari, K.C. Jauhari, Subodh Kumar Verma, U.P. Mishra & V.P. Mishra for the Petitioner.
• Mohd.Mansoor Ahmad and Shishir Jain for the Respondent.

Facts of the Case

In the instant case, the petitioner was working as a storekeeper in the respondent corporation. An amount was withdrawn from the corporation’s savings bank account maintained with the bank. In a preliminary enquiry, it emerged that the petitioner had stolen a cheque and thereafter had made signatures of two officers on the said cheque and upon the said cheque being presented before the bank, the amount was withdrawn.
The Respondent-corporation was of the view that the preliminary enquiry report should be utilised against the petitioner. The Disciplinary authority, relying on the preliminary enquiry report, passed an order of dismissal against the petitioner.
The petitioner submitted a detailed reply, pointing out incongruities in the inquiry report and the inquiry process. Still, the disciplinary authority, although indicating that the petitioner had submitted a reply, failed to consider the same and passed a dismissal order.
It was noted that when a reply has been submitted, the concerned authority is required to apply its mind to it. Further, since disciplinary authority had not considered grounds taken by the petitioner in his reply while passing the dismissal order, the impugned order of dismissal was legally invalid and merited to be quashed.

High Court Held

The High Court observed that since petitioner was only one part of entire episode which started with an unauthorized saving bank account being opened by an officer and which culminated with fraudulent withdrawal of money, there clearly had been discrimination in punishment meted out to individuals, who were involved in entire episode with two individuals being punished with withholding of one increment permanently and a penalty of censure. At the same time, no action had been taken against another officer.
The High Court held that, since the petitioner had died during the pendency of the instant petition, the punishment of withholding one increment permanently and one censure would be imposed on the petitioner, with effect from the date of the dismissal order.

List of Cases Reviewed

• Raj Kumar Mehrotra v. State of Bihar (2005) 12 SCC 256 (para 36)
• Oryx Fisheries Private Limited v. Union of India (2010) 13 SCC 427 (para 37)
• B.C. Chaturvedi v. Union Of India (1995) 6 SCC 749 (para 40) followed

List of Cases Referred to

• Mohd Yunus Khan v. Uttar Pradesh Rajkiya Nirman Nigam Ltd [Writ Petition No. 6544 (SS) of 2000, dated 4-9-2012] (para 14)
• Lucknow Kshetriya Gramin Bank v. Rajendra Singh (2013) 12 SCC 372 (para 15),
• Rajendra Yadav v. State of Madhya Pradesh [2013] 2 taxmann.com 1338 (SC) (para 15)
• Raj Kumar Mehrotra v. State of Bihar (2005) 12 SCC 256 (para 36)
• Oryx Fisheries Private Limited v. Union of India (2010) 13 SCC 427 (para 37)
• B.C. Chaturvedi v. Union Of India (1995) 6 SCC 749 (para 40).

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Case Details: STCI Finance Ltd. vs. Keshav Khaneja - [2025] 180 taxmann.com 138 (NCLT - Ahd.)

Judiciary and Counsel Details

• Shammi Khan, Judicial Member
•  Sanjeev Sharma, Technical Member
• Manish Bhatt, Sr. Adv. & Anip Gandhi, Adv. for the Appellant.
• Rishi Singhal, Adv. for the Respondent.

Facts of the Case

In the instant case, the applicant-NBFC had extended a financial facility to the corporate debtor pursuant to a duly executed facility agreement. In consideration thereof, a hypothecation deed was executed, whereby 129 electric passenger vehicles were hypothecated and exclusively charged in favour of the applicant.

The corporate debtor committed repeated and wilful defaults in repayment of the loan facility, thereby triggering events of default under the facility agreement. Thereafter, the applicant declared the corporate debtor’s account NPA.

The applicant instituted a civil suit before the High Court seeking recovery of the outstanding amount. The High Court was pleased to grant interim relief, thereby appointing the Court receivers to assist the applicant in repossessing the hypothecated vehicles.

During the pendency of said suit, CIRP was initiated against the corporate debtor. The applicant filed an instant application seeking permission to sell hypothecated electric vehicles repossessed before the initiation of CIRP, and declaring that such vehicles were not assets of the corporate debtor and were outside the purview of the ongoing CIRP.

It was noted that the hypothecated electric vehicles repossessed by the applicant were assets of the corporate debtor under the IBC. Further, the moratorium under section 14 of the IBC applies to repossessed vehicles and prohibits the applicant from selling them.

NCLT Held

The NCLT held that the IBC overrides the provisions of the Motor Vehicles Act, 1988, with respect to the ownership of hypothecated vehicles in the possession of a financier. Further, reliefs sought by the applicant, including permission for sale, appropriation of proceeds, and reimbursement, were to be declined.

List of Cases Reviewed

• STCI Finance Ltd. v. Gensol Engineering Ltd. [C.S. (Comm.) 438 of 2025] (para 2.7)
• Tata Motors Finance Ltd. v. Jadoun International Pvt. Ltd. (2019) ibclaw.in 401 NCLAT (para 3.5)
• Swiss Ribbons (P.) Ltd. v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 (SC) (para 3.6)
• Sundaresh Bhatt, Liquidator of ABG Shipyard v. CBDT and Customs [2022] 141 taxmann.com 471 (SC) (para 3.7)
• Mahindra and Mahindra Financial Services Ltd. v. State of U.P. [2022] 136 taxmann.com 363 (SC) (para 4.11)
• Neesa Leisure Ltd. v. Rajasthan State Industrial and Investment Corporation [Company Appeal (AT) (Ins.) No. 510 of 2022, dated 7-12-2022] (para 4.11)
• SMAS Auto Leasing India Pvt. Ltd. v. Gensol Engineering Ltd. [Company Appeal (AT) (Ins.) No. 1042 of 2025,dated 2-9-2025]. (para 4.11)
• Volkswagen Finance (P.) Ltd. v. Shree Balaji Printopack (P.) Ltd. [2021] 124 taxmann.com 614 (NCL-AT) (para 6.6)
• Indian Overseas Bank v. RCM Infrastructure Ltd. [2022] 138 taxmann.com 329 / 172 SCL 533 (SC) (para 6.9)
• Anand Rao Korada Resolution Professional v. Varsha Fabrics (P.) Ltd. [2019] 111 taxmann.com 474/[2020] 157 SCL 350 (SC) (para 6.10)
• Sincere Securities (P.) Ltd. v. Chandrakant Khemka [2025] 177 taxmann.com 161/189 SCL 788 (SC) (para 6.11)
• Encore Asset Reconstruction Company (P.) Ltd. v. Ms. Charu Sandeep Desai [2019] 107 taxmann.com 100/154 SCL 382 (NCL-AT) (para 6.12)
• SIDBI v. Sumit Sharma Erstwhile RP [CA/AT/INS/1359/2025] (para 6.16).

The post IBC Moratorium Bars Sale Of Repossessed Vehicles | NCLT appeared first on Taxmann Blog.

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[2026] 182 taxmann.com 608 (Article)

1. Introduction

The notification and impending implementation of the New Labour Codes, particularly the Code on Wages, 2019, marks a structural shift in India’s employee compensation framework. While the operational and HR implications are widely discussed, the financial reporting consequences under Ind AS 19 Employee Benefits are equally significant and, in many cases, immediate.

Recent quarterly financial statements of several large corporates have already reflected substantial exceptional items arising from employee benefit remeasurements. These adjustments are not policy choices but accounting consequences triggered by a change in the employer’s constructive and legal obligations.

2. Interplay Between Labour Codes and Ind AS 19

Ind AS 19 requires entities to recognize:

• A liability for defined benefit obligations (DBO)
• An expense when employee benefits are earned or when obligations are amended

The New Wage Code alters the definition of “wages”, which directly affects the base on which statutory benefits, such as:

• Gratuity
• Leave encashment
• Bonus-linked benefits are computed.

Once the Code becomes notified or when its implementation becomes virtually certain, the employer’s obligation under Ind AS 19 changes, triggering remeasurement.

3. Beyond HR: Why Labour Code Changes Are a Financial Reporting Issue

Under Ind AS 19, entities are required to recognise increased obligations even before any actual salary restructuring or cash outflow occurs, whenever past service benefits are enhanced or the benefit formula is amended to the employee’s advantage. Consequently, the implementation of the New Wage Code constitutes a financial reporting event in its own right, rather than merely a prospective payroll adjustment.

4. The 50% Wage Rule and Actuarial Mechanics

The 50% Rule – Core Trigger

Under the New Wage Code, exclusions such as HRA, allowances, and perquisites cannot exceed 50% of total remuneration. Consequently, the Basic + DA component must be at least 50% of CTC.

Since gratuity and leave encashment are calculated on Basic (or Basic + DA), this rule significantly increases the benefit base.

5. Impact on Defined Benefit Plans

Defined benefit obligations under Ind AS 19 are sensitive to:

• Salary levels
• Salary escalation rates
• Years of service

An increase in Basic wages leads to:

• Higher projected benefit obligations
• Immediate increase in Present Value of Defined Benefit Obligation (PVDBO).

Click Here To Read The Full Story 

The post Navigating Ind AS 19 in the Era of the New Wage Code appeared first on Taxmann Blog.

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GSTN Advisory, Dated 23-01-2026

1. Introduction: GSTN Issues Advisory on RSP-Based Valuation

The Goods and Services Tax Network (GSTN) has issued an advisory dated 23 January 2026 to guide taxpayers on reporting taxable value and tax liability for notified tobacco and tobacco-related goods under GST. The advisory applies with effect from 1 February 2026 and addresses compliance aspects of Retail Sale Price (RSP)-based valuation.

2. Legal Framework Governing RSP-Based Valuation

The advisory refers to Notification No. 19/2025–Central Tax and Notification No. 20/2025–Central Tax, both dated 31 December 2025. Under these notifications, GST on specified tobacco products is required to be computed on the basis of the RSP declared on the package, irrespective of the actual transaction value agreed between the supplier and the recipient.

3. Computation of Deemed Taxable Value

GSTN has clarified the statutory mechanism for deriving the deemed taxable value and corresponding tax amount from the declared RSP. Even where the commercial consideration differs from the deemed value, taxpayers are required to strictly apply the prescribed RSP-based valuation formula for computing GST liability on the notified goods.

4. Reporting in e-Invoice, e-Way Bill and GST Returns

For reporting purposes in e-Invoice, e-Way Bill, and GSTR-1, GSTR-1A, or IFF, taxpayers must disclose the net sale value, being the commercial consideration, in the taxable value field. However, tax must be calculated strictly as per the RSP-based valuation. The total invoice value should be reported as the aggregate of the net sale value and the tax so computed, even where the deemed taxable value does not align with the transaction value.

5. Conclusion: Compliance Responsibility on Taxpayers

The advisory makes it clear that this reporting mechanism is applicable only to the notified HSNs and places the responsibility of correct self-assessment on taxpayers. Proper identification and classification of goods, accurate computation of tax based on RSP, and verification of reported figures are essential to ensure compliance and avoid disputes under GST.

Click Here To Read The Full Update 

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Rajiv Bhutani – [2026] 182 taxmann.com 609 (Article)

India’s economic journey over the past few years has been marked by remarkable growth and a steady rise in its position on the global stage. India is the fourth largest economy in the world, and the country’s growth reflects a combination of strong domestic demand and policy reforms, positioning the country as a key destination for global capital.

While a strong foothold in global business creates business opportunities, it intertwines with cross border businesses, related party transactions, and international taxation related challenges including Transfer Pricing. With an objective of preventing base erosion and shifting of profits outside the country, India also adopted the Transfer Pricing law back in 2001. And since its inception, India’s Transfer Pricing law has evolved by adapting to market conditions and global developments.

As we approach the Union Budget 2026, it is expected that the Indian Tax landscape will further align itself with the ever-changing global business needs and developments. Some of the key areas, where we expect certain changes and modifications, are listed below:

Removal of ambiguity in the definition of Associate Enterprise for Transfer Pricing Regulations

Currently, the definition of ‘Associated Enterprise’ as per section 162 of the new Income Tax Act 2025 diverges from the existing provisions of section 92A of the Income Tax Act 1961. The Income Tax Act 1961 has two limbs, i.e., section 92A(1) prescribing the basic attributes that must be satisfied for an Associated Enterprise relationship, which include participation in control, management or capital; and section 92A(2) laying down an exhaustive list of conditions to be satisfied by two or more entities to be regarded as Associated Enterprises.

However, Section 162 of the Income Tax Act 2025 has merged the provisions of Section 92A(1) and 92A(2) of the Income Tax Act 1961 into a single segment, and one of the general conditions for an Associated Enterprise relationship has been defined to be one of the specific conditions for establishing an ‘Associated Enterprise’ relationship. The amended definition of Associated Enterprise may result in different interpretations, leading to ambiguity for taxpayers while determining the Associated Enterprises relationship.

To ensure transparency and reduce unnecessary disputes, it is expected that each clause defining an Associated Enterprise be precisely defined, with explicit thresholds for capital, management, and control relationships, so that the scope of the ‘Associated Enterprise’ definition is applied consistently and predictably.

Threshold for maintaining Transfer Pricing documentation

Currently, the taxpayers undertaking international related party transactions exceeding INR 1 crore, are required to mandatorily maintain the Transfer Pricing documentation. This threshold has been applicable since the inception of Transfer Pricing provisions in India in 2001.

With businesses reaching new altitudes and manifold transaction volumes, the number of related party transactions is much higher than ever before. In light of the massive increase in businesses leading to much higher related party transaction volumes, the existing threshold of INR 1 crore seems modest. Hence, the expectation is that this Transfer Pricing Documentation related threshold may get an upgrade, to a much higher number.
Threshold for secondary adjustment

The Indian Transfer Pricing regulations have a provision of ‘secondary adjustment’ which requires an adjustment in the books of accounts to reflect actual profit allocation after a primary transfer pricing adjustment, treating un-repatriated funds as deemed loans with interest, preventing cash imbalances with Associated Enterprises (AEs). However, the threshold for triggering the secondary adjustment currently stands at a modest INR 1 crore of primary adjustment.

Considering the high volume of related party transactions and the transfer pricing adjustments arising out of disputes of such large related party transactions, it is believed that the threshold of INR 1 crore for triggering secondary adjustments is relatively low and often leads to compliance requirements for minor transfer pricing variations. Increasing the threshold to a higher amount would meaningfully reduce administrative burden, particularly for taxpayers with small or routine adjustments.

Furnishing of Accountant’s Certificate for non-residents

Currently, all non-resident taxpayers entering into taxable transactions with their Indian related parties are required to file an Accountant’s Certificate in India, irrespective of the fact that such non-resident taxpayers are exempted from filing their income tax return in India in certain cases.

To avoid redundant compliance, it is expected that an exemption from filing of the Accountant’s Report might be given to such non-resident taxpayers, where they are exempt from filing an income tax return in India.

Click Here To Read The Full Article 

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Case details: T. Srinivasa vs. Chief Traffic Manager B.M.T.C. Central office - [2025] 181 taxmann.com 237 (HC - Karnataka)

Judiciary and Counsel Details

• K. Somashekar & Venkatesh Naik T., JJ.
• Shekar L., Adv. for the Appellant. 
• Smt. H.R. Renuka, Adv. for the Respondent.

Facts of the Case

In the instant case, the appellant-workman of the respondent corporation was dismissed from service for unauthorised absence. At the time of dismissal, an industrial dispute concerning the union was pending, and the appellant asserted that, being a concerned workman, no approval under Section 33(2)(b) was obtained.

The Single Judge passed an order in 2011 in writ proceedings relating to the matter. On appeal to the High Court, the appellant filed a writ appeal seeking condonation of 1202 days’ delay, stating that the corporation had come forward to settle dismissal cases passed during the pendency of ID No.148/2005 and that, believing his case would also be considered, he pursued a complaint under Section 33A and filed an appeal after the respondent invoked res judicata.

The Respondent opposed, contending that appellant remained silent despite the 2011 decision on merits, no similar cases were settled, a nearly four-year delay reflected negligence, and appellant had not discharged duties since 2005

High Court Held

The High Court held that since the appellant was neither diligent nor vigilant in filing an application seeking condonation of the delay, nor in seeking the intervention of the order passed by the Single Judge, the delay application would not survive for consideration.

Consequently, the application filed for condonation of delay was to be dismissed. In view of the dismissal of the delay application, there was no consequence to consider the prayer urged in the appeal, and hence, the appeal was also to be dismissed

List of Cases Referred to

• Jaipur Zila Sahakari Bhoomi Vikas Bank v. Ram Gopal Sharma AIR 2002 SC 643 (para 4)
• New Motors (Private) Ltd. v. Morris (KT) 1961 LLJ 551 (para 6)
• Pradeep Phosphates Ltd. v. Sankar Das 2012 (1) LLJ Ori 519 (para 6)
• Top Security Ltd. v. Subhas Chander Jha [LLP No. 1044 of 2011, dated 16-7-2012] (para 6)
• Engineering Laghu Udyog Employees Union v. Judge, Labour court and Industrial Tribunal [2004] 2003 taxmann.com 4513 (SC) (para 6)
• Chief Traffic Manager, BMTC v. M. Narayana Reddy 2013-iii LLJ KANT 80 (para 6)
• State of Bihar v. Kameshwar Prasad Singh (2000) 9 SCC 94 (para 15)
• State of Uttaranchal v. Alok Sharma (2009) 7 SCC 647 (para 15)
• Gurusharan Singh v. New Delhi Municipal Committee AIR 1996 SC 1175 (para 15)
• Surya Dev Rai v. Ram Chander Rai 2003(3) KLT 490 (para 16)
• Mahindra and Mahindra ltd. v. N.B. NaravadeDE 2005 taxmann.com 1958 (SC) (para 17)

The post Delay Condonation Denied for Lack of Diligence | HC appeared first on Taxmann Blog.

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