Recent Updates on Income-tax, GST & Corporate Law – January 27, 2025
Income-Tax
Update-1: A Sukanya Samriddhi account can be opened by the guardian immediately after the girl child’s birth until she turns 10 years old. The scheme is exclusively for resident Indian girls, from account opening until maturity or closure. Only one account is permitted per child, with a maximum of two accounts allowed per family. Exceptions are made for twins or triplets. The account can also be transferred anywhere in India. To open an account, the following documents are required: the Sukanya Samriddhi Account Opening Form, the girl’s birth certificate, and identity and address proofs as per RBI KYC guidelines.
Accounts can be opened at post offices or designated bank branches with a minimum initial deposit of ₹250. Additional deposits must be in multiples of ₹50, with a minimum annual deposit of ₹250. The maximum deposit allowed per financial year is ₹1,50,000, with excess amounts returned without interest. Deposits can be made for up to 15 years from the account opening date, ensuring disciplined savings for the girl child’s future.
Update-2: In case of Cochin International Airport Ltd. vs The Assistant Commissioner of Income Tax (ITA NO. 77 OF 2018), the Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S of Kerala HC noted that “The role of the assessing officer under the Income Tax Act, 1961 is not only that of an adjudicator but also of an investigator and he cannot remain oblivious in the face of a claim without any enquiry.” U/s 263 of The Income-tax Act, 1961, the Principal Commissioner or Commissioner has the power to review any tax-related decision made by an Assessing Officer (AO). Hence, the bench directed the assessing officer to re-examine the said issue is perfectly justifiable and legal.
Goods & Services Tax (GST)
Update-1: As per a recent news update, the directorate general of Goods and Services Tax Intelligence Wing (GST IW), Jamshedpur regional unit, has exposed tax fraud, estimated to exceed ₹100 crore. A senior GST IW officer involved in the investigation revealed that while initial findings indicate tax evasion of ₹30 crore, the amount is expected to cross ₹100 crore as the probe continues. The primary accused, Vikas Jaisuka, and his brother Rajesh Jaisuka from Jugsalai, allegedly orchestrated the fraud by establishing fictitious companies and generating fake invoice bills worth ₹150 crore. Both are absconding.
Update-2: After Gujarat High Court, in a yet again landmark judgment, the Bombay High Court on January 21 quashed the GST demand on the assigning of leasehold land under the Maharashtra Industrial Development Corporation (MIDC). The dispute arose from a transaction in which MIDC initially assigned leasehold land to Panacea Biotec Ltd. Subsequently, in 2022, Panacea Biotech assigned this leasehold land to Mankind Pharma. The key legal question before the Court was whether GST at 18% could be levied on the transfer of leasehold land by Panacea Biotech to Mankind Pharma. The petitioner, Panacea Biotech Ltd, argued that the transaction falls under Item 5 of Schedule III of the Central Goods and Services Tax Act, 2017.
The Court, under Justice BP Colabawalla and Justice Firdosh P Pooniwalla observed that the impugned order erroneously stated that no submissions were made by the petitioner in response to the show cause notice. This finding was factually incorrect, as the petitioner had indeed submitted a reply dated July 22, 2024, which was duly received by the Assistant Commissioner of State Tax on the same day. Despite this, the impugned order failed to consider or address the petitioner’s submissions, rendering the decision procedurally flawed and violative of principles of natural justice.
Corporate Law
Update-1: The National Company Law Tribunal (NCLT) Delhi comprising of Justice Subrata Kumar Dash (Member Technical) and Justice Ashok Kumar Bhardwaj (Member Judicial) dismissed an appeal filed by the personal guarantors of the principal debtor M/s VCRM Petrochemicals Pvt. Ltd. stating that the appeal falls within the ambit of limitation period as prescribed under Section 19 of Limitation act, 1963 and that the Liquidator can institute a Section 95(4) proceedings against the personal guarantors.
UCO Bank, the applicant and creditor-initiated proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 against the respondents Nishu Goel and Ajay Goel, who were also the personal guarantors for the financial facilities extended to the Principal Debtor, M/s VCRM Petrochemicals Pvt. Ltd. The deed of guarantee was executed on 31.05.2017 and the Principal Debtor account was declared as a non-performing asset (NPA) on 31.03.2018. This led to issue of notice under Section 13(2) of the SARFAESI Act, 2002.
Update-2: Commercial Wisdom Of CoC In Opting For Liquidation And Rejecting Resolution Plan Of Ineligible Applicant Is “Non-Justiciable”: The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi has held that the commercial wisdom of the Committee of Creditors (CoC) in rejecting a resolution plan and opting for liquidation is “non-justiciable”. The Appellant-Director was disqualified under Section 164(2) of the Companies Act, thereby rendering the him ineligible to be a Resolution Applicant under Sections 29A(e) and 29A(j) of Insolvency & Bankruptcy Code, 2016 (IBC). The Tribunal held that the decision of the CoC to reject the Appellant’s Resolution Plan cannot be interfered with.
Update-3: Appeal U/S 421 Of Companies Act Not Maintainable Against Interlocutory Order Permitting AGM, No Substantive Rights Affected: The National Company Law Appellate Tribunal has recently held that an appeal under Section 421 of the Companies Act, 2013, against an interlocutory order permitting holding of an Annual General Meeting (AGM) without affecting the substantive rights of the appellants is not maintainable. The Tribunal emphasized that procedural orders which do not determine substantive rights cannot be appealed under Section 421.
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