Tag: BOMBAY HC

Bombay HC issues notice to IT department over 17-year delay in return of seized jewellery

Bombay High Court Issues Notice to Income Tax Department Over Seized Ornaments

The Nagpur Bench of the Bombay High Court has issued a notice to the Income Tax Department regarding a petition filed by Chaitanya Kochar, who is seeking the return of gold and silver ornaments that were seized during a search conducted back in 2007. The matter was brought before a Division Bench of Justices Anil L. Pansare and Siddheshwar S. Thombre on September 26, 2025.

In his petition, Kochar contended that officers from the Income Tax Department had conducted a search at his premises in 2007, resulting in the seizure of 4,275.15 grams of gold jewellery, 39,075 grams of silver jewellery, and several documents. Following the search, assessment orders were issued, holding him liable for tax payments. These orders were subsequently challenged before the Commissioner of Income Tax (Appeals) in Nagpur, which dismissed the appeals.

The case was then brought before the Income Tax Appellate Tribunal (ITAT) under Section 253 of the Income Tax Act, 1961. In a significant development, the ITAT quashed the assessment orders in its ruling dated April 28, 2022.

Despite the ITAT’s ruling, Kochar asserted before the High Court that the authorities had failed to return the seized jewellery and documents, despite his multiple requests. Arguing that the continued retention of these items was unlawful, he sought judicial intervention.

After considering the submissions, the Court directed the issuance of notice to the respondents, requiring a response within three weeks. The proceedings will now continue with the Income Tax Department required to address the court’s queries.

This case highlights a recurring challenge in tax litigation, where taxpayers often face significant delays in the return of seized assets, even after receiving relief through appellate processes. The Bombay High Court’s decision is anticipated to tackle this issue and promote adherence to appellate orders.

Bombay HC Criticizes Tax Department AI Generated Orders in Tax Cases

HC raises concern over tax dept’s AI-generated order against assessee

Bombay High Court has admonished the tax department for using AI generated order to reject the contentions of the assessee without giving any reasons.

“The principles of natural justice and fairness are too valuable to be sacrificed at the altar of AI and automation expediency,” the court remarked, underscoring that the duty to provide reasons for an adverse order is an established facet of natural justice. The HC advised the revenue department to create a system in which the Centralised Processing Center (CPC) or demonstrates ‘thoughtful consideration’ and that the essence of orders is not like the “inscrutable face of sphinx.”

A taxpayer had filed a petition against a non-speaking order (an order without explanation)  issued by the Tax Department, which had declared return filed as invalid due to the non-filing of a tax audit report. The rejection of the taxpayer’s contentions came without explanation, leaving them with little recourse except to challenge the decision in court.

Hearing the matter, a Division Bench of Justice MS Sonak and Justice Jitendra Jain took note of a critical flaw in the system: the AI-generated order exhibited no sign of human thought. Instead of engaging with the taxpayer’s arguments, the system had mechanically dismissed them—an approach the court found deeply troubling.

The judges warned the Revenue Department that the implementation of AI should not lead to the erosion of fair decision-making. They emphasized that a well-functioning tax system required more than just efficiency— it needed accountability and transparency.

The court ultimately relegated the petitioner to an alternate remedy, directing them to seek revisional jurisdiction under Section 264 of the Income Tax Act. The court reasoned that matters involving compliance with Section 44AB and interpretation of ICAI Guidance Notes were best dealt with by the Commissioner of Income Tax (CIT). However, it made it clear that the revisional authority must consider the case fairly and provide the petitioner with an opportunity to be heard.

Income Tax tribunal paves way for double deduction claims

Income Tax Appellate Tribunal allows simultaneous deduction claims under Section 54 and 54F in Ramdas Sitaram Patil vs ACIT case.

In Ramdas Sitaram Patil vs ACIT, Central Circle, Kolhapur, the Income Tax Appellate Tribunal has held that one could claim deduction under Section 54 and 54F of the Income Tax Act simultaneously.

The appellant, an individual, filed the Return of Income for the 2016-17 declaring total income of ₹96,55,810. However, the assessing officer (AO) disallowed a claim for deduction.

The AO had denied the claim for deduction under Section 54 and 54F of Income Tax Act, 1961, stating that no deduction can be claimed simultaneously in respect of the new residential house and the new residential property was purchased before one year prior to the sale of original asset.

The Tribunal said: “Admittedly, the sale consideration was paid prior to the one year before the sale of original asset. There is no bar under law to claim deduction simultaneously Section 54 and Section 54F in respect of the same asset. The crucial fact which needs to be determined in the present case is the date of purchase of the new residential property. It is settled position of law that the crucial date for the purpose of determination is when the property is purchased for the purpose of Section 54 and the date when the possession and control of the property is given to the purchaser’s hands.”

Placing an earlier Bombay High Court decision in the case of CIT vs Dr Laxmichand Narpal Nagda, the Tribunal noted that it had been previously held that “the term “purchase” employed in sub-section (2) of section 54, is not used in the sense of legal transfer and therefore, the holding of a legal title within a period of one year is not a condition precedent for availing deduction under Section 54.

“We are of the considered opinion that the appellant is entitled for deduction us/.54/54F as claimed by the assessee,” it said.

₹2,237 Crore GST Demand Quashed by Bombay High Court in Larsen & Toubro Case

Larsen & Toubro Nullifies ₹2,237 Crore GST Demand

In a recent announcement, Larsen & Toubro revealed that the Bombay High Court has nullified a GST demand of ₹2,237 crore imposed on the company. The company had filed a Writ Petition against the show cause notice issued by the Principal Commissioner of GST and Service Tax, Mumbai, pertaining to an erstwhile subsidiary. This notice was in relation to tax already paid by the company for certain transactions undertaken post demerger.

The High Court’s order, received on August 19, approved the Writ petition and nullified the show cause notice issued by the GST authorities, as per the filing. Larsen & Toubro expressed, “We wish to inform that the Company on August 19, 2024, has received an order of the Hon’ble Bombay High Court, allowing the Writ petition filed by the Company and has quashed & set aside the show cause notice issued by the GST authorities.

Additionally, Larsen & Toubro reported a 12 percent increase in net profit for the first quarter of FY25. Despite being slightly below expectations, the company’s revenue from operations grew by 15 percent during the April-June period. With revenues reaching ₹55,120 crore, which surpassed the forecast of ₹52,518 crore, the net profit rose to ₹2,786 crore in the three months ending June 30, up from ₹2,493 crore a year earlier.

S.N. Subrahmanyan, Chairman and Managing Director, commented, “We have achieved steady growth across all financial parameters in Q1 FY 2024-25, despite the geopolitical situation across the globe. Amidst various transformational shifts happening worldwide, we are well-positioned to grasp these opportunities with our expertise in our traditional P&M business and technology-driven new-age businesses.” Subrahmanyan further stated, “To enhance our presence in the Semiconductor sector, we have recently entered into a share purchase agreement with SiliConch Systems, a Bengaluru-based chip design company.

Legal Victory for 95-Year-Old Ex-Bank of Maharashtra Chief: Bombay High Court Ruling

Bombay High Court Grants Relief to 95-Year-Old Former Bank of Maharashtra Chairperson

The Bombay High Court recently granted relief to a 95-year-old man, a former Chairperson and Managing Director of Bank of Maharashtra who retired in 1983 after serving for over 37 years from 1947 but could not avail pension as he was not entitled to the same as per the Bank’s scheme.

A division bench of Justices Nitin M Jamdar and M M Sathaye earlier this month passed an order on a plea by a 95-year-old former chairperson and managing director of the bank. The petitioner, through advocate Amit Gharte, informed the court that he served as chairperson and MD of the bank from 1977 till his retirement on September 20, 1983 and had received awards for the bank’s performance during his tenure.

After retiring in 1983, he received gratuity, however no pension was paid to him in absence of any pension scheme at the time. Later, a scheme was introduced in 1995 called the Bank of Maharashtra (Employees) Pension Regulations, 1995, which stated that those employees who were in service on or after a cutoff date of January 1, 1986 would receive pensionary benefits.

As the petitioner had retired prior to the said cut-off date, he was not entitled for the said benefits, and therefore the plea in the HC challenging the “arbitrary” cut-off date.

Advocate Gharte argued that there was no rational nexus providing the cut-off date creating two classes of persons receiving the pension. However, the bank argued that the Supreme Court had passed a verdict rejecting the challenge to the cut-off date.

Gharte argued that his client had also sought enhancement of ex-gratia payment as it was inadequate and should be at least comparable to the pension. However, the bank said there was no specific regulation for the increase. The bench noted, “With these circumstances, we are of the opinion that the case of the Petitioner should be considered by the Bank on a different basis than other employees considering his contribution and Respondent/Bank should consider extending reasonable monetary assistance to the Petitioner in his advanced age.”

The court directed the Managing Director of the bank to “personally look into the petitioner’s matter, and if it is feasible, extend all necessary benefits by considering it as a ‘special case.”

Source: [The Indian Express](insert link here)

Bombay HC Declares Reassessment Proceedings Invalid for Non-Existent Entity with Active PAN!

In a recent judgment, the Bombay High Court has ruled against the validity of reassessment proceedings conducted by the tax department against non-existent entities, even though the PAN remained active.

The court, in its decision, emphasized that an active PAN does not provide a legitimate basis for initiating proceedings against entities that have ceased to exist.

The bench, comprising Justice K. R. Shriram and Justice Neela Gokhale, opined that the mere existence of an active PAN does not justify the Department’s issuance of notices to non-existent entities.

They pointed out that there could be instances spanning various years when a company was in existence, and the PAN numbers might be selected for scrutiny or refund issuance. However, this should not serve as grounds for the Department to target defunct entities.

The case involved a petitioner/assessee who challenged a reassessment notice on the grounds that all notices had been sent to an entity that no longer existed.

Diversey India Private Limited (DIPL) had merged with the petitioner on April 1, 2015, as per an official communication dated May 12, 2016, sent to the Assessing Officer and Principal Commissioner.

The Department argued that the defense presented by the petitioner pertained to assessment years 2012–13 and 2013–14.

Notably, when the notices u/s 148 were initially served, the petitioner did not raise any objections and participated in the reassessment proceedings. Furthermore, the PAN of the noticee was not deactivated.

The assessee contended that issuing a notice and, if applicable, an assessment order in the name of a company that no longer exists post-amalgamation is without jurisdiction and legally flawed, therefore warranting annulment.

Ultimately, the court sided with the petitioner and quashed the reassessment notices, upholding the principle that the tax department cannot pursue proceedings against entities that have undergone amalgamation and lost their legal existence.

This decision serves as an important reminder of the need for tax authorities to align their actions with the legal status of entities and not rely solely on the existence of an active PAN for reassessment purposes.

BREAKING: Bombay High Court warns tax officers over delays in serving assessment orders on taxpayers

The Bombay High Court has warned that it may start imposing costs on income tax assessing officers, if they are found going after taxpayers with delayed assessment orders that leave little time for the taxpayers to respond [Ajay Securities Pvt Ltd vs The Income Tax Officer and Ors.].

A bench of Justices KR Shriram and Kamal Khata condemned such delays and emphasized that the Central Board of Direct Taxes (CBDT) needs to sensitize its officers to ensure that taxpayers are treated fairly.

It is most unfortunate stand being taken by Union of India through its officers which requires to be condemned, which we hereby do. We hope the CBDT would sensitize its officers so that they do not treat assessees in this manner. We think it is high time we start imposing substantial costs to be recovered from the salary of such Assessing Officers,” the Court said.

The Court made these remarks while quashing an income tax draft assessment order, which was served after a six month delay and which eventually left the assessee (a company) only three days to respond.

The assessee company alleged it had responded to a notice from the income tax authorities under Section 142(1) of the Income Tax Act on March 9 and March 16, 2021.

However, the assessing officer failed to act on this response for six months until September 3, 2021.

After receiving a notice dated September 3, the company submitted documentary evidence and inquired whether further details were required.

Despite these efforts, a draft assessment order was issued only on September 23, 2021, giving the company only three working days to respond. Its requests for a short adjournment and a personal hearing through video conferencing were also denied, the Court was told.

The Court criticized the assessing officer for such a delay in taking action and for giving the company only a minimal amount of time to respond to the draft assessment order.

It highlighted that assessing officers must work with more diligence and alacrity.

The Court ultimately quashed the assessment order and remanded the matter back to the Jurisdictional Assessing Officer with directions to pass a fresh assessment after hearing the assessee.

Advocate Dinkle Hariya along with advocate Simoni Chouhan, briefed by advocate Rashmi Vyas appeared for the assessee company. Advocate PC Chhotaray appeared for the revenue authorities.

Bombay High Court Quashes ITAT Order, Ruling it Beyond Scope

ITAT order that upheld additional ‘unaccounted income’ as taxable for an individual who is alleged to have engaged in rigging of stocks, observing the tribunal has gone beyond its scope.The Income Tax Appellate Tribunal (Mumbai bench) had upheld the addition of ‘unaccounted income’ of Rs 90 crore in the hands of a defaulting taxpayer, Naresh Manakchand Jain, purported to have engaged in rigging of prices of select scrips and in money laundering by providing bogus entries like tax-exempt long-term capital gains to other parties. In addition, the ITAT had said that the names of 30,000-odd parties, who had benefited from these transactions, should be shared with regularity authorities.The orders were quashed on technical grounds, as the tax tribunal had passed them ex-parte (without giving a hearing opportunity to Jain). Further, the high court held that the powers of the ITAT are limited to passing an order which is confined to the issues placed before it, in appeal. The high court has directed the ITAT to hear the matter afresh.In this case, as reported by TOI in its edition dated September 9, the ITAT had referred to Jain as a kingpin and had gone beyond upholding the order of lower I-T authorities. It had directed Jain’s jurisdictional income-tax official to provide details of over 30,000 individuals and entities involved in the modus operandi to various regulatory authorities, such as jurisdictional I-T officials of these parties concerned, Sebi, stock exchanges, RBI, and the Registrar of Companies, for investigation and action. These details were to be provided within 90 days of the ITAT order.Subsequent to the ITAT’s order, the Bombay high court granted an interim stay. Now, in its final order, the high court stated: “These directions could not and in any case, should not have been passed because this was an appeal filed by the taxpayer and not an appeal that was filed by revenue authorities.”

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Bombay high court quashes ITAT order on technical grounds, as the tribunal had gone beyond its scope

The Bombay high court has overturned an order by the Income-tax Appellate Tribunal (ITAT) that upheld the addition of unaccounted income in the hands of Naresh Manakchand Jain. The court ruled that the ITAT’s order was passed without giving Jain an opportunity to be heard and that the ITAT’s powers are limited to the issues in appeal. The high court has directed the ITAT to hear the matter again without being influenced by its earlier order.

High court quashes ITAT order in money laundering case

The Bombay High Court has overturned an ITAT order that upheld additional ‘unaccounted income’ as taxable for an individual involved in stock rigging. The court held that the tribunal had exceeded its authority and had passed the orders without giving the individual a hearing opportunity. The high court has directed the ITAT to hear the case again. The ITAT had previously referred to the individual as a kingpin and had ordered the disclosure of details of over 30,000 individuals and entities involved in the scheme for investigation and action.

High court lets Manipur tribal bodies appeal Meitei ST tag order

The Manipur high court has granted permission to four tribal organizations to appeal a previous order directing the state government to recommend Scheduled Tribe (ST) status for the Meitei community. The order, issued in March, led to sectarian violence and at least 180 deaths. The Supreme Court and the Union home minister have criticized the directive, and the tribal organizations have raised objections, arguing that they will be adversely affected if they are not given the opportunity to voice their concerns regarding the ST status for the Meitei community.

Undue harassment of tax payers… Bombay HC told Income Tax Dept – return the seized 16 lakhs, know the whole matter

The Bombay High Court has recently reprimanded the Income Tax Department. Underlining the importance of judicial discipline, the High Court has asked the authorities to return Rs 16 lakh to the lawyer. The Air Intelligence Unit (AIU) seized the money from a Mumbai-based lawyer who was about to go to the Supreme Court to appear in two cases. A bench of Justices KR Sriram and FP Pooniwala said, “It is of utmost importance that the revenue authorities are bound by the decision of the appellate authority.” The Income Tax Appellate Tribunal (ITAT) in May accepted the lawyer’s explanation that it was professional income received from his clients on which he later paid tax. The High Court observed that the order of the Tribunal was binding on the Additional Commissioner and the officers subordinate to him. The High Court’s bench said, ‘The principle of judicial discipline requires that the orders of the higher appellate authority are obeyed by the subordinate officers.

Advocate Ram Mendadkar has been practicing law for more than 25 years. Ram Mendadkar had filed a petition in the High Court seeking the return of his illegally confiscated money. The AIU had intercepted Mendadkar at the Delhi airport in July 2018 and found Rs 16 lakh in currency notes of Rs 2,000, Rs 500 and Rs 100 in his luggage. The department said it was unexplained income.

Interest will be charged after May 12

After the ITAT ruled in his favor, the High Court directed the Income Tax Department to return the entire Rs 16 lakh seized from Mendadkar by August 31. The High Court said that if IT failed in this, it would have to pay interest on it from May 12.

Lawyer was going to Delhi

Mendadkar said the cash was for fees to be paid to the lawyer on record in the Supreme Court for two clients. He was going to appoint a senior advocate for both the cases. His petition did not mention the name of the senior advocate he wanted to appoint.

Dispute over money

The lawyer said that his clients had deposited around Rs 6 lakh in cash and Rs 17 lakh by check in April 2018 as his professional fees. The IT assessing counsel and the Commissioner (Appeals) rejected his explanation, but the ITAT looked at his professional fee account and was satisfied that the amount had been accounted for.

High Court said – highly objectionable

Mendadkar said that the Commissioner of Income Tax cannot seek clarification about the source of money from his client. The Income Tax Department opposed Mendadkar’s plea and requested the High Court not to entertain the ITAT order which was erroneous considering the justification given by the CIT(A). After the High Court called it highly objectionable, the officer withdrew the affidavit.

Training instructions for officers

The High Court order said, ‘If the officers of the Income Tax Department are allowed to continue in this manner, it will only result in undue harassment to the taxpayers and chaos in the administration of tax laws. It is expected that the Union Ministry of Finance, Income Tax and Central Director, Direct Taxes will conduct orientation to train their officers suitably.

Bombay High Court Dismisses BCCI’s Writ Against CESTAT’s Rejection of ‘Rectification Application’ Without ‘Mistake Apparent from Record’

The Bombay High Court has dismisses Writ Petition by Board of Control for Cricket in India (BCCI) against CESTAT’s rejection of ‘Rectification Application’ without ‘Mistake Apparent from Record’.

The petitioner, BCCI is a society registered under the Tamil Nadu Societies Registration Act, 1975 and is also registered under the Finance Act, 1994 (Service Tax). On 21st January 2008, the petitioner entered into an agreement, for grant of Media Rights, with MSM Satellite (Singapore) Pte. Ltd. and World Sport Group (India) Pvt. Ltd. for telecast of Indian Premier League (IPL) Matches.

The agreement was superseded by an agreement dated 25th March 2009. On 14th October 2009, four show cause notices were issued for the periods between 2007-08 and 2011-12. The issue raised in the show cause notices were whether the petitioner is engaged in rendering the “franchisee” services and whether the services rendered under the aforesaid agreement constitutes the “export of service” under the Export of Service Rules, 2005.

The BCCI filed a reply to the show cause notice. On 19th August 2015, the aforesaid show cause notices came to be adjudicated and the Order-in-Original was passed rejecting the contention of the petitioner that they are engaged in export of service and furthermore, the services of the petitioner constitutes “franchisee services” as defined under the Service Tax.

The BCCI made an application, under Section 35C(2) of the Central Excise Act as made applicable to the Service Tax by virtue of Section 86(7) of the Finance Act, 1994, for rectification of mistake in the order dated 10th December 2018. On 2nd December 2019, Tribunal dismissed the rectification application holding that the petitioner is seeking to review the findings recorded in the original order which cannot be the subject matter of rectification of mistake.

The court held that Section 35C (2) read with Section 83 of the Finance Act, 1994 empowers the Tribunal to rectify the order only on mistakes which are apparent from record. The phrase ‘mistake apparent from record’ has been explained by the Supreme Court as far back as in the year 1971 in case of T.S. Balaram, Income Tax Officer, Company Circle IV, Bombay Vs. Volkart Brothers & Ors.2 wherein the Supreme Court held that a debatable point of law cannot constitute a mistake apparent from the record on which two opinions are conceivable, it cannot be said to be an error apparent on the face of the record.

n the present case as observed by us above, none of the errors agitated constitutes mistake apparent from record.

Case Title: BCCI V/s Commissioner of Service Tax

Citation: WRIT PETITION NO.1987 OF 2022

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