I. T. MIRROR 24-25 VOL 10

MOUTH PIECE OF THE INCOME TAX BAR ASSOCIATION ç±l¢{Ýæ „±ü{ÝÐí{¢Ý}¢ì Year 2024-25 | Volume : 10 | Month : MAR 2025 Special Edition SHETAX: WOMEN’S VOICES IN TAXATION

Chairman's Message - CA (Dr.) Vishves Shah 2 President's Message - CA Shridhar Shah 3 Hon. Secretary's Message - CA Kenan Satyawadi 4 MOUTH PIECE OF THE INCOME TAX BAR ASSOCIATION ç±l¢{Ýæ „±ü{ÝÐí{¢Ý}¢ì Year 2024-25 | Volume : 10 | Month : MAR 2025 Adv. Ashutosh Thakkar Adv. (Dr.) Dhruven Shah CA (Dr.) Vishves Shah Invitee Members Bhavesh Govani CA Fenil Shah Hiren Patel Narendra Karkar CA Parth Doshi CA Raghav Thakkar CA Shivam Bhavsar CA Suvrat Shah Committee Members Adv Dhiresh T Shah President Emeritus CA Shridhar Shah President CA Maulik B. Patel Vice President CA Kenan Satyawadi Hon. Secretary CA Pratik Kaneria Hon. Joint Secretary CA Jaykishan Pamnani Hon. Treasurer CA Ashish Tekwani Immediate Past President CA (Dr.) Vishves Shah Chairman CA Nisha Tekwani CA Suvrat Shah CA Harshil Sheth Co – Chairman CA Bhavin Soni CA Jaykishan Vidhwani CA Pratik Kaneria Members IT Mirror Committee Managing Committee Room No. 402, Nature View Building, Nr. Mrudul Tower, Ashram Road, Ahmedabad - 380009. Tel. No. : 079-48011947 I e-mail: [email protected] I www.incometaxbar.org INCOME TAX BAR ASSOCIATION Disclaimer : The opinions, views, statements, results published in this IT Mirror are of the respective authors / contributors and Income Tax Bar Association is neither responsible for the same nor does it necessarily concur with the authors / contributors. It is advised that before taking any professional / legal decision based on the Articles, a legal opinion of proper professional may be obtained. These are articles are for educational purposes only. While every effort has been made to ensure accuracy of information contained in this Journal, the Association is not responsible for any error that may have arisen. 1 The Unseen Cost of Poor Posture Every Tax Professional is Paying… - Dr. Mansi Shah Ignorance of Developments May Not Be The Excuse - CA Krishna Parag Raval Penalty under Section 270A of the Income Tax Act: Legal Provisions, Analysis and Judisprudence - CA Nisha Tekwani Violation of Principles of Natural Justice and Non-Compliance of Service of GST Notices - Adv. Zalak Sohil Dalal Navigating Change: Strategic Imperatives for Chartered Accountants - CA Pooja Thakkar Valuation Pitfalls in Tax Refunds for Exports with Payment of IGST: The FOB or CIF Conundrum - CA Amrin Alwani Waiver of Interest or Penalty or Both relating to Demands raised under Section 73, for certain tax periods - CA Pratibha Goyal Claiming ITC Under the Wrong Head: Legal Analysis and Tax Implications - CA Vanshika Vidhwani Adjudication Process Under Companies Act 2013 - CS Riddhi Pamnani 5 10 17 22 25 28 30 33 36

2 Chairman’s Message CA (Dr.) VISHVES SHAH Chairman Dear Readers, When you are reading this, we are in the month when we celebrate the International Women's Day, and it gives me immense pleasure to introduce this second consecutive special edition of IT Mirror, where every article is penned by the remarkable women of our community. This edition is a tribute to the spirit of women in the profession and life both. Women in India have consistently broken barriers, setting new benchmarks in fields ranging from sports to science, politics to entrepreneurship. Icons such as Mary Kom in sports, Kalpana Chawla in space exploration, Falguni Nayar in entrepreneurship, and Nirmala Sitharaman in governance have redefined the idea of empowerment. Their stories are an inspiration, not just for women but for society at large. They serve as powerful reminders that even when opportunities not equally available, one with strong will, can grab it and thrive, contributing immensely to the progress of society & nation. When you are reading this edition, either you are part of a strong 400+ professionals attending Two Day Tax Conclave, 2025 or you just missed the best event of the year which truly is an event exclusively dedicated to knowledge. At the same time, this month also marks a crucial period for tax professionals as the financial year-end draws near. With it comes the responsibility of ensuring accurate tax filings, financial statements, and compliance requirements. This time of the year brings both pressure and fulfilment as we work tirelessly to meet deadlines, reconcile data, and ensure clients' financial health. The tax profession, I would say much more than other sectors, is witnessing a steady rise in women professionals and level playing field, which is also bringing unique perspectives and expertise to the table. It is inspiring to see women excelling in this space, shouldering responsibilities and thriving in leadership roles. Before ending this message, I would like to quote Louis L'amoar “Knowledge is like money: to be of value it must circulate, and in circulating it can increase can quantity and, hopefully, in value.” Wishing you a successful learning & financial year-end! Warm regards, CA (Dr.) Vishves A. Shah Chairman, IT Mirror Committee Income Tax Bar Association

3 Dear Knowledgeseekers, It is a great privilege to present to you the second consecutive SheTax, a special edition of IT Mirror, where all articles are written by our female contributors in continuation of the tradition, we started during the last year to celebrate the International Women's Day in the month of March. This edition reflects the invaluable contributions of women in the tax profession and showcases their unique perspectives on various subjects. It is indeed a great pleasure for me that this edition will be in your hands during the Two Day Tax Conclave, 2025, the 6th Edition of this flagship event. The event is entirely dedicated to spreading knowledge and learning. The importance of continuous learning cannot be emphasized enough in our profession. Tax laws and regulations are subject to modification with respect to vision of the government and policy decisions, and as professionals, it is our responsibility to stay informed and updated. With the vision of authorities to make tax laws simple, we are witnessing changes like never before in the laws such as Income Tax, GST, and corporate regulations, which demand that we continuously upgrade our knowledge. Learning is not a one-time task but an ongoing journey, and platforms like the Tax Conclave provide the perfect setting for this. The Tax Conclave is a place for professionals to come together, peer-to-peer networking, sharing knowledge, and learning from the experiences of others. It provides an opportunity to sit for two days and learnfrom leading experts in the field that will benefit thetax and allied practice. I strongly encourage all members to actively participate and open new arena to practice which can create a win-win situation for all of us in future. As rightly said by Paul Solarz “Collaboration allows us to know more than we are capable of knowing by ourselves.” One of the unique features of this edition is an article written by a non-tax professional, which focuses on the physical issues tax professionals face due to long hours of desk work. This article sheds light on the importance of maintaining good physical health alongside our professional duties. We often prioritize our work and clients, but it's equally crucial to take care of our bodies and prevent the common work-related issues that arise from prolonged sitting, poor posture, and stress. Being a continuous advocate of prioritizing health, I request all of you to read it and make it part of your routine. As the financial year-end approaches, tax professionals face a crucial period of increased responsibilities. This demands meticulous attention to ensure accurate tax filings, compliance with regulations, and thorough financial reconciliations, all of which are essential for maintaining clients' financial health and trust and I am sure that this tax conclave will certainly add value to each of your client through your learning. I would like to express my gratitude to all the contributors&the Chairman and the members of IT Mirror committee who have made SheTax a success and I hope this special edition also becomes a brand like Two Day Tax Conclave. Wishing you all a happy learning season. Regards, CAShridharShah President Income Tax Bar Association President’s Message CA SHRIDHAR SHAH President

4 Dear Readers, I am honoured and delighted to present to you this special edition of IT Mirror, a celebration of women's empowerment and their contributions to the tax profession. In recognition of International Women's Day, all the articles in this edition have been written by female contributors, showcasing their unique insights and expertise in various aspects of taxation and law. It will be a great honour for us that this edition will be unveiled during the Two Day Tax Conclave 2025, which will take place on the 21st of March. International Women's Day is a time to reflect on the incredible achievements of women across all fields. In the tax profession, women have proven to be strong leaders, skilled practitioners, and role models for the next generation of professionals. This special edition of IT Mirror is filled with a wide variety of articles, ranging from topics on the health and well-being of tax professionals to the latest developments in Income Tax, GST, and the Companies Act. The issue brings together an impressive selection of knowledge and practical advice, which I am sure will prove valuable to all our readers. One of the key highlights of this edition is the focus on the health of tax professionals. As we all know, the role of a tax professional is demanding, especially as the financial year-end approaches. The stress of meeting deadlines, ensuring compliance, and managing client expectations can often lead to burnout. It is during these times that we must pay close attention to our physical and mental health. The articles in this edition provide excellent advice on how to manage posture and adopt habits that can help prevent burnout. In addition to the focus on health, this edition delves into important topics in tax and law, including recent changes and updates in the areas of Income Tax, GST, and the Companies Act. The contributors have shared their expertise on various issues. These insights are particularly relevant as we approach the financial year-end, a crucial time for professionals to ensure that their clients' financial affairs are in order. The release of this edition during the Two Day Tax Conclave, 2025 adds an extra layer of significance. The Conclave will provide a platform for knowledge-sharing, professional development, and networking, and I encourage all attendees to make the most of this opportunity. The special edition of IT Mirror serves as a complement to the Conclave, providing you with additional learning resources from some of the brightest minds in the field. I want to take this opportunity to express my sincere gratitude to all the contributors who have made this edition possible. Their dedication, hard work, and expertise are truly inspiring. I hope that this special edition will not only inform and educate but also serve as a reminder of the importance of women's contributions to the tax profession and beyond. Wishing you all a productive and insightful Two Day Tax Conclave, 2025! Warm regards, CA Kenan Satyawadi Hon. Secretary Income Tax Bar Association Hon. Secretary’s Message CA KENAN SATYAWADI Hon. Secretary

Attention, Tax Professionals! Are you constantly buried under paperwork, hunched over spreadsheets, or glued to your desk, crunching numbers for hours? While you keep your clients' finances in check, your own posture might be accumulating Postural Penalties - leading to back pain, neck stiffness, and fatigue. Think of it like an Assessment Notice for your body - it’s warning you before serious issues arise! Maintaining poor posture while working long hours can have serious consequences, leading to what we call the Taxing Reality of Poor Posture. Just as unpaid taxes accumulate interest over time, bad posture slowly compounds into chronic pain and discomfort. Small imbalances today can result in major issues later, increasing the risk of muscle imbalances, joint stiffness, and even nerve compression. The Impact of Prolonged Sitting 1. The "Tax Season Slouch" – Your Spine’s Biggest Audit Risk Spending hours hunched over spreadsheets or leaning toward a screen creates a postural debt that will eventually come due. Over time, this leads to: • Rounded shoulders & stiff upper back from constant forward leaning. • Neck pain & tension headaches caused by ‘text neck’ from checking emails. • Lower back strain due to prolonged sitting without lumbar support. – Think of your spine as a well-balanced financial portfolio. Poor postural investments–like slouching for hours–will eventually trigger an “assessment notice” from your body in the form of chronic pain. The Unseen Costs of Poor Posture Every Tax Professional is Paying……. - DR MANSI SHAH 5

2. Posture & Stress: The Emotional Depreciation No One Talks About As deadlines approach and stress builds, your posture often worsens. Shoulders tighten, your head leans forward, and suddenly, you're not just stressed–you’re physically carrying it. • Stress leads to bad posture (hunched, tense body). • Bad posture increases stress (signals ‘threat mode’ to the brain). • Increased stress leads to muscle tension and fatigue. • Fatigue decreases productivity, affecting focus and efficiency. – Ever notice how you sit during a stressful audit versus when you’re celebrating a big refund? Your posture reflects and reinforces your emotional state. 3. Body Language = Brand Image Your posture doesn’t just affect your health–it also influences how others perceive you. In the finance world, credibility and confidence are everything. • Slouched, head down? Looks like a stressed-out professional barely surviving tax season. • Upright, shoulders open? Looks like a confident consultant ready to solve problems. – If you were hiring a tax consultant, which version of yourself would you trust more? 4. Sitting Too Long? Your Blood Flow is Filing a Protest If sitting all day were taxed, finance professionals would be in the highest bracket! Prolonged sitting compresses blood vessels, leading to: • Swollen feet & varicose veins from poor circulation. • Higher risk of blood clots (DVT) due to inactivity. • Low energy & sluggish digestion, especially post-lunch. – Imagine if your bank restricted withdrawals. That’s how your veins feel when you sit too long without moving! V/S I. T. MIRROR 6

5. The “Screen-Time Surcharge” – Your Eyes Are Paying Extra GST! Between spreadsheets, audits, and client messages, your eyes work overtime. This results in: • Dry, irritated eyes due to reduced blinking. • Frequent headaches from prolonged screen exposure. • Blurry vision & focus issues as eye muscles fatigue. – You wouldn’t run your laptop at full brightness all day without a break, right? Your eyes need a power-saving mode too! Poor posture is more than just an inconvenience–it’s a silent liability that accumulates over time. But just like a smart tax strategy, small corrections today can prevent major penalties later. In the next section, we’ll uncover easy-to-implement strategies to improve posture, boost productivity, and keep your body’s balance sheet in the green. Optimizing Your Workstation: A Smart Investment for Your Spine Your desk setup is just like your financial portfolio–if it’s not structured well, you’re bound to face long-term losses. Our spine is not designed to stay in a sitting posture for long. No matter how expensive your chair is, if you don’t take breaks, your spine will eventually protest with pain. The Right Desk Setup: Small Tweaks, Big Impact Just as strategic investments yield long-term gains, small tweaks to your workstation can save your spine from unnecessary stress. • Screen at Eye Level – Keep your monitor at eye level to avoid straining your neck. No fancy setup? Use a stack of books to elevate your screen. • Elbows at 90 Degrees – Adjust your keyboard and mouse so your elbows rest at a comfortable 90-degree angle. • Feet Flat on the Floor – Keep feet grounded to maintain circulation. If your chair is too high, use a footrest or a sturdy box. • Lumbar Support – A small cushion or rolled-up towel at your lower back helps maintain your spine's natural curve. (If needed) • Alternate Positions – Sitting cross-legged on the floor occasionally can relieve spinal stress and improve flexibility. (if needed for a change) The Power of Standing Desks: A Worthy Investment One of the best ways to combat prolonged sitting is to stand up and work. • Invest in a standing desk–or DIY one! No budget? A pile of books can elevate your screen to a standingfriendly level. • Follow the 50-50 Rule – Aim for a balance–50% sitting, 50% standing. Start with 10-15 minutes of standing every hour and build from there. I. T. MIRROR 7

• Shift Your Weight – Don’t remain static–move, stretch, or use an anti-fatigue mat for support. • Make Movement a Habit – Take all meetings standing or walking to integrate movement naturally. Movement Breaks: Your Spine’s Mandatory Recess Even with the perfect desk setup, prolonged sitting is the real problem. Sitting is the new smoking – it silently damages your health. • The 30-30 Rule – Every 30 minutes, stand up and move for at least 30 seconds–walk, stretch, or simply reset your posture. • Walk & Talk – Take calls while walking instead of staying seated. • Simple Stretches to Prevent Stiffness:  Neck Stretch – Tilt your head side to side  Shoulder Rolls – Rotate shoulders forward and backward.  Seated Spinal Twist – Sit tall, twist gently to one side, and hold.  Hamstring Stretch – Place one foot on an elevated surface, hinge at the hips, and stretch.  Wrist & Finger Stretch – Extend one arm; pull back fingers gently for a forearm stretch. Beyond the Desk: Small Changes, Big Relief A great desk setup is just one piece of the puzzle. The real key to preventing pain and stiffness lies in frequent movement, hydration, and posture awareness. Move More, Sit Less – Easy Ways to Stay Active at Work Even with the best ergonomic setup, staying in one position too long leads to stiffness and discomfort. • Micro-Movements Matter – Shift your position often–adjust how you sit, roll your shoulders, stretch your legs under the desk. Even small movements prevent stiffness. I. T. MIRROR 8

• Walk Whenever You Can – Take the stairs instead of the elevator, walk while on calls, or do a quick lap around your office after completing a task. • Set a Movement Reminder – Use your phone or smartwatch to remind you every 30-45 minutes to stand up, stretch, or move for a minute. • Change Up Your Sitting Position – Sitting cross-legged on the floor or using a stability ball occasionally can help change the load on your spine. Hydration – Your Secret Weapon Against Stiffness Surprisingly, dehydration contributes to muscle tightness and fatigue. • Drink Water Regularly – Aim for at least 2-3 liters per day. Keeping a water bottle at your desk makes it easy to sip throughout the day. • Use Hydration as a Cue to Move – Every time you finish a glass of water, stand up and stretch before refilling it. • Limit Caffeine & Sugary Drinks – While coffee keeps you alert, too much caffeine can dehydrate you. Balance it with plenty of water. Posture Awareness – The Habit That Saves Your Spine Most posture issues don’t come from a ‘bad chair’ but from a lack of awareness. Even the best setup can’t fix poor posture if you’re not mindful of how you sit and move. • Sit Tall, Not Stiff – Keep your feet flat, shoulders relaxed, and lower back supported. Imagine a string pulling the top of your head towards the ceiling. • Check In With Your Posture – Every time you check your phone or open a new email, do a quick posture scan–are you slouching? Are your shoulders tensed up? • Breathe Deeply – Deep belly breathing helps reset your posture and relieves tension. Try inhaling deeply for four counts, holding for four, and exhaling for four. Final Thoughts A pain-free workday isn’t about finding the perfect chair – it’s about frequent movement, staying hydrated, and being mindful of posture. The more you incorporate these small habits, the less strain you’ll feel at the end of the day. Your posture and daily habits impact not only your physical health but also your mental clarity and productivity. Long hours at your desk don’t have to take a toll on your spine, energy levels, or performance. By making small, intentional adjustments, you’re not just preventing pain; you’re investing in a healthier, more efficient version of yourself. Remember: Your spine isn’t designed for prolonged sitting–no matter how expensive your chair is. The best ergonomic setup is one that encourages movement. Stand, stretch, walk, hydrate–your body will thank you. Start with just one small change today, and watch how it transforms your workday and well-being in the long run. I. T. MIRROR 9

1. Latest trends in claims U/S 80GGC: A. Introduction: 1. Of late, many assessees have received messages advising them to review the claim of 80GGC deduction in respect of donation to political parties and in case of wrong claim, they are advised to rectify it by filing updated returns. 2. 100% donation can be claimed U/s. 80GGC of the Income Tax Act for donations made to political parties registered U/s. 29A of The Representation of People Act, 1951. B. In light of the same, it would be interesting to examine the latest cases on Sec. 80GGC: 1. Assessee had not explained how he contacted with such a political party and yet contributed 50% of the income to the political party: ITAT in Jayeshkumar Gopalbhai Akbari vs. Deputy Commissioner of Income Tax [2024] 162 taxmann 395 (Surat-Trib.) had held that: There was no evidence that the said political party was active or had ever contested any regional or nationallevel election. Further, the assessee had not replied to the basic question and the objection raised by the assessing officer about his doubt on the genuineness of his contribution to such political party, except claiming that it is not his duty to verify the affairs of such political party. The claim cannot be allowed 2. Income Tax Act does not impose an obligation on donors to ensure or verify the utilization of funds by the donees: ITAT Ahmedabad in the case of ACIT vs. Armee Infotech (ITA No.1778/Ahd/2016) had held as below: Income Tax Act does not impose an obligation on donors to ensure or verify the utilization of funds by the donees. Once a donation is made to a duly registered political party through non-cash means, and all statutory conditions are met, the donor is entitled to the deduction under Section 80GGC. The responsibility to monitor the utilization of funds lies with the authorities overseeing the donee entities, not the donor. 3. Political party was found to be involved in accepting bogus donations and returning cash to donors in exchange for cheques: ITAT in the case of Milind Pankajbhai Shroff, ... vs The Principal Commissioner of Income (ITA No.93/RJ T/2023) had held that: Given the findings from investigations indicating that the political party was involved in facilitating bogus donations, the PCIT’s invocation of Section 263 is upheld. Ignorance of Developments May Not Be The Excuse - CA KRISHNA PARAG RAVAL 10

C. Care to be taken in case a notice is received: 1. It is pertinent for the assessee to demonstrate the genuineness and reasonableness of the donation made to the political party. 2. All the necessary documentation such as receipts, bank entries, letter from Election Commission of India regarding recognition of the political party, KYC, etc have to made available for verification. 3. Co-owner who has not received income from house property cannot be taxed for the same: Delhi HC Shivani Madan vs Pr. Commissioner Of Income Tax Delhi 01 (ITA 573/2023) Facts: 1. A property situated at J-278, Saket, New Delhi, was in the joint ownership of the appellant and her husband and had been acquired on 08 March 2011. 2. In the course of assessment, the appellant was placed on notice to answer a query as to why income from the said property be not charged to tax in her hand under the head of 'income from house property'. 3. The appellant asserted that the property is essentially owned by the spouse and that her name appears in the instrument solely for and considering a contribution of INR 20,00,000/-, which was paid by her in A.Y. 2011- 12. 4. This explanation was not accepted by the AO, who proceeded to hold that the property would be liable to be viewed as being jointly owned in equal share by the appellant and her spouse and thus taxed in accordance with Section 23(1)(a) of the Income Tax Act. 5. The AO proceeded further to thus compute the annual letting value and held that the income from house property would be liable to be pegged at INR 19,60,000/- and 50% thereof being assessed in the hands of the appellant. Hon Delhi HC held as below: 1. The Income Tax Act fails to raise any presumption in law, of income necessarily arising or being liable to be assessed in the hands of an individual merely because it be a signatory to an instrument of conveyance. 2. In our considered opinion, the question of taxability would necessarily have to be answered bearing in mind the individual who had in fact obtained benefits from the property. 3. In the absence of any finding in tune with the above having been rendered in so far as the appellant is concerned, we find ourselves unable to sustain the order of the Tribunal. We accordingly allow the instant appeal and set aside the order of the Tribunal dated 05 January 2023 and allow the appeal by the assessee. 3. ITR has to be filed by non-residents in the case of royalty income : 1. Sec 115A amendment: Section 115A of the Income Tax Act amendment in 2023 brings about changes in the withholding tax rates for Fees for Technical Services (FTS) or Royalty. The new rate is set at 20% plus Education cess and surcharge, resulting in an effective rate of 20.8%. 2. DTAA rates: Considering tax treaties with major countries (e.g. United Kingdom, Canada and the United States of America) provide for a tax rate of 15%, many non-residents receiving royalty and FTS were opting for the tax rate under section 115A. Furthermore, even in the case of most of the tax treaties (e.g. Belgium, Netherlands, Singapore) signed by India which provide for the tax rate of 10%. 3. Sec 90(2): As per Sec 90(2) of the Income Tax Act, a non-resident can opt to be taxed as per the domestic tax provisions or tax treaty entered between India and the country of residence of the taxpayer or the Act, whichever is more beneficial. Thus, a tax resident of a country with which India has a DTAA can opt for a lower tax rate. 4. Requirement of filing ITR: As per Section 115A(5), a non-resident (including a foreign company) is NOT required to file an ITR in India if: I. T. MIRROR 11

Their only income in India is from: Royalty (under Section 9(1)(vi)) Fees for Technical Services (FTS) (under Section 9(1)(vii)) Interest (e.g., on foreign currency loans, certain bonds) Sec. 115A(5) is applicable only if the taxes were withheld as per the rate provided under Section 115A. Since the taxes would have been withheld at a lower rate provided in DTAA, ITR would have to be filed. 5. Conclusion: Thus, with the amendment in tax rates for royalty and FTS, a non-resident taking advantage of DTAA would now be required to file his Income Tax Return in India. 4. Merely paying penalty for delay in filing Income Tax Returns does not exonerate assessee from being prosecuted: Karnaatak HC Rajkumar Agarwal AND Income Tax Department (2025 LiveLaw (Kar) 40) Facts: 1. It was alleged that the petitioner had wilfully failed to submit his income tax returns in time for the Assessment Years 2012- 13 to 2015-16 and thereby committed the alleged offence. 2. The Department filed four separate private complaints against the petitioner for an offence punishable under section 276CC of the Income Tax Act, after obtaining necessary sanction orders from the Competent Authority to prosecute. 3. The petitioner argued that on receipt of notice under section 139 of the Income Tax Act, he had submitted his income tax returns. Since there was a delay in filing the returns a penalty was levied which was paid by him. Therefore, there was no occasion for the respondent Department to initiate criminal prosecution against him for the alleged offence. 4. It was claimed that he was not granted an opportunity by the competent authority before issuing the sanction order. Moreover, he had not wilfully delayed the filing of the returns, and the delay was beyond the control of the petitioner since his brothers had died. 5. The Department filed four separate private complaints against the petitioner for an offence punishable under section 276CC of the Income Tax Act, after obtaining necessary sanction orders from the Competent Authority to prosecute. 6. It was alleged that the petitioner had wilfully failed to submit his income tax returns in time for the Assessment Years 2012-13 to 2015-16 and thereby committed the alleged offence. 7. The petitioner argued that on receipt of notice under section 139 of the Act, he had submitted his income tax returns. Since there was a delay in filing the returns a penalty was levied which was paid by him. Therefore, there was no occasion for the respondent-Department to initiate criminal prosecution against him for the alleged offence. 8. It was claimed that he was not granted an opportunity by the competent authority before issuing the sanction order. Moreover, he had not wilfully delayed the filing of the returns, and the delay was beyond the control of the petitioner since his brothers had died. Hon Karanataka HC held as below: 1. Section 276CC is attracted on failure to comply with the provisions of Section 139(1) or failure to respond to the notice issued under Section 142 or Section 148 of the Act, within the time specified therein. 2. Proviso to Section 276CC takes in only sub-section 1 of Section 139 of the Act and the provisions of Section 142(1)(i) or Section 148 are conspicuously absent. The benefit of the proviso is available only to voluntary filing of the return as required under Section 139(1) of the Act. Thus, proviso would not apply after detection of the failure to file the return and after a notice under Section 142(1)(i) or Section 148 of the Act, is issued calling for filing of the return of the income. I. T. MIRROR 12

3. Under the circumstances, the explanation sought to be offered on behalf of the petitioner before this Court cannot be accepted and it is for the petitioner to lead evidence and produce necessary material before the learned Magistrate in support of his defence and rebut the presumption available against him under Section 278E of the Income Tax Act. 4. Therefore, merely because petitioner has paid the penalty levied by the Competent Authority for the delay in filing of the returns, the same does not exonerate the petitioner from being prosecuted. 5. Budget : Amendment in carry forward of losses1. Section 72: Section 72 of the Income Tax Act provides that no loss (other than loss from speculation business) under the head “Profits and gains from business or profession” shall be carried forward for more than 8 assessment years immediately succeeding the assessment years for which the loss was first computed. 2. Section 72A: Section 72A and 72AA of the Income Tax Act provide that accumulated loss of the amalgamating entity or predecessor entity shall be deemed to be the loss of the amalgamated entity or the successor entity for the previous year in which amalgamation or business reorganisation has been effected or brought into force. 3. Amendment: In order to bring clarity and parity with the provisions of section 72 of the Act, it is proposed to amend section 72A and section 72AA of the Act to provide that any loss forming part of the accumulated loss of the predecessor entity, which is deemed to be the loss of the successor entity, shall be eligible to be carried forward for not more than eight assessment years immediately succeeding the assessment year for which such loss was first computed for original predecessor entity. 4. Rationale: The proposed amendment is aimed to prevent evergreening of the losses of the predecessor entity resulting from successive amalgamations and to ensure that no carry forward and set off of accumulated loss is allowed after eight assessment years from the immediately succeeding the assessment year for which such loss was first computed for original predecessor entity. 5. Practical example why this amendment is proposed: If X Company had a loss and carried forward the same from 2016 and suddenly in 2023 it got merged with Y Company, Y company was eligible to further carry forward losses for further 8 years. This is called as evergreening of losses. This kind of amalgamation abuses the benefits provided in Sec. 72A and Sec. 72AA to carry forward the business losses pursuant to an amalgamation. With the proposed amendment, the Government has essentially made the timeline for losses to stay fixed. Now, the losses can only be carried forward by the amalgamated company for a period of 8 years from the end of the Assessment Year in which such loss was first computed by the predecessor entity. 6. Point to note: The change is only applicable to amalgamations or business reorganisations effected on or after 1st April, 2025. So, it will not impact the amalgamations already affected. 6. Offence committed before show cause notice compoundable as covered by 'First Offence' in Compounding Guidelines: SC : Vinubhai Mohanlal Dobaria Vs Chief Commissioner of Income Tax Special Leave Petition (C) No. 20519 of 2024 Facts: 1. The appellant, Vinubhai Mohanlal Dobaria, had filed a belated Income Tax Return (ITR) for AY 2011-2012 on March 4, 2013, whereas the due date was September 30, 2011. 2. As a result, the Income Tax Department proposed prosecution under Section 276CC of the Income Tax Act (which penalizes failure to furnish income tax returns) on October 27, 2014. 3. The assessee then sought compounding under the Guidelines for Compounding of Offences, 2008, which was granted on November 11, 2014 for both AY 2011-2012 and AY 2012-2013. 4. For AY 2013-2014, the appellant again filed a delayed return on November 29, 2014, whereas the due date was October 31, 2013. I. T. MIRROR 13

5. A show-cause notice for prosecution under Section 276CC was issued on March 12, 2015, leading the appellant to seek compounding again. 6. However, this time, the compounding request was rejected in 2017, citing that compounding was only available for the first offence under the 2014 Guidelines, and since the appellant had already availed compounding for AY 2011-2012, he was ineligible. 7. The Gujarat High Court upheld this rejection, ruling that the compounding authority need not consider the circumstances of the delay and that such matters should be examined only during trial. Hon Supreme Court held as below: 1. An offence under Section 276CC could be said to have been committed as soon as there is a failure on the part of the assessee in furnishing the return of income within the due time as prescribed under Section 139(1) of the Income Tax Act i.e. for AY 13-14, date after the due date Oct 31st, 2013. 2. Guidelines for Compounding of Offences, 2014, define a "first offence" as an offence committed prior to the date of the show-cause notice for prosecution. 3. Thus, both the offences under Section 276CC of the Act were committed prior to the date of issue of any showcause notice for prosecution. 4. Thus, under the 2014 Guidelines, both AY 2011-2012 and AY 2013-2014 qualify as a "first offence", making the appellant eligible for compounding for AY 2013-2014. 7. Can employees be made liable if TDS is deducted but not paid by the employer? 1. Background: Sec 199 of the Income Tax Act states that TDS deducted by the payer and paid to the government is treated as tax paid on behalf of the payee. The Central Board of Direct Taxes (CBDT) is authorized to issue rules for crediting TDS to the taxpayer. Now a question arises as to when TDS is deducted by the employer but not paid to the credit of the employee would it give rise to recovery of income tax from employee? 2. Section 205 bars recovery from the assessee: Sec 205 explicitly bars income tax authorities from directly recovering unpaid TDS from the payee if it was already deducted by the deductor. 3. CBDT instructions also bar recovery: The CBDT issued clear instructions in 2015 and 2016 stating, The Act puts a bar on direct demand against the assessee in cases where TDS has been deducted by the payer and the demand on account of tax credit mismatch cannot be enforced coercively. 4. Some latest High Court judgements on the matter: Satwant Singh Sanghera (Delhi HC) (167 taxmann 713) ruled in favour of the employee, allowing TDS credit despite the employer failing to deposit the deducted tax. Orissa High Court in case of Malay Kar v. Union of India [2024] 162 taxmann 767 (Orissa) allowed the TDS credit to the employee where the employer had deducted tax at source but had not deposited amount to Central Government’s account. Consequently, if an employer fails to remit the deducted tax, the liability to pay that tax cannot be shifted to the employee. 5. Conclusion: Sec. 205, CBDT Instructions and a series of High Court judgements have reinforced a basic jurisprudence that where TDS has been deducted by the employer but not paid to the government, recovery of the same cannot be made from employees, even in situations of any financial difficulties. 8. UAE Pillar 2 Rules Announced – Top-up Tax on MNEs Introduction: On 6th February 2025, the UAE Ministry of Finance has issued Cabinet Decision No. 142 of 2024 for imposition of Top-up Tax on Multinational Enterprises (MNEs). I. T. MIRROR 14

Key Highlights: 1. MNE’s with annual group revenue of EURO 750 million or more are covered. 2. For the purpose of revenue threshold, any two out of four immediately preceding years to be considered. 3. On account of application of top-up tax, covered entities would be subject to minimum tax of 15% effective January 2025. 4. UAE entities of MNE group (“covered entities”), which are either subject to corporate tax at 9% or 0% as per the UAE corporate tax law, would be subject to top-up tax. 5. Covered entities would be required to register with the Federal Tax Authority (“FTA”) within the timelines to be prescribed. 6. Covered entities would be required to file annual top-up tax return with the FTA, or it can designate other group entity to file on its behalf. 7. Entities (to be specified in the Ministerial Decision) would be required to file the Pillar Two Information Return with the FTA 9. Why are the investments made abroad under the ODI route under scrutiny of enforcement agencies? What is Overseas Direct Investment (ODI)? 1. Overseas Direct Investment (ODI) refers to investments made by Indian entities in a foreign country. In this form of investment, Indian companies and individuals can enter into a Joint Venture (JV) or have their Wholly Owned Subsidiary (WOS) in a different country. 2. Limits are prescribed for investments (e.g., up to 400% of a company’s net worth). 3. ODI investments are subject to the Rules provided in Foreign Exchange (Overseas Investment) Rules, 2022. Why are ODI investments under the scrutiny of the Enforcement Directorate? 1. Bona Fide Business Requirement: Under FEMA, ODI transactions must be for genuine business purposes. Investments that are structured primarily for personal benefit (for example, to bypass domestic investment restrictions or to channel funds abroad without establishing a bona fide business activity) can be flagged as non compliant. This means if the intended use of funds or the nature of the investment isn’t clearly tied to a legitimate business strategy, the transaction might be challenged. 2. Regulatory and Documentation Burdens: Compliance under FEMA requires that all ODI transactions are executed through approved banking channels, with all required documentation, disclosures, and reporting in place. Any lapse—such as incomplete documentation, inadequate disclosures, or failure to meet procedural requirements—can lead to enforcement actions, including ED notices, penalties, or even forced unwinding of the investment. 3. Investment Limits and Structural Constraints: The ODI route is subject to limits based on the net worth of the Indian entity, and the structure of the investment must not create abusive multi layered arrangements (often referred to as “round tripping”). Conclusion: Recent trends suggest that enforcement agencies like the ED are increasingly scrutinizing ODI transactions—even those carried out through formal banking channels—if they suspect that the investments are used to shift funds abroad without a clear business rationale. This heightened scrutiny means that even minor deviations from FEMA norms can lead to notices or penalties. I. T. MIRROR 15

10. SC reinforces the principle that while granting registration, focus should be on proposed charitable activities and not past activities: COMMISSIONER OF INCOME TAX EXEMPTIONS VERSUS M/S INTERNATIONAL HEALTH CARE EDUCATION AND RESEARCH INSTITUTE (SLP No. 19528/2018) Facts: 1. The assessee claims to be a charitable trust engaged in activities like education, medical aid etc. The trust has been registered under the Indian Trusts, 1882 Act. 2. However, for the purpose of claiming exemption under Sections 10 and 11 respectively of the Income Tax Act, 1961 they applied for being registered under Section 12-AA of the Income Tax Act. 3. The registration was declined by the Commissioner on the ground that there was nothing on record to indicate that the Trust was undertaking any charitable activities. 4. Being dissatisfied with the order passed by the Commissioner declining registration under Section 12-AA, the assessee went before the Appellate Tribunal, The Tribunal allowed the appeal, which was further confirmed by the Rajasthan HC. The revenue then filed an appeal with the Hon. SC. Hon. SC held as below: 1. The very purpose for any assessee to seek registration under Section 12AA is to claim exemption under Sections 10 and 11 respectively of the Act, as the case may be. 2. Therefore, before seeking registration, it is essential that the Trust should adduce cogent material to the satisfaction of the Commissioner that the activities are genuinely charitable in nature. 3. To the aforesaid extent there is no problem, we may only say that mere registration under Section 12-AA automatically does not entitle any charitable trust to claim exemption under Sections 10 and 11 respectively of the Act, 1961. 4. When a return is filed by any trust claiming exemption it is for the assessing officer to look into all the materials and satisfy itself whether the exemption has been claimed genuinely or not. If the assessing officer is not convinced it is always open for him to decline grant of exemption. 5. So, the appeal by the revenue is dismissed. I. T. MIRROR 16

Penalty under Section 270A of the Income Tax Act: Legal Provisions, Analysis and Jurisprudence – CA NISHA TEKWANI 17 Section 270A of the Income Tax Act, 1961, introduced by the Finance Act, 2016, marked a significant shift in how penalties are levied for underreporting and misreporting of income. The section aims to rationalize the penalty regime, ensuring that penalties are levied in a more structured and predictable manner, thus encouraging tax compliance. In this article, we have discussed the key provisions of Section 270A, discuss the terms “underreporting” and “misreporting” of income, explore the legal jurisprudence surrounding these provisions, and review case laws that provide clarity on their interpretation. Key Provisions of Section 270A Section 270A lays down penalties for two distinct categories of default: 1. Underreporting of Income. 2. Misreporting of Income. 1. Underreporting of Income Underreporting occurs when the income assessed by the Assessing Officer (AO) exceeds the income declared by the assessee in their return of income. The section provides specific situations where underreporting is deemed to have occurred: The situations covered in Section 270A(2) in clauses (a) to (g) are broadly classified into following categories - (A) In the case of regular assessment (where income is taxable as per the normal provisions): • The income assessed is greater than the income determined and return processed u/s 143(1)(a). • The income assessed is greater than the maximum amount not chargeable to tax, where no return has been furnished, or the return was furnished for the first time u/s 148. (B) In the case of reassessment: • The income reassessed is greater than the income assessed or reassessed immediately before such reassessment. (C) In the cases where loss is reduced or converted into income: • The income assessed or reassessed has the effect of (a) reducing the loss or (b) converting such loss into income. (D) In the cases where income computed u/s 115JB or 115JC (for MAT or AMT) is the deemed total income: • The amount of deemed total income assessed or reassessed as per the provisions of section 115JB or 115JC, is greater than the deemed total income determined in the return processed u/s 143(1)(a). • The amount of deemed total income assessed as per the provisions of section 115JB or 115JC is greater than the maximum amount not chargeable to tax, where no return of income has been furnished, or where return has been furnished for the first time u/s 148.

• The amount of deemed total income reassessed as per the provisions of section 115JB or 115JC, is greater than the deemed total income assessed or reassessed immediately before such reassessment. 2. Misreporting of Income Misreporting of income is a more severe form of default and covers deliberate actions aimed at concealing income. Section 270A(9) covers the following cases as misreporting of Income: • Misrepresentation or suppression of facts. • Failure to record investments in books of accounts. • Claim of expenditure not substantiated by any evidence. • Recording false entries in books of accounts. • Failure to record any receipt in books that has an impact on total income. • Failure to report international transactions or deemed international transactions or specified domestic transactions subject to transfer pricing provisions. Calculation of Penalty for Underreporting and Misreporting of Income The penalty prescribed under Section 270A is as follows: • For Underreporting of Income: The penalty is 50% of the tax payable on the underreported income. • For Misreporting of Income: The penalty is 200% of the tax payable on the misreported income. Calculation of under-reported Income Section 270A(3) provides how the under-reported income can be calculated. (A) Cases which are assessed for the first time: • If Return has been furnished: The amount of difference between the assessed income and the amount of income determined u/s 143(1)(a). • If Return has not been furnished (or furnished u/s 148): In case of a company, firm or local authority the amount of income assessed & In rest of the cases, the amount of income assessed minus the maximum amount not chargeable to tax (i.e. basic exemption limit). (B) Cases where loss is reduced or converted into income: • The difference between the loss claimed and the income or loss, as the case may be, assessed or reassessed. (C) Any other Cases • The difference between the amount of income reassessed or recomputed and the amount of income assessed, reassessed or recomputed in a preceding order. (D) Cases where income computed u/s 115JB or 115JC (for MAT or AMT) is the deemed total income: • (A - B) + (C - D); where A: The total income assessed as per the general provisions (other than 115JB / 115JC) B: The total income assessed as per the general provisions minus the amount of under-reported income. I. T. MIRROR 18

C: The total income assessed as per the provisions of section 115JB / 115JC D: The total income assessed as per the provisions of section 115JB / 115JC minus the amount of underreported income. (Where amount is considered under both normal provision and MAT/AMT, then such amount shall not be reduced from total income assessed while determining the amount under item D.) Note: From above calculations, the income calculated covered u/s 270A(6) shall be reduced. Exceptions for Underreporting as per Section 270A(6) (where under reported income shall not include the following amounts) • Bonafide Explanation Offered: The amount of income in respect of which the assessee offers an explanation and the Assessing Officer is satisfied that the explanation is bona fide and the assessee has disclosed all the material facts to substantiate the explanation offered. • On Account of Estimate: The amount of under-reported income determined on the basis of an estimate, (a) if the accounts are correct and complete to the satisfaction of the Assessing Officer, but the method employed is such that the income cannot properly be deduced therefrom. (b) if the assessee has, on his own, estimated a lower amount of addition or disallowance on the same issue, has included such amount in the computation of his income and has disclosed all the facts material to the addition or disallowance. • Addition due to ALP calculation by TPO: The amount of under-reported income represented by any addition made in conformity with the arm's length price determined by the Transfer Pricing Officer, where the assessee had maintained information and documents as prescribed u/s 92D, declared the international transaction, and disclosed all the material facts relating to the transaction. • Search Cases: The amount of undisclosed income referred to in section 271AAB. Note: for Assessing Officer (AO) referred above, the AO includes the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Principal Commissioner or Commissioner. Tax payable in respect of the underreported income (Section 270A(10)) • Where no return of income has been furnished or return furnished for the first time u/s 148 and the income has been assessed for the first time: the amount of tax calculated on the under-reported income as increased by the maximum amount not chargeable to tax as if it were the total income. • Where the total income determined u/s 143(1)(a) or assessed, reassessed or recomputed in a preceding order is a loss: the amount of tax calculated on the under-reported income as if it were the total income. · In any other case (X-Y), whereX: the amount of tax calculated on the under-reported income as increased by the total income determined u/s 143(1)(a) or total income assessed, reassessed or recomputed in a preceding order as if it were the total income; and Y: the amount of tax calculated on the total income determined u/s 143(1)(a) or total income assessed, reassessed or recomputed in a preceding order. I. T. MIRROR 19

Intangible Addition • As provided in 270A(4), where the source of any receipt, deposit or investment in any assessment year is claimed to be an amount added to income or deducted while computing loss, as the case may be, in the assessment of such person in any year prior to the assessment year in which such receipt, deposit or investment appears (in the preceding year) and no penalty was levied for such preceding year, then, the under-reported income shall include such amount as is sufficient to cover such receipt, deposit or investment. • Further, section 270A(5) specifies that the amount for the purpose of subsection (4) shall firstly be from the immediately preceding assessment year and then from the year preceding that and so on. Immunity from Imposition of Penalty levied u/s 270A(Section 270AA) The assessee gets an option to get immunity u/s 270AAfrom imposition of penalty levied u/s 270Awhich is useful to reduce litigation. This immunity is available on fulfilment of certain conditions. Conditions: (a) The tax and interest payable as per the order of assessment or reassessment u/s 143(3) or 147 has been paid within the period specified in such notice of demand AND (b) No appeal is filed against this order. (both conditions shall be fulfilled) Mode & Time limit: The application for the same has to be done in prescribed Form 68 within ONE month from the end of the month in which the order referred above is received. Order by AO: The Assessing Officer shall pass an appropriate order either accepting or rejecting the application after withing a period of one month from the end of the month in which the application was made and period to file an appeal with CIT(A) is expired. Before rejection the AO shall provide an opportunity of being heard. Non availability: The option of immunity u/s 270AA is not available where the penalty is on ground of misreporting. Points to Consider: Once the application u/s 270AA is accepted, no appeal u/s 246A or revision application u/s 264 shall be accepted against the assessment or the reassessment order. In case of rejection, the assessee can file an appeal and the time from date of filing application till the rejection of application by AO shall be reduced from calculation of 30 days for filing appeal. Understanding “Underreporting” and “Misreporting” through Jurisprudence Being a comparatively new in the statute, there are not much in jurisprudence directly on section 270A, but to understand the scope of Section 270Abetter, few judicial interpretations that provide clarity on underreporting and misreporting are quoted herewith. Readers should take a note that these case laws are selected solely for interpretation of underreporting and misreporting terms and shall not be used directly without application of professional judgment in any case. 1. CITvs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) In this landmark decision, the Supreme Court observed that mere making of a claim which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars of income. The Court held that a disallowance of a claim does not automatically result in penalty unless there is a deliberate concealment of facts or misreporting. This case is significant as it sets a precedent that bona fide mistakes or incorrect claims, if made with full disclosure, do not attract penalties under the Income Tax Act. While this case was under the older penalty regime, the principles apply equally to Section 270A, especially in the context of distinguishing between Underreporting (which may occur due to a genuine mistake) and misreporting (which involves intentional misrepresentation). I. T. MIRROR 20

2. CITvs. Zoom Communication Pvt. Ltd. (2010) 327 ITR 510 (Delhi HC) The Delhi High Court in this case held that when a taxpayermakes a patently false claim, such as the claim of an expenditure that is not substantiated by any evidence, it constitutes concealment of income. The Court emphasized that if the explanation offered by the assessee is not plausible, it would amount to furnishing inaccurate particulars of income. This judgment is relevant for understanding cases of misreporting, where the taxpayer knowingly makes false claims, such as recording false entries or claiming fictitious expenditures. Distinction Between Underreporting and Misreporting The jurisprudence on Underreporting and misreporting reveals that the primary distinction between the two lies in the intent and degree of transparency exhibited by the taxpayer. • Underreporting involves instances where there is a genuine mistake, an error in judgment, or a bona fide difference in interpretation of the law. The penalty is less severe (50%)since it acknowledges that the taxpayer may not have wilfully attempted to evade taxes. • Misreporting, on the other hand, covers intentional acts aimed at concealing income or claiming false deductions. It attracts a heavier penalty (200%), reflecting the severity of the act and the deliberate nature of the misreporting. CONCLUSION Section 270A of the Income Tax Act represents an important mechanism for promoting tax compliance and discouraging tax evasion. By introducing separate penalties for Underreporting and misreporting of income, the law provides for proportional penalties based on the nature of the default. I. T. MIRROR 21

Background Very few Sections are not amended till now in GST law and Section 169 is one of those sections of GST law. The Section 169 Service of Notice in Certain Circumstances is under Chapter XXI Miscellaneous of CGST Act,2017 and Section 20 of IGST Act,2017. Various judgement has been declared by Various High Court of India on Section 169. Let’s Discuss here in detail Sahulhameed Versus Commercial Tax Officer (2025) 26 Centax 362 (Mad.) W.P. (MD) Nos. 26481 and 27190 of 2024 a Judgement given by Madras High Court on 06-01- 2025 By the Single Bench Judge K. Kumaresh Babu, J. on compliance of Section 169 of CGST Act, 2017. Facts of the Case 1. The GST Department uploaded notices, including orders, on the web portal of the registered portal without any modes of communication such as email, post or SMS as prescribed under Section 169 of CGST Act,2017. 2. Petitioner i.e, Mr. Sahulhameed was not well aware about the portal of the Department and due to unawareness of information technology, he had relied upon the practitioners for filing his returns in the portal of the Department. 3. The Practitioners have uploaded his phone numbers and e-mail IDs for receipt of alerts and that in most of the cases, the practitioners have not informed the assessees either the updation in the portal or the receipt of the emails which have kept the assessees in dark. Issue Involved Whether notices/orders uploaded only on the GST portal, without alternative modes of communication (email, post, or SMS), violated the principles of natural justice under Section 169 (1)(a) to (c) of the CGST Act, 2017. Petitioner’s contentions 1. The Petitioner submitted that even though the provisions under Section 169 (1)(a) to (f) are disjunctive, they should be read conjunctively, failing which, the basic principles of natural justice would be violated. They submit that Clauses (a) to (c) of sub section (1) of Section 169 should be read as alternative. 2. Section 169 (1) of the Act should be read in such a manner that it effectively complies with the principles of natural justice. A reading of the same, which do not effectively comply the said principles, would only be a disadvantage to the assessees. Respondent contentions 1. Learned Additional Government Pleader contended that service of notice through portal had already held a valid service by the learned Single Judge of this Court in a judgment reported in Pandidorai Sethupathi Raja Vs Superintendent of Central Tax, Chennai 2022 SCC online Mad 8986. The learned Judge while considering Section 144B of the Income Tax Act, which mandates that E-mail IDs or phone numbers given by the assessee for SMS alerts at the time of registration would not obliterate a notice issued through portal, as the assessee is required to visit the portal once in a month for filing its returns. Hence, the said obligation of the assessee would cover the principles of natural justice. When the assessees have obligated to visit the portal, it is their duty to also look at the notices that had been issued through the portal and reply properly. Violation of Principles of Natural Justice and Non-Compliance of Service of GST Notices - ADV ZALAK SOHIL DALAL 22

2. Further, reliance given upon the M. Satyanarayana v. State of Karnataka and another reported in 1986 (2) SCC 512 of the Hon'ble Apex Court, Section 169 should be read only disjunctively and not conjunctively and therefore, any modes that have been prescribed under Clause (a) to (f) if had been complied with by the Department, there can be no complaint of violation of principles of natural justice. Rule 149 of the GST Rules says that what has been provided is for updation of the notices by any electronic mode and not by registered post. 3. Respondent drew the attention of the Court to Rule 52 of the TNGST Rules 1959, which deals with service of notices under 52 (1) (a) to (d) and relied upon the Division Bench judgment of this Court in interpreting Rule 52 and further affirmed by a Division Bench of this Court in the case of Singaravelar Spinning Mills (P) Ltd., v. State of Tamil Nadu & Another reported in 2010 SCC Online Mad 6454. and also relied upon the judgment in the case of Pee Bee Enterprises v. Assistant Commissioner and Another reported in 2020 SCC Online Ker 3331, 2020 SCC Online MP 4650, a judgment of learned Single Judge of Punjab and Haryana High Court made in CWP 10560 & 10568 of 2021, dated 30.01.2021 in support of their contention that a notice served through portal is a sufficient notice. 4. Further, relied upon the Division Bench of this Court in the case of V.N.V. Builders Pvt., Ltd., v. State Tax Officer & Other reported in 2024 SCC Online Mad 4927 to say that these issues can also be raised before the Appellant Authority where there is an efficacious alternative remedy that is available to the respective assessees. Court’s Observation 1. Rule 52 of the TNGST Rule 1959 provided for service of notices on the assessees. It is considered by the two Division Bench of this Court. Firstly, in the judgment reported in 1972 SCC Online Mad 347, The Division Bench held that the authority have to comply with any of the three modes under (a), (b) & (c) of Rule 52 and if found that such service was not effective, then the Clause (d) of Rule 52 have to be complied. 2. A similar view had been taken by a subsequent Division Bench in a judgment in the case of Singaravelar Spinning Mills (P) Ltd., v. State of Tamil Nadu and Another reported in 2010 SCC Online Mad 6454. The Division Bench in the said judgment had also taken note of the earlier Division Bench indicated supra, wherein, the Division Bench held that the mode of service referred to under Clause (a) to (c) are only alternative and not cumulative and that any one of the modes have to be exhausted before proceeding under Rule 52 (d). For better appreciation, relevant paragraphs are extracted hereunder: Para 9. Having heard the learned counsel for the respective parties and having perused section 31 of the TNGST Act and and rule 52(1) of the Rules made thereunder, we are not inclined to accede to the submissions of the learned counsel for the petitioner that only after resorting to the service of notice in person, service through registered post was permissible. A reading of rule 52(1), makes it clear that the set of expressions in the first part of rule 52(1), viz., "may be effected in any of the following ways" makes it amply clear that the service of notice on a dealer can be resorted to by any one of the modes specified in rule 52(1)(a), (b), (c). Only sub-rule 52(1)(d) specifies that if none of the modes provided under rule 52(1)(a), (b), (c) is practicable, the alternative mode of affixing notice in some conspicuous place at the last known business or residence can be resorted to. As far as the modes of service specified in rule 52(1)(a), (b), (c) are concerned, it is for the authorities concerned to resort to anyone of the modes specified therein. 3. The decision in State of Tamil Nadu v. Blue Mountain Hosieriesreported in [2003] 133 STC 80 (Mad)fully supports the above said view, wherein the earlier decision of this court in A. Sanjeevi Naidu v. Deputy Commercial Tax Officer [1973] 31 STC 377 (Mad.) referred, wherein it has been held as under (page 378 in 31 STC) : "The modes of service referred to in clauses (a) to (c) are only alternative and not cumulative and, therefore, it cannot be said that all the above three modes have to be exhausted before the service by affixture can be effected under clause (d). Therefore, the assessing authority was justified in proceeding to serve the assessment order by affixing it in the petitioner's place of business under rule 52(d)". 4. In the Section 169(1), a learned Single Judge of this Court in a judgment in the case of Pandidorai Sethupathi Raja v. Superintendent of Central Tax, Chennai reported in 2022 SCC Online Mad 8986 held that it is the I. T. MIRROR 23

obligation of the assessee to visit the portal and therefore, posting of summons and orders through portal is a sufficient compliance of notice on the assessee and therefore, there is no necessity for any alert. The learned single Judge had also compared the explanation of (r) to (u) of Section 144B of the Income Tax Act which had mandated an alert either to the registered e-mail ID of the assessee or by way of SMS to the registered mobile number of the assessee. 5. Court observed that Clause (d) of Rule 52 and Section 169(1)(f) are Pari Materia. Rule 52 had been dealt with by a Division Bench of this Court as early as in the year 1972 and had held that Clauses (a), (b) & (c) are alternative and if any of the aforesaid modes is not practicable then Clause (d) ought to have been followed. 6. A conjoined reading of Sub-Section (1),(2) & (3) of Section 169 makes it clear that the State is obliged to comply with the Clauses (a) to (c) alternatively and thereafter, comply with Clauses (d) to (f). Further, even though Clause (f) has also been proceeded with the word 'or' indicating it to be disjunctive / an alternative mode of services, Clause (f) could be resorted to by the State, if any of the Clauses preceding it, was not practicable. Here also, Clause (f) makes it imperative that such affixure shall be in a conspicuous place and at the last known business or residence of the assessee. Therefore, the object of Section 169 is for strict observance of the principles of natural justice. 7. Argument was made on behalf of the respondent that Rules 149 of the GST Rules only provides for electronically issuing of notices/ summons/ orders which is having persuasive value in eyes of law. Rules are creature of a Statute and the Rules cannot circumscribe the mode that had been provided under the Statute. When the Statute had also mandated issuance of notice in person/ registered post/ e-mail, etc., the Rules cannot be limited to only serving it through electronic modes. Therefore, the contention that the Rules will prevail over the Statute cannot be accepted. Verdict Declared By The Hon’ble High Court 1. Section 169 mandates a notice in person or by registered post or to the registered e-mail ID alternatively and on a failure or impracticability of adopting any of the aforesaid modes, then the State can, in addition, make a publication of such notices/ summons/ orders in the portal/ newspaper through the concerned officials. 2. Therefore, the Writ Petition was allowed setting aside the impugned assessment orders and remitting the same back to the respective respondents to comply with the directions. 3. There shall be no order as to costs. Conclusion The above write petition is in the favour of assessee. Although Rule 142(5) of the CGST Rules, 2017 prescribes that Order under Section 73, Section 74, section 76, section 129 or, section 130 of the CGST Rules, 2017 shall be uploaded electronically on the common portal. Here, it should be taken in mind that Rules could not curtail what has been prescribed in the Statute. Later on, In the Udumalpet Sarvodaya Sangham Versus Authority (2025) 26 Centax 367 (Mad.) Madras High Court held that Order to be set aside as revenue had uploaded notices/orders on web portal and not served them through any other modes reason being since section 169 mandates a notice in person or by registered post or to registered e-mail ID alternatively and on a failure or impracticability of adopting any of aforesaid modes, then State can, in addition, make a publication of such notices/summons/orders in portal/newspaper through concerned officials. The same view which is taken in above writ i.e. Sahulhameed Versus Commercial Tax Officer (2025) 26 Centax 362 (Mad.) by the same judge has been taken. In the M. Vimalraj Versus Union Of India (2025) 27 Centax 155 (Mad.) the Madras High court Single Bench delivered decision and it is by same Judge K. Kumaresh Babu, J. and it followed Udumalpet Sarvodaya Sangham vs. Authority — (2025) 26 Centax 367 (Mad.) [06-01-2025] — Followed [Para 3]. I. T. MIRROR 24

Introduction In an era defined by rapid technological advancements and volatile economic landscapes, the role of Chartered Accountants (CAs) transcends traditional financial stewardship to encompass that of strategic change agents. As organizations strive to remain competitive, managing change effectively is crucial. This article explores strategic imperatives for CAs to adeptly navigate change, fostering organizational resilience and growth through a comprehensive, multidisciplinary approach. The Changing Paradigm Change management is a complex, multidimensional process that encompasses strategic vision, operational shifts, and human capital realignment. For CAs, this is not just a necessity, but an opportunity to evolve into change leaders. Equipped with analytical prowess, strategic foresight, and a keen awareness of stakeholder engagement, the modern CA can lead the way in navigating change. Navigating Change: Strategic Imperatives for Chartered Accountants – CA. POOJA THAKKAR 25 Strategic Imperatives in Change Management 1. Visionary Leadership Effective change management begins with visionary leadership. CAs must cultivate a strategic vision that aligns change initiatives with long-term organizational goals. This involves not only financial acumen but also the ability to anticipate market trends, regulatory shifts, and technological disruptions. A well-articulated vision serves as a guiding beacon, steering the organization through the complexities of change. 2. Comprehensive Risk Assessment The essence of change management lies in mitigating risks while capitalizing on opportunities. CAs should employ a comprehensive approach to risk assessment, encompassing financial, operational, strategic, and reputational dimensions. Advanced data analytics and scenario planning can provide actionable insights, enabling CAs to develop robust contingency plans. This strategic foresight ensures that the organization remains agile and resilient in the face of uncertainty. 3. Stakeholder Alignment and Engagement Successful change initiatives hinge on stakeholder alignment. CAs must proactively engage with diverse stakeholders, including employees, customers, investors, and regulators. Transparent communication and

inclusive decision-making processes foster trust and buy-in. By aligning stakeholder interests with organizational objectives, CAs can facilitate smoother transitions and minimize resistance to change. 4. Cultural Transformation Organizational culture plays a pivotal role in the success of change initiatives. CAs should collaborate with human resource professionals to assess the existing culture and identify areas for transformation. Promoting a culture of innovation, adaptability, and continuous learning is essential. This involves recognizing and rewarding behaviors that align with the desired cultural attributes, thereby embedding change into the organizational DNA. 5. Technological Integration In the digital age, technological integration is a cornerstone of change management. CAs must champion the adoption of cutting-edge technologies that enhance efficiency, accuracy, and decision-making. This includes leveraging artificial intelligence, blockchain, and cloud computing to streamline financial processes and drive strategic initiatives. Technological prowess not only optimizes operations but also positions the organization at the forefront of industry evolution. 6. Continuous Improvement and Learning Change management is an iterative process, necessitating a commitment to continuous improvement and learning. CAs should establish mechanisms for monitoring and evaluating the impact of change initiatives. Key performance indicators (KPIs) and feedback loops enable the organization to learn from its experiences and refine its strategies. This iterative approach fosters a culture of excellence and ensures sustained competitive advantage. Detailed Steps for Implementation 1. Diagnostic Phase o Assessment of Current State: Conduct a thorough analysis of the current organizational structure, processes, and culture. Utilize SWOT analysis to identify strengths, weaknesses, opportunities, and threats. o Stakeholder Mapping: Identify all stakeholders and assess their influence and interest in the change process. Develop a stakeholder engagement plan to ensure their concerns are addressed. 2. Design Phase o Vision and Strategy Development: Collaborate with leadership to define a clear vision for the change initiative. Develop a strategic plan that outlines objectives, timelines, and resource requirements. o Risk Management Plan: Conduct a comprehensive risk assessment to identify potential obstacles. Develop mitigation strategies and contingency plans to address these risks. 3. Execution Phase o Communication Strategy: Implement a communication plan that ensures transparency and clarity. Utilize multiple channels (e.g., town hall meetings, newsletters, and digital platforms) to disseminate information and gather feedback. o Training and Development: Design and implement training programs to equip employees with the skills and knowledge needed to adapt to the change. Provide continuous support through coaching and mentoring. 4. Sustainability Phase o Monitoring and Evaluation: Establish metrics and KPIs to track the progress of the change initiative. Conduct regular reviews and adjust strategies as necessary to ensure objectives are met. o Embedding Change: Foster a culture of continuous improvement by encouraging innovation and rewarding adaptable behaviors. Ensure that change becomes an integral part of the organizational ethos. I. T. MIRROR 26

Case Study: Strategic Change Management in Practice Consider the case of a multinational conglomerate undergoing digital transformation. The CA leading the initiative recognized the need for a comprehensive strategy encompassing technological adoption, process reengineering, and cultural shift. By leveraging data analytics, the CA conducted a thorough risk assessment and developed a phased implementation plan. Engaging with key stakeholders through workshops and communication campaigns, the CA ensured alignment and buy-in. The result was a seamless transition to a digital-first operating model, yielding enhanced efficiency, reduced costs, and increased market responsiveness. Conclusion The role of Chartered Accountants in change management is both strategic and transformative. By embodying visionary leadership, conducting comprehensive risk assessments, aligning stakeholders, fostering cultural transformation, integrating technology, and committing to continuous improvement, CAs can navigate the complexities of change with finesse. These strategic imperatives empower CAs to drive sustainable growth and resilience in an ever-evolving business landscape. I. T. MIRROR 27

India's export landscape is evolving with significant potential across sectors. India has achieved significant progress by expanding its global footprint. On the Tax front, Exports have always enjoyed a preferential treatment under the principle "Only the Goods be Exported and not the Taxes." However, there are still a lot of ambiguities surrounding the legal provisions governing export and their implementation by departmental authorities. As a result, the exporters are facing issues on two fronts, on the tax payment and while seeking refunds. The underlying principle is that tax paid on exports should be refunded in full. Let's delve into the intricacies of GST refund for exports with payment of tax. Before examining the refund mechanism, let's understand the provisions relating to levy and valuation under GST Law in relation to exports: Section 16 of the IGST Act, 2017, provides two options for the export of goods or services: Exports with payment of IGST (except for specified categories); and Exports without payment of IGST. The primary issue revolves around determination of the value on which IGST should be paid for the goods exported. The values in Export and Import transactions depends on the commercial agreement which are based on INCOTERMS. Some of the known terminologies as per INCOTERMS are Ex-works, FOB, CIF, C&F, etc. Such disclosure of freight, insurance and other expenses separately also depends on the determination of prices and agreements between the parties to the contract. While we refer the provisions of GST Law, there are no specific valuation provisions in relation to Export of Goods and hence, provisions of Section 15 of the CGST Act should apply on the Export transactions as well. As per Section 15, the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. This means, IGST in case of Exports with tax method has to be paid on the value agreed upon which can be Exworks, FOB, CIF, etc. Reconciling this with the disclosure mechanism in the shipping bill, the CBIC has issued an advisory clarifying that in cases where the arrangement in the Export transaction are CIF / C&F, the item level values in Shipping Bills are also required to be mentioned at CIF / C & F. The system will auto calculate the item level FOB, considering the actual values of Freight, insurance or any other component specified while filing of Shipping Bill. The various values mentioned in the shipping bill, including FOB, align with INCOTERMS and customs laws for identifying and calculating export incentives. While the shipping bill allows mentioning IGST value, the value should be the transaction value (at par with the sales value as specified in commercial invoice) as per Section 15 of the CGST Act. Now based on the rationale underlined in the GST Law, Exporter should get refund of the IGST as declared in Shipping Bill and also deposited in GST Returns. However, the industry faces issues where refunds for exports with payment of IGST are restricted to the GST portion on FOB value. Thus, one may have paid higher IGST based on transaction value, but the refund is limited to the FOB portion. Valuation Pitfalls in Tax Refunds for Exports with Payment of IGST: The FOB or CIF Conundrum - CA AMRIN ALWANI 28

Analysing the issue further, attention is drawn on the provisions of Rule 89 of the CGST Rules, which deals with Application for refund of tax, interest, penalty, fees or any other amount. The explanation to Sub-rule 4 provides that for the purpose of this rule the value of goods exported out of India shall be taken as FOB value as declared in Shipping Bill. Conversely, Rule 96 of the CGST Rules which deals with the Refund of integrated tax paid on goods or services exported out of India, provides that the shipping bill filed by an exporter of goods shall be deemed to be an application for refund of IGST paid on the goods exported. Comparing Rule 89 and Rule 96, since the shipping bill is considered as an application for a refund, provisions of Rule 89, which deals with the Application of refund concerning with the cases other than those covered in Rule 96, should not apply. Therefore, the valuation of Export determined as per Rule 89 should not apply in case of Rule 96. The IGST paid on transaction values should be considered as the entitled value of refund for exports. Multiple judicial decisions consider Rule 96 of the CGST Rules as the basis for claiming refunds for goods exported with payment of tax. In one such case, the Madras High Court (2019-VIL-563-MAD) emphasized that Rule 96 of the CGST Rules provide a deeming fiction. The shipping bill filed by the exporter of goods is deemed to be an application for a refund of the integrated tax paid on the goods exported out of India. Thus, Section 54 should be read with Rule 96 of the Rules. Thus, the legal provisions and proceeding makes it clear that the refund amount in case of export with payment of tax is equivalent to the GST discharged in Shipping Bill and hence, if such GST is discharged on Transaction Value, refund should not be restricted only to the extent of IGST on FOB Value. Author’s Comments: Though the provision in respect of taxes on export and refund thereof seems to be quite simple and much clear especially in case of exports with payment of tax, it carries a lot of anomalies as the authorities consider conjoint reading of Rule 89 and Rule 96 for the purpose of value of refund. In recent news, one of the pharma companies has announced that they have received a demand order on account of export refund claimed on CIF value instead of FOB value (though it is unclear whether the transaction involved payment of IGST). The company intends to file an appeal against the confirmed demand. I. T. MIRROR 29

Waiver of Interest or Penalty or Both relating to Demands raised under Section 73, for certain tax periods - CA PRATIBHA GOYAL 30 Eligibility Condition for Section 128 Notice/Statement issued or Order Passed u/s 73 [Section 128A (1)] Notice has been issued under 74(1), and order is passed or required to be passed in pursuance of the direction of AA or AT or a court in accordance with provisions of section 75 (2) [First Proviso of Section 128A (1)] Period Covered 1st July, 2017 to 31st March, 2020 Payment of Tax and Filing of Application Eligibility Section 128A (1) First Proviso of Section 128A (1) Tax Payment: 31st March 2025 Tax Payment: Date ending on completion of 6 months from the date of issuance of the order by the PO redetermining tax u/s 73 Filing of Application: 30th June 2025 [Application to be filed within 3 months from Payment of Tax] Filing of Application: 6 months from the date of communication of the order of the proper officer redetermining such tax u/s 73 Payment of Tax Payable Notice Adjudicated and Payment Pending DRC-03 Payment made Via DRC03 Adjust DRC-03 via DRC-03A [Rule 142(2B)]

Forms for Taxpayers Particulars Forms to File Due Date Notice/Statement issued but no Order Passed u/s 73 GST SPL-01 30th June 2025 Notice/Statement issued and Order Passed u/s 73 but no Order Passed u/s 107(1)/108 (1) GST SPL-02 30th June 2025 Notice/Statement issued and Order Passed u/s 73 and Order Passed u/s 107(1)/108 (1) but no Order Passed u/s 113(1) GST SPL-02 30th June 2025 Partial Refund No Partial Reilef Allowed Notice/ Order includes demand for Erroneous refund or for period other than 1st July, 2017 to 31st March, 2020 Exception carved out The amount payable shall be calculated, after deducting the amount payable in accordance with sub-section (5) or sub-section (6) of section 16 [Filing of Rectification Application NN 22/2024] Non-Eligibility Not-Eligible for the scheme Erroneous refund, Late Fees, Import IGST Appeal or writ petition pending before AA/AT/court, and same has not been withdrawn on or before the date. Cases u/s 74 I. T. MIRROR 31

Process After Filing the Application Application made GST SPL-01/ GST SPL-02 Rejected by PO Accepted by PO GST-SPL-05 [3 months from date of receipt of application] Section 128A Concluded, Proceedings concluded, Summary of order in FORM GST DRC-07 not required, The liability created in the part II of Electronic Liability Register, shall be modified Application Deemed to be approved if Timely Order not passed by PO Pay Interest/Penalty on Period not covered/ Errorneous refund within 3 Months of SPL-05 Issuance Else -Scheme will be void. GST-SPL-03 [3 months from date of receipt of application] Opportunity of Being Heard Given Taxpayer Files No Response Taxpayer Files Response Rejected by PO GST-SPL-07 [4 months from date of issuance of notice in FORM GST SPL-03] Original Appeal That was Withdrawn will be restored. GST-SPL-04 [1 month from date of receipt GST-SPL-03] Rejected by PO GST-SPL-07 [3 months from date of receipt of reply of applicant in FORM GST SPL-04] Accepted by PO GST-SPL-05 Section 128A Concluded [3 months from date of receipt of reply of applicant in FORM GST SPL-04] No Appeal by Taxpayer Against Rejection Order Taxpayers Files Appeal Against Rejection Order AA Held: PO has rightly rejected application Original appeal, if any will be restored subject to condition that applicant files an undertaking to not challenge AA's Order in FORM GST SPL-08 AA Held: PO has wrongly rejected application AA shall pass an order in FORM GST SPL-06 on common portal accepting application I. T. MIRROR 32

Claiming ITC Under the Wrong Head: Legal Analysis and Tax Implications - CA VANSHIKA VIDHWANI 33 The Goods and Services Tax (GST) in India was introduced to eliminate the cascading effect of taxes and create a seamless flow of input tax credit (ITC) across the supply chain. By allowing businesses to offset the tax paid on inputs against their output tax liability, GST ensures that tax is levied only on the value addition at each stage. However, for this system to function efficiently, the correct availment and utilization of ITC are crucial. A recurring issue has been the erroneous claiming of ITC under the Central GST (CGST) and State GST (SGST) heads instead of the Integrated GST (IGST) head. This erroneous availment, while procedural in nature, has been the subject of litigation. This article aims to provide insights into its implications and the concept of revenue neutrality. Understanding ITC and Its Allocation ITC allows businesses to offset the tax they pay on inputs against their output tax liability, thereby preventing tax cascading. Under the GST framework: • IGST is levied on inter-state supplies and imports. • CGST and SGST are levied on intra-state supplies. Utilization of ITC Section 49(5) of the Central Goods and Services Tax Act, 2017, prescribes a structured utilization of ITC to ensure a seamless tax credit flow and avoid cascading effects. The utilization follows this sequence: Type of Credit Utilization Order IGST Credit 1. IGST → 2. CGST → 3. SGST/UTGST CGST Credit 1. CGST → 2. IGST (only if CGST liability is nil) SGST/UTGST Credit 1. SGST/UTGST → 2. IGST (only if SGST/UTGST liability is nil) Simplified Flow of ITC Utilization 1. IGST Credit Utilization: o First used for discharging IGST liability. o If any balance remains, it can be used for CGST liability. o If there is still a balance, it can be used for SGST/UTGST liability. 2. CGST Credit Utilization: o First used for discharging CGST liability. o If CGST liability is fully met, any remaining credit can be utilized for IGST liability. o Cannot be used for SGST/UTGST liability.

3. SGST/UTGSTCredit Utilization: o First used for discharging SGST/UTGSTliability. o If SGST/UTGSTliability is fully met, any remaining credit can be utilized for IGSTliability. o Cannot be used for CGSTliability. Revenue Neutrality in Case of ITC Claimed Under the Wrong Head Revenue neutrality refers to a situation where a tax error does not result in a financial loss to the government exchequer. In cases where ITC is availed under CGST and SGST instead of IGST, the tax authorities do not suffer a revenue loss, as the receiving state ultimately gets its share of the tax, which is allowed to be set off against the liability. The proviso to Section 49(5) establishes a clear and structured hierarchy for utilizing input tax credits, ensuring that there is no cross-utilization between different tax components. IGST credits can be applied toward liabilities arising from CGSTand SGST, and vice versa. However, central tax cannot be used to pay state tax or union territory tax, and the reverse is also prohibited. If the assessee utilized credit under CGST and SGST instead of IGST and applied it toward the payment of GST on outward supplies, their actions align with legal provisions. Essence of Circular No.192/04/2023-GST Dated 17th July 2023 and its applicability The CBIC, via Circular No.192/04/2023-GST, provided clarification on charging interest under Section 50(3) of the CGSTAct, 2017, in cases of wrongful availment of IGSTcredit and its subsequent reversal. According to the circular: • Since ITC available in the electronic credit ledger (IGST, CGST, or SGST) can be utilized for IGST liability, the total ITC available across all heads must be considered when determining interest under Rule 88B of CGSTRules. • If, at any point between availment and reversal, the total ITC balance (across IGST, CGST, and SGST) does not fall below the wrongly availed IGSTcredit, no interest is applicable. • If the total ITC balance falls below the wrongly availed amount, then interest is payable under Section 50(3) of the CGSTAct,read with Section 20 of the IGSTAct and Rule 88B(3) of the CGSTRules. Clarification Using the Single Pool of Balance Analogy The essence of the above clarification is that the input tax credit (ITC) available in the electronic credit ledger should be considered as a pool of funds designated for different types of taxes, such IGST, CGST and SGST. These accounts represent a wallet with compartments for IGST, CGST, and SGST funds. Therefore, while determining interest under rule 88B of the CGST Rules, the entire wallet has to be taken into consideration, not just individual compartments. If the total balance (combining IGST, CGST, and SGST) falls below the amount of the wrongly availed IGST credit, there is interest liability. If, however, the total wallet balance never dips below this specific amount during the relevant period, there's no interest liability. Similarly, for utilizing the IGST liability, the clarification emphasizes that the eligibility of funds for this payment is based on the total balance in the entire wallet, not just the IGST compartment. In short, the analogy of the above circular is that the GST system treats the electronic credit ledger as a unified resource, and interest is incurred if, collectively, the available funds fall below the amount of wrongly availed credit during the specified period. I. T. MIRROR 34

Judicial Perspectives on ITC Claimed Under the Wrong Head Several judicial decisions have addressed the issue of misclaimed ITC: 1. Rejimon Padickapparambil Alex v. Union of India (2024-VIL-1284-KER) o The Kerala High Court ruled that the electronic credit ledger functions as a unified pool of tax funds. o Misallocation does not constitute wrongful availment, as no revenue loss occurs. o Demanding repayment in such cases was deemed unjustified. 2. M/s. Kalleppuram Metals v. Union of India (2025-VIL-10-KER) o The petitioner's mistake of availing CGST/SGST instead of IGST was a technical error with no revenue loss. o Section 73 of the CGST Act applies only when tax has not been paid, is short-paid, erroneously refunded, or wrongfully utilized. o Since the GST system treats the electronic credit ledger as a unified source, the claim did not constitute wrongful availment. o The impugned order was set aside, and the writ petition was allowed. Implications of Judicial Decisions The consistent judicial stance underscores that: • Technical Errors: Claiming ITC under the wrong head is considered a technical or procedural error. • No Revenue Loss: Such errors do not cause financial loss to the government, as the total tax paid remains unchanged. CONCLUSION The judiciary's approach to ITC claimed under CGST and SGST instead of IGST highlights the importance of substance over form. As long as there is no revenue loss, such procedural errors are viewed leniently, and taxpayers are allowed to rectify them. This perspective ensures fairness and maintains the integrity of the GST system, reinforcing the principle of revenue neutrality. I. T. MIRROR 35

Adjudication Process Under Companies Act 2013 - CS RIDDHI PAMNANI 36 Adjudication Process under Companies Act 2013 [Covered under the Section 454 of the Companies Act, 2013 read with The Companies (Adjudication of Penalties) Rules, 2014 & amendments thereafter.] It has been more than a decade now where the Companies Act, 2013 have completed its remarkable journey. By this time, gradually Ministry of Corporate Affairs have been taking its sincere actions and also taking serious measures for implementation of various Compliances under the act in much stricter way. It can be witnessed that any non-compliances or deviations will ultimately lead to adjudication and compounding of offences under the provisions of the Companies Act, 2013. During this journey, MCA has de-criminalized the various offences. It is the legislative process which removes prosecutions against an action so that the action remains illegal but has no criminal penalties or at most some civil fine. To understand the entire concept of the Adjudication, we shall first understand the basic concepts: 1. Liable to penalty or fine and/or imprisonment 2. Compoundable or non-compoundable 3. Cognizable or Non-Cognizable Difference between Penalty or fine/ imprisonment under the Companies Act, 2013: So far as the Companies Act, 2013 is concerned, penalty is meant for civil default while Fine is meant for criminal offences. Penalty: Wherever, the word used in the section is penalty, it simply means the default is within the in-house adjudication mechanism (without intervention of the court) i.e. the amount of penalty will be adjudicated by the Adjudicating officer inhouse- by ROC. Fine/imprisonment: Wherever, the words used are fine, fine and/or imprisonment, it simply means the adjudication of fine / imprisonment will be done by the court of competent jurisdiction. Difference between Compoundable and Non-compoundable Offence: Compoundable: Offences punishable: With fine only; With fine or imprisonment or both Which simply means offence where imprisonment is not mandatory

Non-compoundable: Offences punishable with fine and imprisonment are non-compoundable which simply means where imprisonment is mandatory Default v/s Offence Default refers to a failure to meet legal or contractual obligations, such as non-compliance with regulatory requirements. An “offence,” on the other hand is considered as an illegal Act which involves a violation of criminal law that is punishable by penalties or imprisonment. Cognizable and Non Cognizable Offence Cognizable offences are more serious in nature and those in which a police officer can arrest a person without the need for a court order or warrant. Non-cognizable offences are usually less serious and those where the police officer needs court permission or warrant to arrest a person. To make it simple to understand the Offences under the Companies Act, 2013, it can be categorized as below: Who is “officer who is in default”- Section 2(60): for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:— i) whole-time director; ii) key managerial personnel; iii) where there is no key managerial personnel, such director or Directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the Directors, if no director is so specified; I. T. MIRROR 37

iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default; v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity; vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance; vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer; PROCEDURE FOR ADJUDICATION UNDER SECTION 454 1. ISSUANCE OFTHE SHOWCAUSE NOTICE BYTHE ROC OR FILE EFORM GNL-1 SUO MOTU: Adjudicating officer shall issue show notice to the Company / officer in default/ any other person who is in default as to why penalty should not be imposed. Notice to be complying provisions of Section 20. Content of Notice shall be Nature of Default, Relevant Penal Provisions & maximum penalty that can be imposed. Reply within 15 to 30 days as specified in the notice by ROC. It can be extended by ROC for further period not exceeding 15 days if it satisfies the adjudicating officer that it or he has sufficient cause for not responding to the notice within the stipulated period or the adjudicating officer has reason to believe that the company or the officer or the person has received a shorter notice and did not have reasonable time to give reply. Reply only in electronic mode and Physical appearance if so asked by the ROC. 2. HEARING: If ROC is of the opinion that physical appearance is required, he shall issue a notice within 10 working days of receiving the reply. It would be noted that Electronic mode shall be mandatory on commencement of E-Adjudication. Reply maybe extended by recording reason in writing. While making reply, it can be requested for making oral submissions. 3. PASSING OFTHE ORDER BYROC: ROC may pass the order with reason within 30 days from the date of issue of show cause notice if no reply is received or else within 90 days if appearance is made. 4. APPEALTO RD IFAGGREIVED BYAN ORDER OFROC: Any person aggrieved by an order issued by ROC may prefer an appeal to RD within 60 days in form ADJ setting forth the grounds of appeal and shall be accompanied by a certified copy of the order against which the appeal is sought. 5. DELIVERYOFORDER & POSTON WEBSITE: ROC to send a copy of order to the Company & every person and to upload on the website of MCA. I. T. MIRROR 38

6. FACTORS TO DECIDE QUANTUM OF PENALTY: Such Factors are Size of the company, Nature of business carried on by the company, Injury to public interest, Nature of default, Repetition of default, amount of disproportionate gain or unfair advantage and amount of loss caused to the investor/creditor. Penalty Cannot be less than the minimum penalty under the section 7. PENALTY TO PAY THROUGH MCA PORTAL WITHIN 90 DAYS. POWERS OF THE ROC WHILE HOLDING AN INQUIRY: a) to summon and enforce the attendance of any person acquainted with the facts and circumstances of the case; (b) to order for evidence or to produce any document, which in the opinion of the adjudicating officer, may be useful for or relevant to the subject matter of the inquiry. RD'S ROLE & POWERS ON RECEIPT OF THE APPEAL: ROLE: The RD shall endorse the date on such appeal and shall sign such endorsement. If, on scrutiny, the appeal is found to be in order, it shall be duly registered and given a serial number. Where the appeal is found to be defective, the RD may allow time of at least fourteen days and further fourteen days on being satisfied for sufficient cause, showing about the nature of the defects, to rectify the defects and if the appellant fails to rectify such defects within the time period allowed, He may by order and for reasons to be recorded in writing, decline to register such appeal and communicate such refusal to the appellant within a period of seven days thereof. The rest procedure can be read at Rule 6 of The Companies (Adjudication of Penalties) Rules, 2014. POWERS: 1. Dismiss the appeal based on the grounds or merits 2. Retain the decision of the ROC 3. Reduce the penalty amount 4. Set aside / resend the order to ROC for re-examination 5. Direct ROC to pass fresh order after reconsidering the appeal 6. Any other order as the RD thinks fit in the case. CONSEQUENCES OF FAILING TO COMPLY WITH THE ORDER OF ROC WITHIN PERIOD OF 90 DAYS: COMPANY: The company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees. AN OFFICER OF A COMPANY OR ANY OTHER PERSON: punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both. ADVANTAGES OF ADJUDICATION OF PENALTIES (SECTION 454) 1. Fast & Simple mechanism 2. Without Court procedures 3. Small Companies, Start ups, Producer Company are benefitted with half penalty I. T. MIRROR 39

KEY POINTS UNDER THE ADJUDICATION OF PENALTIES (SECTION 454):  It is done through the ROC.  Before imposing any penalty, The Act envisages a natural justice-based mechanism of adjudication of penalties whereby the ROC has been mandated under the provisions of the Act, to provide the reasonable opportunity of being heard to the Company and Officer in default.  The decision of RD on the matter shall be final and binding to him/ them when appeal if filed before RD.  An appeal in Form ADJ shall not seek relief(s) therein against more than one order unless the reliefs prayed for are consequential.  Special privilege under section 446 B: In case of OPC, Small Company, Start-up Company and Producer Company, penalty shall not be levied more than one half of the penalty specified.  In case the default related to non-compliance of filing of Annual Return (section 92(4)) or filing of financial statements (section 139(1)& (2)) and such default has been rectified either prior to, or within thirty days of, the issue of the notice by the adjudicating officer, no penalty shall be imposed in this regard and all proceedings under this section in respect of such default shall be deemed to be concluded.  If any person fails to reply or neglects or refuses to appear as required before the ROC, he may pass an order imposing the penalty, in the absence of such person after recording the reasons for doing so.  Every order of the adjudicating officer shall be duly dated and signed by him and shall clearly state the reasons for requiring the physical appearance.  Penalty shall be paid through Ministry of Corporate Affairs portal only.  All sums realised by way of penalties under the Act shall be credited to the Consolidated Fund of India. I. T. MIRROR 40

INTER ASSOCIATION BOX CRICKET TOURNAMENT 01.03.2025

INTER ASSOCIATION BOX CRICKET TOURNAMENT 01.03.2025