Insights & Resources

The Gauhati High Court, in Principal Commissioner of Income-tax v. Greenply Industries Ltd., held that excise duty exemptions granted under a notified industrial policy constitute capital receipts. Consequently, such receipts are neither taxable under regular provisions of the Income-tax Act, 1961 nor includible in book profits for MAT purposes under section 115JB.

The Delhi High Court, in Christian James Michel v. Directorate of Enforcement, granted bail under PMLA on grounds of prolonged undertrial incarceration. The judgment highlights the constitutional imperative under Article 21 and harmonises it with the stringent bail provisions of Section 45 PMLA, reinforcing the jurisprudence against indefinite pre-trial detention in economic offences.

The SAFEMA Appellate Tribunal upheld the ED's attachment of property acquired before the commission of a scheduled offence, holding it to be ‘proceeds of crime’ under PMLA. It ruled that the date of detection of laundering, not the original offence, governs applicability. The decision underscores key compliance principles around equivalent value attachment, retrospective prosecution, and statutory timelines impacted by COVID-19.

In a pivotal decision, the ITAT Chennai held that accrued interest on non-performing assets (NPAs) is not taxable for co-operative banks if not credited to the profit and loss account, in compliance with RBI guidelines. This ruling reinforces the legal principle that RBI norms on income recognition, under Section 45Q of the RBI Act, override the provisions of the Income-tax Act, even prior to the 2018 amendment to Section 43D.

The SAT’s ruling in CapitalVia Global Research Ltd. v. SEBI offers valuable guidance on regulatory compliance for investment advisers under the SEBI framework. While upholding nine out of thirteen charges—including KYC failures, risk profiling lapses, and misleading disclosures—the Tribunal reduced the penalty from ₹1 crore to ₹70 lakhs, reaffirming the importance of proportionality in enforcement and the fiduciary obligations of advisory firms.

The Jaipur ITAT’s ruling in Jai Singh Sethia v. DCIT/ACIT clarifies the distinction between Sections 54 and 54F under the Income-tax Act, 1961. The Tribunal denied exemption under Section 54F due to the property’s residential classification but granted relief under Section 54, reaffirming that procedural lapses should not defeat substantive tax relief when eligibility conditions are otherwise satisfied.

SC upholds PMLA’s continuing offence doctrine, rejecting retrospective and threshold-based challenges to money laundering prosecutions.

The Supreme Court has clarified that regulatory penalties imposed under the Consumer Protection Act do not qualify as ‘debt’ under Section 96 of the IBC. This landmark ruling restricts the use of insolvency proceedings by errant developers to avoid penalties for non-compliance, reinforcing consumer rights and statutory accountability.

The Appellate Tribunal (SAFEMA) in SBI v. ED (2025) held that the moratorium under section 14 of the IBC does not bar enforcement proceedings under the PMLA. The decision reinforces that financial creditors cannot claim immunity under section 32A unless a resolution plan is approved. The ruling draws a clear boundary between civil insolvency resolution and criminal asset confiscation under anti-money laundering laws.

The Appellate Tribunal under SAFEMA held that a mere agreement to sell, unsupported by a registered sale deed or actual possession, does not constitute a benami transaction under section 2(9)(A) of the Benami Act. In setting aside the provisional attachment, the Tribunal reaffirmed settled law that partial payments and unproven cash transfers do not suffice to trigger Benami Act consequences.

In K.S. Mehta v. Morgan Securities, the Supreme Court decisively addressed the vicarious liability of non-executive directors under the Negotiable Instruments Act, 1881. Reinforcing strict construction principles, the Court quashed criminal proceedings against directors lacking active involvement, setting a clear precedent on the necessity of specific allegations for liability under Section 141.

Bombay High Court reaffirms that statutory law prevails over CBDT guidelines in compounding offences under income tax legislation.

The ITAT Mumbai held that recording a bank-transferred loan via a journal entry does not violate s. 269SS of the Income-tax Act. The decision reinforces that substance prevails over form in genuine business transactions, especially where funds are routed through banking channels and properly documented.

Rajasthan High Court upholds Section 153C action based on WhatsApp chats corroborated by digital records and cash book evidence.

The SAFEMA Appellate Tribunal upheld FEMA liability against former partners of Rosecut Diamonds for failure to realise export proceeds within the prescribed timeframe under GR forms. Despite their resignation prior to adjudication, the Tribunal held that the obligation under sections 7 and 8 of FEMA had crystallised during their tenure. The penalty was reduced, but liability was affirmed for non-compliance with foreign exchange regulations.

SEBI’s 2025 amendment to the Insider Trading Regulations expands the definition of Unpublished Price Sensitive Information (UPSI), introduces new disclosure triggers, and streamlines compliance with structured data protocols. This regulatory update signals a decisive shift toward pre-emptive corporate transparency and robust market integrity safeguards.

The IFSCA has issued a comprehensive framework on cyber security and resilience for regulated entities operating in IFSC. These guidelines mandate robust governance, data protection, IT asset management, and incident reporting measures to counter escalating cyber threats. Regulated entities must adopt structured protocols, undergo annual audits, and manage third-party risk to ensure financial system stability.

ITAT rules that failure to transfer liabilities with assets disqualifies a demerger from tax exemption under Section 2(19AA) of the IT Act.

The NCLAT held that a statutory demand notice under Rule 7(1) of the 2019 IBC Rules does not amount to the invocation of a personal guarantee. The Tribunal reaffirmed that personal guarantor liability arises only when the guarantee is contractually invoked in accordance with its terms. This judgment reinforces procedural safeguards and curbs premature insolvency filings under s. 95 of the IBC.

The Delhi High Court, in Shiv Prakash Bansal v. DCIT, reaffirmed that proceedings under Section 153C of the Income-tax Act can be initiated solely on incriminating material found during a search, without requiring any nexus between the searched and non-searched persons. This judgment strengthens the Department’s power to act on discovered evidence, even against third parties not named in the search warrant.