Taxation Law - Income Tax – Share Application Money – Section 68 – Evidentiary Value of Statements under Section 131 – ITAT erred in holding that authorities have no power to administer oath under Section 131 – High Court held that such statements are admissible and Section 131 explicitly empowers authorities to examine persons on oath – First question of law answered in favour of Revenue [Paras 4.10–4.12].

Income Tax – Section 68 – Addition based on vague statements – Statement of Mahendra Kumar Sethia found vague, lacking specific allegation that cash was received from assessee – No corroborative material to establish cash trail – ITAT’s reappreciation of evidence not perverse – Fourth question of law answered in favour of Assessee [Paras 7.1–7.4].

Income Tax – Section 68 – Reliance on prior judgment – ITAT rightly relied on High Court decision in assessee’s own case for AY 2007–08 – Legal principles laid down in Lovely Exports and prior case applicable even after insertion of 2012 provisos – Identity, creditworthiness and genuineness remain primary tests – Third question of law answered in favour of Assessee [Paras 6.1–6.12].

Income Tax – Section 56(2)(viib) – Fair Market Value of Shares – Valuation by assessee not specifically questioned by AO – ITAT held that AO must record judicially justifiable dissatisfaction before rejecting valuation – Addition not sustainable without proper analysis under Rule 11UA – Second question of law answered in favour of Assessee [Paras 8.1–8.5].

Income Tax – Lease Rent Paid to Director – Section 40A(2)(a) – ITAT remanded issue for fresh consideration regarding lease rent paid to Director – Assessment must consider prevailing market rates, amenities, and statutory provisions – Remand upheld – No substantial question of law arises – Fifth question in TCA No.14/2020 answered accordingly [Paras 9.1–9.5].

Income Tax – Disallowance under Sections 36(1)(iii) and 36(1)(va) – Lease advance and employee contributions – ITAT remanded issue without properly examining business necessity or timing of payment – High Court held remand order to be legally infirm – ITAT directed to reconsider in accordance with law – Fifth and sixth questions of law in TCA Nos.15 and 16 of 2020 answered in favour of Revenue [Paras 10.1–10.9].

Decision: Appeals partly allowed – First question of law answered in favour of Revenue – Second, third and fourth questions of law answered in favour of Assessee – No question of law arises on fifth question in TCA No.14/2020 – Fifth and sixth questions in TCA Nos.15 and 16 of 2020 answered in favour of Revenue – Matter remanded to ITAT for re-examination on Sections 36(1)(iii) and 36(1)(va) [Para 11].

Maharashtra Cooperative Societies Act, 1960 – Section 88 – Inquiry and Assessment of Damages – Functus Officio – Replacement of Authorized Officer – Held: The authority of an officer to conduct inquiry and submit a report flows solely from the order of appointment – Once the Registrar issues an order replacing the Authorized Officer, the original officer becomes functus officio and loses all jurisdiction to act – A report submitted by the original officer after the date of his replacement is void ab initio and without authority. [Paras 12-17]

Administrative Law – Effectiveness of Orders – Knowledge of Officer – Held: An administrative order (replacement of officer) takes effect when issued by the competent authority – The validity of the cessation of power does not depend on the personal knowledge of the officer being replaced – The plea that the officer was unaware of the replacement order cannot validate a report submitted after his authority was withdrawn. [Paras 19-21, 24]

Decision: Petitions allowed. Report dated 28.02.2022 and Recovery Certificate dated 13.10.2022 quashed. Matter remitted to the Competent Authority for fresh hearing by the newly appointed Authorized Officer.

Criminal Law – Identification of Accused – Dock Identification vs. TIP – Held: Dock identification of an accused, who is a stranger to the witness, without a prior Test Identification Parade (TIP), is a weak piece of evidence. Where the complainant failed to identify the appellant in the TIP proceedings but identified him in Court after a gap of more than 3 years, such identification casts a shadow of doubt. The failure to identify in TIP and subsequent identification in Court renders the evidence unreliable. – [Paras 12-13]

Criminal Law – Section 397 IPC – Proof of Use of Weapon – Specific Context: Allegation of using a knife during robbery – Held: The complainant’s testimony regarding the role of the appellant was inconsistent. While the complainant attributed the use of a knife to the appellant in Court, he had failed to identify him earlier. Furthermore, no recovery of the weapon or robbed articles was effected from the appellant. In the absence of reliable identification and corroborative recovery, the conviction under Section 397 IPC cannot be sustained. – [Paras 12-14]

Criminal Law – Benefit of Doubt – Inconsistent Testimony – Held: The complainant made improvements in his testimony regarding the role of co-accused, leading to the co-accused's acquittal. Similar inconsistencies and the failure of identification in TIP regarding the appellant entitle him to the benefit of doubt. – [Paras 13-14]

Decision: Appeal allowed. Impugned judgment of conviction and order on sentence set aside. Appellant acquitted. [Para 15]

NDPS Act – Regular bail – Section 37 – Commercial quantity – Recovery of 710 kg poppy husk from vehicle – Petitioners Gurjeet Singh @ Bhura Fauji and Satguru Singh apprehended at spot – Co-accused Lali and Jagtar @ Kari @ Jagtar Singh implicated through disclosure statements – Challan filed and trial underway – Only 2 out of 34 witnesses examined and 15 given up – Held – Alleged quantity being commercial – and in view of nature and seriousness of offence – petitioners must satisfy twin conditions of Section 37(1)(b) NDPS Act – On material on record no reasonable ground made out to believe petitioners are not guilty – or that they are not likely to commit offence while on bail – Rigours of Section 37 not satisfied – Bail declined [Paras 3–6, 8–9, 9.3].

NDPS Act – Long incarceration – Article 21 – Regular bail on ground of custody length – Petitioners Gurjeet and Satguru in custody since 10.06.2024 – about 1½ years – Petitioners Lali and Jagtar in custody since March 2025 – about 8 months – Held – In view of recent Supreme Court decisions stressing gravity of organised drug trafficking and strict application of Section 37 NDPS Act – mere period of custody of 1½ years in case carrying punishment of 10–20 years cannot be termed unreasonably long – Long incarceration by itself not sufficient to dilute Section 37 requirements – especially where serious allegations and commercial quantity are involved [Paras 5–6, 8–9].

NDPS Act – Bail – Disclosure statements as sole basis for implication of some accused – Petitioners Lali and Jagtar @ Kari @ Jagtar Singh implicated only on basis of disclosure of co-accused – Argument that such implication is weak and that mandatory provisions not complied with – Held – At bail stage – in prosecution involving commercial quantity – Court not to conduct mini-trial – When overall material including recovery of huge commercial quantity and allegations of organised activity exist – disclosure-based implication alone does not enable satisfaction of twin conditions under Section 37 – No case made out for regular bail [Paras 4–6, 8–9].

Drugs Menace – Policy concern – Public health crisis – Supreme Court guidance – Court places reliance on UOI v. Namdeo Ashruba Nakade SLP (Crl.) No. 9792/2025 and UOI v. Vigin K. Varghese SLP (Crl.) No. 7768/2025 – noting Supreme Court’s emphasis that drug abuse is a pervasive global and national menace – destructive of youth and social fabric – and that Courts must be slow in granting bail in serious NDPS cases involving commercial quantity – unless statutory conditions are clearly met – Held – These principles weigh heavily against relaxation of Section 37 rigours in present case [Para 8(i)–(ii)].

Section 37 NDPS – Interpretation – High Court’s own precedent – Court reiterates principles laid down in Jaswinder Singh @ Kala v. State of Punjab CRM-M-33729-2025 = 2025 SCC OnLine P&H 4537 – that (i) twin conditions under Section 37(1)(b) are cumulative and in addition to ordinary bail tests – (ii) long incarceration may relax rigours only where delay is not attributable to accused and custody is truly excessive – and (iii) Court must sift material to form prima facie view but not enter into full-scale appreciation of evidence – Held – Applying these postulates to facts – petitioners fail to cross Section 37 threshold [Para 8(iii)].

Medical grounds for bail – NDPS – Petitioner Jagtar @ Kari @ Jagtar Singh – old fracture and chronic osteomyelitis – Medical board report indicates right tibia fracture operated 27 years back – implant in situ – fracture united – superficial chronic ulcer requiring regular dressing and antibiotics – ankle fixed in plantar flexion – walking with limp – no surgery required – Held – Condition neither serious nor life-threatening – treatment possible in jail – Medical ground insufficient to override rigours of Section 37 NDPS Act – Regular bail refused [Paras 5.1, 9.1–9.2].

Section 37 NDPS – Antecedents – Relevance – Custody certificates show petitioners Gurjeet and Satguru involved in other FIRs while Lali and Jagtar have no other FIRs – Held – Antecedents are relevant component of “likely to commit any offence while on bail” limb – prior involvement of some petitioners reinforces refusal of bail – For others with clean record – seriousness of role and commercial quantity still prevents satisfaction of first limb (reasonable grounds of non-guilt) – hence no bail to any petitioner [Paras 6, 9, 9.3].

Decision: Bail petitions dismissed – Petitions under Section 483 BNSS for regular bail in FIR No. 83 dated 10.06.2024 under Sections 15, 25 and 29 NDPS Act relating to recovery of 710 kg poppy husk rejected – Court holds that petitioners have failed to satisfy twin conditions under Section 37 NDPS Act – long custody and medical condition of one petitioner not sufficient to dilute statutory rigours in a commercial quantity case – Trial to proceed uninfluenced by any observations in order [Paras 9, 9.3, 10–11].

Civil Law - Surplus Area Declaration – Mandatory Notice to Tenants – Rule 6 of Punjab Security of Land Tenure Rules, 1956 – Held: It is mandatory for the Collector to serve notice upon tenants in cultivating possession before declaring land as surplus. Where revenue records (Jamabandis 1950-1981) consistently showed plaintiffs as tenants, an order passed declaring land surplus without notice to them is in complete violation of statutory mandate and principles of natural justice. Such an order is void ab initio and non-est in the eyes of law. [Paras 16, 19-20].

Vesting of Land in State – Section 12(3) of Haryana Ceiling on Land Holdings Act, 1972 – Validity of Foundation Order – Held: Vesting of surplus land in the State postulates a valid surplus declaration. If the foundational order (1961 surplus order) is void for want of notice, no vesting takes place under Section 12(3). The State cannot acquire title based on a nullity, and consequently, cannot allot such land to third parties. [Paras 17-18, 21].

Jurisdiction of Civil Court – Bar under Section 26 of Haryana Ceiling Act – Exception for Void Orders – Held: The bar on Civil Court jurisdiction applies only to orders passed within jurisdiction by prescribed authorities. It does not apply where the foundational order is a nullity or void ab initio. The Civil Court retains jurisdiction to examine and set aside orders passed without complying with mandatory statutory procedures (specifically notice under Rule 6). [Paras 22-23].

Limitation – Suit for Possession based on Title – Article 65 Limitation Act – Held: A suit seeking recovery of possession based on title is governed by Article 65 (12 years limitation), not Article 58. Limitation does not run in favor of a party who takes possession under a void and non-est order. [Paras 25-26].

Decision: Appeal dismissed. Concurrent findings of Courts below affirmed. [Para 28].

Service Law – Age Relaxation – Recruitment to Post of Fireman and Fireman Driver – Petitioners challenged fixation of upper age limit at 25 years in Advertisement dated 29.08.2023 – Petitioners contended that the posts were lying vacant since 2015 and no recruitment held due to COVID-19 – Court noted that age limit was fixed under 2021 Rules framed under Section 26(2) of the Odisha Fire Service Act – However, Rule 30 vested State Government with power to relax rules in public interest – Held: Petitioners’ claim for age relaxation justified considering precedents and comparable cases – Directed State to relax upper age limit by 3 years for 7 qualified petitioners as a one-time special case [Paras 5.5, 7.6, 7.7]

Administrative Law – Discretionary Powers – Rule 30 of 2021 Rules – Power of State to relax age limit provisions – Court held that Rule 30 expressly authorized the Government to relax any rule for reasons to be recorded – Non-exercise of such discretion in appropriate circumstances would be arbitrary – State directed to consider age relaxation in spirit of earlier decision in Nagen Bhoi v. State of Odisha [Paras 5, 5.4, 5.5, 7.4, 7.6]

Constitutional Law – Article 14 and 16 – Equal Treatment – Petitioners sought parity with similarly situated candidates in other recruitments like Constables and ASIs where 3 to 4 years age relaxation was granted – Court found State had extended similar concessions in Nagen Bhoi case and Writ Appeal No. 3321 of 2024 – Held: Denial of similar relaxation would violate equality principles enshrined in Articles 14 and 16 – One-time age relaxation justified [Paras 4.10 to 4.14, 7.4 to 7.6]

Public Employment – Interim Participation in Selection – Petitioners allowed to participate in selection process under interim orders – Seven petitioners found qualified – Court clarified interim participation does not confer equity – However, upon subsequent relaxation, qualified candidates to be considered for appointment subject to eligibility within relaxed age criteria – State directed to complete appointment process within 2 months [Paras 4.1 to 4.4, 7.7]

Decision: Writ Petitions allowed in part – State directed to grant three years age relaxation as a one-time special measure to seven qualified petitioners – State to take steps for their appointment against existing vacancies if they fall within relaxed age limit – Exercise to be completed within two months – Order not to be treated as precedent.

Civil Procedure – Ex Parte Decree – Refusal to Accept Summons – Presumption of Service – Summons sent to Appellant’s known addresses returned with endorsements of “refused” – Legal notices had also been previously served at same addresses – Appellant failed to rebut presumption of valid service under Section 27 of the General Clauses Act – Held: Service was duly effected, and ex parte decree justified [Paras 23–34, 42–44, 49].

Limitation – Condonation of Delay – Order 9 Rule 13 CPC – Delay of 43 days in filing application to set aside ex parte decree not supported by sufficient cause – Conduct showed negligence and lack of bona fides – Court reiterates that “sufficient cause” must be proven with due diligence and not invoked casually [Paras 18, 46–50].

Civil Procedure – Refusal of Summons – Legal Presumption – Court reiterates legal principle that refusal to accept summons amounts to valid service – Relied on Parimal v. Veena, (2011) 3 SCC 545 and Vishwabandhu v. Sri Krishna, (2021) 19 SCC 549 – No evidence of impeccable character adduced by Appellant to rebut legal presumption of service [Paras 40–44, 48–49].

Civil Procedure – Bona Fides and Diligence – Appellant failed to appear or respond until execution commenced – Alleged lack of knowledge disproved by tracking reports and prior service – Plea of false address and lack of notice rejected as frivolous – Court held that appellant’s conduct reflected clear neglect [Paras 35, 37–39, 50].

Civil Procedure – Ex Parte Decree – Requisites under Order IX Rule 13 – Either improper service or sufficient cause must be established – Both not satisfied in present case – High Court upholds Trial Court’s rejection of application to set aside decree [Paras 12, 48, 51].

Decision: Appeal dismissed – Application under Order IX Rule 13 CPC rightly rejected – Ex parte decree stands confirmed – Pending applications rendered infructuous

Criminal Law – Assault – Section 325 IPC – Section 324 IPC – Appellant Lalit Mahto assaulted the victim on the head with a spade causing grievous injury – Appellant Titu Mahto hit the victim on his back with the blunt side of the spade causing simple injury – Conviction under Sections 325 and 324 IPC respectively held proper – Trial court rightly acquitted appellants of Section 302 IPC as prosecution failed to connect death with the injuries due to non-examination of post-mortem doctor and Investigating Officer [Paras 13–19]

Criminal Procedure – Appeal Against Conviction – Scope of Interference – Appellants challenged conviction relying on sole eyewitness being interested witness – Court held that testimony of PW-1, nephew of deceased, was consistent and corroborated by medical evidence – Absence of other eyewitnesses or I.O. not fatal – Conviction sustained [Paras 9, 15, 18–19]

Evidence Act – Testimony of Interested Witness – Sole eyewitness was nephew of deceased – Court found testimony reliable and natural – No material elicited in cross-examination to discredit witness – Held: Relationship alone not sufficient ground to discard credible testimony [Para 15]

Sentencing – Modification – Leniency for Aged Accused – Appellant Lalit Mahto aged over 80 years, ailing, and faced trial for over 25 years – Court modified sentence under Section 325 IPC to period already undergone (5 months) – Appellant Titu Mahto’s sentence under Section 324 IPC (1 year RI) upheld – Directed to surrender within 45 days [Para 20–22]

Decision: Conviction of both appellants under Sections 325 and 324 IPC respectively affirmed – Sentence of appellant Lalit Mahto modified to period already undergone – Sentence of appellant Titu Mahto upheld – Appeal partly allowed.

Matrimonial Law – Divorce – Dismissal of Husband’s Petition – Grounds of Cruelty and Desertion – Appellant/Husband filed for dissolution of marriage under Section 10 of the Divorce Act – Alleged that wife refused to care for his parents, expressed dissatisfaction over financial issues, and deserted him – Family Court dismissed the petition – Held: Grounds of cruelty and desertion not established by the appellant [Paras 1–2, 4–9]

Desertion – Wife’s Departure for Delivery Not Voluntary Desertion – Wife returned from Dubai to parental home due to pregnancy-related complications – Appellant admitted this in cross-examination – Court held that such return for delivery is a common familial practice and cannot be construed as desertion – Filing for divorce before even the child’s birth showed absence of genuine effort to resolve issues – Divorce on ground of desertion rightly rejected [Paras 3–6, 8]

Cruelty – Allegations Found Baseless – Appellant failed to produce credible evidence of cruelty – Claims that wife quarrelled over financial matters and neglected his parents were not substantiated – Court found these to be routine marital disagreements – Trial court preferred testimony of wife over that of husband after observing demeanour – No perversity found in lower court's findings [Paras 4, 7–9]

Decision: Appeal dismissed – No interference warranted with Family Court’s decision – Divorce rightly denied as appellant failed to prove cruelty or desertion – [Para 9].