Taxation Law - Income Tax – Reassessment – Validity of Sanction under Section 151 – ITAT quashed reassessment on ground that approval for reopening by Principal Commissioner of Income Tax was mechanical – Approval merely recorded “Yes, I am convinced it is a fit case” – Held: Such wording amounts to valid approval satisfying requirement of Section 151 – Distinction drawn with N.C. Cables Ltd., where only word “approved” was used – Approval here involved expression of satisfaction and thus meets statutory mandate [Paras 13–20].

Income Tax – Section 68 – Addition of Share Capital – Assessee alleged to have received ₹25,00,000/- as accommodation entry from S.K. Jain Group – AO relied on investigation wing report and added sum under Section 68 – ITAT did not adjudicate merits and quashed proceedings solely on approval defect – Held: Since approval under Section 151 was proper, ITAT erred in quashing reassessment without examining merits [Paras 6–10, 19–20].

Precedent – N.C. Cables Ltd. – Applicability – ITAT and Assessee relied on N.C. Cables Ltd., (2017) 391 ITR 11, where only “approved” was recorded as sanction – Held: Distinction exists as present case used more detailed language reflecting satisfaction – Earlier decision not attracted – Also relied on Meenakshi Overseas Pvt. Ltd. where similar approval held valid [Paras 13–19].

Assessment Procedure – Use of Investigation Wing Reports – AO reopened assessment based on incriminating material from investigation into S.K. Jain Group’s shell companies and accommodation entry operations – Challenge by Assessee to authenticity and non-supply of documents rejected – High Court did not interfere with the reliance placed on such reports for initiating reassessment [Paras 3–8].

Appellate Procedure – Deference to Prior ITAT Order – ITAT followed its earlier order in Assessee’s own case for A.Y. 2010–11 – High Court noted that earlier ITAT decision was not appealed due to low tax effect – Held: Lack of appeal in prior case does not preclude adjudication on merits when substantial question of law is framed [Paras 14–15].

Decision: Appeal allowed – ITAT’s order dated 07.07.2023 quashing reassessment set aside – Reassessment proceedings restored – Substantial question of law decided in favour of Revenue.

Negotiable Instruments Act – Section 138 – Dishonour of Cheque – Limitation – Cause of Action – Notice Returned ‘Refused’ – Applicability of 15-day Period – Held: Even when statutory notice is returned unclaimed or refused, service is deemed effected under Section 27 of the General Clauses Act – Cause of action arises only after expiry of 15 days contemplated under proviso (c) to Section 138 N.I. Act – Contrary view in Jayakrishnan v. Unnikrishnan, 2015 (5) KHC 683, held per incuriam for not noticing Supreme Court’s binding precedents in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555 and K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 [Paras 6–8].

Criminal Law – Section 138 N.I. Act – Refusal to Accept Notice – Effect – Refusal deemed valid service – However, drawer entitled to statutory period of 15 days for payment from date of deemed service – Complaint filed before expiry of 15 days premature, but one filed after expiry within limitation valid [Paras 7–8].

Precedent – Doctrine of Per Incuriam – High Court’s earlier decision in Jayakrishnan v. Unnikrishnan per incuriam as it ignored binding decisions of the Supreme Court – Law declared by Supreme Court in C.C. Alavi Haji governs – High Court bound to apply ratio [Paras 8–9].

Criminal Procedure – Acquittal under Section 255(1) Cr.P.C. – When based solely on erroneous interpretation of limitation under Section 142 N.I. Act – Proper course is to set aside and remand for fresh trial on merits [Para 9].

Decision: Held, Jayakrishnan (2015) incorrectly interpreted Section 138 – Supreme Court decisions in Alavi Haji and Bhaskaran apply – Complaints not time-barred – Judgments of acquittal set aside – Matters remanded for fresh consideration – All other issues left open – Parties directed to appear before Trial Court on 13.10.2025 at 11:00 a.m. [Paras 8–9].

Civil Law – Second Appeal – Scope under Section 100 CPC – Concurrent findings of Trial Court and First Appellate Court dismissing the suit for injunction upheld – High Court cannot re-appreciate evidence unless findings are perverse or contrary to law – No substantial question of law arises [Paras 5.16–6].

Transfer of Property – Unregistered Agreement to Sell – Effect – Plaintiff sought injunction restraining defendant from transferring property on basis of unregistered Banachitthi dated 18.09.2008 – Original document not produced – Defendant denied execution and thumb impression – Held: As per Section 17 of the Registration Act, such document requires compulsory registration; unregistered document cannot confer any right, title, or interest in immovable property [Paras 5.3–5.4].

Specific Relief – Suit for Injunction on Unregistered Agreement – Maintainability – Plaintiff filed only for injunction without claiming specific performance – Following Balram Singh v. Kelo Devi, MANU/SC/1241/2022, and Devesh Metcast Pvt. Ltd. v. Girish Nagjibhai Savaliya (Guj HC, 03.07.2025), held that a party cannot indirectly secure injunction on basis of unregistered sale agreement when substantive relief of specific performance is not sought – Suit not maintainable under Section 41(h) of the Specific Relief Act [Paras 5.5–5.7].

Registration Act – Section 49 – Collateral Purpose – Unregistered agreement can be used only in a suit for specific performance or for collateral purpose not requiring registration – As plaintiff’s suit was solely for injunction, such use was impermissible – Unregistered Banachitthi could not be relied upon to protect possession or claim rights under Section 53-A of the Transfer of Property Act [Paras 5.8–5.12].

Judicial Precedent – Limited Scope of Interference – Reiterated principles from Navaneethammal v. Arjuna Chetty (1996) 6 SCC 177 and Jaichand (Dead) through LRs v. Sahnulal (2024 SCC OnLine SC 3864): High Court cannot interfere with concurrent factual findings unless they are perverse, based on no evidence, or contrary to law [Paras 5.16–5.17].

Decision:

Second Appeal dismissed at admission stage – No substantial question of law arises – Both Courts below rightly held that the suit based on an unregistered and unproved Banachitthi was not maintainable – Connected Civil Application for Stay disposed of accordingly [Para 6].

Criminal Law – Abetment of Suicide – Mens Rea – Adequacy of Sentence – Section 306 IPC – Section 377 Cr.P.C. – State sought enhancement of sentence imposed on accused-husband convicted under Sections 498A and 306 IPC for wife’s self-immolation following repeated quarrels and physical abuse under intoxication – Evidence showed deceased committed suicide after domestic discord, joblessness of husband, and estrangement from her family – No evidence that accused intended or consciously instigated wife to commit suicide – Dying declaration and complaint revealed quarrel but not proximate act of abetment – Held: Continuous harassment alone insufficient to constitute abetment under Section 306 IPC without proof of mens rea or proximate incitement – Husband’s intoxicated state and flight from scene not conclusive of instigation – Sentence of three years’ imprisonment proper and not inadequate – Appeal dismissed [Paras 21, 22, 23, 28, 31, 32].

Evidence – Dying Declaration – Reliability – Complaint treated as First Dying Declaration – Recorded in presence of Medical Officer – Endorsed as patient conscious – No prompting or tutoring shown – Held reliable and admissible – Corroborated by subsequent dying declaration before Executive Magistrate [Paras 8–13].

Criminal Procedure – Appeal against Sentence under Section 377(3) Cr.P.C. – Scope – Court empowered to consider both enhancement and reduction of sentence or even acquittal on merits – No ground to interfere when sentence proportionate and supported by evidence [Paras 7, 32].

Decision: Appeal dismissed – Conviction and sentence under Sections 498A and 306 IPC confirmed – No enhancement warranted – Record and proceedings to be returned to Trial Court [Para 33].

Mines and Minerals (Development and Regulation) Act, 1957 – Section 21 read with Section 22 – Cognizance – Complaint Requirement – Charge on Police Report Quashed – Petitioner charged under Sections 379, 411 IPC and Section 21 MMDR Act read with Rule 54 JMMC Rules – Cognizance taken based on police report – Held: Section 22 MMDR Act imposes a statutory bar against courts taking cognizance of offences under the Act except upon a written complaint by an authorized officer – Hence, Magistrate could not frame charge for MMDR offences on police report – Charges under Section 21 MMDR Act and Rule 54 JMMC Rules quashed with liberty to file complaint through authorized officer [Paras 8–9, 16–19].

Cognizance – Offences under IPC and MMDR Act – Distinction and Coexistence – Court clarified that police investigation and cognizance under IPC (Sections 379, 411) are not barred—Offence of theft of minerals under IPC distinct from mining without license under MMDR Act—Police report maintainable for IPC offences—Magistrate competent to take cognizance for IPC offences independent of complaint under MMDR Act [Paras 10–14, 17].

Interpretation of Law – Section 22 MMDR Act – Judicial Precedents – Followed State (NCT of Delhi) v. Sanjay, (2014) 9 SCC 772; Kanwar Pal Singh v. State of U.P., (2020) 14 SCC 331; and Jayant v. State of M.P., (2021) 2 SCC 670 – Held: Section 22 bars cognizance only, not investigation—Magistrate can take cognizance of IPC offences on police report; for MMDR offences, cognizance must rest on complaint by authorized officer [Paras 14–18].

Investigation – Parallel Proceedings – Permissibility – Police may investigate offences under both IPC and MMDR Act; however, after investigation, report under Section 173 Cr.P.C. can relate only to IPC offences—Authorized officer may separately file complaint under MMDR Act—Both proceedings can coexist without conflict [Paras 16–18].

Decision: Order dated 23.11.2023 framing charges under Section 21 MMDR Act and Rule 54 JMMC Rules quashed—Liberty to prosecution to file complaint through authorized officer—Charges under IPC (Sections 379 and 411) upheld; trial to continue accordingly [Paras 19–20].

Civil Procedure – Rejection of Plaint – Limitation – Order VII Rule 11(d) CPC – Article 59, Limitation Act – Cause of Action and Date of Knowledge – Suit for cancellation of sale deed filed after 25 years – Trial Court rejected plaint as time-barred – Appellate Court held limitation to be mixed question of fact and law and remanded matter for trial – Held: Power under Order VII Rule 11(d) CPC is to be exercised only on averments in plaint – Written statement or defendant’s contentions irrelevant – Limitation to be reckoned from date of knowledge of execution of document – When date of knowledge specifically pleaded, issue of limitation cannot be decided summarily – Proper course is to frame and decide as a triable issue [Paras 25–34].

Order VII Rule 11 – Scope and Nature – Drastic Power – While considering application under Order VII Rule 11, only plaint averments to be seen – If plaint discloses cause of action and prima facie explains limitation, rejection not permissible – Clever drafting or illusory cause of action can justify rejection only if ex facie apparent – Trial Court erred in relying upon assertions in written statement and application rather than plaint – Appellate Court rightly interfered [Paras 23–26, 29–31].

Limitation – Article 59 Limitation Act – Period begins when facts entitling cancellation first become known – Not from date of execution – Knowledge of fraud or unauthorized execution triggers limitation – Question of knowledge and delay are factual and require evidence – Rejection of plaint without trial unsustainable [Paras 32–34].

Appeal under Order 43 Rule 1(u) CPC – Scope – Such appeal to be heard on substantial questions of law under Section 100 CPC – No substantial question of law arose against the well-settled legal position – Appeal dismissed [Paras 35, 38].

Decision: Appeal dismissed – No substantial question of law arises – Order of First Appellate Court upheld – Trial Court to proceed with preliminary issues as directed [Paras 38–40].

Narcotic Drugs and Psychotropic Substances Act – Bail – Commercial Quantity – Petitioners arrested with 112.270 kg of ganja, a commercial quantity, and in custody for 182 days – No application filed by the Public Prosecutor seeking extension of detention under Section 36A(4) of the NDPS Act – Held: In absence of a report from the Public Prosecutor seeking extension beyond 180 days with reasons and progress of investigation, petitioners acquire an indefeasible right to bail – Bail granted with stringent conditions [Paras 8–12]

Statutory Bail – Right under Section 36A(4) NDPS Act – Petitioners remained in judicial custody beyond the statutory 180-day period without the prosecution filing for extension – Held: Right to bail becomes enforceable in the absence of valid prosecutorial request – Custody beyond 180 days without extension is illegal – Bail cannot be denied on apprehensions alone if investigation is substantially complete and witnesses examined are official [Paras 9–11]

Criminal Procedure – Bail Conditions – Court imposed strict bail conditions including execution of bonds, weekly appearance at the police station, restriction on travel outside the state, and prohibition from influencing witnesses or committing any further offence – Held: Conditions necessary to balance liberty of accused with the interest of investigation and justice [Para 11]

Decision: Criminal petition allowed – Petitioners/Accused Nos. 2 and 3 granted bail subject to strict conditions including personal bonds, weekly reporting, restriction on travel, and cooperation with investigation.

Family Law – Restitution of Conjugal Rights – Section 22 of Special Marriage Act – Valid Cause for Withdrawal – Appellant-husband filed suit for restitution alleging desertion – Trial court found concealment of prior subsisting marriage by appellant and held that respondent-wife had valid apprehension for her safety – Held: Respondent’s withdrawal from society was based on reasonable cause – No decree of restitution can be granted [Paras 1, 22–25, 49–54].

Special Marriage Act – Applicability Over Personal Laws – Prior Marriage and Muslim Personal Law – Appellant, a Muslim, argued that under Mohammadan Law multiple marriages are permitted – Marriage with respondent solemnized under Special Marriage Act – Held: Marriage under Special Marriage Act governed solely by statutory conditions – Section 4(a) prohibits marriage if either party has a living spouse – Appellant's defence under personal law held untenable [Paras 38–48].

Appellate Review – Perversity in Findings – Appreciation of Evidence – Appellant challenged impugned judgment as perverse – High Court found Family Court had considered all relevant evidence, including testimonies of both parties and prior litigation under Section 125 CrPC – Held: Judgment based on correct legal standards and appreciation of facts – No perversity found in findings or conclusions [Paras 54–58].

Judicial Interpretation – Scope of Conjugal Rights – Rights Inherent in Marriage – Court discussed scope and meaning of conjugal rights under Indian matrimonial jurisprudence – Held: Conjugal rights imply cohabitation and marital companionship – Withdrawal from society without just cause disentitles spouse to restitution, but valid cause precludes grant of decree [Paras 30–34].

Decision: Appeal dismissed – Judgment of Family Court upheld – Respondent had valid cause to live separately – Suit for restitution of conjugal rights rightly dismissed – No perversity in trial court’s findings [Paras 58–60].

Taxation Law - Income Tax – Assessment Order – Principles of Natural Justice – Writ Petition challenging assessment order under Section 143(3) read with Section 144B for A.Y. 2023–24 – Addition of ₹2.15 crores towards bogus purchases made without considering supplier’s detailed reply to notice under Section 133(6) confirming transaction and submitting supporting documents – Held: Clear breach of natural justice, assessment order unsustainable [Paras 4, 5(a), 8] –

Income Tax – Unsecured Loans – Peak Credit Addition – Addition of ₹22.66 crores made towards director’s loans including opening balances – Held: No show-cause notice issued regarding peak credit addition – Reliance placed on non-existent judgments – Grievance of lack of basis and computation found justified – Quasi-judicial function requires proper verification and diligence before relying on AI-generated content or sources [Paras 5(b), 9] –

Remand – Alternate Remedy – Despite availability of appellate remedy, interference under Article 226 warranted due to procedural violations – Assessment Order, Demand Notice under Section 156, and Penalty SCN under Sections 274/271AAC quashed – Matter remanded with directions to issue proper show cause, provide personal hearing, and pass a reasoned, speaking order by 31st December 2025 [Paras 10–12] –

Decision: Assessment Order, Demand Notice and Penalty Show Cause Notice quashed – Matter remanded for fresh assessment – Writ Petition allowed [Paras 11–14].