Weekly Round-up on Tax and Corporate Laws | 06th to 11th October 2025

This weekly newsletter analytically summarises the key stories reported at taxmann.com during the previous week from 06^th to 11^th October, 2025, namely:

1. Notice under section 148 sent by speed post without acknowledgment is invalid; presumption of service applies only to registered post: HC;
2. RBI Releases Draft ‘Reserve Bank Ombudsman Scheme, 2025’;
3. GSTN clarifies no change in ITC auto-population process and GSTR-2B generation under IMS: Advisory;
4. CBIC launches system-based auto-approval for IFSC code registration at multiple ports: Press Release;
5. Increase in quantity or free material under scheme won’t satisfy requirement of passing on benefit to consumers after GST reduction: HC; and
6. Determining whether post-reporting date events require adjustment or disclosure under Ind AS 10.

1. Notice under section 148 sent by speed post without acknowledgment is invalid; presumption of service applies only to registered post: HC

The assessee filed the return of income for the relevant assessment year. The Assessing Officer (AO) issued a notice for the assessment year 2003-04 under section 148 of the Income-tax Act, 1961 (the Act) in response to the information received from the Central Excise Department. The notice was sent via speed post, but it was returned unserved as the assessee was untraceable. AO proceeded with reassessment proceedings and passed the order under section 147.

The assessee preferred an appeal to CIT(A). The CIT(A) allowed the appeal and held that the reassessment proceedings were invalid in law due to the absence of valid service. Aggrieved by the order, an appeal was filed to the Agra Tribunal. The Tribunal reversed the order of CIT(A) and held that the notice was validly served upon the assessee.

The matter then reached the Allahabad High Court.

The High Court held that from perusal of section 148, it is clear that notice has to be served on the assessee personally and as per section 282, notice required under the Act, 1961, may be served on a person either by post or as a summons issued by the court under the Code of Civil Procedure, 1908.

The term ‘post’ has not been defined in the Act or in the Indian Post Office Act, 1898, the Post Office Act, 2023, the Indian Post Office Rules, 1933, the Post Office Rules, 2024, but it has been defined in Section 2(1)(k) of the Post Office Regulation, 2024. As per this definition, any system for collection, dispatching, conveyance and delivery of items by the postal network is ‘post’.

In view of the above-mentioned definition of post, registered post or speed post, both come within the definition of post. However, the procedure of sending and serving the summons issued by the court under the Code of Civil Procedure includes not only sending the notice through registered post but also personal service and in the absence thereof, affixing the notice at the house of the assessee. However, if there is no proof of service of notice sent through post to the addressee, then the presumption of service of registered post can be invoked as per Section 27 of the General Clauses Act, 1897.

But for invoking the presumption of service of notice through post upon the addressee, the condition mentioned under Section 27 of the General Clauses Act, 1897 should be fulfilled which requires a proper address, pre-paying and posting by registered post.

Therefore, the legal presumption of service under Section 27 of the General Clauses Act, 1897 and Section 114(f) of the Indian Evidence Act, 1872, can only be applied when notice is sent via registered post, not by speed post. Therefore, for the purpose of deemed service under Section 27 of the General Clauses Act, 1897 for the notice under section 148, speed post cannot be considered equivalent to registered post.

Read the Ruling

2. RBI Releases Draft ‘Reserve Bank Ombudsman Scheme, 2025’

The Reserve Bank of India has issued the draft Reserve Bank – Ombudsman Scheme, 2025, inviting comments from the public and stakeholders by October 28, 2025. The draft Scheme aims to provide an improved, cost-effective, and time-bound mechanism for resolving customer grievances related to services provided by entities regulated by the Reserve Bank.

The proposal marks a major overhaul of the existing Reserve Bank – Integrated Ombudsman Scheme, 2021, which came into effect on November 12, 2021. The revision is based on operational experience, stakeholder feedback, and a review of global best practices in consumer protection.

Key features of Draft Reserve Bank – Ombudsman Scheme, 2025

Some of the key features of the draft Reserve Bank – Ombudsman Scheme, 2025 are as follows:

• Broader Coverage and Simplified Framework

The draft Scheme consolidates and updates the grievance redress mechanism to cover banks, NBFCs, payment system participants and credit information companies, among others. It aims to strengthen the accountability of regulated entities by ensuring that every customer has access to an efficient redress platform through a single, simplified system.

The Scheme applies to services provided by entities regulated under the Banking Regulation Act, 1949, Reserve Bank of India Act, 1934, Payment and Settlement Systems Act, 2007, and the Credit Information Companies (Regulation) Act, 2005.

It provides for the establishment of a Centralised Receipt and Processing Centre (CRPC) for registration and scrutiny of complaints, both online and offline. Complaints can be filed through the RBI’s Complaint Management System (https://cms.rbi.org.in), via email, or by post to the CRPC located at Chandigarh.

• Powers and Functions of the Ombudsman

The powers and functions of the Ombudsman are as follows:

a) The Ombudsman/Deputy Ombudsman will consider the complaints of customers of Regulated Entities relating to deficiencies in services.
b) When examining complaints, the Ombudsman/Deputy Ombudsman will consider the principles of banking law and practice, as well as directions and guidelines issued by the Reserve Bank, and other relevant factors.
c) The Ombudsman will have the power to examine and close all complaints.
d) There is no limit on the amount in a dispute that can be brought before the Ombudsman for which the Ombudsman/Deputy Ombudsman can facilitate a settlement or pass an award. However, for any consequential loss suffered by the complainant, the Ombudsman will have the power to provide compensation up to Rs 30 lakh. In addition, the Ombudsman will also have the power to provide up to Rs 3 lakh for the loss of the complainant’s time, expenses incurred and for harassment suffered, if any, by the complainant.

Further, the Ombudsman will have the power to issue an Advisory to the regulated entity, or pass an Award directing specific performance and/or compensation.

• Exclusions from the Scheme

The complaints involving the following matters are excluded from the purview of the Scheme:

a) matters related to commercial judgment or decision of a regulated entity;
b) a dispute between a vendor and a regulated entity;
c) grievances against the management or executives of a regulated entity;
d) grievances arising from an action of a regulated entity  in compliance with the orders of a judicial, quasi-judicial, statutory or law enforcement authority;
e) services not within the regulatory purview of the Reserve Bank;
f) disputes between regulated entities;
g) employee–employer disputes of a regulated entity;
h) grievances for which a remedy is already provided under Section 18 of the Credit Information Companies (Regulation) Act, 2005; and
i) Grievances pertaining to customers of regulated entities not covered under the Scheme.

• Appeal before the Appellate Authority

A complainant aggrieved by an Award may file an appeal before the Appellate Authority (Executive Director in-charge of the Consumer Education and Protection Department) within 30 days. No right of appeal is available to regulated entities.

Regulated entities covered under the Scheme shall appoint a Principal Nodal Officer (of the rank not less than a General Manager or equivalent) who shall be responsible for representing the entity and providing information in respect of complaints filed by regulated entities.

• Regulated Entities to display salient features of scheme for Public Awareness

Entities must display for the benefit of their customers, at all their branches/places where the business is transacted and on their websites, the salient features of the Scheme, contact details of the Principal Nodal Officer, along with the details of the Ombudsman complaint portal and address of the Centralised Receipt and Processing Centre.

Public comments on the draft Scheme may be submitted up to October 28, 2025, through the link provided under the ‘Connect 2 Regulate’ section available on the Reserve Bank’s website, or by e-mail.

Read the Press Release

3. GSTN clarifies no change in ITC auto-population process and GSTR-2B generation under IMS: Advisory

The GSTN has issued an advisory clarifying that there is no change in the auto-population of ITC from GSTR-2B to GSTR-3B under the Invoice Management System (IMS). It confirmed that GSTR-2B will continue to be generated automatically on the 14th of every month, allowing adjustments and regeneration through IMS, with manual management of ITC reversals for pending documents. This was stated in GSTN Advisory, Dated 08-10-2025.

About the Update

The GSTN has issued an advisory to clarify the operation of the Invoice Management System (IMS) and to address misinformation regarding GST return filing effective from 01-10-2025. The advisory confirms that auto-population of ITC from GSTR-2B to GSTR-3B will continue unchanged, without any manual intervention. GSTR-2B will continue to be generated automatically on the 14th of every month, regardless of taxpayer actions, and taxpayers may make adjustments in IMS even after GSTR-2B generation and regenerate it if needed.

Furthermore, from the October 2025 period onward, recipient taxpayers may keep Credit Notes or related documents pending for a specified duration and, upon acceptance, can adjust ITC only to the extent availed by manually managing the reversal amount.

Read the Advisory

4. CBIC launches system-based auto-approval for IFSC code registration at multiple ports: Press Release

The CBIC has issued a press release announcing system-based auto-approval for IFSC code registration across multiple Customs ports to enhance Ease of Doing Business. It provides that once an IFSC code and bank account combination is approved for an IEC at one location, it will be auto-approved at other ports, eliminating manual intervention and expediting export incentive processing. This was stated in  Press Release dated 07-10-2025.

About the Update

The CBIC has issued a press release announcing the introduction of system-based auto-approval for IFSC code registration, aimed at streamlining Customs procedures and enhance Ease of Doing Business. Under this new system, requests to register the same incentive bank account and IFSC code for a particular IEC at multiple Customs locations will be automatically approved if the combination has already been approved at any one location. This removes the need for manual intervention by Port officers and ensures faster processing, simplified registration across multiple ports, seamless credit of export incentives, and overall improvement in trade efficiency.

Exporters are required to continue using the bank account declared in the Customs Automated System for receiving export-related benefits. Registration of Authorised Dealer (AD) Codes remains available online on ICEGATE. Stakeholders simply need to submit requests through the system, which will automatically approve duplicates across different ports, thereby avoiding repeated manual approvals.

Read the Press Release

 5. Increase in quantity or free material under scheme won’t satisfy requirement of passing on benefit to consumers after GST reduction: HC

The High Court held that increasing product quantity or offering free material under a scheme does not amount to passing on the benefit of GST rate reduction under Section 171. The Court noted that raising the base price after rate reduction from 28% to 18% constituted profiteering and defeated the purpose of consumer benefit.

Facts of the Case

The distributor was a stockist of various products of Hindustan Unilever Limited (HUL). One of the products was Vaseline VTM 400 ML. It is a matter of common knowledge that the GST Regime came into effect from 01-07-2017. Initially, the GST payable on the product was 28%. However, the rate was reduced to 18% w.e.f. 14-11-2017.A complaint was filed against the distributor, alleging that he continued to charge the same amount despite the reduction in the rate of GST. The matter was referred to the Standing Committee on Anti-Profiteering, which in turn referred the matter to the Director-General of Anti-Profiteering (DGAP) for investigation. DGAP submitted the investigation report to the Authority, wherein it was stated that the distributor had profiteered by not passing on the benefit of reduction in GST rates to the consumers. The Authority directed the distributor to deposit the profiteered amount along with interest in the Consumer Welfare Fund and also ordered to recover the profiteered amount from the recipients of the goods. The distributor filed a writ petition before the Delhi High Court to challenge the said order.

High Court Held

The Delhi High Court held that the distributor had increased the base price of the product when the GST rate was reduced from 28% to 18%. Thus, the benefit of reduction in the GST rate was not passed on to the consumers. Such an act of the distributor was against the provisions of Section 171 of the Central Goods and Services Tax Act, 2017. The Court further held that the rationale behind the reduction in GST rates is to ensure that the consumer gets the benefit of the said reduction. A deadline, once fixed by way of notifications, cannot be sought to be violated merely on the ground that some special scheme is being launched or the product is being sought to be given free with some other product or the grammage or the quantity of the product is being increased. The term MRP means ‘Maximum Retail Price’ and thus sale below the said price is permissible. It is only sale above the said price which is impermissible. But to ensure that the GST benefit is not passed on, increasing the quantity of the product unknowingly and charging the same MRP is nothing but deception. The consumer’s choice is being curtailed. The non-reduction of price cannot be sought to be justified on the ground that the quantity has been increased or that there was some scheme which justifies the increase in price. Such an approach would defeat the entire purpose of reduction of GST rates and the same cannot be permitted.

Read the Ruling

6. Determining whether post-reporting date events require adjustment or disclosure under Ind AS 10

Ind AS 10 “Events after the Reporting Period” guides the accounting and disclosure of events occurring between the reporting period and the date when the financial statements are approved. Events may be favourable or unfavourable and are classified as either Adjusting Events, which provide evidence of conditions existing at the reporting date or Non-Adjusting Events, which arise after the reporting period. Adjusting events require adjustments in the financial statements, whereas non-adjusting events require disclosure if material.

Examples of post-reporting date events

a) Impact on Inventory

A company manufacturing car engines had accumulated inventory for customer orders. After the reporting period, the customer announced that a specific car model would no longer be produced.

For inventory exceeding the orders on hand, the high stock level already indicated low demand as of the reporting date. The customer’s announcement after the reporting period confirmed this condition. This is considered an Adjusting Event, and the company wrote down the inventory to its net realizable value.

For inventory matching the orders on hand, the stock level was appropriate at the reporting date. The customer’s announcement arose from circumstances occurring after the reporting period. This is a Non-Adjusting Event, and no adjustment was made to the financial statements, though disclosure may be necessary if material.

b) Effect of Fraud on Investments

A company held shares in a listed entity measured at fair value through profit or loss (FVTPL). After the reporting period, the investee disclosed financial stress due to fraud. Since the fraud occurred externally and post reporting date, the decline in share price did not reflect conditions at the reporting date and was treated as a non-adjusting event. In contrast, if a company falsely reported an investment it did not hold, the discovery of this misstatement after the reporting date would be an adjusting event, reflecting a condition that existed at the balance sheet date.

c) Changes in Government Legislation

A coal-mining company faced a new carbon cess imposed after the reporting period. While a draft bill existed before the reporting date, the legislation was enacted post-reporting period. This was treated as a non-adjusting event. The company did not adjust the financial statements, but disclosed the legislation and its potential impact in the notes due to its materiality.

Thus, Ind AS 10 ensures that financial statements reflect conditions existing at the reporting date while maintaining transparency about significant events thereafter. By correctly classifying events as adjusting or non-adjusting, companies enhance the relevance and reliability of financial reporting.

Read the Story