Issues: (i) Whether the advertisement, marketing and promotion expenditure constituted an international transaction warranting an arm's length price adjustment; (ii) Whether the arm's length price adjustment for royalty payments was sustainable; (iii) Whether the arm's length price for IT support services was correctly determined; (iv) Whether a mark-up could be imposed on chargeback of expenses recovered at cost; (v) Whether the arm's length price adjustment for technical and research and development services was sustainable; (vi) Whether transfer-pricing adjustment on purchase of equity shares from an associated enterprise was sustainable; (vii) Whether residual expenses were correctly allocated for computing deductions under Sections 80-IB and 80-IC; (viii) Whether interest on income-tax refunds could be added while computing book profit under Section 115JB; and (ix) Whether treaty benefit on dividend payments to non-resident shareholders required consideration.

Issue (i): Whether the advertisement, marketing and promotion expenditure constituted an international transaction warranting an arm's length price adjustment.

Analysis: An arm's length price adjustment under Chapter X requires an identified international transaction; its existence cannot be presumed merely from the quantum of AMP expenditure or application of the Bright Line Test. The relevant agreements and surrounding facts required examination to determine whether the expenditure was unilaterally incurred, arose from a contractual obligation, or conferred a direct or indirect benefit upon the associated enterprise. The legal position on AMP adjustments was also treated as requiring reconsideration in light of the final position emerging from pending higher judicial proceedings.

Conclusion: The AMP adjustment is to be determined afresh after the prescribed factual and legal enquiries.

Issue (ii): Whether the arm's length price adjustment for royalty payments was sustainable.

Analysis: The royalty arrangements covered a bundle of intellectual-property and commercial rights. In the absence of any material change in facts or law, the Principle of Consistency applied to the earlier acceptance of such payments. There was no cogent basis to treat royalty for specified products as nil, to restrict brand royalty on an ad hoc basis, or to presume that royalty paid on imported products was embedded in the import price. The transfer-pricing authority could not substitute its commercial judgment for a documented commercial arrangement without adequate supporting material.

Conclusion: The royalty adjustment is deleted, in favour of the assessee.

Issue (iii): Whether the arm's length price for IT support services was correctly determined.

Analysis: Correct benchmarking requires a fresh comparability exercise based on the actual functional profile of the IT support services, supported by Functional, Assets and Risks Analysis and economic material. The selected comparables and their functions required reassessment against the services actually rendered.

Conclusion: The arm's length price of IT support services requires fresh functional comparability analysis and recomputation.

Issue (iv): Whether a mark-up could be imposed on chargeback of expenses recovered at cost.

Analysis: A Cost-to-Cost Reimbursement does not by itself establish that market-support or other services were rendered. The evidentiary material concerning the nature of the expenses and debit-note recoveries had to be evaluated, and any adjustment required a proper benchmarking basis.

Conclusion: The chargeback issue requires fresh adjudication and recomputation, if warranted.

Issue (v): Whether the arm's length price adjustment for technical and research and development services was sustainable.

Analysis: Benchmarking of technical and research and development services must proceed on the correct functional profile of the assessee and the comparables. The existing analysis required reconsideration with reference to the Functional, Assets and Risks Analysis, economic analysis, and material describing the services provided.

Conclusion: The technical and research and development services adjustment requires fresh comparability analysis and recomputation.

Issue (vi): Whether transfer-pricing adjustment on purchase of equity shares from an associated enterprise was sustainable.

Analysis: Consideration paid for acquisition of shares is ordinarily a Capital Account Transaction, and arm's length price determination under Chapter X cannot be sustained merely by substituting one valuation with another where no taxable income arises. However, applicability of Section 56(2)(viib) for the relevant assessment year required examination because of the statutory change referred to in the order.

Conclusion: The equity-share transaction requires fresh decision in accordance with law after examining the applicability of Section 56(2)(viib).

Issue (vii): Whether residual expenses were correctly allocated for computing deductions under Sections 80-IB and 80-IC.

Analysis: Residual head-office expenses, being incapable of direct unit-wise identification, must be apportioned on a logical basis reflecting the effort attributable to eligible manufacturing units. Allocation based on corporate employees linked to factory operations together with the eligible units' sales was accepted as more rational than allocation solely by turnover. The deduction period and continuing eligibility nevertheless required verification.

Conclusion: The assessee's allocation methodology is accepted, in favour of the assessee, subject to verification of eligibility for the statutory deduction period.

Issue (viii): Whether interest on income-tax refunds could be added while computing book profit under Section 115JB.

Analysis: Minimum Alternate Tax computation under Section 115JB is governed by the audited profit and loss account and only the specified adjustments. The limited scope for adjustment, the fact that the interest was offered under normal provisions after the audited accounts, and the requirement to observe Principles of Natural Justice required a fresh determination after hearing the assessee.

Conclusion: The book-profit adjustment requires fresh determination after providing an effective opportunity of hearing.

Issue (ix): Whether treaty benefit on dividend payments to non-resident shareholders required consideration.

Analysis: The claim for Tax Treaty Entitlement in respect of dividend payments required examination of the relevant factual and legal submissions, including applicability of the relevant India-UK and India-Spain tax treaties.

Conclusion: The treaty-benefit claim requires fresh adjudication after considering the assessee's factual and legal submissions.

Final Conclusion: The royalty adjustment is eliminated, and the accepted residual-expense allocation is to govern upon eligibility verification; the remaining transfer-pricing, book-profit, and treaty matters require fresh determinations in accordance with the stated legal framework.

Issues: Whether the operative direction concerning clubbing and transfer of the two FIRs required correction to conform to the judgment's reasoning.

Analysis: The earlier judgment found that both FIRs arose from the same allegations and formed part of the same transaction, making parallel investigation improper. Its operative portion, however, reversed the intended transfer by directing the earlier FIR to be transferred to the location of the later FIR. The clarification did not permit selection of an investigating agency; it corrected that inconsistency.

Conclusion: The later FIR registered at Gurugram shall be clubbed and transferred to the earlier FIR registered with the Economic Offences Wing, Delhi.

Issues: Whether additions under search assessment proceedings could be sustained where no credible incriminating material was found against the assessee and the additions rested on unreliable statements and electronic material arising from the same search considered in a connected case.

Analysis: The additions arose from the same search operation, material and statements that had been considered in the connected case. The appellate findings that no incriminating material was found against the assessee were consistent with the coordinate bench decision concerning the principal searched person. The material relied on for the additions, including statements and electronic records, lacked sufficient credibility and reliability to support a conclusive inference of undisclosed income or receipt of alleged kickbacks.

Conclusion: The deletion of additions was upheld; the issue was decided in favour of the assessee.

Issues: Whether the delay of 1592 days and 1455 days in filing the appeals before the first appellate authority deserved to be condoned; and whether ex-gratia compensation received under the BSNL VRS-2019 scheme was eligible for exemption under section 10(10B) of the Income-tax Act, 1961.

Issue (i): Whether the delay of 1592 days and 1455 days in filing the appeals before the first appellate authority deserved to be condoned.

Analysis: The explanation offered for the delay was that the assessee was a senior citizen and retrenched BSNL employee who became aware of the legal remedy only later, after judicial decisions on BSNL VRS compensation were circulated among employees. The explanation was found to constitute sufficient and reasonable cause, and refusal to condone the delay was held to impede substantial justice.

Conclusion: The delay was condoned in favour of the assessee.

Issue (ii): Whether ex-gratia compensation received under the BSNL VRS-2019 scheme was eligible for exemption under section 10(10B) of the Income-tax Act, 1961.

Analysis: The scheme was noted to have been approved under the Government revival package and funded through budgetary support, and the compensation was treated as partaking the character of retrenchment compensation rather than a mere voluntary retirement benefit. The Tribunal also relied on consistent coordinate bench and appellate authority views accepting the same exemption for BSNL VRS-2019 receipts.

Conclusion: The ex-gratia compensation was held to be exempt under section 10(10B), and the corresponding additions were directed to be deleted. Consequential relief in respect of leave encashment under section 10(10AA) was also directed, if otherwise eligible.

Final Conclusion: The appeals succeeded, the delay stood condoned, and the impugned tax additions on BSNL VRS compensation were deleted with consequential relief as admissible.

Ratio Decidendi: Where a BSNL VRS-2019 compensation scheme is shown to be Government-approved and funded, and the assessee establishes sufficient cause for belated appellate filing, the delay may be condoned to advance substantial justice and the compensation may be treated as retrenchment compensation eligible for exemption under section 10(10B).

Issues: Whether the disallowance of business expenditure claimed under section 37(1) of the Income-tax Act, 1961, sustained by the first appellate authority on the basis of third-party statements and a perceived lack of substantial business activity, was justified.

Analysis: The disallowance was founded on generalised search statements and not on any cogent incriminating material specific to the assessees. The record showed that the Assessing Officer had not rejected the books of account, had not brought on record any adverse balance sheet, profit and loss account or bank statement, and had not established that the claimed expenditure was bogus, inflated or unrelated to business. The appellate authority itself accepted that the assessees were engaged in business and that statutory and compliance-related expenses were genuine, yet sustained salary, rent and other routine administrative outgoings without identifying any specific defect. In the absence of fresh material or distinguishing facts, the departure from earlier accepted assessments was held to be contrary to the rule of consistency. The reasoning also rested on the principle that routine business expenditure necessary for carrying on business and statutory compliance cannot be disallowed merely on suspicion or on uncorroborated third-party statements.

Conclusion: The disallowance sustained under section 37(1) was held unsustainable and was deleted; the issue was decided in favour of the assessees.

Ratio Decidendi: Business expenditure supported by records and not shown to be non-genuine cannot be disallowed on mere suspicion, uncorroborated third-party statements, or without specific adverse material, and consistency must be maintained where no new facts emerge.

Issues: Whether the addition for alleged difference in closing work-in-progress, based on unaudited Tally-generated financial statements, was sustainable.

Analysis: The unaudited Tally records showed work-in-progress of Rs. 85,00,000 in the profit and loss account and Rs. 1,21,50,000 in the balance sheet. The audited financial statements for the preceding year showed closing work-in-progress of Rs. 36,50,000, which was correctly carried as opening work-in-progress in the audited accounts for the relevant year; the audited accounts reflected closing work-in-progress of Rs. 85,00,000. The difference of Rs. 36,50,000 arose because opening work-in-progress had been added to, rather than excluded from, the closing work-in-progress in the unaudited Tally-generated balance sheet. The audited accounts therefore reconciled the figures, and no discrepancy in work-in-progress remained.

Conclusion: The addition of Rs. 36,50,000 towards alleged difference in stock-in-trade was unsustainable and was directed to be deleted, in favour of the assessee.

Issues: Whether reassessment proceedings were valid where the recorded reasons for reopening and the approval for issue of notice were undated, and the approval was mechanically granted.

Analysis: Section 148(2) of the Income-tax Act, 1961 requires the Assessing Officer to record reasons before issuing a reassessment notice. The reasons placed on record and the sanction under Section 151 were admittedly undated. The sanctioning authority merely wrote "yes" and "approved" on a pre-typed proforma, without any discernible independent consideration of the recorded reasons or underlying material. Such undated reasons did not establish that they preceded the notice, and the mechanical sanction failed the statutory jurisdictional safeguard.

Conclusion: The reassessment proceedings and consequential assessment order were invalid and were quashed; the issue was decided in favour of the assessee.

Issues: (i) Whether receipts for borrowed services/advisory support constituted fees for technical services under Article 13 of the India-United Kingdom Double Taxation Avoidance Agreement; (ii) Whether the receipts could be taxed as business profits on the basis that the assessee had a permanent establishment in India.

Issue (i): Whether receipts for borrowed services/advisory support constituted fees for technical services under Article 13 of the India-United Kingdom Double Taxation Avoidance Agreement.

Analysis: Article 13(4) requires that technical knowledge, experience, skill, know-how or processes be made available to the recipient. Mere utilisation of advisory or consultancy services by the recipient does not satisfy that requirement. No material established that the borrowed services transferred such knowledge or capability to the Indian recipients. The consistent treatment of identical services in the assessee's and group entities' cases, including prior Tribunal decisions and MAP resolutions, supported the finding that the receipts were not fees for technical services.

Conclusion: The borrowed-services receipts were not fees for technical services under Article 13 and were not taxable in India on that basis, in favour of the assessee.

Issue (ii): Whether the receipts could be taxed as business profits on the basis that the assessee had a permanent establishment in India.

Analysis: Article 5(6) expressly provides that control or shareholding between companies does not, by itself, constitute either company a permanent establishment of the other. The Revenue produced no cogent evidence of a permanent establishment in India beyond the asserted group and holding-company relationship. Consequently, the prerequisites for taxation of business profits under Article 7 were not established.

Conclusion: The assessee had no permanent establishment in India on the material produced, and the receipts could not be taxed as business profits under Article 7, in favour of the assessee.

Final Conclusion: The deletions of additions relating to borrowed-services fees and reimbursement of expenses remain effective; the reimbursement had no profit element and did not give rise to taxable fees for technical services.

Ratio Decidendi: Under a treaty containing a make-available clause, receipt of consultancy or advisory services is not fees for technical services unless the services enable the recipient to apply the transferred technical knowledge, skill, know-how or process independently; corporate control alone does not establish a permanent establishment.

Issues: (i) Whether an assessment completed through the faceless assessment mechanism is amenable to revision under section 263 of the Income-tax Act, 1961; (ii) Whether revision under section 263 was valid where deduction for bad debts under section 36(1)(vii) of the Income-tax Act, 1961 was allowed without enquiry.

Issue (i): Whether an assessment completed through the faceless assessment mechanism is amenable to revision under section 263 of the Income-tax Act, 1961.

Analysis: An order under section 144B is passed in exercise of the powers and functions of the Assessing Officer assigned under the Board's directions. It consequently falls within Explanation 1 to section 263(1). Section 144B does not establish that the assessment order is passed by the Principal Chief Commissioner of Income Tax, and supervisory arrangements under the faceless regime do not exclude the Principal Commissioner's revisional authority.

Conclusion: A faceless assessment under section 144B is amenable to revision under section 263. The issue is decided against the assessee.

Issue (ii): Whether revision under section 263 was valid where deduction for bad debts under section 36(1)(vii) of the Income-tax Act, 1961 was allowed without enquiry.

Analysis: Exercise of revision requires the assessment order to be both erroneous and prejudicial to Revenue. The assessment record did not show any query or examination concerning the bad-debt deduction and the adjustment required against the opening credit balance of provision for doubtful debts. The admitted computational error was corrected in the succeeding assessment year, but income must be assessed in the correct assessment year. Allowance of a complex deduction without verification is not a plausible view and constitutes an erroneous order prejudicial to Revenue.

Conclusion: The assumption of revisional jurisdiction under section 263 to address the unexamined excess bad-debt claim was valid. The issue is decided against the assessee.

Final Conclusion: The revisional order requiring reassessment of the unverified bad-debt deduction remains effective.

Ratio Decidendi: An assessment order that allows a material deduction without enquiry or verification is erroneous and prejudicial to Revenue, and is therefore liable to revision under section 263 notwithstanding that it was made through the faceless assessment procedure.

Issues: (i) Whether the order of the first appellate authority directing withdrawal of reassessment notices and allowing the assessee's appeals without adjudicating the additions on merits could be sustained; (ii) whether the matters arising from the two assessment years should be sent back for fresh reassessment and reconsideration of the connected cross-objections.

Issue (i): Whether the order of the first appellate authority directing withdrawal of reassessment notices and allowing the assessee's appeals without adjudicating the additions on merits could be sustained.

Analysis: The appeals involved reassessment notices issued under the Income-tax Act, 1961 and challenges based on the faceless assessment regime and the jurisdiction of the Assessing Officer. The Tribunal noted that the first appellate authority had granted relief only on the jurisdictional aspect and had not examined the merits of the additions. It further held that the direction to withdraw the notice was not in accordance with law and that the controversy required reconsideration in the light of the subsequent legislative amendment and the factual disputes surrounding the alleged accommodation entries and genuineness of the transactions.

Conclusion: The order of the first appellate authority was not sustained on this footing, and the matter was required to be reopened for fresh consideration.

Issue (ii): Whether the matters arising from the two assessment years should be sent back for fresh reassessment and reconsideration of the connected cross-objections.

Analysis: Since the additions and the related jurisdictional objections depended on factual verification, the Tribunal considered it appropriate to set aside the appellate orders and remit both assessment years to the Assessing Officer for de novo reassessment. The assessee was to be afforded a reasonable opportunity of hearing, and the connected cross-objections were also restored for decision along with the reassessment proceedings. No final adjudication on the merits of the additions was recorded.

Conclusion: The appeals and cross-objections were remanded for fresh adjudication with opportunity to both sides.

Final Conclusion: The dispute was not finally decided on the tax additions, and both assessment years were sent back for fresh reassessment, leaving the merits open for reconsideration.

Ratio Decidendi: Where the appellate relief rests only on a jurisdictional objection and the merits of the additions remain unexamined, the appropriate course is to set aside the order and restore the matter for de novo adjudication with due opportunity of hearing.

Issues: (i) whether the secured creditor was bound to disclose known encumbrances and the undivided nature of the auctioned property, and whether failure to do so entitled the auction purchaser to cancellation of the sale and refund of the consideration; (ii) whether the writ petition was maintainable notwithstanding the plea of alternative remedy.

Issue (i): whether the secured creditor was bound to disclose known encumbrances and the undivided nature of the auctioned property, and whether failure to do so entitled the auction purchaser to cancellation of the sale and refund of the consideration

Analysis: The sale notice and sale certificate were found not to have disclosed that the property formed only an undivided and undemarcated portion of a larger plot. The statutory scheme under the Security Interest (Enforcement) Rules, 2002 requires disclosure of the description of the property and the encumbrances known to the secured creditor, and also obliges delivery of the secured asset free from encumbrance. The Court held that the secured creditor is not a passive seller, must exercise due diligence, and cannot rely on an as is where is or caveat emptor position where material defects, encumbrances, or title issues were within its knowledge or ought to have been ascertained.

Conclusion: The bank breached its statutory obligations, and the auction purchaser was entitled to refund of the sale consideration in lieu of delivery of unencumbered title and possession.

Issue (ii): whether the writ petition was maintainable notwithstanding the plea of alternative remedy

Analysis: The petitioner was a third party auction purchaser complaining of the bank's failure to deliver possession and of non-disclosure of material defects in the auction process. In the absence of disputed questions of fact and in view of the alleged clear statutory violation, the existence of an alternative remedy was held not to bar writ relief.

Conclusion: The plea of alternative remedy was rejected.

Final Conclusion: The auction sale was cancelled and the bank was directed to refund the full consideration amount to the auction purchaser.

Ratio Decidendi: A secured creditor conducting a SARFAESI auction must disclose known encumbrances and material title defects, and where it fails to do so and cannot deliver unencumbered possession, the auction purchaser may seek cancellation of the sale and refund notwithstanding the plea of alternative remedy.

Issues: Whether disallowance under section 40(a)(i) for payments made to non-resident entities could be sustained when the payments were for services rendered outside India and the sums were not chargeable to tax in India, so that no obligation to deduct tax at source arose under section 195.

Analysis: The payments were made to entities situated outside India for services rendered abroad. The recipients had no permanent establishment or business connection in India, and the record showed that the income was earned outside India and did not accrue or arise in India within the meaning of section 9. Section 195 applies only to sums chargeable under the Act; therefore, where the remittance is not chargeable to tax in India, the payer is under no obligation to deduct tax at source. On these facts, the disallowance under section 40(a)(i) could not be justified.

Conclusion: The disallowance under section 40(a)(i) was rightly deleted and the payments were held not to attract deduction of tax at source under section 195.

Issues: Whether a notice uploaded only on the GST portal after cancellation of registration could validly support an order under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, and whether the impugned order was vitiated for breach of natural justice.

Analysis: The petitioner's registration had already been cancelled, so there was no obligation to keep checking the GST portal. In such a situation, service of notice had to be made by an alternative and effective mode. As the show cause notice was not properly served, the petitioner was denied a fair opportunity of hearing.

Conclusion: The impugned order was quashed and set aside for violation of natural justice, with liberty to the department to issue a proper notice and proceed in accordance with law.

Issues: Whether the assessment orders framed in search proceedings were vitiated for want of a valid, reasoned and application-of-mind approval under section 153D of the Income-tax Act, 1961, and whether the later amendment concerning section 292BC could be applied to approvals granted before its stated effective date.

Analysis: The approval note did not show any examination of the assessment records, seized material, issues involved, or reasons for the conclusion reached, and reflected only a mechanical grant of approval. The approval under section 153D is a mandatory safeguard in search assessments and requires independent, judicious application of mind by the approving authority. The later amendment relied upon by the Revenue was held not to govern approvals already granted prior to 01.04.2021, even though the appeal was heard later. The request to release the matter for constitution of a special bench was also declined because the issue was treated as covered by binding judicial precedent.

Conclusion: The approval under section 153D was invalid, the assessment orders were vitiated, and the assessee succeeded.

Final Conclusion: The search assessments were quashed for want of lawful approval, and the appeals were allowed.

Ratio Decidendi: A search assessment order is liable to be quashed where the mandatory approval under section 153D is granted mechanically without independent application of mind, and a subsequent amendment cannot validate approvals already granted before its effective date.

Issues: Whether the addition made under section 68 of the Income-tax Act, 1961 on account of unsecured loans was rightly deleted by the first appellate authority.

Analysis: The assessee had furnished confirmations, income-tax particulars, bank statements and audited financial statements of the lenders, and the loans were repaid during the year through banking channels. The addition was based only on earlier search material and a general allegation that the lenders were accommodation-entry providers, without any independent enquiry or direct evidence linking the assessee's specific loans to any bogus transaction. The appellate authority found that the Revenue had not rebutted the documentary evidence or established that the loans were sham, and that the subsequent repayment could not be ignored in the factual setting of the case.

Conclusion: The deletion of the addition under section 68 was upheld and the issue was decided against the Revenue.

Final Conclusion: The appeal failed as the Revenue could not dislodge the finding that the impugned credits were not proved to be unexplained on the material available.

Ratio Decidendi: An addition under section 68 cannot be sustained merely on generalized allegations or third-party modus operandi unless the Revenue brings specific material connecting the assessee's credit entries to unexplained or non-genuine transactions.

Issues: Whether the final assessment order passed under section 143(3) read with section 144C(13) read with section 144B of the Income-tax Act, 1961 was barred by limitation and liable to be quashed.

Analysis: The directions of the DRP were uploaded on 30.09.2025, so the Assessing Officer was required under section 144C(13) to complete the assessment within one month from the end of that month, i.e. on or before 31.10.2025. The impugned final assessment order was passed only on 27.12.2025. The mandatory nature of the time limit under section 144C(13) was treated as settled by the binding jurisdictional precedent relied upon, which held that the statutory deadline is not directory and that breach of the prescribed period renders the assessment order unsustainable in law.

Conclusion: The assessment order was held to be barred by limitation, void ab initio, and quashed.

Final Conclusion: The appeal succeeded on the preliminary jurisdictional ground, and the assessment and all consequential proceedings did not survive.

Ratio Decidendi: The time limit prescribed in section 144C(13) for passing the final assessment order after receipt of DRP directions is mandatory, and an order passed beyond that period is invalid and liable to be quashed.

Issues: Whether the addition made on the basis of seized electronic data and recorded statement could be sustained in the absence of corroborative evidence and an opportunity for cross-examination.

Analysis: The addition was founded on an Excel sheet allegedly recovered in search, along with a statement recorded under section 132(4), but the assessment record did not show any specific admission by the assessee relating to the alleged on-money payment. The agreement for sale reproduced in the assessment order did not contain particulars supporting the alleged cash transaction, and the assessee's explanation of the earlier allotment and subsequent shift of unit was not rebutted by independent material. In these circumstances, reliance placed only on investigation material collected behind the assessee's back, without furnishing the material for rebuttal or cross-examination, offended the rule of audi alteram partem.

Conclusion: The addition was unsustainable and was deleted, resulting in relief to the assessee.

Issues: Whether the Commissioner (Appeals) was justified in setting aside the reassessment and remanding the matter to the Assessing Officer for fresh consideration under the proviso to section 251(1)(a) of the Income-tax Act, 1961, in a case where the reassessment had been completed after repeated non-compliance by the assessee with notices issued in faceless proceedings.

Analysis: The reassessment arose from proceedings under sections 147 and 144B, where notices under section 142(1) and the subsequent show-cause notices remained largely unanswered. The record showed that the assessee had not supplied complete replies or the verification material sought by the Assessing Officer. The order also noted that section 144B governs reassessment in the faceless regime and that failure to comply with statutory notices can culminate in a best judgment assessment under section 144. The proviso inserted in section 251(1)(a) by the Finance Act, 2024 was applied to hold that, in an appeal against an assessment made under section 144, the Commissioner (Appeals) could set aside the assessment and direct fresh assessment after giving opportunity of hearing.

Conclusion: The Commissioner (Appeals) was held to have validly exercised the power to remand the matter for denovo reassessment, and the Revenue's challenge failed.

Final Conclusion: The appellate order remanding the matter for fresh adjudication was sustained, and the Revenue's appeal was dismissed.

Ratio Decidendi: In an appeal against a best judgment reassessment completed for non-compliance with statutory notices, the Commissioner (Appeals) may invoke the proviso to section 251(1)(a) to set aside the assessment and remand the matter for fresh assessment after due opportunity to the assessee.

Issues: Whether the disallowance under section 40(a)(i) of the Income-tax Act, 1961 for non-deduction of tax at source on computer licence fee and recruitment expenses could survive when the corresponding income had been settled by the deductee under the Direct Taxes Vivad se Vishwas Scheme, 2024 and consequential relief was claimed by the deductor.

Analysis: The transfer pricing ground was withdrawn as it did not survive after resolution under the Mutual Agreement Procedure. The ground relating to late payment of provident fund contribution under section 36(1)(va) was not pressed. For the surviving disallowance under section 40(a)(i), the assessee relied on the CBDT Circular No. 19/2024 dated 16.12.2024, including FAQ No. 58, which clarifies that where the deductee has settled the tax liability under the scheme, corresponding consequential relief should also be available to the deductor. The Revenue accepted this position.

Conclusion: The disallowance under section 40(a)(i) was directed to be deleted and the ground was allowed in favour of the assessee.