Issues: Whether accrued interest on fixed deposits, kept under prohibitory orders in pending criminal proceedings and not credited to the assessee's account, could still be brought to tax merely because the assessee had earlier offered such interest on accrual basis and had subsequently shifted to receipt basis.

Analysis: The assessment years in question were governed by the Income-tax Act, 1961. The dispute centred on whether the interest on the fixed deposits had attained the character of real income in the assessee's hands. The fixed deposits remained subject to uncertainty because the underlying criminal proceedings were pending and the amounts were not credited to the assessee's account. In that situation, the Court treated the CBDT's clarification and the surrounding legal position as supporting the principle that uncertain income cannot be taxed on a notional basis merely because interest may accrue in a bookkeeping sense. The earlier practice of offering the interest to tax did not override the continuing uncertainty attaching to the deposits and the assessee's liability to pay tax was held to arise only upon final resolution of the pending proceedings.

Conclusion: The addition of accrued interest on fixed deposits was rightly deleted and the answer to the substantial questions was in favour of the assessee.

Final Conclusion: The appeals failed on the core tax issue and the Tribunal's deletion of the interest addition was sustained.

Ratio Decidendi: Interest that remains uncertain because the underlying entitlement to the fixed deposits is sub judice does not constitute taxable real income merely on accrual, and cannot be brought to tax until the uncertainty is resolved.

Issues: Whether the assessment order warranted interference insofar as it treated the corporate guarantee transaction as taxable on the entire turnover, and whether the matter required remand for fresh consideration on the assessee's objection that only 1% of the turnover was liable to tax.

Analysis: The impugned order was an assessment under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017. The Court found that the major part of the tax demand arose from the corporate guarantee issue, and the assessee's contention that only 1% of the turnover could be taxed was not seriously disputed. The assessee also relied on GST circulars and an earlier decision of the Court supporting its stand. In these circumstances, the Court considered it appropriate to set aside the assessment order to the extent it dealt with the corporate guarantee issue and to remit that issue for fresh consideration after giving the assessee an opportunity to file a reply and additional documents.

Conclusion: The assessment order was interfered with only on the corporate guarantee issue, and the matter was remitted for fresh adjudication on that issue alone, while the remaining findings were left undisturbed.

Issues: Whether amendment of the bills of entry and correction of the classification of imported goods could be sought under Sections 149 and 154 of the Customs Act, 1962 without filing an appeal under Section 128 of the Customs Act, 1962.

Analysis: The dispute concerned an inadvertent classification error in the bills of entry. The governing framework permits the proper officer to authorise amendment of documents under Section 149 and to correct clerical or arithmetical mistakes or errors arising from accidental slip or omission under Section 154. The appeal reasoned that self-assessment is nonetheless an assessment, but modification of such assessment is not confined to appellate remedy under Section 128 and may also be achieved through the other statutory routes, including amendment of the bill of entry on the basis of documentary evidence already in existence at the time of clearance.

Conclusion: The rejection of the amendment request on the ground that no appeal had been filed under Section 128 was unsustainable, and the appellant was entitled to correction of the classification through the statutory amendment mechanism.

Issues: Whether reassessment under section 147 of the Income-tax Act, 1961 was valid where the additions originated from search material relating to another person and the Revenue ought to have proceeded under section 153C of the Act.

Analysis: The search on a third party yielded material relating to the assessee. The reassessment was founded on that search-linked material rather than on an independent source of escapement information. In such a situation, the special scheme governing search-related action must be followed, and the general reassessment provision cannot be used to bypass the statutory route applicable to material emanating from a search. Where the Revenue relies exclusively on search material and does not adopt the special procedure contemplated for such material, the assumption of jurisdiction under section 147 is legally flawed.

Conclusion: The reassessment proceedings under section 147 were without jurisdiction and were quashed in favour of the assessee.

Ratio Decidendi: Where escaped income is sought to be assessed on the basis of incriminating material arising from a search, the Revenue must invoke the special statutory mechanism applicable to search material and cannot resort to section 147 as a substitute for that procedure.

Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 and the reassessment proceedings were valid when the approval was granted by the Principal Commissioner instead of the authority prescribed under section 151(1)(ii), and whether the consequential assessment could survive.

Analysis: The reassessment notice for assessment year 2017-18 was issued after the expiry of three years from the end of the assessment year. In such a case, the prescribed approval was that of the Principal Chief Commissioner or the equivalent higher authority. The record showed approval by the Principal Commissioner instead. Following the view that sanction by the wrong authority is not valid approval, the reassessment was treated as not in accordance with law.

Conclusion: The notice under section 148 was held to be bad in law, and the consequential assessment order was declared void ab initio.

Issues: Whether the cash and credit entries aggregating to Rs. 1,70,53,900 credited in the assessee's bank accounts were assessable as unexplained money under section 69A of the Income-tax Act, 1961, or represented business receipts received in the course of agency activity for onward transfer.

Analysis: The assessee produced the authorisation from Airtel Payments Bank Ltd., bank statements, a detailed transaction chart, and material showing that the amounts collected from customers were transferred onward, leaving only commission income in its hands. The Tribunal accepted that the assessee functioned as a Business Correspondent Agent and that the deposited sums were not owned by the assessee but were received for transmission in the course of business. In these circumstances, the precondition for invoking section 69A, namely ownership of unexplained money by the assessee, was not satisfied.

Conclusion: The addition of Rs. 1,70,53,900 under section 69A was not sustainable and the issue was decided in favour of the assessee.

Issues: Whether the assessee was entitled to deduction under section 80IA(4) of the Income-tax Act, 1961 in respect of income from erection of road signages and foot-over bridges as part of alleged infrastructure development.

Analysis: Deduction under section 80IA(4) is available only where profits are derived from developing, operating or maintaining an eligible infrastructure facility, such as a road or bridge. Road signages, though useful for traffic management and safety, are ancillary works and do not themselves create, develop, expand or structurally improve a road or bridge. A composite work order does not automatically make the entire profit eligible for deduction; the assessee must segregate and prove that the profits claimed arise from qualifying infrastructure activity alone. The assessee failed to establish that the entire claim pertained exclusively to eligible works, and the earlier adverse decision in its own case remained operative as there was no stay of the Tribunal order.

Conclusion: The assessee was not entitled to deduction under section 80IA(4), and the disallowance was upheld in favour of the Revenue.

Final Conclusion: The common issue was decided against the assessee, and all three appeals failed.

Ratio Decidendi: Ancillary works such as road signages do not constitute an eligible infrastructure facility under section 80IA(4), and deduction cannot be claimed on composite receipts unless the assessee proves that the profits are derived from qualifying infrastructure activity alone.

Issues: Whether revision under section 263 of the Income-tax Act, 1961 could survive when the underlying assessment had been framed in the name of a deceased assessee and was therefore void.

Analysis: The assessment order was passed in the name of a deceased person without validly bringing the legal heir on record. Such an assessment is a nullity and void ab initio, creating a fundamental jurisdictional defect. Once the foundational assessment is non est, the Commissioner cannot revise it under section 263. The explanation regarding cash deposits was also found insufficient to justify an adverse inference, as the deposits were made on different dates and no cogent material was brought to disprove the assessee's explanation.

Conclusion: The revision order under section 263 could not be sustained and was invalid in law; the assessment being void, the revision proceedings failed.

Issues: (i) Whether the rejection of the books of account under section 145(3) was justified on account of discrepancies in the salary and wage records; (ii) Whether estimation of net profit at 8% of turnover was sustainable, and if not, what rate was .

Issue (i): Whether the rejection of the books of account under section 145(3) was justified on account of discrepancies in the salary and wage records.

Analysis: The authorities found serious defects in the wage and salary registers, including inconsistent signatures, identical handwriting in multiple signatures, different signatures against the same employee name, absence of names and addresses of workers, no dates of payment, and cash payments that could not be properly verified. These defects created doubt about the correctness and completeness of the accounts and the genuineness of the salary expenditure claimed.

Conclusion: The rejection of the books of account was upheld and this issue was decided against the assessee.

Issue (ii): Whether estimation of net profit at 8% of turnover was sustainable, and if not, what rate was .

Analysis: After rejecting the books, the profit had to be estimated on a reasonable basis. The adopted rate of 8% was found to be unsupported and arbitrary, particularly when the assessee's past net profit history was only about 1% to 2% and no material showed a higher comparable margin. On that factual basis, a 3% net profit rate was considered more appropriate.

Conclusion: The estimation at 8% was set aside and substituted with 3% of turnover, so this issue was decided in favour of the assessee in part.

Final Conclusion: The accounts were validly rejected, but the profit estimation was reduced to a reasonable level, resulting in partial relief to the assessee.

Ratio Decidendi: When defects in account records render them unreliable, income may be estimated, but the estimation must be based on a rational and non-arbitrary assessment of the facts and past results.

Issues: Whether penalty levied for alleged concealment of income and furnishing of inaccurate particulars under section 271(1)(c) was sustainable.

Analysis: The penalty was initiated with reference to additions made in assessment, but the order did not establish that the assessee had furnished inaccurate particulars of income. The material on record did not show a clear basis for invoking the penalty provision in relation to the claimed loan and interest-related additions. In the absence of a demonstrated case of concealment or inaccurate particulars, the statutory requirements for penalty were not met.

Conclusion: The penalty was not sustainable and was deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded because the penalty under section 271(1)(c) could not be maintained on the facts recorded.

Ratio Decidendi: Penalty under section 271(1)(c) cannot be sustained unless the revenue establishes concealment of income or furnishing of inaccurate particulars of income on the basis of clear findings.

Issues: Whether the revisionary order under section 263 of the Income-tax Act, 1961 was valid when the assessment record showed inquiries under sections 142(1) and 133(6), and whether the conditions that the assessment order be both erroneous and prejudicial to the interests of the Revenue were satisfied.

Analysis: The record showed that the Assessing Officer had called for details, issued notices to parties, and received replies from several of them. The absence of an elaborate discussion in the assessment order did not establish absence of inquiry. The revision was founded mainly on GST data reflected in the Insight Portal, but no categorical finding was recorded that the assessee had incurred unexplained expenditure out of undisclosed sources. The materials furnished in revision, including ledger accounts and bank statements, were not shown to be false or fabricated, and discrepancy in third-party data without proper reconciliation or independent verification was insufficient to treat the assessment order as erroneous.

Conclusion: The twin conditions for invoking section 263 were not satisfied. The revisionary order was quashed and the assessee succeeded.

Issues: Whether the appellate orders were liable to be set aside and the matters remanded for de novo consideration on the ground of violation of principles of natural justice and denial of opportunity of hearing.

Analysis: The record showed that the assessee was not afforded an effective opportunity before the first appellate authority. The Tribunal noted that both sides were ad idem that the impugned orders suffered from denial of natural justice, and the assessee sought one further opportunity to place its case on merits. In these circumstances, the Tribunal found it appropriate to interfere with the appellate orders and direct fresh adjudication on merits by the first appellate authority.

Conclusion: The impugned orders were set aside and the matters were remanded to the first appellate authority for de novo adjudication. The relief was thus granted in favour of the assessee.

Issues: (i) Whether delay of 967 days in filing the appeal was liable to be condoned; (ii) whether interest levied on the delayed re-deposit of TDS was sustainable; (iii) whether late fee levied under section 234E for the subsequent Form 26QB filing was sustainable.

Issue (i): Whether delay of 967 days in filing the appeal was liable to be condoned.

Analysis: The explanation showed that the assessee was an NRI, was residing abroad, could not access the registered email account and later approached counsel after learning of the order. No contrary material was brought on record. The statutory power under section 253(5) permits admission of an appeal on showing sufficient cause, and a justice-oriented approach was applied.

Conclusion: The delay was condoned and the appeal was admitted.

Issue (ii): Whether interest levied on the delayed re-deposit of TDS was sustainable.

Analysis: The original TDS was deposited within time, but the later payment was a duplicate re-deposit made after the prescribed time. Once the re-deposit was made and credit was availed by the payee, the Revenue suffered deprivation of corresponding interest. The delayed payment was therefore not treated as a case warranting deletion of interest.

Conclusion: The levy of interest was upheld.

Issue (iii): Whether late fee levied under section 234E for the subsequent Form 26QB filing was sustainable.

Analysis: The later Form 26QB filing arose from an inadvertent duplicate payment after the original TDS had already been deposited and reported within time. The matter was treated as a technical and duplicative error, with no loss to the Revenue, and the decision followed the justice-oriented view adopted in comparable factual situations.

Conclusion: The late fee was directed to be deleted.

Final Conclusion: The appeal succeeded only to the extent of deletion of the late fee, while the interest component was sustained, leaving the assessee with partial relief.

Ratio Decidendi: Where the original TDS deposit and reporting were made within time, a later duplicate filing caused by an inadvertent technical error may not justify late fee under section 234E, but delayed re-deposit can still attract interest where the Revenue is deprived of the time value of tax.

Issues: Whether the addition made on account of cash deposits in the bank account as unexplained cash credit could be sustained when the underlying Form 26AS entry was found to be and the deposits were explained as cash sales.

Analysis: The assessment was founded principally on Form 26AS, which initially reflected a higher cash deposit figure, but the material placed before the Tribunal showed that the entry had been revised and that the correct cash deposit figure was materially different. The assessee's audited accounts, turnover details, and month-wise bank deposit particulars indicated that the deposits were linked to business receipts from sale of chicken. On that basis, the foundation for treating the entire amount as unexplained cash credit was held to be erroneous, and the absence of effective compliance before the appellate authority did not justify sustaining an addition based on wrong facts.

Conclusion: The addition under section 68 was not sustainable and was directed to be deleted, in favour of the assessee.

Issues: Whether the assessment was invalid and liable to be quashed because the notice under section 143(2) was issued by an officer lacking pecuniary jurisdiction and the assessment was completed without a valid jurisdictional notice.

Analysis: The return was selected for scrutiny and the notices under sections 143(2) and 142(1) were issued by the Income-tax Officer, Ward 5(2), Kolkata, although the assessee's income fell within the monetary range placing the case with the Deputy Commissioner/Assistant Commissioner under CBDT Instruction No. 1/2011. The statutory notice under section 143(2) is mandatory for a scrutiny assessment and must be issued by the assessing officer having jurisdiction over the case. The assessment was ultimately framed by the Deputy Commissioner without a valid notice from the jurisdictional officer. The defect went to the root of the assessment and could not be sustained.

Conclusion: The assessment was invalid and was rightly quashed.

Issues: Whether the addition made towards alleged difference in cash balance as unexplained money under section 69A, with tax consequences under section 115BBE, was justified.

Analysis: The assessee produced cash book extracts and a cash flow statement showing that the closing balance on 31.03.2022 was carried forward as the opening balance on 01.04.2022. The discrepancy noticed by the Assessing Officer arose from comparing figures without properly considering the assessee's personal cash flow statement and the contemporaneous cash book records. On the material on record, the claimed difference in cash balance was not established.

Conclusion: The addition as unexplained money was not sustainable and was directed to be deleted in favour of the assessee.

Issues: (i) Whether the receipt of Rs. 84,83,800/- against recorded sales could be treated as unexplained cash credit under section 68 of the Income-tax Act, 1961; (ii) Whether the ad hoc disallowance of Rs. 11,60,640/- being 10% of certain expenses was justified.

Issue (i): Whether the receipt of Rs. 84,83,800/- against recorded sales could be treated as unexplained cash credit under section 68 of the Income-tax Act, 1961.

Analysis: The sales were recorded in the regular books and were supported by invoices, waybills, ledger account, Form C, stock records and banking trail. No specific defect was pointed out in the documents, the books were not rejected, and no discrepancy in purchases or stock was established. The addition rested mainly on a third-party statement without independent corroboration and without any adverse material from the alleged buyer to show non-genuine transactions or cash routing back to the assessee.

Conclusion: The receipt against recorded sales could not be treated as unexplained cash credit, and the addition under section 68 was deleted, in favour of the assessee.

Issue (ii): Whether the ad hoc disallowance of Rs. 11,60,640/- being 10% of certain expenses was justified.

Analysis: The assessee did not produce supporting bills and vouchers for the disputed expenditure before the assessing authority or before the Tribunal. In the absence of primary evidence, the genuineness of the expenditure could not be fully verified.

Conclusion: The disallowance of Rs. 11,60,640/- was upheld, against the assessee.

Final Conclusion: The addition under section 68 was deleted, but the estimated disallowance of expenses was sustained, resulting in partial relief to the assessee.

Ratio Decidendi: When sales are duly recorded in regular books and supported by contemporaneous documentary evidence and banking receipts, an addition under section 68 cannot be sustained merely on suspicion or an uncorroborated third-party statement; conversely, expenditure unsupported by bills and vouchers may be disallowed on verification failure.

Issues: Whether the Principal Commissioner was justified in exercising revisionary jurisdiction under section 263 on the ground that the Assessing Officer failed to examine disallowance of interest expenditure on unsecured loans treated as non-genuine.

Analysis: Section 263 can be invoked only where the assessment order is both erroneous and prejudicial to the interests of the Revenue. On the facts recorded, the assessment had accepted the unsecured loans as non-genuine but did not disallow the corresponding interest expenditure. The omission reflected lack of proper inquiry on an issue having revenue consequences, bringing the case within the statutory standard for revision.

Conclusion: The revisionary order was valid and the challenge to the exercise of jurisdiction under section 263 failed.

Final Conclusion: The assessment order was rightly set aside for fresh examination of the interest disallowance issue, and the assessee's appeal was rejected.

Ratio Decidendi: Revision under section 263 is sustainable where the Assessing Officer's order suffers from lack of inquiry on a material revenue issue and is therefore both erroneous and prejudicial to the interests of the Revenue.

Issues: Whether the assessee's sale of immovable property was liable to be assessed by taking the entire sale consideration as short-term capital gain, and whether the indexed cost of acquisition and indexed cost of improvement were required to be considered while computing long-term capital gain.

Analysis: The assessee had sold an immovable property for a stated consideration, and the purchase cost, indexed cost of acquisition, and supported cost of improvement were all ascertainable from the record. The assessment had proceeded without considering the cost of improvement and had treated the entire sale consideration as short-term capital gain. The assessee's non-response to notices had led to assessment under section 144 of the Income-tax Act, 1961, but the material before the Tribunal showed that the sale value, purchase cost, cost of improvement, and fixed deposits made out of the sale proceeds were not in dispute. In these circumstances, the computation had to be made on the actual capital gains basis after giving indexation benefit to both acquisition and improvement costs.

Conclusion: The assessment was required to be recomputed by treating the transaction as giving rise to long-term capital gain and by allowing the indexed cost of acquisition and indexed cost of improvement; the addition made by treating the entire sale consideration as short-term capital gain was not sustainable.

Issues: Whether the reassessment proceedings and the notice issued under section 148 of the Income-tax Act, 1961 were vitiated because the Assessing Officer did not supply the adverse material relied upon at the stage of section 148A and did not meaningfully consider the assessee's reply.

Analysis: The statutory scheme of section 148A requires the Assessing Officer to furnish the information suggesting escapement of income, consider the assessee's reply, and then decide whether notice under section 148 should be issued. The assessee specifically objected that the material relied upon by the Assessing Officer was not supplied and that the reply pointing out factual inaccuracies in the reopening basis was not dealt with. The order under section 148A(d) merely repeated the departmental information and did not answer the assessee's factual objections. In such circumstances, the procedural safeguards built into the reassessment framework were not complied with and the assumption of jurisdiction stood vitiated.

Conclusion: The reassessment order and the consequential notice under section 148 were held to be valid jurisdiction and were quashed, in favour of the assessee.