Issues: (i) Whether the respondent was contractually entitled to retain the balance security deposit on the alleged loss of input tax credit arising from defective VAT invoices; (ii) Whether the appellant was entitled to interest on the refunded security deposit.

Issue (i): Whether the respondent was contractually entitled to retain the balance security deposit on the alleged loss of input tax credit arising from defective VAT invoices.

Analysis: The appellant established the foundational facts of completion and acceptance of the works, expiry of the relevant retention period, and demand for refund. The evidentiary onus consequently shifted to the respondent to prove the alleged invoice defects, actual denial and quantification of input tax credit, causation, and a contractual right to recover the alleged loss from the security deposit. The respondent had accepted and processed the invoices, deducted VAT, and issued Form VAT 156, yet produced no tax assessment, audit material, rejection communication, or reliable computation establishing that input tax credit was denied solely due to the appellant's invoices. Its own records also contained an inconsistency concerning the applicable tax rate. Clauses governing the security deposit permitted recovery only of loss, damage, compensation, or other sums shown to be contractually payable due to the contractor's default; they did not authorise an unproved adjustment for an alleged statutory consequence. The respondent's failure to timely address any alleged invoice defect after accepting the invoices could not be shifted to the appellant.

Conclusion: The respondent had no established contractual right to withhold Rs. 36,64,474 from the security deposit; the appellant was entitled to its refund. The issue is decided in favour of the assessee.

Issue (ii): Whether the appellant was entitled to interest on the refunded security deposit.

Analysis: The contract excluded interest while the security deposit was validly retained. However, the five-year performance guarantee period ended on 30.10.2018, after which the purpose of retention ceased and continued withholding became wrongful. In the absence of a contractual stipulation for the claimed rate of 18% per annum, a commercial rate of 9% per annum was found just and equitable from 31.10.2018 until realisation.

Conclusion: The appellant is entitled to interest at 9% per annum from 31.10.2018 until realisation, but not at 18% per annum. The issue is partly in favour of the assessee.

Final Conclusion: The decree dismissing the claim for refund was set aside, and the appellant obtained recovery of the withheld security deposit with interest at the reduced rate.

Ratio Decidendi: Once a contractor establishes completion, expiry of the retention period, and entitlement to refund, the employer must prove the contractor's default, the resulting loss, and contractual authority for any deduction from the security deposit; an unsubstantiated alleged tax-credit loss cannot justify retention.

Issues: Whether cancellation of GST registration for continuous non-filing of returns should be set aside and registration restored upon compliance with return-filing and payment obligations.

Analysis: The cancellation was founded solely on non-filing of returns, without any allegation of a dubious process for tax evasion. Continued cancellation would prevent the registered person from conducting business and issuing invoices, thereby impairing determination and recovery of the tax liability. A pragmatic course was therefore warranted, consistent with the requirement that outstanding returns be filed and consequential tax, interest, fine and penalty be paid.

Conclusion: The cancellation order was set aside conditionally; registration is to be restored if the petitioner files all default-period returns and pays the requisite tax, interest, fine and penalty within the stipulated period.

Issues: Whether an adjudication order under the GST law could stand where the notices and reminders omitted the date, time and venue of personal hearing, no effective hearing opportunities were afforded, and the order was non-speaking.

Analysis: Section 75(4) mandates an opportunity of hearing where an adverse decision is contemplated, while Section 75(6) requires the order to state the relevant facts and basis of decision. The show-cause notice and all reminders recorded no date, time or venue for personal hearing. The petitioners' selection of "No" in the hearing column did not dispense with the statutory obligation to provide an effective hearing before an adverse determination. The two-line order also failed to disclose reasons or consideration of the material placed in reply.

Conclusion: The impugned adjudication order was invalid for breach of natural justice and for being non-speaking; the issue was decided in favour of the assessee.

Issues: Whether the assessment order could stand where the assessee was allowed only three days to respond to the show-cause notice and its subsequent grievance seeking a hearing was not considered.

Analysis: The show-cause notice, issued on a Sunday, allowed only three days for a response. The assessee thereafter submitted its reply and grievance requesting a video-conference hearing, but the assessment order was passed without considering them. Such limited time did not constitute a reasonable opportunity, and the grievance concerning inadequate time required consideration before completing the assessment.

Conclusion: The assessment order was vitiated by breach of the principles of natural justice; the assessee was entitled to a fresh assessment after an adequate opportunity of hearing, including personal hearing where permissible in law.

Issues: Whether the complaint and process for prosecution for wilful attempt to evade payment of tax under Section 276C(2) were sustainable.

Analysis: Section 276C(2) requires a deliberate, intentional and conscious attempt to evade tax, penalty or interest; mere delay or failure to pay, without mens rea, does not satisfy the penal provision. The assessee had declared its income, repeatedly sought time owing to business closure, made periodic payments with interest, and discharged the entire liability before the complaint proceedings materially progressed. The complaint did not identify any specific wilful act or circumstance demonstrating an attempt to evade payment. The order issuing process also failed to account for these material facts and reflected no proper scrutiny of whether the offence was prima facie made out.

Conclusion: The essential ingredients of a wilful attempt to evade tax were not disclosed; the criminal complaint and the process issued against the petitioners were unsustainable.

Issues: Whether foreign tax credit can be denied solely because Form 67 was furnished after the prescribed due date.

Analysis: The return was filed within time, and Form 67 had been uploaded before the rectification application was considered. The delay in furnishing Form 67 was treated as a procedural, technical and venial lapse. The applicable legal position is that delayed furnishing of Form 67 does not, by itself, justify denial of an otherwise admissible foreign tax credit.

Conclusion: The delay in filing Form 67 was condoned, and the assessee was entitled to verification and grant of admissible foreign tax credit in accordance with law.

Outcome: Revenue appeal dismissed under the Government litigation policy on account of the monetary threshold.

Issues: Whether CENVAT credit is admissible on steel, cement, welding electrodes and gases used in fabricating structural works and support structures connected with cement and power plants for the period before 07.07.2009.

Analysis: The materials were used for fabrication of foundations, platforms, supports, conveyor structures, galleries, pipelines, chimneys and related structures required for installation and functioning of capital goods. Their eventual embedding in earth did not negate their use, directly or indirectly, in relation to manufacture. The exclusion introduced with effect from 07.07.2009 was not clarificatory or retrospective; therefore, it could not govern credit taken before that date.

Conclusion: CENVAT credit on the specified materials used for the stated structural and support works before 07.07.2009 is admissible, in favour of the assessee.

Outcome: Delay condoned; Special Leave Petition dismissed and pending applications disposed of.

Issues: Whether delay in releasing the refund determined under Form No. 4 under the Direct Tax Vivad Se Vishwas Scheme, 2024 warranted further directions concerning payment and systemic refund processing.

Analysis: The stated non-availability of the processing module and engagement in time-barring proceedings did not adequately explain the prolonged non-credit of the refund. Although the Scheme excludes statutory interest under Section 244A of the Income-tax Act, 1961, that exclusion does not justify administrative delay. The matter was considered significant in view of recurring refund-delay cases and the need for a functional mechanism following issuance of Form No. 4.

Outcome: Further time was granted and the matter was listed for 06.08.2026; a copy of the order was directed to be sent to the CBDT for verification and appropriate systemic action.

Issues: Whether the addition for purchases from an unverified supplier should be estimated at 12.5 per cent or at a lower profit rate.

Analysis: The corresponding sales, stock records and quantitative movement were accepted, and payments were made through banking channels. However, the supplier could not be verified or produced, its GST registration stood cancelled, and the assessee could not conclusively establish procurement from the named supplier. Therefore, only the profit or saving embedded in purchases from an unverified source was taxable. The rate of such profit depends on the nature of trade, disclosed margins, evidence and facts of the relevant year; an estimate adopted in an earlier year does not mechanically govern a subsequent year without identical material facts. In the low-margin ferrous and non-ferrous metals trade, the disclosed net-profit margin and comparable decisions supported estimation at 2 per cent.

Conclusion: The addition was restricted to 2 per cent of the disputed purchases, and the balance addition was deleted, in favour of the assessee.

Issues: Whether delayed furnishing of the audit report in Form 10B disentitled a registered charitable trust from exemption for application of income where the report was available before processing of the return.

Analysis: The trust's charitable status and registration were undisputed, and the audit report had been furnished before processing under section 143(1). The requirement was satisfied where the report was available to the assessing authority while processing the return. The rule concerning a declaration for opting out of an exemption under section 10B was distinguishable, since that declaration directly affected the return and assessment at the outset; the governing principle was that an audit report furnished before completion of assessment sufficiently supports a deduction or exemption claim.

Conclusion: Delayed filing of Form 10B did not bar the trust's claim for exemption of its application of income; the relief granted was sustained.

Issues: (i) Whether the entire amount of alleged bogus purchases was taxable or only the profit element embedded therein; (ii) Whether the difference between contract income reflected in Form 26AS and turnover recorded in the accounts warranted an addition.

Issue (i): Whether the entire amount of alleged bogus purchases was taxable or only the profit element embedded therein.

Analysis: The declared turnover was not disturbed and could not have been generated without corresponding purchases. In the absence of proof that no actual purchases were made or that the recorded sales lacked nexus with materials procured, taxation of the entire alleged purchase amount was unwarranted. Estimation of the profit embedded in such transactions at 12.5% was found justified.

Conclusion: Only 12.5% of the alleged bogus purchases was liable to be added, in favour of the assessee.

Issue (ii): Whether the difference between contract income reflected in Form 26AS and turnover recorded in the accounts warranted an addition.

Analysis: The difference represented advance payments received for contractual work, recorded as a liability and offered to tax in the subsequent assessment year. The related carry-forward of tax deducted at source and subsequent income recognition supported this treatment.

Conclusion: The turnover difference did not constitute taxable income for the relevant year, in favour of the assessee.

Final Conclusion: The additions contested by the Revenue were not restored, and the relief based on profit estimation and deferred recognition of contractual advances remained intact.

Ratio Decidendi: Where recorded sales are accepted and actual procurement is not disproved, an addition for alleged bogus purchases is confined to the profit element embedded in those purchases; contractual advances taxable in a later year do not create taxable turnover in the year of receipt.

Issues: Whether belated furnishing of Form No. 10, where it was available before processing of the return, disentitles a charitable trust from claiming exemption for accumulated income under Section 11(2).

Analysis: The requirement to furnish Form No. 10 is mandatory, but compliance is sufficient where the prescribed information is available to the Assessing Officer before completion of assessment. Since Form No. 10 was on record when the return was processed, delay beyond the due date under Section 139(1) could not, by itself, justify denial of the exemption. The claim nevertheless required verification on its merits, including the relevant factual conditions for accumulation.

Conclusion: Belated filing of Form No. 10 alone does not bar the claim under Section 11(2) where the form was available before assessment; the claim must be reconsidered on merits.

Issues: Whether the estimated addition for profit allegedly arising from suppressed sales could survive after the GST appellate authority found no evidence of clandestine removal or unrecorded sales.

Analysis: The addition was founded exclusively on information from the GST authorities concerning alleged suppressed sales. The GST appellate order, after verification of seized material against regular books, found no evidence of interstate movement, clandestine removal, unaccounted raw materials, actual removal, sales, sale proceeds, transportation, or other corroborative material. No independent material beyond the GST information supported the income-tax addition.

Conclusion: The estimated addition for alleged undisclosed profit was deleted in favour of the assessee.

Issues: Whether exemption under section 10(23C)(vi) could be denied merely because Form 10B was not furnished with the return, although it was available with the Assessing Officer before processing under section 143(1).

Analysis: Furnishing the audit report in Form 10B is mandatory, but the timing and mode of filing are procedural. Since the report had been uploaded and was available on the record before processing of the return, it ought to have been considered while determining the exemption claim.

Conclusion: The delayed filing of Form 10B did not justify denial of exemption where the report was available before processing; the Assessing Officer was directed to consider it while rectifying the assessment.

Issues: (i) Whether the assessments initiated under Section 153C on the basis of material seized during search were valid; (ii) Whether sales routed through the searched entities were bogus and the appropriate basis for estimating the resulting addition.

Issue (i): Whether the assessments initiated under Section 153C on the basis of material seized during search were valid.

Analysis: The seized material was found to pertain to the assessee and to relate to alleged bogus sales entries obtained through the searched entities. The assessment and appellate findings consistently connected that material with the assessee's transactions, supporting recourse to the search-related assessment jurisdiction.

Conclusion: The initiation of proceedings and assessments under Section 153C was valid, against the assessee.

Issue (ii): Whether sales routed through the searched entities were bogus and the appropriate basis for estimating the resulting addition.

Analysis: Search evidence and subsequent enquiries established that the searched entities functioned as accommodation-entry providers; consequently, the sales sourced through them were rightly treated as bogus in principle. However, the reduced commission rate of 3% lacked support from segmental comparables. Since the sales were treated as bogus only once, estimation at that rate was excessive. A lump-sum gross-profit estimation at 1% or the gross profit disclosed in the books, whichever was higher, was considered appropriate on the facts.

Conclusion: The treatment of the impugned sales as bogus was sustained, but the addition was restricted to gross profit at 1% or the declared book gross-profit rate, whichever was higher, in favour of the assessee.

Final Conclusion: The search-related assessments remain legally sustainable, while the taxable profit attributable to the impugned bogus sales is confined to the specified gross-profit estimation.

Issues: Whether registration under Section 12AB could be refused solely because the trust deed had not been registered with the Sub-Registrar.

Analysis: Non-registration of a trust deed does not, by itself, justify refusal of registration. The rejection was based on an incorrect premise and required reconsideration of the legal requirements relating to the trust's immovable property and any registration requirement before the Charity Commissioner. The assessee must be given an adequate opportunity to rectify any defects before a fresh decision.

Conclusion: The rejection of the registration application solely on account of non-registration of the trust deed was set aside in favour of the assessee, with the matter restored for fresh adjudication.