Issues: Whether services consisting of collection, transportation and disposal of segregated municipal solid waste by the applicant to a municipal corporation using the applicant's own fuel operated vehicles qualify for exemption under Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 (Sl. No. 3, alternatively Sl. No. 3A or Sl. No.4) as activities in relation to functions entrusted to a Municipality under Article 243W of the Constitution of India.

Analysis: The service is provided to a municipal corporation which falls within the statutory definition of "local authority". The work orders require collection, transportation and dumping of segregated waste at a designated dumpsite with the applicant supplying and maintaining its own vehicles and uploading quantity evidence; consideration is fixed per unit of waste removed. Sl. No. 4 of the notification applies only to a "governmental authority" as defined and is therefore inapplicable. Sl. No. 3A relates to composite supplies where goods constitute not more than 25% of value; the contractual terms and functional details show no transfer of goods to the local authority and no component of supply of goods forming part of the contractual consideration. The activity therefore does not constitute a works contract or a composite supply involving supply of goods but is a supply of pure services directly in relation to municipal solid waste management which is an activity listed at Sl. No. 6 of the Twelfth Schedule under Article 243W.

Conclusion: The service qualifies as a pure service supplied to a local authority in relation to a function entrusted to a Municipality under Article 243W and therefore falls within Sl. No. 3 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017; the supply is exempt from tax. This conclusion is in favour of the assessee.

Ratio Decidendi: A contractual supply of collection, transportation and disposal of municipal solid waste by a contractor using its own vehicles and equipment, where there is no transfer of ownership of goods and consideration is measured for the service of removal, qualifies as a "pure service" to a local authority and is exempt under Sl. No. 3 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 when the activity relates to functions entrusted to a Municipality under Article 243W of the Constitution of India.

Issues: (i) Whether serving non-tobacco or tobacco-based hookah in a restaurant along with food is a supply of goods or services within the ambit of Clause 6(b) of Schedule II to the Central Goods and Services Tax Act, 2017; (ii) If so, what rate of tax applies to such supply(s)?

Issue (i): Whether serving hookah (non-tobacco or tobacco-based) in a restaurant constitutes supply within Clause 6(b) of Schedule II and is therefore to be treated as a supply of service.

Analysis: Clause 6(b) of Schedule II treats supply of food or any other article for human consumption or any drink (other than alcoholic liquor) as supply of service when supplied by way of or as part of any service. The ejusdem generis principle requires construing "any other article for human consumption" with reference to "food" and "drink," which are ingested and digested. Smoke inhaled from hookah (tobacco or non-tobacco) is inhaled into the respiratory tract and not ingested for nutritional purposes. The composite supply definition (Section 2(30)) and practical aspects of preparation and service show that hookah involves both goods (tobacco/non-tobacco product) and service (use of apparatus and ambience), but the principal element is the goods used for smoking. The fact that hookah is served within restaurant infrastructure does not convert the goods element into a restaurant service under Clause 6(b).

Conclusion: Serving hookah in a restaurant is not covered by Clause 6(b) of Schedule II as a restaurant service; it is a composite supply in which the principal supply is goods (tobacco or non-tobacco hookah products).

Issue (ii): The rate of tax applicable on the supplies identified (food service and hookah supplies).

Analysis: Section 8 determines tax treatment of composite and mixed supplies by reference to the principal supply. Food supplied in a restaurant that falls within Clause 6(b) continues to be treated as restaurant service and attracts rates specified for restaurant services under Notification No. 11/2017-CT (Rate) dated 28.06.2017. Hookah supplies, being supplies of goods with the goods element as principal, are taxable under the applicable HSN/notification entries: tobacco-based hookah products under HSN 2403 at the rate and cess prescribed by relevant notifications; specified non-tobacco ingredients classified under applicable entries with the corresponding rates in Notification No. 01/2017-Central Tax (Rate) as amended.

Conclusion: Food served in the restaurant is taxable as restaurant service at the rates under Notification No. 11/2017-CT (Rate) dated 28.06.2017. Tobacco-based hookah supplies are taxable as goods under HSN 2403 at the rates and cess prescribed by Notification No. 01/2017-Central Tax (Rate) and Notification No. 19/2025 - Central Tax (Rate) dated 31.12.2025. Non-tobacco hookah ingredients are taxable as goods at the rates applicable under Notification No. 01/2017-Central Tax (Rate) as amended.

Final Conclusion: The supplies are to be treated as two separate composite supplies: (a) supply of food in the restaurant treated as restaurant service under Clause 6(b) of Schedule II and taxed under Notification No. 11/2017-CT (Rate); and (b) supply of hookah (tobacco or non-tobacco products) treated as supply of goods, taxed under the relevant HSN entries and rate notifications. The Authority accordingly rules on classification and applicable rates for each supply.

Ratio Decidendi: Where a supply comprises both goods for smoking and ancillary use of restaurant infrastructure, the phrase "any other article for human consumption" in Clause 6(b) of Schedule II must be read ejusdem generis with "food" and "drink," excluding inhaled smoke products; the tax character of a composite supply is determined by its principal element under Section 8 and Section 2(30) of the Central Goods and Services Tax Act, 2017.

Issues: Whether the order dated 10.02.2026 passed under Section 144C(1) of the Income-tax Act, 1961 by the Faceless Assessing Officer can be sustained where an earlier High Court order dated 06.02.2026 in the same matter did not reach the Assessing Officer due to a communication gap.

Analysis: The dispute concerns the validity of an assessment order passed after a prior High Court order in the same matter had been pronounced but, owing to a communication lapse, had not been received by the Faceless Assessing Officer. The legal framework includes procedural fairness and the statutory scheme for faceless assessments under Section 144C(1) of the Income-tax Act, 1961, as well as the procedural safeguards in transfer pricing proceedings requiring provision of relied upon documents and opportunity to reply. In the circumstances where the earlier judicial order directed supply of relied upon agreements, and those directions had not been placed before the Assessing Officer due to a communication failure, the assessment order was rendered without the assessment authority having the benefit of the earlier judicial direction and without the parties having the intended procedural opportunities. The remedy applied entails setting aside the impugned assessment order, directing compliance with the earlier judicial directions (supply of agreements with permissible redaction), permitting filing of a reply within a specified timeframe, and mandating the TPO/AO to pass fresh orders within extended timelines to secure effective adjudication of disputes in accordance with principles of fairness.

Conclusion: The impugned order dated 10.02.2026 is set aside; the petitioner is directed to be supplied the relied upon agreements with permissible redaction, shall file a reply by 16.03.2026, and the Transfer Pricing Officer shall pass a fresh order by 16.04.2026; all timelines before the TPO/AO and DRP are extended by sixty days and the writ petition is allowed.

Issues: Whether the Competent Authority erred in issuing a tax withholding certificate directing deduction at 15% under Section 197 of the Income-tax Act, 1961 for the petitioner (a non-resident US tax resident) for AY 2026-27, and whether a certificate for deduction at a lower rate should be issued.

Analysis: The Court examined whether the Competent Authority correctly applied relevant legal principles, including Section 197 of the Income-tax Act, 1961 and the India-USA Double Taxation Avoidance Agreement, in determining the rate of deduction. The Court found that the petitioner's case is covered by the reasoning in Engineering Analysis Centre of Excellence Ltd. (supra) and that the Competent Authority did not correctly deal with that precedent or take relevant factors into account. The Court noted that the transactions prima facie appear not to be exigible to tax under the Act read with the India-USA Treaty, and observed that the certificate at 15% was issued without adequate reasoning. Considering that most of the relevant period had elapsed and substantial amounts were being withheld, but acknowledging the Revenue's right to examine the transactions in assessment proceedings and seek refund if appropriate, the Court determined that a lower withholding certificate at 2% would suitably balance the parties' interests while preserving the Revenue's right to scrutiny.

Conclusion: The petition is partly allowed; the respondent is directed to issue a tax withholding certificate requiring deduction of tax at the rate of 2% for AY 2026-27 within 10 days. The direction applies only to the certificate for AY 2026-27 and does not preclude the Competent Authority from considering future applications in accordance with law.

Ratio Decidendi: Where transactions prima facie are not exigible to tax under the Income-tax Act, 1961 read with an applicable tax treaty, the Competent Authority must apply Section 197 of the Income-tax Act, 1961 consistently with binding precedent and may grant a certificate for deduction at a lower rate to prevent disproportionate withholding while preserving the Revenue's right to assessment and refund.

Issues: Whether the continued issuance and maintenance of lookout circulars against the petitioners after completion of income-tax proceedings and in absence of any outstanding demand or pending proceeding violates the petitioners' fundamental rights and whether such lookout circulars should be set aside.

Analysis: The petitioners were subjected to search on 17.03.2021 and a lookout circular was issued in April/May 2021. Assessment orders for relevant assessment years were passed and appealed; the appellate orders were partly allowed and subsequently affirmed by the Income Tax Appellate Tribunal which quashed the assessments under Section 143(3) of the Income-tax Act, 1961. As of the date of this order no demand remains outstanding and no proceedings under the Act of 1961 are pending. The respondents contend that foreign reference under the Foreign Tax and Tax Research Division (FT&TRD) under the DTAA is pending to elicit overseas information, and therefore the lookout circular should be maintained. The Court found that where domestic tax proceedings have culminated and no demand is outstanding, maintaining a lookout circular for an indefinite period while foreign information is being sought results in an open-ended suspension of the petitioners' freedom to travel. The petitioners have cooperated with authorities and there has been no notice requiring their presence since June 2021. The Court balanced the department's investigatory interest with the petitioners' constitutional protections under Articles 14, 19(1)(g) and 21 of the Constitution of India and concluded that indefinite restraint without a proximate or concrete basis is impermissible. The Court conditioned lifting of the lookout circulars on the furnishing of an undertaking by the petitioners not to alienate or create third-party rights in assets outside India and to inform the Income Tax Department thirty days prior to any intended alienation.

Conclusion: The continued lookout circulars against the petitioners are set aside. The petitioners shall furnish an undertaking that they will not alienate, transfer or otherwise create third party rights in respect of assets held outside India and will give the Income Tax Department thirty days' advance notice if they intend to do so; upon such undertaking being filed by 15.03.2026 the lookout circulars shall stand vacated. The petitions are allowed and pending application disposed of.

Ratio Decidendi: Where domestic tax proceedings have been finally concluded and no demand remains outstanding, an administrative restraint such as a lookout circular cannot be maintained indefinitely in the absence of a proximate, concrete basis; indefinite suspension of the fundamental right of freedom of movement is impermissible unless proportionate measures and safeguards are in place.

Issues: Whether the First Information Report alleging cheating, conspiracy, and corruption could be quashed on the basis that the materials collected did not disclose deception at the inception, the alleged advances and recoveries were supported by documents, and the continuation of investigation would amount to a roving inquiry.

Analysis: The materials placed on record, including documents gathered during the preliminary enquiry, the forensic audit material, the communications from the lending banks, and the conduct of the consortium, did not show any false representation or dishonest intention at the inception of the transaction. The allegations essentially disclosed a commercial lending dispute and recovery issues, not the essential ingredients of cheating. The record also did not show any identifiable public servant or bank official against whom a concrete allegation of collusion or misconduct had been made. In the absence of a prima facie case of deception, dishonest inducement, or intentional wrongful loss, continuation of the criminal process would serve only as a fishing exercise.

Conclusion: The First Information Report could not be allowed to continue and was liable to be quashed.

Issues: Whether the component of the impugned order imposing costs of Rs. 5,00,000/- on each of the financial creditors should be set aside.

Analysis: The Tribunal examined the circumstances leading to withdrawal under Section 12A of the Insolvency and Bankruptcy Code and the facts that (i) the Corporate Insolvency Resolution Process commenced and an interim order restrained constitution of the committee of creditors, (ii) the corporate debtor entered into one-time settlements with financial creditors after the interim order, and (iii) no other creditor filed objection to the Section 12A application. The Tribunal considered the relevance of the right of other creditors to object (as noted in prior authority) but found no objections recorded in the impugned order. On the question of imposing costs, the Tribunal held that imposing a monetary penalty on the financial creditors required valid reasons tied to the record; absent a finding that withdrawal under Section 12A ought to be disallowed or that the creditors had committed sanctionable misconduct, the imposition of costs was not sustainable. The Tribunal therefore confined its review to the reasoned basis for cost imposition and found none sufficient to warrant the penalty.

Conclusion: The part of the impugned order dated 30/10/2025 imposing costs of Rs. 5,00,000/- on each financial creditor is set aside and the appeals are allowed to that extent; the direction to impose costs is quashed in favour of the appellants.

Issues: Whether the Appellate Tribunal can condone a delay of 103 days in filing an appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 by invoking or relying upon Section 198 of the Insolvency and Bankruptcy Code, 2016.

Analysis: Section 61(2) prescribes a thirty day period for filing appeals with a discretionary condonable extension not exceeding fifteen days. Section 198 empowers the relevant Adjudicating Authority to condone delay where the Board fails to perform an act within a period specified under the Code; its scope relates to regulatory or administrative functions of the Board performed within timeframes specified in the Code. The text, context and scheme of the Code show Section 198 is directed to condonation of delays in performance of functions entrusted to the Board and intended to prevent such delays from being fatal to proceedings; it is not a general provision to override limitation periods for appeals before the Appellate Tribunal. While the Appellate Tribunal may exercise certain powers akin to the Adjudicating Authority in appropriate contexts, Section 198 was not enacted to displace the specific limitation regime of Section 61(2) governing appeals. The Tribunal examined authorities on purposive construction and locus of the Board but found no provision requiring the Board to file appeals within the time prescribed by Section 61(2) or permitting Section 198 to enlarge the statutory appeal period beyond the limits set by Section 61(2).

Conclusion: The delay of 103 days in filing the appeal cannot be condoned by the Appellate Tribunal under Section 198; the application for condonation is rejected and the appeal is rejected (in favour of the Respondent).

Issues: Whether additional tax or surcharge under Section 7-A of the Haryana Value Added Tax Act, 2003 was leviable on tax payable under Section 7 of the said Act in respect of sales of declared goods against Form D-1, and whether Sections 7 and 7-A operate independently.

Analysis: Section 7 prescribes the rate of tax on taxable turnover, including the concessional rate applicable to declared goods sold against the prescribed declaration. Section 7-A, by contrast, creates an additional levy in the nature of surcharge and opens with a non-obstante clause. The two provisions therefore operate in distinct spheres. The surcharge is calculated on the tax payable and not on the taxable turnover, and the proviso to Section 7-A ensures conformity with the ceiling applicable to declared goods under the Central Sales Tax Act, 1956. The scheme does not support the contention that acceptance of Form D-1 excludes the additional levy.

Conclusion: Additional tax or surcharge under Section 7-A was validly leviable in addition to tax under Section 7, and the challenge to the computation at 4.2% failed.

Ratio Decidendi: Where the taxing statute separately provides for tax on taxable turnover and for an additional surcharge on the tax payable, the surcharge is an independent levy sustained by a non-obstante clause and is not excluded merely because the underlying sale is taxed at a concessional rate.

Outcome: Delay condoned. The Special Leave Petition was dismissed and the accompanying interlocutory application(s), if any, were disposed of.

Issues: Whether the reassessment initiation under Sections 148A(d) and 148 for Assessment Year 2013-14 was barred by limitation in view of Section 149(1) of the Income-tax Act, 1961 read with Section 3(1) of the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020.

Analysis: The reassessment had to be tested on the basis of the limitation regime applicable to the relevant assessment year, as modified by the Finance Act, 2021 and the extension granted under TOLA. The original limitation for issuing notice under Section 148 had expired, but the notice issued on 31.05.2021 was within the extended period available under TOLA. The period after issuance of the notice, the interval up to the decision in Ashish Agarwal, the time taken for issuance of the Section 148A(b) notice, and the response period granted to the assessee were all required to be excluded while computing the balance limitation. After such exclusions, only thirty days remained for the Assessing Officer to complete the reassessment initiation process. The impugned order under Section 148A(d) and the consequential notice under Section 148 were issued after that balance period had expired.

Conclusion: The reassessment proceedings were time-barred and invalid; the challenge succeeded.

Issues: Whether the valuation of the immovable property should have been referred to a Valuation Officer (DVO) under the third proviso to section 56(2)(x)(b) of the Income-tax Act, 1961 read with section 50C(2) of the Income-tax Act, 1961.

Analysis: The stamp valuation authority's value exceeded the consideration and that valuation was not the subject of any appeal, revision or reference before any authority, court or High Court. The conditions specified in section 50C(2) of the Income-tax Act, 1961 are therefore satisfied. The third proviso to section 56(2)(x)(b) of the Income-tax Act, 1961 permits the Assessing Officer to refer such disputed stamp duty valuation to a Valuation Officer and requires application, as far as may be, of the provisions specified for valuation references. The Assessing Officer and the appellate authority did not make such a reference despite the statutory conditions being met, and the assessee's valuation evidence was rejected as self-procured without independent contemporaneous support.

Conclusion: The matter is restored to the file of the Assessing Officer for de novo adjudication after obtaining a valuation report from a Valuation Officer as provided under the statute; the impugned order is set aside and the grounds are allowed for statistical purposes, which is in favour of the assessee.

Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 is leviable where the impugned addition has been made purely on the basis of estimate (estimated disallowance for bogus purchases).

Analysis: The impugned penalty was imposed after an addition based on estimated non-genuine purchases. Precedents establish that when additions are made purely on an estimate and not supported by concrete evidence of concealment or inaccurate particulars, penalty under section 271(1)(c) is not sustainable. The authorities relied upon apply the legal principle that estimate-based quantification of income, without specific evidence of deliberate concealment, does not justify imposing the statutory penalty. The statutory provisions involved include Section 271(1)(c) (penalty for concealment or furnishing inaccurate particulars), and the assessment steps under Section 147 and Section 143(3) which record that the quantum was determined by estimate.

Conclusion: Penalty under section 271(1)(c) of the Income-tax Act, 1961 is not leviable where the addition has been made solely on an estimate; decision is in favour of the assessee.

Issues: Whether the assessee's claim for credit of taxes paid in the United Kingdom on salary attributable to services rendered there should be examined afresh by the Assessing Officer under Article 24 of the India-UK tax treaty.

Analysis: The assessee produced the UK tax return and the assignment letter to support the claim that salary relating to services rendered in the United Kingdom had been offered to tax there. Without adjudicating the remaining questions concerning treaty residence and the substantive taxability of the salary income, the matter was restored to the Assessing Officer for verification of the claim for foreign tax credit and for examination of such further information as may be required. The grounds relating to the substantive treaty position were kept open, and the interest ground was treated as consequential.

Conclusion: The claim for foreign tax credit was remanded to the Assessing Officer for fresh examination, with relief granted to the assessee on that limited issue.

Ratio Decidendi: A claim for credit of foreign taxes, supported by prima facie documents, may be remitted to the Assessing Officer for verification where the substantive issue is not finally adjudicated.

Issues: Whether the addition on account of alleged bogus purchases could be restricted to 8% or whether the matter required fresh adjudication in view of later binding precedent.

Analysis: The dispute concerned an addition arising from purchases treated as non-genuine. The appellate authority had restricted the disallowance to 8% by following the Tribunal's earlier decision in the assessee's own case for a different assessment year. The Revenue relied on later judicial developments, including the stricter approach reflected in subsequent binding precedent, and contended that the earlier percentage-based estimation could not be applied mechanically without examining whether the facts for the relevant year were identical and whether the later legal position altered the outcome. The impugned order was found to have followed the earlier Tribunal direction without an independent reconsideration of the issue in the light of the later authorities.

Conclusion: The restriction of the addition to 8% was set aside and the issue was restored to the appellate authority for fresh adjudication in accordance with law after giving the assessee an opportunity of hearing.

Issues: (i) Whether the Assessing Officer's estimation of additional income at 7% (and the First Appellate Authority's reduction to 0.5%) of sales turnover is sustainable; (ii) Whether disallowance of indirect expenses and depreciation is sustainable where transactions are alleged to be bogus; (iii) Whether unsecured loans treated as unexplained cash credit under section 68 of the Income-tax Act, 1961 are liable to be added.

Issue (i): Whether estimation of additional income at specified percentages of sales turnover is sustainable.

Analysis: The assessment followed search and seizure material alleging back-to-back transactions using letter of credit facilities. The Assessing Officer rejected books u/s 145(3) and estimated income at 7% of turnover; the First Appellate Authority accepted books and estimated additional income at 0.5% relying on earlier coordinate-bench orders. The Tribunal examined (a) presence of documentary evidence of transactions and bank payments, (b) absence of any cash trail or specific evidence of introduction of cash in search records, (c) precedents of coordinate Benches addressing identical factual matrix, and (d) absence of rationale or industry basis for AO's 7% rate.

Conclusion: Estimation of additional income at 7% and at 0.5% of sales turnover is unsustainable; the additions based on such estimation are deleted in favour of the assessee.

Issue (ii): Whether disallowance of indirect expenses and depreciation is justified where the AO alleged transactions to be bogus.

Analysis: The AO disallowed indirect expenses and depreciation because he considered trading bogus. The appellate authority and the Tribunal found that transactions were recorded in audited books, payments were made through banking channels (LC and bill discounting), no specific defect in books was pointed out by AO, and AO did not dispute actual incurrence of expenses. Section 37 principles regarding illegality were considered in context of LC charges paid to banks and the absence of any finding that payments were penal or prohibited by law.

Conclusion: Disallowance of indirect expenses and depreciation is not justified; the deletion of such disallowances is upheld in favour of the assessee.

Issue (iii): Whether unsecured loans treated as unexplained cash credit under section 68 can be added to the income.

Analysis: The appellate authority examined identity and creditworthiness of lenders, bank routing of transactions, existence of advances by the assessee to lender parties, repayment pattern, and absence of any finding of cash introduction prior to loans. The Tribunal found AO did not adequately consider ledger evidence, repayments, and bank balances indicating genuineness.

Conclusion: Addition as unexplained cash credit under section 68 is not sustainable; deletion of the addition is upheld in favour of the assessee.

Final Conclusion: On the merits, additions based on percentage estimation of turnover, disallowance of indirect expenses and depreciation, and section 68 additions are deleted; Revenue's appeals are dismissed and the assessee's appeals are partly allowed.

Ratio Decidendi: In absence of tangible evidence of cash receipts or demonstrable defect in books of account, estimation of income by applying arbitrary percentage rates and additions under section 68 cannot be sustained; where transactions are recorded in audited books and payments flow through banking channels, related business expenses and depreciation are allowable.

Issues: (i) Whether the reassessment and additions under Sections 68 and 69C of the Income-tax Act, 1961 in respect of alleged penny scrip transactions and claimed long term capital gains are sustainable; (ii) Whether the order of the Learned CIT(A) is vitiated for violation of principles of natural justice by denying hearing or not considering requests for adjournment/abeyance.

Issue (i): Whether the reassessment and additions under Sections 68 and 69C of the Income-tax Act, 1961 are sustainable in respect of transactions in the alleged penny scrip where the assessee claimed exempt long term capital gains under Section 10(38).

Analysis: The Tribunal examined the materials on record including the purchase and sale dates and values, the information from the investigation wing regarding artificial price manipulation, the lack of documentary rebuttal by the assessee despite opportunities, and the circumstantial evidence pointing to rigged trading in the scrip. Reliance was placed on relevant judicial precedents addressing dubious penny scrip transactions and the principle that unexplained or sham transactions can be treated as unexplained investments. The Tribunal noted the assessee failed to substantiate genuineness of the transactions or provide supporting evidence to counter the Revenue's findings.

Conclusion: The additions under Section 68 and Section 69C of the Income-tax Act, 1961 are upheld. This conclusion is against the assessee.

Issue (ii): Whether the CIT(A)'s order is vitiated by denial of opportunity of hearing or by not keeping the proceedings in abeyance for exploring settlement under applicable schemes.

Analysis: The Tribunal reviewed the conduct of proceedings, recording that multiple opportunities were afforded to the assessee, that no representative appeared despite directions, and that the assessee did not furnish the requested or necessary material to substantiate its case or press for abeyance. The Tribunal found no persuasive material showing that the Learned CIT(A) declined a genuine request for hearing or that principles of natural justice were breached in a manner that prejudiced the assessee's right to be heard.

Conclusion: The challenge to the CIT(A)'s order on grounds of violation of natural justice and request for abeyance is rejected. This conclusion is against the assessee.

Final Conclusion: On the merits of the substantive transaction issues and on procedural grounds, the Tribunal finds no infirmity in the order of the Learned CIT(A) and dismisses the assessee's appeal.

Ratio Decidendi: Where an assessee transacts in an alleged penny scrip and fails to substantiate the genuineness of unusually large gains or to rebut circumstantial evidence of price manipulation, additions under Sections 68 and 69C of the Income-tax Act, 1961 may be sustained; absence of a meaningful rebuttal or failure to avail opportunities to be heard negates claims of breach of natural justice.

Issues: Whether the final assessment orders dated 31.03.2025 and 03.04.2025 (passed pursuant to directions of the Dispute Resolution Panel and TPO after the Tribunal's remand) are barred by limitation under the time limits prescribed by Section 153(2A) and Section 153(3) of the Income-tax Act, 1961.

Analysis: The timeline shows the Tribunal rendered its order on 28.07.2022 after which the remand/second round proceedings commenced. Section 153(2A) prescribes the limitation for completion of a fresh assessment where an appellate order sets aside or cancels the earlier assessment and remits for fresh assessment; Section 153(3) applies to consequential orders but is subject to Section 153(2A). The directions by the Dispute Resolution Panel were issued on 25.03.2025 and the consequential orders by the TPO and Assessing Officer were passed on 28.03.2025, 31.03.2025 and 03.04.2025. Those dates fall beyond the period calculated under the proviso to Section 153(3)/Section 153(2A) measured from the Tribunal's order in July 2022. Established authorities hold that where remand requires a fresh assessment of an issue, the time limit in Section 153(2A) applies and failure to complete assessment within that period renders the proceedings time-barred. Applying that legal framework to the facts, the DRP/TPO/AO actions giving effect to the remand were completed after expiry of the statutory period.

Conclusion: The final assessment orders dated 31.03.2025 and 03.04.2025 are time-barred and are quashed; the appeal is allowed in favour of the assessee.

Issues: (i) Whether receipts from software licences and software maintenance services were taxable in India as royalty / fee for included services under the India-Canada DTAA. (ii) Whether the assessee had a permanent establishment in India and whether the receipts were taxable under section 44BB of the Income-tax Act, 1961.

Issue (i): Whether receipts from software licences and software maintenance services were taxable in India as royalty / fee for included services under the India-Canada DTAA.

Analysis: The receipts had already been examined in the assessee's own earlier years on identical facts, and the coordinate bench had deleted the additions. The present year involved the same nature of software licence receipts and maintenance charges. The Tribunal found no material change in the factual matrix. It also held that the characterization of the receipts as royalty or fee for included services did not survive once the income was treated as business income not chargeable in India in the absence of a permanent establishment.

Conclusion: The receipts were not taxable in India as royalty or fee for included services.

Issue (ii): Whether the assessee had a permanent establishment in India and whether the receipts were taxable under section 44BB of the Income-tax Act, 1961.

Analysis: The Tribunal held that the revenue had not discharged the burden of establishing the existence of a permanent establishment in India. The finding of a permanent establishment was based on an unsustainable assumption that the software licence constituted equipment royalty. The Tribunal distinguished the authority relied upon by the revenue on facts, noting that the assessee's software was off-the-shelf software and that the material on record did not show any PE in India. In the absence of a PE, the assessee's business income could not be brought to tax under section 44BB, and the treaty's more beneficial provisions applied.

Conclusion: The assessee did not have a permanent establishment in India, and the receipts were not taxable under section 44BB.

Final Conclusion: The assessment additions were unsustainable, the assessee succeeded on the core issues, and the appeal was allowed.

Ratio Decidendi: For a non-resident covered by a beneficial tax treaty, business receipts are not taxable in India under section 44BB in the absence of a proved permanent establishment, and where that core jurisdictional requirement fails, characterization of the receipts as royalty or fee for included services becomes academic.

Issues: (i) Whether the Transfer Pricing Officer's arm's length price adjustment in respect of interest on non-convertible debentures (NCDs) is sustainable and whether the specific NCD issued at 13.20% is at arm's length; (ii) Whether the additional claim of deduction of Rs. 7,50,05,325/- for incentives paid to customers is admissible though not claimed in the original return; (iii) Whether correct interest under law is payable under section 244A on any refund; (iv) Whether initiation of penalty proceedings under section 270A is maintainable at this stage.

Issue (i): Whether the TPO's ALP adjustment on interest paid on NCDs (including the instrument at 13.20%) is justified and what benchmarking method should be applied.

Analysis: The TPO applied filters accepting only instruments issued in FY 2017-18 and arrived at an ALP of 12.13% based on selected comparables, proposing an overall adjustment. The DRP deleted one of the adjustments but sustained others. The assessee had submitted an alternative internal CUP benchmarking and an external CUP benchmarking before the TPO; the DRP had directed the TPO to examine the internal CUP analysis and pass a speaking order. The record shows the internal CUP analysis was filed before the TPO and was considered in a later year's order for the assessee. Two opening NCDs do not meet the TPO's own filter and therefore fall outside the ambit of adjustment. For the remaining disputed instrument at 13.20%, the Tribunal found that the TPO did not comply with DRP's direction and that the internal CUP method must be examined as the most appropriate method for that instrument.

Conclusion: The arm's length adjustment is not sustained in respect of the two opening NCDs; the TPO is directed to benchmark the Rs.4,00,00,00,000 NCD at 13.20% using the internal CUP as the most appropriate method. Issue decided partly in favour of the assessee.

Issue (ii): Whether the assessee's additional claim of deduction of Rs.7,50,05,325/- for incentives paid to customers, made during assessment proceedings though not in the original return, should be admitted and adjudicated.

Analysis: The assessee, an NBFC, created a provision and subsequently incurred actual expenditure on customer incentives. The AO rejected the fresh claim relying on precedent that claims not in the return are not entertainable. The DRP directed the AO to consider the claim and pass a speaking order. The Tribunal noted that appellate authorities may entertain a fresh claim for quantification even if not in the return and that the AO's action contradicted the DRP's binding direction.

Conclusion: The fresh claim is admitted for the limited purpose of quantification and the matter is restored to the AO for de novo adjudication on merits. Issue decided in favour of the assessee for statistical purposes.

Issue (iii): Whether correct interest under law is payable under section 244A on any refund.

Analysis: The assessee sought correct interest under the statutory provision governing interest on refunds. No factual dispute prevents recalculation of interest by the AO.

Conclusion: The AO is directed to grant correct interest under the statute as per law. Issue decided in favour of the assessee.

Issue (iv): Whether initiation of penalty under section 270A is ripe for adjudication.

Analysis: The challenge to initiation of penalty proceedings was raised at this stage; the Tribunal considered it premature to adjudicate penalty initiation in the present appeal.

Conclusion: Ground challenging initiation of penalty under section 270A is dismissed as premature. Issue decided against the assessee.

Final Conclusion: The Tribunal has partly allowed the assessee's contentions: transfer pricing adjustments are modified directing reconsideration for one instrument and deletion for two instruments, the fresh deduction claim is admitted and remitted for quantification, interest on refund is to be granted correctly, and the penalty challenge is dismissed as premature.

Ratio Decidendi: Where the Dispute Resolution Panel directs consideration of an alternative transfer pricing methodology filed by the assessee, the TPO must examine that methodology and pass a speaking order; opening instruments excluded by a TPO's own filter cannot be subjected to adjustment, and appellate authorities may admit and remit fresh claims for quantification even if not included in the original return.