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.

Issues: Whether deduction for a political contribution under Section 80GGC was allowable where the recipient political party had failed to file statutory contribution reports and the donation was found to form part of a bogus-donation arrangement.

Analysis: The recipient party had not filed contribution reports from FY 2013-14 and consequently did not fulfil the conditions associated with exemption under Section 13A. Applying the coordinate-bench decision concerning donations to the same party in the same year, the material regarding its sham donation mechanism established that the claimed contribution was not genuine. Banking-mode payment alone did not establish entitlement to the deduction.

Conclusion: The deduction under Section 80GGC for the contribution was not allowable; the issue was decided against the assessee.

Issues: (i) Whether transfer-pricing adjustments for intra-group services and purchase of fixed assets were sustainable; (ii) Whether the assessee could raise an additional claim for treaty-based relief in respect of dividend distribution tax without filing a revised return.

Issue (i): Whether transfer-pricing adjustments for intra-group services and purchase of fixed assets were sustainable.

Analysis: The assessee had benchmarked closely linked international transactions by an aggregated Transactional Net Margin Method approach, which had been accepted for the other transactions. The earlier co-ordinate decision on identical facts found that selective segregation of intra-group services was unsustainable, that documentary evidence established receipt of services and tangible benefits, and that an arm's length price could not be determined at nil under the Comparable Uncontrolled Price Method without a comparable uncontrolled transaction. The preceding decision also covered the fixed-assets adjustment.

Conclusion: The transfer-pricing adjustments concerning intra-group services and purchase of fixed assets were deleted in favour of the assessee.

Issue (ii): Whether the assessee could raise an additional claim for treaty-based relief in respect of dividend distribution tax without filing a revised return.

Analysis: A revised return is not mandatory for entertaining a new claim in first or second appellate proceedings. The appellate authorities retain jurisdiction to admit an additional ground necessary for determining the correct tax liability. The substantive treaty question concerning dividend distribution tax was subject to pending consideration by the Supreme Court and was therefore not finally determined.

Conclusion: The additional treaty-relief claim was admitted in favour of the assessee and was directed to be adjudicated afresh after the final determination of the pending legal issue.

Final Conclusion: The assessee obtained deletion of the transfer-pricing additions, while its claim for treaty-based dividend distribution tax relief remains for fresh adjudication in accordance with the final ruling on that legal question.

Ratio Decidendi: Where an aggregated transfer-pricing methodology for closely linked transactions is accepted, a particular transaction cannot be selectively assigned a nil arm's length price under the Comparable Uncontrolled Price Method without reliable comparable data; an additional claim may be raised before appellate authorities without a revised return to determine correct tax liability.

Issues: (i) Whether the same receipt can be assessed substantively and protectively in the hands of the same assessee; (ii) Whether the assessee had a permanent establishment in India so as to tax the receipts as business income; (iii) Whether the receipts for services rendered under the post-1 January 2020 agreement qualify as fees for technical services under Article 13(4) of the India-UK DTAA.

Issue (i): Whether the same receipt can be assessed substantively and protectively in the hands of the same assessee.

Analysis: Protective assessment is confined to cases of uncertainty regarding the person in whose hands an income is taxable. Characterising an identical receipt alternatively as business income and fees for technical services does not justify substantive and protective assessments against the same taxpayer.

Conclusion: The same receipt cannot be assessed both substantively and protectively in the hands of the assessee. The Revenue must adopt one method of assessment.

Issue (ii): Whether the assessee had a permanent establishment in India so as to tax the receipts as business income.

Analysis: The directions treating a permanent establishment as existing rested on facts and agreements pertaining to earlier years, whereas the governing agreement had changed with effect from 1 January 2020. The services were rendered remotely from outside India and no employee of the assessee visited India under the new arrangement. No adequate current-year factual examination supported a permanent establishment.

Conclusion: The assessee had no permanent establishment in India; the receipts cannot be taxed as business income under Section 44DA of the Income-tax Act, 1961. The conclusion is in favour of the assessee.

Issue (iii): Whether the receipts for services rendered under the post-1 January 2020 agreement qualify as fees for technical services under Article 13(4) of the India-UK DTAA.

Analysis: Fees for technical services under the treaty require that technical knowledge, experience, skill, know-how, process, or a technical plan or design be made available so that the recipient can independently use it in future. The authorities had not adequately examined the current service agreement, the corresponding project agreement, the complete scope of services, or whether BECI was enabled to perform the services independently on a continuing basis. The tax treatment of the receipts in the United Kingdom also required factual verification.

Conclusion: The question whether the receipts are taxable as fees for technical services is remanded to the Assessing Officer/DRP for fresh examination after affording opportunity to the assessee.

Final Conclusion: The substantive assessment as business income is unsustainable, and the alternative treaty characterisation requires a fresh fact-based determination.

Ratio Decidendi: Protective and substantive assessments cannot be imposed on the same receipt in the hands of the same taxpayer; treaty taxation of technical-service receipts depends upon a factual finding that the recipient is enabled to independently use the technical knowledge or skills provided.

Issues: (i) Whether receipts from Indian legal engagements attributable to partners resident outside the United Kingdom could be taxed as fees for technical services; (ii) Whether credit of claimed advance tax and tax deducted at source was to be granted.

Issue (i): Whether receipts from Indian legal engagements attributable to partners resident outside the United Kingdom could be taxed as fees for technical services.

Analysis: A United Kingdom partnership is tax transparent, and treaty eligibility for its income depends upon the residence and taxability of each partner. Legal and other professional services are statutorily distinct from managerial, technical or consultancy services constituting fees for technical services. The India-United Kingdom treaty also excludes professional services of lawyers and similar professionals from fees for technical services. Taxability of the profit shares of non-United Kingdom resident partners must therefore be examined under the applicable treaty with their respective countries of residence.

Conclusion: Receipts for legal services attributable to non-United Kingdom resident partners cannot be assessed as fees for technical services under section 9(1)(vii); the addition was deleted and the partners' treaty taxability was restored for examination by the Assessing Officer. This is in favour of the assessee.

Issue (ii): Whether credit of claimed advance tax and tax deducted at source was to be granted.

Analysis: The claimed advance-tax and tax-deducted-at-source credits require verification against the records.

Conclusion: The credit claims were restored to the Assessing Officer for verification and allowance in accordance with law. This is in favour of the assessee.

Final Conclusion: The assessment cannot sustain taxation of the legal-service receipts as fees for technical services, and the tax-credit claims require fresh verification and consequential allowance.

Ratio Decidendi: In a tax-transparent partnership, income attributable to partners is subject to treaty analysis by reference to each partner's residence, and legal professional services do not constitute fees for technical services.

Issues: (i) Whether exemption for taxable services supplied to an SEZ unit for authorised operations can be denied solely for non-production of Form A-2; (ii) Whether late fee for delayed ST-3 returns may exceed the statutory ceiling.

Issue (i): Whether exemption for taxable services supplied to an SEZ unit for authorised operations can be denied solely for non-production of Form A-2.

Analysis: Section 26 of the Special Economic Zones Act confers substantive exemption for eligible supplies to an SEZ unit for authorised operations. Conditions regulating that exemption must arise under the SEZ statutory framework; a procedural requirement imposed through notifications issued under the Finance Act cannot curtail the statutory benefit. Section 51 gives the special enactment overriding effect. The services were undisputedly supplied to an SEZ unit and used for authorised operations, and no independent ineligibility was found.

Conclusion: Exemption cannot be denied merely because Form A-2 for the relevant financial year was not produced. The service-tax demand, interest and penalty are set aside in favour of the assessee.

Issue (ii): Whether late fee for delayed ST-3 returns may exceed the statutory ceiling.

Analysis: Section 70 of the Finance Act, 1994 limits late fee for delayed filing of ST-3 returns. Any amount levied beyond the ceiling applicable to the relevant period is impermissible and requires re-quantification.

Conclusion: The late fee must be confined to the legally permissible statutory limit, in favour of the assessee.

Final Conclusion: The SEZ exemption remains available where services were rendered to an eligible SEZ unit for authorised operations notwithstanding non-compliance with Form A-2, and any late fee must remain within the statutory cap.

Ratio Decidendi: A substantive SEZ exemption for services used in authorised operations cannot be defeated by a procedural Form A-2 requirement imposed outside the SEZ statutory framework; late fee is enforceable only up to the statutory maximum.

Issues: Whether an appeal against the CESTAT's determination of taxability of a service is maintainable before the High Court under Section 35G of the Central Excise Act, 1944.

Analysis: A determination of the taxability of a particular service falls within the expression "determination of any question having a relation to the rate of duty of excise". The applicable appellate forum for such determination is the Supreme Court under Section 35L of the Central Excise Act, 1944. The contrary authority did not decide the question of High Court maintainability, and no basis was established for departing from the binding Division Bench view.

Conclusion: The appeal was not maintainable before the High Court; the appropriate statutory remedy lies before the Supreme Court under Section 35L of the Central Excise Act, 1944.

Issues: (i) Whether additional input tax credit arising after implementation of GST was required to be passed on to the homebuyers under Section 171(1). (ii) Whether free structural upgrades and fittings constituted passing on of input tax credit benefit by commensurate reduction in prices. (iii) Whether the respondent remained liable to pay the quantified profiteered amount, including GST, to eligible homebuyers. (iv) Whether interest was payable on the profiteered amount and at what rate. (v) Whether penalty under Section 171(3A) was leviable.

Issue (i): Whether additional input tax credit arising after implementation of GST was required to be passed on to the homebuyers under Section 171(1).

Analysis: The respondent was ineligible for input tax credit in the pre-GST period but became eligible for GST input tax credit on project inputs and input services after 1 July 2017. The entitlement and the DGAP computation of additional credit were not disputed. Section 171(1) requires the resulting benefit to be passed to recipients through commensurate price reduction.

Conclusion: The additional input tax credit benefit was required to be passed on to the eligible homebuyers. The issue is decided against the assessee.

Issue (ii): Whether free structural upgrades and fittings constituted passing on of input tax credit benefit by commensurate reduction in prices.

Analysis: Section 171(1) mandates that the benefit reach recipients by commensurate reduction in prices. The statutory mode cannot be substituted by free material, additional works, fittings, or other collateral benefits, irrespective of their claimed value. This requirement applies equally to real-estate supplies and is not confined to FMCG transactions.

Conclusion: Free structural upgrades and fittings do not constitute passing on of input tax credit benefit by commensurate reduction in prices. The issue is decided against the assessee.

Issue (iii): Whether the respondent remained liable to pay the quantified profiteered amount, including GST, to eligible homebuyers.

Analysis: Since the claimed additional works could not discharge the statutory obligation, the undisputed DGAP computation remained payable. As the consideration collected from homebuyers included GST, the benefit not passed on also included the GST collected on the additional realisation.

Conclusion: The respondent is liable to pass on Rs. 8,18,899, comprising Rs. 7,31,160 as profiteered amount and Rs. 87,739 as GST, to the eligible homebuyers. The issue is decided against the assessee.

Issue (iv): Whether interest was payable on the profiteered amount and at what rate.

Analysis: Rule 133(3)(b) requires return of the amount not passed on with interest at 18% from the date of collection of the higher amount until return or recovery.

Conclusion: Interest is payable at 18% per annum from collection of the higher amount until actual payment. The issue is decided against the assessee.

Issue (v): Whether penalty under Section 171(3A) was leviable.

Analysis: The relevant project construction and the conduct giving rise to profiteering had substantially concluded before Section 171(3A) came into force on 1 January 2020. In these circumstances, imposition of penalty was unwarranted.

Conclusion: No penalty under Section 171(3A) is leviable. The issue is decided in favour of the assessee.

Final Conclusion: The input tax credit benefit must be transmitted to each eligible recipient through price reduction; non-price benefits cannot replace that statutory requirement. The quantified amount, with GST and statutory interest, remains recoverable from the respondent, without penalty.

Ratio Decidendi: Where Section 171(1) prescribes commensurate reduction in price as the means of passing on input tax credit benefit, a supplier cannot substitute structural works, free fittings, or other non-price benefits for that statutory obligation.

Issues: Whether a finally assessed transaction value of imported aluminium scrap can subsequently be rejected and reassessed solely on Directorate of Valuation guidelines based on London Metal Exchange prices.

Analysis: The Bills of Entry had been assessed after scrutiny, and in some instances the value had already been enhanced. The Department had not challenged those assessments. Rejection of the declared transaction value under the valuation framework requires objectively reasonable doubt supported by recorded reasons and cogent material showing that the declared value is incorrect. Directorate of Valuation guidelines lack statutory force and cannot override the Customs Valuation Rules. Reliance only on benchmark data or London Metal Exchange-based guidelines, without independent evidence discrediting the supplier invoices or transaction value, could not justify a subsequent reassessment.

Conclusion: The declared transaction value could not be rejected or reassessed on the sole basis of the Directorate of Valuation guidelines; the demand, interest and penalty founded on that reassessment were unsustainable, in favour of the assessee.