Issues: (i) Arm's-length mark-up for technical and information technology-enabled services supplied to associated enterprises; (ii) Deductibility of actuarially valued pension provision; (iii) Disallowance of expenditure relating to exempt income under section 14A and Rule 8D; (iv) Depreciation on leased assets; (v) Valuation of banking securities, including AFS, HFT and HTM securities, and amortisation of premium; (vi) Deduction for provision concerning standard assets under section 36(1)(viia); (vii) Taxability of interest on non-performing assets and non-performing investments; (viii) Deductibility of contribution to the retired employees medical benefit scheme; (ix) Taxability in India of foreign-branch income; (x) Taxability of recoveries from bad debts written off in earlier years; (xi) Deduction for windmill income under section 80-IA; (xii) Disallowance under section 40(a)(ia) for short deduction of tax at source; (xiii) Deduction under section 80LA; (xiv) Disallowance of interest expenditure and delayed-payment compensation; (xv) Additional deduction under section 36(1)(viii); (xvi) Quantification of deduction under section 36(1)(viia); (xvii) Deduction for bad debts relating to non-rural advances; (xviii) Deductibility of provisions for other employee benefits and privilege-leave encashment; (xix) Allowability of broken-period interest and staff-welfare expenditure; (xx) Taxability of interest on securities and deferred-payment guarantee commission; (xxi) Deductibility of other long-term employee-benefit liabilities.

Issue (i): Arm's-length mark-up for technical and information technology-enabled services supplied to associated enterprises.

Analysis: The Safe Harbour Rules prescribing a 20% mark-up were inapplicable to the relevant year and could not be mechanically adopted. Nevertheless, services rendered through deputed personnel involved value addition and required Arm's Length Price remuneration. In the absence of reliable contemporaneous comparables and owing to the elapsed period, a 10% mark-up on relevant costs was considered reasonable.

Conclusion: The transfer-pricing adjustment shall be recomputed by applying a 10% mark-up on relevant costs and granting credit for amounts already recovered. This issue is partly in favour of the assessee.

Issue (ii): Deductibility of actuarially valued pension provision.

Analysis: Pension obligations arose from employee services already rendered, while actuarial valuation only quantified their present value. The provision therefore represented an Accrued Liability rather than a contingent liability.

Conclusion: The actuarially valued pension provision is allowable as a deduction. This issue is in favour of the assessee.

Issue (iii): Disallowance of expenditure relating to exempt income under section 14A and Rule 8D.

Analysis: The interest component was not sustainable on the applicable facts. Recomputation must be confined to investments which actually yielded exempt income, with credit for the voluntary disallowance, and cannot exceed exempt income.

Conclusion: The disallowance is restored for limited recomputation on the stated basis. This issue is in favour of the assessee to that extent.

Issue (iv): Depreciation on leased assets.

Analysis: The leasing transactions were found to be financing arrangements in substance, with the lessees being the real owners and the assessee only a nominal owner.

Conclusion: Depreciation on the leased assets is not allowable. This issue is against the assessee.

Issue (v): Valuation of banking securities, including AFS, HFT and HTM securities, and amortisation of premium.

Analysis: Securities held in banking operations form part of circulating capital. Regulatory classification does not conclusively determine their tax character. A consistently followed recognised valuation method reflects Real Income and permits valuation at cost or market value, whichever is lower.

Conclusion: Depreciation, loss on valuation and amortisation claims relating to the securities are allowable. This issue is in favour of the assessee.

Issue (vi): Deduction for provision concerning standard assets under section 36(1)(viia).

Analysis: The expression concerning bad and doubtful debts is not confined to assets classified as non-performing under regulatory norms. Regulatory classifications cannot restrict the statutory deduction, though the provision created and statutory limits require verification.

Conclusion: Inclusion of standard assets does not by itself bar deduction; the issue is restored solely for quantification. This issue is in favour of the assessee on principle.

Issue (vii): Taxability of interest on non-performing assets and non-performing investments.

Analysis: Where recovery is uncertain and interest is not recognised under binding prudential norms, notional interest has not accrued in real terms. The Real Income principle applies notwithstanding the mercantile accounting method.

Conclusion: Interest on non-performing assets and non-performing investments cannot be taxed until realisation. This issue is in favour of the assessee.

Issue (viii): Deductibility of contribution to the retired employees medical benefit scheme.

Analysis: The actual contribution formed part of a structured employee-welfare scheme and had a direct nexus with workforce morale, industrial harmony and business operations. It was supported by Business Expediency and was not merely a prohibited fund contribution.

Conclusion: The contribution is allowable as business expenditure. This issue is in favour of the assessee.

Issue (ix): Taxability in India of foreign-branch income.

Analysis: Income which may be taxed in the other contracting jurisdiction remains includible in Indian total income under the statutory notification framework, with double-taxation relief available in accordance with the applicable treaty method.

Conclusion: Foreign-branch income is taxable in India. This issue is against the assessee.

Issue (x): Taxability of recoveries from bad debts written off in earlier years.

Analysis: Section 41(4) applies only where a corresponding deduction for the written-off debt had been allowed earlier. Whether such deduction was in fact allowed requires factual verification.

Conclusion: The issue is restored for verification; recoveries are taxable only to the extent of prior allowed deductions. This issue is in favour of the assessee on the governing principle.

Issue (xi): Deduction for windmill income under section 80-IA.

Analysis: Eligibility depends upon verification of the statutory conditions, including the nature of the undertaking, power generation and computation of eligible profits.

Conclusion: The claim is restored for verification and recomputation in accordance with law. No final entitlement is determined.

Issue (xii): Disallowance under section 40(a)(ia) for short deduction of tax at source.

Analysis: A claim raised through a note cannot be rejected solely on that basis before appellate authorities. The nature of payments, the extent of deduction and the applicability of the provision to short deduction require examination.

Conclusion: The issue is restored for factual and legal examination. No final entitlement is determined.

Issue (xiii): Deduction under section 80LA.

Analysis: The claim lacked material showing eligibility, the nature of qualifying income and computation of the deduction.

Conclusion: The deduction claim is not entertained. This issue is against the assessee.

Issue (xiv): Disallowance of interest expenditure and delayed-payment compensation.

Analysis: The allowability of the interest claim and the alleged compensatory character of delayed-payment compensation depend upon the relevant facts, supporting documentation and the statutory basis of the claim.

Conclusion: Both matters are restored for verification and fresh determination in accordance with law. No final entitlement is determined.

Issue (xv): Additional deduction under section 36(1)(viii).

Analysis: No complete and verifiable computation established attribution of non-interest income to the eligible long-term finance business or quantified the resulting additional deduction. The existence of a special reserve alone does not establish entitlement.

Conclusion: The additional deduction claim is disallowed. This issue is against the assessee.

Issue (xvi): Quantification of deduction under section 36(1)(viia).

Analysis: Quantification requires verification of the actual provision created, total income before the specified deductions, rural advances and the applicable statutory ceilings.

Conclusion: The issue is restored for recomputation of the allowable deduction. No final quantum is determined.

Issue (xvii): Deduction for bad debts relating to non-rural advances.

Analysis: Deductions under sections 36(1)(vii) and 36(1)(viia) operate in distinct fields, subject to conditions and prevention of Double Deduction. A deduction for actual write-off of non-rural advances is not automatically barred, but requires factual verification.

Conclusion: The claim is restored for verification and fresh adjudication. This issue is in favour of the assessee on the legal principle.

Issue (xviii): Deductibility of provisions for other employee benefits and privilege-leave encashment.

Analysis: Provisions for earned leave-related benefits, other than leave encashment, represented scientifically determined present obligations from past service and constituted Accrued Liability. Privilege-leave encashment is governed by the Actual Payment Basis mandated by section 43B(f).

Conclusion: Other employee-benefit provisions are allowable, while privilege-leave encashment is allowable only in the year of actual payment subject to statutory conditions. This issue is partly in favour of the assessee.

Issue (xix): Allowability of broken-period interest and staff-welfare expenditure.

Analysis: Broken-period interest paid on purchase of securities is Revenue Expenditure where corresponding receipt is taxed as business income; disallowance would violate the Real Income and Matching Principle. Staff-welfare expenditure having a direct business nexus is incurred wholly and exclusively for business purposes.

Conclusion: Broken-period interest and staff-welfare expenditure are allowable. This issue is in favour of the assessee.

Issue (xx): Taxability of interest on securities and deferred-payment guarantee commission.

Analysis: Interest on securities was accepted on due basis because of binding earlier determinations and Judicial Discipline, notwithstanding the accrual-based accounting treatment. Guarantee commission received upon issue of a non-refundable deferred guarantee accrues at that time and cannot be spread over the guarantee period.

Conclusion: Interest on securities remains taxable on due basis, whereas deferred-payment guarantee commission is taxable in the year of receipt. The former is in favour of the assessee and the latter is against the assessee.

Issue (xxi): Deductibility of other long-term employee-benefit liabilities.

Analysis: Allowability of bonus and other employee liabilities depends upon actual payment by the statutory due date; leave encashment additionally requires compliance with the specific actual-payment requirement. Verification is necessary.

Conclusion: The issue is restored for limited verification under the Actual Payment Basis. No final entitlement is determined.

Final Conclusion: The assessment is to be recomputed by giving effect to the allowed claims and the limited verification directions, while the disallowed claims remain governed by the findings recorded above.

Issues: Whether rebate under section 87A was available against tax payable on short-term capital gains chargeable at special rates under section 111A.

Analysis: The statutory rebate applied to tax computed on total income and, for the applicable period, neither section 87A nor section 111A contained an express exclusion for tax arising from short-term capital gains. The subsequent restriction introduced by the Finance Act, 2025 was prospective and could not govern the relevant claim. The automated denial of rebate could not override the statutory entitlement.

Conclusion: Rebate under section 87A was available in respect of tax payable on short-term capital gains under section 111A. The issue was decided in favour of the assessee.

Issues: Whether a public charitable society whose members are not beneficiaries is taxable at the maximum marginal rate under Section 167B or at the normal rate applicable to an association of persons.

Analysis: Section 167B applies where the individual shares of members of an association of persons or body of individuals are indeterminate or unknown. A public charitable body operates for the benefit of the public at large, and its members have no entitlement to a share of its income. The statutory scheme and the applicable clarification therefore do not support applying the maximum marginal rate merely because member shares are not specified.

Conclusion: Section 167B is inapplicable. The assessee's income is taxable at the normal rate applicable to an association of persons and not at the maximum marginal rate.

Issues: (i) Whether addition for alleged understatement of rental income was sustainable; (ii) Whether disallowance of salary paid to a family member for services rendered in the business was sustainable; (iii) Whether interest paid at 18% on unsecured loans was allowable as business expenditure.

Issue (i): Whether addition for alleged understatement of rental income was sustainable.

Analysis: The rental addition was based on an estimated market rent derived from a comparable commercial property situated in a different city, without credible evidence of higher rent for similar premises in the relevant locality. The rent actually charged exceeded the applicable standard rent and was consistently disclosed.

Conclusion: The rental-income addition was deleted in favour of the assessee.

Issue (ii): Whether disallowance of salary paid to a family member for services rendered in the business was sustainable.

Analysis: The salary recipient performed business functions over a sustained period, including operational and banking work. The expenditure had not been disallowed in earlier years, the business results were increasing, and the salary was offered to tax by the recipient. These circumstances established that the payment was a genuine business expenditure.

Conclusion: The salary disallowance was deleted in favour of the assessee.

Issue (iii): Whether interest paid at 18% on unsecured loans was allowable as business expenditure.

Analysis: The effective cost of secured bank borrowing included ancillary charges and was substantially higher than the stated bank interest rate. Unsecured loans carried greater commercial flexibility, shorter repayment cycles and ordinarily attracted a higher rate than secured borrowings. The 18% interest payment was incurred in the ordinary course of business and was commercially expedient.

Conclusion: The interest disallowance was deleted in favour of the assessee.

Final Conclusion: The assessed rental, salary and interest additions were unsustainable and stood deleted.

Ratio Decidendi: Business expenditure and rental income cannot be adjusted on unsupported estimates where the record establishes the reasonableness, genuineness and commercial expediency of the disclosed transactions.

Issues: Whether the provisional freezing of a bank account under Section 110(5) of the Customs Act, 1962 could continue after expiry of the maximum statutory period notwithstanding issuance and pendency of a show cause notice under Section 124.

Analysis: Section 110(5) permits provisional attachment of a bank account for a period not exceeding six months, with a written extension by the competent Commissioner for a further period not exceeding six months, communicated before expiry of the original period. The statutory scheme consequently fixes twelve months as the outer limit for provisional attachment. Issuance of a show cause notice under Section 124 and pendency of adjudication do not enlarge or override that express temporal limit. An attachment that has expired by operation of the statute cannot be continued through administrative action.

Conclusion: The bank-account attachment had ceased to operate by efflux of the maximum statutory period and could not be continued merely because adjudication proceedings were pending.

Issues: Whether the Designated Committee validly determined the amount payable under the Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019 without verifying the assessee's disclosed payments and supporting records.

Analysis: Section 124(1)(ii) of the Finance (No. 2) Act, 2019 grants relief of 50% where tax dues exceed Rs. 50 lakh, while the proviso excludes a refund. Section 126 of that Act read with Rule 6 of the Sabka Vishwas (Legacy Dispute Resolution Scheme) Rules, 2019 requires the Designated Committee to verify departmental records, the declaration, and supporting material before determining the payable amount. Two Forms SVLDRS-3 issued on the same date determined materially different amounts, and the required verification of documentary evidence was absent.

Conclusion: The Forms SVLDRS-3 were invalid for want of the mandatory verification and were set aside; the Designated Committee must make a fresh determination after verifying the complete disclosure and documentary evidence.

Issues: Whether a composite show-cause notice covering several financial years or tax periods is permissible under the Central Goods and Services Tax Act, 2017.

Analysis: The GST framework treats liability, returns, assessment, and recovery as referable to distinct tax periods and financial years. The statutory limitation for determination and recovery runs independently for each relevant financial year. Combining multiple years with separate due dates and limitation periods in one notice is inconsistent with this year-wise structure and impairs the taxpayer's ability to respond to each period separately. The dismissal in limine of a challenge to a contrary High Court view did not attract the doctrine of merger. Authorities within the Court's territorial jurisdiction were bound by the Court's earlier decisions holding against such consolidation.

Conclusion: A composite show-cause notice consolidating multiple financial years or tax periods is not permissible; the issue is decided in favour of the assessee.

Issues: (i) Whether a company incorporated as an unlisted public limited company may be treated as a private company under Section 179(1) of the Income-tax Act, 1961 merely because a director held substantial shareholding and the shares were not offered to the public; (ii) Whether the former director could be made personally liable for unrecovered tax dues without findings that the non-recovery was attributable to his gross neglect, misfeasance or breach of duty.

Issue (i): Whether a company incorporated as an unlisted public limited company may be treated as a private company under Section 179(1) of the Income-tax Act, 1961 merely because a director held substantial shareholding and the shares were not offered to the public.

Analysis: A company's public or private character is determined by its memorandum and articles of association and its statutory incorporation, not by concentration of shareholding or the fact that its shares are unlisted. Lifting the corporate veil to extend Section 179 to a public company requires stringent, exceptional circumstances, such as use of the company as a conduit to siphon income or create undisclosed assets for directors. The material did not establish that the assessee had diverted company funds or used its corporate structure to defraud the Revenue.

Conclusion: The company could not be treated as a private company merely on account of the assessee's substantial shareholding; this issue is in favour of the assessee.

Issue (ii): Whether the former director could be made personally liable for unrecovered tax dues without findings that the non-recovery was attributable to his gross neglect, misfeasance or breach of duty.

Analysis: Section 179(1) imposes liability only where tax dues of a private company remain unrecovered and the director fails to establish that such non-recovery was not attributable to gross neglect, misfeasance or breach of duty in relation to company affairs. Once the director provides an explanation, the authority must consider it and record findings linking the director's conduct to the failure of recovery. The assessee had placed material showing that his directorship was brief, that he did not manage the company or operate its accounts, and that subsequent transactions concerning its assets occurred after his resignation. The authority neither addressed this material nor recorded findings of siphoning of funds or of a causal connection between the assessee's conduct and non-recovery. Reliance on another director's statement concerning accommodation entries without putting that statement to the assessee also breached principles of natural justice.

Conclusion: In the absence of findings establishing that non-recovery was attributable to the assessee's gross neglect, misfeasance or breach of duty, liability under Section 179(1) could not be imposed; this issue is in favour of the assessee.

Final Conclusion: Section 179(1) cannot be invoked against a director of an incorporated public company on shareholding concentration alone, and personal recovery requires a reasoned finding connecting the director's conduct with the company's unrecovered tax dues.

Ratio Decidendi: Personal liability under Section 179(1) requires satisfaction of its statutory preconditions, including a finding that unrecovered tax is attributable to the director's gross neglect, misfeasance or breach of duty; corporate veil principles cannot convert a public company into a private company solely because of concentrated shareholding.

Issues: (i) Whether penalty for failure to deduct tax on rent paid to a Government company was sustainable despite the assessee's bona fide belief that the payment was exempt from deduction of tax at source; (ii) Whether penalty for failure to collect tax at source on scrap generated during construction activity was sustainable despite the assessee's bona fide belief that such scrap was outside the tax-collection provisions.

Issue (i): Whether penalty for failure to deduct tax on rent paid to a Government company was sustainable despite the assessee's bona fide belief that the payment was exempt from deduction of tax at source.

Analysis: The entire share capital of the recipient company was substantially held by the Government. Its character as an instrumentality of the State under Article 12 supported the assessee's bona fide understanding that payment to it was covered by the exclusion relied upon. This bona fide belief constituted reasonable cause for the default within the meaning of the penalty-relief provision.

Conclusion: The penalty for non-deduction of tax on rent was not leviable; the finding is in favour of the assessee.

Issue (ii): Whether penalty for failure to collect tax at source on scrap generated during construction activity was sustainable despite the assessee's bona fide belief that such scrap was outside the tax-collection provisions.

Analysis: Scrap generated from construction activity through labour and materials was not regarded as arising from a manufacturing process for the relevant definition. The assessee's bona fide belief that the construction scrap was outside the tax-collection requirement constituted reasonable cause for the failure.

Conclusion: The penalty for non-collection of tax at source on construction scrap was not leviable; the finding is in favour of the assessee.

Final Conclusion: The penalties imposed for the tax-deduction and tax-collection defaults were deleted on account of reasonable cause arising from bona fide beliefs.

Ratio Decidendi: A bona fide and objectively supportable belief regarding non-applicability of tax-deduction or tax-collection obligations constitutes reasonable cause sufficient to preclude penalty.

Issues: (i) Whether addition based on alleged unrecorded cash purchases of coal, estimated from third-party search material, could be sustained by applying a net-profit rate; (ii) Whether addition for alleged under-invoicing of mill-scale sales could be sustained on a retracted statement and CCTV footage.

Issue (i): Whether addition based on alleged unrecorded cash purchases of coal, estimated from third-party search material, could be sustained by applying a net-profit rate.

Analysis: The alleged coal purchases were founded on material recovered in a third-party search without corroborative material connecting the purchases to the assessee. The books of account were not rejected, and no abnormality in production, consumption, input-output ratio, or recorded sales was established. Having found the alleged purchases themselves unsustainable, the residual net-profit addition rested only on speculation regarding possible outside-the-books coal trading.

Conclusion: The net-profit addition on alleged unrecorded coal purchases is deleted, in favour of the assessee.

Issue (ii): Whether addition for alleged under-invoicing of mill-scale sales could be sustained on a retracted statement and CCTV footage.

Analysis: The statement suggesting under-invoicing was retracted, and the cash seen in CCTV footage was explained as cash recorded in the books and supported by the available cash balance. No independent evidence established under-invoicing or unaccounted sales. A statement without material substantiating its contents could not support an addition, and the estimation was founded on presumptions and surmises.

Conclusion: The addition for alleged under-invoicing of mill-scale sales is deleted, in favour of the assessee.

Final Conclusion: Additions founded on uncorroborated third-party material, a retracted statement, and speculative estimations cannot be sustained.

Ratio Decidendi: An income-tax addition cannot rest on a retracted statement or uncorroborated material without independent evidence substantiating the alleged unaccounted transaction or income.

Issues: (i) Whether the addition for labour and manpower services could be sustained as unexplained expenditure merely because the service provider did not comply with a third-party notice; (ii) Whether the addition for purchases subsequently returned could be sustained as unexplained expenditure where no payment or effective deduction was claimed.

Issue (i): Whether the addition for labour and manpower services could be sustained as unexplained expenditure merely because the service provider did not comply with a third-party notice.

Analysis: Under Section 69C of the Income-tax Act, 1961, the assessee substantiated the labour and manpower expenditure through invoices, ledger accounts, bank payments after tax deduction at source, audited accounts and GST records. The supplier's non-response to a notice under Section 133(6) of the Income-tax Act, 1961, particularly when it had been struck off, did not displace this documentary evidence. No further enquiry was undertaken and the evidentiary material was not controverted.

Conclusion: The addition for labour and manpower services was deleted in favour of the assessee.

Issue (ii): Whether the addition for purchases subsequently returned could be sustained as unexplained expenditure where no payment or effective deduction was claimed.

Analysis: The purchases were included in closing work-in-progress during the relevant year, producing a corresponding credit that neutralised their effect on taxable income. The goods were returned in the succeeding year, no payment was made, and the related GST input credit was reversed. The entries and subsequent return established that no expenditure giving rise to unexplained expenditure under Section 69C of the Income-tax Act, 1961, remained claimed.

Conclusion: The addition for the returned purchases was deleted in favour of the assessee.

Final Conclusion: Documented expenditure cannot be treated as unexplained solely because a third party fails to respond, and purchase entries having no effective income-tax impact after return of goods do not warrant an unexplained-expenditure addition.

Ratio Decidendi: An addition for unexplained expenditure requires the Revenue to displace the assessee's substantiating evidence; third-party non-compliance alone is insufficient, particularly where the transaction has no effective deduction or tax impact.

Issues: Whether rebate under Section 87A is available against tax payable on short-term capital gains taxable at special rates under Section 111A.

Analysis: Section 87A grants rebate from income-tax computed on total income and, for the applicable period, contains no exclusion for tax attributable to short-term capital gains. Section 111A similarly imposes no express restriction on the rebate. The express limitation under Section 112A(6) for long-term capital gains demonstrates that a restriction on special-rate income must be specifically enacted. Section 115BAC(1A) regulates tax computation under the concessional regime and does not curtail the independently available rebate. The proposed prospective amendment could not create a restriction under the unamended provision applicable to the year in question.

Conclusion: The assessee is entitled to rebate under Section 87A on tax payable on short-term capital gains taxable under Section 111A; the allowance of rebate of Rs. 8,331 is sustained, in favour of the assessee.

Issues: Whether rebate under Section 87A is available against tax payable on short-term capital gains taxable at special rates under Section 111A where the assessee has opted for the regime under Section 115BAC(1A).

Analysis: Section 87A grants rebate with reference to tax liability on total income and does not distinguish between income chargeable at normal rates and short-term capital gains chargeable at special rates. Neither Section 111A nor Section 115BAC(1A) contains an express exclusion denying the rebate on such gains. Section 115BAC(1A) governs the applicable tax-rate regime and does not impliedly curtail the independent rebate available under Section 87A. The consistent Tribunal decisions supporting this interpretation remained undisplaced by any contrary jurisdictional High Court or Supreme Court decision.

Conclusion: The assessee is eligible for rebate under Section 87A on tax payable on short-term capital gains chargeable under Section 111A; the finding is in favour of the assessee.

Issues: Whether the accused was entitled to bail pending investigation into alleged evasion of customs and anti-dumping duty through false country-of-origin certificates.

Analysis: The investigation substantially depended upon documentary material, including certificates of origin, correspondence, bills of lading and records requiring cross-border verification. The accused had remained in custody for more than 37 days and had already been remanded to DRI custody twice. The dispute concerning the genuineness and effect of the original and subsequently revised certificates required further verification and could be investigated through attendance and production of documents. Continued incarceration was not necessary where the apprehension of tampering could be addressed by appropriate safeguards.

Conclusion: The accused was entitled to release on bail pending completion of investigation.

Issues: Whether delay in filing a statutory appeal could be condoned where sufficient cause was established and the mandatory pre-deposit had been made.

Analysis: The delay was attributed to the serious illness of the person entrusted with attending to the business affairs, supported by medical material. The pre-deposit requirement had been complied with before the appeal was filed. Treating the appeal as barred solely on limitation, without giving effect to the demonstrated sufficient cause and substantial compliance with the pre-deposit requirement, was found to be unduly technical and to render the statutory appellate remedy illusory.

Conclusion: The delay was condoned in favour of the assessee; the appellate dismissal was quashed, and the appeal was directed to be admitted and decided on merits.

Issues: Whether rejection of the appeal as time-barred without considering the grounds in the delay-condonation application was sustainable.

Analysis: The stated reason treated acceptance of an appeal beyond the prescribed period as rendering the statutory limitation provisions ineffective. That approach did not address the specific explanation tendered for the nine-day delay or demonstrate consideration of the delay-condonation application. A determination on limitation must deal with the material submissions and disclose reasons.

Conclusion: The rejection of the delay-condonation request without consideration of the petitioner's stated grounds was unsustainable; the limitation issue must be determined afresh through a reasoned order after hearing the petitioner.

Issues: (i) Whether Papad Khar is classifiable under Heading 2501 or Heading 2102, or under tariff item 28362090, and its applicable GST rate; (ii) Whether Papad Khar qualifies for GST exemption as an ingredient used in exempt papad or under the stated exemption entries.

Issue (i): Whether Papad Khar is classifiable under Heading 2501 or Heading 2102, or under tariff item 28362090, and its applicable GST rate.

Analysis: Heading 2501 applies to salt and pure sodium chloride within the limited processing permitted by Chapter 25. Papad Khar is manufactured by mixing sodium chloride with sodium carbonate and sodium bicarbonate, followed by solidification, breaking and drying. Its composition and manufacturing process therefore do not satisfy the requirements for common salt, rock salt, or other products of Heading 2501.

Analysis: Heading 2102 is confined to yeasts, inactive single-cell micro-organisms and prepared baking powders. Papad Khar is neither yeast nor prepared baking powder: its alkaline carbonate and bicarbonate composition, utility and effect in preparing crisp traditional snacks are materially different. Its functionally active constituents are sodium carbonate and sodium bicarbonate, bringing it within the carbonate heading. Entry 35 of Schedule II to Notification No. 09/2025-Central Tax (Rate) applies to the product.

Conclusion: Papad Khar is not classifiable under Heading 2501 or Heading 2102. It is classifiable under tariff item 28362090 of the Customs Tariff Act, 1975 and is liable to GST at 18%; the finding is against the assessee.

Issue (ii): Whether Papad Khar qualifies for GST exemption as an ingredient used in exempt papad or under the stated exemption entries.

Analysis: Exemption of a finished product does not, by itself, extend to its raw materials or processing ingredients. Under the value-added tax framework, inputs and finished goods are independently classified and taxed according to their respective specific tariff entries and rate notifications. Papad Khar is not covered by the claimed exemption entries.

Conclusion: Papad Khar does not qualify for GST exemption under the claimed entries or on the ground that papad is exempt; the finding is against the assessee.

Final Conclusion: The product remains taxable as an inorganic carbonate preparation under the applicable Schedule II rate entry.

Ratio Decidendi: A product must be classified according to its composition, manufacturing process and functional character under the applicable tariff entry; exemption of a finished product does not automatically extend to its inputs.

Issues: Whether reassessment proceedings and the consequential tax demand for the pre-resolution-plan period could survive after approval of a resolution plan when the Revenue had not lodged its claim in the corporate insolvency resolution process.

Analysis: Approval of the resolution plan under Section 31(1) bound all stakeholders, including governmental authorities. Claims not forming part of the approved plan stood extinguished, and no proceedings in respect of such claims could be initiated or continued. Since the Revenue had not submitted its claim in the insolvency process, the reassessment and demand relating to the relevant pre-resolution-plan period could not continue.

Conclusion: The reassessment proceedings and consequential demand did not survive; the issue was decided in favour of the assessee.

Issues: (i) Whether the addition for alleged bogus or unaccounted purchases under Section 69C, based solely on third-party parallel tally data without independent corroboration, was sustainable; (ii) Whether denial of cross-examination regarding the third-party statement and seized material violated principles of natural justice.

Issue (i): Whether the addition for alleged bogus or unaccounted purchases under Section 69C, based solely on third-party parallel tally data without independent corroboration, was sustainable.

Analysis: The alleged purchases rested exclusively on parallel tally data recovered in a search of a third party. No independent verification, transport documents, purchase invoices, proof of delivery, payment evidence, or other material connecting the assessee with the alleged cash purchases was produced. The assessee consistently denied the purchases and furnished an affidavit, sales invoices, e-way bills, ledger accounts and bank records showing regular sale transactions with the concerned party. The books of account and business results were not disputed.

Conclusion: The addition under Section 69C for alleged bogus or unaccounted purchases was unsustainable and was deleted, in favour of the assessee.

Issue (ii): Whether denial of cross-examination regarding the third-party statement and seized material violated principles of natural justice.

Analysis: The third-party statement and seized tally material were relied upon without affording the assessee an opportunity to cross-examine or confront the underlying details, despite requests. Such denial deprived the assessee of an effective opportunity to test the material forming the basis of the addition.

Conclusion: Denial of cross-examination violated principles of natural justice and independently rendered the addition unsustainable, in favour of the assessee.

Final Conclusion: The alleged purchase transaction lacked reliable evidentiary support and could not sustain an unexplained-expenditure charge.

Ratio Decidendi: An unexplained-expenditure addition cannot rest solely on uncorroborated third-party search data where the assessee's contrary evidence remains unrebutted and cross-examination of the relied-on material is denied.

Issues: (i) Whether a notice under Section 148A(b) granting less than seven days to respond validly supports reassessment; (ii) Whether penalty based on the reassessment addition survives after deletion of that addition.

Issue (i): Whether a notice under Section 148A(b) granting less than seven days to respond validly supports reassessment.

Analysis: Section 148A(b) requires a minimum opportunity of seven days for response. The notice allowed only five effective days, or six days even on including the date of issue. The minimum period is mandatory; non-compliance invalidates the notice and vitiates the reassessment founded on it.

Conclusion: The notice under Section 148A(b) and the consequential reassessment under Section 147 were void ab initio; the reassessment addition was deleted, in favour of the assessee.

Issue (ii): Whether penalty based on the reassessment addition survives after deletion of that addition.

Analysis: The penalty under Section 271AAC(1) was dependent upon the quantum addition, which had been deleted on the legal validity of the reassessment proceedings.

Conclusion: The penalty was unsustainable and deleted, in favour of the assessee.

Final Conclusion: Invalidity of the statutory notice nullified the reassessment and removed the foundation for the related penalty.

Ratio Decidendi: A reassessment notice issued without affording the mandatory minimum response period under Section 148A(b) is invalid and renders the consequential reassessment void ab initio.