Issues: (i) Whether the delayed appeals could be rejected in limine; (ii) Whether the addition under section 56(2)(x) of the Income-tax Act, 1961 required fresh factual verification of the claimed compensatory allotment; and (iii) Whether the penalty for under-reporting under section 270A of the Income-tax Act, 1961 could survive before the factual basis of the addition was determined.

Issue (i): Whether the delayed appeals could be rejected in limine

Analysis: Section 249(3) of the Income-tax Act, 1961 permits condonation where sufficient cause is shown. Professional status alone did not establish computer literacy or actual awareness of electronic proceedings, and no advantage was shown to have been gained by the delay. The material facts concerning the property transaction had been raised but remained unexamined.

Conclusion: The in-limine dismissal of the delayed appeals could not be sustained; this issue is decided in favour of the assessee.

Issue (ii): Whether the addition under section 56(2)(x) of the Income-tax Act, 1961 required fresh factual verification of the claimed compensatory allotment

Analysis: Section 56(2)(x) of the Income-tax Act, 1961 taxes deemed income arising from receipt of immovable property for inadequate consideration when its statutory conditions are satisfied. The claim that the registered plot was allotted as compensation for land acquired after an earlier purchase, rather than being a fresh purchase, had not been factually verified. If established, the allotment could relate back to a transaction preceding the introduction of section 56(2)(x).

Conclusion: The addition could not be sustained without fresh factual determination, and the assessment must be reconsidered after verification; this issue is decided in favour of the assessee to that extent.

Issue (iii): Whether the penalty for under-reporting under section 270A of the Income-tax Act, 1961 could survive before the factual basis of the addition was determined

Analysis: Under-reporting of income under section 270A of the Income-tax Act, 1961 could not be conclusively determined while the taxability of the differential property value under section 56(2)(x) remained unverified and required fresh assessment.

Conclusion: The existing penalty could not survive and was deleted; any fresh statutory action depends upon the outcome of the fresh assessment.

Final Conclusion: Taxability of the property transaction requires factual verification of the claimed compensatory allotment, and a penalty founded on unverified taxability cannot be retained.

Ratio Decidendi: A penalty for under-reporting cannot be sustained where the foundational taxability of the alleged income remains unverified and requires fresh factual determination.

Issues: Whether the addition for alleged cash on-money paid towards purchase of a residential flat could be sustained solely on an uncorroborated third-party statement recorded during search proceedings.

Analysis: The recorded purchase consideration was explained through banking channels, provident-fund withdrawal, loans and accumulated savings. The statement under Section 132(4) of the Income-tax Act, 1961, concerning the builder group's alleged receipt of on-money, did not specifically connect the assessee with the alleged cash payment. No independent material corroborated payment of the impugned amount, and cross-examination of the person whose statement was relied upon was not afforded. A third-party statement may justify further enquiry but cannot, without specific corroboration, establish undisclosed payment by the purchaser.

Conclusion: The addition under Section 69A of the Income-tax Act, 1961, was unsustainable and was deleted, in favour of the assessee.

Issues: Whether the assessment order passed after commencement of the corporate insolvency resolution process moratorium was sustainable.

Analysis: A moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 was in force when the Assessing Officer passed the assessment order. The approved resolution plan also prohibited government authorities from initiating or continuing proceedings against the company. Section 238 of the Insolvency and Bankruptcy Code, 2016 gives the Code overriding effect over inconsistent provisions of the Income-tax Act, 1961; accordingly, assessment proceedings could not be initiated or continued during the moratorium.

Conclusion: The assessment order passed during the operative moratorium was unsustainable and was set aside, in favour of the assessee.

Issues: Whether foreign tax credit under Section 90 can be denied solely because Form No. 67 was filed after the prescribed due date.

Analysis: Rule 128(9) of the Income-tax Rules, 1962 does not provide for disallowance of foreign tax credit merely on account of delayed filing of Form No. 67. The requirement to furnish Form No. 67 within the prescribed time is procedural and directory, not mandatory. Where the form has been filed and the foreign tax credit claim is otherwise eligible, a delay in its filing does not extinguish the substantive entitlement.

Conclusion: Foreign tax credit cannot be denied solely for delayed filing of Form No. 67; the claimed credit is allowable subject to verification of the claim and the form.

Issues: Whether commission paid to the Managing Director was allowable as a deduction or was payment in lieu of dividend.

Analysis: Deductibility turned on whether the commission represented remuneration for services rather than a distribution of profits. The payment was authorised by a Board resolution, formed part of the Managing Director's remuneration, was linked to performance and increased profitability, and was subjected to tax deduction at source. Similar commission paid in earlier years had been accepted. Independent declaration of dividend during the relevant year negated the characterisation of the commission as dividend in lieu. Consistency, uniformity and certainty supported acceptance of the payment in the absence of distinguishing circumstances.

Conclusion: The commission was remuneration for services and not payment in lieu of dividend; it was allowable as a deduction and the disallowance was deleted.

Issues: Whether foreign tax credit otherwise available under Section 90 of the Income-tax Act, 1961 can be denied solely because Form No. 67 prescribed under Rule 128(9) of the Income-tax Rules, 1962 was furnished after the prescribed due date.

Analysis: Rule 128(9) does not prescribe denial of foreign tax credit as a consequence of delayed filing of Form No. 67. The prescribed timeline for furnishing the form is directory, and a substantive foreign tax credit claim remains admissible where the prescribed form has subsequently been furnished and the claim is capable of verification.

Conclusion: Delay in furnishing Form No. 67 does not by itself disentitle the assessee to foreign tax credit; the claimed credit is admissible after verification.

Issues: Whether receipts from sub-letting commercial premises taken on lease, together with ancillary services, are assessable as business income or income from house property.

Analysis: Section 22 charges the annual value of property under the head of income from house property only in the hands of its owner. The assessee was merely a tenant and not the owner or deemed owner of the premises. The leased premises were systematically commercially exploited by sub-letting the entire premises along with maintenance, security, cleaning, water and repair-related services. The existence of salary income did not preclude the assessee from carrying on an independent business activity.

Conclusion: The sub-letting receipts are assessable under the head "Profits and gains of business or profession" and not under the head "Income from house property", in favour of the assessee.

Issues: Whether revisionary jurisdiction under section 263 could be invoked to disturb the assessment order allowing deduction of employee stock option scheme expenditure.

Analysis: Revision under section 263 requires the assessment order to be both erroneous and prejudicial to the interests of the Revenue. The assessment record showed that the Assessing Officer specifically queried the employee stock option scheme expenditure, considered the assessee's supporting explanation and documents, and accepted the claim. Absence of elaborate discussion in the assessment order did not establish lack of inquiry. The view accepting the expenditure was also legally permissible, since the employee stock option scheme discount constituted employee compensation and revenue expenditure deductible under section 37(1). Admission of a challenge against a precedent, without stay or reversal, did not displace that legal position. Revisionary jurisdiction could not be used to substitute the Principal Commissioner's view for a permissible view adopted after inquiry.

Conclusion: Revision under section 263 was invalid, and the assessment order allowing the employee stock option scheme deduction stood.

Issues: Whether a composite assessment order covering more than one tax period is valid under the Andhra Pradesh Goods and Services Tax Act, 2017.

Analysis: The statutory scheme under Sections 73 and 74 was applied to require separate assessment proceedings for each tax period. A composite order spanning multiple tax periods can impair the availability of statutory benefits and the statutory right of appeal. The adopted interpretation precludes a single show-cause notice or assessment order for more than one tax period.

Conclusion: A composite assessment order covering the relevant multiple tax periods was legally unsustainable. The impugned assessment and appellate orders were set aside on the prescribed deposit condition, without precluding separate proceedings in accordance with law for the relevant tax periods.

Issues: Whether an adjudication order under Section 73, rejecting the taxpayer's explanation to the show-cause notice merely as unsatisfactory without addressing the specific response, is sustainable.

Analysis: An adjudicating authority performing a quasi-judicial function must address the specific issues raised in the response to the show-cause notice. A bare assertion that the written explanation is unsatisfactory, without reasons demonstrating its consideration, does not constitute valid adjudication. The admitted facts were covered by the earlier decision applying this requirement.

Conclusion: The adjudication order was unsustainable for failure to give reasons and to consider the taxpayer's response, requiring fresh adjudication in accordance with law.

Issues: Whether the Commissioner of Income-tax (Appeals), Pune-13 lacked jurisdiction to decide the assessee's appeal after its automated allocation under the Faceless Appeal Scheme, 2021.

Analysis: The Faceless Appeal Scheme, 2021 provides for automated allocation of electronically filed appeals by the National Faceless Appeal Centre, leaving the assessee with no choice of appellate authority. The appeal was allocated to the Commissioner of Income-tax (Appeals), Pune-13, and the Assessing Officer received the appeal memorandum and an opportunity to participate but raised no jurisdictional objection at that stage. A literal cumulative reading of the jurisdictional entry in CBDT Notification No. 113/2022 dated 13.10.2022 would require a transfer-pricing order, arm's-length-price grounds, and related penalties in every case, producing the absurd result that certain arm's-length-price appeals would have no designated appellate forum. The entry therefore requires purposive and harmonious construction, without treating all stated conditions as cumulatively mandatory.

Conclusion: The Commissioner of Income-tax (Appeals), Pune-13 validly exercised jurisdiction over the allocated appeal; the Revenue's jurisdictional objection fails, in favour of the assessee.

Issues: Whether the FIR and criminal proceeding should be quashed in exercise of inherent jurisdiction.

Analysis: The inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, corresponding to Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, permits quashing where the FIR allegations, taken at face value, do not prima facie disclose a cognizable offence or where continuation would amount to abuse of process of court. The engagement memorandum required filing of the audit report in Form 10BB; the subsequent request for Form 10B followed the revised requirement. The materials also showed that the revised report was ultimately filed after a delay of 37 days with an explanation. These facts did not furnish a basis for criminal breach of trust, cheating, extortion, or any other alleged offence.

Conclusion: The FIR did not prima facie disclose any cognizable offence against the petitioner, and continuation of the criminal proceeding was an abuse of process of court warranting quashing.

Issues: (i) Whether foreign currency concealed and carried for export without evidence of lawful acquisition, Reserve Bank permission, or Customs declaration was liable to confiscation; (ii) Whether absolute confiscation of the seized foreign currency should be modified by permitting redemption on payment of fine; (iii) Whether the penalties imposed for the attempted illegal export required reduction.

Issue (i): Whether foreign currency concealed and carried for export without evidence of lawful acquisition, Reserve Bank permission, or Customs declaration was liable to confiscation.

Analysis: Regulation 5 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 prohibits export of foreign currency without general or special permission of the Reserve Bank, while Regulation 7 permits export of foreign exchange obtained by drawal from an authorised person in accordance with the governing framework. The currency was concealed, not declared before Customs, admittedly acquired through unauthorised channels, and unsupported by documents evidencing lawful acquisition or authority to export. These circumstances established an attempted export contrary to the foreign-exchange regime and attracted confiscation under Sections 113(d) and 113(e) of the Customs Act, 1962.

Conclusion: The foreign currency was liable to confiscation under Sections 113(d) and 113(e) of the Customs Act, 1962; against the assessee.

Issue (ii): Whether absolute confiscation of the seized foreign currency should be modified by permitting redemption on payment of fine.

Analysis: Section 125 of the Customs Act, 1962 permits exercise of discretion to allow redemption even where goods are confiscable. Confiscability alone did not require absolute confiscation; the nature of the contravention, value of the currency, and proportionality of the consequence required a balanced exercise of discretion. Redemption was therefore made available through separately allocated fines of Rs. 3,50,000 each for the respective portions of the currency.

Conclusion: Absolute confiscation was modified by granting an option to redeem the confiscated currency on payment of the prescribed redemption fines; in favour of the assessee.

Issue (iii): Whether the penalties imposed for the attempted illegal export required reduction.

Analysis: Liability to penalty under Section 114 of the Customs Act, 1962 followed from the established attempt to export currency through unauthorised channels. However, the material indicated that the persons penalised lacked the financial capacity to be the actual owners or ultimate beneficiaries and were functioning as carriers; the actual beneficiaries were not conclusively identified. These factors warranted a proportionate reduction in penalty.

Conclusion: Penalty liability was sustained, but the penalty on each assessee was reduced from Rs. 5,00,000 to Rs. 2,00,000; in favour of the assessee.

Final Conclusion: The currency remains confiscable for unauthorised attempted export, but absolute confiscation is replaced with redemption on stipulated fines and the penal consequences are moderated.

Ratio Decidendi: Where foreign currency is liable to confiscation for unauthorised export, discretion to permit redemption must be exercised judicially and proportionately, with penalties reflecting the proven degree of participation.

Issues: Whether a best-judgment order for non-filing of the return could be sustained where the return was filed shortly after expiry of the condonable period together with tax, interest and late fee.

Analysis: The return was filed with payment of tax, interest and late fee after a marginal delay beyond the prescribed and condonable periods. In these circumstances, the belated return warranted scrutiny under Section 61 of the applicable GST enactment. The period from this order until completion of scrutiny was directed to be excluded in computing limitation for proceedings under Sections 73 and 74 of the applicable GST enactment.

Conclusion: The impugned best-judgment order was quashed, and the belated return was directed to be scrutinised in accordance with law.

Issues: Whether renewal of charitable registration could be refused because a beneficiary received treatment in the private category and the assistance given to that beneficiary constituted about 25% of the trust's expenditure.

Analysis: Renewal under the charitable-registration framework is to be assessed with reference to the charitable objects and activities of the trust. Treatment in a private category, without more, does not establish absence of financial indigence or economic hardship, particularly where prolonged treatment for a life-threatening illness may exhaust the resources of a person of modest means. Further, assistance constituting approximately 25% of the relevant expenditure did not by itself negate the public charitable character of the trust's activities. No other basis for refusing renewal was recorded.

Conclusion: The refusal of renewal was unsustainable and registration was required to be renewed. The consequential rejection of approval under Section 80G, founded solely on the refusal of registration, could not stand.

Issues: Whether the Tribunal was justified in excluding Accurate Data Converters Limited as a comparable for determining the arm's length price.

Analysis: Selection or exclusion of comparables is a factual and data-driven exercise that must conform to Rule 10B. Accurate Data Converters Limited had outsourced a major part of its work and was therefore not functionally comparable to the assessee. The Revenue produced no material to displace this factual basis or establish perversity, reliance on irrelevant material, or exclusion of relevant material.

Conclusion: The exclusion of Accurate Data Converters Limited as a comparable was justified, in favour of the assessee.

Issues: (i) Whether prior-period expenditure is deductible in the year in which the related liability became known and crystallised; and (ii) Whether the Consulting Practice and Global Innovation Centre divisions could be aggregated for entity-level transfer-pricing benchmarking.

Issue (i): Whether prior-period expenditure is deductible in the year in which the related liability became known and crystallised.

Analysis: The dispute concerned the year of allowability, not the genuineness or business character of the expenditure. The invoices and their particulars became known only on receipt of the parent company's reconciliation after the preceding year had closed. Under the principle of crystallisation of liability, an expenditure cannot be provided for in an earlier year where the liability and its quantum were not known or ascertainable in that year.

Conclusion: The expenditure was deductible in the relevant year and the disallowance was deleted, in favour of the assessee.

Issue (ii): Whether the Consulting Practice and Global Innovation Centre divisions could be aggregated for entity-level transfer-pricing benchmarking.

Analysis: The transfer-pricing framework requires determination of the arm's length price with regard to the functions, services, risks and economic profile of the tested transactions. The Consulting Practice division rendered market-analysis and consulting services to associated and unrelated enterprises and had been benchmarked using the Comparable Uncontrolled Price method, whereas the Global Innovation Centre division provided captive back-office support services and had separately been benchmarked under the Transactional Net Margin Method. Their functional profiles were materially different, and there was no material change justifying departure from the earlier acceptance of separate benchmarking. Consequently, entity-level benchmarking lacked a sustainable basis; the functional and economic differences in the challenged comparables further supported the grievance against the adjustment.

Conclusion: The divisions were required to be benchmarked separately; the entity-level transfer-pricing adjustment was deleted, in favour of the assessee.

Final Conclusion: Taxable income must be recomputed by allowing the crystallised expenditure and eliminating the impugned entity-level transfer-pricing adjustment.

Ratio Decidendi: Functionally distinct divisions having separately identifiable controlled transactions cannot be aggregated for transfer-pricing benchmarking at the entity level without a material basis establishing their comparability.

Issues: (i) Whether transhipped goods entering India constitute imports subject to the prohibition on import or transit of Pakistani-origin goods; (ii) Whether country of origin could be conclusively determined in writ jurisdiction on conflicting documentary material; (iii) Whether Directorate of Revenue Intelligence officials at Chennai had authority to inspect and seize a consignment slated for transhipment to Kolkata; (iv) Whether the India-Nepal transit treaty overrides domestic customs law and the import/transit prohibition; (v) Whether seizure should be confined to 300 labelled bags rather than the entire consignment.

Issue (i): Whether transhipped goods entering India constitute imports subject to the prohibition on import or transit of Pakistani-origin goods.

Analysis: Paragraph 2.20A of the Foreign Trade Policy, 2023 expressly prohibits direct or indirect import or transit of goods originating in or exported from Pakistan. The Customs Act, 1962 treats goods brought into India from outside India as imported goods, while Section 54 permits transhipment only subject to statutory prohibitions. Clearance for home consumption is not a prerequisite for the applicability of the prohibition where goods have entered India for transit.

Conclusion: The transhipped consignments constitute imports for applying the prohibition; this issue is decided against the assessee.

Issue (ii): Whether country of origin could be conclusively determined in writ jurisdiction on conflicting documentary material.

Analysis: The accompanying documents inconsistently identified Nigeria, Sudan and Pakistan as the origin of the goods. Such conflicting evidence gives rise to a disputed question of fact requiring determination through the statutory procedures and applicable rules of origin, rather than in writ proceedings.

Conclusion: The country of origin is not conclusively determinable in writ jurisdiction and must be determined through the statutory process; this issue is decided against the assessee.

Issue (iii): Whether Directorate of Revenue Intelligence officials at Chennai had authority to inspect and seize a consignment slated for transhipment to Kolkata.

Analysis: Notification No. 17/2002-Customs (N.T.) dated 07.03.2002 confers All India jurisdiction on the Directorate of Revenue Intelligence. Chennai was the first point of arrival of the consignment in India, permitting inspection and seizure there notwithstanding the intended onward transhipment.

Conclusion: The Directorate of Revenue Intelligence at Chennai had jurisdiction to inspect and seize the consignment; this issue is decided against the assessee.

Issue (iv): Whether the India-Nepal transit treaty overrides domestic customs law and the import/transit prohibition.

Analysis: The Customs Act, 1962 and the notification provide a clear domestic legal regime governing prohibited imports and transit. In the event of conflict, municipal law prevails over an international obligation; further, the treaty framework recognises exceptions concerning prohibited goods and essential security interests.

Conclusion: The transit treaty does not override the domestic prohibition; this issue is decided against the assessee.

Issue (v): Whether seizure should be confined to 300 labelled bags rather than the entire consignment.

Analysis: All 4,050 bags formed a single consignment under two bills of lading and were placed together in the containers. The unresolved discrepancies concerning origin reinforced the absence of a basis to segregate the labelled bags from the remainder at that stage.

Conclusion: There is no basis to bifurcate the consignment or restrict seizure to 300 bags; this issue is decided against the assessee.

Final Conclusion: The prohibition applies to transhipment entering India, and the origin inquiry, enforcement action and treatment of the consignment must proceed under the applicable customs and statutory framework.

Issues: Whether a tax-demand show-cause notice under Section 74 may be issued to an unregistered person without first initiating assessment under Section 63 of the applicable GST enactment.

Analysis: Section 63 prescribes the statutory mechanism for determining the tax liability of a person who has failed to obtain registration despite being liable to do so. It operates notwithstanding Section 74 and requires a best-judgment assessment, with an opportunity of hearing, before an assessment order is made. The question of entitlement to exemption remains for determination in proceedings under the applicable GST enactment.

Conclusion: The show-cause notice issued under Section 74 was quashed, with liberty to initiate assessment proceedings under Section 63 by issuing notice in ASMT-14.

Issues: Whether proceedings restricting refund under Rule 96(10) could continue after its omission without a savings or sunset clause.

Analysis: The governing principle on omission of subordinate legislation is that an omitted rule cannot sustain pending proceedings unless it is preserved by a savings clause or sunset clause. Rule 96(10) was omitted without such preservation; the recommendation that its omission operate prospectively was advisory and did not retain the rule for pending proceedings.

Conclusion: The omitted Rule 96(10) could not be kept alive to deny the refund claim.