Issues: Whether reassessment proceedings and the consequential notice could be founded on grounds not stated in the underlying show-cause notice.

Analysis: The show-cause notice was confined to high-value financial transactions. After the explanation regarding the funding of those transactions, the impugned order shifted to the source and creditworthiness of the margin money and the proposed disallowance of interest under Section 40(a)(ia). Those matters were not put to the assessee in the notice, and no opportunity was afforded to respond to them before the order was made.

Conclusion: Reassessment action cannot be sustained on new grounds falling outside the scope of the show-cause notice without affording the assessee an opportunity of hearing.

Issues: Whether reassessment notices under Section 148 of the Income-tax Act, 1961, based on a seized broker's inquiry-register entry alleging undisclosed consideration for purchase of land, were valid in the absence of a live nexus between that entry and the assessee's transaction.

Analysis: Explanation 2(iv) to Section 148 of the Income-tax Act, 1961 treats information in documents seized from another person that pertains to or relates to an assessee as information suggesting escapement of income; nevertheless, the reopening jurisdiction requires a live and direct nexus between the seized material and the assessee. The register entry dated 16.01.2020 merely recorded an asking rate for land available for sale and preceded the registered purchase by about one and a half years. It covered multiple survey numbers and a substantially larger area, while the assessee purchased only Survey No. 509/A. The names recorded in the entry did not correspond to the sellers, and neither the entry nor the broker's statements under Section 131 of the Income-tax Act, 1961 referred to the assessee or the co-purchasers. The broker's admissions also precluded treating every register entry as conclusive proof of an actual undisclosed transaction under the presumptions in Sections 132(4A) and 292C of the Income-tax Act, 1961. No inquiry establishing a connection between the persons named in the entry and the assessee's purchase was shown.

Conclusion: The seized register entry did not establish any live nexus with the assessee's purchase; the reassessment notices under Section 148 of the Income-tax Act, 1961 were unsustainable and were quashed, in favour of the assessee.

Issues: Whether a reassessment notice for Assessment Year 2012-13, founded on material seized in a post-1 April 2021 third-party search, was barred by limitation under the first proviso to Section 149(1) read with the pre-Finance Act, 2021 provisions of Sections 153A and 153C.

Analysis: For an assessment year beginning on or before 1 April 2021, the first proviso to Section 149(1) preserves the limitation applicable under the erstwhile reassessment and search-assessment provisions, notwithstanding that the search occurred after that date. The six-year period under the unamended Section 149(1)(b) had expired for Assessment Year 2012-13. Under Explanation 1 to Section 153A, the extended ten-year block is reckoned from the end of the assessment year relevant to the previous year of search; unlike the distinct six-year block of years "immediately preceding" that year, it includes the search assessment year. The search in financial year 2021-22 made Assessment Year 2022-23 the first year and Assessment Year 2013-14 the tenth year, leaving Assessment Year 2012-13 outside the permissible block. The alternative reference year based on recording of satisfaction also placed that assessment year beyond the ten-year limit.

Conclusion: The reassessment notice for Assessment Year 2012-13 was barred by limitation under the first proviso to Section 149(1) of the Income-tax Act, 1961.

Issues: Whether reassessment under Sections 147 and 148 on the basis of material seized in a search of a third party was permissible without a satisfaction note, instead of proceeding under Section 153C.

Analysis: The sole basis for reopening was material obtained during a search under Section 132 in the case of another person, and no satisfaction note had been recorded by the Assessing Officer of the searched person. Under the statutory scheme, where incriminating material from a search is relied upon against an other person, the prescribed recourse is assessment or reassessment under Section 153C upon recording and transmission of the requisite satisfaction. Sections 147 and 148 may be invoked only on independently obtained material, not on such seized material.

Conclusion: Invocation of Sections 147 and 148 on the seized material without the requisite satisfaction note and without proceeding under Section 153C was without jurisdiction.

Issues: (i) Whether export incentives arising from export of gherkins to an associated enterprise form part of operating income for determining the arm's length price; and (ii) Whether the Tribunal's remand to the Transfer Pricing Officer for fresh consideration of comparables was justified.

Issue (i): Whether export incentives arising from export of gherkins to an associated enterprise form part of operating income for determining the arm's length price.

Analysis: For transfer-pricing purposes, an income item is operational where it bears a direct nexus to the relevant business activity. The export incentives were available solely because of the assessee's export of gherkins and arose directly from that export business. The fact that the incentives were granted under governmental policy did not render them ancillary profits.

Conclusion: Export incentives constituted operating income for determination of the arm's length price, in favour of the assessee and against the Revenue.

Issue (ii): Whether the Tribunal's remand to the Transfer Pricing Officer for fresh consideration of comparables was justified.

Analysis: Selection or exclusion of comparables is a factual and data-driven exercise requiring functional comparability under Rule 10B of the Income-tax Rules. The assessee's proposed comparables were engaged in growing, processing and exporting gherkins, whereas the comparables selected by the Transfer Pricing Officer were engaged in food processing and were not functionally similar. No perversity in the Tribunal's findings was established.

Conclusion: The remand for fresh consideration of comparables was justified, in favour of the assessee and against the Revenue.

Final Conclusion: The transfer-pricing computation must include export incentives having a direct nexus with exports as operating income and must apply functionally comparable entities for benchmarking.

Ratio Decidendi: In transfer-pricing analysis, operating income and comparable entities must bear a direct nexus and functional comparability, respectively, to the controlled transaction.

Issues: Whether exclusion of a proposed comparable in transfer-pricing analysis for functional dissimilarity, notwithstanding its selection under Rule 10B, warranted interference.

Analysis: Selection or exclusion of comparables is a factual and data-driven comparability analysis that must conform to Rule 10B. The assessee's software-development functions differed from the proposed company's diversified service, industrial, telecommunications and sectoral operations. The Tribunal's finding of functional dissimilarity was not shown to be perverse.

Conclusion: The proposed company was rightly excluded as a functionally dissimilar comparable, and no interference with the Tribunal's factual finding was warranted.

Issues: Whether the Tribunal rightly excluded selected companies from the TNMM comparability set on account of functional dissimilarity to a software development service provider.

Analysis: Selection or exclusion of comparables is a factual and data-driven exercise governed by Rule 10B of the Income-tax Rules. Companies owning significant intangibles, earning substantial revenue from software products, undertaking product development or product-design services, or deriving income from licences and subscriptions were functionally dissimilar to a captive software development service provider. A standard departmental set of comparables cannot be substituted without establishing functional comparability. No perversity was shown in the Tribunal's factual findings.

Conclusion: The exclusion of the functionally dissimilar companies was upheld, and the substantial questions were answered in favour of the assessee and against the Revenue.

Issues: Whether interest earned by a co-operative credit society from funds deposited with co-operative banks or other banks qualifies for deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961.

Analysis: Section 80P(2)(a)(i) allows deduction of profits and gains attributable to the business of providing credit facilities to members. Interest earned on funds generated from that business and deposited with banks retains its character as business income where the deposits are connected with the society's regulated lending operations. The principle applicable to retention and investment of members' sale proceeds did not govern interest earned on the society's own business funds.

Conclusion: The interest income earned on the bank deposits qualifies for deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961, and the corresponding addition is liable to be deleted.

Outcome: The writ petition was closed with liberty to approach the Court afresh; the earlier protection was continued for 90 days.

Issues: (i) Whether the police may investigate an FIR alleging offences under the Maharashtra Goods and Services Tax Act, 2017 when offences under the Bharatiya Nyaya Sanhita, 2023 arise from the same transaction; (ii) Whether the FIR and ongoing investigation were liable to be quashed at the preliminary stage.

Issue (i): Whether the police may investigate an FIR alleging offences under the Maharashtra Goods and Services Tax Act, 2017 when offences under the Bharatiya Nyaya Sanhita, 2023 arise from the same transaction.

Analysis: Section 4 of the Code of Criminal Procedure, 1973 applies to offences under other laws unless the special enactment contains a contrary provision regulating investigation or trial. The Maharashtra Goods and Services Tax Act, 2017 contains no express exclusion of police powers, and Section 72 requires police officers to assist proper officers in implementing the Act. The offences alleged under the Bharatiya Nyaya Sanhita, 2023 are distinct from the offences under the fiscal statute; the special statute therefore does not displace police investigation of such penal offences.

Conclusion: Police investigation was legally permissible; the issue was decided against the petitioner.

Issue (ii): Whether the FIR and ongoing investigation were liable to be quashed at the preliminary stage.

Analysis: An FIR merely sets the investigative process in motion and is not an exhaustive account of the case. The investigation remained pending, the petitioner was not named as an accused, and evidence had yet to be collected before filing of a charge-sheet.

Conclusion: No ground existed to declare the investigation illegal or to quash the FIR; the issue was decided against the petitioner.

Final Conclusion: The statutory GST framework does not bar regular police action where distinct offences under general criminal law accompany the alleged fiscal offences, and intervention during the ongoing investigation was unwarranted.

Ratio Decidendi: In the absence of an express statutory exclusion, general criminal procedure permits police investigation of distinct penal offences arising alongside offences under a special fiscal statute.

Issues: The constitutional challenge to statutory conditions governing input tax credit and the challenge to denial of input tax credit based on a supplier's non-payment of tax were raised; no final adjudication took place.

Outcome: The petitioner was permitted to pursue the statutory appellate remedy, with the proposed appeal treated as filed within limitation if lodged within 60 days.

Issues: Whether the writ petition warranted restoration despite the available statutory appellate remedy and the alleged overlap between proceedings.

Analysis: An appeal against the impugned order was maintainable under Section 107 of the Central Goods and Services Tax Act, 2017. The question of overlapping demands could be examined by the Appellate Authority, including an application for exemption from pre-deposit to the extent permissible in law. The challenge to the notifications remained pending consideration before the Supreme Court and was not adjudicated.

Outcome: The restoration application was dismissed, with liberty to pursue the statutory appeal within the stipulated period.

Issues: (i) Whether restoration of registration could be made conditional upon cash reversal or payment of disputed input tax credit, coupled with an automatic-void clause, without notice and statutory adjudication; (ii) Whether cancellation of registration based on alleged wrongful availment of input tax credit was sustainable when the show-cause notice alleged only non-existence of the registered premises.

Issue (i): Whether restoration of registration could be made conditional upon cash reversal or payment of disputed input tax credit, coupled with an automatic-void clause, without notice and statutory adjudication.

Analysis: The appellate power under Section 107(11) permits confirmation, modification or annulment of the order under appeal, but an order requiring payment of tax or wrongly availed input tax credit requires a notice to show cause and compliance with the prescribed adjudicatory process and limitation. The cancellation proceedings concerned non-existence of the business premises, not entitlement to input tax credit. A conditional affidavit expressing willingness to reverse credit after verification did not dispense with statutory notice, inquiry and a meaningful opportunity to respond. The cash-deposit direction therefore travelled beyond the scope of the registration appeal and violated natural justice.

Conclusion: The condition requiring cash payment or reversal of disputed input tax credit within seven days, including the automatic-void clause, was invalid and unenforceable in favour of the assessee.

Issue (ii): Whether cancellation of registration based on alleged wrongful availment of input tax credit was sustainable when the show-cause notice alleged only non-existence of the registered premises.

Analysis: The show-cause notice was confined to alleged non-existence at the declared place of business. The original cancellation order introduced wrongful availment of input tax credit from certain suppliers as a separate basis, although no demand or allegation concerning such credit had been made in the notice. Confirmation on a ground outside the notice was inconsistent with Section 75(7).

Conclusion: The cancellation order founded on a ground beyond the show-cause notice was legally unsustainable; the registration cancellation was revoked in favour of the assessee.

Final Conclusion: Registration stands restored without the impugned cash-deposit condition, while lawful fresh proceedings concerning any alleged wrongful input tax credit remain open to the competent authority.

Ratio Decidendi: In a registration-cancellation appeal, an appellate authority cannot impose an input tax credit recovery or reversal condition on matters outside the show-cause notice unless the statutory notice, opportunity and adjudicatory requirements for such determination are fulfilled.

Issues: Whether an assessee may raise a fresh claim before the revisional authority under Section 264 of the Income-tax Act, 1961 without having filed a revised return within the prescribed time.

Analysis: Revisional jurisdiction may entertain a new question of law or point of law only on the facts already available before the assessing authority. It cannot be used to introduce a fresh claim requiring facts not forming part of the assessment record, as that would effectively permit revision of the return after expiry of the statutory period. The appellate powers of the Tribunal under Section 254 are distinct and do not enlarge the revisional authority's power or the assessing authority's jurisdiction to entertain a claim otherwise than through a timely revised return.

Conclusion: A fresh claim not made through a revised return filed within time cannot be raised before the revisional authority under Section 264; the issue is decided against the assessee.

Issues: (i) Whether factual reconciliation of turnover discrepancies between VAT returns and income-tax books warrants quashing reassessment notice in writ jurisdiction; (ii) Whether a notice issued after four years was invalid for absence of failure to disclose fully and truly material facts; (iii) Whether rejection of preliminary objections to the reassessment notice was legally valid.

Issue (i): Whether factual reconciliation of turnover discrepancies between VAT returns and income-tax books warrants quashing reassessment notice in writ jurisdiction.

Analysis: The recorded reasons identified a substantial difference between sales disclosed in VAT returns and turnover recorded in the income-tax accounts. The explanation that the difference arose from MRP-based VAT reporting and components such as duty, freight and local taxes requires factual verification under the applicable State law and records during reassessment. Such merits-based reconciliation does not warrant adjudication in writ jurisdiction.

Conclusion: The factual reconciliation does not invalidate the reassessment notice and is to be addressed in reassessment proceedings; against the assessee.

Issue (ii): Whether a notice issued after four years was invalid for absence of failure to disclose fully and truly material facts.

Analysis: The VAT returns forming the basis of the turnover discrepancy were not shown to have been required to be furnished with, or otherwise disclosed during, the original income-tax assessment. The material difference between VAT turnover and the profit-and-loss account provided a basis to invoke the extended period for reassessment on the ground of possible escapement of income.

Conclusion: The notice issued beyond four years was valid; against the assessee.

Issue (iii): Whether rejection of preliminary objections to the reassessment notice was legally valid.

Analysis: The notice was issued before 01.04.2021, when the procedure under Section 148A was not applicable. Under the applicable procedure, preliminary objections were confined to jurisdictional matters, whereas the objections raised substantially concerned the merits of the proposed reassessment. The objections therefore did not require the proceedings to be dropped at the threshold.

Conclusion: Rejection of the preliminary objections was legally valid; against the assessee.

Final Conclusion: The reassessment may proceed, with factual and merits-based contentions remaining available for consideration in accordance with law, other than the jurisdictional challenge already determined.

Ratio Decidendi: Where a reassessment notice is founded on a material turnover discrepancy apparent from VAT returns not shown to have been disclosed in the original income-tax assessment, factual reconciliation is a matter for reassessment rather than writ review, and the extended reopening period may validly be invoked.

Issues: Whether rejection of declarations under the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019, because the disclosed amount did not match the departmental record, required reconsideration where the assessee accepted the amount stated in the show-cause notice as final for the purposes of the Scheme.

Analysis: The statutory scheme under Section 120 of the Finance (No. 2) Act, 2019 is a tax amnesty scheme intended to settle eligible legacy disputes. The declarations had been rejected solely because the amount disclosed did not correspond with the Authority's records. The assessee agreed that its liability for the Scheme could be determined on the amount quantified in the show-cause notice and undertook not to dispute that amount. In those circumstances, recalculation of liability under the Scheme after affording the assessee an opportunity to present its case would advance settlement of the dispute.

Conclusion: The Designated Committee shall reconsider the declarations under the Scheme by treating the amount stated in the show-cause notice as the final liability for that purpose, after giving the assessee an opportunity to present its case.

Issues: Whether refund of service tax paid by an importer under reverse charge on ocean freight was correctly allowed.

Analysis: The service-tax levy under Notification No. 15/2017-ST dated 13.04.2017 and Notification No. 16/2017-ST dated 13.04.2017 had been quashed by the jurisdictional High Court. In the absence of a stay of that decision, judicial discipline required its application. The appeal was also below the monetary threshold prescribed under the departmental litigation policy.

Conclusion: The refund of service tax paid on ocean freight was correctly allowed, in favour of the assessee.

Issues: (i) Whether the successful tenderer could collect the prescribed fee of Rs. 50 plus GST separately from the performers; (ii) Whether the tenderer could obtain reimbursement from the Board of GST which he was not permitted to collect separately.

Issue (i): Whether the successful tenderer could collect the prescribed fee of Rs. 50 plus GST separately from the performers.

Analysis: A supplier's statutory liability to pay GST is distinct from its right to pass the tax burden to the recipient, which depends on the contractual terms. The tender authorised collection of Rs. 50 per performance and stipulated that the scheduled collections were inclusive of all taxes. No tender term conferred a right to charge an additional sum towards GST.

Conclusion: The tenderer was not entitled to collect Rs. 50 plus GST separately from the performers; decided against the assessee.

Issue (ii): Whether the tenderer could obtain reimbursement from the Board of GST which he was not permitted to collect separately.

Analysis: The statutory obligation to discharge GST could not, without a statutory or contractual basis, be converted into an obligation of the Board to reimburse the tenderer. No such entitlement was established under the tender documents or law.

Conclusion: The tenderer was not entitled to reimbursement of GST from the Board; decided against the assessee.

Final Conclusion: The tender rate was tax-inclusive, and the statutory GST liability did not create an independent contractual right either to recover an additional amount from performers or to seek reimbursement.

Ratio Decidendi: A statutory liability to pay GST does not by itself confer a right to recover the tax separately from the recipient; that right is governed by the contractual terms of the transaction.

Issues: Whether writ jurisdiction should be exercised against a GST adjudication order on the allegation that cross-examination of revenue officers was wrongly refused, despite the availability of a statutory appeal.

Analysis: The earlier defect under Section 75(7) of the Uttar Pradesh Goods and Services Tax Act, 2017 had been rectified, relied-upon documents were supplied, and the petitioner had cross-examined the panch witnesses. The evidentiary effect of those statements and the proof of the panchnama required a merits assessment appropriate for appellate proceedings. Although the immunity-based reason under Section 157 for refusing cross-examination of the revenue officers was unsustainable, that error did not itself establish an automatic right to their cross-examination; the necessity of such cross-examination is fact-specific. The principles of natural justice objection may be raised before the appellate authority, which may order cross-examination or obtain an appropriate report if warranted.

Conclusion: Writ jurisdiction was not exercised; the challenge concerning cross-examination and the evidentiary issues was left open for determination in the statutory appeal.

Issues: Whether the writ court had roster determination to entertain a challenge to summons issued under customs law.

Analysis: Schedule B of the Appellate Side Rules specifically assigns revenue and tax-law matters, including search and seizure, adjudication proceedings and miscellaneous revenue matters, to Group IV. The substantive grievance arose from summons issued under Section 108 of the Customs Act, 1962. The ancillary requests concerning preservation of CCTV footage, presence of an advocate during interrogation and alleged human-rights violations did not create an overlap with the residuary group, particularly when no prior complaint regarding the alleged torture had been made to any authority.

Conclusion: The writ court lacked determination to hear the matter; the petitioners were granted liberty to approach the appropriate court having determination.