Issues: Whether the reassessment order and notice for Assessment Year 2016-17, issued after expiry of the applicable six-year period, were barred by limitation.

Analysis: The first proviso to Section 149(1)(b) preserves the limitation applicable under the earlier reassessment regime for assessment years up to 2021-22. A notice under the new regime cannot be issued where the corresponding six-year period under the earlier regime had already expired. For Assessment Year 2016-17, that period expired on 31.03.2023, whereas the reassessment notice was issued on 31.08.2024. No contrary legal position was established.

Conclusion: The reassessment proceedings were barred by limitation; the order under Section 148A(d) and the notice under Section 148 were quashed, in favour of the assessee.

Issues: Whether the assessee was entitled to exemption under section 54F despite purchasing the new residential flat after the stipulated two-year period.

Analysis: The sale of the original asset, the stamp-duty valuation adopted for capital-gains computation, and the genuineness of the subsequent purchase of the residential flat were undisputed. The delay of seven months and eighteen days fell wholly within the period excluded for limitation purposes during the COVID-19 pandemic. Section 54F is a beneficial provision and requires liberal interpretation; a delay attributable to circumstances beyond the assessee's control during the excluded pandemic period could not defeat the substantive exemption claim.

Conclusion: The assessee was entitled to deduction under section 54F; the delayed period stood excluded for computing compliance with the two-year investment condition.

Issues: Whether the enhanced leave-encashment exemption limit of Rs.25 lakh under section 10(10AA)(ii), notified on 24 May 2023, applies to Assessment Year 2020-21.

Analysis: Section 10(10AA)(ii) governs exemption of leave encashment received on retirement. The revised limit of Rs.25 lakh replaced the earlier Rs.3 lakh cap fixed more than two decades earlier. Coordinate Bench decisions had treated the enhancement as a beneficial and remedial rationalisation intended to alleviate hardship and address disparity arising from outdated salary-linked limits. The revision did not create a new exemption and was applied to pending matters and earlier assessment years where no vested right of the Revenue was adversely affected.

Conclusion: The enhanced exemption limit applies to Assessment Year 2020-21, and the entire leave-encashment amount of Rs.922,762 is exempt in favour of the assessee.

Issues: Whether sufficient cause was shown for condoning the delay of 2,376 days in filing the tax appeal.

Analysis: Under Section 5 of the Limitation Act, condonation requires a satisfactory explanation demonstrating sufficient cause. The explanation based on the earlier filing before a court lacking territorial jurisdiction and subsequent administrative movement of records did not justify the prolonged delay. The asserted COVID-19 ground was not pleaded in the supporting affidavit. Inordinate delay attributable to negligence, inaction, or absence of bona fides cannot be condoned.

Conclusion: No sufficient cause was established for condoning the delay of 2,376 days.

Issues: (i) Whether the transfer-pricing adjustment for interest paid on unsecured related-party loans could be sustained where the benchmark was derived from a bank prime lending rate with an estimated risk premium and controlled transactions were treated as internal comparables; (ii) Whether interest and administrative expenditure were disallowable under section 14A read with rule 8D; (iii) Whether interest expenditure was disallowable under section 36(1)(iii) on account of interest-free loans and advances.

Issue (i): Whether the transfer-pricing adjustment for interest paid on unsecured related-party loans could be sustained where the benchmark was derived from a bank prime lending rate with an estimated risk premium and controlled transactions were treated as internal comparables.

Analysis: The alleged agreement to the adjustment did not bar the statutory appeal, since there was no supporting written concession and the Assessing Officer was required to compute income in conformity with the transfer-pricing determination. Under the Comparable Uncontrolled Price Method in rule 10B(1)(a), an identifiable uncontrolled comparable transaction, adjusted for material differences, is required. A prime lending rate enhanced by an estimated premium was not the price of a comparable transaction, and interest paid in controlled related-party transactions could not constitute an internal comparable uncontrolled price. The assessee's secured bank borrowing at 13.10 per cent and unsecured borrowings from unrelated lenders at 15 per cent or 18 per cent supported the Arm's Length Price of the related-party borrowings at 13.25 per cent and 15 per cent.

Conclusion: The interest paid to the related parties did not exceed the Arm's Length Price, and the transfer-pricing adjustment was deleted in favour of the assessee.

Issue (ii): Whether interest and administrative expenditure were disallowable under section 14A read with rule 8D.

Analysis: The assessee's own interest-free funds substantially exceeded its investments, while its interest income exceeded interest expenditure. The Interest-Free Funds Presumption consequently applied to mixed funds, and the Revenue did not establish that borrowed funds were used for investments. A fund-flow or cash-flow statement was not required for deleting the interest component under rule 8D(2)(ii). However, the administrative-expenditure component under rule 8D(2)(iii) was sustainable because exempt agricultural income was earned, dissatisfaction with the nil disallowance was recorded from the accounts, and the amount was within the exempt income.

Conclusion: The interest disallowance was deleted, but the administrative-expenditure disallowance was sustained; the issue was decided partly in favour of the assessee.

Issue (iii): Whether interest expenditure was disallowable under section 36(1)(iii) on account of interest-free loans and advances.

Analysis: A disallowance under section 36(1)(iii) requires a Nexus Between Borrowed Funds and Advances showing diversion of interest-bearing borrowings. The assessee's own funds exceeded the interest-free advances, its interest income exceeded interest expenditure, and no borrowing was identified as having been diverted. The disallowance calculated as a percentage of total interest bore no relation to any advance or borrowing. Commercial Expediency becomes relevant only after such diversion is established; a separate linking chart is not required where sufficient own funds exist and the Revenue fails to rebut the applicable presumption.

Conclusion: The disallowance of interest on the interest-free advances was deleted in favour of the assessee.

Final Conclusion: The impugned transfer-pricing adjustment and the interest disallowance on advances were unsustainable, while the limited administrative expenditure disallowance relating to exempt income remained intact.

Issues: Whether the penalty order under Section 271D was barred by limitation under Section 275(1)(c).

Analysis: Section 275(1)(c) requires a penalty order to be passed within six months from the end of the month in which notice initiating penalty proceedings is issued. The notice under Sections 274 and 271D was issued on 4 January 2021; consequently, the limitation period expired on 31 July 2021. The penalty order passed on 28 March 2022 was beyond that prescribed period.

Conclusion: The penalty order was invalid and quashed, and the first appellate order was set aside, in favour of the assessee.

Issues: (i) Whether an assessment under Section 153A of the Income-tax Act, 1961 could rest exclusively on incriminating material seized from third-party premises in a coordinated search, rather than proceeding under Section 153C; (ii) Whether a protective addition under Section 68 of the Income-tax Act, 1961 could survive after the substantive addition had not survived.

Issue (i): Whether an assessment under Section 153A of the Income-tax Act, 1961 could rest exclusively on incriminating material seized from third-party premises in a coordinated search, rather than proceeding under Section 153C.

Analysis: The assessment was founded solely on cash-book and excel-sheet material recovered from a laptop at third-party premises. Even in coordinated searches, incriminating material seized from a third party can be used for assessment only through the mechanism under Section 153C, and not by invoking Section 153A against the assessee.

Conclusion: No. The assessment founded on third-party seized material had to proceed under Section 153C; the finding favouring the assessee was sustained.

Issue (ii): Whether a protective addition under Section 68 of the Income-tax Act, 1961 could survive after the substantive addition had not survived.

Analysis: The addition in the assessee's hands was protective and corresponded to a substantive addition made elsewhere. Since the substantive assessment had been quashed, the basis for retaining the protective addition ceased to exist.

Conclusion: No. The protective addition was unsustainable and its deletion was sustained, in favour of the assessee.

Final Conclusion: Third-party seized material must be assessed through the statutory route applicable to such material, and no protective tax liability can subsist once the corresponding substantive addition does not survive.

Issues: Whether the Tribunal's earlier order sustaining revision under Section 263 of the Income-tax Act, 1961 contained a mistake apparent from the record warranting rectification under Section 254(2) of the Income-tax Act, 1961.

Analysis: Rectification under Section 254(2) is confined to a mistake apparent from the record and cannot be invoked to revisit findings already reached on the material considered. The earlier order had relied not merely on the discrepancy in a donation receipt reflecting a different donor name, but also on findings concerning the non-genuine status of the donee political entities, alleged bogus political donations, and the Assessing Officer's inadequate inquiry into the eligibility and genuineness of the claim under Section 80GGC. The receipts and bank statements did not demonstrate any manifest error in the earlier finding that the assessment order was erroneous and prejudicial to the interests of Revenue.

Conclusion: No mistake apparent from the record was established, and rectification under Section 254(2) of the Income-tax Act, 1961 was unavailable.

Issues: Whether reassessment was jurisdictionally valid where actual service of notice under Section 148 was not proved, and whether the assessee's subsequent participation in the proceedings cured that defect.

Analysis: Valid issuance and actual service of notice under Section 148 are jurisdictional conditions precedent to reassessment under Section 147. The Revenue bore the burden of proving actual service, but no postal receipt, acknowledgement, or other service evidence was available despite the assessee's inspection of the assessment record. The assessee's response to a later notice, filing of return, and participation in assessment proceedings could not confer jurisdiction by consent, waiver, or estoppel.

Conclusion: The reassessment was void ab initio for want of proved service of notice under Section 148. Subsequent participation did not cure the jurisdictional defect, and revision of the non-existent reassessment could not validly subsist.

Issues: Whether the cash-credit addition and ad hoc expenditure disallowance made in a best-judgment assessment following repeated non-compliance warranted de novo consideration.

Analysis: The assessment was completed under the best-judgment procedure because, despite repeated statutory notices, no material was furnished to substantiate the liabilities or expenditure, apart from the audit report. The failure to provide grounds, submissions, or supporting evidence continued in the first appellate proceedings. Nevertheless, having regard to the substantial additions and the request to produce relevant evidence, a final opportunity to substantiate the claims was considered appropriate in the interests of justice. The repeated non-cooperation justified imposition of cost and a direction that no further unjustified default be permitted.

Conclusion: The additions and disallowance were not affirmed on merits and are to be determined afresh after payment of the imposed cost and grant of a final opportunity to furnish supporting evidence.

Issues: Whether an assessment order under Section 62 of the GST Act is deemed withdrawn upon belated filing of the return and payment of the requisite late fee.

Analysis: Section 62(2) provides for deemed withdrawal of an assessment made for non-filing of returns when the necessary return is filed in accordance with the statutory conditions, including payment of late fee for delayed filing. The return for the relevant period was filed and the stipulated additional late fee was paid. The statutory benefit, including the benefit of the amendment accommodating delayed return filing, was therefore applicable.

Conclusion: The assessment order stood deemed withdrawn, and recovery of the tax and dues raised under that order could not be initiated or continued.

Issues: Whether excess managerial remuneration pertaining to an earlier year, subsequently determined and actually recovered by the employer during the relevant previous year, is adjustable while computing salary income for that year.

Analysis: Section 15 of the Income-tax Act, 1961 governs chargeability of salary, whereas Section 16 concerns specified deductions from salary. The claim was not for an independent deduction under Section 16 or for revision of the salary assessed in the earlier assessment year. The excess remuneration was determined after finalisation and audit of the employer's accounts, creating an enforceable liability that crystallised during the relevant previous year. Its actual repayment was supported by audited accounts and banking records and was not disputed. The annuality principle does not require a genuine subsequent recovery of remuneration to be ignored merely because the original payment was taxed in an earlier year.

Conclusion: The assessee is entitled to adjustment of the recovered excess managerial remuneration of Rs.83,20,355 while computing salary income for Assessment Year 2013-14.

Issues: Whether the burden under Section 123 of the Customs Act, 1962 could shift to the owner, and confiscation and penalty could be sustained, where the foreign origin and smuggled character of the seized gold were not established.

Analysis: The statutory presumption arises only after the Department establishes that the seized gold is of foreign origin. Foreign markings, or their alleged presence, without corroborative evidence of illicit importation, do not establish the smuggled character of gold. The seized primary gold and cut-pieces bore no clear foreign markings, and no further evidence established their foreign origin or unlawful importation. The Department therefore failed to discharge its initial burden.

Conclusion: The burden under Section 123 of the Customs Act, 1962 did not shift to the appellant; the confiscation of gold and penalty were unsustainable.

Issues: (i) Whether the annual capacity of production and duty liability under the compounded levy scheme could be fixed at 2722 M.T. and at a rate other than that applicable under Rule 96ZP(3); (ii) Whether a demand founded on a determination beyond the scope of the show cause notice could be sustained; (iii) Whether duty was payable after permanent closure of the factory and whether excess duty was refundable; (iv) Whether interest and penalty under Rules 96ZO, 96ZP and 96ZQ could be sustained.

Issue (i): Whether the annual capacity of production and duty liability under the compounded levy scheme could be fixed at 2722 M.T. and at a rate other than that applicable under Rule 96ZP(3).

Analysis: Section 3A of the Central Excise Act, 1944 subjected the rolling mill to capacity-based levy. The verified measurements of the Assistant Commissioner and technical expert established annual capacity at 373.53 M.T. As the parameter 'd' was within 160 mm and payment under Rule 96ZP(3) had been opted for, the applicable duty rate was Rs.150 per M.T. The capacity and rate adopted in the impugned demand were not based on the verified parameters.

Conclusion: The annual capacity was required to be taken as 373.53 M.T. and duty was payable at Rs.150 per M.T.; the contrary demand was unsustainable, in favour of the assessee.

Issue (ii): Whether a demand founded on a determination beyond the scope of the show cause notice could be sustained.

Analysis: The adjudicating authority adopted a new annual-capacity figure not proposed in the show cause notice. Confirmation on a basis outside the notice was impermissible.

Conclusion: The demand confirmed beyond the show cause notice could not be sustained, in favour of the assessee.

Issue (iii): Whether duty was payable after permanent closure of the factory and whether excess duty was refundable.

Analysis: The rolling mills operated only up to March 1999, after which the factory was permanently closed and no production occurred. On the correct capacity and rate, the duty paid exceeded the liability.

Conclusion: No duty was payable for the period of permanent closure and the excess payment was refundable, in favour of the assessee.

Issue (iv): Whether interest and penalty under Rules 96ZO, 96ZP and 96ZQ could be sustained.

Analysis: The provisions concerning interest and penalty in Rules 96ZO, 96ZP and 96ZQ had been declared ultra vires.

Conclusion: Interest and penalty imposed under those provisions could not be sustained, in favour of the assessee.

Final Conclusion: The capacity-based levy had to be determined from verified parameters at the prescribed rate, and the impugned demand and related liabilities could not survive.

Ratio Decidendi: Under a compounded levy scheme, duty must be determined from verified production-capacity parameters at the prescribed rate and cannot rest on a determination outside the show cause notice.

Issues: Validity of applying an upper turnover limit of Rs.200 crore for selecting comparable companies in transfer-pricing analysis.

Analysis: Rule 10B of the Income-tax Rules, 1962 requires comparability to be assessed with reference to market conditions, assets employed and risks assumed. In the absence of a statutory upper or lower turnover prescription, adoption of an upper turnover filter of Rs.200 crore was a rational and logical factual determination for benchmarking the arm's length price. Such a determination is not open to interference unless specifically shown to be perverse.

Conclusion: The upper turnover filter of Rs.200 crore was validly applied; the issue was decided in favour of the assessee.

Issues: Whether temporary protection from coercive action should be granted to enable the petitioners to appear and have their statements recorded during the money-laundering investigation.

Analysis: The petitioners undertook to appear and cooperate with the investigation. The respondent stated that coercive steps were not contemplated until their statements were recorded. The direction was confined to facilitating their examination and did not determine the merits of the allegations or confer immunity from further investigation.

Outcome: The petition was disposed of with directions for the petitioners' appearance and recording of statements, without coercive action until completion of such recording.

Issues: Whether release of the seized imported goods pending adjudication was warranted.

Analysis: The test reports consistently indicated that the imported nut pieces were unfit for human consumption, with the reports supporting their stated use as cattle feed. The customs alert and the alleged disparity between the declared price and the minimum price applicable to cashew kernels intended for human consumption did not, at this stage, establish that the goods were prohibited. The material also prima facie supported the intended use as cattle feed.

Conclusion: The direction to release the goods upon furnishing indemnity was confirmed, while statutory adjudication may continue in accordance with law.

Issues: (i) Whether the provisional attachment was sustainable where Tramadol exported under no-objection certificates to overseas entities was allegedly diverted to Pakistan without the requisite authorisation, with the appellant's knowledge; (ii) Whether the attached property's value and the extent of attachment were impermissibly determined.

Issue (i): Whether the provisional attachment was sustainable where Tramadol exported under no-objection certificates to overseas entities was allegedly diverted to Pakistan without the requisite authorisation, with the appellant's knowledge.

Analysis: The alleged predicate offences under the Narcotic Drugs and Psychotropic Substances Act, 1985 were scheduled offences for purposes of Section 3 of the Prevention of Money Laundering Act, 2002. The no-objection certificates authorised exports only to their stated destinations and did not permit diversion to Pakistan. Email communications, purchase orders, shipping records and payment details established that overseas entities functioned as intermediaries and that Pakistan was the intended final destination. The material also showed knowledge of, and participation in, concealing Pakistan as the destination.

Conclusion: The provisional attachment was sustainable because the material established illegal exports to Pakistan and proceeds of crime attributable to money laundering. The finding is against the appellant.

Issue (ii): Whether the attached property's value and the extent of attachment were impermissibly determined.

Analysis: Section 2(1)(zb) of the Prevention of Money Laundering Act, 2002 defines value as the fair market value on the date of acquisition, or, where that date cannot be determined, the date of possession. A present-day valuation report could not displace that statutory measure. The acquisition document recorded a lower consideration than the value adopted for attachment, and the attachment was confined to the quantified proceeds of crime.

Conclusion: The challenge based on the current valuation report and alleged excess attachment was rejected. The finding is against the appellant.

Final Conclusion: The confirmation of the provisional attachment remains legally effective to the extent of the quantified proceeds of crime.

Issues: (i) Whether the Tribunal could decline consideration on merits of the disputed Rs. 14.10 crore disallowance merely because an additional claim of Rs. 51.52 crore was raised; (ii) Whether the additional claim of Rs. 51.52 crore, first raised before the first appellate authority, could be entertained in appellate proceedings arising from an assessment under Section 143(3) read with Section 263 of the Income-tax Act.

Issue (i): Whether the Tribunal could decline consideration on merits of the disputed Rs. 14.10 crore disallowance merely because an additional claim of Rs. 51.52 crore was raised.

Analysis: The challenge to the Rs. 14.10 crore addition arose from the assessment made under Section 143(3) pursuant to proceedings under Section 263 of the Income-tax Act. The presence of a separate additional claim did not relieve the Tribunal of its appellate obligation to adjudicate the validity of the challenged addition on its merits.

Conclusion: The Tribunal was required to consider the Rs. 14.10 crore disallowance on merits. This issue was decided in favour of the assessee.

Issue (ii): Whether the additional claim of Rs. 51.52 crore, first raised before the first appellate authority, could be entertained in appellate proceedings arising from an assessment under Section 143(3) read with Section 263 of the Income-tax Act.

Analysis: The additional claim under Section 36(1)(vii) of the Income-tax Act was not part of the assessment challenge arising from the order passed pursuant to Section 263. It could not be introduced for the first time in the first appellate proceedings and pursued before the Tribunal within that appellate scope.

Conclusion: The additional claim of Rs. 51.52 crore was not entertainable in those appellate proceedings. This issue was decided against the assessee.

Final Conclusion: The disputed assessment addition requires adjudication on merits, while the separate additional bad-debt claim remains outside the scope of the appellate proceedings, without prejudice to any remedy available in law.

Ratio Decidendi: An appellate tribunal must adjudicate on merits a challenge to an addition arising from the assessment order, and an independent additional claim outside that assessment challenge cannot be introduced in the same appellate proceedings.

Issues: Whether the order issuing process and the complaint alleging an offence under Section 138 of the Negotiable Instruments Act, 1881 warranted quashing because the alleged settlement cheque was asserted to be improbable and its number differed from that referred to in a subsequent police statement.

Analysis: The order sheet showed that the earlier criminal matter had been posted for evidence before the date of the alleged cheque. The expression that the matter had reached the stage of evidence did not require that evidence must already have been recorded. The variation in cheque numbers involved a disputed factual question concerning the identity and evidentiary effect of the cheque, which requires trial-stage evaluation of the parties and documents. A quashing proceeding cannot be used for detailed appreciation of such factual disputes where the complaint pleads issuance of a specified cheque and the foundational allegations of the offence.

Conclusion: No ground existed to quash the issuance of process or the pending complaint; the disputed factual matters are to be determined at trial.