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Account freeze review requires KYC and supporting documents before threshold reassessment and potential unfreezing of banking access.
Account freezes based on transactions exceeding a prescribed threshold and alleged KYC deficiencies require reassessment upon submission of supporting and KYC documentation. The account may be unfrozen if the documents are found satisfactory on verification. No final determination was made on the legality of the freeze; the matter was disposed of through directions for document submission, threshold reassessment, and consequential review of the freeze.
Review jurisdiction cannot revive unexercised conditional appellate liberty after appeal withdrawal and finality of underlying adjudication.
Review jurisdiction could not be invoked because CESTAT's liberty to re-approach was expressly conditional on action within the prescribed time. Following unconditional withdrawal of Supreme Court appeals, the petitioners neither used that remedy nor challenged the underlying adjudication, instead contesting consequential demand notices. Their later recall application was inconsistent with reliance on the CESTAT order. Without an error apparent on the record, review failed; the unchallenged adjudication attained finality and repeated proceedings constituted abuse of process.
Transfer-pricing method selection requires RPM for unchanged trading functions, while unsupported nil pricing of intra-group services fails.
Transfer-pricing analysis distinguishes trading from manufacturing, requiring fresh arm's-length determination of finished-goods purchases under the Resale Price Method where the functional profile remains unchanged. Nil valuation of intra-group engineering and professional services under the Comparable Uncontrolled Price Method is unsustainable without an internal or external comparable, particularly where evidence establishes plant-related services and prior-year treatment supports consistency. Book adjustment of customer security deposits against receivables does not establish repayment outside banking channels, so the related disallowance cannot stand. The DRP may consider an additional interest-expenditure claim relevant to a proposed variation. However, a separate processing adjustment outside the draft assessment variation falls beyond DRP proceedings.
Specified-authority approval after the three-year period is mandatory; approval by an incorrect authority invalidates reassessment notices.
After expiry of three years from the end of the relevant assessment year, Section 151(ii) requires approval from the Principal Chief Commissioner for issuing a reassessment notice. Approval granted by the Principal Commissioner instead constitutes a jurisdictional defect. Consequently, the notice issued under Section 148 was void ab initio, and the reassessment proceedings initiated on that basis could not survive.
Unexplained cash credit additions fail where documented share-trading losses lack transaction-specific evidence of manipulation or connected money trails.
Sale proceeds from share transactions documented through recognised exchanges, brokers, contract notes, broker ledgers and banking channels could not be treated as unexplained cash credit merely on general investigation material. Regular trading records established purchases, sales and losses, while no capital-gains exemption or set-off against taxable income was claimed. In the absence of a specific enquiry or evidence linking the transactions or brokers to manipulation, and where the alleged money trail was unrelated, the additions were unsustainable and deleted.
Unexplained cash credits require rebuttal of documents; untested third-party statements cannot sustain additions without cross-examination.
Section 68 permits an unexplained cash-credit addition only where the taxpayer fails to explain the credit. Sale invoices, ledgers, bank statements, import-purchase records, VAT returns and C Forms supported receipts as sale proceeds, while separate funds were documented as a repaid advance after a proposed sale failed. In the absence of independent verification rebutting that evidence, a third-party allegation alone did not sustain the addition. Denial of the requested cross-examination of the third party breached natural justice; the credits were accordingly treated as satisfactorily explained.
Appeal admissibility after reassessment return: payment of tax on returned income triggers the applicable appellate condition.
Section 249(4) distinguishes between taxpayers who have filed a return and those who have not. Where a return is filed in response to a reassessment notice, accepted for assessment purposes, and tax on the returned income is paid, the appellate condition requiring payment of tax on returned income applies. The advance-tax condition for non-filers does not govern such an appeal. The appeal must therefore be considered on merits under the applicable condition for return filers.
SEZ profit deduction protects full eligible profits despite notional finance expenses added back in taxable-income computation.
Duplicate disallowance under section 143(1) may arise where expenditure for non-deduction of tax at source has already been voluntarily disallowed under section 40(a)(ia). Deduction under section 10AA is based on eligible SEZ-unit profits for tax purposes. Notional Ind-AS finance expenses recorded in the accounts but added back while computing taxable income do not reduce the deduction where eligible business profits are undisputed. These principles support computation without double disallowance and with deduction on full eligible SEZ profits.
Section 14A disallowance fails without exempt income, preventing revision where the Assessing Officer conducted detailed enquiries.
Revision under section 263 cannot rest on an alleged failure to examine section 14A where the assessment record shows detailed enquiries into investments, interest expenditure, exempt income and Rule 8D. An assessment order need not expressly discuss every examined issue. For periods before 1 April 2022, section 14A read with Rule 8D did not support a disallowance where no exempt income arose, and a departmental circular could not override the statute. On those facts, the assessment was neither erroneous nor prejudicial to Revenue interests.
Explained property-registration expenses cannot be taxed as unexplained investment when treasury receipts establish the spouse-funded payment source.
Stamp duty and registration charges paid for a property purchase cannot be treated as unexplained investment where documentary evidence establishes their source. Treasury receipts showed that the purchaser's spouse paid the charges and had arranged the purchase consideration. Because the source of the expenditure was substantiated during assessment, adding one-half of those charges to the purchaser's income as unexplained investment was unsustainable and was deleted.
Assessment of struck-off companies: non-existent entity assessments are jurisdictional nullities; revival should precede completion of assessment.
Assessment proceedings against a company struck off from the register after it has ceased to exist lack jurisdictional validity. Where revenue authorities were aware of the strike-off but completed a best-judgment assessment without pursuing revival, the assessment is void. CBDT instructions contemplate seeking revival before completing assessment in such circumstances. The resulting appellate order and consequential additions were also treated as void and deleted.
Unspecified penalty charges invalidate notices that retain both concealment and inaccurate-particulars limbs without identifying the applicable allegation.
Penalty notices under Section 271(1)(c) are invalid where they retain both concealment of income and furnishing inaccurate particulars limbs without identifying the applicable charge. The resulting vagueness denies the taxpayer a clear opportunity to respond, demonstrates non-application of mind, and requires deletion of consequential penalties under the applicable jurisdictional precedent. Dismissal of a special leave petition in a factually distinguishable matter neither results in merger nor constitutes a declaration of law under Article 141, particularly where both penalty limbs applied and the objection was not raised earlier.
Defective penalty notices lacking a precise charge invalidate penalty proceedings despite dismissal of a special leave petition.
Penalty notices initiating proceedings for concealment of income or furnishing inaccurate particulars must clearly identify the specific statutory charge. Retaining both limbs without striking out the inapplicable charge leaves the taxpayer without precise notice of the allegation, demonstrates non-application of mind, and vitiates the resulting penalty proceedings. Dismissal of a special leave petition does not cause merger with the Supreme Court order or create a binding declaration of law. It therefore does not displace an applicable jurisdictional rule on defective penalty notices, particularly where the relied-on decision is factually distinguishable.
Mandatory reassessment notice: regular scrutiny cannot validate search-related additions in a taxpayer's own assessment following a search.
For searches initiated between 1 April 2021 and 1 September 2024, Explanation 2 to section 148 deems search material to be information suggesting income escaping assessment, placing search-related assessments under sections 147 and 148. The inapplicability of section 148A in an assessee's own search case does not remove the mandatory section 148 notice. Regular scrutiny under section 143(2) cannot replace that reassessment procedure for additions arising from search material; an assessment made solely under section 143(3) is invalid.
Section 40(a)(i) disallowance deletion stands where unchallenged prior rulings govern payment nature and Indian taxability for same taxpayer.
Deletion of a disallowance for failure to withhold tax on payment was sustained because prior determinations on the same issue in the taxpayer's earlier assessment years remained unchallenged and undisturbed. Separate re-examination of the payment's nature and its taxability in India was therefore not required. The issue was resolved in favour of the taxpayer.
Curable filing defects require an opportunity to rectify before an appeal can be dismissed without merits review.
Non-submission of a self-certified copy of the impugned order constitutes a curable procedural defect in an appeal. The appellate process must afford the appellant an opportunity to rectify the deficiency before the appeal is rejected without consideration on merits. Dismissal solely for failure to file the self-certified copy, without allowing cure, is impermissible. Where the required copy is filed within the stipulated period, the appeal must be restored and determined on merits.
Bail pending trial for alleged fraudulent input tax credit offences follows prolonged custody and delayed proceedings.
Bail pending trial for alleged fraudulent input tax credit offences may be warranted where Magistrate-triable charges carry a maximum five-year sentence, custody is prolonged, and proceedings show little progress. Article 21 protects personal liberty against extended incarceration without an expeditious trial, while requiring a balance with societal interests. Continuing investigation, delayed witness examination, and the non-arrest or non-examination of principal-firm proprietors are material considerations. Bail was granted without addressing the prosecution allegations on their merits.
Rectifiable filing defects cannot defeat an appeal without allowing cure and restoration for merits-based adjudication.
Non-furnishing of a self-certified copy of the challenged order constitutes a rectifiable procedural defect rather than an independent basis to terminate appellate proceedings. Dismissal solely for that omission, without an opportunity to cure it, is unsustainable. Where the required copy is filed within the stipulated period, the appeal should be restored and considered on merits.
Statutory jurisdiction under Section 151A invalidates show-cause notices issued by an unauthorised assessing officer and consequential proceedings.
Section 151A confines the statutory jurisdiction for issuing the relevant notice. Issuance of a show-cause notice by the jurisdictional assessing officer fell outside that framework and was invalid. The notice and all consequential proceedings were therefore quashed, applying reasoning already adopted on identical grounds in connected matters.
Anti-dumping duty applies to Titanium Dioxide imported into India when originating in or exported from China PR, with producer-specific rates and an all-other-producers rate. The duty covers goods under specified tariff items, although product description governs classification, and excludes defined food, pharmaceutical, skin-care, textile and fibre applications, and nano or ultrafine material below the prescribed particle size. Individual producer rates require a valid commercial invoice containing the prescribed manufacturer certification; otherwise, the all-other-producers rate applies. The duty remains in force for five years unless earlier revoked, superseded or amended. Landed value follows customs assessable-value rules, and exchange rates are determined by the bill-of-entry date.