Composite consideration for assigned goodwill and brand names, inseparable from perpetual restrictive covenants, is treated as deferred revenue expenditure where it protects existing business profitability without creating or enlarging the profit-making apparatus. One-fifth is deductible in the relevant year, with the balance deductible equally over the following four years. Legal, professional, travel and related costs incurred for an abandoned acquisition project are revenue expenditure where no plant, machinery, technology or other enduring capital asset comes into existence. This differs from expenditure on an asset that was created before becoming unusable.

The first proviso to section 149(1)(b) retains the limitation period under the earlier reassessment regime for assessment years up to 2021-22. A notice under the new regime cannot be issued once the corresponding six-year period available under the earlier regime has expired. For assessment year 2016-17, the six-year period ended on 31 March 2023; a reassessment notice issued on 31 August 2024 was therefore time-barred. The reassessment proceedings were barred by limitation, resulting in quashing of the section 148A(d) order and section 148 notice.

Income-tax proceedings alone do not justify automatically withholding an assessee's bank accounts. A bank account hold based solely on an Income Tax Department intimation, without prior enquiry, due process, or identified statutory or regulatory authority, lacks a demonstrated legal basis. The direction to hold two accounts was set aside and the accounts were restored to operational status. The validity of the underlying income-tax proceedings and penalty remained unresolved.

Reassessment proceedings require the assessing authority to consider the assessee's response and supporting records before recording cogent reasons that reassessment is warranted and issuing notice. Credits identified as loans, capital transactions, debtor receipts, sale proceeds, cash deposits and refund interest must be evaluated against available material, including balance-sheet schedules. Where apparent inconsistencies concern capital or unsecured loans, clarification should be sought before credits are treated as unexplained. The approval process must not convey predetermination. Non-compliance resulted in quashing of the reassessment-fit order and notice, with fresh consideration after an opportunity for clarification.

Reassessment for AY 2016-17 beyond three years is barred under section 149(1)(b) where the alleged escaped income, after allowing indexed cost, remains below the Rs. 50 lakh threshold. The taxpayer's non-response to initial notices does not remove the Assessing Officer's duty to apply that limitation once the actual escapement is known from TDS information and assessment material. Consequently, a section 148 notice and section 148A(d) order issued beyond that period lack jurisdiction.

Sections 148A(1) and 148A(3) require meaningful notice and a reasonable opportunity to respond to the material and propositions relied on in determining whether reassessment should proceed. Where alleged undisclosed turnover is derived from bank credits, the underlying computation and supporting information must be supplied, particularly when requested. Reliance on additional allegations concerning fund parking or rotation, unsecured loans, interest, expenses or accounting practices absent from the show-cause notice is impermissible. A reassessment fitness determination based on undisclosed material or unnotified propositions would improperly turn the process into a roving enquiry and cannot stand.

Section 148A requires disclosure of the material and propositions supporting proposed reassessment, including the computation underlying alleged undisclosed turnover, so that the assessee has a meaningful opportunity to respond. A notice confined to bank-credit allegations cannot support a later determination relying on undisclosed allegations of fund parking or rotation, loans, expenses, or accounting practices. Reassessment founded on such undisclosed matters cannot be sustained; relevant material and computations must be furnished and a reasonable opportunity given before reconsideration.

Failure to consider an assessee's timely electronic response to a draft assessment order breaches the principles of natural justice and audi alteram partem. A response uploaded within the stipulated period, acknowledged on the e-filing portal, and confirmed by departmental email must be considered before finalising an assessment under the electronic-assessment framework. Proceeding on the incorrect premise that no reply was filed, while making the proposed addition, vitiated the final assessment order, which was set aside.

Rule 10B requires transfer-pricing comparability analysis to be factual, data-driven and based on functional similarity. A company undertaking diversified service, industrial, telecommunications and other sectoral operations may not be comparable with a software-development provider where their functions materially differ. Functional dissimilarity supports exclusion of the proposed comparable, and factual comparability findings require a showing of perversity before interference.

Export incentives available solely because of gherkin exports have a direct nexus with the export business and are treated as operating income when determining the arm's length price. Their origin in governmental policy does not make them ancillary or non-operating profits. Comparable selection for transfer-pricing benchmarking requires functional comparability under Rule 10B: businesses growing, processing and exporting gherkins are not necessarily comparable with general food-processing entities. Transfer-pricing computation must therefore include export-linked incentives as operating income and benchmark the controlled transaction using functionally similar entities.

Reassessment under Sections 147 and 148 cannot be based solely on material seized during a search of a third party where the statutory route under Section 153C applies. Use of such seized material against another person requires the Assessing Officer of the searched person to record and transmit the required satisfaction note before assessment or reassessment proceedings under Section 153C. Sections 147 and 148 remain available only where reopening is founded on independently obtained material. Absence of the required satisfaction note renders reopening on third-party seized material without jurisdiction.

For assessment years beginning on or before 1 April 2021, the first proviso to section 149(1) retains the limitation regime under the pre-Finance Act 2021 reassessment and search-assessment provisions, even where a third-party search occurs later. For Assessment Year 2012-13, the former six-year reassessment period had expired. The ten-year search-assessment block under Explanation 1 to section 153A includes the search assessment year and runs from the end of that year; a financial year 2021-22 search covers Assessment Years 2013-14 to 2022-23, excluding Assessment Year 2012-13. A satisfaction-date reference likewise does not extend limitation. The reassessment notice is therefore time-barred.

Information in a document seized from another person may suggest income escapement under Explanation 2(iv) to section 148, but reassessment requires a live and direct nexus between that material and the assessee's transaction. A broker's register entry recording an asking price for a larger property, made substantially before the registered purchase, did not establish that nexus where it named different persons, covered different survey numbers, and did not refer to the assessee or co-purchasers. The broker's statements also prevented the entry from being treated as conclusive proof of undisclosed consideration under the statutory presumptions. The reassessment notices were therefore unsustainable and quashed.

Reassessment proceedings and consequential notices must remain within the grounds specified in the underlying show-cause notice. Where the notice concerns high-value financial transactions, an order cannot instead rely on the source and creditworthiness of margin money or interest disallowance unless those issues were notified. Introducing new grounds without giving the assessee an opportunity to respond violates the hearing requirement and cannot sustain reassessment action.

Reassessment initiation under Section 148A(d) requires assessee-specific information creating a rational and direct nexus, or live link, between available material and the belief that taxable income escaped assessment. Allegations that a mutual fund manipulated its accounting methodology, coupled with investor dividends or short-term capital losses, do not establish an assessee's knowing participation in a sham transaction without material connecting that assessee to the alleged conduct. Precedent on synchronised securities trades does not supply the required nexus in this context. In the absence of that jurisdictional basis, reopening is invalid.

Reassessment based exclusively on material found during a third-party search must follow the special procedure under Section 153C, which requires the searched person's Assessing Officer to record satisfaction and communicate it to the other person's jurisdictional officer. General reassessment under Sections 147 and 148 cannot substitute for that procedure where no independent material indicates escaped income. Reopening founded solely on search material without the required satisfaction lacks jurisdiction; assessment or reassessment may proceed under Section 153C only when its statutory conditions are met.

Section 109(8) permits a Single Member to hear an appeal only where the disputed amount is within the prescribed limit and no question of law arises. Interpretation of the relationship between input tax credit conditions, credit transfer following merger or amalgamation, and the prescribed transfer procedure raises a legal issue concerning statutory eligibility and the manner of valid credit availment. Where the appeal asserts that the credit-transfer mechanism is mandatory, the matter requires consideration by a Judicial Member and a Technical Member sitting as a Division Bench.

Penalty under Section 129 for alleged e-way bill reuse requires cogent, positive evidence of an intention to evade tax; invoice dates, loading dates, or e-way bill extensions alone do not establish prior movement or delivery. Valid invoices and e-way bills, matching physical verification, and purchase and return records support the legitimacy of a consignment where no independent material proves earlier movement, unloading, or reloading. Omission of the GSTIN of the dispatching premises is a technical breach unless it establishes unaccounted goods or a fictitious transaction. Penalty is therefore unsustainable without proof of tax evasion.

Retrospective cancellation of GST registration is permissible under section 29(2) only where the prescribed contingencies exist. The notice must specifically disclose the proposed retrospective effect and the grounds supporting it, enabling the registered person to respond effectively. Any cancellation order imposing retrospective effect must record reasons justifying that consequence. Cancellation without prior notice of the proposed retrospective action violates principles of natural justice and is illegal.

Fair opportunity to reconcile input tax credit reported in Form GSTR-3B with Form GSTR-2A, supported by transaction documents, was treated as necessary for adjudication on merits. The adjudication and demand orders were quashed to allow responses to the show-cause notices, subject to stipulated conditions. The petitioner may establish the genuineness of its input tax credit claims through reconciliation and supporting material despite earlier non-participation following the full-time director's cessation of association.