Year-end expense provisions maintained under a consistent accrual and reversal practice remain allowable where they represent ascertained liabilities, while cumulative accrued interest beyond the amount claimed cannot be added. Capital expenditure not claimed as a revenue deduction, recorded cash deposits, and income already offered to tax should not be added again. Payments outside tax-deduction-at-source provisions cannot attract withholding disallowance, and no expenditure disallowance arises without exempt income. First appellate remand power does not extend to fresh verification in regular assessments. Actuarially valued leave-encashment liabilities are deductible despite future payment, and valid under-reporting penalty initiation requires recorded satisfaction.

Accepted books of account and reconciliation of project costs with regular books support allowance of contingency expenditure absent evidence that the expenditure was inflated, fictitious, or generated unaccounted cash; internal SOP breaches and isolated failure to respond to verification notices alone do not establish such defects. No disallowance under section 14A read with Rule 8D arises where no exempt Chapter III income is earned; joint-venture profit is governed by section 86. A royalty transfer-pricing adjustment requires use of a prescribed method and proper benchmarking, with joint-venture agreements, support services, and relevant revenue appropriately considered in determining arm's-length pricing.

Royalty paid to an associated enterprise under an agreement supporting manufacturing operations may be benchmarked with related transactions through entity-level TNMM where the transactions are interrelated. Section 92C requires the arm's length price to be determined using a prescribed method. CUP requires comparable uncontrolled transactions; without them, it cannot support a royalty adjustment. A nil royalty determination based solely on a benefit test is impermissible. Where the agreement, technical support and material facts remain unchanged from prior years, consistency supports continued use of entity-level TNMM.

Foreign tax credit under section 90 and Article 23 of the India-Germany DTAA provides relief from double taxation, while Rule 128 prescribes the claim procedure. Where Form No. 67 is filed within the prescribed time, an incorrect DTAA article reference is a curable defect if later rectified. Rule 128(9) is directory and does not justify denying foreign tax credit solely because a corrected form is filed late. Credit remains subject to verification of foreign tax payment and eligibility under the applicable provisions.

Search assessments under section 153A must remain within the applicable ten-year assessment block; years outside it cannot be assessed under that provision. The extended block requires material showing escaped income represented by a qualifying asset, so foreign-travel expenditure and unsecured loans, being liabilities, do not satisfy that jurisdictional condition. For completed, unabated years, additions require incriminating material unearthed during the search; disclosed books, recorded expenditure, and pre-existing investigation statements are insufficient. Section 153B also requires completion within the prescribed limitation period; an assessment completed after that deadline is time-barred. These requirements can invalidate assessments and related additions that fail the relevant condition.

Issuance of notice under section 143(2) is a mandatory jurisdictional condition before income returned in response to a section 153C notice may be assessed under section 143(3). Complete absence of that notice is not a procedural defect curable under section 292BB. Where competing interpretations of a taxing provision exist and no jurisdictional High Court ruling applies, the interpretation favourable to the assessee governs. Assessments completed without the mandatory notice are invalid and liable to be quashed.

Reassessment initiated on information from the Insight portal and investigation wing was treated as valid notwithstanding allegations of borrowed satisfaction and inadequate independent enquiry, as the first-appellate findings disclosed no infirmity. Where goods were actually received but invoiced through fictitious suppliers, the recorded purchase expenditure was regarded as inflated. Disallowance of an appropriate portion of the purchase price was permissible to account for that inflation, and the 25% disallowance was maintained. The reassessment and addition for inflated purchases consequently remained undisturbed.

Actual service of a notice under Section 148, in addition to valid issuance, is a jurisdictional condition precedent to reassessment under Section 147. The Revenue must establish service through postal receipts, acknowledgements, or other reliable evidence. Where no service evidence is available, reassessment is void ab initio. An assessee's response to a later notice, return filing, or participation in assessment proceedings cannot confer jurisdiction by consent, waiver, or estoppel. Consequently, revision founded on an invalid reassessment cannot validly survive.

Rectification under Section 254(2) is limited to mistakes apparent from the record and cannot reopen findings reached on material already considered. Revision under Section 263 remained sustainable because the assessment order was found erroneous and prejudicial to Revenue, based not only on a discrepancy in the donation receipt but also on concerns over the genuineness of political entities, alleged bogus political donations, and inadequate assessment inquiry into eligibility under Section 80GGC. Receipts and bank statements did not establish any manifest error warranting rectification; consequently, Section 254(2) relief was unavailable.

Third-party seized material recovered during a coordinated search must be used against an assessee through the assessment mechanism under Section 153C, rather than through Section 153A where the material was seized from another person's premises. This preserves the statutory route governing material belonging to or relating to a third party. A protective addition under Section 68 cannot continue once the corresponding substantive addition has been quashed, because the protective assessment has no independent basis after the substantive liability fails.

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. As the notice for penalty under section 271D was issued in January 2021, the limitation period expired in July 2021. The penalty order passed in March 2022 was time-barred and invalid. The first appellate order was consequently set aside in favour of the assessee.

Comparable Uncontrolled Price benchmarking requires an identifiable uncontrolled transaction adjusted for material differences; a bank prime lending rate plus an estimated premium, and controlled related-party transactions, cannot supply the benchmark. Secured bank borrowing and unrelated unsecured loans supported the related-party interest rate, leaving no transfer-pricing adjustment. Where own interest-free funds exceed investments or advances and the Revenue does not prove diversion of borrowings, the interest-free funds presumption removes interest disallowance under rule 8D and for interest-free advances; fund-flow evidence or a linking chart is unnecessary. Administrative expenditure may nevertheless be disallowed where exempt income is earned, recorded dissatisfaction supports the computation, and the amount does not exceed exempt income.

Documentary proof of lender identity, creditworthiness and transaction genuineness, including confirmations, financial records and banking-channel receipt, interest and repayment, discharges the assessee's onus for unsecured loan credits. A general allegation that lenders are accommodation-entry providers, without material linking the assessee or transactions to that arrangement or rebutting the evidence, does not sustain additions for loan credits or repayments. Unexplained-expenditure additions for alleged interest or commission require evidence that expenditure was actually incurred; presumptions, estimates, or consequential allegations arising from loan transactions are insufficient.

Transfer-pricing analysis of banking services requires demonstrable functional, asset and risk comparability, a reliable prescribed method, and an effective opportunity to rebut third-party data obtained under section 133(6). Counter-guarantee pricing should distinguish an intermediary's role from that of a guarantor bank. Attribution of ECB interest and fee income should reflect each entity's funding, lending functions and assumption of credit, liquidity and interest-rate risks. Regional support and head-office expense charges require evidence of services received, business benefit, cost base and allocation methodology. Mark-to-market treatment of AFS and HFT investments held as stock-in-trade and consistently valued at lower of cost or market value concerns whether diminution is a trading loss rather than an unascertained-liability provision.

Timely issuance of a draft assessment order attracts the separate final-order timelines prescribed for DRP directions, notwithstanding the general assessment limitation. Tax computation must conform to assessed nil income after set-off of brought-forward losses and unabsorbed depreciation, subject to verification of year-wise utilisation. For traded goods purchased from associated enterprises and resold independently, RPM remains appropriate absent material processing, substantial value addition, or defects in gross-margin comparables; a comparable with verifiable gross-profit data cannot be rejected solely under TNMM profitability criteria. A commercially justified weighted NAV-DCF valuation may determine the arm's length price of an operating-business transfer where neither NAV nor DCF should receive exclusive weight. A transaction deemed international does not alone establish associated-enterprise status for secondary adjustment; refund eligibility requires verification of that relationship.

Section 254(2) permits rectification only of a mistake apparent from the record and does not authorise review of a concluded reassessment decision. A retrospective insertion of section 147A after an earlier decision applying the law and binding jurisdictional precedent then in force may raise a debatable legal question, particularly while its constitutional validity remains under challenge. Retrospective operation alone therefore does not establish an apparent mistake or support recall or modification of the earlier decision.

The first proviso to Section 149(1) retains the earlier limitation regime for assessment years beginning on or before 1 April 2021. For Assessment Year 2015-16, a Section 148 notice issued on or after 1 April 2022 is barred by limitation. Service of a Section 148A(b) notice within the earlier limitation period does not preserve or extend time for the later Section 148 notice. A time-barred Section 148 notice invalidates the consequential reassessment proceedings and assessment order.

Section 69A cash-deposit explanations require a demonstrable link between cash sales, cash-in-hand and individual bank deposits. Matching aggregate turnover reported in returns and VAT records, particularly where multiple accounts are used, does not alone establish that nexus; cash books, sales records, stock records or a reconciliation may be needed for factual verification. A Rule 46A objection does not arise without a demonstrated breach, but absence of that breach does not remove the need to verify the stated source. Section 148A(b) requires at least seven days to respond; despite a shorter stated deadline, twelve days before the Section 148A(d) order provided a real opportunity where no response attempt or impediment was shown.

The first proviso to Section 149(1)(b) preserves the earlier six-year limitation for reassessment notices relating to covered assessment years and operates as an absolute restriction. For Assessment Year 2015-16, that period expired on 31 March 2022; therefore, a notice issued on 12 April 2022 was time-barred. The fifth and sixth provisos, which govern exclusions or extensions when computing the amended limitation periods, cannot enlarge the restriction retained by the first proviso. A time-barred jurisdictional notice invalidates the consequential reassessment. Medical incapacity of the person handling an assessee's legal affairs may constitute sufficient cause for condoning filing delay.

Failure to record satisfaction for penalty for an alleged cash-transaction contravention does not, by itself, make an assessment erroneous and prejudicial to the Revenue. The penalty operates independently of income computation and, for the relevant year, fell within the Joint Commissioner's competence rather than the assessment process. Revision cannot create a fresh basis for, or bypass the separate limitation governing, penalty proceedings. Where the underlying cash transactions remain disputed and the restriction's applicability is uncertain amid divergent judicial views, non-initiation represents a plausible legal view. Revision jurisdiction therefore cannot be invoked to initiate or revive independent penalty proceedings.