Transactional Net Margin Method benchmarking for administrative support services requires comparables to be functionally similar and capable of meaningful comparison after considering scale, risk profile, intangibles, brand value, service nature and financial stability. Entities with substantially higher turnover, diversified or high-end services, significant intangible or brand advantages, abnormal or volatile results, or functional differences must be excluded. Web-based software development and high-end analytical and research service providers were unsuitable. After their exclusion, the remaining comparable margins were lower than the tested party's margin, so no upward transfer-pricing adjustment was warranted.

Embezzlement and misappropriation losses suffered by a charitable institution are allowable where special-audit findings and a first information report substantiate fabricated records, unauthorised use of fixed deposits, and diversion of funds or blood stock. The material consideration is the institution's conduct and evidence establishing the embezzlement, rather than the eventual result of criminal proceedings. Losses caused by persons managing the institution are treated as absolute and irrecoverable on the established facts, and cannot be characterised as benefits extended to specified persons.

For the relevant pre-amendment period, section 194B applied its withholding threshold to each individual winnings payment rather than aggregated payments; disallowance under section 40(a)(ia) also requires an identifiable expenditure and withholding default. Deposit-linked and referral bonuses granted on promotional conditions are not winnings merely because recipients participate on an online gaming platform. CSR expenditure excluded from business-expense deduction under section 37(1) may nevertheless qualify under section 80G where the statutory conditions, including donee eligibility, are met. Employee Stock Option Plan expenditure follows established allowable treatment absent distinguishing facts. Total-income computation requires verification of all operative assessment, appellate, and rectification orders.

Reassessment cannot be used to review foreign-remittance deductions already examined in the original assessment on the same disclosed material, without new tangible material indicating escaped income; reopening on that basis is invalid as a change of opinion. A pending appeal concerning tax-deduction default proceedings does not bar a reassessment disallowance, because those proceedings concern tax collection while disallowance concerns income computation. The same expenditure cannot be disallowed twice, requiring verification of alleged arithmetical errors, including tax-deducted amounts and expense reversals. Claimed carry-forward losses also require verification against assessment records before determination.

Motor cars held for personal use are excluded from the definition of capital assets under the Income-tax Act, except for specified exceptions that do not cover motor cars. Actual use determines an asset's character, rather than its classification as a fixed asset in the balance sheet. Where no depreciation is claimed, vehicle expenses are disallowed as personal, and no business use exists, sale of the car cannot generate an allowable long-term capital loss.

Faceless appellate jurisdiction does not extend to appeals against penalty orders arising from assessments completed following a search under sections 132 or 132A. Although section 250(6B) enables faceless appeals generally, the Faceless Appeal Scheme, 2021, read with the relevant CBDT circular and notification, specifically excludes such penalty appeals from the National Faceless Appeal Centre's jurisdiction. These appeals must be decided by the jurisdictional Commissioner of Income Tax (Appeals). Orders passed by the National Faceless Appeal Centre in excluded search-related penalty matters are liable to be set aside for de novo adjudication by the jurisdictional appellate authority.

Section 263 revisional jurisdiction cannot be invoked solely because the Assessing Officer did not initiate penalty proceedings or record satisfaction for penalty in the assessment order. Penalty proceedings are separate and independent from assessment proceedings; therefore, their non-initiation does not by itself make an assessment order erroneous or prejudicial to the interests of the Revenue. Revisional powers cannot be used to direct initiation of penalty proceedings, and a revisionary order founded only on that omission is invalid.

Third-party grant disbursement does not displace a resident contracting party's withholding-tax responsibility where it satisfies that party's enforceable liability to a non-resident. Section 195 applies when payment includes income chargeable in India, and Section 40(a)(i) disallows the corresponding expenditure if tax is not deducted. Consideration for technical know-how and allied services used for an Indian industrial project is deemed to accrue in India under Section 9(1)(vii), subject to statutory exceptions. Under the India-UK tax treaty, source follows the person bearing the payment obligation rather than the place of remittance. A UK-funded payment mechanism therefore does not alter Indian taxability or withholding obligations.

For Assessment Year 2015-16, the applicable limitation framework required reassessment notices issued after 1 April 2021 to be dropped. The initial notice dated 30 June 2021 and the subsequent reassessment order dated 28 July 2022 were issued after the prescribed cut-off. The reassessment action was therefore time-barred and invalid, and the notice was quashed in favour of the assessee.

Government securities held by a bank as stock-in-trade may be valued at the lower of cost or market value under Section 145, and a consistently applied accounting and valuation method should not be displaced merely because another method is preferred; the related depreciation claim was allowable. A brokerage claim remained allowable after post-remand consideration. Section 41(1) applies only where a trading liability previously allowed as a deduction has been remitted or has ceased. Unclaimed customer balances were not taxable because the bank's continuing legal obligation to repay them precluded any remission or cessation of liability.

Regional Rural Banks treated as co-operative societies for income-tax purposes under the statutory deeming fiction in Section 22 remain eligible for the deduction under Section 80P. The exclusion in Section 80P(4) for co-operative banks does not displace that treatment unless the Regional Rural Bank is established to fall within the relevant co-operative bank categories. An assessment granting the deduction on this basis is legally sustainable and does not satisfy the requirement of being erroneous and prejudicial to revenue for revision under Section 263.

Reassessment notices for assessment year 2015-16 issued on or after 1 April 2021 under section 148 were required to be dropped because proceedings could not be completed within the period prescribed by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Notices dated 9 April 2021 and 27 July 2022 were therefore unsustainable and quashed. Revenue accepted the applicability of the Supreme Court determination.

For reassessment proceedings, a return filed after the period stated in a notice under Section 148 remains valid where the law applicable to the assessment year permits its filing; it cannot be treated as non est merely because it was delayed. Once that return and the required materials are furnished, service of a scrutiny notice under Section 143(2) is mandatory before reassessment can be completed. Completion of reassessment without issuing or serving that mandatory notice is invalid.

Section 220(6) permits consideration of a stay of disputed tax demand while an appeal is pending. An unconditional stay of the full disputed demand was warranted because the stay rejection failed to address material grounds, including a prima facie limitation challenge to the reassessment notice. The unresolved limitation issue remained for appellate determination. The assessment was high-pitched, with additions nearly five times returned income, and turnover alone did not establish financial soundness.

Approval for reassessment under section 151 requires genuine consideration of the assessee's response to the section 148A(b) notice. Recording that no response was filed when a response existed, and sanctioning reassessment solely on the Assessing Officer's proposal and materials, constitutes mechanical approval without application of mind. Such invalid approval renders the consequential order under section 148A(d) and notice under section 148 unsustainable, while leaving fresh proceedings available in accordance with law.

Interim protection against recovery of a refund credited to the petitioner's bank account was granted pending writ adjudication. The Department had sought direct recovery from the bank based on the Assessing Officer's satisfaction. To balance equities, the existing fixed deposit was required to remain intact pending further orders. Amendment of the writ petition was permitted, and the matter was listed for further hearing.

Faceless assessment procedures require a personal hearing when specifically requested under section 144B(6)(viii) of the Income-tax Act. The applicable SOP also requires at least seven days to answer a final show-cause notice, unless a limitation-driven curtailment is justified. Denial of the requested hearing and unexplained curtailment of the response period breach natural justice and permit judicial review under Article 226. The assessment order, demand notice, penalty show-cause notice, and consequential penalty order were set aside as invalid.

Prima facie jurisdictional objections to reassessment, including sanction and statutory limitation, supported interim protection while the pending appeal remained undecided. Because 20% of the disputed demand had already been deposited, recovery was limited to that amount: adjusted refunds exceeding the deposit were to be returned, and further refund adjustment was barred pending appellate disposal. The appellate authority was required to determine the appeal within 12 weeks.

TNMM comparability depends on functional, asset and risk profiles; entity size may justify a turnover filter even without a prescribed ceiling. Operating-margin analysis may use a cash PLI excluding depreciation where asset types, technology and investment levels cause material depreciation differences. Provisions for bad and doubtful debts ordinarily form operating costs unless demonstrated to be extraordinary. Equipment supplied without charge by an associated enterprise does not constitute a taxable business perquisite where ownership remains with that enterprise, the recipient neither capitalises nor depreciates it, and its use is limited to testing software for the owner.

Section 119(2)(b) provides a statutory remedy to seek condonation for delayed return filing where the appellate authority has no such power. Completion of assessment and pendency of an assessment appeal do not, by themselves, bar that remedy. Genuine hardship requires a liberal assessment of a delay explanation, particularly where a short COVID-19-period delay is substantially similar to a previously accepted delay. Rejection solely on the basis of completed assessment or pending appeal is unsustainable, and the related deduction claim requires consideration on merits in accordance with law.