Classification of feasibility study costs: expansion-related studies without new assets qualify as revenue expenditure.
Whether feasibility study expenditures are revenue or capital depends on purpose and benefit: costs to obtain an enduring benefit or create a new capital asset are capital; costs incurred to expand the same business, under unity of control and without creation of new assets, are revenue in nature.

Section 43B actual-payment requirement prevents deduction of unutilised MODVAT credit and sales tax recoverable balances.
Section 43B permits deduction only for sums payable as tax, duty, cess or fee that are actually paid in the relevant previous year (or paid before the return due date where a statutory liability existed). Unutilised MODVAT credit is an entitlement to adjust future excise liabilities and not an actual payment; sales tax in a recoverable account is a cost adjustment, not discharge of statutory liability. Because no excise liability existed at the relevant year end, the proviso does not apply and such credits do not meet the Section 43B payment requirement for deduction.

Retrospective application of curative amendment to TDS deadline clarified, affecting disallowance of expenses under the tax provision.
The Court addressed whether an amendment extending the time to deposit TDS should be applied retrospectively to govern the operation of a statutory disallowance provision. After reviewing prior amendments, explanatory materials, and precedent on curative measures, the Court characterised the later amendment as curative and directed its retrospective application to the date of insertion of the original provision, thereby affecting the applicability of the disallowance to expenses where TDS was deposited by the extended deadline.

Bad debt deduction criteria clarified under Sections 36 and 37 - stricter substantiation required; capital expenditure excluded.
Entitlement to a bad debt deduction requires statutory compliance and adequate substantiation; an accounting write off alone does not suffice. The assessee's failure to produce coherent documentary evidence of the nature and terms of the advance, inconsistent characterisation of the payment, and the capital nature of the outflow precluded treatment as a business deduction. The general business expenditure provision does not avail items that are within or expressly excluded by the bad debt framework.

Commission characterization: discounts to franchisees are sales margins, not commission; therefore no TDS obligation under Section 194-H.
The Court held that the characterisation of receipts as commission or brokerage under Section 194-H requires agency relationships established by control, fiduciary obligations and the ability to bind the principal. Franchisees/distributors who buy prepaid products at discounts, bear commercial risk, determine resale margins and lack pricing control operate independently. Their discounted purchase price and resale margin constitute sale proceeds, not commission for services rendered on behalf of the provider, and thus do not fall within Section 194-H's withholding obligation.

Procedural timelines for charitable registration may be treated as directory to mitigate transitional electronic filing hardships and enable merit review.
The tribunal treated administrative timeline extensions and electronic-filing difficulties as relevant to construing statutory deadlines for charitable approval, regarding the contested filing timelines as directory rather than strictly mandatory where substantive compliance existed, and directed merit-based reconsideration instead of dismissal solely for technical delay.

Incriminating evidence requirement for search-based tax assessments: without it, 153 C assessments fail; reassessment under 147/148 remains possible.
Assessments under Section 153-C require incriminating material discovered during search and seizure; absent such material, those assessments lack evidentiary foundation and may be set aside, though the Revenue may pursue reassessment under alternate provisions if independent legal grounds exist.

Post-search assessment requires reliance on incriminating material discovered during search to validate reassessment of income.
Post-search assessments must be founded on incriminating material discovered during the search; reassessments cannot be based on material unconnected to search records. Third party assessments require a demonstrable link between the impugned income and the incriminating material within those records. The court reaffirmed precedent distinguishing ordinary reassessment from search triggered reassessment and directed re determination consistent with those legal principles to preserve procedural fairness.

Procedural fairness: clarifying timing for final registration under section 80G prevents denial for pre approval activities.
The tribunal identified procedural deficiencies in the tax authority's handling of a charity's final registration application, finding that a single short-notice hearing failed to secure adequate opportunity to be heard and underscoring procedural fairness. It further clarified that provisional approval is a predicate to applying for final registration and that activities begun prior to provisional approval do not automatically preclude later final registration, rejecting a restrictive timing construction and directing fresh consideration consistent with those legal principles.

Jurisdictional objection waiver: assessee's participation after notice bars later challenge, remedial reassessment permitted within timeframe.
The Supreme Court held that an assessee who participates in assessment proceedings after receiving an assessment-process notice without timely challenging the assessing officer's jurisdiction is barred from later disputing that jurisdiction under the statutory limitation. It set aside the High Court's order and directed the assessing officer to complete the assessment within a short prescribed timeframe, with the proviso that the assessee may not plead limitation in that completion process.

Jurisdiction in tax assessments: improper issuing authority can invalidate notices and require reissuance by competent authority.
Jurisdiction in tax assessments was the pivotal issue: the record showed assessment power lay with the Commissioner of Income Tax (Exemption), not the subordinate officer who issued the contested notice, rendering that notice issued without jurisdiction. The petition also challenged adherence to principles of natural justice. The court refrained from adjudicating the substantive assessment and demand because those aspects were subject to statutory appeal, distinguishing jurisdictional defects from appealable merits and allowing issuance by the competent authority in conformity with procedural safeguards.

Taxation of cross border software payments as royalty reinforced; precedent remains binding despite pending review, so withholding obligations persist.
Supreme Court reaffirmed that payments to non residents for software are to be treated as royalty for withholding tax purposes, holding that a pending review against an earlier precedent does not suspend that precedent's application; procedural limits on review under the Code of Civil Procedure prevent indefinite postponement of settled law, requiring taxpayers and payors in cross border software transactions to comply with prevailing withholding obligations.

Royalty characterisation of cross-border software dictates TDS obligations based on transaction substance and applicable DTAA.
Whether payments to non-resident suppliers for computer software constitute royalty and attract TDS depends on the transaction's terms and economic substance; payments reflecting a one-time purchase or transfer of goods do not automatically qualify as royalty. Applicable Double Taxation Avoidance Agreement (DTAA) provisions that are more favourable to the taxpayer govern taxability, and withholding obligations arise only if, after applying treaty benefits and examining substance, the payment is chargeable under domestic law or the DTAA.

Tax exemption under Section 80P clarified: cooperative societies engaged in non banking, member centric activities retain deduction eligibility.
Classification for tax concessions under Section 80P depends on an entity's functional character, regulatory oversight, and whether it engages in commercial banking. Entities that are member centric and do not perform commercial banking functions align with the legislative intent to promote cooperative societies and remain eligible for deductions; regulatory distinctions and precedents support treating non bank cooperative activity as within the exemption framework.

Cross examination rights in tax proceedings protect taxpayers when third party seized evidence is used against them.
The core issue is whether reliance on third party seized documents and an employee's statement to attribute unaccounted interest to the assessee was permissible without permitting cross examination or testing a retraction affidavit. Denial of the opportunity to confront the declarant engages principles of natural justice, and indirect evidence requires direct inquiry and corroboration before adverse tax findings can be sustained.

Processing of e-filed refund claims extended, allowing administrative approval for delayed non-scrutiny returns to secure refunds.
Processing of electronically filed income-tax returns with refund claims may be completed beyond prescribed time limits for non-scrutiny cases where technical problems or other non-fault causes delayed processing. Assessing officers may process such returns only after prior approval from higher tax authorities; technical support and supervisory monitoring will be provided. The relaxation excludes returns under scrutiny, returns showing or likely to show a payable demand, and returns unprocessed due to taxpayer fault.

Electronic filing requirements expanded: audit liable taxpayers must file digitally; senior taxpayers retain flexible filing options.
Rule 12 amendments require electronic filing for individuals and HUFs subject to audit under section 44AB, permitting filing via digital signature or electronic verification. For other taxpayers the permitted modes are digital signature, electronic transmission with verification code, or electronic filing followed by submission of Form ITR-V. Senior taxpayers are afforded additional flexibility: specified forms may be filed with digital signature, electronically with verification code, electronically with subsequent ITR-V submission, or on paper. The notification also substitutes ITR-1, ITR-3 and ITR-5.

Incomplete assessment communication can delay the start of the limitation period for appeals when essential contents are not disclosed.
Incomplete ITBA order uploads do not void an assessment but may postpone the commencement of the limitation period for appeals because knowledge of decision requires understanding the essential contents; defective communication can justify extension of time even though the assessment's substantive validity remains unaffected.

Charitable status preserved where incidental surplus, trustee payments, or deed amendments further educational objectives without private benefit.
The Court analysed whether surplus generation, fee policies, deed amendments, and payments to trustees removed an educational trust's charitable purpose. It held that incidental surplus and deed changes furthering objectives do not automatically negate charitable character, and payments for genuine services do not necessarily amount to private benefit. Cancellation of registration requires proof of lack of genuineness or objective deviation; mere shortcomings or commercial elements aimed at sustainability are insufficient.

Alteration of objects: failure to notify tax authority can jeopardise a society's registered status under section 12A.
A material amendment of a registered society's objects, coupled with failure to intimate the Commissioner under rule 17B and Form No.10A, undermines the basis of registration under Section 12A; Section 12AA(3) addresses activities inconsistent with objects, whereas fundamental change in the objects themselves requires statutory intimation to preserve the original registration.