Penalty for unexplained money under Section 271AAC(1) was not leviable where cash deposits connected with trading activity were assessed only by estimating an embedded profit element. Restriction of the quantum addition to 10% of the deposits reflected an ad hoc estimation rather than proof of conscious concealment or undisclosed income. The penalty was therefore deleted.

Reassessment notices issued under the substituted regime introduced by the Finance Act, 2021 require approval under Section 151(ii) where more than three years have elapsed from the end of the relevant assessment year. Approval by a Principal Commissioner is not valid for that period because Section 151(ii) limits sanctioning authority to the Principal Chief Commissioner, Principal Director General, Chief Commissioner, or Director General. Consequently, a notice issued under Section 148 on a Principal Commissioner's sanction is jurisdictionally defective, and the consequential reassessment proceedings lack jurisdiction.

Limitation-based dismissal without adjudicating the grounds on merits requires reconsideration where the appeal was rejected solely for delay. An unsupported explanation attributing non-compliance and delayed filing to an authorised representative may justify costs, but does not remove the need for substantive adjudication. Presumptive application of tax-deduction requirements to all purchases is insufficient without examining whether purchases from each relevant party exceeded the prescribed threshold. Merits must be considered after allowing additional evidence, obtaining the Assessing Officer's remand report, and payment of imposed costs.

Sufficient cause supported by a tax professional's affidavit, including health-related inability to attend assessment and appellate proceedings, warrants condonation of delay so that substantial justice prevails over procedural default. Where an assessment is completed ex parte without an effective opportunity to explain bank deposits and furnish supporting evidence for claimed business receipts, the deposits require fresh examination. De novo adjudication should allow the taxpayer to substantiate the source and nature of the deposits before the Assessing Officer.

Penalty for under-reported income arising from misreporting remains leviable where deductions for interest and dividend income were maintained during assessment and penalty proceedings. Section 270A(6) permits relief on a bona fide explanation, but section 270A(8) excludes that relief when the under-reporting constitutes misreporting under section 270A(9)(a). Payment of tax and interest after scrutiny assessment and initiation of penalty proceedings is consequential compliance, not voluntary disclosure demonstrating a bona fide error. Accordingly, the penalty at 200% for under-reporting resulting from misreporting was valid.

Diminution in the value of investment in a wholly owned subsidiary made to expand and strengthen existing business operations may qualify as a business loss where binding jurisdictional precedent supports that treatment. An intimation issued under section 143(1)(a) performs a quasi-judicial function and cannot disregard such precedent solely because the tax audit report characterises the expenditure as capital. Failure to consider a jurisdictional High Court decision already in force when the intimation was issued constitutes a mistake apparent from the record. Rectification under section 154 was therefore maintainable, and the disallowance was liable to be deleted.

Section 145 permits rejection of books only on a reasonable and cogent basis that accounts are incorrect, incomplete, or incapable of determining true income. A consistently followed completed contract or project-completion method is not invalid merely because another revenue-recognition method is preferred. Variations in flat-booking prices, without proof of suppressed sales, unrecorded receipts, or accounting defects, do not establish unreliability of accounts. Similarly, a uniform base price cannot support an addition for undisclosed consideration without evidence that the differential amount was received by the assessee. Payments under separate extra-work arrangements require evidence linking them to the assessee.

Reassessment for escaped capital gains was sustained because the taxpayer had not filed a return despite taxable income, did not dispute the property sale or resulting gains, and produced no material showing that the reopening information was incorrect or mechanically acted upon. Capital-gains exemption for investment in two flats was disallowed because construction agreements did not substantiate instalment dates or payments, sale deeds did not record the asserted prior payments, and completion of the unfinished flats within the prescribed three-year period was not established. Qualifying construction-based exemption requires reliable proof of investment and timely completion.

For property purchases where the agreement date and registration date differ, stamp-duty valuation may be determined as of the agreement date if consideration, wholly or partly, was paid through prescribed banking modes on or before that date. Where the agreement pre-dated the introduction of section 56(2)(x), the sale deed recorded the agreed consideration and payments, and the payment condition was met, the registration-date guideline value could not replace the agreed consideration. The agreement-date value governed, and the addition based on the guideline value at registration was deleted.

Section 28(iv) applies to non-monetary benefits or perquisites arising from business or profession. Acquisition of land at a materially lower value than its established value constitutes a benefit received in kind and is taxable as business income under that provision. The rule excluding monetary receipts from Section 28(iv) does not apply where the benefit is land rather than cash. Taxation of that benefit cannot be offset by increasing the land's stock-in-trade cost, because deductible cost must be actually incurred. The levy is authorised by the Income-tax Act and is not defeated by Article 265 of the Constitution.

Stamp-duty valuation differences within the 10% tolerance band for purchase of immovable property are protected by the curative and beneficial relaxation under section 56(2)(vii)(b). A variation of approximately 6.2% to 6.6% between the stamp-duty value and actual consideration was treated as a marginal bona fide valuation difference. Applying the coordinate-bench view that the enhanced tolerance band operates retrospectively, the addition based on the valuation difference was unsustainable and required deletion.

Reassessment initiated more than three years after the relevant assessment year requires approval under section 151(ii) from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. Approval by a Principal Commissioner is not approval by the specified authority. This defect affects the Assessing Officer's jurisdiction and is not a curable procedural irregularity. Consequently, an invalid approval vitiates the order under section 148A(d), the notice under section 148, the reassessment proceedings and the reassessment order.

Goodwill arising from the assumption of excess liabilities in a slump-sale acquisition of a going concern constitutes consideration for acquired business and commercial rights. Its absence as separately stated monetary consideration or an individual asset valuation does not make it a mere book entry. For assessment years preceding the prospective statutory exclusion of goodwill from depreciable assets, depreciation on such goodwill is allowable; consequential book-profit adjustments based on its disallowance cannot stand. TDS credit belongs to the assessment year in which the related income is assessable, subject to verification through the return, books of account and Form 26AS that the income was offered to tax in that year.

Commission expenditure under section 37(1) was supported by recipient-wise details, PAN particulars, TDS records, Form 26Q and payment evidence, discharging the assessee's initial burden of proving business expenditure. A referral-based business model supported the commercial basis for commission payments. No recipient or payment was specifically identified as non-genuine, excessive or unrelated to business. An estimated commission benchmark without comparable cases, market data or other cogent material could not support an ad hoc disallowance, particularly where the commission ratio broadly aligned with preceding years. The disallowance was therefore deleted.

Rectification under section 154 is confined to an obvious, patent error apparent from the record and cannot resolve matters requiring substantive evidence or extended inquiry. The relevant record may include connected assessment records of the taxpayer; therefore, an addition of share capital and securities premium in an incorrect assessment year may warrant fresh determination after verification of supporting material and coordinated consideration with the original assessment proceedings. Conversely, an addition for share application money received in the relevant year, where identity, source and genuineness require evidentiary appraisal, falls outside rectification. The former claim requires fresh adjudication, while the latter remains unrectifiable under section 154.

Cancellation of charitable registration under sections 12AA(3) and 12AA(4) requires the Principal Commissioner or Commissioner to have demonstrable jurisdiction over the assessee under section 120 and applicable jurisdictional orders or notifications. Centralisation of assessment proceedings with a Central Circle does not, by itself, transfer separate jurisdiction over registration or its cancellation. A Central Commissioner may exercise such functions only where a valid assignment under section 127 places the matter with an Assessing Officer subordinate to that Commissioner. In the absence of a produced transfer order, notification, or other instrument establishing that assignment, cancellation jurisdiction is not established; the cancellation is without jurisdiction and registration remains restored on its original terms.

Territorial and subject-matter jurisdiction remains necessary for cancellation of charitable registration; designation as a Principal Commissioner or Commissioner does not itself confer authority over exemption registration. Exemption jurisdiction continues with the designated exemption authority unless lawfully transferred. Centralisation of group assessments for investigation does not establish transfer of registration jurisdiction without a transfer order, notification, or other jurisdictional instrument assigning an Assessing Officer under the relevant Central Commissioner. Notification No. 70/2014 applies only where such assignment is proved. On these principles, cancellation of registration for want of jurisdiction was quashed and the original registration restored, while the underlying allegations and retrospective-cancellation issue remained unresolved.

Goodwill arising from acquisition of a going-concern business under a slump-sale agreement may constitute a depreciable intangible asset where assumed liabilities exceed acquired assets and are subsequently discharged. Such excess liabilities represent economic consideration for business and commercial rights, notwithstanding the absence of separately stated consideration or individual asset valuations. The Finance Act, 2021 exclusion of goodwill from depreciable intangible assets operates prospectively. Where depreciation on goodwill is allowable under normal provisions, no consequential add-back is warranted in book-profit computation. TDS credit is available in the year in which corresponding income is assessable, subject to verification that the income was offered to tax in that year.

Section 28(iv) covers non-monetary benefits arising from business or profession, including land acquired in a real-estate business for consideration below its established value. The ITAT treated the difference as a real business benefit received in kind, rather than a notional gain, and distinguished loan-waiver principles. It sustained taxation of the benefit and rejected the constitutional objection. The taxable benefit does not increase the land's deductible cost: where no corresponding expenditure was incurred, deduction is limited to the actual acquisition cost despite a revenue-neutrality claim. The addition was sustained and the appeal dismissed.

Project-completion accounting, when consistently followed by a real estate developer, is a recognised method and cannot be rejected merely because substantial sale proceeds were received or the Assessing Officer preferred a different revenue-recognition method. Rejection under section 145 was unsustainable because no specific defect showed that the accounts were unreliable, while estimated profit was applied to recorded receipts without an independent basis. Differing flat agreement values also did not establish undisclosed consideration without cogent evidence of actual on-money receipts. Payments for extra work under separate agreements could not be attributed to the developer solely through a director's connection. The book rejection and additions were deleted.