Reassessment notices issued more than three years after the relevant assessment year require material revealing escaped income of at least Rs. 50 lakh and prior sanction from the higher specified authority. These conditions are mandatory for assuming reassessment jurisdiction. Where the alleged escaped income was below that threshold and approval came from the Principal Commissioner rather than the authority prescribed for delayed notices, jurisdiction was not validly assumed. The reassessment notice was invalid, and the consequential assessment was quashed.

Professional banking education provided to an identifiable section of the public constitutes educational charitable activity for Section 2(15); the general-public-utility proviso does not apply, and refusal of approval under Section 10(23C)(vi) does not determine entitlement to Section 11 exemption. Interest on tax-free bonds is consequently governed by the charitable-institution computation regime under Section 11 rather than Section 10(15). Section 11(6) cannot support a depreciation disallowance where no depreciation was claimed. Accumulation under Section 11(2) is permissible where Form No. 10 identifies definite purposes, including premises, e-learning facilities, and testing, learning and data centres, rather than merely repeating general institutional objects.

Unexplained-income addition based on alleged share-sale proceeds requires assessee-specific evidence linking identified transactions to unaccounted income, sham trades, or accommodation entries. Gross sale consideration cannot be treated as taxable profit without reconciling transaction-wise records and examining the actual income component. Books of account, contract notes, bank statements and broker records supported the reported transactions, while general penny-stock investigation material did not establish a nexus with them. No exempt long-term capital-gains claim had been made. The unsupported addition was deleted, with consequential interest to be recomputed on finally determined income.

Section 14A(2) requires the Assessing Officer to examine the accounts and record cogent, objective dissatisfaction with the assessee's expenditure claim before invoking Rule 8D. Rule 8D is not an automatic computation merely because exempt income exists. A reasoned suo motu disallowance based on proportionate employee and communication costs cannot be increased through general references to common accounts, intermingled funds, transactions or interest expenditure without identifying defects or expenditure with a proximate nexus to exempt income. Unrebutted explanations on interest and interest-free own funds must be addressed. The additional disallowance was deleted, while the voluntary disallowance remained intact.

Unexplained unsecured loans may be accepted where confirmations, ledger accounts, bank statements, tax returns and financial statements establish creditor identity, creditworthiness and transaction genuineness, particularly when the material remains unverified or undiscredited during remand. Low returned income alone does not disprove creditworthiness. Alleged accommodation-entry loans require corroborated evidence linking funds to unaccounted cash; unauthenticated, undated third-party messages without a cash trail or bank evidence are insufficient. Disallowance of expenditure relating to exempt income under the prescribed computation mechanism requires recorded dissatisfaction with the taxpayer's accounts; without it, the disallowance is unsustainable.

Section 12AB registration depends on the charitable nature of a trust's objects and the genuineness of its proposed activities, not on whether charitable activities have already commenced. Where the objects are undisputedly charitable and proposed activities align with them, the absence of activity in relevant years does not by itself demonstrate non-genuineness or a specified violation. Registration does not automatically confer income-tax exemption; actual application of income and the genuineness of an exemption claim remain subject to scrutiny during assessment proceedings. Registration therefore cannot be refused solely because charitable activities have not begun.

Rectification under Section 154 is limited to mistakes apparent from the record and cannot determine disputed questions requiring factual investigation or legal interpretation. A claim that part of purchased land was compulsorily retained by a development authority on conversion to non-agricultural use required examination of the conversion order, the legal effect of statutory surrender, and attribution of acquisition cost. Reduction of indexed acquisition cost on that basis therefore lay outside rectification jurisdiction. The rectification order was quashed, and the addition for alleged excess indexed cost was deleted.

Cash exclusivity compensation received when negotiations to transfer subsidiary shares fail is capital in character where exclusivity prevents dealings with other buyers but does not restrict business activity. It is therefore outside business-income taxation under Sections 28(iv) and 28(va) and excluded from book-profit computation under Section 115JB. Section 14A disallowance does not arise for a year with no exempt income; the Finance Act 2022 Explanation applies from assessment year 2022-23 and does not govern an earlier year.

A society filing its income-tax return as an association of persons or body of individuals is taxable at normal rates where that status applies; maximum marginal rate treatment is unwarranted. Where the society's total income is below the taxable limit, no tax liability arises and the returned income is to be accepted without applying the maximum marginal rate. The relevant distinction is between the entity's declared taxable status and an unsupported application of the higher rate.

Accepted sales, maintained quantitative records and unrejected books of account preclude addition of the entire value of alleged bogus purchases merely because suppliers or purchases remain insufficiently substantiated. In those circumstances, tax is confined to the profit element embedded in the non-genuine purchases, rather than the full purchase amount. Applying that approach, the disputed purchase addition was restricted to 10% of the alleged bogus purchases.

Reasonable and bona fide cause under Section 273B protects an assessee from penalty for delayed furnishing of a tax audit report. The accountant's illness and medical treatment prevented timely preparation of accounts, while the audit report was furnished before scrutiny proceedings commenced. These circumstances support deletion of penalty imposed for delayed submission of the tax audit report under Section 271B.

Section 115BBE's enhanced 60% rate, effective from 1 April 2017, applies from assessment year 2018-19 and not to assessment year 2017-18. Unexplained money assessed under Section 69A for financial year 2016-17, corresponding to assessment year 2017-18, is taxable at the then-applicable 30% rate. The tax on the addition must therefore be computed at 30%, rather than 60%.

Reassessment proceedings cannot be validly initiated through a Section 148 notice issued in the name of a person who had died before its issuance. Section 159 permits continuation against a legal representative only where proceedings began during the deceased person's lifetime; where fresh proceedings are permissible after death, the jurisdictional notice must be issued to the legal representative. Revenue's lack of knowledge of the death, or a later assessment in the legal heir's name, does not cure the defect. Where the legal heir promptly objects and does not submit to jurisdiction, reassessment founded on the notice to the deceased is legally unsustainable.

A domestic company that validly exercised the section 115BAA option through Form No. 10-IC remains eligible for the 22% concessional tax rate in subsequent assessment years. Section 115BAA(5) gives continuing effect to an option exercised in the prescribed manner. Acknowledgement of the form, prior acceptance of the option, and disclosure in the relevant return establish compliance. Processing at the normal rate under section 143(1), or failure to produce supporting documents before the first appellate authority, does not nullify a subsisting statutory option demonstrated on record.

Penalty for concealment of income under Section 271(1)(c) remains sustainable where a survey detects a stock discrepancy omitted from the original return and the taxpayer discloses the resulting income only in a revised return. Admission that the original return was untrue or incomplete can establish concealment without further proof. A revised return filed after detection of undisclosed income under compulsion does not cure or erase the initial concealment. Binding High Court precedent supported sustaining the penalty.

Fee-based payment and settlement services operated on a non-profit basis to provide secure, efficient and cost-effective national payment infrastructure retained their charitable character where fees funded technology-intensive operations, surpluses were non-distributable, and the dominant purpose was advancing general public utility. Charging fees and earning incidental surplus did not trigger the proviso to Section 2(15), preserving exemption under Sections 11 and 12. Uniform access to payment facilities at identical charges did not amount to application of income for the benefit of promoter banks or other specified persons. Subscription to share capital alone did not establish such benefit, so no violation of Section 13(1)(c)(ii) read with Section 13(3) arose.

Genuine business activity is required for a deductible business loss; mirror-image group agreements, year-end journal entries, and no demonstrated services, infrastructure, fund movement, or commercial substance support denial of the loss. Interest on borrowings used to acquire shares is deductible only where a business nexus and commercial expediency are established; absence of a demonstrated commercial interest justified disallowance. Disallowance of expenditure relating to exempt income cannot exceed verified exempt income for the relevant year, as the 2022 Explanation operates prospectively. For share-capital credits, identity alone is insufficient: unexplained circular group transfers require fresh examination of transaction genuineness.

Transfer-pricing characterisation of an international transaction involving purchase of services for resale requires examination of the taxpayer's functions, assets and risks. Treating the taxpayer as an information technology enabled service provider without cogent reasons, and without explaining departure from its earlier reseller characterisation despite no material factual change, was unsustainable. Although the Advance Pricing Agreement did not cover the relevant year, its functional analysis, acceptance of the Transactional Net Margin Method and reseller characterisation were relevant for reconsideration. The transfer-pricing issue was restored for fresh determination of the arm's length price under applicable law.

Reassessment of share capital, investments, advances and loans already examined in a completed scrutiny assessment cannot rest solely on an anonymous complaint or a change of opinion where material facts were disclosed and no fresh tangible material exists. A converted reassessment notice must be issued within the surviving statutory limitation period after applicable exclusions and deemed-stay periods. Where proceedings proceed on a three-year limitation basis, extended limitation cannot be invoked without recorded and satisfied conditions; if it applies, approval must come from the statutorily competent specified authority. A notice issued outside the available period or without valid sanction invalidates consequential reassessment proceedings, subject to fresh action otherwise permitted by law.

Direct Tax Vivad se Vishwas Scheme refunds covered by Form-5 must be processed through consequential orders or refunds within the Central Action Plan deadline where Form-5 was issued by 30 June 2021. The prescribed completion date was 31 July 2021; the Income-tax Act limitation for assessments could not extend this period because neither the Scheme circular nor the Action Plan adopted it. Delayed retention of the refunded amount compensates the taxpayer through interest. Interest at 6% per annum applies from 1 August 2021 until the date the refund was credited.