Addition based on an alleged fall in net profit rate was unsustainable because the assessment incorrectly treated the declared rate as 0.35% instead of the audited net profit rate of 46.99%. The audited financial results showed increased profitability compared with the preceding year, making the comparison underlying the addition factually incorrect. The addition founded on the erroneous net profit-rate comparison was deleted.

Approved resolution plans under Section 31 of the Insolvency and Bankruptcy Code, 2016 bind governmental and statutory authorities. Where a plan expressly covers affiliates and subsidiaries, requires withdrawal or dismissal of tax proceedings for periods before approval, extinguishes related liabilities, and bars contrary governmental or quasi-judicial action, pending income-tax proceedings for that period cannot continue. The clean slate principle applies where tax authorities participated in the insolvency process and their objections were rejected. Subsequent approval of such a plan may also support additional grounds or a Rule 27 plea before the Tribunal where it raises a pure legal issue without requiring fresh factual enquiry, avoiding an academic merits determination.

Voluntary and corpus donations received from identified donors cannot be treated as anonymous where the recipient maintains donor names, PANs, addresses, donation amounts, income-tax returns, confirmations and bank details at the time of receipt. Donors' non-compliance with verification notices, without contrary findings in the remand report or independent evidence displacing the records, does not negate donor identity. Specific confirmations may also establish the corpus character of donations. On these facts, the additions for voluntary and corpus donations were set aside.

Protective addition under section 69A cannot rest solely on physical possession of jewellery where the same asset has been substantively assessed in the hands of another claimed owner. Physical possession is relevant but does not establish actual or beneficial ownership without independent positive evidence. A protective assessment is contingent and serves to safeguard revenue only where genuine uncertainty exists regarding the person liable; it cannot be converted into a substantive charge through the assessee's non-compliance. The stated principles support deletion of the protective addition and recomputation of consequential interest. The delay in filing the appeal was treated as condonable where bona fide pursuit of connected remedies established sufficient cause.

Omission to apply the statutory deeming provisions to excess cash consideration and undisclosed cash can render an assessment erroneous and prejudicial to the interests of Revenue where it causes non-levy or short levy of tax. Undisclosed investment and cash are addressed through sections 69B and 69A, with the special tax regime under section 115BBE and potential penalty proceedings under section 271AAC. Such omissions indicate non-application of mind and support revision under section 263, including directions for fresh inquiry and a reasoned reassessment.

Interest disallowance on interest-free supplier advances requires an established nexus between interest-bearing borrowings and diversion of borrowed funds for non-business purposes. Consistent exclusion of VAT from both opening and closing stock requires corresponding adjustments to opening stock, purchases and sales; adding VAT only to closing stock distorts profit and is tax neutral after full adjustments. Taxation of outstanding creditor balances as cessation of trading liabilities requires remission or cessation during the relevant year and prior allowance of the liability as a deduction. Continuing creditor transactions or subsequent set-off arrangements supported by confirmation do not alone establish cessation.

Section 271AAB requires an independent finding that surrendered amounts fall within its exhaustive definition of undisclosed income; an admission in a search statement alone does not satisfy that requirement. Land and other advances are fund outflows, while the definition concerns undisclosed income represented by inflows or specified search material. Undated and uncorroborated diary notings lacking complete party details, payment mode and land particulars are dumb documents that cannot independently establish undisclosed income. Deeming provisions for unexplained investments cannot be imported where they were not invoked in the quantum assessment. Consequently, penalty on the recorded advances was not sustainable.

Subscription-based SaaS receipts from Indian customers did not constitute fees for included services under Article 12(4)(b) of the India-USA tax treaty where the products were standard, automated and non-customised. Customers independently used the SDK, their own data and dashboard-generated reports, without receiving customer-specific development, coding, algorithm configuration or post-sale technical services. Technology is made available only when recipients can independently apply it; access to a product embodying technology is insufficient. Retained source code, algorithms and processes, together with recurring subscriptions, showed no transfer of enduring technical capability. Incidental account management, support and demonstrations merely enabled product use and did not transfer technical knowledge, know-how, processes, plans or designs.

Section 56(2)(viib) does not support an addition for excess share premium where the issue price falls within the 10% safe-harbour variation from the fair market value determined under Rule 11UA. Rule 11UA(4), read with Notification No. 81/2023, treats an issue price within that tolerance as fair market value. Since the variation between the issue price and Rule 11UA valuation was 3.98%, the issue price was deemed to be fair market value and the addition was unsustainable.

Clause (iv) of the first proviso to section 80G(5), effective from 1 October 2024, independently permits a trust that has commenced activities to seek regular approval after commencement. An application decided after the amendment took effect cannot be treated as non-maintainable solely because it missed the time limit under the former clause (iii) regime. Section 12AB registration may support the genuineness of the trust's activities. Rejection solely for delay was set aside, and the application was restored for consideration under clause (iv)(B) after a reasonable opportunity of hearing.

Service permanent establishment requires proof that personnel furnished qualifying services in India beyond auxiliary functions and outside treaty exclusions for technical or consultancy services. Oversight, training, administrative support, news-gathering assistance and product-sales support did not establish such a presence where the activities were auxiliary or potentially excluded. A subsidiary was not a dependent agent permanent establishment because it independently contracted with customers, invoiced them and assumed contractual responsibilities on a principal-to-principal basis; parental controls and exclusive distribution did not alter that character. Arm's-length transfer-pricing acceptance further supported no additional profit attribution. No taxable profit was assessable in India on a permanent-establishment basis.

Reassessment for Assessment Year 2015-16 could not be initiated in August 2024 because the first proviso to Section 149 preserves the limitation available under the pre-amendment reassessment regime. Although the amended framework permits longer limitation periods in specified circumstances, it does not revive reassessment where the earlier limitation had already expired. The applicable six-year period expired on 31 March 2022, before proceedings under Section 148A(b) began. Consequently, the order under Section 148A(d) and the consequential notice under Section 148 were time-barred and without jurisdiction.

Section 119(2)(b) permits admission of belated applications to prevent genuine hardship and does not impose a specific limitation period for seeking condonation. This statutory discretion must be exercised liberally after considering the assessee's difficulties. Departmental circulars bind income-tax authorities but cannot restrict the discretion conferred by Section 119(2)(b), including in writ proceedings under Article 226. Rejection of delayed Form-10B condonation applications solely because they exceeded a circular-prescribed period was unsustainable. The delay was condoned, permitting Form-10B to be furnished with the returns for processing in accordance with law.

Penalty for concealment or furnishing inaccurate particulars is not automatically attracted by disallowance of deduction or depreciation claims. Assessment and penalty proceedings are distinct, and the rebuttable presumption under Explanation 1 to section 271(1)(c) does not establish concealment merely because an addition is made. Where relevant particulars are disclosed and the taxpayer provides a plausible, bona fide explanation for the claims, penalty is not leviable. The deletion of penalty was upheld, particularly as the underlying quantum additions were not sustained.

Revisionary jurisdiction under Section 263 requires an assessment order to be both erroneous and prejudicial to Revenue. Revision is unsustainable where the Assessing Officer has investigated unaccounted expenditure, investments and petrol-pump income, and the related assessment and appellate findings have attained finality; a differing view by the Commissioner is insufficient. Tanker-related revision and the consequential addition also fail where concurrent factual findings establish no evidence of unaccounted tanker income in the assessee's books. The disputed undisclosed-income additions therefore cannot be sustained.

A draft assessment order under Section 144C cannot support a tax demand or penalty proceedings because it only proposes variations and does not determine the sum payable as required for a final assessment. Section 292B cannot cure an order expressly issued as a draft or retrospectively convert it into a final assessment. Where the Transfer Pricing Officer proposes no variation to international transactions because an advance pricing agreement covers the relevant year, the taxpayer is not an eligible assessee for the draft-assessment procedure. A draft order issued in those circumstances, and consequential demand and penalty actions, lack legal foundation and are annulled.

Reassessment disputes concern the validity of notices, sanction by the specified authority, and whether jurisdictional Assessing Officers may issue notices instead of the prescribed faceless mechanism or competent Faceless Assessment Officers. The issues also cover the effect of subsequent amending legislation on pending reassessment litigation, including the Finance Act 2021 changes to the reassessment framework and insertion of section 147A. The appeals were disposed of under an earlier Supreme Court order and remitted to the respective High Courts for decision in accordance with that order.

The Supreme Court criticised the Department for filing a special leave petition with an excessive delay after an earlier SLP challenging the same impugned order had already been dismissed for delay. The petition was characterised as frivolous and as unnecessarily burdening the Court. The Court urged the Department to exercise greater vigilance and avoid repeatedly filing matters with exorbitant delay. Although the material lists substantive tax issues concerning goodwill depreciation, CSR expenditure, related-unit valuation, captive power, steam transfers, additional claims and consistency, no determination of those issues is set out.

Rule 43's 2022 amendment excluding duty credit scrip values from exempt supplies is presented as prospective from 5 July 2022, not applicable to transactions during 2017-20. The amendment is characterised as creating a new benefit in calculating proportionate input tax credit reversal rather than clarifying an existing ambiguity; input tax credit is treated as concessional and not retrospectively vested. The monetary-limit circular is described as binding departmental officers but not the Tribunal, with aggregate tax involved in a composite order and recurring interpretive issues requiring consideration. Section 74(1) requires proof of fraud, wilful misstatement, or deliberate suppression intended to evade tax; absent such material, liability should be determined under Section 75(2) using the Section 73(1) mechanism.

Section 171 of the CGST Act requires additional input tax credit benefits to be passed to recipients through commensurate price reductions. Verified beneficiary-wise shortfalls remain payable where invoices and receipts do not establish full pass-through. Rule 133(3)(b) requires return of unpassed benefit with interest at 18% per annum from the commencement of GST until payment. Section 171(3A) applies a 10% penalty to profiteering attributable to the period after its commencement, subject to the exception where the amount is deposited within 30 days of the order. The residual input tax credit shortfall is therefore recoverable with applicable interest and penalty consequences.