Expense disallowance in a high-volume petrol and diesel outlet business must reflect the business's consistently low profit and gross-profit margins. Where some expenditure remains unsubstantiated, an ad hoc disallowance that produces an abnormal margin disproportionate to the business is not reasonable. Restricting the disallowance to 5% was considered appropriate instead of 10%, resulting in relief for the assessee.

Foreign leave travel concession is not exempt from salary taxation and must be included in taxable salary for tax deduction at source. An employer's statutory deduction obligation remains distinct from recovery of tax from employees; judicial restraint on employee recovery does not itself remove that obligation, particularly where no restraint operates. Failure to deduct tax may result in treatment as an assessee in default. Interest for non-deduction is consequential and mandatory, although its computation or recovery may be reconsidered for periods covered by judicial stay or where employees have discharged their tax liability through self-assessment tax.

A notice under section 148 issued by an Income-tax Officer without pecuniary jurisdiction is inherently invalid where CBDT Instruction No. 1/2011 assigns cases exceeding the prescribed returned-income threshold to an Assistant Commissioner or Deputy Commissioner. The territorial-jurisdiction objection limitation under section 124(3) does not apply to a defect in pecuniary jurisdiction. Such lack of authority is not a procedural irregularity and cannot be cured by section 292BB. Consequently, the section 148 notice and the resulting reassessment are void from inception.

Documented purchases cannot be disallowed as bogus solely because suppliers later become non-compliant, untraceable, or have GST registrations cancelled. Contemporaneous contracts, purchase orders, invoices, delivery and manpower records, e-way bills, banking trails, GST entries, and evidence of use in executed works establish actual receipt where no evidence links the purchaser to a sham transaction or payment recycling. Supplier-side defaults require action against suppliers and do not negate supported procurement. Reliance on incomplete or irrelevant third-party statements breaches natural justice, particularly where books are not rejected. An addition for an alleged transaction cannot stand without verification where the purchaser denies that any transaction occurred; a purchaser need not prove a negative fact.

Profit attributable to an Indian permanent establishment from offshore equipment supplies was assessed at 3.75% by relying principally on findings concerning another group entity. A 2.5% profit attribution was considered reasonable on the available record and was accepted to avoid further litigation. Accordingly, the attributable profit is computed at 2.5% rather than 3.75%, reducing the taxable profit allocated to the Indian permanent establishment.

Pecuniary jurisdiction under CBDT Instruction No. 1/2011 requires a non-corporate assessee reporting income above the prescribed threshold to be assessed by an Assistant Commissioner or Deputy Commissioner. Notices for scrutiny issued by an Income-tax Officer outside that assigned monetary jurisdiction are inherently invalid. The restriction on raising territorial-jurisdiction objections does not apply to a defect in pecuniary jurisdiction. Such a jurisdictional defect is not a procedural irregularity capable of validation through deemed service or participation provisions, rendering the consequential assessment void ab initio.

Capital gains of a charitable trust are treated as applied to charitable purposes when the net consideration from transferring a trust-held capital asset is used to acquire another capital asset. Deposits with a scheduled bank, including savings-bank balances and fixed deposits, constitute distinct debtor-creditor assets rather than cash merely retained by the depositor. Consequently, fixed deposits qualify as new capital assets regardless of their tenure or whether they were made after the financial year-end, and scheduled-bank savings-account balances also qualify for the capital-gains exemption.

Electronic filing of Form 10-IC for the concessional corporate tax regime under section 115BAA was treated as a curable and directory requirement where the form was uploaded within the CBDT-extended deadline. The extension allowed filing until 31 January 2024 for the relevant assessment year, and filing on 10 November 2023 met that deadline. Denial of the concessional regime despite compliance within the extended period was therefore unjustified, and the taxpayer remained entitled to the section 115BAA benefit.

Common approval covering 111 reassessment cases does not satisfy the statutory requirement that the competent authority independently consider the assessee's case and the material supporting reopening. Where approval fails to disclose such application of mind and has been treated as mechanical for the same group of cases, reassessment jurisdiction is invalidly assumed. A retrospective provision cannot validate the approval where it was granted before that provision took effect. The resulting reassessment is therefore unsustainable.

An ex parte first-appellate adjudication is unsustainable where hearing notices allow less than fifteen days each for the assessee to respond and substantiate claims. Section 250(6) of the Income-tax Act requires a reasoned, speaking appellate determination, while the hearing opportunity must be real, reasonable and effective rather than merely formal. Inadequate response time prevents effective representation and production of supporting evidence. The appellate order should therefore be set aside for fresh de novo consideration through a speaking order.

Section 68 credit addition cannot rest solely on a creditor's comparatively low declared income where the assessee has produced a sale agreement, banking records, ledger account, and the creditor's PAN and address. Such material supports the creditor's identity and the transaction's genuineness; low income alone does not conclusively disprove creditworthiness without further enquiry or contrary material. Failure to undertake requested statutory verification weakens the proposed addition. The later proviso requiring explanation of the creditor's source of funds does not apply to the relevant assessment year, making the addition unsustainable.

Renewal approval under Section 80G cannot be denied solely because an institution's governing objects include maintaining places of worship. Eligibility requires examination of actual activities and financial records for the relevant preceding years, including the extent of expenditure on religious purposes. Where activities principally advance education, medical facilities, public welfare and inter-community cohesion, and records show no religious expenditure, non-discriminatory maintenance of places of worship of different faiths does not itself establish prohibited religious activity. The predominant object, proportionality of expenditure and, where relevant, the Essential Religious Practices test determine whether activity is genuinely religious.

Reassessment initiated solely on investigation-wing information without independent enquiry, verification, or application of mind is vulnerable as borrowed satisfaction. Where recorded reasons do not connect the taxpayer's actual transactions to named entities, reopening lacks a proper factual foundation. An unexplained-credit addition is unsustainable when lender confirmations, ledger accounts, bank records of receipt and repayment, and interest-payment evidence remain unrebutted. Amounts representing reversal of payments to another creditor cannot be treated as fresh loans. Reliance on adverse third-party statements without granting requested cross-examination also cannot displace reliable documentary evidence, including for consequential alleged commission expenditure.

Limitation for issuing a reassessment notice for AY 2017-18 expired on 11 June 2022 under the applicable reassessment framework and principles governing surviving limitation. A notice issued on 27 July 2022 fell outside the available statutory period. The resulting reassessment was treated as time-barred, leading to the reassessment order being quashed. The central legal point is that reassessment proceedings cannot continue where the notice itself is issued after the governing limitation period has expired.

In unabated assessments under Section 153A, additions must rest on incriminating material found during the assessee's own search. Investigation material concerning the company whose shares were sold, or statements recorded in a third-party search, cannot independently support additions. Consequently, differential share-sale proceeds treated under Section 68 despite disclosure of long-term capital gain under the Income Disclosure Scheme, 2016, as well as disallowance of short-term capital loss and estimated commission additions, are unsustainable without assessee-specific incriminating material.

Restricted end-user software licences that confer no copyright rights, commercial exploitation rights or authority to modify, sublicense or reproduce software do not constitute royalty under Article 12(3) of the India-USA DTAA. The related software payment therefore carries no withholding-tax obligation or consequential default liability. Under the India-Germany DTAA, consideration for video-conferencing equipment and allied non-service components cannot be treated wholly as fees for technical services. Withholding may be confined to the separately identified installation, setup and training consideration at the applicable treaty rate, with consequential default liability recomputed.

Section 68 requires credible lender-specific evidence of identity, financial capacity and transaction genuineness. Confirmations, tax particulars, audited financial statements, ledger accounts, banking records, repayments and interest supported the unsecured loans; general investigation information without adverse lender-specific material or effective confrontation could not displace that evidence, so the cash-credit addition was deleted. Business expenditure could not be disallowed on an ad hoc basis merely because receipts were absent, and the consequential interest disallowance also failed. The recomputed current-year business loss was eligible for adjustment against capital gains under the inter-head set-off provisions.

Additional evidence comprising party-wise commission details, identity particulars and tax-deduction information requires admission where it is relevant to a business-expenditure claim and was not examined earlier; the commission disallowance therefore requires fresh verification. Estimated interest on non-performing asset loans is revenue neutral where the corresponding interest income qualifies for deduction under Section 80P(2)(a)(i), so the addition is not sustainable. Uniform interest estimation across housing, mortgage, personal, deposit-backed and overdraft loans is also unsustainable because those facilities carry different rates and any enhanced eligible business income remains deductible.

Reassessment initiated more than three years after the relevant assessment year requires approval from the higher specified authority under section 151(ii). Approval from the authority under section 151(i) after the limited TOLA extension period is not a curable defect under section 292B; the resulting section 148A(d) order, section 148 notice and reassessment lack jurisdiction. Audit-default penalty requires proof that the assessee carried on a business and that legally relevant sales, turnover or gross receipts exceeded the prescribed threshold. Purchases and unverified transaction aggregates do not establish turnover. Consistent investment and capital-gains treatment may also constitute reasonable cause, preventing penalty under section 271B.

Additional evidence on the accounting and tax treatment of a GST refund may require admission and factual verification where it is material to a business-loss adjustment and was not examined earlier. The GST-refund mismatch consequently requires fresh determination after verification of the supporting material. Trade payables arising from purchases cannot be treated as unexplained cash credits where reconciliations and supporting records establish creditor identity and the genuineness of the liabilities. Non-response to verification notices alone is insufficient without evidence that the underlying purchases are fictitious or non-genuine.