Retrospective amendments to the limitation framework in sections 144C and 153, effective from 1 April 2009, place the final assessment order within time. Transfer-pricing benchmarking of software-development and IT-enabled services must rely on contemporaneous functional evidence and reliable segmental data: entities with distinct functions, diversified unsegregated operations, or unreliable related-party transaction information require exclusion, while functionally comparable segregable segments may be included. The distribution transaction's tolerance-band claim requires factual verification of purchase-cost, inventory-to-sales, and arm's-length-price variation conditions; any eligible transaction within the prescribed band requires deletion of the adjustment. Benchmarking must be recomputed using the resulting comparability changes.

Transfer-pricing adjustment for notional interest on overdue associated-enterprise receivables is unwarranted where the entity is debt-free, incurs no borrowing cost, and has not provided interest-free funding to associated enterprises. The agreed credit period must be considered; restricting it without basis can improperly create an interest adjustment. Employee Stock Purchase Plan costs borne for employee share allotment constitute employee compensation and may be deducted under Section 37(1) when incurred wholly and exclusively for business. Their deductibility is not defeated because payment is non-cash or liability is quantified or discharged later, provided the expenditure secures employee services and is not capital in nature.

Personal-use disallowance may be proportionately applied to motor-car depreciation, insurance and fuel expenditure where business use is not exclusive, but car-loan interest remains allowable absent evidence that borrowings served a non-business purpose. Interest-free advances do not justify interest disallowance where sufficient own funds existed at the relevant time, unless a nexus with interest-bearing borrowings is established; fund availability and commercial expediency require verification. Salary, wages and labour charges require verification of payee identity, payment, genuineness and business nexus. Adverse third-party statements must be disclosed, with a meaningful opportunity to rebut and seek cross-examination where warranted; unsupported ad hoc estimates cannot sustain disallowance.

Penalty for misreporting of income under Section 270A cannot rest solely on an inadmissible Section 80GGC deduction that was transparently disclosed in the original return and later withdrawn in reassessment proceedings. Misreporting requires cogent material demonstrating deliberate falsity, suppression, misrepresentation, or fabrication of particulars; assessment findings do not independently establish it. Penalty proceedings remain distinct from assessment proceedings, and under-reporting must be distinguished from misreporting. Fulfilment of the substantive conditions for immunity under Section 270AA(1) further supported deletion of the penalty.

Form 15CA requirements were amended from 1 April 2016. Failure to furnish information for foreign remittances did not warrant penalty where the taxpayer bona fide believed that the applicable rule did not require Form 15CA for remittances not chargeable to tax during the relevant period. On those facts, penalty provisions for non-furnishing of Form 15CA information did not apply, and the penalty was deleted.

Penalty for under-reporting of income under section 270A does not apply where a Government company's delayed return resulted from mandatory and supplementary audit requirements, its explanation was bona fide, and all material facts were disclosed. The accounts could not be finalised and adopted by the original filing due date. After a reassessment notice, the company filed its return, fully explained deposit sources and interest treatment with supporting records, and the assessment accepted the returned income without additions. The declared income was therefore not under-reported income, making the penalty unsustainable.

Section 194A exemption was unavailable for the relevant assessment year merely because the interest recipient, HUDCO, was government-owned. However, the first proviso to Section 201(1) prevents the payer from being treated as an assessee in default where the recipient has included the interest in taxable income and paid the due tax. Form 26A from the recipient's accountant supported fulfilment of those conditions. Relief from default status remains subject to the Assessing Officer's verification of the revised Form 26A.

Promotion and development of women's golf through tournaments, coaching, player development, junior camps, overseas participation assistance and caddy training constitute advancement of an object of general public utility. Sponsorship, entry and professional entry receipts do not alone make those activities commercial where tournaments directly implement the sporting objects, receipts are substantially applied to those activities, and no substantial commercial margin or profit motive exists. The proviso to section 2(15) applies only after the underlying activity is established as commercial. Renewal under section 12AB must assess charitable objects and the genuineness of activities; absent material changes in objects, activities or fund application, refusal based on such receipts is unjustified. Eligibility for section 80G approval consequently follows.

Corporate guarantees furnished to associated enterprises constitute international transactions for transfer-pricing purposes. Commercial-bank guarantee rates are not comparable to a parent company's guarantee for an associated enterprise. Where the underlying facts remain unchanged from earlier years, the corporate guarantee commission should be computed at 0.5% of the total guarantee amount, requiring recomputation of the transfer-pricing adjustment at that rate.

Penalty for misreporting under Section 270A requires circumstances under Section 270A(9), such as deliberate misrepresentation, suppression, false entries, or an unsubstantiated claim. Withdrawal of a Section 80GGC deduction in a return filed pursuant to reassessment, despite its earlier disclosure, does not by itself establish a knowingly false claim without cogent supporting material. The substantive conditions for immunity under Section 270AA(1) were also satisfied. Consequently, the misreporting penalty was unsustainable and deleted.

Addition for alleged bogus purchases cannot be sustained as unexplained expenditure where purchases are recorded, supported by documentary material, and the books of account have neither been rejected nor found incorrect or incomplete. Section 69C applies only where the source of expenditure remains unexplained; an allegation that a supplier provided accommodation entries does not by itself satisfy that condition. Accepted sales and turnover within the presumptive-taxation regime under section 44AD further supported deletion of the addition. Consequently, taxation under section 115BBE did not apply.

Compensation received for withdrawing a legal challenge and surrendering contractual pre-emptive rights over shareholding is capital in character where the rights enabled shareholders to acquire shares before transfer and their relinquishment impaired a capital asset and source of income. Although consideration for a non-compete covenant is taxable under Section 28(va) of the Income-tax Act, consideration for other negative covenants or surrender of rights to acquire or operate an asset remains capital. Payment by an acquiring entity does not alter its character. The contractual transfer restriction is not an impermissible absolute restraint under the Companies Act. The receipt is not taxable as business income or income from other sources.

Reassessment notices issued within four years from the end of the relevant assessment year under the pre-amendment regime required sanction from the Joint Commissioner. Extension of time for obtaining sanction did not alter the applicability of the prescribed approval provision. Approval granted by the Principal Commissioner, who was designated for notices issued beyond the four-year period, did not meet the statutory requirement. Where legislation assigns satisfaction and sanction to a specified authority, that authority alone must exercise the power. Absence of valid sanction rendered the reassessment notice invalid, with the consequential objection-disposal, assessment, demand and related proceedings liable to be quashed.

The twelve-month period for enhanced compounding charges under the 2024 and 2022 Compounding Guidelines runs from actual service of the prosecution complaint, not its filing date. The 2024 Guidelines apply to pending compounding applications, and their requirement that the complaint be served promptly supports a fair calculation of time-based differential charges. Computing the period from filing would be inappropriate where the accused had neither been served nor made aware of the complaint. Consequently, a compounding application filed within twelve months of service attracts normal charges rather than the fifty per cent enhanced rate.

Electronic upload of hearing notices and assessment orders on a taxpayer's designated web portal constitutes valid service. Statutory appeals against assessment orders are available under the prescribed appellate mechanism, and a writ challenge based on alleged lack of hearing is not maintainable where portal communications were duly uploaded. Taxpayers must monitor portal communications and instruct authorised representatives accordingly; executing a vakalatnama does not transfer that responsibility or, without more, establish a representative's lapse.

Statutory appeal against an assessment order under Section 74(9) is subject to the prescribed limitation and the limited further period under Section 107(4), beyond which the Appellate Authority cannot condone delay. Where a writ petition was instituted within the original appeal period, the taxpayer may be afforded the statutory appellate remedy despite expiry of the condonable period during writ proceedings. The appeal may be filed by the stipulated date and must be decided on merits, with a hearing and a speaking, reasoned order, rather than rejected as time-barred.

Revocation of cancelled GST registration may be sought where the taxpayer undertakes to submit pending returns and pay outstanding tax dues. The prescribed process requires filing a revocation application, furnishing proposed returns and depositing the applicable dues, after which the registering authority must consider the application. Cancellation of registration can prevent continuation of business, making an opportunity to restore registration practically significant. The validity of the cancellation order remains undecided and is not resolved through the revocation process directions.

Ineffective service of GST notices and an adjudication order may justify writ relief despite the statutory appeal limitation under Section 107. Mere uploading on the common portal, without acknowledged receipt or any response, does not by itself establish sufficient service where the assessee lacked an effective opportunity to contest the demand. Refusal of merits adjudication in those circumstances causes prejudice. The limitation-based appellate dismissal was set aside, delay was condoned, and the assessee could file an appeal within the stipulated period for merits adjudication without a limitation objection.

Assessment proceedings under Sections 73 and 74 must be confined to the relevant tax period. Separate notices and assessment orders are required for distinct tax periods, because a composite order spanning multiple financial years can impair a registered person's access to statutory benefits and effective appellate remedies. Consequently, a single assessment order imposing penalty across more than one tax period is impermissible and unsustainable.

Time spent prosecuting a rectification application after an adjudication order must be excluded when computing the limitation period for a GST appeal. Where exclusion of that period places the appeal within the prescribed period, dismissal on the ground that it exceeded the maximum appellate limitation is unsustainable. The limitation calculation must therefore account for the period genuinely consumed in rectification proceedings before determining whether the statutory appeal is time-barred.