S. 276CC: Offences and prosecutions – Failure to furnish return of income – Prosecution for failure to furnish the return of income is not maintainable where, on regular assessment, the tax payable after giving credit for TDS and advance tax does not exceed the statutory limit.- Where the assessee is entitled to a refund, and there is no loss of revenue, continuation of criminal prosecution amounts to an abuse of the process of law. [S. 139(1), 142(1), 147, 148, Art. 226 ]

S. 69C: Unexplained expenditure -Bogus purchases -Where the sales, quantitative stock records and consumption of goods are accepted, and the purchases are supported by invoices, delivery challans, bank payments and stock records, merely because the supplier is found to be non-genuine, the entire purchases cannot be disallowed- Only the profit element embedded in such purchases is liable to be taxed. In the case of a trader in ferrous and non-ferrous metals, estimation of profit at 2% of the disputed purchases is reasonable, and application of 12.5% is unjustified. [S. 145 ]

S. 143(2): Assessment – Notice – Notice of demand to be valid in certain circumstances -Limited scrutiny – Authentication of notices and other documents – A notice issued under section 143(2) after 23-06-2017 is not rendered invalid merely because it is not in the format prescribed by the CBDT Instruction dated 23-06-2017 or does not specify whether the case is selected for Limited Scrutiny, Complete Scrutiny or Manual Scrutiny- Such omission is a procedural defect cured by section 292BB provided the notice is issued within limitation, conveys that the return has been selected for scrutiny and no prejudice is caused to the assessee. [S. 119, 142(1), 143(3), 282A, 292B, 292BB]

S. 45: Capital gains – Redevelopment -On redevelopment of a building, the redeveloped flat received in lieu of the original flat is a continuation of the existing capital asset and not a new independent capital asset- The period of holding is to be reckoned from the date on which rights in the original property/redevelopment crystallised and not from the date of the Permanent Alternate Accommodation Agreement- Consequently, gain on sale of the redeveloped flat is assessable as long-term capital gain and eligible for indexation and exemption under sections 54/54F. [S. 2(42A, 48, 54F, CBDT Circular Nos. 471 & 672 ]

S. 144B : Faceless Assessment –Best judgment assessment -Reassessment – Assessment order passed without granting the assessee a fair and effective opportunity of hearing is liable to be quashed- Where statutory notices are not effectively communicated to the assessee’s registered e-mail addresses, the assessment is vitiated for breach of principles of natural justice. [S. 143(2), 144, 148, 156, 282,ITAT R.127, Art . 226 ]

S. 167B: Charge of tax – Shares of members unknown – Maximum Marginal Rate is not applicable to a society registered under the Societies Registration Act, 1860- Such a society is liable to tax at the normal rates and not at the Maximum Marginal Rate, even if the shares of its members are indeterminate. [S. 143(1), 154, 250]

S. 68: Cash credits- Penny stock – NCL Research & Financial Services Ltd- Long-term capital gain on sale of listed shares cannot be treated as bogus merely on the basis of a general Investigation Wing report or abnormal rise in share price when the assessee has established the genuineness of the transactions through documentary evidence such as purchase bills, contract notes, demat statements, bank statements and payment of STT.–Addition under section 68 cannot be sustained in the absence of any material specifically implicating the assessee. [S.10 (38), 45 , 69C, 147, 148 ]

S. 80-IB(10): Housing projects- Deduction cannot be denied merely because audit report in Form No. 10CCB was not filed along with the return or within the due date prescribed under section 139(1), if the audit report was furnished before processing of the return under section 143(1)- Filing of Form No. 10CCB is a procedural requirement and substantial compliance before completion of the assessment/processing is sufficient- Tribunal distinguished PCIT v. Wipro Ltd(2021) 446 ITR (SC) [S. 143(1), Rule 18BBB, Form No. 10CCB ]

S. 10A: Free trade zone – Mere higher profit margin vis-à-vis comparable companies or sister concerns, without any material establishing an arrangement to inflate profits between the assessee and its associated enterprise, does not justify invocation of s. 10A(7) r.w.s. 80-IA(10) for restricting deduction- The provisions can be invoked only where there is evidence of an arrangement resulting in more than ordinary profits. [S. 10A(7) ,80IA(10) ]

S. 254(1): Appellate Tribunal – Duties-–Respondent can support order of CIT(A) on any legal ground without filing cross-objection or cross-appeal – Tribunal erred in refusing to consider jurisdictional grounds.[ S. 143(2) 158BC , 260A)