S. 153C: Search and seizure-Assessment of third person-Satisfaction note-Must state with reference to information from seized material its relevance to assessee’s income-Assessee’s business not commenced-No question of turnover being suppressed-Seized documents bearing no reference to turnover-Satisfaction note issued without application of mind-Approval under section 153D also invalid-Assessments not sustainable. [S. 69C, 153A, 153D]

S. 151: Reassessment-Sanction for issue of notice-Within four years-Non-application of mind-Approval granted by the specified authority is not in accordance with the law-The notice for reopening and the subsequent assessment order is bad in law [S. 147, 148]

S. 149: Reassessment-Limitation-Notice for assessment year 2015-16 deemed notice under section 148A(b) per Ashish Agarwal (SC)-Fresh notice under section 148 required within balance period per UOI v. Rajeev Bansal (2024) 469 ITR 46 (SC)-Department had 15 days but issued notice after 34 days-Notice void ab initio-Reassessment quashed. [S. 147, 148, 148A(b), 148A(d)]

S. 145: Method of accounting-Accommodation entries-In the case of accommodation entry providers, commission income is to be estimated only on the sales turnover and not on the aggregate of purchases and sales-The ITAT directed the AO to estimate commission income at 0.05% of the total sales turnover. [S. 145(3), 153A]

S. 144C: Reference to dispute resolution panel Assessment-Validity-Final assessment order pursuant to Dispute Resolution Panel’s directions-Order time-barred once Dispute Resolution Panel’s order held non est for want of document identification number-Extended time under section 144C(13) inapplicable-Final assessment order bad in law. [S. 116, 144C, 153, 253, 254(1)]

S. 143(2): Assessment-Validity-Notice under section 143(2) issued by Income-tax Officer-Additional grounds-Legal issue-Jurisdictional Assessing Officer, having regard to quantum of returned income, being Deputy Commissioner-No order transferring case to Deputy Commissioner-Income-tax Officer lacking jurisdiction-Deputy Commissioner completing assessment without valid notice-Defect not curable-Assessment quashed. [S. 124(3), 127, 254, ITAT Rules, 1963, R. 11]

S. 115-O: Company-Dividend distribution tax-Payment of dividend to non-resident shareholder-Dividend distribution tax payable by company at rate under section 115-O, not at rate applicable to non-resident shareholder under Double Taxation Avoidance Agreement, unless contracting States by specific provision extend treaty protection to domestic company. [S. 90]

S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Corporate guarantee-Rate limited to 0.60 per cent. In assessee’s own case for earlier year-Same rate sustained for all corporate guarantees-Income-Higher turnover reported in service tax return, including mobilisation advances from customers, treated as income by Assessing Officer-Advances not taxable as income-Appeal-Power of appellate authorities-Claim raised for first time before appellate authorities can be considered-Remitted to Assessing Officer for statistical purposes.[S. 4, 250]

S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Selection of comparables-Companies included by assessee itself in final list, later sought to be excluded on functional difference/turnover filter-Functional similarity established-Turnover difference not sufficient for exclusion-Interest on outstanding receivables constitutes international transaction-Rate depends on currency of denomination-Remanded for reconsideration-Employees’ contribution to provident fund-Belated remittance not deductible even if paid before due date of filing return [S. 2(24)(x), 36(1)(va), 92CA, 139(1)]

S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Selection of comparables-Related-party transactions ratio to be applied consistently on aggregate basis, 15 per cent. filter appropriate-Functionally different companies without segmental data to be re-verified-Companies with unreliable export data excluded-Negative net worth not a factor for rejection if functions, assets and risk analysis acceptable-Functionally similar companies satisfying export turnover filter to be included-Matter remitted for company-wise functions, assets and risk analysis-OECD guidelines to be followed for broad comparability-Working capital adjustment affecting net profit margin to be allowed-Inadvertent wrong reckoning by Assessing Officer-Rectification application pending-Assessing Officer directed to carry out rectification. [S.92CA, 154]