Revision under section 263 is invalid where the Assessing Officer has examined related-party payments, obtained relevant particulars, assessed the taxpayer's explanation, and taken a plausible view. Payments to specified persons under section 40A(2)(a) cannot be disallowed merely because of the relationship; excessiveness or unreasonableness must be supported by statutory criteria or comparable market material. Absence of detailed discussion in the assessment order does not itself establish lack of inquiry. Explanation 2 to section 263(1) does not permit revision solely because further inquiry is desirable, particularly without identifying excessive payments or quantifying revenue prejudice.

Unsecured-loan additions cannot be sustained merely because certain lenders did not furnish income-tax returns where the assessee establishes creditor identity and transaction genuineness through PAN details, confirmations and bank statements, with repayment through banking channels. These materials discharge the assessee's initial onus and shift the burden to Revenue. Where Revenue does not independently verify the lenders despite available particulars or undertake necessary enquiries into their creditworthiness, the addition for unsecured loans is unsustainable and must be deleted.

Settlement Commission jurisdiction becomes exclusive once an application is allowed to proceed under section 245D(1), covering matters in the application and related matters in the Commissioner's report. A final settlement order under section 245D(4) has statutory finality under section 245-I and precludes parallel assessment proceedings for the settled assessment year. Accordingly, a later reassessment concerning that year cannot provide a valid foundation for revision under section 263; revisionary action on that basis is invalid.

Enhanced penalty for misreporting requires establishment of a specified statutory instance of misreporting; under-reporting alone supports only the ordinary penalty rate. A penalty notice is sufficiently specific where it expressly identifies under-reporting arising from misreporting as the charge. Where a return has been furnished, the excess of income assessed for the first time over income processed under section 143(1)(a) constitutes under-reported income. The enhanced rate cannot apply merely because under-reported income exists where no statutory misreporting category is identified or established; penalty is then confined to 50% of tax on that under-reported income.

Unsigned third-party Excel material that neither identifies nor bears the assessee's signature cannot, by itself, support an addition for unexplained money. Cross-examination of persons connected with the material and independent evidence that the alleged cash payment was made are necessary to establish reliability. Without those safeguards, an addition under Section 69A read with Section 115BBE is unsustainable and was deleted.

Reassessment jurisdiction under the Income-tax Act requires an independently formed reason to believe, based on relevant and verified tangible material, that taxable income escaped assessment; borrowed satisfaction, factual errors, and unverified records do not meet that standard. Additions relying on third-party statements require disclosure and a meaningful rebuttal opportunity, including cross-examination, so that the evidence can be tested. Loan credits supported by accounting entries, lender tax identification, bank records, confirmations, and repayment evidence may establish genuineness and should not be treated as unexplained cash credits merely on unsupported allegations.

Reassessment under Section 147 requires assessment or reassessment of the income forming the recorded reason for reopening. Although Explanation 3 permits assessment of other income noticed during a validly reopened proceeding, it does not dispense with that requirement. Where no addition was made for the long-term capital gains identified in the recorded reasons, additions for disallowance of the Section 54F exemption and income from other sources, being distinct matters, could not sustain the reassessment. The reassessment was therefore unsustainable, and the consequential additions could not survive.

Income from alleged cash transactions was assessed by applying an 8% estimated profit element, reflecting the consistent treatment accepted in prior assessment years for similar transactions. The addition was therefore confined to the profit component rather than the entire transaction amount, and the remaining portion of the proposed addition was not sustained.

House-property loss and Chapter VI-A deduction claims require reliable evidentiary substantiation. Partly self-serving and inconsistent material did not support allowing the claims in full. Income was estimated at 10 per cent of the aggregate disallowance, restricting the additions accordingly. The resulting addition was taxable at normal rates rather than under the special tax regime under Section 115BBE.

Section 158BD permits block assessment of a person other than the searched person only when search material reveals undisclosed income belonging to that person and jurisdictional satisfaction is recorded. Transactions already entered in the books of account and reflected in returns subject to regular assessment do not, without incriminating search material, establish undisclosed income for this purpose. Absence of a basis or satisfaction note for assuming jurisdiction further defeats the assessment. Block assessments unsupported by search material evidencing undisclosed income are therefore invalid.

Section 153A assessment additions require incriminating material discovered during a search. Statements recorded under Section 132(4) may carry evidentiary value but do not independently constitute incriminating material. Such statements can support an addition only where they have a nexus with corroborative incriminating evidence found during the search. A factual deletion of additions is not subject to reappreciation under Section 260A. Accordingly, an uncorroborated search statement alone cannot sustain additions in a Section 153A assessment.

Merits adjudication was required where the Tribunal had the factual material, grounds, and a detailed first-appellate order for one assessment year before it. Treating both years alike solely because the first-appellate order for the other year lacked reasons amounted to non-application of mind. The restoration of both matters without deciding the Revenue's appeals and the assessee's cross-objections was unsustainable. The Tribunal was required to determine the disputes on merits after hearing both sides.

For search assessments under Section 153A, pending assessments abate, but completed or unabated assessments may be reassessed only when incriminating material is unearthed during the search. Additions founded solely on regular books of account, land-sale information, or estimated profits cannot be sustained in an unabated assessment without such material. The separate reassessment power under Sections 147 and 148 remains available only where its statutory conditions are fulfilled. This distinction limits search-based reassessment of completed assessments while preserving reassessment under the independent statutory regime.

Reassessment founded solely on a transfer-pricing adjustment and material already examined during scrutiny is impermissible where the original assessment lapsed because no final assessment order followed the draft order within the statutory time. The reassessment mechanism cannot cure, bypass, or indirectly extend the limitation applicable to completion of the original assessment. Absence of fresh material prevents reopening based on the same transfer-pricing issue.

Interest income earned by a co-operative society from investments with a co-operative bank qualifies for deduction available for income derived from investments with other co-operative societies. The exclusion applicable to a co-operative bank's own deduction claim does not prevent another co-operative society from claiming deduction on such interest. The tax-deduction-at-source provision concerning interest payments does not remove co-operative banks from the class of co-operative societies for this purpose. Consequently, interest from investments with co-operative banks remains eligible for the deduction.

Approval of a corporate insolvency resolution plan extinguishes past claims, including statutory dues, for periods before approval. Its binding effect prevents reassessment proceedings against the corporate debtor for a pre-plan assessment year, even where fresh information later emerges regarding alleged transactions before plan approval. Consequently, pre-resolution-plan tax liabilities cannot be pursued through a newly initiated reassessment.

Draft assessment orders under Section 144C(1) must be made and forwarded within the applicable limitation period under Section 153, including any extension arising from a transfer-pricing reference. Expiry of that period renders a subsequently issued draft order time-barred and without jurisdiction. Final assessment orders, demand notices and penalty show-cause notices founded on such an invalid draft order cannot survive. Availability of a statutory appellate remedy does not bar writ jurisdiction where the assessment proceedings suffer from a clear jurisdictional defect caused by limitation expiry.

Section 148A(1) requires a reassessment show-cause notice to provide the information suggesting income escapement, including the relevant transaction, valuation or computation basis, and statutory basis, so that the taxpayer has an effective opportunity to respond. Supplying that foundational information after expiry of the limitation period under Section 149(2)(b) cannot retrospectively cure an invalid notice, and a consequential Section 148 notice cannot validate the defective initiation. Section 56(2)(x) does not apply merely because proportionately allotted fresh rights shares are subscribed below computed market value where the shareholder's percentage holding remains unchanged; such allotment does not establish receipt of property from another person for inadequate consideration.

Assessment transfer and centralisation under Section 127 may be justified where a search yields material linking an assessee to the searched group and related entities. Centralisation facilitates coordinated investigation and assessment of matters arising from the same search. A transfer order does not finally determine tax liability, and the assessee may contest the assessment on merits after relevant material is supplied. On those grounds, transfer to a Central Circle is treated as valid and non-arbitrary.

Review petitions challenging a criminal-appeal judgment on wilful tax-evasion prosecution were dismissed because the filing delay lacked satisfactory explanation and no ground for review existed on merits. The proceedings concerned prosecution immunity available through Settlement Commission procedures, the binding effect of CBDT circulars and prosecution guidelines, and statutory sanction and sanctioning-authority competence for prosecution.