Functional comparability under the Transactional Net Margin Method requires a contemporaneous analysis of functions performed, assets deployed and risks assumed; broad functional similarity alone does not establish comparability. The disputed freight-forwarding comparables require fresh consideration through that analysis, with an opportunity of hearing. A working capital adjustment under Rule 10B(3) may be examined where it improves comparability between the tested party and selected comparables, even if the claim was not raised before the Dispute Resolution Panel. That adjustment requires a merits determination after hearing.

Section 68 applies to credits recorded during the relevant year and generally does not cover opening balances carried forward from prior years. Creditor identity, confirmations, tax records, banking-channel receipts and undisputed repayments are relevant to genuineness, while lenders' creditworthiness may require enquiry under Section 133(6). Capital credits transferred from a deceased parent's bank account require verification of the parent's financial records and availability of funds. Under Section 145(3), a fall in gross-profit rate alone does not justify rejecting books or adopting an earlier rate; estimation requires objective, cogent grounds, considering turnover and actual gross and net profits.

Reassessment under Sections 147 and 148 following a scrutiny assessment under Section 143(3) is invalid where the loan transaction, repayment, lender identity, creditworthiness and genuineness were already examined on material furnished by the assessee. Reopening on that same material, without a fresh tangible basis, constitutes a change of opinion and cannot support reassessment jurisdiction; the reassessment was quashed.

Recorded purchases supported by invoices, bank payments, stock records, and manufacturing consumption could not be treated wholly as bogus when corresponding sales remained undisputed. The books were not rejected under section 145(3), and the assessing authority did not discredit the evidence, question consumption, or challenge sales. A supplier's later identification as an accommodation-invoice issuer, or non-response to notice, did not by itself prove non-receipt of goods in the relevant year. The entire alleged bogus-purchase addition was therefore deleted.

Section 43CA's 10% tolerance band treats small differences between declared consideration and stamp-duty valuation as insufficient to trigger deemed-consideration additions. As a beneficial, curative measure designed to address hardship in genuine real-estate transactions, the tolerance applies retrospectively. Where the difference between declared sale consideration and the District Valuation Officer's valuation remains below 10%, stamp-duty value cannot replace declared consideration, and no addition under Section 43CA is warranted.

Filing the prescribed audit report in Form No. 10B within a due date validly extended by the CBDT satisfies the timing requirement for charitable exemption under sections 11 and 12. Accordingly, exemption cannot be denied during return processing under section 143(1) on the ground of delayed audit-report filing where the report was filed within the extended deadline. Bona fide circumstances preventing timely first appeals, including loss of access to the registered email account and COVID-19-related disruption, may constitute reasonable cause for condoning delay. The charitable exemption remains available where the audit reports are treated as timely filed under the applicable extensions.

Penalty for alleged cash acceptance in a jointly owned property sale was deleted for one co-owner after a registered rectification deed changed the stated cash-receipt dates. The identical transaction had resulted in no penalty for the other equal co-owner. Equal treatment was therefore applied to the assessee in relation to the same cash receipts and property transaction.

Rectification for a mistake apparent from the record is confined to obvious, patent and self-evident errors. Where documentary evidence, explanations for bank deposits and related submissions were considered in the appellate proceedings, dissatisfaction with their acceptance or a request for a different inference does not establish such an error. Rectification cannot be used to review, rehear or reappreciate material already examined on appeal. On these facts, no mistake apparent from the record arose and rectification was unavailable.

Form 10AB approval under section 80G required fresh adjudication on merits because valid charitable registration existed when the rejection was issued and the proposed objection concerning religious expenditure had not been included in the show-cause notice. Filing the application under an incorrect statutory clause did not, by itself, justify relief, as the trust was expected to exercise diligence. However, correction of the application and submission of relevant material were to be permitted before reconsidering eligibility for approval.

Capital gains in a joint development arrangement are computed by adopting the agreed consideration or the property's fair market value on the transfer date where consideration is not ascertainable. Developer construction costs incurred in later financial years, particularly without reliable authentication, do not provide an appropriate basis for determining the full value of consideration. The valuation approach reflected in sections 50D and 45(5A) supports transfer-date valuation, preventing subsequent construction expenditure from being used to inflate capital-gains computation.

Condonation of delay in a first income-tax appeal is examined where a best-judgment reassessment, an unexplained-money addition, and consequential penalties were decided ex parte. Lack of familiarity with tax proceedings, inadequate assistance, and difficulty in filing the appeal are treated as relevant to a 163-day delay. The matter concerns setting aside the appellate disposition and restoring assessment and penalty proceedings for de novo merits adjudication, subject to the taxpayer's full cooperation, current contact details, hearing attendance, and provision of requested information.

Section 270A(6)(a) excludes amounts from under-reported income where the taxpayer provides a bona fide explanation and fully discloses material facts. A legally plausible indexation method for long-term capital loss, supported transfer expenses, and disclosed property-transaction details do not become false claims merely because complete substantiation was unavailable during assessment or the quantum adjustment was not challenged. An inadvertent omission of insignificant refund interest similarly does not establish misreporting. The disclosed amounts fell within the statutory exception, resulting in deletion of the under-reporting penalty.

Effective opportunity of hearing is required in assessment and first-appellate proceedings, particularly where notices or orders were communicated to contact details other than those declared by the assessee. A 113-day filing delay was treated as bona fide and condoned because the explanation concerning deficient communication was undisputed. Ex parte assessment and appellate orders that do not determine the dispute on merits require fresh, speaking and reasoned adjudication after the assessee provides current contact details, participates in proceedings, and submits supporting explanations and material. The taxability of the investment and related reassessment issues remain open for fresh determination.

Rectification under section 254(2) is confined to correcting a mistake apparent from the record and does not permit reconsideration of facts, fresh arguments, or review of a concluded decision. The Revenue's miscellaneous application challenged an earlier jurisdictional finding without identifying any rectifiable apparent mistake. It therefore fell outside the statutory rectification power as an impermissible review.

Reassessment under Sections 147 and 148 may be initiated on information indicating escaped income, with the approval required under Section 151; proceedings under Section 153A are not mandatory without an Income-tax Department search or requisition. Cash found in possession may be explained through an unregistered land-sale agreement when subsequent registered sale deeds, purchaser statements and related payments corroborate the transaction. Jewellery and silver holdings may be assessed against reasonable family-holding benchmarks recognised in CBDT Instruction No. 1916, considering customary acquisition and unavailable historic records. Cheque receipts from verified land purchasers following registered sale deeds are not unexplained money where the transaction, identity and source are undisputed.

Employee stock option plan discount granted as employee compensation may constitute deductible business expenditure, reflecting the cost of obtaining and retaining employee services during the vesting period. Its non-cash nature does not by itself make it notional or capital expenditure, and employee perquisite taxation operates independently of employer deductibility. Revisionary jurisdiction requires an assessment order to be both erroneous and prejudicial to Revenue; these conditions are conjunctive. A legally sustainable view cannot be displaced merely because a revisional authority prefers another view or seeks further enquiry. Explanation 2 does not remove the need to establish legal error and resulting prejudice.

Transfer-pricing benchmarking of interest on Indian rupee-denominated non-convertible debentures requires reliable comparability between the tested debt transaction and any proposed benchmark. Domestic lending conditions support use of SBI BPLR/PLR for fixed-rate rupee NCDs. An EBLR-based benchmark requires comparison of tenure, repayment terms, security, interest structure, credit profile and other contractual features of underlying lending transactions. A credit-risk premium does not substitute for this comparability analysis. Accordingly, EBLR cannot be preferred without establishing appropriate comparability.

Functional comparability under the Transactional Net Margin Method depends on the tested party's actual functions, assets and risks; a taxpayer's initial inclusion of a comparable does not prevent exclusion where it is functionally dissimilar. A manufacturing concern was excluded from the comparable set for a trading entity, requiring recomputation of the arm's-length margin and verification-based deletion of the sale-of-goods adjustment. Notional interest on an interest-free loan to an associated enterprise was removed because the loan had reasonable commercial expediency and was connected to goods sales. A potentially duplicated return-processing addition requires verification and deletion if substantiated.

Paragraph 3.3(a) of CBDT Instruction No. 3/2016 permits a transfer-pricing reference in a case selected on non-transfer-pricing parameters only where the section 92E accountant's report was not filed or the relevant international transaction was not disclosed. Form 3CEB disclosed and quantified interest on fully and compulsorily convertible debentures, which was the transaction subjected to adjustment. Differences between the return and financial statements did not establish a separate undisclosed international transaction, and procedural steps could not replace the substantive preconditions for a reference. The transfer-pricing adjustment relating to disclosed debenture interest was deleted.

The enhanced leave-encashment exemption ceiling of Rs. 25,00,000 applies beneficially to retirement claims falling within the revised limit, supporting exemption of the full amount received where it does not exceed that ceiling. For condonation of delay, a taxpayer's reliance on a tax consultant may justify a liberal approach where the consultant failed to communicate an appellate order or pursue further proceedings. Consultant negligence is not attributed to a retired taxpayer unfamiliar with tax law where that reliance caused the delay, advancing substantial justice.