https://www.taxtmi.com/caselaws?id=793531 Audit-report based adjustment at the processing stage is permissible where the Income-tax Act expressly allows disallowance or income increase indicated in the tax audit report and the assessee's reply is considered; the older "debatable issue" line does not defeat the amended provision. Rectification that enhances liability must comply with the hearing requirement under section 154, and failure to properly consider the assessee's explanation can invalidate the enhancement. Section 14A disallowance must not duplicate amounts already disallowed under another provision and cannot be applied mechanically without recorded dissatisfaction with the assessee's claim; on the facts, the disallowance was confined to the amount already offered. en-us Tue, 12 May 2026 00:00:00 +0530 Thu, 18 Jun 2026 08:45:38 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=793531 Audit-report based adjustment at the processing stage is permissible where the Income-tax Act expressly allows disallowance or income increase indicated in the tax audit report and the assessee's reply is considered; the older "debatable issue" line does not defeat the amended provision. Rectification that enhances liability must comply with the hearing requirement under section 154, and failure to properly consider the assessee's explanation can invalidate the enhancement. Section 14A disallowance must not duplicate amounts already disallowed under another provision and cannot be applied mechanically without recorded dissatisfaction with the assessee's claim; on the facts, the disallowance was confined to the amount already offered. Case-Laws Income Tax Tue, 12 May 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=793531