Monetary policy calibration remained on hold because food and fuel inflation had not yet produced broad-based or persistent price pressures. The policy pause was supported by limited pass-through of supply-side shocks, contained core inflation and no clear demand-driven overheating. Recalibration depends on incoming evidence of persistent inflation, entrenched supply-side pressures, de-anchored expectations and the evolving growth-inflation dynamic. Geopolitical disruption, volatile oil prices, monsoon conditions and El Nin o-related agricultural risks remain material inflation risks.

Compassionate-appointment applications arising from an employee's death before the 2020 Rehabilitation Assistance Rules commenced must be assessed under the rules in force on the date of death where the application was timely under the 1990 Rules. Administrative delay in processing a pending application cannot subject the applicant to the later regime. Substituted Rule 6(9), introduced by the 2025 Amendment Rules, expressly preserves the earlier rules for pending claims concerning pre-2020 deaths. The prior judicial declaration regarding the former Rule 6(9) continues to operate absent a stay. Accordingly, the application must be considered under the 1990 Rules.

Supreme Court considered whether the High Court could entertain a challenge relating to proceedings pending before the National Company Law Tribunal under the insolvency framework. The jurisdictional objection required consideration, and notice was issued. The impugned order and further proceedings were stayed pending further consideration, suspending the challenged action during the interim period.

Revocation of a customs broker licence, forfeiture of security deposit and penalty cannot be sustained where the Regulation 17 enquiry substantially exceeds the prescribed timeline without recorded justification or a finding that the customs broker caused the delay. Although the timeline is directory, a delay of more than nine months between the show-cause notice and enquiry report required reasons showing that it was reasonable, unavoidable or attributable to the broker. Procedural fairness was also impaired because the enquiry officer investigated the underlying offence. The revocation, forfeiture and penalty were therefore set aside.

Interest-free or inadequately remunerated loans to a concern connected with a person specified under Section 13(3) constitute a benefit attracting Sections 13(1)(c) and 13(1)(d). Under Section 164(2), the applicable CBDT circular and judicial position, the breach taxes only income attributable to the prohibited benefit at the maximum marginal rate, rather than withdrawing Section 11 exemption from the trust's entire income. Accordingly, notional interest on the connected-party loan is taxable, while the trust retains exemption for its remaining income. The Finance Act 2022 amendment to Section 13 is consistent with this limited-denial approach.

A penalty for concealment of income or furnishing inaccurate particulars cannot be sustained where the notice under section 274 retains both statutory limbs without identifying the specific charge. Failure to strike off the inapplicable limb leaves the allegation ambiguous, denies the assessee clear notice and an effective opportunity to defend, and vitiates the penalty proceedings. The penalty was therefore treated as invalid and deleted.

Cash deposits assessed as unexplained income under Section 68 were supported by a cash-flow statement, prior income records, loan documents, bank records, household and education expense evidence, and the spouse's returns. The available material established an opening cash balance, while the balance of the deposits was explained through the assessee's, spouse's and agricultural income. An opening cash balance brought forward from an earlier year cannot be taxed in the relevant year. Where supporting evidence is not specifically rebutted, the entire cash deposit cannot be treated as unexplained on surmises and conjectures; the addition was therefore deleted.

Counsel-related communication failure, supported by affidavit and untainted by deliberate delay, constituted sufficient cause for condoning a 285-day delay in filing an appeal. An ex parte appellate decision made when the assessee lacked representation required fresh adjudication to ensure a meaningful opportunity to submit factual material and explanations. The additions and disallowance remained open for independent determination on merits, and the matter was restored for fresh appellate consideration after due hearing.

Disclosed commodity-trading profit accepted as business income cannot be treated as unexplained money where seized cash is explained by that profit and no contrary material disproves the explanation. The amount formed part of the return under profits and gains of business or profession, and the returned income had been accepted. As the income was not characterised as non-business income and its stated source was not rejected on evidence, the conditions for applying the special-rate provision for unexplained money were not satisfied. The profit is therefore assessable as disclosed business income rather than unexplained money.

Disallowance of expenditure relating to exempt income cannot exceed the exempt income earned, even where the prescribed computation method produces a higher figure. For both assessment years, the computed disallowance exceeded the respective exempt income and must therefore be restricted to that exempt-income amount. This limits the disallowance to the actual tax-exempt income earned, in favour of the assessee.

Reassessment cannot be validly initiated on the premise that stock-option transaction profit escaped assessment where substantially corresponding commodity-dealing profit was already disclosed in the profit and loss account, computation of income and return. The alleged escaped income had therefore already been offered to tax and assessed on the basis of the return. The reopening and consequential reassessment order were quashed in favour of the assessee.

Employees' PF/ESI contribution disallowance may be adjusted while processing a return under Section 143(1) where the return material itself establishes a prima facie disallowance. The statutory adjustment therefore remains valid. TDS credit relating to an amalgamating company requires factual verification of whether tax was deducted on that company's behalf. Upon such verification, the amalgamated company is entitled to the corresponding TDS credit.

Recorded cash sales supported by purchase invoices, stock records, payment details, VAT disclosures and supplier confirmations explain demonetisation-period bank deposits; absent proof that the underlying purchases or sales were bogus, the deposits cannot be treated as unexplained cash credits. General investigation material alleging that suppliers provide accommodation entries does not disprove transaction-specific purchases where contemporaneous records, corresponding sales and supplier confirmations remain unrebutted. Adverse third-party statements cannot support additions when requested cross-examination is denied. Once purchases are accepted as genuine, estimating a profit element on those purchases lacks a legal basis. The business transactions and resulting cash balance therefore eliminate both additions.

Employees' provident fund contribution deposited one day after the prescribed date remained deductible where the delay resulted from technical glitches on the provident fund portal. Material on record established the portal-related cause, identical decisions on such delays supported deduction, and no contrary material was produced. The disallowance was therefore required to be deleted.

Internal inconsistency in return entries can constitute an incorrect claim apparent from information in the return, permitting adjustment during processing under section 143(1). Where interest sub-fields were shown as nil but the aggregate interest column disclosed an amount, the interest claim was capable of adjustment. Interest expenditure recorded in audited accounts but entered in an incorrect return column remains subject to verification of applicable tax-deduction compliance and any resulting disallowance under section 40(a)(ia). Following verification, the expenditure may be allowed or disallowed accordingly.

Transfer-pricing benchmarking of captive software development service providers requires turnover-based and functional comparability. Entities with turnover exceeding ten times that of the tested party, diversified operations, product activities, or materially different functional profiles should be excluded, while suitable comparables should be included for fresh arm's-length computation. A separate adjustment for interest on delayed trade receivables requires verification and should not be made where the delay is already reflected in a working-capital adjustment, as this would duplicate the adjustment. Penalty proceedings require consequential reconsideration after recomputation of the underlying transfer-pricing adjustment.

Non-filing of a return attracts statutory deemed concealment even where income is later disclosed in response to a reassessment notice and accepted in reassessment. Acceptance of the returned income does not remove concealment because the income would otherwise have escaped assessment. For computing tax sought to be evaded, tax deducted at source and self-assessment tax paid before issue of the reassessment notice must be reduced from tax on the assessed income. Penalty is therefore leviable, subject to computation after allowing those eligible tax credits.

Interest expenditure on borrowings used to advance funds generating taxable interest income is deductible under Section 57(iii) where a reasonable and proximate nexus exists between the expenditure and the income-earning purpose. The relevant test is the dominant purpose of incurring the expenditure, not whether income arises in the same accounting period. Where accounts establish that borrowed funds were advanced to entities from which interest income was earned and offered to tax, and the remaining interest cost was capitalised, the corresponding interest expense is allowable. The expenditure's genuineness and factual linkage must not be disproved.

Under the CGST and KGST Acts, each tax period must be subjected to separate proceedings under the statutory framework for tax determination. Clubbing multiple tax periods or financial years into a single composite show-cause notice exceeds the authority provided under the relevant provisions. Such a notice is invalid for want of jurisdiction, and adjudication or appellate proceedings based on it cannot be sustained. The defect does not prevent initiation of fresh proceedings separately for each relevant tax period in accordance with law.

Anticipatory bail was sought in allegations of fraudulent availment and passing of fake input tax credit without actual supply of goods or services. The allegations concerned non-payment of GST on substantial transactions and were characterised as an economic offence involving a cognizable and non-bailable offence. The Supreme Court dismissed the special leave petition without interfering with the High Court's judgment and order.