Cash held by a non-earning senior citizen and minors cannot be treated as unexplained solely because they did not file returns where their income was below the taxable threshold. Lifetime household savings, stridhan and customary cash gifts to minors may explain such holdings despite the absence of formal books or mathematical precision. Cash previously accepted as exempt agricultural-land sale proceeds also remained available to explain cash found during search unless the Revenue established that it had been invested or spent elsewhere. Applying telescoping, the addition for unexplained money under Section 69A was deleted.

Delay in filing the appeal was condoned because the assessee had diligently pursued filing but was prevented by the authorised representative's inaction; the explanation was bona fide and showed no deliberate negligence or mala fides. A first appellate authority must decide statutory grounds arising from the assessment order through a reasoned order under Section 250, even where the appellant is absent. Dismissal of the first appeal solely for non-prosecution without merits adjudication was therefore unsustainable. The matter was restored to the Assessing Officer for fresh adjudication, including examination of the assessee's documentary explanation for cash deposits, after a reasonable opportunity of hearing.

Accumulated charitable income under the pre-amendment section 11(2) regime may be applied during the immediately succeeding year where that period was available when the accumulation was made. The omission effective from 1 April 2023 is prospective and does not curtail the previously available application period. A return-processing adjustment cannot disallow such application or treat it as chargeable under section 115BBI where eligibility depends on interpreting the amendment's temporal operation, applicable utilisation period, or statutory-form reconciliation. Claims requiring legal interpretation or factual verification fall outside prima facie adjustment under section 143(1).

Rule 8D disallowance requires recorded dissatisfaction with the taxpayer's accounts, while interest disallowance is not warranted where sufficient own interest-free funds support investments. Section 80-IA profits require standalone computation without reducing eligible profits for CENVAT benefits enjoyed by non-eligible units; captive-power pricing may use the distribution-licensee tariff as an internal comparable. Corporate advertising, scientifically accrued lease equalisation charges, actuarially valued leave-salary provisions, employee stock-option discounts, school-fee welfare expenditure, additional depreciation and acquired-goodwill depreciation are addressed as deductible claims. Subsidy character depends on the scheme's purpose and conditions, with technology-upgradation interest subsidy characterised by its capital-investment purpose. Negative net worth, cess deductibility, treaty-relief evidence, stock valuation and head-office expense allocation also require application of the stated statutory and factual tests.

Fair market value of specified securities or sweat equity shares determined for ESOP perquisite valuation under section 17(2)(vi) is treated as the cost of acquisition under section 49(2AA) for capital-gains computation. Section 49(2AA) does not require the perquisite to have been taxed in India or included in Indian total income. Perquisite valuation under Rule 3 and tax chargeability under sections 4, 5 and 9 operate separately. Where fair market value is determined under Rule 3(8)(ii), capital gains are recomputed using that value as the acquisition cost.

Section 143(1) could not support disallowance of delayed employees' provident fund and ESI contributions for the relevant pre-Supreme Court decision assessment year, so the adjustment was deleted. Treaty non-discrimination protection under section 90 restricted disallowance for payments to US and Chinese non-residents without tax deduction to the rate applicable to comparable resident payments; the excess disallowance was deleted. The further disallowance of MSMED interest and claims for TDS and TCS credits of amalgamated entities required factual verification, with consequential allowance and eligible credit to be granted in accordance with law.

Impounded Tally entries reflecting an educational trust's receipts, payments and expenditure do not establish unexplained investments of the individuals handling those funds unless material shows investment of their own unaccounted income. The ledger balances operated as control accounts for trust-related collections, expenditure and bank deposits, and reconciliation with the trust's regular accounts supported deletion of the Section 69 additions. Separately, a bank-credit loan remained taxable as unexplained money under Section 69A because the lender's explanation for the deposited source was inconsistent with human probability and did not establish creditworthiness or the source of funds.

Reassessment notices for assessment years 2014-15 to 2016-17 under Section 148 were invalid because they relied on investigation-wing information received before 4 March 2021, rather than cases flagged through the prescribed post-4 March 2021 process. The additional legal ground was admissible as it arose from facts already on record and went to the root of the assessments. CBDT instructions, clarified on 12 March 2021, restricted selection of investigation-report cases for reassessment to the specified process and did not permit jurisdictional Assessing Officers to select other cases. The notices and consequential reassessments were quashed.

For section 56(2)(x), the District Valuation Officer's value replaces the stamp-duty value when applying the safe-harbour rule. The 10% tolerance for differences between purchase consideration and valuation, intended to reduce hardship in genuine transactions, operates as a curative and beneficial provision with retrospective effect. Where the difference between actual consideration and the District Valuation Officer's valuation was 9.57%, it remained within the permissible tolerance; consequently, the addition under section 56(2)(x) was not sustainable and was deleted.

Cash deposits claimed to arise from inherited savings, agricultural income or prior remittance withdrawals require satisfactory, credible corroboration of their nature, source and availability at the time of deposit. An affidavit alone, without cash-flow details, agricultural or land records, receipt evidence, or proof that withdrawn funds remained available, does not establish the explanation; the deposit is consequently treated as unexplained money. An enhanced tax rate for unexplained income applies prospectively where the deposit predates the amendment's effective date and no retrospective operation is specified. Tax must therefore be computed under the law applicable when the deposit was made.

Exemption under section 11 cannot be denied solely because the audit report in Form No. 10B was filed one day after the prescribed due date. Furnishing Form No. 10B is procedural and directory rather than mandatory; a delay in filing the report does not by itself defeat exemption where the trust fulfils the substantive statutory conditions. The Assessing Officer must allow the claimed exemption once those substantive conditions are satisfied.

Estate income administered by a sole executor is chargeable under section 168(1)(a) in the executor's hands as if the executor were an individual, rather than at the maximum marginal rate applicable to an association of persons or artificial juridical person. Where more than one executor administers the estate, section 168(1)(b) applies. The number of executors must be verified from the will and testamentary documents before determining the correct assessment status and tax rate. Subject to confirmation of a sole executor, the estate is assessable at individual rates; the assessment requires fresh verification.

Section 43CA does not apply where agreements for sale of land fixed consideration and substantial non-cash consideration was received before the provision came into force, even if sale deeds were registered later. Subsequent registration merely completes the pre-existing contractual arrangement and does not render the provision retrospectively applicable. Although Section 43CA permits stamp-duty value as on the agreement date where consideration is received otherwise than in cash, that mechanism does not extend the provision to transactions substantially executed before enactment. Applying the law prevailing when substantive contractual obligations arose, stamp-duty valuation could not support the addition.

Reassessment orders issued in the name of a private company after its conversion into an LLP are void where the Assessing Officer had been informed of the conversion and received the conversion certificate before issuing jurisdictional notices. A company and LLP have distinct legal identities and tax treatment. Service of notice under section 143(2) after a return in response to section 148 is a jurisdictional requirement. Issuing both that notice and the reassessment order to an entity that had ceased to exist is a substantive illegality, not a mere misdescription, and cannot be cured under section 292B. The reassessment orders were quashed.

Section 270A requires the applicable statutory circumstance and factual basis for under-reporting or misreporting to be specifically identified in the initiating notice and penalty proceedings. Under-reporting under section 270A(2) is distinct from under-reporting resulting from misreporting under section 270A(9). Initiating proceedings for misreporting but imposing penalty for under-reporting, without specifying the relevant charge, denies the assessee a meaningful opportunity to respond and breaches natural justice. The penalty was therefore treated as invalid and quashed.

Reassessments based on documents seized during a search of a third party must proceed under Section 153C where the material pertains to the assessee and is relevant to determining that assessee's income. Sections 153A and 153C override the general reassessment mechanism under Sections 147 and 148 through non-obstante clauses. Consequently, Section 147 is unavailable for initiating reassessment on such search-seized material. Reassessment orders initiated under Section 147 in these circumstances lack jurisdiction and are liable to be quashed; factual additions need not be examined.

Cash deposits during demonetisation were satisfactorily explained where the assessee substantiated a maternal gift through the donor's income-tax returns showing undisputed rental income, and the Revenue made no enquiry into her accumulated cash savings despite unavailable bank withdrawals. A further deposit was explained through the HUF's disclosed rental income and available cash resources. As the disclosed rental receipts of both sources were not disputed and the assessee discharged the burden of proving the sources, the additions for unexplained investments were deleted.

Transfer-pricing adjustment on interest paid to a related enterprise may be deleted as revenue neutral if factual verification confirms a specified domestic transaction between domestic entities. Revenue neutrality ordinarily applies unless profit shifts from a profit-making entity to a loss-making entity or from a higher-tax entity to a lower-tax entity. Where the taxpayer is subject to a concessional lower rate and the related enterprise to a higher rate, an alleged shift would move profit to the higher-tax entity. Verification is required because the transaction was treated as international despite the related enterprise being identified as domestic.

Reassessment initiated more than three years after the relevant assessment year requires approval from the specified senior authority under section 151(ii); approval by a Principal Commissioner is not competent for that period. Notice beyond three years is permissible under section 149(1)(b) only where escaped income represented by an asset meets the prescribed threshold. Where the alleged escaped income falls below that threshold, the section 148A(d) order, section 148 notice and consequential reassessment are invalid and liable to be quashed.

Interest for failure to deduct tax on lease-rent payments is confined to the period from the date of deductibility until the deductee files its return. Disallowance for non-deduction of tax applies only to expenditure claimed as a revenue deduction in computing taxable income. Interest capitalised as inventory or work-in-progress under the percentage-of-completion method, and not charged to the profit and loss account, cannot be disallowed because it has not been claimed as deductible expenditure. Consequently, capitalised interest is excluded from the disallowance, while interest liability for non-deduction ends on the deductee's return-filing date.