Cash deposits representing cash sales already recorded in turnover cannot be added again as unexplained cash credits. Where the books debit cash and credit sales, no credit arises in any person's name that creates a liability, and the sales have already entered the computation of taxable income. Section 68 applies only to credited sums not already accounted for in computing income. Rejection of explanations and supporting material without discussion does not support the addition. No statutory restriction equivalent to Section 40A(3) applies to cash sales. The addition of the cash deposits was therefore impermissible and required deletion.

Delay arising from incorrect professional advice, an employer's Form 16, and lack of awareness of an available exemption may constitute sufficient cause for condonation where comparable scheme-related matters received similar treatment. Compensation under the BSNL Voluntary Retirement Scheme 2019 is characterised as retrenchment compensation when the Cabinet-approved, government-funded scheme functioned as a workforce-reduction and cost-rationalisation measure. On that characterisation, the full compensation falls outside the monetary restriction in the first proviso to section 10(10B) and qualifies for exemption.

Capital-gains addition arising from the transfer of claimed rural agricultural land was remanded for fresh examination because the taxpayer's submissions and documentary evidence required reconsideration. The Assessing Officer must re-examine the matter after giving reasonable opportunity to furnish necessary evidence, and the taxpayer must cooperate. The validity of reopening and the taxability of the alleged transfer were not decided on merits. The appeal was allowed for statistical purposes through restoration for fresh assessment.

Section 10(27) exempts income of a cooperative society formed to promote the interests of Scheduled Castes or Scheduled Tribes where its membership consists of similarly purposive cooperative societies and its finances are provided by the Government and those societies. Promotion through the lac industry may satisfy the statutory purpose where supported by the society's objects, membership records and beneficiary details. The provision does not require beneficiaries to be exclusively Scheduled Castes or Scheduled Tribes. Substantial Government and similar-society funding may meet the financing condition despite incidental income from other sources.

Ex parte assessment and appellate orders require a proper opportunity for the assessee to present supporting evidence and explanations. Where the assessee alleges defective service of notices and shows that replies were filed during assessment proceedings, adjudication should proceed on merits only after a final hearing opportunity. The matter was restored to the jurisdictional assessing authority for fresh adjudication after affording that opportunity.

Section 263 revisionary jurisdiction cannot be used to direct initiation of penalty under Section 271AAD where the Principal Commissioner lacks statutory power to impose or direct that penalty. Penalty proceedings are separate from assessment proceedings; therefore, an assessment order is not erroneous and prejudicial to Revenue merely because penalty was not initiated. Where the underlying disallowance remains before the first appellate authority, that authority may independently initiate penalty if warranted. A revisional authority cannot require the assessing authority to perform an act that the revisional authority itself is not empowered to perform. The direction to initiate penalty was beyond jurisdiction and invalid.

Exemption for a charitable trust registered under Section 12AB should not be denied solely because Form 10BB was uploaded after Form 10B, where the delay was bona fide and the substantive conditions for exemption are otherwise met. A just, balanced and equitable approach may be applied to this procedural lapse. Exemption under Section 11 was directed to be granted after verification of the belatedly filed Form 10BB.

Revisionary jurisdiction could not be invoked where the assessment record showed that the Assessing Officer specifically sought section-wise details and supporting evidence for Chapter VIA deductions, and the taxpayer provided the donation receipt, explanatory note and bank extracts for the CSR contribution claimed under section 80G. An assessment order need not contain detailed discussion when the enquiry and response are evident from the record. A revisionary authority cannot rely merely on a view that further enquiry was warranted or that another view on allowability was possible. The assessment order was not both erroneous and prejudicial to Revenue interests, rendering the revisionary order invalid.

Unverified trade-credit entries cannot be accepted merely because they are recorded as sundry creditors. Section 68 requires evidentiary examination of credits, including support for any claimed exemption under Section 10(23B); the credit additions and exemption claim require fresh factual verification. Similarly, reduction of a business-expenditure disallowance cannot rest on an unsupported percentage estimate. Evidence substantiating the expenditure must be examined before relief is granted under Section 37(1). The relevant credits, expenditure and exemption claim require reconsideration on the evidentiary record in fresh assessment proceedings.

Commissioner (Appeals) cannot dismiss an income-tax appeal for non-prosecution where it has not been withdrawn and contains substantive grounds challenging reassessment proceedings and additions. Non-compliance with subsequent notices does not remove the appellate obligation to decide the grounds raised on their merits. Dismissal without addressing those grounds is unsustainable. Fresh adjudication is required after giving the assessee an opportunity to substantiate the contentions.

For Assessment Year 2025-26, the first proviso to section 87A applied where total income fell within the prescribed limit and did not exclude income-tax on short-term capital gains taxable at the special rate under section 111A. Section 111A prescribed a tax rate but did not bar the rebate. The subsequent restriction limiting rebate to tax computed under section 115BAC(1A) took effect only from 1 April 2026 and did not apply to the preceding year. Administrative guidance or return-processing systems could not create a substantive statutory exclusion. Full section 87A rebate therefore remained available despite such short-term capital gains.

Commission receipts may be computed on a presumptive basis where the receipts are accepted but the claimed indirect expenditure is not supported by an agreement, evidence of services, or proof of exclusive linkage to commission activity. Income is consequently computed at 50% of commission receipts under Section 44ADA rather than by disallowing all expenditure. Books of account may be rejected where disclosed sales are materially lower than bank credits and the excess credits remain unexplained; profit estimated at 8% of those credits on a presumptive basis remains sustained.

An omitted Section 80C deduction cannot be obtained through rectification of an intimation where no deduction was claimed in the original return, because neither the Section 143(1) intimation nor the Section 154 rectification order contains a rectifiable error. Where supporting evidence of qualifying investment exists, the taxpayer may seek permission under Section 119(2)(b) to file a revised return and make the deduction claim in accordance with law.

Income surrendered during a survey from excess stock and cash at business premises is assessable as business income at normal rates where it is consistently recorded as business income, has a nexus with regular business stock, and no separate undisclosed asset or non-business source is identified. The enhanced tax rate under Section 115BBE does not apply before its effective assessment year. Disallowance under Section 14A remains sustainable when computed under the statutory mandate, and an ad hoc disallowance of business expenditure may be sustained where reasonable on the facts.

Unaccounted purchases that generate corresponding sales give rise only to the profit embedded in those transactions, rather than their gross value. For reassessment notices issued beyond three years, the Section 149 threshold must be tested against that real escaped income; where embedded profit is below Rs. 50 lakh, extended reassessment is unavailable. Search material relating to an assessee must be assessed through the Section 148 reassessment route rather than directly under Section 143(3). Before 1 April 2023, a 30-day period for filing a return under Section 148 was permissible. A cross-examination objection requires a specific request during assessment proceedings.

Penalty for furnishing inaccurate particulars cannot rest on an addition absent from the assessment order. Interest on enhanced compensation involved a debatable taxability issue subject to divergent judicial views, and mere disallowance of a claim does not, by itself, establish inaccurate particulars. The penalty order also proceeded on an erroneous factual premise. Penalty was therefore unsustainable and deleted in favour of the assessee.

Protection insurance, processing fees and annual maintenance charges linked to genuine bank borrowings used to acquire a let-out property fall within deductible interest under section 24(b). The inclusive definition of interest covers service fees and other charges relating to money borrowed, debt incurred or a credit facility. Where the charges have an undisputed nexus with the borrowing, they are treated as interest for deduction purposes, extending the section 24(b) deduction beyond periodic loan interest.

Deduction for a co-operative society providing credit facilities to members depends on the statutory conditions for Section 80P(2)(a)(i). A society not shown to be a co-operative bank, including through an RBI banking licence or other statutory conditions, is not excluded by Section 80P(4). General allegations of failed mutuality, nominal or non-member dealings, irregularities, or fund diversion cannot deny the deduction without identified year-specific transactions and attributable income. Further factual verification should not permit a roving enquiry where prior proceedings provided opportunity to produce evidence. A protective disallowance unsupported by proven nominal-member dealings does not itself establish failed mutuality.

Section 80GGC permits deduction for non-cash political contributions where the recipient is registered, payment is made through banking channels, and a donation receipt is available. General search material alleging accommodation entries cannot, without assessee-specific evidence of cash repayment and an opportunity to rebut third-party material, justify disallowance. Similarly, an addition for unexplained money under Section 69A requires proof that the assessee received or owned the alleged cash. Statutory presumptions and preponderance of probabilities cannot replace foundational evidence linking the assessee to a cash-back arrangement.

Reassessment initiated against a successor amalgamated entity was not invalid merely because notices and the assessment retained the predecessor's old PAN. Where the recorded reasons correctly identified the successor and its new PAN, and the successor participated without confusion or prejudice, the PAN mismatch was a rectifiable clerical defect under Section 292B. Conversely, reopening based on alleged escaped commission income could not support an unexplained unsecured-loan addition when no addition was made on the recorded reason. Explanation 3 to Section 147 permits assessment of other escaped income but not a new-issue addition after the original reopening ground yields none.