Revision under Section 263 applies where an assessment order is erroneous and prejudicial to the interests of the revenue. Explanation 2(a) treats an order passed without enquiries or verification that should have been undertaken as meeting that condition. A cryptic, non-speaking assessment order that contains no factual particulars of enquiry into transactions, claimed expenses, or declared profit may fail to demonstrate the Assessing Officer's application of mind. Where the record does not establish such enquiry, revisionary jurisdiction is valid, particularly when the revisional authority has examined relevant financial details and submissions.

Purchase additions arising from supplier verification require fresh factual examination where the supplier later clarifies that sales from a unit were omitted and supports that clarification with invoices, payment records, GST material and delivery evidence. The assessee's earlier differing explanation must also be verified. A reasonable opportunity of hearing is required before deciding whether the disputed purchases are allowable. The purchase claim and supplier's clarification therefore require verification before any lawful addition is determined.

Section 80GGC deduction requires a genuine political contribution, not merely a donation receipt and payment through banking channels. Investigation material, un-retracted statements recorded under Section 132(4), bank-trail analysis and an established accommodation-entry arrangement involving layered funds can outweigh apparent documentation. Applying human probabilities and the preponderance-of-probabilities standard, the contribution described was treated as non-genuine and therefore ineligible for deduction under Section 80GGC.

Revenue expenditure classification applies to invoice-supported materials consumed regularly in business operations and to rates and taxes, where the accounts are accepted and no item is shown to be bogus, non-genuine or fictitious. Mere expenditure quantum or an unsupported assertion of enduring benefit does not establish a capital asset or justify capital treatment. In the absence of rejected books, identified evidentiary defects, or a demonstrated capital character, an ad hoc percentage disallowance is unsustainable. The expenditure is therefore treated as allowable revenue expenditure.

Revisionary jurisdiction under Section 263 requires an assessment order to be both erroneous and prejudicial to Revenue interests. Explanation 2(a) covers a failure to conduct enquiries or verification that ought to have been made, not merely an allegedly inadequate enquiry. Examination of seized records, statements, supporting documents, digital data and third-party responses, together with summons and notices, demonstrated substantive verification. Where the Assessing Officer evaluates that material, makes additions and adopts a view, further investigation into the same material cannot replace an independent finding that the assessment is erroneous or legally unsustainable. The revision order was invalid and the assessment was restored.

Section 11 exemption cannot be denied solely because the audit report in Form 10B was filed separately from the income-tax return. Where both the return and audit report are filed within the prescribed statutory period and the report is available when the return is processed under Section 143(1), separate filing is a procedural lapse rather than a failure of substantive exemption conditions. The exemption remains available, and denial solely on that basis is set aside.

Section 151 requires sanction from the statutorily designated PCCIT before a Section 148 reassessment notice issued beyond the prescribed period; approval by a PCIT does not cure the jurisdictional defect. Cash-deposit additions under Section 69A made in ex parte reassessment proceedings require an effective opportunity for the assessee to address the disputed deposits. Where neither the assessment nor the first appeal afforded that opportunity, the addition requires de novo adjudication after a reasonable hearing.

Tax-deduction disallowance on interest does not arise where no interest is credited or paid in the relevant year; brought-forward closing balances alone do not trigger withholding. Section 69C applies only to unexplained expenditure incurred during the relevant financial year, so a recorded capital advance paid through banking channels in an earlier year cannot be treated as fresh unexplained expenditure merely because it remains in the balance sheet. Amounts already added back as capital write-offs cannot be added again. Notional interest is not taxable where no real income accrued, and project-interest disallowance fails where tax was deducted and deposited within the prescribed time. The additions and disallowances were deleted.

Section 68 does not permit cash deposits in specified bank notes during demonetisation to be treated as unexplained cash credits where recorded cash sales establish their source. Accepted trading results and stock records free from defects support the genuineness of the recorded sales; the absence of customer particulars for cash sales alone does not make the sale proceeds unexplained. On these facts, the addition for unexplained cash credit was deleted.

Penalty for misreporting of income under section 270A(9) does not arise merely because employees' PF/ESI contributions are disallowed on a technical basis. Where the taxpayer disclosed the payments and all related particulars in its records and tax audit report, and no material establishes suppression or misrepresentation of income, rejection of the claim does not constitute misreporting. The penalty was therefore unsustainable.

Non-conformity of a scrutiny notice with a CBDT-prescribed format is an internal administrative lapse and a curable procedural defect; where the notice otherwise initiates scrutiny, section 292B preserves the consequential assessment. Appellate deletion of additions for unexplained expenditure and time deposits cannot rest on documents or explanations first produced on appeal without giving the Assessing Officer an opportunity under Rule 46A. Such reliance breaches natural justice, and failure to state reasons for admitting evidence or deleting additions makes the appellate decision non-speaking. The jurisdictional challenge fails, while the addition issues require de novo assessment after giving the assessee due opportunity.

Section 68 permits an unexplained-credit addition only where a credit is entered in the relevant previous year and the taxpayer fails to establish the investor's identity, creditworthiness and the transaction's genuineness. Confirmations, tax records, audited financials, banking trails and source-of-source material support those requirements unless contrary evidence discredits them. Repayment of an existing loan balance, without receipt of a fresh loan, does not create a relevant-year credit. An investor's accepted funding source may satisfy source-of-source requirements, while a Section 132(4) statement must specifically link the investor or transaction to an accommodation entry. A commission addition requires an independent evidentiary basis.

Section 68 requires an assessee receiving share capital to establish each investor's identity and creditworthiness and the genuineness of the transaction. Confirmations, tax returns, audited financial statements, bank records, share-allotment documents and evidence of immediate funding sources may substantiate that burden. Investor creditworthiness may be supported by loan repayments received from financially capable entities, liquidation of investments, and sufficient net worth. Banking-channel transactions and unrebutted documentary evidence remain material; low returned income or an investor's location alone does not disprove creditworthiness. The evidentiary requirement can extend to explaining the investors' source of funds.

Reassessment under Sections 148A(b) and 148A(d) requires consistency between the foundational allegation in the notice and the reasons supporting the determination that income escaped assessment. Where the notice alleged that a land purchase was unrecorded, but the subsequent determination accepted disclosure of the property and instead questioned the source of funds received from a holding company, the reassessment rested on an impermissible new ground. This divergence created a jurisdictional defect, rendering the reassessment invalid and liable to be quashed.

Documented IPO share acquisition through banking channels, demat credit, and screen-based stock-exchange sales with bank-received consideration substantiate the genuineness of share transactions for Section 68 purposes. Penny-stock characteristics, substantial price movement, general investigation material, and human-probability reasoning do not justify treating sale proceeds as unexplained cash credit without evidence linking the taxpayer to manipulation or accommodation entries. The claimed long-term capital gain remains accepted. A Section 69C addition for estimated commission expenditure also fails where the underlying transactions are genuine and no evidence establishes that commission was incurred.

Section 45(2) applies only when an owner converts a capital asset into, or treats it as, stock-in-trade of a business carried on by that owner. Entering a joint development agreement under which another party undertakes development does not, without evidence of conversion or real-estate business, alter the land's capital-asset character; the long-term capital-gains addition was therefore deleted. Business-income treatment of flats transferred to a spouse requires proof of a sale for actual consideration. Unrebutted affidavit and bank evidence of non-payment outweigh a sale-deed recital or value stated for duty purposes, so no taxable business income arose and the addition was deleted.

Limitation for notice under Section 153C is determined from the deemed date of search, fixed by the handing over of seized material to the assessing officer of the other person. The material was handed over on 17 September 2021. The proviso to Section 153C(3), read with Section 153(3), barred issuance of the notice after 1 April 2021. Consequently, the notice issued on 9 October 2021 was beyond the prescribed limitation period and was invalid for lack of jurisdiction, as was the consequential assessment.

Timely issuance and recorded service of a scrutiny notice within the statutory period preserve assessment validity where no evidence disproves service or identifies another mandatory breach. For unexplained-money treatment, possession creates only a rebuttable presumption of ownership. A consistent search-stage explanation that cash was held in safe custody for an employer, supported by the employer's cash book and audited accounts, rebuts that presumption unless the revenue discredits those records or proves personal ownership. The cash is therefore not assessable in the individual's hands as unexplained money, and the consequential special tax treatment does not arise.

Reassessment under sections 147 and 148 requires a legally sustainable reopening based on recorded information. Where the recorded reasons concern specified financial transactions but no addition is made on those transactions, an addition on unrelated surplus funds cannot be sustained. The absence of an addition on the issue forming the basis for reopening prevents reassessment from supporting a separate, unconnected addition; consequently, the reassessment and the surplus-fund addition are legally unsustainable.

Section 148 reassessment notices must state a definite jurisdictional basis. Treating an assessee alternatively as a searched person and another person leaves jurisdiction indeterminate and invalidates the notice. Section 151 approval requires genuine examination of the recorded reasons; an unexplained mismatch between the escaped-income figure in the reasons and approval demonstrates mechanical approval. These defects invalidated the reassessment proceedings and resulted in quashing of the assessment.