Section 270A(6)(a) excludes income from under-reporting where a bona fide explanation is supported by full disclosure of material facts. Uploaded audited accounts and tax audit report, pre-notice tax payments, and acceptance of returned income supported cancellation of the penalty under Section 270A(3). Section 273B also protects a taxpayer from penalty for delayed furnishing of a tax audit report where reasonable cause is established. Pandemic-related disruption and director disputes delaying finalisation of accounts, followed by report upload and no prejudice to assessment, treated the delay as a technical breach and precluded penalty under Section 271B.

Section 10(26) salary exemption requires the claimant to prove that income accrued or arose from a source situated in the notified area or State, in addition to satisfying every other prescribed condition. An employer's letter recording a residential address in Shillong does not establish employment in Meghalaya or demonstrate that salary income arose from a qualifying source. Without an appointment letter or other supporting material proving the required source of income, the claimed exemption is unavailable.

Subscription fees paid for access to an online communication platform do not constitute royalty where customers receive only a limited, non-exclusive right to use the service and the provider retains ownership of the software, source code, copyright and intellectual-property rights. Customers must not obtain access to underlying processes or rights to modify, reproduce, exploit or own the software. Digital processes used by the provider to deliver communication, collaboration and file-sharing services are not made available to customers merely through platform access. Such receipts are business receipts and are not taxable in India without a permanent establishment.

Revisionary jurisdiction under Section 263 applies where an assessment is both erroneous and prejudicial to Revenue, including where mandatory inquiries or verification are omitted before allowing relief. Section 80AC makes timely filing of the return under Section 139(1) a condition for the relevant deduction, so allowing a Section 80P(2) claim without examining that condition may warrant revision. Examination of the deduction also falls within reassessment where the claim is directly connected with the explanation for deposits forming the basis of reopening, rather than being a wholly independent issue.

For fresh assessments under Section 153(3), the nine-month limitation period is reckoned from an operative order under Section 254, including a rectification order under Section 254(2) that directs de novo assessment. This approach avoids requiring completion of an assessment before later operative directions are issued. Where additions concern income from undisclosed sources, the status and supporting material relating to a connected prosecution remain relevant to determining taxable income. Failure to comply with directions to provide that material may permit the Assessing Officer to draw an adverse inference, while the quantum may require fresh consideration on the available evidence.

Protection against adverse action for failure to deduct tax at source from annual lease rent cannot be denied solely because a similarly situated assessee was not a party to earlier connected litigation. GNOIDA was treated as falling outside the expression "Government", requiring tax deduction from annual lease rent for the relevant assessment period; however, all similarly situated assessees were entitled to an opportunity of hearing. As the respondent had received no such hearing and the Authority's position was uniformly applicable, protection from adverse action remained available. Likely finalisation of GNOIDA's assessment also supported non-interference with the concurrent orders.

Penalty liability under Section 271(1)(c) for periods before 1 April 2016 requires application of Circular No. 25/2015 rather than automatic reliance on Explanation 4. The Circular treats the relevant explanation as prospective and makes penalty following an adjustment to computed income dependent on the nature of that adjustment. Where this framework was not considered, the penalty order and consequential demand notice were quashed, and the penalty liability was remitted for reconsideration under the Circular.

Concurrent factual findings on the attribution of impounded diaries, land-purchase material and cash transactions generally do not raise a substantial question of law in a further appeal. The statutory presumption relating to documents applies to the person from whose premises the material is found; absent independent evidence, recorded transactions cannot automatically be attributed to a firm. Additions for a partner's recorded cash credit may be limited after considering available sources and telescoping, while separate additions for unaccounted land consideration should not duplicate the same amount. Cash purchases neither recorded nor claimed as deductions cannot be disallowed as business expenditure.

Section 250(6) of the Income-tax Act requires the first appellate authority to formulate points for determination and decide each appeal by recorded reasons. This duty continues even if the appellant does not attend the hearing. An income-tax appeal cannot therefore be dismissed solely for non-appearance without adjudicating the grounds raised; such dismissal contravenes the statutory requirement for a reasoned appellate decision.

Faceless assessment procedure must provide a meaningful opportunity to respond and be heard. A show-cause notice allowing effectively only one working day, contrary to the prescribed minimum response period, coupled with a personal-hearing notice issued before the reply period expired, can breach the principles of natural justice. Refusal of a reasonable short adjournment and closure of the portal preventing upload of a reply compound that breach. Assessment proceedings should recommence from the show-cause-notice stage with prescribed reply time, prior video-conference hearing notice, disclosure of relied-upon material, and a speaking assessment order.

Faceless assessment procedure requires an effective personal hearing through video conferencing when the assessee specifically requests one. Where the requested hearing does not commence and is not rescheduled, with no subsequent hearing notice shown, finalising the assessment breaches Section 144B of the Income-tax Act and principles of natural justice. The assessment, consequential demand and penalty proceedings cannot be sustained; fresh assessment requires a further reply opportunity, an effective hearing, disclosure of material proposed for reliance, and a reasoned order.

Section 149(1)(b) permits a reassessment notice issued beyond three years only where escaped income is represented in the form of an asset and meets the prescribed monetary threshold. Treating entire contractual receipts as escaped income does not satisfy that condition when the income embedded in those receipts, as estimated for reassessment, falls below the threshold. In those circumstances, the jurisdictional conditions for issuing a Section 148 notice remain unmet, rendering the notice and consequential reassessment proceedings invalid.

TDS credit for tax deducted from salary cannot be refused solely because the deduction is absent from Form 26AS. Salary slips, employment records read with bank records, employer payroll or tax workings, and communications concerning tax deduction or deposit may support the claim. The available evidence must be evaluated to determine whether salary-related tax deduction was satisfactorily established. Where such deduction is established, the corresponding TDS credit must be granted despite non-reflection in Form 26AS.

Settlement application eligibility cannot be denied solely because the statutory notice was issued after 31 January 2021 where a live, unadjudicated notice under section 153A or section 143(2) existed when the application was filed by 30 September 2021. Section 245A(b) requires a pending assessment proceeding on the application date, while section 245C permits an application at any stage and does not require eligibility to arise by an earlier date. The CBDT eligibility condition is read down because departmental delay in issuing notices cannot defeat settlement access, and differential treatment of years from the same search lacks a reasonable classification under Article 14. Affected applications must be considered on merits by the Interim Board for Settlement.

Pendency of a statutory appeal against an assessment order supported declining discretionary writ jurisdiction. High Court disposed of the writ petition without examining the merits or the asserted jurisdictional defect, leaving those matters for the appellate process. The appellate authority was requested to determine the pending statutory appeal expeditiously, so the available appellate remedy remained the route for resolving the assessment challenge.

Effective opportunity of hearing under faceless assessment requires sufficient time to answer a show-cause notice, clear communication on any request for additional time, and consideration of material subsequently filed. Four working days for response, without communicating whether an extension request was accepted or rejected and without addressing uploaded submissions, may deny that opportunity. These requirements apply equally where assessment proceedings may lead to consequential penalty action.

Recovery of a tax demand pending a first appeal may be stayed where aggregated and apparently repetitive import information, without invoice-wise or bill-of-entry-wise details, prevents meaningful reconciliation with the assessee's complete accounting records. Such circumstances create a strong prima facie concern of breach of natural justice; a high-pitched assessment and resulting undue hardship further support protection from recovery. Administrative memoranda requiring payment of 20% of the demand do not restrict the Court's power to grant an appropriate stay, and no deposit need be imposed where the facts justify full protection. The appellate authority must decide the appeal promptly and independently on its merits.

Section 119(2)(b) permits condonation of a short, bona fide compliance delay where refusal would cause genuine hardship and defeat a statutory exemption. The audit report in Form No. 10B was required one month before the return due date for the relevant assessment year; a 30-day delay arose from a bona fide understanding, COVID-19 conditions and extended compliance timelines. The pending condonation application before CBDT did not require exhaustion before writ relief. The delay was condoned, the denial of exemption was set aside, and the return was required to be processed afresh by treating Form No. 10B as timely filed.

Alleged bogus and unexplained purchases were satisfactorily explained where the assessee produced books of account, purchase invoices, banking payment details and supporting evidence. Supplier non-response to notices and GST-registration status, being matters beyond the assessee's control, could not alone justify disallowance. As the books were not rejected and recorded sales were accepted, the corresponding purchases could not be disallowed entirely on presumption without tangible material. Deletion of the additions was justified, and no substantial question of law arose.

Section 260A does not permit interference with a Tribunal's factual assessment of disputed bullion purchases unless perversity, lack of evidence, or disregard of material evidence is shown. Purchase invoices, vendor confirmations, banking and GST records, stock registers, and undisputed corresponding sales and closing stock supported the purchase findings. Given narrow, market-driven bullion margins, treating the entire purchases as income was commercially incongruous; applying a 0.15% gross-profit rate remained a factual determination. No substantial question of law arose, and the restricted addition was sustained.