Section 68 of the Income Tax Act

Income-tax Act, 2025: s.102

Section 68 of the Income-tax Act, 1961 corresponds to section 102 (Unexplained credits) of the Income-tax Act, 2025.

Read section 102 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 68 is Pr. CIT v. Abhisar Buildwell (P.) Ltd. (149 Taxmann.com 399), cited in 2,379 of the 29,931 judgments on BharatTax that turn on this section.

Leading authorities on Section 68

Pr. CIT v. Abhisar Buildwell (P.) Ltd.
149 Taxmann.com 399 · 2023 · Supreme Court
2,379
citing judgments

An assessment under section 153A is without jurisdiction if there is an absence of incriminating material for an unabated assessment year.

Sumati Dayal v. CIT
214 ITR 801 · 1995 · Supreme Court
1,967
citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd.
374 ITR 645 · 2015 · High Court
1,823
citing judgments

In Section 153A proceedings, the scope of assessment extends to abated proceedings, enabling an assessee to raise fresh legal claims that could have been made in regular assessment proceedings.

CIT v. Kelvinator of India Ltd.
320 ITR 561 · 2010 · Supreme Court
1,673
citing judgments

An Assessing Officer cannot initiate reassessment proceedings under Section 147 of the Income Tax Act based on a mere change of opinion. Reassessment is permissible only when there is fresh tangible material leading to the belief of income escapement, not merely a review of existing facts.

CIT v. Durga Prasad More
82 ITR 540 · 1971 · Supreme Court
1,579
citing judgments

Tax authorities must judge evidence using the test of human probabilities and consider the apparent as real until there are reasons to believe it is not. They can rely on circumstantial evidence and the preponderance of probabilities to determine the genuineness of transactions.

GKN Driveshafts (India) Ltd. v. ITO
259 ITR 19 · 2003 · Supreme Court
1,349
citing judgments

When a notice under Section 148 of the Income Tax Act is issued, the Assessing Officer is bound to furnish reasons for reopening upon the assessee's request and must dispose of the assessee's objections to the notice by passing a speaking order.

Dhakeshwari Cotton Mills Ltd. v. CIT
26 ITR 775 · 1954 · Supreme Court
1,061
citing judgments

Corroborative evidence is essential to support evidence found on third-party premises, and an assessment cannot be based on suspicion, surmises, or conjecture.

ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd.
291 ITR 500 · 2007 · Supreme Court
1,030
citing judgments

For initiating reassessment proceedings under Section 147, the Assessing Officer needs only prima facie material providing a reason to believe that income has escaped assessment. Conclusive proof or the sufficiency/correctness of the material is not required at the stage of issuing the notice under Section 148.

CIT v. Orissa Corporation Pvt. Ltd.
159 ITR 78 · 1986 · Supreme Court
897
citing judgments

When an assessee provides the identity and address of a creditor or investor for a cash credit or share capital under Section 68, the burden shifts to the Department to establish lack of genuineness or creditworthiness, requiring it to conduct further inquiries; mere non-compliance by third parties to summons cannot be the sole basis for an adverse inference against the assessee.

Raymond Woollen Mills Ltd. v. ITO
236 ITR 34 · 1999 · Supreme Court
862
citing judgments

For reassessment proceedings under Section 148, the Assessing Officer only needs prima facie material to have a reason to believe income has escaped assessment. Conclusive proof or evaluation of the sufficiency and correctness of such material is not required at the stage of issuing the notice.

Judgments on Section 68

Sri Balaji Metals and Minerals Private Limited, Kolkata vs. ACIT, Circle 5(1), Kolkata

In the result. The appeal of the assessee is allowed

ITA 2784/KOL/2025[2016-2017]Status: DisposedITAT Kolkata21 Apr 2026AY 2016-2017

Bench: Shrirajesh Kumar & Shripradip Kumar Choubeyassessment Year: 2016-17 Sri Balaji Metals & Minerals Private Limited.....................................................Appellant Room No.6, 3Rd Floor, 23A, Netaji Subhas Kolkata- 700001. [Pan No. Aaics1619J] Vs. Acit, Circle 5(1)..…………..…………………....……….Respondent Aayakar Bhawan, P-7, Chowringhee Square Kolkata- 700069 Appearances By: Shri A.K. Tibrewal, Fca, Adv., Appeared On Behalf Of The Appellant. Shri S.B. Chakraborthy, Addl.Sr. Dr ,Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : March 26, 2026 Date Of Pronouncing The Order : April 21 ,2026 Order Per Pradip Kumar Choubey: This Appeal Filed By The Assessee Is Directed Against The Order Dated 14.10.2025 Of The National Faceless Appeal Centre (Nfac) Passed Under Section 147 R.W.S144 Of The Assessment Year 2016-17 Of The Income-Tax Act, 1961 (Hereinafter Referred To As “The Act”). 2. At The Outset The Ld. Ar Challenges The Very Impugned Order By Taking Legal Ground That Ld. Cit(A)Have Erred That The Ito Circle 5 (1) Kolkata Lacked Jurisdiction Over The Assessee To Take Up The Assessment Proceedings Due To Pecuniary Limit As Prescribed In The Cbdt Instruction No. 1/2011 Dated 31.01.2011. The Ld. Ar Submits That Cit(A) Did Not Consider The Case Of The Assessee On This Issue & Rejected The Same On Surmises & Conjectures. The Ld. Ar Cited Following Decisions Which Is As Follows:- 1. Pr. Commissioner Of Income Tax-Vs-Shree Shoppers Ltd. Assessment Year- 2016-17

Section 142(1)Section 147Section 148Section 148A