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

Nirav Chandrakantbhai Bhalani, Bhavnagar vs. The Pr. CIT, Ahmedabad-1, Ahmedabad

In the result, the appeal of the Assessee is partly allowed

ITA 1041/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad06 Aug 2024AY 2016-17

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No. 1041/Ahd/2024 "नधा"रण वष" /Assessment Year :2016-17 Nirav Chandrakantbhai The Pr.Cit,Ahmedabad-1 Bhalani बनाम/ Ahmedabad-380 015 Plot No.9, Vibhapark Society V/S. Adhewada, Bhavnagar Bhavnagar – 364 002 (Gujarat) "थायी लेखा सं./Pan: Bcipb 8197 E (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri Mehul K. Patel, Ar Revenue By : Shri Kamlesh Makwana, Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 29/07/2024 घोषणा क" तार"ख /Date Of Pronouncement: 06/08/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee As Against The Order Dated 27/03/2024 Passed By The Principal Commissioner Of Income Tax, Ahmedabad-1 [Hereinafter Referred To As “The Ld.Pcit” In Short] In Exercise Of His Revisionary Jurisdiction Under Section 263 Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act” In Short) For The Assessment Year (Ay) 2016-17. Nirav Chandrakantbhai Bhalani Vs. The Pcit Asst. Year : 2016-17

For Appellant: Shri Mehul K. Patel, ARFor Respondent: Shri Kamlesh Makwana, CIT-DR
Section 142(1)Section 144Section 147Section 148Section 263Section 68

M/S Indovision Commodities Ltd., Kolkata vs. ITO, Ward-6(2), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 500/KOL/2024[2012-13]Status: DisposedITAT Kolkata06 Aug 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Sanjay Awasthii.T.A. No.500/Kol/2024 Assessment Year: 2012-13 M/S Indovision Commodities Ltd. .....……………………....………....Appellant Block-B, Suit No.1A Mangalam, 24 & 26 Hemanta Basu Sarani, Dalhousie, Kol-1. [Pan: Aabcm8943Q] Vs. Ito, Ward-6(2), Kolkata…...................................................…..…..... Respondent Appearances By: Shri Sunil Surana, Ar, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit- Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : May 30, 2024 Date Of Pronouncing The Order : August 06, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 23.02.2024 Of The National Faceless Appeal Centre (Hereinafter Referred To As The ‘Cit(A)’) Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. For That The Notice U/S 148 & The Reassessment Completed By Ito Wd 6(4) Was Without Jurisdiction, Invalid & Bad In Law & Therefore The Entire Reassessment Is Liable To Be Quashed. 2. For That The Proceedings Initiated U/S 147 On Vague Reasons Without Any Tangible Material Or Independent Application Of Mind Simply On Borrowed Satisfaction, Suspicion & Surmises Were Bad In Law & Therefore The Entire Reassessment Is Liable To Be Quashed.

Section 120Section 143(2)Section 147Section 148Section 250Section 68