Section 69C of the Income Tax Act

Income-tax Act, 2025: s.105

Section 69C of the Income-tax Act, 1961 corresponds to section 105 (Unexplained expenditure) of the Income-tax Act, 2025.

Read section 105 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 69C is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 of the 8,217 judgments on BharatTax that turn on this section.

Leading authorities on Section 69C

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. 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.

CIT v. Simit P. Sheth
356 ITR 451 · 2013 · High Court
1,465
citing judgments

Additions for alleged bogus purchases should be restricted to the profit element, not the entire turnover. The profit element is often estimated at 12.5% of the purported bogus purchases.

Kishanchand Chellaram v. CIT
125 ITR 713 · 1980 · Supreme Court
962
citing judgments

An assessee is entitled to be confronted with evidence used against them and to an opportunity for cross-examination, especially when that evidence is from a third party or a retracted statement. Failure to provide such an opportunity violates the principles of natural justice.

McDowell & Co. Ltd. v. CTO
154 ITR 148 · 1985 · Supreme Court
741
citing judgments

The Supreme Court held that while legitimate tax planning is permissible, transactions structured as a "colourable device" or "subterfuge" solely to avoid tax are impermissible. It mandates a judicial shift to look beyond the form to the substance of a transaction, allowing the lifting of the corporate veil in tax evasion arrangements.

(Central)-1 v. NRA Iron & Steel (P) Ltd.
103 Taxmann.com 48 · 2019 · Supreme Court
696
citing judgments

When assessing cash credits, share capital, or loans, the assessee bears the onus to prove the identity, creditworthiness, and genuineness of transactions. This burden is not discharged merely by documentary evidence if field inquiries reveal accommodation entries or dealings with paper/shell companies.

Umacharan Shaw & Bros. v. CIT
37 ITR 271 · 1959 · Supreme Court
567
citing judgments

An income tax assessment or addition cannot be sustained solely on the basis of suspicion, surmises, or conjectures, as strong suspicion does not amount to proof. The revenue authorities must rely on concrete evidence and material to frame an assessment.

CIT v. Daulat Ram Rawatmull
87 ITR 349 · 1973 · Supreme Court
525
citing judgments

The onus to prove that an apparent transaction or explanation is not real lies with the person who claims it to be so. If an assessee provides a plausible explanation for a transaction, the revenue must establish that the apparent transaction is not genuine.

CIT v. P. Mohanakala
291 ITR 278 · 2007 · Supreme Court
525
citing judgments

The Supreme Court emphasized that in the absence of concrete rebuttal by the assessee, circumstantial evidence holds significant weight, applying the doctrine of preponderance of probability, particularly when assessing undisclosed income or unexplained cash credits.

Parashuram Pottery Works Co. Ltd. v. ITO
106 ITR 1 · 1977 · Supreme Court
486
citing judgments

The principle of finality dictates that stale issues should not be reactivated, and lapse of time brings repose to judicial and quasi-judicial controversies. A Commissioner cannot substitute their judgment for the Assessing Officer's unless the assessment order is legally erroneous, not merely less elaborate, thus limiting revisionary powers under Section 263.

Judgments on Section 69C

Rajiv Panjwani, Lucknow vs. The Income Tax Officer, Ward- 5(1), Lucknow

In the result, both appeals of the assessee in ITA

ITA 665/LKW/2025[2014-15]Status: DisposedITAT Lucknow24 Aug 2026AY 2014-15

Bench: Shri Kul Bharat & Shri Nikhil Choudharyआयकर अपील सं/ Ita Nos.664 & 665/Lkw/2025 ननिाारण वर्ा/ Assessment Years: 2013-14 & 2014-15 Rajiv Panjwani V. The Income Tax Officer, 111, Kesab Bhaduri Road, Ward-5(1) Aminabad Park, S.O, Lucknow- Pratyakshkar Bhawan, 226018. Ramtirth Marg, Lucknow- 226001. Pan:Acwpp8188L अपीलार्थी/(Appellant) प्रत्यर्थी/(Respondent) अपीलार्थी कक और से/Appellant By: Shri Rakesh Garg, Advocate प्रत्यर्थी कक और से /Respondent By: Smt Pratibha Singh, Acit (Dr) सुनवाई कक तारीख / Date Of Hearing: 28 07 2026 घोर्णा कक तारीख/ Date Of 24 08 2026 Pronouncement: O R D E R Per Kul Bharat.: These Appeals, By The Assessee Filed Against The Order Of The Learned Commissioner Of Income-Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi Dated 18.07.2025 Pertaining To The Assessment Years 2013-14 & 2014-15. For The Sake Of Convenience & Brevity, Both The Appeals Were Heard Together & Are Being Disposed Of By This Consolidated Order. First, We Take Up The Appeal Ita. No. 664/Lkw/2025, Pertaining To The A.Y. 2013-14 Is Taken As A Lead Case. The Assessee Has Raised The Following Grounds Of Appeal: - “01. Because The Cit(A) Has Erred On Facts & In Law In Upholding The Proceedings Initiated Under Section 147 Of The Income-Tax Act, 1961, Which Proceedings Being Without Jurisdiction, Bad In Law, Be Quashed.

For Appellant: Shri Rakesh Garg, AdvocateFor Respondent: Smt Pratibha Singh, ACIT (DR)
Section 147Section 148Section 69C

Rajiv Panjwani, Lucknow vs. The Income Tax Officer, Ward-5(1), Lucknow

In the result, both appeals of the assessee in ITA

ITA 664/LKW/2025[2013-14]Status: DisposedITAT Lucknow24 Aug 2026AY 2013-14

Bench: Shri Kul Bharat & Shri Nikhil Choudharyआयकर अपील सं/ Ita Nos.664 & 665/Lkw/2025 ननिाारण वर्ा/ Assessment Years: 2013-14 & 2014-15 Rajiv Panjwani V. The Income Tax Officer, 111, Kesab Bhaduri Road, Ward-5(1) Aminabad Park, S.O, Lucknow- Pratyakshkar Bhawan, 226018. Ramtirth Marg, Lucknow- 226001. Pan:Acwpp8188L अपीलार्थी/(Appellant) प्रत्यर्थी/(Respondent) अपीलार्थी कक और से/Appellant By: Shri Rakesh Garg, Advocate प्रत्यर्थी कक और से /Respondent By: Smt Pratibha Singh, Acit (Dr) सुनवाई कक तारीख / Date Of Hearing: 28 07 2026 घोर्णा कक तारीख/ Date Of 24 08 2026 Pronouncement: O R D E R Per Kul Bharat.: These Appeals, By The Assessee Filed Against The Order Of The Learned Commissioner Of Income-Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi Dated 18.07.2025 Pertaining To The Assessment Years 2013-14 & 2014-15. For The Sake Of Convenience & Brevity, Both The Appeals Were Heard Together & Are Being Disposed Of By This Consolidated Order. First, We Take Up The Appeal Ita. No. 664/Lkw/2025, Pertaining To The A.Y. 2013-14 Is Taken As A Lead Case. The Assessee Has Raised The Following Grounds Of Appeal: - “01. Because The Cit(A) Has Erred On Facts & In Law In Upholding The Proceedings Initiated Under Section 147 Of The Income-Tax Act, 1961, Which Proceedings Being Without Jurisdiction, Bad In Law, Be Quashed.

For Appellant: Shri Rakesh Garg, AdvocateFor Respondent: Smt Pratibha Singh, ACIT (DR)
Section 147Section 148Section 69C