INCOME TAX
ITAT Mumbai Upholds Fresh Examination of Ambuja Cements' AY 2019–20 Assessment For Lack Of Inquiry
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed Ambuja Cements Limited's appeal against a revision order that had set aside its completed tax assessment for fresh verification, holding that the original assessment was passed “without due examination and verification.” The company had challenged the Principal Commissioner of Income Tax's order under Section 263 revising and setting aside its Assessment Year 2019–20 assessment on the ground that the Assessing Officer...
ITAT Delhi Quashes Tax Revision Against Senior Advocate Mukul Rohatgi For AY 2020–21
The Delhi Bench of the Income Tax Appellate Tribunal on Monday quashed a revision order passed against Senior Advocate Mukul Rohatgi for Assessment Year 2020–21, holding that the Income Tax Department lacked material to exercise its revision powers for an assessment of Rs.133.46 crore. Section 263 allows a senior tax officer to revise a completed assessment if it is found to be erroneous and prejudicial to the interests of the Revenue. In Rohatgi's case, the Tribunal held that these...
Only Commissioner Can Decide If Delay In Income Tax Refund Is Attributable to Taxpayer, Not AO: Delhi High Court
The Delhi High Court has recently held that the question whether delay in processing TDS refund is attributable to the assessee/taxpayer, for the purpose of denying interest under Section 244A(2) of the Income Tax Act, can be decided only by the Principal Commissioner/Commissioner and not by the Assessing Officer (AO).A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed,“Looking at the language used in sub-section (2) of Section 244A of the Act of 1961, we are of the firm opinion...
Reopening Of Assessment Invalid If AO Fails To Show Reason To Believe: ITAT Chennai
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February quashed the reopening of assessment against a SEBI-registered stock broker, holding that the Assessing Officer failed to satisfy the “reason to believe” requirement under Section 147 of the Income Tax Act, 1961. Judicial Member Abhy T. Varkey and Accountant Member S.R. Raghunatha observed that the recorded reasons were “extremely scanty and vague.” They further held: “According to us, the reasons recorded should be...
Delhi High Court Slams IT Officer For Relying On Set-Aside Order, Directs Issue Of Nil TDS Certificate
The Delhi High Court has strongly criticised the Income Tax Department for relying on a long-set-aside assessment order to deny withholding tax relief, holding that such an approach amounts to a revenue-driven exercise contrary to law and judicial discipline.A Division Bench of Justices Dinesh Mehta and Vinod Kumar set aside the order passed under Section 197 of the Income Tax Act, 1961, which had directed deduction of tax at 15% instead of issuing a nil withholding certificate to a a UK-based...
Income Tax | Duty Drawback Not Eligible for 80-IC Relief ; Taxes on Raw Materials Must Be Set Off: Delhi High Court
The Delhi High Court has held that while duty drawback receipts are not eligible for deduction under Section 80-IC of the Income Tax Act, the excise and customs duties paid by a taxpayer on raw materials are required to be deducted/subsumed from the duty drawback while recomputing income in the facts of the case.A Division Bench of Justices Dinesh Mehta and Vinod Kumar partly allowed the appeal filed by Narayan Industries against ITAT order denying its claim for deduction under Section 80-IC in...
Reassessment Must Be Based On AO's Independent 'Reason To Believe,' Not Borrowed: Delhi High Court
The Delhi High Court has dismissed the Income Tax Department's appeals against NTPC Ltd., holding that reassessment proceedings cannot be initiated merely on the basis of an audit objection and that the statutory requirement of “reason to believe” must be from independent satisfaction of the Assessing Officer (AO).A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed,“the provision expressly used the language 'reason to believe' and the same has been interpreted by Hon'ble the...
Delhi High Court Affirms ITAT View That Excise Duty Refund Under Kutch Incentive Scheme Is Capital Receipt
The Delhi High Court has upheld an order of the Income Tax Appellate Tribunal (ITAT) holding that excise duty refund received by Jindal SAW Ltd. under the Kutch district incentive scheme is a capital receipt and not taxable as income.While dismissing the Income Tax Department's appeal, the Division Bench of Justices Dinesh Mehta and Vinod Kumar agreed with ITAT's view that the refund was granted under the Incentive Scheme 2001 for Economic Development of Kutch District, notified by the...
Orissa High Court Grants Fresh Hearing To Taxpayer With Neurological Illness, Quashes Ex Parte Order
The Orissa High Court on 2 February set aside an ex parte assessment order against Sri Susil Nath, the taxpayer, as he could not participate due to neurological illness.A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman noted: “As it appears from the record that the invoices along with vehicle particulars issued by the Government Authority could not be placed before the said Authority in view of the circumstances beyond the control of the petitioner.” The petition...
ITAT Chennai Cancels Rs 1.5 Lakh Penalty For Delayed Audit Filing, Cites Reasonable Cause
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February deleted a penalty of Rs. 1,50,000 imposed on a jewelry export company for delayed filing of its audit report under Section 44AB of the Income-tax Act, 1961. A Bench of Judicial Member Abhy T. Varkey and Accountant Member S.R. Raghunatha, observed that penalty provisions could not to be mechanically invoked and that the assessee was prevented by “reasonable cause.” They held: “Penalty provisions being quasi-criminal...
ITAT Chennai Rules Cash Deposits Can Be Set Off Against Earlier Advances, Deletes ₹20 Lakh Addition
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February deleted an addition of Rs. 20 lakh on a taxpayer out of the total Rs. 39.95 lakh made towards unexplained cash deposits and bank credits, observing that earlier bank deposits or cash advances can be set off against the said deposits.The matter was heard by Judicial Member Manu Kumar Giri and Accountant Member S.R. Raghunatha. The Bench noted that cash deposits of Rs. 20,00,000 in UCO Bank, made by Dhanabalan Selvamuthu...
Delhi High Court Directs Nil TDS For GoDaddy, Says Domain Registration Fees Not Taxable Under India-US DTAA
The Delhi High Court has held that domain name registration fees received by GoDaddy is not chargeable to income tax in India, in terms of the India-USA Double Taxation Avoidance Agreement.A division bench of Justices Dinesh Mehta and Vinod Kumar also criticised the Income Tax Department for refusing to grant a nil withholding tax certificate under Section 197 of the Income Tax Act, 1961, despite binding judicial precedent.“We record our displeasure about the casual rather callous manner, in...