Delhi High Court Drops Suo Moto Contempt Action Against Income Tax Officer For Allegedly Passing Unreasoned Order

The Delhi High Court has dropped the civil contempt proceedings initiated against a Principal Commissioner of Income Tax (now retired) six years ago, for alleged wilful disobedience of its order to give reasons for insisting an assessee to deposit 20% demand in appeal.The proceedings were initiated suo moto in 2019 on a prima facie opinion but on a closer scrutiny, Justice Vikas Mahajan now found that the Respondent's order though brief, was not bereft of reasons.“Such reasons are brief and not...

Income Tax Act | Assessee Can Challenge Cash Credit Addition U/S 68 In Remand Proceedings; Tribunal's Direction Not Binding: Kerala High Court

The Kerala High Court held that the assessee is free to challenge the cash credit addition under Section 68 of the Income Tax Act in remand proceedings; the tribunal's directions are not binding. As per Section 68 of the Income Tax Act, 1961, any sum found credited in the books of a taxpayer, for which he offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, may be charged to income-tax...

Income Tax | Rajasthan High Court Quashes Repeated Orders To Transfer Case, Calls Revenue's Approach 'Rigid' & 'Adamant'

The Rajasthan High Court has come down heavily on the Revenue Department for being “rigid and adamant” to transfer the case of the petitioner from Udaipur to Delhi under Section 127 of the Income Tax Act, 1961, despite the coordinate bench's earlier decision that quashed the same order.Section 127 of the Act empowers the income tax authorities to transfer a case from one Assessing officer to another to ensure better coordination, effective investigation or administrative convenience. The...

Notice U/S 148 Income Tax Act Must Be Delivered To Addressee Personally By Post To Complete Service U/S 27: Allahabad High Court

The Allahabad High Court has held that notices under Section 148 and 282 of the Income tax Act, 1961 must be delivered to the assesee personally through speed post and not merely upon his address to complete service under Section 27 of the General Clauses Act, 1897. It held that presumption of sufficient service arises only when the notice is sent by registered post as in registered post the notice is delivered to the person it is addressed to. Highlighting the difference between...

Karnataka High Court Directs CBDT To Extend Tax Audit Due Date To 31st October

The Karnataka High Court today directed the Central Board of Direct Taxes to extend the due date for filing Tax Audit Reports under Section 44AB of the Income Tax Act, 1961, by one month to 31st October, 2025.For reference: “Section 44AB of the Income Tax Act, 1961 mandates compulsory audit of accounts for businesses and professionals above a specified turnover or gross receipts threshold.”The Court took into consideration the difficulties faced and directed the CBDT to extend the due...

Rajasthan HC Grants One Month Extension For Filing Tax Audit Report After Complaints Of Glitches On E-Filing Portal

The Rajasthan High Court has extended the deadline for filing the Tax Audit Report by one month. A division bench of Justice (Dr.) Pushpendra Singh Bhati and Justice Bipin Gupta at the Rajasthan High Court extended the deadline under Section 44AB of the Income Tax Act, 1961, by 1 (one) month beyond September 30, 2025. It was submitted that in the previous years, CBDT had consistently granted such extensions in similar circumstances, and refusal to grant the same in the present...

Income Tax Act | To Claim Deduction U/S 54F, Assessee Must Show Intention To Repay Borrowed Funds With Capital Gains: Kerala HC

The Kerala High Court stated that to claim the Section 54F deduction under the Income Tax Act, the assessee must satisfy the authorities that borrowed funds were used at their own risk with the intention to be repaid with capital gains. Section 54F of the Income Tax Act, 1961, allows a tax exemption on capital gains earned from selling a residential property, but only if certain rules are followed. Justice Ziyad Rahman A.A. stated that "...even in a case where, the residential...

Income Tax Act | Payment To Consulting Doctors Appointed On Probation Is Not Salary; TDS Deductible U/S 194J, Not U/S 192: Bombay High Court

The Bombay High Court has held that payments to consultant doctors are not salary. Hence, TDS is deductible under section 194J and not under section 192 of the Income Tax Act. Justices B.P. Colabawalla and Firdosh P. Pooniwalla stated that there does not exist an employer-employee relationship between the assessee and consultant doctors, and the payments made to them by the assessee come under the purview of section 194J of the Income Tax Act. Section 194J of the Income Tax Act,...

Income Tax Act | Draft Assessment Order Not Permissible U/S 144C(1) When TPO Makes No Variation: Bombay High Court

The Bombay High Court has held that a draft assessment order is not permissible under section 144C(1) of the Income Tax Act when the TPO (transfer pricing officer) makes no variation. Section 144C(1) of the Income Tax Act, 1961, provides that the Assessing Officer should forward a draft of the proposed assessment order to the eligible assessee if any variation of the income or loss returned is proposed to be made which affects the assessee negatively. Justices B.P. Colabawalla and...

S. 149 Income Tax Act | Reassessment Beyond Limitation Period Is Valid Where 'Bogus' Royalty Payments Exceed ₹50 Lakh: Bombay High Court

The Bombay High Court has stated that reassessment beyond 3 years is valid where bogus royalty expenses exceed Rs. 50 lakhs. Justices Bharati Dangre and Nivedita P. Mehta upheld the reassessment proceedings initiated beyond three years, in the present case, where the alleged bogus royalty expenses exceeded 50 Lakhs. The bench opined that Section 149(1)(b) of the Income Tax Act is a jurisdictional fact which must be established prior to reopening of assessment on the ground that...

Sale Proceeds Of Minor's Property Share Deposited Under Court Order Excluded From Father's Taxable Income: ITAT

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has stated that sale proceeds of a minor's property share deposited under court order are excluded from father's taxable income. S.S. Viswanethra Ravi (Judicial Member) held that the assessee cannot decide the utilization of his minor daughter's share as it is deposited as per Court's order and it is impossible to club the same in the assessee's (father) hand. In this case, the assessee filed return of income in response...

Surprise Searches Can Be Conducted On Family's Lockers U/S 132 Of Income Tax Act Over Suspicion Of Undisclosed Assets: Delhi High Court

The Delhi High Court has upheld the surprise search and seizure conducted by the Income Tax Department at the private lockers maintained by a family at South Delhi Vaults, without issuance of prior notice or summons to them.The family claimed that failure to notify them was a flagrant violation of Section 132 of the Income Tax Act, 1961 which relates to 'Search and seizure'.Section 132(1)(c) stipulates that when the Department has 'reason to believe' that any person is in possession of...