INCOME TAX
S.197 IT Act | AO Must Form Prima Facie Opinion Regarding Taxability In India Before Rejecting Assessee's Application For Nil TDS: Delhi HC
The Delhi High Court has made it clear that before rejecting an assessee's application under Section 197 of the Income Tax Act 1961 for nil TDS or deduction of tax at a lower rate, the assessing officer must form a prima facie opinion regarding the assessee's taxability in India.Section 197(1) of the Act enables an assessee to make an application for a certificate requiring the deduction of tax at a lower rate or no deduction at all if the Assessing Officer is satisfied that the total income of...
AO Becomes 'Functus Officio' After Closure Of Assessment, Must Put Relevant Incriminating Material To Assessee To Re-Confer Jurisdiction: Delhi HC
The Delhi High Court has made it clear that after the closure of assessment proceedings, the Assessing Officer becomes 'functus officio' and to re-confer jurisdiction upon the AO to initiate re-assessment proceedings, relevant incriminating material ought to be put to the assessee.A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela made the observation while dealing with a writ petition filed by Vivo Mobiles, assailing the reassessment proceedings initiated...
Cash Seized From Assessee Cannot Be Retained By GST Dept Or IT Dept Prior To Finalisation Of Proceedings: Kerala High Court
The Kerala High Court stated that illegal cash seizure by GST Department and handing over to Income Tax Department is illegal under Section 132A of the Income Tax Act. The Division Bench of Justices A.K. Jyasankaran Nambiar and Easwaran S. held that “Cash amount seized from the premises of the assessee cannot be retained either by the GST Department of the State or the Income Tax Department prior to a finalisation of respective proceedings initiated by them,” In this case, the...
Income Tax Act | 'Fee For Technical Services' Means Transfer Of 'Specialised'/ 'Distinctive' Knowledge Or Skill By Service Provider: Delhi HC
The Delhi High Court has held that Fee for Technical Services (FTS) as contained under Section 9(1)(vii) of the Income Tax Act, 1961 is concerned with the transfer of 'distinctive', 'specialized' knowledge, skill, expertise and know-how by a service provider.A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar thus observed that assistance provided by the assessee-respondent with respect to rules and regulations for clearance of customs frontiers is not 'specialised...
Charitable Trust's Registration For Income Tax Exemption To Be Decided Based On Proposed Activities & Not Actual Activities : Supreme Court
The Supreme Court reiterated that when a charitable trust applies under Section 12-AA of the Income Tax Act (“Act”) for income tax exemptions (under Sections 10 and 11), the tax authorities should decide on the registration based on the charity's "proposed activities" than its actual activities, as stated in the Ananda Social case. The Court, however, clarified that mere registration under Section 12-AA would not entitle a charitable trust to claim exemption under Sections 10 and 11...
Income Tax Act | No Penalty Under S.271AAA If Undisclosed Income Is Admitted, Explained & Tax Paid Even With Delay : Supreme Court
The Supreme Court, while determining a tax matter, observed that the undisclosed income, under Section 271AAA(1) of the Income Tax Act, surrendered by the assessee during the search, is not sufficient to levy the penalty. Essentially, the said provision talks about penalty where a search has been initiated. The explanation reads as: “(a) “Undisclosed income” means— (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or...
High Court Within Whose Jurisdiction AO Passes Assessment Order Has Jurisdiction To Entertain Appeal U/S 260A Income Tax Act: Delhi HC
The Delhi High Court has reiterated that only such High Court within whose jurisdiction the Assessing Officer passing an impugned assessment order is situated would have the jurisdiction to entertain an appeal under Section 260A of the Income Tax Act, 1961.The Section makes provision for an appeal to the High Court from an order passed in appeal by the Appellate Tribunal.In the case at hand, the original assessment order was passed by the AO in Amritsar, making an addition of ₹4,37,046/- to the...
AO Duty Bound To Dispose Of Assessee's Written Objections To Proposed Re-Assessment By Passing Speaking Order: Calcutta High Court
The Calcutta High Court recently upheld an ITAT order deleting the addition of over ₹4 crore made to the income of an assessee under the Income Tax Act, 1961 in reassessment action.A division bench of Chief Justice TS Sivagnanam and Justice Bivas Pattanayak held that the Assessing Officer had erred in not disposing of the written objection submitted by the assessee against the reopening of the assessment.It observed, “The duty cast upon the assessing officer is to decide the written objections...
Income Tax Act | Offence Committed Before Show-Cause Notice Compoundable As Covered By 'First Offence' In Compounding Guidelines: Supreme Court
The Supreme Court on January 7 set aside the Gujarat High Court's judgment dated March 21, 2017, through which the rejection to the compounding application of the Appellant for the assessment year 2013-2014, for having filed the belated income tax return, was upheld on the ground that only for the "first offence" compounding of offence is possible. Since the Appellant had filed delayed income tax for 2011-2012 and his compounding application was accepted, it now cannot be accepted.However,...
Not An Enabling Provision, Proscribes Reassessment Action Beyond Limitation: Delhi HC Explains Timelines U/S 149 Of Income Tax Act
The Delhi High Court has made it clear that Section 149 of the Income Tax Act, which prescribes a limitation period for initiating reassessment against an assessee, is not an enabling provision but rather a proscription on the Assessing Officer's powers.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed,“The opening sentence of Section 149(1) of the Act clearly indicates that the time limit as prescribed under Section 149(1) of the Act is a hard stop....
Superannuation Fund | Limit On Deduction Of Employer's Contribution Applies To Initial/ Annual Contribution, Not Additional Payments: Delhi HC
The Delhi High Court has held that the limit prescribed under Section 36(1)(iv) of the Income Tax Act 1961, on deductions that an employer can seek for contributions made towards superannuation funds, applies only at the stage of setting up the fund or making ordinary annual payments.A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar said any contribution made additionally in discharge of an overarching obligation would not be rendered as a disallowable expense.It thus...
What Is The Time Period Surviving U/S 149 Of Income Tax Act For Issuing Reassessment Notices: Delhi High Court Explains
The Delhi High Court has interpreted the Supreme Court's decision in Union of India v. Rajeev Bansal to elucidate the time period surviving under Section 149 of the Income Tax Act, 1961 for issuing reassessment notices.A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar concluded that the period between 20 March 2020 to 30 June 2021 would be excluded from limitation, in view of Section 3(1) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act,...