Delhi High Court Quashes IT Order After Dept. Failed To Intimate Decision On Taxpayer's Adjournment Request

The Delhi High Court has quashed an income tax assessment order and demand notice after finding that a taxpayer was denied a fair hearing. The tax department failed to communicate whether his adjournment request had been accepted or rejected. It also passed the order without considering the reply he had filed. A Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed, “It is clear that the petitioner's right of being heard has been infracted and the violation of petitioner's Fundamental...

Father Of Deceased Taxpayer Can Be Treated As Legal Representative Despite Not Being Legal Heir: Delhi HC

The Delhi High Court has held that the father of a deceased assessee can be treated as a “legal representative” under the Income Tax Act even if he is not a Class-I heir under the Hindu Succession Act.A Division Bench of Justices Dinesh Mehta and Amit Mahajan observed,“A person need not be a legal heir, much less a Class I heir under the Hindu Succession Act to fall within this definition. The test is not one of inheritance; it is one of representation vis-à-vis the estate of the deceased.”The...

No Rectification For Debatable Points Under Section 254(2) Of Income Tax Act: Allahabad High Court

The Allahabad High Court on 6 May held that only mistakes apparent from the record can be rectified under Section 254(2) of the Income Tax Act, 1961, and that debatable issues fall outside its scope. A Division Bench of Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary dismissed the appeal filed by Abusaad Ahmad, upholding the Income Tax Appellate Tribunal's refusal to rectify its earlier order rejecting condonation of delay. It held: “In order to attract the power to rectify under...

Supreme Court Issues Notice On IT Dept. Appeal Over Relief To Vedanta For TDS Default On Non-Resident Payments

The Supreme Court on Monday issued notice on an appeal filed by the Income Tax Department against a Madras High Court ruling that had partly quashed tax proceedings against Vedanta Ltd. The case concerns its alleged failure to deduct tax on payments made to its overseas group entity. The Madras High Court had, on August 29, 2025 partly ruled in Vedanta's favour. It held that the tax department could not uniformly apply a seven-year limitation benchmark across all assessment years. Observing...

ITAT Mumbai Deletes ₹36.54 Crore Share Premium Tax Addition, Says AO Could Not Replace Projections With Actuals

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has recently deleted a ₹36.54 crore tax addition made on share premium received by footwear company Catwalk Worldwide Ltd, holding that the tax department wrongly rejected the company's share valuation by comparing business projections with actual later performance “The Assessing Officer ought not to have disturbed the method adopted by assessee or cannot adopt the figures by replacing the projections with actual financials.” A bench...

ITAT Mumbai Says Section 43CA Does Not Cover Pre-Enactment Bookings, Grants Relief To Lodha Developers

On 13 May, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that Section 43CA of the Income Tax Act does not apply to flats booked and allotted before the provision came into force, even if the sale deed is registered later. The provision deems stamp duty value as sale consideration for taxing real estate business transfers when it exceeds the declared price.Accountant Member Om Prakash Kant and Judicial Member Anikesh Banerjee deleted an addition of Rs. 2.05 crore made by the...

Income Tax Dept. Releases ITR-1, ITR-4 Utilities 45 Days After Court Indicated April 1 Timeline

Despite a judicial direction that income tax return filing utilities be made available from April 1 every year, the Income Tax Department on Friday (May 15) released the ITR-1 and ITR-4 utilities for Assessment Year 2026-27, formally opening the return filing season for salaried taxpayers and small businesses. The utilities for ITR-1 (Sahaj) and ITR-4 (Sugam) were made available on the Income Tax Department's e-filing portal, allowing eligible taxpayers to begin preparing and filing returns for...

Cash Deposits From Recorded Sales Cannot Be Taxed Again As Unexplained: ITAT Mumbai

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 7 May observed that once sales are recorded in the books of account and offered as business turnover, the same amount cannot again be taxed as unexplained cash credit under Section 68 of the Income Tax Act. Judicial Member Amit Shukla and Accountant Member Makarand Vasant Mahadeokar were hearing an appeal filed by Raju Samsurat Yadav, an electronics trader operating through proprietary concerns SKS Enterprises and Omega Marketing....

Genuine Sales Bar Full Disallowance Of Purchases From Entry Provider: ITAT Mumbai

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 7 May held that where sales are accepted as genuine and supported by invoices and delivery challans, the entire purchase amount cannot be treated as bogus merely because the supplier was found to be an accommodation entry provider. Judicial Member Sandeep Singh Karhail and Accountant Member Vikram Singh Yadav held that only the profit element embedded in such purchases can be brought to tax and partly allowed an appeal filed by...

Fixed Share Of Gross Receipts Paid To AOP Member Was Taxable Revenue Income, Not Exempt Profit: Supreme Court

The Supreme Court has held that the 35% share of gross sale proceeds received by Sanand Properties Pvt Ltd from an Association of Persons (AOP) formed for a Pune housing project was taxable business income and not an exempt share of profit, holding that the payment was insulated from project expenses and therefore bore the character of revenue rather than profit. A bench led by Justice J.B. Pardiwala and Justice K V Viswanathan delivered the ruling in a dispute arising out of a joint...

ITAT Mumbai Upholds Denial Of Tax Deduction On ₹25 Lakh Donation To Kisan Party Of India

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the denial of a tax deduction claimed by a Mumbai chemical trader for a ₹25 lakh donation to the Kisan Party of India. The tribunal found several circumstances that cast doubt on whether the contribution was genuine. A bench of Judicial Member Sandeep Singh Karhail and Accountant Member Bijayananda Pruseth noted that the taxpayer was a chemical trader with no apparent connection to a Bihar-registered political party...

R&D Deduction Cannot Be Denied for Non-Filing of Form 3CL When Already Available With AO: ITAT Mumbai

Today, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that a taxpayer cannot be denied deduction for research and development (R&D) expenditure under Section 35(2AB) of the Income Tax Act merely for not separately filing Form 3CL during assessment proceedings, where the approval had already been transmitted to and was available with the Assessing Officer. Judicial Member Justice Sandeep Singh Karhai and Accountant Member Bijayananda Pruseth allowed the appeal filed by...