INCOME TAX
S.149 IT Act | Additions Made During Reassessment Don't Validate Proceedings Initiated For Income Escapement Below ₹50 Lakh Threshold: Delhi HC
The Delhi High Court has held that the benchmark of minimum Rs. 50 lakh income escapement prescribed under Section 149 of the Income Tax Act, 1961 must be met at the very initiation of reassessment proceedings. A division bench of Justices Yashwant Varma and Dharmesh Sharma observed, “Additions ultimately made in the course of reassessment would not validate the initiation of proceedings if founded on income of INR 46,17,000/- having escaped assessment and thus evidently below the...
Absence Of Formal Communication U/S 148A Of Income Tax Act Not Fatal When Opportunity To Question Reassessment Had Been Provided: Delhi HC
The Delhi High Court observed that absence of a formal notice under Section 148A of the Income Tax Act, 1961 was not fatal to reassessment proceedings initiated in the twilight zone when the inquiry provisions were introduced by the Finance Act, 2021. A division bench of Justices Yashwant Varma and Dharmesh Sharma noted that the Department had provided an opportunity to the petitioner-assessee to question the assumption of jurisdiction under Section 148, which was the “underlying...
[Income Tax] Allahabad HC To Examine Whether Proceedings U/S 148A(b) Initiated Prior To 01.09.2024 Would Be Saved After Enforcement Of The Finance (No.2) Act, 2024
The Lucknow Bench of the Allahabad High Court has sought state response on the question of maintainability of proceedings under Section 148A(b) of the Income Tax Act initiated prior to 01.09.2024, if at all, would be saved after enforcement of the Finance (No.2) Act, 2024 w.e.f. 01.09.2024 especially in view of sub-Section- (4) of Section 152 of the Income Tax Act, 1961 which has been inserted by the said Finance (No.2) Act, 2024. Section 148A has been amended by the Act of 2024....
If Assessee Produces Accounts, AO Must Be Satisfied That Accommodation Entries Exist Before Proceeding U/S 148 Of Income Tax Act: Delhi HC
The Delhi High Court has held that an Assessing Officer is required to be satisfied that accommodation entries as alleged in show cause notice under Section 148A(b) of the Income Tax Act 1961 exist, particularly where the assessee produces its accounts. In doing so, a division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma heavily relied on its recent ruling in Sonansh Creations Pvt Ltd. v. Assistant Commissioner Of Income Tax And Anr. where it was held...
Compounding Of Offences Allowed Under IT Act, HC's Inherent Jurisdiction U/S 482 CrPC Cannot Be Invoked For Quashing: Orissa HC
The Orissa High Court has refused to entertain a petition filed for quashing the offence under Sections 276(B) of the Income Tax Act, 1961, stating that the Petitioner-accused should have sought compounding of the offence. Justice Sibo Sankar Mishra observed, “In the present regime, where the compounding of the offence is permissible, the jurisdiction of this Court under Section 482 Cr.P.C. may not be necessarily invoked by the petitioner. In that view of the matter, the petitioner...
Income Tax Act | Reassessment Notice To Merged Entity U/S 148A(d) Not Invalid Merely Because SCN Was Issued In Name Of Ceased Entity: Delhi HC
The Delhi High Court has made it clear that merely because notice under Section 148A(b) of the Income Tax Act, 1961 is issued in the name of an amalgamating company which had ceased to exist, subsequent notice issued under Section 148A(d) in the name of merged entity cannot be declared invalid. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma held, “The nature of proceedings under Section 148A of the Act is to enable the AO to form an opinion...
AO Bound To Ascertain 'Correctness' Of Information Available Against Assessee, 'Decide' Whether It Is Sufficient To Reopen Assessment: Delhi HC
The Delhi High Court has turned down the contention that an Assessing Officer, at the stage of passing an order under Section 148A(d) of the Income Tax Act, 1961 for initiation of reassessment proceedings, is not required to form any opinion as to the genuineness or veracity of the information available against an assessee. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed, “As is clear from the plain language of Section 148A(d) of the...
Delay In Issuing Requisition U/S 132A Of Income Tax Act Due To Investigation By Department Can Be Condoned: Delhi HC
The Delhi High Court has held that the delay in issuing requisition under Section 132A of the Income Tax Act, 1961, can be condoned if the same is explained by the Authority concerned. The provision contemplates powers to requisition books of account, etc. It stipulates that where a search has already been conducted by any authority under any other law, the Income Tax authority shall authorize the Assessing Officer to make requisition to that authority to deliver books of accounts and...
Income Tax Dept Can Invoke S.159 When Reassessment Notice Was Issued During Lifetime Of Deceased Assessee: Delhi HC
The Delhi High Court has held that Section 159 of the Income Tax Act can be invoked to proceed against the legal representative of an assessee, only in cases where the reassessment notice was issued to the assessee during his lifetime, not after. When a person dies, the provision makes his legal representative liable to pay any sum which the deceased would have been liable to pay if he had not died. Sub-section (2) thereof clearly stipulates that any proceeding taken against the...
Reduction In Share Capital Amounts To Transfer Of Capital Asset Under Income Tax Act : Supreme Court
The Supreme Court (recently on January 02) reiterated that reduction in share capital is covered under Section 2(47) of the Income Tax Act, 1961, which talks about transfer of a capital asset. It explained that such reduction would be come under the expression “sale, exchange or relinquishment of the asset” used in the provision.For reference, the concerned portion of Section 2(47) reads as:“transfer' in relation to a capital asset, includes, (i) the sale, exchange or relinquishment of the...
Twin Conditions U/S 127 Of Income Tax Act For Transferring Assessee's Case From One Officer To Another Are Mandatory: Himachal Pradesh HC
The Himachal Pradesh High Court has elucidated the mandatory twin conditions for transfer of an assessee's case under Section 127 of the Income Tax Act, 1961, from one Assessing Officer to another. Section 127 stipulates that the Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter and after recording his reasons for doing so, transfer any case from Assessing Officer subordinate to him to any other Assessing Officer also subordinate to him. ...
Uploading Information On Insight Portal Not A Substitute For Handing Over Material To AO For Non-Searched Entity U/S 153C Of IT Act: Delhi HC
The Delhi High Court has held that the provision under Section 153C of the Income Tax Act, 1961 for the Assessing officer of a searched person to record 'satisfaction' and handover documents regarding undisclosed income of another person cannot be substituted by merely uploading such information on the Department's insight portal. The provision stipulates that where the Assessing Officer of the person searched is satisfied that records of undisclosed assets relate to another person,...