ITAT Chennai Deletes ₹1.5 Lakh Penalty On Stargate Enterprises, Holds Bona Fide Belief As Reasonable Cause

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 26 June held that a penalty under Section 271B for failure to furnish a tax audit report cannot be sustained where the taxpayer acted under a bona fide belief that the audit requirement did not apply. Vice President George George K and Accountant Member Gagan Goyal allowed the appeal filed by Stargate Enterprises Pvt. Ltd. and deleted the penalty of Rs.1.5 lakh imposed under Section 271B for failure to furnish a tax audit report...

Search Assessment, Not Reassessment, Applies To Cases Based On Pre-April 1, 2021 Third-Party Search Material: ITAT Kolkata

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT), on 26 June held that where reassessment is initiated on the basis of material seized during a third-party search conducted prior to 1 April 2021, the Income Tax Department must proceed under the special search assessment provisions and cannot invoke Sections 147 and 148 of the Income Tax Act, 1961. Accountant Member Rajesh Kumar allowed the appeals filed by Maan Steel & Power Ltd. for assessment years 2018–19 and 2019–20 and...

Brilliant Study Centre Faculty Are Independent Professionals, Not Employees For TDS: ITAT Cochin

The Income Tax Appellate Tribunal (ITAT) at Cochin has recently held that faculty members engaged by Brilliant Study Centre Pvt. Ltd., a well-known Kerala coaching institute that prepares students for NEET, JEE, and other medical and engineering entrance examinations, were independent professionals and not employees. It consequently set aside a demand of Rs. 9.48 lakh raised against the institute after the Income Tax Department treated it as an assessee in default for allegedly short-deducting...

ITAT Ahmedabad Quashes Reassessment Against Tipsons Stock Brokers, Deletes ₹1.33 Crore Disallowance

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has recently quashed reassessment proceedings against Tipsons Stock Brokers Pvt. Ltd. It held that the Income Tax Department reopened the assessment solely by re-examining material already on record. The tribunal also deleted a disallowance of about ₹1.33 crore made against the company.A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary observed that the conditions for reopening an assessment beyond four...

ITAT Delhi Deletes ₹1.23 Crore Addition To Borrower's Income Over Lender's Low-Declared Income

The Income Tax Appellate Tribunal (ITAT) at Delhi has recently reiterated that a lender's low declared income, by itself, is not sufficient to reject its creditworthiness for advancing an unsecured loan. Allowing the appeal of Florence Nightingale Educational Society, the tribunal observed that the relevant test is the lender's ability to arrange funds and not merely its earning capacity. Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman allowed the appeal filed by...

ITAT Delhi Says Computation Of Mandatory Interest Must Be Examined Before Dismissing Appeal

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that while the levy of interest under the Income Tax Act is statutory and mandatory, an appeal challenging its computation cannot be dismissed without examining the issue on merits. A coram of Judicial Member Vimal Kumar and Accountant Member Ramit Kochar ruled,“There is no dispute that the interest is statutory and mandatory, but working /computation could be subject to challenge, if the assessee is so aggrieved, which...

Interest Received By Foreign Banks On Foreign Currency Loans To Indian Concerns Taxable On Gross Basis: ITAT Mumbai

The Income Tax Appellate Tribunal (ITAT), Mumbai, has recently held that interest income earned by a foreign bank from foreign currency loans extended to Indian corporates is taxable on a gross basis. It ruled that such income cannot be reduced by attributing expenditure before the concessional rate of tax is applied. The bench of President Justice C.V. Bhadang and Accountant Member Vikram Singh Yadav held that the provisions of Section 115A of the Income Tax Act require interest income earned...

ITAT Kolkata Restores Appeal Over CPC Notice Sent To Former Consultant, Condones 1,542-Day Delay

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) on 22 June held that authorities must condone delay where sufficient cause exists, particularly when tax communications are addressed to a former authorised representative and the taxpayer establishes lack of actual knowledge. Judicial Member George Mathan and Accountant Member Rakesh Mishra allowed the appeal filed by Angkur Moulik, set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)], and restored the matter for...

Loan To Non-Shareholder Company Not Taxable As Deemed Dividend Under Section 2(22)(e): ITAT Kolkata

On 22 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that a loan received by a company cannot be taxed as deemed dividend under Section 2(22)(e) of the Income Tax Act merely because it has a common shareholder with the lending company, where the borrowing company itself is not a shareholder. Judicial Member George Mathan and Accountant Member Rakesh Mishra partly allowed JHV Steels Ltd.'s appeal against an order passed under Section 263 of the Income Tax Act and set...

ITAT Restores Appeal As Assessee Receives Order Intimation Belatedly, Accepts Envelope As Proof

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) on 22 June held that an appeal cannot be dismissed as time barred if filed within the statutory period computed from the date of service of the order. Judicial Member George Mathan and Accountant Member Rakesh Mishra set aside an Order of the Commissioner (Appeals) that had dismissed an appeal by Sudipta Traders Pvt. Ltd. without examining merits, and restored the matter for fresh adjudication. The Bench observed: "the appeal was...

Why Madras High Court Refused To Order Probe Into Tamil Nadu CM's Financial Disclosures In Election Affidavit?

The Madras High Court has recently refused to direct the Income Tax Department to investigate the financial disclosures made by Tamil Nadu Chief Minister and Tamilaga Vettri Kazhagam chief C. Joseph Vijay in his election affidavit. It held that disputes over such disclosures can only be adjudicated through an election petition and not in writ proceedings. A Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed a writ petition seeking directions to...

IT Department Moves Supreme Court Against Delhi HC Order Quashing Reassessment Notices Against NDTV Founders

The Income Tax Department has challenged a Delhi High Court ruling that quashed reassessment proceedings against NDTV founders Dr. Prannoy Roy and Radhika Roy over interest-free loans received from RRPR Holdings Pvt. Ltd. The loans included about ₹21 crore advanced to Prannoy Roy and about ₹71 crore advanced to Radhika Roy.The Special Leave Petition is likely to be heard by a vacation bench of Justices R. Mahadevan and Alok Aradhe on June 30, 2026.The High Court judgment delivered by a Division...