Four-Year Income Tax Refund Delay: Delhi High Court Directs AO To Appear If Campus Activewear Not Paid With Interest

The Delhi High Court has directed the Assessing Officer (AO) to remain present before it and explain the “inordinate delay” in refunding Campus Activewear if the due payment along with applicable interest is not made by the next date. The refund has remained unpaid for last four years.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta was informed by the Income Tax Department counsel that the requisite exercise for processing the Petitioner-company's refund was underway and the...

No Unaccounted Assets Or Investments Found: Delhi High Court Rejects Revenue's Plea For Higher Tax

The Delhi High Court has dismissed an appeal filed by the Income Tax Department seeking to levy tax at a higher rate under Section 115BBE of the Income Tax Act, 1961, holding that neither the Assessing Officer nor the Principal Commissioner of Income Tax had recorded any finding regarding the existence of undisclosed or unaccounted assets or investments.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta upheld the ITAT order, observing that in the absence of unexplained...

IT Dept. Cannot Cite Website Functionality To Avoid Withdrawing Order Passed In Defiance Of Court: Gujarat High Court

The Gujarat High Court has recently quashed reassessment proceedings against a charitable trust after the Revenue told the court that its tax portal had no functionality to withdraw an assessment order once it had been passed and accounted for. The assessment order was passed despite an interim order restraining the Assessing Officer from doing so.A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati ruled, "Revenue cannot cite the excuse of nonavailability of any...

Delhi High Court To Examine If Audit Objection Can Trigger Reassessment For Period Prior To April 2021

The Delhi High Court is set to examine whether an audit objection can constitute “information” for initiating proceedings under the Income Tax Act, 1961, for a period prior to April 1, 2021.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed that the issue raised “seminal questions” requiring determination, particularly in view of the larger legal implications involved.The case arose from a notice issued to the assessee under Section 148A(1) of the Income Tax Act for...

Can ITAT Annul Assessment On Issue Taxpayer Did Not Challenge In Cross-Appeal Delhi High Court Issues Notice

The Delhi High Court has recently issued notice on appeals filed by the Income Tax Department challenging an ITAT order which had annulled certain assessment orders on the ground of non-compliance with the requirements of Section 153C of the Income Tax Act, 1961, despite the assessee not having filed a cross-appeal on that issue.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta was hearing Revenue's challenge in connection with nine assessment years from 2010-11 to 2018-19....

Karnataka High Court Dismisses Income Tax Appeals, As Additions Were Based On Uncorroborated Search Material

The Karnataka High Court has dismissed two Income Tax Department appeals concerning alleged unaccounted fees at an educational trust. It ruled that alleged unaccounted fee additions could not be sustained merely on the basis of loose sheets and similar seized documents in the absence of corroborative material.“Thus, the Revenue has not been able to corroborate the loose sheets and other seized materials on the basis of which the additions have been made. In the absence of any corroborative...

Delhi High Court Dismisses Tax Dept. Appeals Against Suzuki Motorcycle Over AMP Adjustment Using Bright Line Test

The Delhi High Court has dismissed appeals filed by the Income Tax Department against Suzuki Motorcycle India, challenging the Income Tax Appellate Tribunal's rejection of an Advertising, Marketing and Promotion (AMP) adjustment based on the Bright Line TestThe Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta followed the High Court's earlier decisions in Sony Ericsson Mobile Communications India Pvt. Ltd. v. Commissioner of Income Tax and Maruti Suzuki Ltd. v. Commissioner of...

Delhi High Court Sets Aside ITAT's Ex-Parte Order Against AAI Over Non-Service Of Hearing Notice

The Delhi High Court has recently held that the Income Tax Appellate Tribunal (ITAT) cannot decide an appeal ex-parte without first ensuring that notice of the hearing has been issued and served on the concerned party.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta allowed an appeal filed by the Airports Authority of India (AAI) and set aside the ITAT's order, which had disposed AAI's appeal on merits in its absence.The Court observed that the Tribunal had committed a...

Delhi High Court Stays Reassessment Proceedings Over Non-Supply Of Material To Taxpayer

The Delhi High Court has stayed reassessment proceedings initiated against an assessee under Section 148 of the Income Tax Act, 1961, after the assessee submitted that the material relied upon by the Assessing Officer (AO) had not been supplied to him.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta issued notice to the Income Tax Department and stayed further proceedings pursuant to notice dated June 29.Reassessment proceedings had been initiated in relation to insurance...

SaaS Support Does Not Amount To Transfer Of Technology Under India-US DTAA: ITAT Delhi

The Income Tax Appellate Tribunal at Delhi has recently held that payments received by US-based Branch Metrics Inc. from Indian customers for its standard SaaS products do not qualify as Fees for Included Services (FIS) under Article 12(4)(b) of the India-US DTAA.The tribunal found that while customers could use the platform, they were not enabled to apply the technology underlying it, failing the “make available” test under the treaty.A bench comprising Judicial Member Vikas Awasthy and...

ITAT Delhi Deletes Over ₹7,800 Crore Tax Adjustments Against Samsung India

The Delhi bench of the Income Tax Appellate Tribunal has deleted about ₹3,605 crore in adjustments for AY 2016-17 and ₹4,211 crore for AY 2017-18 in the case of Samsung India Electronics Pvt. Ltd. The tribunal also excluded Verizon Communications Pvt. Ltd. as a comparable for Samsung India's networking segment and upheld its use of the Berry Ratio for benchmarking distribution transactions.The bench comprising Judicial Member Anubhav Sharma and Accountant Member Naveen Chandra found Verizon...

Punjab and Haryana High Court Sets Aside IT Assessment Order Against UCWeb Mobile During Pendency Of DRP Proceedings

The Punjab and Haryana High Court has recently set aside the final assessment order passed against UCWeb Mobile Private Ltd. while its objections to the draft assessment order were pending before the Dispute Resolution Panel (DRP).The court held that the assessment violated the procedure prescribed under Section 144C of the Income-tax Act, which requires the Assessing Officer to pass the final assessment in conformity with directions issued by the DRP after considering the assessee's...