Patna High Court Quashes Reassessment Based On Bank's Wrong Reporting Of ₹12.50 Lakh FD As ₹12.50 Cr

The Patna High Court on 10 August quashed income tax reassessment proceedings against Satya Narayan Jha after Union Bank of India wrongly reported his fixed deposit of Rs. 12.50 lakh as Rs. 12.50 crore to the Income Tax Department, holding that the Department had relied on incorrect information. A Division Bench of Justices Rajeev Ranjan Prasad and Ramesh Chand Malviya held that the notice issued under Section 148A(b) of the Income Tax Act, 1961, which requires the taxpayer to be given an...

ITAT Cannot Automatically Confirm Adverse Order For Non-Payment Of Costs: Calcutta High Court

The Calcutta High Court on 7 August held that the Income Tax Appellate Tribunal (ITAT) cannot make payment of costs a condition for continuation of an appeal or direct that non-payment would automatically revive or confirm an adverse appellate order. A Division Bench of Justices Rajarshi Bharadwaj and Uday Kumar clarified that while the ITAT can impose costs for procedural lapses, such costs cannot be made a condition precedent to a litigant's statutory right to have an appeal adjudicated,...

Delhi High Court Seeks PAN Details Of Supreme Court, High Court Judges Amid Income Tax Allowances Dispute

The Delhi High Court on Monday directed the Private Secretaries of Supreme Court and High Court judges who have filed their income tax returns under the new tax regime to furnish their PAN Card details.The Court had also directed furnishing other details like assessment year, date of filing and Acknowledgment Number (of Return) to the Income Tax Department, to ensure that their returns are not processed pending adjudication of a plea concerning the tax treatment of judicial allowances.The bench...

Assessing Officer Can't Become An Economist To Question Expected Return In Share Valuation: Delhi High Court

The Delhi High Court has held that an Assessing Officer (AO) cannot act as an economist to determine the expected rate of return while examining a company's share valuation.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta added that while the AO may identify flaws in the valuation methodology adopted by a taxpayer, he cannot substitute the commercial assumptions underlying a recognized valuation method with his own.The Court made the observations while dismissing the Income...

Delhi High Court Seeks Centre's Response On PIL Seeking Automatic TDS Refunds For Non-Taxable Individuals

The Delhi High Court on Wednesday sought the response of the Union Government and the Central Board of Direct Taxes (CBDT) on a public interest litigation seeking an automatic mechanism to refund Tax Deducted at Source (TDS) to individuals whose income falls below the taxable limit without requiring them to file income tax returns (ITRs). A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela issued notice on the petition filed by petitioner-in-person Aakash...

Co-Operative Banks Need Not Deduct TDS On Interest Paid To Co-Operative Societies: Bombay High Court

The Bombay High Court has ruled that co-operative banks are not required to deduct Tax Deducted at Source (TDS) on interest paid on fixed deposits held by another co-operative society, holding that the exemption for such payments continues to apply. A Division Bench of Justice G.S. Kulkarni and Justice Aarti Sathe interpreted Section 194A(3)(v) of the Income Tax Act, which exempts certain categories of interest payments from TDS. The dispute before the bench was whether the exemption...

Delhi High Court Asks Income Tax Department To Explain 13-Year Delay In Releasing Seized Jewellery

The Delhi High Court has directed the Income Tax Department to file a “comprehensive affidavit” explaining the 13-year delay in releasing jewellery seized from an assessee.The Department informed the Court that the jewellery had now been released and assured that the balance refundable amount, along with applicable interest, would be paid within four weeks.However, the Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta sought to know from the Assessing Officer, the reasons for the...

Madras High Court Says Tax Authorities Must Consider Demerger Impact, Remands Grace Infrastructure Case

The Madras High Court on 20 July held that tax authorities must consider the impact of a court-approved demerger before revising an assessment and set aside a revision order passed without examining the effect of the restructuring on Grace Infrastructure Private Limited's financial statements. Justice C. Saravanan remitted the matter to the Principal Commissioner of Income Tax for fresh adjudication, directing it to reconsider the assessment after allowing the company to file a revised return...

Income Tax Findings Have Evidentiary Value In Benami Proceedings: Rajasthan High Court

On 3 August, the Rajasthan High Court held that findings under the Income Tax Act, though not conclusive in proceedings under the Prohibition of Benami Property Transactions (PBPT) Act, have evidentiary value and must be considered by authorities deciding benami proceedings. A Division Bench of Justices Arun Monga and Sandeep Shah allowed an appeal filed by Alishan Complex Private Limited against orders passed by the Appellate Tribunal, Adjudicating Authority and Initiating Officer, which had...

Delay In Filing Certificate Not Ground To Deny Property Tax Exemption To School: Chhattisgarh High Court

The Chhattisgarh High Court on 31 July held that a municipal authority cannot reject a property tax exemption claim merely because a school did not submit its Section 12AA registration certificate under the Income Tax Act, 1961 (which grants tax exemption to charitable institutions) along with its initial self assessment or representation.Justice Parth Prateem Sahu disposed of the writ petition filed by Riverdale World School, which challenged a demand notice seeking recovery of Rs. 30,808...

Delhi High Court Closes Long-Pending Challenge To Special Audit Order, Directs Centre To Bear Audit Cost

The Delhi High Court has closed a 19-year-old writ petition challenging an order directing a special audit under Section 142(2A) of the Income Tax Act, holding that the proceedings had become infructuous since the audit had already been completed.Petitioner had challenged an order dated March 30, 2006, by which the assessing officer had directed a special audit. The writ petition was instituted in 2007, and notices were issued on May 30 that year, without any interim stay.The division bench of...

Madras High Court Quashes Reassessment Against Stock Broker Over Misreading Client Funds As Income

The Madras High Court on 31 July held that reassessment proceedings cannot be initiated merely on the basis of suspicion arising from a misunderstanding of a stock broker's business model, ruling that client funds received by a broker in a fiduciary capacity cannot be treated as the broker's own income without tangible material. A Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed the Revenue's appeal against the Income Tax Appellate...