Delhi HC Sets Aside Reassessment Over Cash Deposits During Demonetisation, Says Order U/S 148A(d) Income Tax Act Transgressed Notice U/S 148A(b)

The Delhi High Court has set aside the reassessment action initiated against a partnership firm under Section 148A(d) of the Income Tax Act, 1961 over cash deposits made by it during demonetisation, stating that this ground was not mentioned in the notice issued to the firm under Section 148A(b).Section 148A(b) contemplates issuance of a notice asking assessee to show cause why reassessment proceedings should not be initiated against it.Notice under Section 148A(d) is issued after considering...

S.13 Income Tax Act | Charitable Trust's Status Not Affected For Making Reasonable Payments On Services Rendered By Related Party: Delhi HC

The Delhi High Court has held that a Charitable Trust's status cannot be taken away citing violation of Section 13 of the Income Tax Act, 1961 merely because it made reasonable payment for services rendered by a related party.Ordinarily, Charitable Trusts are not allowed to make payments for the benefit of 'prohibited parties'.Section 13 states that exemptions to Charitable Trust under Section 11/12 of the Act would not be available to the extent that the said income is applied for the benefit...

Delhi High Court Rejects Income Tax Dept's Appeal Raising ₹42 Crore Demand On NTPC Subsidiary

The Delhi High Court dismissed an appeal preferred by the Income Tax Department raising a demand of ₹42,16,04,786/- from a wholly owned subsidiary of National Thermal Power Corporation Limited (NTPC).The demand was raised in view of alleged income from sale of fly ash, transferred to it by NTPC.As per factual matrix of the case, the fly ash was transferred to the assessee in view of Environment Ministry's notification requiring all thermal plants to utilize the fly ash generated from the power...

Penalty U/S 271(1)(c) Of Income Tax Act Not Applicable If Assessee Voluntary Discloses Bona Fide Mistake: Chhattisgarh High Court

In a recent ruling, the Chhattisgarh High Court held that penalty under Section 271(1)(c) of Income Tax Act not applicable if assessee voluntary discloses bona fide mistake. Section 271(1)(c) of the Income Tax Act, 1961 deals with penalties for concealment of income or furnishing inaccurate particulars of income. The Division Bench of Justices Sanjay K. Agrawal and Deepak Kumar Tiwari noted that “it is a case where the assessee came up fairly before the Assessing Officer correcting...

Income Tax | Amount Received As Compensation For Compulsory Acquisition Of Landed Property Is Income Under 'Capital Gains': Kerala High Court

In a recent judgment, the Kerala High Court stated that the amounts received by an assessee as compensation or enhanced compensation for compulsory acquisition of his landed property would be treated as income under the head of 'Capital Gains' for the purposes of the I.T. Act. The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. stated that “Interest amounts received by an assessee in respect of delayed payment of compensation under the LAA will be treated as...

Income Tax Act | Rajasthan HC Dismisses Challenge Against Proceedings Initiated U/S 153C Based On WhatsApp Chats, Says Chats Had Been Corroborated

Rajasthan High Court denied interference with initiation of proceedings under Section 153C of the Income Tax Act, 1961 (“the Act”) that were alleged to be initiated merely based on certain WhatsApp Chats, observing that the information in the chats were completely corroborated by specific transactions and hence, the said chat could be considered to be falling under the definition of “other documents” under Section 153C.The division bench of Justice Pushpendra Singh Bhati and Justice Chandra...

Rajasthan HC Quashes Prosecution Sanction Against E-Commerce Company For Delay In Depositing TDS Due To Late Submission Of Bills By Amazon, E-Bay

Rajasthan High Court set aside prosecution under Income Tax Act, 1961 (“the Act”), against the petitioner-company whose business activity related to e-commerce transactions, and owing to delay on part of the companies like Amazon, Naaptol, Ebay, etc. in submitting the bills, the petitioner got delayed by almost 10 months in submitting the deducted TDS.The division bench of Justice Maneesh Sharma and Justice Avneesh Jhingan held that since the TDS was deposited voluntarily by the petitioner, that...

Sections 43B & 40A Income Tax Act | Which Provision Prevails When Both Commence With Non-Obstante Clause? Madras High Court Clarifies

The Madras High Court while referring sections 43B and 40A Income Tax Act explained which provision prevails when both commence with a non-obstante clause. The Division Bench of Justices Dr. Anita Sumanth and G. Arul Murugan stated that “the Rule that a general provision should yield to specific provision springs from the common understanding that when two directions are given one encompassing a large number of matters in general and another to only some, the latter directions should...

Delhi High Court Grants Relief To Lufthansa Airlines, Sets Aside Revenue's Order Denying 'Nil' TDS Certificate

In a relief to German cargo airline Lufthansa, the Delhi High Court set aside the Revenue's order denying nil TDS certificate to the company for the financial year 2024-25.Section 195 of the Income Tax Act, 1961 deals with the deduction of TDS (Tax Deducted at Source) on payments made to non-resident Indians (NRIs). However, 'nil' withholding tax certificates can be issued under Section 195(3), subject to prescribed conditions.Accordingly, Lufthansa moved an application before the Revenue for...

Relationship Between Searched And Non-Searched Entity Not Mandatory For Invocation Of Proceedings U/S 153C Income Tax Act: Delhi High Court

The Delhi High Court has held that the statutory scheme of Sections 153A and 153C of the Income Tax Act, 1961 does not envisage the discovery of a connection or interrelationship between the searched and the non-searched entity.Section 153A deals with the procedure for assessment which may be set in motion in respect of an entity searched under Section 132 of the Act. Upon such a search being conducted, the AO of the searched person is statutorily enabled to issue notice to the searched entity...

Jurisdictional Assessing Officer Lacks Jurisdiction To Issue Reassessment Notices U/S 148 Of Income Tax Act: Rajasthan High Court

The Rajasthan High Court stated that the Jurisdictional Assessing Officer (JAO) lacks jurisdiction to issue income tax reassessment notices under section 148 of the Income Tax Act, 1961. The Bench of Justice Pushpendra Singh Bhati and Munnuri Laxman observed that “the JAO shall not have the jurisdiction to issue notices under Section 148 of the Act of 1961, as it would not only render Section 151A weak, but may also lead to its diminishing activation.” Section 147 of the Income Tax...

Income Tax Act | Order Passed By Commissioner U/S 263 Can't Be Construed As Closed Remand, No Need To Challenge Order Separately: Kerala High Court

The Kerala High Court stated that the order passed by the Commissioner of Appeals under Section 263 of the Income Tax Act cannot be under any circumstances construed as a closed remand and there is no requirement to challenge the order under Section 263 separately. The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. observed that “In as much as the Commissioner of Income Tax (Appeals) had decided the appeal preferred by the assessee against the revised assessment...