Delhi High Court Cuts TDS To 0.5% for UK Company Travelport, Sets Aside 1.6% Certificate

The Delhi High Court has granted partial relief to UK-based travel technology company Travelport International Operations Limited by setting aside a tax withholding certificate that required deduction of tax at 1.6%. A division bench of Justices Dinesh Mehta and Vinod Kumar directed the tax authorities to issue a fresh certificate providing deduction of tax at a reduced rate of 0.5%.Travelport, a United Kingdom tax resident, provides electronic global distribution services to the travel industry...

Delhi High Court Quashes Tax Demand On NGO, Raps Revenue for 'Taking Advantage' Of Taxpayer's Ignorance

The Delhi High Court has granted tax exemption to the International Buddhist Confederation, a Non-Governmental Organisation holding that tax authorities can't deny statutory benefits merely because of an inadvertent disclosure error made in the income tax return. A division bench of Justices Dinesh Mehta and Vinod Kumar also criticised the Revenue for taking advantage of the assessee's ignorance of his rights while passing the scrutiny assessment.Briefly put, the NGO filed its income tax return...

Orissa High Court Grants Interim Relief to Taxpayer Against Non-Faceless IT Reassessment

The Orissa High Court on 2 February restrained the Income Tax Department from proceeding further on a reassessment notice issued to a Bhubaneswar-based taxpayer, after finding that the notice was not issued in accordance with the mandatory faceless procedure prescribed under the Income Tax Act, 1961. The Division Bench of Chief Justice Harish Tandon and Justice M.S. Raman was hearing a writ petition filed by Bibekananda Parida, challenging an order passed under Section 148A of the Income Tax...

Transfer Pricing Reference During Extended Reassessment Period Invalid: Madras High Court

The Madras High Court held that a reference to the Transfer Pricing Officer (TPO) made during the extended period available for completion of reassessment is invalid, rendering the proceedings time-barred. Justice C. Saravanan delivered the judgment while allowing a writ petition filed by Eaton Power Quality Private Limited which challenged the order passed by the TPO under Section 92CA(3) of the Income Tax Act by which the arm's length price of corporate service fees was determined at nil and...

IT Reassessment Notices Issued After Limitation Period Invalid Despite Ashish Agarwal Ruling: Karnataka High Court

The Karnataka High Court has recently held that reassessment proceedings initiated after the expiry of the statutorily surviving period of limitation under the Income Tax Act are invalid. This remains so even where the revenue seeks to sustain the reassessment notice on the basis of the Supreme Court's directions in Union of India v. Ashish Agarwal. In Ashish Agarwal, the Supreme Court protected reassessment notices issued under the old law during the transition to the new reassessment regime...

'Reason To Believe' Not Required To Inspect Seized Jewellery Under Income Tax Act: Calcutta High Court

The Calcutta High Court on 28 January dismissed a writ petition challenging inspection notices issued by the Income Tax Department for jewellery and bullion seized during a search operation, holding that the revenue authorities are not required to disclose the information or reasons that prompted the inspection, so long as it is undertaken for purposes permitted under the Income Tax Act (IT Act), 1961. Justice Om Narayan Rai delivered the ruling while examining a challenge to notices issued...

ITAT Bench Can't Sit Over Its President's Order Transferring Cases: Delhi High Court Restores Sahara Appeals

The Delhi High Court has set aside a series of orders passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench, which had dismissed long-pending tax appeals of the Sahara Group on the ground of lack of territorial jurisdiction, despite the matters having been administratively transferred to Delhi nearly two decades ago.A Division Bench of Justices Dinesh Mehta and Vinod Kumar held that once the President of the ITAT exercises his administrative powers to transfer appeals from one Bench to...

Tax Recovery Officer Can't Void Third-Party Mortgages: Madras High Court In Sree Gokulam Chit's Case

The Madras High Court has recently set aside an income tax recovery order that had declared a mortgage created in favour of Sree Gokulam Chit and Finance, a chit fund part of the Gokulam Group, as void from the outset. Justice Senthilkumar Ramamoorthy held that the Income Tax Department can recover its dues by selling an attached property, but the Tax Recovery Officer cannot decide the validity of a transfer in favour of a third party. The court said the recovery framework does not permit such...

Delhi High Court Says Impermissible Foreign Tax Reference Can't Extend Limitation For Search Assessments

The Delhi High Court has ruled that the Income Tax Department cannot extend the time limit for completing search assessments merely by making a reference to a foreign tax authority if the information sought is not permissible under the applicable tax treaty. Dismissing a batch of appeals filed by the Revenue, a Division Bench of Justices Dinesh Mehta and Vinod Kumar upheld the Income Tax Appellate Tribunal's finding that assessment orders passed for Assessment Years 2011–12 to 2017–18 were...

Dormant Partner Cannot Face Criminal Liability Without Proof Of Control Over Firm: Madras High Court

The Madras High Court has held that a dormant partner cannot be fastened with criminal liability in the absence of specific allegations showing that she was in charge of or responsible for the conduct of the firm's business. A Bench of Justice Sunder Mohan was considering criminal revision petitions filed by a firm, its managing partner, and another partner, challenging the trial court's order that had refused to discharge them from criminal proceedings initiated under the Prohibition of Benami...

Calcutta High Court Upholds ITAT Order Allowing NBFC To Set Off Share Trading Losses Against Interest Income

The Calcutta High Court has dismissed the income tax department's appeal against an ITAT order allowing an NBFC to set off losses described by the department as penny stock trades against its interest and other income. The Court held that the case raised no substantial question of law. A Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar said the department had failed to produce any direct or substantial evidence to support its case. It found that the allegation that the...

After 10 Years, Royal Jordanian Airlines Cannot Be Asked To Prove Travel Agents Paid Tax: Delhi High Court

The Delhi High Court has held that Royal Jordanian airline can't be saddled with the burden of proving, after a decade, that its travel agents had discharged their tax liability.The observation was made by the division bench of Justices Dinesh Mehta and Vinod Kumar while dealing with proceedings relating to deduction of tax at source (TDS) under the Income Tax Act.Section 194H of the Income Tax Act, 1961, mandates TDS on commission and brokerage payments.The Court was hearing an appeal filed by...