Delhi High Court Quashes ₹21 Crore Block Assessment Over Failure To Issue Mandatory Scrutiny Notice

The Delhi High Court has reiterated that issuance of a notice under Section 143(2) of the Income Tax Act, 1961, is mandatory for completing block assessments under Section 158BC of the Act.A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta relied on Assistant Commissioner of Income Tax vs. Hotel Blue Moon (2010), where the Supreme Court held that the omission to issue such notice is not a curable procedural irregularity.The High Court thus quashed a ₹21-crore tax addition made...

IT Reassessment Notice Received On April 1, 2021, Must Follow New Reassessment Regime: Bombay High Court

The Bombay High Court has held that an income tax reassessment notice dated and digitally signed on March 31, 2021, cannot be treated as having been issued on that date if it was actually dispatched through the Income Tax Business Application (ITBA) portal and reached the assessee only on April 1, 2021. The court ruled that the notice would be deemed to have been issued on April 1, 2021, and the reassessment proceedings must continue under the framework introduced by the Finance Act, 2021. A...

Bombay High Court Says ITAT Took 'Pedantic Approach', Condones 1,797-Day Delay in Income Tax Appeals

The Bombay High Court has set aside an Income Tax Appellate Tribunal (ITAT) order refusing to condone a 1,797-day delay in appeals filed by Uttar Bhartiya Education Society. Holding that the trust's explanation for the delay deserved due consideration, the court condoned the delay and restored the appeals for a decision on merits. A division bench of Justice G.S. Kulkarni and Justice Aarti Sathe held that the tribunal had adopted a "pedantic approach" while rejecting the charitable trust's...

Bombay High Court Sets Aside Order Rejecting Naresh Goyal's Objections In Income Tax Reassessment

The Bombay High Court has recently set aside an order rejecting former Jet Airways chairman Naresh Goyal's objections to the reopening of his income tax assessment for the Assessment Year 2014-15. It directed the Assessing Officer to reconsider the objections after taking into account Goyal's March 8, 2022 letter and the annexures explaining the source of funds used to acquire Jet Airways (India) Ltd. shares. A division bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla held...

Telangana HC Restores DBS Technology Services' Tax Deduction Claim, Says Technical Lapse Cannot Prevail

The Telangana High Court on 3 July held that the Income Tax Department cannot reject a genuine claim for deduction on the sole ground of a technical or procedural lapse if the taxpayer is otherwise entitled to the benefit. A Division Bench of Justices P. Sam Koshy and Suddala Chalapathi Rao set aside the order rejecting the deduction claimed by DBS Technology Services India Private Limited and directed the Assessing Officer to reconsider the company's claim in accordance with law. The judges...

Gujarat High Court Quashes Income Tax Reassessment Over Pre-2012 Property Valuation Rule

The Gujarat High Court has quashed an income tax reassessment notice issued over the valuation of land sold in 2009. It held that the reassessment in the case was unsustainable because the assessing officer sought to adopt a lower fair market value despite the unamended law governing the assessment. A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati held that the amendment made to Section 55A through the Finance Act, 2012 applied only prospectively. It therefore could not...

Pre-Search Material Cannot Be Basis For Additions In Completed Search Assessments: Bombay High Court

The Bombay High Court has recently reiterated that the Income Tax Department cannot make additions in a completed assessment under the search assessment provisions on the basis of material that was already in its possession before the search. Dismissing two appeals filed by the Revenue, the court also held that the Department had failed to establish that the assessee owned the foreign bank accounts sought to be taxed. A division bench of Justice B.P. Colabawalla and Justice Firdosh P....

Madras High Court Quashes Reassessment Based On Material Already Examined During Original Assessment

The Madras High Court has recently set aside reassessment proceedings initiated against an engineering equipment manufacturer after finding that the Income Tax Department reopened the assessment based on material that had already been disclosed and examined during the original assessment. Justice Senthilkumar Ramamoorthy observed that the reassessment amounted to an impermissible change of opinion. "On comparing the above reasons for reopening with the reply of the petitioner to the notice...

Gujarat HC Holds Reassessment Notice Cannot Be Challenged After Assessment Order, Directs Appeal Remedy

The Gujarat High Court on 29 June held that a reassessment notice cannot be challenged through a writ petition after reassessment proceedings have culminated in an assessment order. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati dismissed the writ petitions filed by Jitendra Shankarlal Mistri and others, holding that the petitioners could avail the statutory remedy of appeal against the reassessment orders before the Commissioner of Income Tax (Appeals). The...

Madras HC Upholds Jurisdiction Of Assessing Officers To Issue Reassessment Notices Under Income Tax Act

The Madras High Court has held that Jurisdictional Assessing Officers have the authority to issue reassessment notices under Sections 148A, 148 and 147 of the Income Tax Act, 1961, observing that the retrospective insertion of Section 147A has clarified their jurisdiction to initiate proceedings for income escaping assessment. Justice C. Saravanan dismissed a batch of writ petitions challenging reassessment proceedings initiated by Jurisdictional Assessing Officers, holding that the petitioners...

Madras High Court Holds Employer Cannot Grant Section 89 Tax Relief Without Form 10E From Employees

The Madras High Court on 24 June held that employers deducting Tax Deducted at Source (TDS) on voluntary retirement compensation cannot be faulted for not granting relief under Section 89 of the Income Tax Act (relief for salary received in arrears or advance) unless employees submit the prescribed Form 10E. Justice C. Saravanan allowed the writ petition filed by the Hosur Bata Employees Union in part and directed the Income Tax Department to process the income tax returns of affected employees...

Jharkhand High Court Upholds Conviction For False Income Tax Refund Claim Based On Forged Documents

The Jharkhand High Court has upheld the conviction of an Eastern Coalfields Limited employee for claiming an income tax refund of ₹35,875 on the basis of forged documents. The court found no reason to interfere with the concurrent findings of the trial and appellate courts. Justice Pradeep Kumar Srivastava dismissed the criminal revision filed by Sashi Bhusan Prasad Bhuian. The court directed him to surrender before the trial court within two months to undergo the remaining sentence. The court...