International Tax Cases Not Exempt From Faceless Reassessment Regime: Bombay High Court Quashes S.148 IT Act Notice

The Bombay High Court quashed the reassessment notice issued under Section 148 of the Income Tax Act, 1961, stating that the reassessment notice did not follow the mandate that the Faceless Assessing Officer only has the jurisdiction to reopen the assessment and not the Jurisdictional Assessing Officer. It was further stated that even international taxation matters could be made subject to the faceless regime. A Division Bench comprising Justices B.P. Colabawalla and Amit S....

Income Tax Appellate Tribunal Cannot Pass Ex-Parte Orders Without Recording Reasons For Denying Adjournment: Allahabad High Court

While hearing an appeal under S. 260A of the Income Tax Act, the Allahabad High Court has held that the Income Tax Appellate Tribunal cannot reject adjournment applications and pass ex-parte orders without recording reasons for such dismissal. It was held that if the Tribunal was allowed to do such a thing, it would hamper the right of the parties to a reasonable opportunity of hearing. “While inordinate delays in judicial decision making is not healthy and expeditious disposal of the...

Income Tax Act | Co-operative Societies Not Engaged In Banking Not Entitled To TDS Exemption U/S 194A(3)(iii): Kerala High Court

The Kerala High Court has held that co-operative societies not engaged in banking are not entitled to TDS (Tax Deducted at Source) exemption under section 194A (3)(iii) of the Income Tax Act. Section 194A(3) of the Income Tax Act, 1961 provides exemptions from TDS on interest for certain persons or institutions. Justice Ziyad Rahman A.A. was dealing with a petition challenging the Constitutional validity of the proviso to section 194A(3) of the Income Tax Act, 1961, which imposed...

Income Tax Act | Interest On Loan Advanced To Company Not Deductible Against Salary Income: Karnataka High Court

The Karnataka High Court has held that a loan raised by mortgaging property and advancing to a company does not constitute business expenditure, and the interest is not deductible against salary income. The bench opined that unless expenditure is incurred in the course of the business or professional service, the assessee is not entitled to a deduction, merely due to it being incurred on the amount borrowed and advanced to the company. Justices D K Singh and Rajesh Rai K stated that...

Delhi High Court Raps Income Tax Dept For Over Two-Year Delay In Implementing ITAT Order; Directs Refund With Interest Within One Month

The Delhi High Court recently criticized the Income Tax Department for an over 2-year delay in implementing an ITAT order, directing it to reconsider the demand raised against an assessee.A division bench of Justices Prathiba M. Singh and aShail Jain observed that the Income Tax Department must implement judicial orders with “alacrity” however in this case, it woke up only after the assessee moved the High Court to seek enforcement of the ITAT order passed back in January 2023.“The Court notes...

Income Tax Act | Reassessment Beyond Four Years Invalid When Original Assessment Finalised U/S 143(3): Punjab & Haryana High Court

The Punjab and Haryana High Court has held that re-assessment proceedings beyond four years are invalid when the original assessment has been finalised under Section 143(3) of the Income Tax Act. In case of an Assessment under Section 143(3) of the Income Tax Act, a scrutiny is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in the return of income. Justices Lisa Gill and Meenakshi I. Mehta stated that the assessing ...

Disclosure Of Income & Payment Of Income Tax Do Not Bar Proceedings Under Benami Transactions Act: Kerala High Court

The Kerala High Court has held that disclosure of income and payment of tax under the Income Tax Act, 1961, does not preclude initiation of proceedings under the Prohibition of Benami Property Transactions Act, 1988. Justice Ziyad Rahman A.A. agreed with the department that the fact that the assessees have disclosed the income in the return and the same was proceeded against under the provisions of the Income Tax Act, by itself, cannot be a reason to interfere with the proceedings...

Kerala High Court Quashes Income Tax Appellate Order Against AMMA, Directs Fresh Consideration

The Kerala High Court has set aside an order passed by the Commissioner of Income tax (Appeals), against the Association of Malayalam Movie Artists (AMMA), holding that the appellate authority failed to comply with the mandatory requirements under the Income Tax Act.Justice Ziyad Rahman A A, observed that the Commissioner of Income Tax (Appeals) erred by rejecting AMMA's appeal solely on the ground of non-appearance, without addressing the merits of the case as mandated under Section 250(6) of...

Income Tax Act | Trust's Legitimate Tax Exemption Cannot Be Denied For Delay In Filing Form 10B: Madras High Court

The Madras High Court held that delay in filing Form 10B required under Section 44AB for the purpose of Section 12A(1)(b) of the Income Tax Act, 1961, is not a ground to deny legitimate exemption tax exemptions. Justice C. Saravanan observed that the assessee was registered as a “Trust” in the year 2017. Effectively, the assessee would have carried on operation as a “Trust” from 01.04.2017 onwards, which would fall under the Assessment Year 2018-2019. The failure is in the year...

Income Tax Act | Revisional Power U/S 263 Cannot Be Invoked When AO Allows Deduction U/S 32AC After Proper Inquiry: Kerala High Court

The Kerala High Court stated that revisional power under Section 263 of the Income Tax Act cannot be invoked when Assessing Officer (AO) allowed deduction under Section 32AC after proper inquiry. Justices A. Muhamed Mustaque and Harisankar V. Menon opined that merely for the reason that AO extended the deduction claimed after carrying out investigations, the exercise of the power under Section 263 of the Act is not required. At worst, the revisional authority can correct the error, if...

Approval From Higher Authority Mandatory For Issuing Notice U/S 148 Income Tax Act After Expiry Of 3-Year Limitation: Madras High Court

The Madras High Court has held that under the new regime, approval from a higher authority, such as the Principal Chief Commissioner of Income Tax or the Principal Director General, is mandatory to issue a notice under Section 148 of the Income Tax Act after the expiry of a three-year limitation period. Justice C. Saravanan stated that …….three years from the end of the Assessment Year 2016-2017, 2017-2018 and 2018-2019, to issue Section 148 Notice under the new regime had already...

Income Tax | Assessee Should Not Be Penalised For Delay In Filing Return Caused By CA's Belated Advice: Bombay High Court

The Bombay High Court has held that the assessee should not be penalised for the delay in filing the return caused by the chartered accountant's belated advice. The bench noted that the delay is not due to any negligence on the part of the assessee, but to inadequate advice by the Chartered Accountant, a fact admitted by him in his affidavit. Justices B.P. Colabawalla and Amit S. Jamsandekar opined that the Petitioner ought not to be put to a considerable disadvantage as a result...