If Assessee Produces Accounts, AO Must Be Satisfied That Accommodation Entries Exist Before Proceeding U/S 148 Of Income Tax Act: Delhi HC

The Delhi High Court has held that an Assessing Officer is required to be satisfied that accommodation entries as alleged in show cause notice under Section 148A(b) of the Income Tax Act 1961 exist, particularly where the assessee produces its accounts. In doing so, a division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma heavily relied on its recent ruling in Sonansh Creations Pvt Ltd. v. Assistant Commissioner Of Income Tax And Anr. where it was held...

Compounding Of Offences Allowed Under IT Act, HC's Inherent Jurisdiction U/S 482 CrPC Cannot Be Invoked For Quashing: Orissa HC

The Orissa High Court has refused to entertain a petition filed for quashing the offence under Sections 276(B) of the Income Tax Act, 1961, stating that the Petitioner-accused should have sought compounding of the offence. Justice Sibo Sankar Mishra observed, “In the present regime, where the compounding of the offence is permissible, the jurisdiction of this Court under Section 482 Cr.P.C. may not be necessarily invoked by the petitioner. In that view of the matter, the petitioner...

Income Tax Act | Reassessment Notice To Merged Entity U/S 148A(d) Not Invalid Merely Because SCN Was Issued In Name Of Ceased Entity: Delhi HC

The Delhi High Court has made it clear that merely because notice under Section 148A(b) of the Income Tax Act, 1961 is issued in the name of an amalgamating company which had ceased to exist, subsequent notice issued under Section 148A(d) in the name of merged entity cannot be declared invalid. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma held, “The nature of proceedings under Section 148A of the Act is to enable the AO to form an opinion...

AO Bound To Ascertain 'Correctness' Of Information Available Against Assessee, 'Decide' Whether It Is Sufficient To Reopen Assessment: Delhi HC

The Delhi High Court has turned down the contention that an Assessing Officer, at the stage of passing an order under Section 148A(d) of the Income Tax Act, 1961 for initiation of reassessment proceedings, is not required to form any opinion as to the genuineness or veracity of the information available against an assessee. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed, “As is clear from the plain language of Section 148A(d) of the...

Delay In Issuing Requisition U/S 132A Of Income Tax Act Due To Investigation By Department Can Be Condoned: Delhi HC

The Delhi High Court has held that the delay in issuing requisition under Section 132A of the Income Tax Act, 1961, can be condoned if the same is explained by the Authority concerned. The provision contemplates powers to requisition books of account, etc. It stipulates that where a search has already been conducted by any authority under any other law, the Income Tax authority shall authorize the Assessing Officer to make requisition to that authority to deliver books of accounts and...

Income Tax Dept Can Invoke S.159 When Reassessment Notice Was Issued During Lifetime Of Deceased Assessee: Delhi HC

The Delhi High Court has held that Section 159 of the Income Tax Act can be invoked to proceed against the legal representative of an assessee, only in cases where the reassessment notice was issued to the assessee during his lifetime, not after. When a person dies, the provision makes his legal representative liable to pay any sum which the deceased would have been liable to pay if he had not died. Sub-section (2) thereof clearly stipulates that any proceeding taken against the...

Twin Conditions U/S 127 Of Income Tax Act For Transferring Assessee's Case From One Officer To Another Are Mandatory: Himachal Pradesh HC

The Himachal Pradesh High Court has elucidated the mandatory twin conditions for transfer of an assessee's case under Section 127 of the Income Tax Act, 1961, from one Assessing Officer to another. Section 127 stipulates that the Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter and after recording his reasons for doing so, transfer any case from Assessing Officer subordinate to him to any other Assessing Officer also subordinate to him. ...

Uploading Information On Insight Portal Not A Substitute For Handing Over Material To AO For Non-Searched Entity U/S 153C Of IT Act: Delhi HC

The Delhi High Court has held that the provision under Section 153C of the Income Tax Act, 1961 for the Assessing officer of a searched person to record 'satisfaction' and handover documents regarding undisclosed income of another person cannot be substituted by merely uploading such information on the Department's insight portal. The provision stipulates that where the Assessing Officer of the person searched is satisfied that records of undisclosed assets relate to another person,...

FAOs And JAOs Have Concurrent Jurisdiction For Assessment, Re-assessment Or Re-Computation U/S 147 Income Tax Act: Madras High Court

The Madras High Court recently clarified that both the Faceless Assessment Officer and Jurisdictional Assessment Officer have concurrent jurisdiction as far as assessment, re-assessment or re-computation under Section 147 of the Income Tax Act. “As far as the assessment, re-assessment or re-computation in terms of the provisions of Section 147 of the IT Act is concerned, both the FAO as well as the JAO will have concurrent jurisdiction,” the court ruled. Justice Krishnan Ramasamy made...

Reassessment U/S 150 Of Income Tax Act Can't Be Initiated On Mere 'Incidental' Findings Of Appellate Authority: Delhi High Court

The Delhi High Court has held that Section 150 of the Income Tax Act, 1961 can be invoked for reassessment only to give effect to a 'conclusive finding' by an appellate authority regarding escapement of income by an assessee. Section 150 makes provision for cases where assessment is in pursuance of an order on appeal, etc. It empowers an Assessing Officer to issue reassessment notice under Section 148, to give effect to any finding or direction contained in an order passed by any...

Co-Accused Can Apply Separately For Compounding Of Offences Committed By Company Or HUF Under Income Tax Act: Delhi High Court

The Delhi High Court has held that co-accused are entitled to apply separately for compounding of offences committed by a Company or a Hindu Undivided Family under the Income Tax Act, 1961. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela ruled that the co-accused need not await filing of application for compounding by the company or the HUF. In doing so, it relied upon the guidelines issued by the Central Board of Direct Taxes, stipulating that...

Income From Capital Gains On Certain Assets Which Are Excluded U/S 10(38) Of IT Act Must Be Included While Computing Book Profits: Delhi HC

The Delhi High Court held that proviso to Sec 10(38) cannot be read in reverse to mean that if gains are not included as book profits u/s 115JB, the same are liable to be included as income for purposes of assessment to tax under the normal provisions.Even though, the gains are required to be excluded from income chargeable to tax u/s 10(38), added the Court. As per Section 10(38) of Income tax Act, in computing the total income of a previous year of any person, any income arising from the...