Belated Filing Of Form 9A Is Not Attributable To Trust: Bombay HC Allows Exemption U/S 11 After Condoning Delay Under IT Act

The Bombay High Court held that bonafide delay in filing Form 9A on part of trust, has to be construed as procedural lapse and shall be condoned by exercising powers u/s 119(2) of Income tax Act.The Division Bench of Justice G S Kulkarni and Justice Advait M Sethna observed that that the jurisdictional AO completely lost sight of the fact that at the time when assessee claimed deductions towards depreciation and capital expenditure u/s 11(1) by filing the revised computation, the time limit for...

S.147 Of IT Act Doesn't Postulate Review Jurisdiction Such That Assessment Can Be Reviewed By AO Intending To Form Different Opinion: Bombay HC

The Bombay High Court ruled that the materials which were already available before AO and which ultimately were considered in passing assessment order u/s 143(3), cannot form basis of reopening, on ground that such materials were ignored in finalizing assessment.Section 147 does not postulate review jurisdiction, so that assessment can be reviewed by the Assessing Officer intending to form different and/or a new opinion, added the Court. The Division Bench of Justice G S Kulkarni and Justice...

Interest Earned On Borrowed Funds Kept For Acquiring Coal Mine Is Not Revenue Receipt If Coal Mine Is Aborted, Borrowings Are Repaid: Delhi HC

The Delhi High Court recently accepted that the interest received on borrowed funds, which were temporarily held in interest bearing deposit, is a part of the capital cost and is required to be credited to Capital Work In Progress.The Division Bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed that if the interest is earned on the amounts temporarily kept in fixed deposits in course of acquisition of coal mine to set up its business, then interest earned would...

ITO Acted On Complete Change Of Opinion On Same Material With Intent To Review Assessment Order Passed By Him: Bombay HC Quashes Reopening

While setting aside the reassessment proceedings, the Bombay High Court held that 'change of opinion' or 'review of already completed assessment', is not permitted to AO.While holding so, the Division Bench of Justice G.S Kulkarni and Justice Advait M Sethna observed that there is no whisper of allegations against the assessee that income that has escaped assessment was attributable to the assessee for not disclosing fully & truly all material facts necessary for assessment.Facts of the...

No Penalty Can Be Levied U/S 271B Of IT Act If No Prejudice Is Caused To Dept On Account Of Belated Furnishing Of Audit Report: Kerala HC

The Kerala High Court held that circumstances under which AO can absolve a taxpayer from payment of penalty u/s 271B are discernible from a reading of Sec 273B, which states that no penalty can be imposed on an assessee u/s 271B for breach of the provisions, if he proves that there was "reasonable cause" for the said failure.The provision of Section 44AB of Income tax Act prescribes a procedure of audit of accounts by certain categories of assessees and deals inter alia with the manner in which...

Amendment In Finance Act Can't Retrospectively Affect Vested Right Of Taxpayer To Adjudicate Settlement Application U/S 245(D): Calcutta HC

The Calcutta High Court recently reiterated that when the settlement applications were filed before the date on which the Finance Act 2021 did not come into effect, then taxpayers had vested right of preferring the application in absence of any statute prohibiting the said application.The Division Bench of Justice Harish Tandon and Justice Hiranmay Bhattacharyya reiterated that retrospective legislation cannot affect the vested rights.The purport of Sec 245(C)(5) is not to make an application...

There Cannot Be 'Disconnect' Between Reasons For Initiating Reassessment U/S 147 Of IT Act & Grounds On Which Final Order Is Passed: Delhi HC

The Delhi High Court has held that only 'original reasons' which formed the basis for initiating reassessment proceedings under Section 147 of the Income Tax Act can be taken into consideration by the Assessing Officer, for coming to the conclusion that income had escaped assessment. A division bench of Justice Yashwant Varma Hon'ble Mr. Justice Dharmesh Sharma observed that there cannot be a 'disconnect' between the reasons which had been originally recorded for initiation of ...

Rule 8D Of IT Rules Can Be Invoked Only If Assessee's Computation Of Expenses Attributable To Earning Exempt Income Is Found Inadequate: Delhi HC

The Delhi High Court has held that recourse to Rule 8D of the Income Tax Rules, 1962 for computing disallowance under Section 14A of the Income Tax Act is available only if the Assessee's computation of expenses attributable to earning exempt income, is found to be inadequate. Rule 8D provides a mechanism to determine the expenditure in relation to exempt income. In the case at hand, Assessee had earned income by way of dividend amounting to ₹8,55,88,493/-, which was exempt under...