Telangana HC Upholds ITAT Order Rectifying Contradiction That Allowed Both Taxpayer and Revenue Appeals

The Telangana High Court has upheld an Income Tax Appellate Tribunal (ITAT) order that corrected its own contradictory ruling after it had simultaneously allowed both the assessee's and the Revenue's appeals on the very same issue. Holding that such an outcome was inherently inconsistent, a bench of Justice P. Sam Koshy and Justice Suddala Chalapathi Rao observed the tribunal was justified in stepping in to resolve the contradiction, especially when it had already decided the issue on...

Search Under IT Act Is Person-Centric; Premises Don't Decide 'Searched Person': Karnataka High Court

Holding that a “searched person” under the Income Tax Act is determined by the person against whom statutory satisfaction is recorded and not by whose premises are searched, the Karnataka High Court on Friday ruled that a taxpayer cannot be treated as a searched person merely because a search was conducted at his premises.The ruling came in a case where the tax department initiated proceedings against the taxpayer under Section 153C based on documents seized during a search conducted at his...

Failure To Claim Tax Relief Doesn't Change Nature Of Salary Arrears: Delhi High Court

The Delhi High Court has clarified that the non-claim of relief under Section 89 of the Income Tax Act, 1961 does not determine the nature of income and cannot be taken to mean that such income is not arrears.For context, Section 89 provides relief to taxpayers receiving salary arrears, advance salary, or profits in lieu of salary in a lump sum.A division bench of Justices Anil Kshetarpal and Amit Mahajan was dealing with a petition challenging an order of the Central Administrative Tribunal...

Delhi High Court Refuses To Quash Third-Party Reassessment Despite Interim Relief To Searched Entity

The Delhi High Court has dismissed a writ petition filed by Hari Bhoomi Communications Private Limited, holding that reassessment proceedings initiated against it on the basis of material recovered during a search at another entity's premises are not rendered void by a subsequent interim order passed in favour of the searched entity. A division bench of Justice Dinesh Mehta and Justice Vinod Kumar refused to interfere with an assessment order dated March 25, 2026, passed against the company...

Depreciation In Sale–Leaseback Cannot Be Denied On Mere Suspicion: Madras High Court

The Madras High Court on 20 April 2026 held that under the Income Tax Act, 1961, a taxpayer is entitled to claim deduction of accrued construction expenses and depreciation arising from sale and leaseback transactions. It ruled that such transactions cannot be treated as colourable devices merely because they result in tax advantages. A Division Bench comprising Justices G. Jayachandran and Shamim Ahmed dismissed the appeals filed by the Income Tax Department under Section 260-A and affirmed...

Bombay High Court Allows Delay Condonation For Charitable Trust IT Filing, Attributes Delay To CA Lapse

The Bombay High Court has set aside an order rejecting a charitable trust's request to excuse a delay in filing Form 10, holding that a lapse on the part of its Chartered Accountant could not be used to deny the trust tax exemption under Section 11 of the Income Tax Act. A Bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla said, “the Petitioner Trust would suffer grave hardship if the delay is not condoned since the Petitioner Firm would be saddled with a huge tax liability for...

Taxpayer Liable Only For Own Investment Share, Not Spouse's Contribution: Delhi High Court

The Delhi High Court on 17 April 2026 held that a taxpayer can only be required to explain his own share of investment and cannot be saddled with tax liability for the contribution of a co-owner, including a spouse, where joint ownership and independent sources of funds are evident. A Division Bench of Justice Dinesh Mehta and Justice Vinod Kumar set aside the assessment order passed under Sections 143(3) read with 144B of the Income Tax Act, 1961, and remanded the matter for reconsideration,...

Madras High Court Holds Post-Search Return Invalid In Block Assessment, Rejects Kerala Roadways' Claim

The Madras High Court on 7 April, held that a return filed after the initiation of search proceedings and beyond the due date cannot qualify as a valid disclosure to exclude such income from undisclosed income in block assessment under the Income Tax Act. A Division Bench of Justices G. Jayachandran and R. Sakthivel rejected the Kerala Roadways appeal. It partly accepted one of the Revenue's appeals and fully accepted another, while deciding issues on block assessment, revisional powers, and...

IT Appellate Authority Must Pass Speaking Order, Hear AO Before Admitting Fresh Evidence: J&K&L High Court

The Jammu and Kashmir and Ladakh High Court has recently held that an appellate authority under the Income Tax law cannot allow a taxpayer to file fresh evidence at the appeal stage without first passing a reasoned order and giving the tax officer a fair chance to respond. A bench of Justice Sanjeev Kumar and Justice Sanjay Parihar said, “We are also of the clear view that the opportunity to lead additional evidence at the appellate stage could not be granted by the First Appellate Authority...

Revised IT Return Permissible Only For Bona Fide Discovery Of Omission Or Mistake: Gujarat High Court

The Gujarat High Court on 9 April, held that a taxpayer can file a revised return under Section 139(5) of the Income Tax Act, 1961 only when it discovers a bona fide omission or wrong statement in the original return filed under Section 139(1). The provision cannot be used to make deliberate or afterthought changes. The Bench of Justices A.S. Supehia and Pranav Trivedi emphasised that a valid revised return replaces the original return for all purposes under the Act, but only when it reflects...

Gujarat High Court Sets Aside Move For Income Tax Reassessment In Land Sale, Bars Differing Stand On Evidence

The Gujarat High Court has set aside a tax reassessment notice issued in a land sale case, holding that the Income Tax Department cannot rely on the same evidence to take opposite positions against the buyer and the seller.The Division Bench comprising Justice A.S. Supehia and Justice Pranav Trivedi was dealing with a writ petition challenging a notice issued under Section 148 of the Income Tax Act for Assessment Year 2020–21.The case arose from a search conducted under Section 132 of the Income...

Gujarat High Court Quashes Move To Reopen Income Tax Assessment Over Vague Third-Party Material

The Gujarat High Court has quashed reassessment notices against a taxpayer, ruling that the Income Tax Department cannot reopen completed assessments based on vague third-party documents that have no clear link to the person concerned.The ruling was delivered by a Division Bench comprising Justice A. S. Supehia and Justice Pranav Trivedi in a batch of petitions led by Bhavnaben Darshanbhai Patel, challenging reassessment proceedings for Assessment Year 2020–21.The case arose after a search under...