Income Tax Act | Rajasthan HC Dismisses Challenge Against Proceedings Initiated U/S 153C Based On WhatsApp Chats, Says Chats Had Been Corroborated

Rajasthan High Court denied interference with initiation of proceedings under Section 153C of the Income Tax Act, 1961 (“the Act”) that were alleged to be initiated merely based on certain WhatsApp Chats, observing that the information in the chats were completely corroborated by specific transactions and hence, the said chat could be considered to be falling under the definition of “other documents” under Section 153C.The division bench of Justice Pushpendra Singh Bhati and Justice Chandra...

Rajasthan HC Quashes Prosecution Sanction Against E-Commerce Company For Delay In Depositing TDS Due To Late Submission Of Bills By Amazon, E-Bay

Rajasthan High Court set aside prosecution under Income Tax Act, 1961 (“the Act”), against the petitioner-company whose business activity related to e-commerce transactions, and owing to delay on part of the companies like Amazon, Naaptol, Ebay, etc. in submitting the bills, the petitioner got delayed by almost 10 months in submitting the deducted TDS.The division bench of Justice Maneesh Sharma and Justice Avneesh Jhingan held that since the TDS was deposited voluntarily by the petitioner, that...

Sections 43B & 40A Income Tax Act | Which Provision Prevails When Both Commence With Non-Obstante Clause? Madras High Court Clarifies

The Madras High Court while referring sections 43B and 40A Income Tax Act explained which provision prevails when both commence with a non-obstante clause. The Division Bench of Justices Dr. Anita Sumanth and G. Arul Murugan stated that “the Rule that a general provision should yield to specific provision springs from the common understanding that when two directions are given one encompassing a large number of matters in general and another to only some, the latter directions should...

Delhi High Court Grants Relief To Lufthansa Airlines, Sets Aside Revenue's Order Denying 'Nil' TDS Certificate

In a relief to German cargo airline Lufthansa, the Delhi High Court set aside the Revenue's order denying nil TDS certificate to the company for the financial year 2024-25.Section 195 of the Income Tax Act, 1961 deals with the deduction of TDS (Tax Deducted at Source) on payments made to non-resident Indians (NRIs). However, 'nil' withholding tax certificates can be issued under Section 195(3), subject to prescribed conditions.Accordingly, Lufthansa moved an application before the Revenue for...

Relationship Between Searched And Non-Searched Entity Not Mandatory For Invocation Of Proceedings U/S 153C Income Tax Act: Delhi High Court

The Delhi High Court has held that the statutory scheme of Sections 153A and 153C of the Income Tax Act, 1961 does not envisage the discovery of a connection or interrelationship between the searched and the non-searched entity.Section 153A deals with the procedure for assessment which may be set in motion in respect of an entity searched under Section 132 of the Act. Upon such a search being conducted, the AO of the searched person is statutorily enabled to issue notice to the searched entity...

Jurisdictional Assessing Officer Lacks Jurisdiction To Issue Reassessment Notices U/S 148 Of Income Tax Act: Rajasthan High Court

The Rajasthan High Court stated that the Jurisdictional Assessing Officer (JAO) lacks jurisdiction to issue income tax reassessment notices under section 148 of the Income Tax Act, 1961. The Bench of Justice Pushpendra Singh Bhati and Munnuri Laxman observed that “the JAO shall not have the jurisdiction to issue notices under Section 148 of the Act of 1961, as it would not only render Section 151A weak, but may also lead to its diminishing activation.” Section 147 of the Income Tax...

Income Tax Act | Order Passed By Commissioner U/S 263 Can't Be Construed As Closed Remand, No Need To Challenge Order Separately: Kerala High Court

The Kerala High Court stated that the order passed by the Commissioner of Appeals under Section 263 of the Income Tax Act cannot be under any circumstances construed as a closed remand and there is no requirement to challenge the order under Section 263 separately. The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. observed that “In as much as the Commissioner of Income Tax (Appeals) had decided the appeal preferred by the assessee against the revised assessment...

Income Tax Bill Allows Officials To Access Assessee's Computer System Overriding Access Code In Certain Cases: Finance Ministry

The Ministry of Finance has told the Parliament that the Income Tax officials cannot access the personal emails, social media accounts and bank accounts of all assesses.However, there is a provision in the new Income Tax Bill 2025, which allows Income Tax officals, in certain cases of search and seizure, to access the computer systems of the assesses by "overriding the access code", if the assesse is not cooperating. Minister of State in the Ministry of Finance, Pankaj Chaudhary, made these...

Application Of Funds By Indian Broadcasting Foundation In BARC Is Not For Profit, Exempted U/S 11 & 12 Of Income Tax Act: Delhi High Court

In an order bringing relief to the Indian Broadcasting Foundation (IBF), which was incorporated to protect the interests of various stakeholders in the field of television broadcasting, the Delhi High Court allowed the body to claim exemption from payment of tax under Sections 11 and 12 of the Income Tax Act, 1961.The provisions govern the taxation of income derived from property held under trust for charitable or religious purposes.Section 11 provides for the exemption of income from property...

'Proof Beyond Reasonable Doubt' Is A Principle Of Criminal Law, Not Applicable To Tax Law: Delhi High Court

The Delhi High Court has made it clear that the principle of 'proof beyond reasonable doubt' cannot be made applicable to Section 148 of the Income Tax Act, 1961 which enables an assessing officer to open an assessment if he has 'reason to believe' that an assessee's income escaped assessment.A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela observed, “It is trite that the concept of “proving beyond reasonable doubt” applies “strictu senso” to penal...

Expansion Of Definition Of 'Sikkimese' In S.10(26AAA) Of Income Tax Act Doesn't Affect Rights Of Indigenous People: Sikkim High Court

The Sikkim High Court has upheld the constitutional validity of the definition 'Sikkimese' under the Income Tax Act, which was slightly expanded by way of an amendment in terms of the Finance Act, 2023.A division bench of Chief Justice Biswanath Somadder and Justice Meenakshi Madan Rai upheld the vires of Explanation (v) contained under clause (26AAA) of section 10 of the Income Tax Act, 1961.The initial definition excluded from the definition Indians who had settled in Sikkim prior to the...

Fair Market Value Of Shares Determined By Statutory Methods Can't Be Rejected By Income Tax Department: Karnataka High Court

The Karnataka High Court stated that fair market value of shares determined by statutory methods can't be rejected by the income tax department. The Division Bench of Justices Krishna S Dixit and Ramachandra D. Huddar was addressing a case where the revenue has challenged the order passed by the Tribunal where the Tribunal held that the valuation report on DCF Method produced during assessment proceedings was a valid report justifying valuation of shares. In this case, the...