Limitation To Pass Transfer Pricing Order Cannot Be Extended By Treating Remand As Fresh Reference: Karnataka High Court

Rejecting the income tax department's attempt to treat a Tribunal remand as a fresh transfer pricing reference to extend limitation, the Karnataka High Court has held that no order can be passed once the statutory time limit expires. A single-judge bench of Justice Nagaprasanna emphasised that there is a “world of difference” between a reference made by the Assessing Officer to the Transfer Pricing Officer under Section 92CA(1) and a remand of the matter by the Tribunal, rejecting the Revenue's...

Search Year Included In Extended 10-Year Limit For Reopening Income Tax Assessments: Gujarat High Court

The Gujarat High Court has recently held that while computing the extended ten-year period for reopening income tax assessments following a search, the assessment year in which the search was conducted must be included in the reckoning.The bench stated that "..... the assessment year relevant to the previous year of search becomes the reference year and the ten-year period is counted from the end of that assessment year. This necessarily includes the search assessment year within the ten-year...

Gujarat High Court Quashes Reassessment Based On GST Proceedings Set Aside, Finds No Independent Material

The Gujarat High Court has quashed reassessment proceedings initiated against an individual taxpayer, holding that reopening of assessment was uncalled for where it was based on GST proceedings that had already been set aside by the appellate authority and where no independent material existed to indicate escapement of income. “Apart from this, there is no other material which is in possession of the respondent No.1, which could prove that there has been an escapement of income and hence the...

Gujarat High Court Condones Delay In Filing Income Tax Return, Finds Accountant's Error Caused Genuine Hardship

The Gujarat High Court has held that a taxpayer's delay in filing its income tax return due to a bona fide misunderstanding of audit requirements under Section 44AB of the Income Tax Act, resulting in denial of a tax deduction under Section 80-IAB for Special Economic Zone developers, constitutes “genuine hardship” warranting condonation.The case arose from the petitioner firm's failure to file its return of income for Assessment Year 2023–24 within the prescribed due date of 31 July 2023. The...

Bona Fide Delay Justifies Tax Benefit, “Genuine Hardship” Must Be Liberally Applied: Gujarat High Court

The Gujarat High Court on 16 March, held that a bona fide delay of 53 days in filing Form 10-IC cannot deprive an eligible taxpayer of concessional tax benefits. The expression “genuine hardship” under the Income Tax Act must be given a liberal, justice-oriented interpretation. Form 10-IC is a declaration filed by a company to opt for the concessional corporate tax rate under Section 115BAA of the Income Tax Act.A Bench comprising Justice A.S. Supehia and Justice Pranav Trivedi allowed...

Kerala High Court Upholds Relief To Kalyan Jewellers, Rules Unrealised Mark-To-Market Gains Not Taxable

The Kerala High Court on 11 March, held that unrealised gains arising from mark-to-market valuation of forward contracts are not taxable as income unless actually realised. The Division Bench comprising Justice Devan Ramachandran and Justice Basant Balaji dismissed the appeal filed by the Principal Commissioner of Income Tax against Kalyan Jewellers India Ltd. The judges held: “It is doubtless that, in a 'mark-to-market' forward commodities contract, the gains and losses fluctuate until the...

Balance Depreciation Allowed In Subsequent Year For Assets Used Less Than 180 Days: Madras High Court

The Madras High Court on 2 March held that a taxpayer is entitled to claim the balance 50% of additional depreciation in the subsequent assessment year where new plant and machinery are put to use for less than 180 days in the year of acquisition. A Bench of Justice G. Jayachandran and Justice Shamim Ahmed allowed an appeal filed by Wheels India Limited against an order of the Income Tax Appellate Tribunal for the assessment year 2007–08, which had upheld the partial disallowance of the...

ITAT Ahmedabad Sets Aside Ad-Hoc Expense Disallowance As AO Failed To Point Out Defects

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has recently set aside ad-hoc disallowances made against Raghani Tradelink, a commission agent engaged in facilitating sales of sarees, suits, and garments across India, holding that additions towards sub-brokerage and administrative expenses cannot be sustained when the Assessing Officer fails to point out specific discrepancies in the evidence produced by the assessee. The coram comprising Judicial Member Sanjay Garg and...

Charitable Trust Cannot Be Denied Income-Tax Registration For Lack of Irrevocability Clause In Trust Deed: Bombay High Court

The Bombay High Court has held that the absence of an explicit irrevocability clause in a trust deed cannot be a ground to reject the application of a charitable trust for registration or renewal under Section 12AB of the Income Tax Act, 1961. Section 12AB governs the grant and renewal of registration to charitable and religious trusts for the purpose of claiming tax exemption, and the Court observed that the statute does not require such a clause and that a trust is ordinarily irrevocable...

Karnataka High Court Frames Guidelines On Calling For Production Of Spouse's Income-Tax Returns In Maintenance Cases

The Karnataka High Court has framed detailed "gender-neutral" guidelines regulating the procedure to be followed by matrimonial courts when applications are made seeking production of income tax returns and other financial records in maintenance and alimony proceedings, in order to ensure uniform practice while safeguarding the confidentiality of personal financial information. A single bench of Justice Suraj Govindaraj held that the Right to Information Act is not the proper mechanism for...

RTI Cannot Be Used To Obtain Spouse's Income Tax Returns In Maintenance Dispute Without Larger Public Interest: Karnataka High Court

The Karnataka High Court, in a recent noteworthy ruling, has held that income tax returns and financial details of a spouse constitute “personal information” under the Right to Information Act, 2005, and cannot be disclosed in the absence of a demonstrable larger public interest, even in maintenance disputes. Observing that private matrimonial disputes do not by themselves satisfy the statutory requirement for disclosure, a single bench, Justice Suraj Govindaraj, held, "While the need for a...

Allahabad High Court Allows Anand And Anand Firm's Writ, Holds Favorable Findings Prevent Remand

The Allahabad High Court on 16 February held that once a finding is recorded in favour of a party, the appellate authority cannot remand the matter back to the original assessing authority to redetermine the issue. A Single Judge Bench of Justice Vikas Budhwar allowed the writ petition filed by Anand and Anand Law Firm, holding: “Apparently, the writ petitioners herein are questioning the appellate order dated 30.04.2024 passed by the Joint Commissioner, GST (Appeals) for various periods....