Telangana High Court Quashes IT Reassessment On Issue Already Examined, Calls It Change of Opinion

The Telangana High Court has set aside income tax reassessment proceedings against Piramal Swasthya Management and Research Institute, holding that the tax department cannot reopen an issue it had already examined and accepted during the original assessment. “once the assessment proceedings are completed and assessment order is passed, the 1st respondent cannot reopen the assessment proceedings by issuing the impugned show-cause notice, dt.27.02.2023, alleging that Form 10 had not been...

Delhi High Court Says 100% Shareholding Not Enough To Tax Shareholders For Company's Income

The Delhi High Court has held that shareholders, even if holding all the shares of a company, are only owners of the shares and not of the company's assets, and therefore the company's income cannot be taxed in their hands. “Legally speaking, the respondents being shareholders of the company, even if holding all the shares (100%), are only owners of the shares of the company and not the owners of the property as such and similarly the income which that company has earned cannot ipso-facto be...

Telangana High Court Upholds 1% Royalty Cap On Export Sales, Dismisses Gulf Oil Appeals

The Telangana High Court on 26 March, upheld the restriction of royalty on export sales to 1% for Gulf Oil Corporation Ltd., holding that regulatory approvals permitting higher royalty rates do not determine arm's length price under transfer pricing provisions, which operate as a self-contained code under Sections 92 to 92F of the Income Tax Act. The Division Bench comprising Justices P. Sam Koshy and Suddala Chalapathi Rao held that no substantial question of law arose in the matter and...

Approval By Additional Commissioner Valid As “Joint Commissioner” Under Income Tax Act: Kerala High Court

The Kerala High Court, on 8 April, held that approval granted by an Additional Commissioner of Income Tax satisfies the statutory requirement under Section 274(2) of the Income Tax Act for imposing penalties. It clarified that the term “Joint Commissioner” includes an Additional Commissioner under Section 2(28C) of the Act. Justice Ziyad Rahman A.A. dismissed a batch of writ petitions filed by Service Cooperative Bank Limited, holding that the challenge failed on the limited question of the...

Delhi High Court Cuts ₹80.42 Lakh Addition To ₹68.47 Lakh, Says Taxpayers' Claim Was Relied On Despite Rejection

The Delhi High Court has reduced the addition to the taxpayers' income from Rs.80.42 lakh to Rs.68.47 lakh in a cash seizure case, holding that the Assessing Officer could not rely on the assessee's claim of having “borrowed/collected” Rs.80.42 lakh from 17 persons after rejecting that very explanation, terming such an approach “perverse” in the absence of any independent material.A Division Bench of Justices Dinesh Mehta and Vinod Kumar partly allowed an appeal under Section 260A of the Income...

Bombay High Court Sets Aside Cap On Export Unit Tax Deduction Based On Sister Concern Profits

The Bombay High Court has held that deduction under Section 10B of the Income Tax Act, which grants tax relief to export-oriented units on profits derived from exports, cannot be restricted merely by comparing the assessee's profit margins with those of a sister concern, in the absence of any material establishing an arrangement to inflate profits. “The capping of the profit share of the Assessee on which deduction under Section 10B could be claimed at 19% solely on the basis of the sister...

Income Tax | Reference To District Valuation Officer Cannot Be Used To Initiate Assessment Proceedings: Telangana HC

The Telangana High Court has dismissed the revenue's appeal against Legend Estates Pvt. Ltd. and held that a reference to the District Valuation Officer under Section 142A of the Income Tax Act is untenable where the taxpayer's books of accounts are neither rejected nor found defective. It also held that a reference under Section 142A can be made only during the course of assessment or reassessment proceedings and not for the purpose of initiating such proceedings. A Division Bench of Justice...

Interest Earned By Co-operative Credit Society On Bank Deposits Eligible For Tax Deduction: Telangana HC

The Telangana High Court has held that interest earned by the Hyderabad-based co-operative credit society on bank deposits made from its business funds is eligible for deduction under the provision applicable to co-operative societies providing credit facilities to their members."It is clear that eligibility for deduction under Section 80P(2)(a) requires that the claim must relate to the profits and gains of business attributable to one or more of the activities specified therein. In the present...

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...