Airline Operations Exempt Under India-UK DTAA: Delhi High Court Directs NIL TDS Certificate For British Airways

The Delhi High Court has set aside an order of the Income Tax Department issuing a 0.1% TDS certificate to British Airways under Section 197 of the Income Tax Act, 1961.A Division Bench of Justices Dinesh Mehta and Vinod Kumar directed the authorities to issue a NIL TDS certificate, holding that income from airline operations is exempt under the India–UK Double Taxation Avoidance Agreement (DTAA).The development comes in a petition moved by British Airways, a tax resident of the United Kingdom,...

Punjab & Haryana High Court Bars Higher Bank Guarantee Demand For Delay In Releasing Seized Jewellery

The Punjab and Haryana High Court on 18 February, directed the Income Tax Department to immediately release jewellery seized from the Sanjeet Singh and other petitioners, holding that the department cannot demand a higher bank guarantee due to an increase in gold prices when the delay in release was solely attributable to administrative lapses of the authorities. A Division Bench of Justice Deepak Sibal and Justice Lapita Banerji allowed a writ petition which sought the release of jewellery...

Change Of Opinion Not Enough To Reopen Assessment: Calcutta High Court

The Calcutta High Court on 20 February held that revisional powers under Section 263 of the Income Tax Act, 1961 cannot be invoked merely because the Principal Commissioner holds a different opinion on the nature of income. A Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar, dismissed an appeal filed by the Principal Commissioner of Income Tax, Kolkata, and upheld the order of the Income Tax Appellate Tribunal setting aside revisionary proceedings against Russel Credit...

Only Commissioner Can Decide If Delay In Income Tax Refund Is Attributable to Taxpayer, Not AO: Delhi High Court

The Delhi High Court has recently held that the question whether delay in processing TDS refund is attributable to the assessee/taxpayer, for the purpose of denying interest under Section 244A(2) of the Income Tax Act, can be decided only by the Principal Commissioner/Commissioner and not by the Assessing Officer (AO).A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed,“Looking at the language used in sub-section (2) of Section 244A of the Act of 1961, we are of the firm opinion...

Delhi High Court Slams IT Officer For Relying On Set-Aside Order, Directs Issue Of Nil TDS Certificate

The Delhi High Court has strongly criticised the Income Tax Department for relying on a long-set-aside assessment order to deny withholding tax relief, holding that such an approach amounts to a revenue-driven exercise contrary to law and judicial discipline.A Division Bench of Justices Dinesh Mehta and Vinod Kumar set aside the order passed under Section 197 of the Income Tax Act, 1961, which had directed deduction of tax at 15% instead of issuing a nil withholding certificate to a a UK-based...

Income Tax | Duty Drawback Not Eligible for 80-IC Relief ; Taxes on Raw Materials Must Be Set Off: Delhi High Court

The Delhi High Court has held that while duty drawback receipts are not eligible for deduction under Section 80-IC of the Income Tax Act, the excise and customs duties paid by a taxpayer on raw materials are required to be deducted/subsumed from the duty drawback while recomputing income in the facts of the case.A Division Bench of Justices Dinesh Mehta and Vinod Kumar partly allowed the appeal filed by Narayan Industries against ITAT order denying its claim for deduction under Section 80-IC in...

Reassessment Must Be Based On AO's Independent 'Reason To Believe,' Not Borrowed: Delhi High Court

The Delhi High Court has dismissed the Income Tax Department's appeals against NTPC Ltd., holding that reassessment proceedings cannot be initiated merely on the basis of an audit objection and that the statutory requirement of “reason to believe” must be from independent satisfaction of the Assessing Officer (AO).A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed,“the provision expressly used the language 'reason to believe' and the same has been interpreted by Hon'ble the...

Delhi High Court Affirms ITAT View That Excise Duty Refund Under Kutch Incentive Scheme Is Capital Receipt

The Delhi High Court has upheld an order of the Income Tax Appellate Tribunal (ITAT) holding that excise duty refund received by Jindal SAW Ltd. under the Kutch district incentive scheme is a capital receipt and not taxable as income.While dismissing the Income Tax Department's appeal, the Division Bench of Justices Dinesh Mehta and Vinod Kumar agreed with ITAT's view that the refund was granted under the Incentive Scheme 2001 for Economic Development of Kutch District, notified by the...

Orissa High Court Grants Fresh Hearing To Taxpayer With Neurological Illness, Quashes Ex Parte Order

The Orissa High Court on 2 February set aside an ex parte assessment order against Sri Susil Nath, the taxpayer, as he could not participate due to neurological illness.A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman noted: “As it appears from the record that the invoices along with vehicle particulars issued by the Government Authority could not be placed before the said Authority in view of the circumstances beyond the control of the petitioner.” The petition...

Delhi High Court Directs Nil TDS For GoDaddy, Says Domain Registration Fees Not Taxable Under India-US DTAA

The Delhi High Court has held that domain name registration fees received by GoDaddy is not chargeable to income tax in India, in terms of the India-USA Double Taxation Avoidance Agreement.A division bench of Justices Dinesh Mehta and Vinod Kumar also criticised the Income Tax Department for refusing to grant a nil withholding tax certificate under Section 197 of the Income Tax Act, 1961, despite binding judicial precedent.“We record our displeasure about the casual rather callous manner, in...

Delhi High Court Dismisses Revenue Appeals Against ITAT Order In Mahagun TDS Dispute Over NOIDA Lease Rent

The Delhi High Court has dismissed three appeals filed by the Income Tax Department challenging orders of the Income Tax Appellate Tribunal (ITAT) that had granted relief to Mahagun developers in a long-running dispute over deduction of tax at source (TDS) on lease rent payments made to the NOIDA Authority.A Division Bench of Justices Dinesh Mehta and Justice Vinod Kumar rejected the appeals after noting that the controversy was squarely covered by its earlier ruling in Rajesh Projects (India)...

Gujarat High Court Sets Aside TDS Order For Failure To Apply 'Make Available' Test Under India–Singapore DTAA

The Gujarat High Court has recently set aside a tax deduction at source order against Solvay Specialities India, holding that the Income Tax Department failed to apply the mandatory “make available” test under the India–Singapore tax treaty. Under this test, tax authorities are required to first determine whether the foreign service provider actually passed on any technical knowledge, skill, or know-how in a way that allows the Indian company to use it independently in the future. Without...