Supreme Court
Is Merchant Navy Officer's Salary Credited In Indian Bank Account Exempt From Income Tax? Supreme Court To Decide
The Supreme Court on Monday (Aug. 18) agreed to decide whether the income credited in an Indian bank account while working with a Foreign Entity would be exempted from the payment of Income Tax under the Income Tax Act, 1961.. The issue arose before the bench of Justices Pankaj Mithal and Prasanna B. Varale while hearing the appeal filed against the Punjab & Haryana High Court's decision upholding the Motor Accident Claims Tribunal (“MACT”) decision to deduct 30% towards tax liability while...
Income Tax Act | Supreme Court Delivers Split Verdict On Timelimit For Assessments Under S.144C
The Supreme Court on Friday (Aug. 8) delivered a split verdict on the interpretation of the limitation period under Section 144C of the Income Tax Act, 1961 (“Act”), governing the timeline for passing assessment orders by the Assessing Officer in cases involving eligible assessees, such as foreign companies and transfer pricing matters.The judgment was delivered by the bench of Justices BV Nagarathna and SC Sharma.In a split verdict, Justice BV Nagarathna ruled that Section 153(3)'s...
Foreign Entity Doing Business Through Temporary Premises In India Liable To Tax : Supreme Court Rejects Hyatt International's Appeal
The Supreme Court on Thursday (July 24) ruled that the existence of a Permanent Establishment (PE) is sufficient to attract tax liability for a foreign entity in India, even in the absence of exclusive possession of a fixed place of business. The Court clarified that temporary or shared use of premises, when combined with administrative or operational control, is adequate to establish a PE, thereby triggering income tax liability in India.Holding so, the bench comprising Justice J.B. Pardiwala...
Income Tax Act | Supreme Court Clarifies Restriction Under S.80-IA(9) On Claiming Cumulative Deductions Under S.80IA & 80-HHC
Answering a reference, the Supreme Court held that deductions under Sections 80-IA/80-IB of the Income Tax Act need not reduce the gross total income before computing deductions under other provisions like Section 80-HH for export profits.The bench comprising Justices Abhay S Oka, Ahsanuddin Amanullah and AG Masih delivered the verdict while answering a reference after a matter was referred to the larger bench due to split verdict in Assistant Commissioner of Income Tax v. Micro Labs Limited...
Courts & SROs Must Report To Income Tax Authorities If Suits/Deeds Mention Cash Transactions Above ₹2 Lakh: Supreme Court
In a significant ruling aimed at combating black money and tax evasion, the Supreme Court today (April 16) directed courts and registration authorities to report cash transactions exceeding ₹2 lakhs to the Income Tax Department. The Court ruled that whenever any suit is filed claiming that a consideration of Rs. 2 Lacs or above is paid towards a transaction, then it becomes obligatory upon the Court to intimate the jurisdictional Income Tax Department for verification whether there's a...
Charitable Trust's Registration For Income Tax Exemption To Be Decided Based On Proposed Activities & Not Actual Activities : Supreme Court
The Supreme Court reiterated that when a charitable trust applies under Section 12-AA of the Income Tax Act (“Act”) for income tax exemptions (under Sections 10 and 11), the tax authorities should decide on the registration based on the charity's "proposed activities" than its actual activities, as stated in the Ananda Social case. The Court, however, clarified that mere registration under Section 12-AA would not entitle a charitable trust to claim exemption under Sections 10 and 11...
Income Tax Act | No Penalty Under S.271AAA If Undisclosed Income Is Admitted, Explained & Tax Paid Even With Delay : Supreme Court
The Supreme Court, while determining a tax matter, observed that the undisclosed income, under Section 271AAA(1) of the Income Tax Act, surrendered by the assessee during the search, is not sufficient to levy the penalty. Essentially, the said provision talks about penalty where a search has been initiated. The explanation reads as: “(a) “Undisclosed income” means— (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or...
Income Tax Act | Offence Committed Before Show-Cause Notice Compoundable As Covered By 'First Offence' In Compounding Guidelines: Supreme Court
The Supreme Court on January 7 set aside the Gujarat High Court's judgment dated March 21, 2017, through which the rejection to the compounding application of the Appellant for the assessment year 2013-2014, for having filed the belated income tax return, was upheld on the ground that only for the "first offence" compounding of offence is possible. Since the Appellant had filed delayed income tax for 2011-2012 and his compounding application was accepted, it now cannot be accepted.However,...
Reduction In Share Capital Amounts To Transfer Of Capital Asset Under Income Tax Act : Supreme Court
The Supreme Court (recently on January 02) reiterated that reduction in share capital is covered under Section 2(47) of the Income Tax Act, 1961, which talks about transfer of a capital asset. It explained that such reduction would be come under the expression “sale, exchange or relinquishment of the asset” used in the provision.For reference, the concerned portion of Section 2(47) reads as:“transfer' in relation to a capital asset, includes, (i) the sale, exchange or relinquishment of the...
Explained| Why Supreme Court Allowed Benefit Of TOLA In Extending Timelimits For Issuing Income Tax Reassessment Notices
The Supreme Court in its recent decision allowed the revenue authorities to issue notices for reassessment under the Income Tax Act for the period between 01.04.2021 and 30.06.2021 by granting the benefit of time extensions under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021. Here is a detailed breakdown of the key issue involved and the analysis of the Court in allowing a batch of 727 appeals filed by the Income Tax Department against the various...
TOLA Extends Income Tax Reasssment Timelimit; Notices Can Be Issued After 2021 Under Old Regime : Supreme Court
The Supreme Court on Thursday (October 3) set aside the judgments of the High Courts which held that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021 will not extend the time limit for issuing notices for re-assessment under the Income Tax Act.A bench comprising Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Manoj Misra delivered the judgment allowing a batch of 727 appeals filed by the Income Tax Department against the various orders...