Income Tax Act | Writ Petition Can Be Entertained To Examine If Conditions To Issue Section 148 Notice Are Satisfied : Supreme Court

The Supreme Court recently set aside an order of the Punjab and Haryana High Court which dismissed a writ petition filed by an assessee against a notice issued under Section 148A of the Income Tax Act 1961 for reopening assessment.The High Court had dismissed the writ petition on the ground of availability of alternative remedy. Taking exception to the High Court's approach, the Supreme Court observed that writ petitions have been entertained to examine whether the conditions for the...

Income Tax Dept. Can't Initiate Reassessment Proceedings During The Pendency Of The Rectification Proceedings: Supreme Court

The Supreme Court has held that the income tax department cannot initiate the reassessment proceedings during the pendency of the rectification proceedings.The division bench of Justice M.R. Shah and Justice C.T. Ravikumar has observed that the Punjab and Haryana High Court has committed a serious error in holding that the notice under Section 154 was invalid as it was beyond the period of limitation. The proceedings under Section 154 of the Income Tax Act were not the subject matter before the...

Section 45(4) Of Income Tax Act Applicable To Cases Of Subsisting Partners Of A Partnership Transferring The Assets In Favour Of A Retiring Partner: Supreme Court

A Supreme Court bench comprising Justices M.R. Shah and M.M. Sundresh held that Section 45(4) of the Income Tax Act was applicable to not only the cases of dissolution but also cases of subsisting partners of a partnership, transferring the assets in favour of a retiring partner.The respondent assessee, a partnership firm originally consisted of four partners (all brothers) engaging in the business of Dyeing and Printing, Processing, Manufacturing, and Trading in Clothing. Under the family...

Supreme Court Dismisses Department's SLP Against HC Decision Holding That Entrance Fees Received By Club From Its Member Is Capital Receipts

The Supreme Court bench of Chief Justice of India, Justice D.Y. Chandrachud, and Justice Hima Kohli has dismissed the special leave petition of the department challenging the decision of the Bombay High Court. The Bombay High Court has held that any sum paid by a member of a club to acquire the rights of a club is a capital receipt and not a revenue receipt.The assessee or respondent runs the race course in Bombay. During the assessment year 2009-10 and in the years prior, the assessee used to...

Sec.194H Income Tax Act Attracted For 'Supplementary Commission' Earned By Travel Agents ; Airlines Liable To Deduct TDS : Supreme Court

The Supreme Court held that Section 194H of the Income Tax Act is attracted in the case of Supplementary Commission amounts earned by the travel agent and therefore Airlines are liable to deduct TDS in this regard.The bench comprising Justices Surya Kant and MM Sundresh upheld the Delhi High Court judgment and overruled the Bombay High Court judgment in CIT v. Qatar Airways [2009 SCC OnLine Bom 2179] that had held otherwise.Section 194HSection 194H of the IT Act was introduced by the Finance...

Statutory Authorities, Professional Bodies Like ICAI Entitled To Income Tax Exemption If Amounts Charged By Them Are Nominal To Cover Costs : Supreme Court

The Supreme Court has pronounced a significant judgment on the scope of exemption for "charitable purposes" under Section 2(15) of the Income Tax Act 1961 in relation to statutory authorities and professional bodies.With effect from 01.04.2009, after the Finance Act 2009, a proviso was added to the section to state : "Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of...

Advancement Of General Public Utility Won't Be "Charitable Purpose" For Income Tax Exemption If It Is Done As Business : Supreme Court

In a significant judgment, the Supreme Court has held that entities created with the object of advancing general public utility cannot seek exemption under the Income Tax Act 1961 under the head "charitable purposes" if they are engaging in any trade, business, commerce or providing any service for any consideration.However, in the course of carrying out the general public utility, the assessee can engage in incidental trade or business or provide services for consideration and can generate...

Sufficiency Or Inadequacy Of Reasons To Believe Cannot Be Looked Into While Considering Validity Of Search & Seizure U/Sec 132 Income Tax Act: Supreme Court

The Supreme Court, in a judgment delivered on Wednesday, restated the principles in exercising the writ jurisdiction in the matter of search and seizure under Section 132 of the Income Tax Act."The sufficiency or inadequacy of the reasons to believe recorded cannot be gone into while considering the validity of an act of authorization to conduct search and seizure", the bench comprising Justices Hemant Gupta and V. Ramasubramanian observedThe court was considering an appeal against the judgment...

Twin Conditions In Section 10B (8) Income Tax Act Has To Be Fulfilled To Claim Exemption Relief: Supreme Court

For claiming the benefit under Section 10B (8) of the Income Tax Act, the twin conditions of furnishing a declaration before the assessing officer and that too before the due date of filing the original return of income under section 139(1) are to be satisfied and both are mandatorily to be complied with, the Supreme Court observed in a judgment delivered yesterday. Section 10B (8) IT ActThe Section 10B (8) IT Act reads as follows: Notwithstanding anything contained in the foregoing...

Equilibrium Between Power Of The Income Tax Dept. Of Reassessment And Rights Of The Assessee: Supreme Court

The Supreme Court, by invoking the extraordinary jurisdiction under Article 142 of the Constitution of India, saved over 90,000 Income Tax Reassessment notices issued after the 2021 Amendment by deeming them as notices under Section 148A of the Income Tax Act. At the same time, in order to protect the interests of the assessees, the Apex Court directed that the income tax officer must follow the procedure laid down as per amendments made by the Finance Act, 2021. All defences shall be...

Supreme Court Saves Over 90,000 Income Tax Reassessment Notices Issued After 2021 Amendment By Deeming Them As Notices Under Section 148A

The Supreme Court, on Wednesday, directed that reassessment notices under Section 148 of the unamended Income Tax Act which were issued beyond 01.04.2021 (the effective date of amendment of the said provision by the Finance Act, 2021) to be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021 and be construed as show cause notices in terms of section 148A(b). While deciding an appeal against an order of the Allahabad High Court which had set aside...

No Deemed Registration Even If Registration Application U/Sec 12AA Income Tax Act Is Not Decided Within Six Months: Supreme Court

The Supreme Court has observed that there shall not be any deemed registration even if in a case where the registration application under Section 12AA of the Income Tax Act, 1961, is not decided within six months.The bench comprising Justices MR Shah and BV Nagarathna was considering a Special Leave Petition challenging a judgment of Allahabad High Court in which the issue raised was whether on non-deciding the application for registration under Section 12AA (2) of the Income Tax Act within a...