Indian Tax Authorities Favoured: Supreme Court Rules On The 'Most Favoured Nation' Controversy

In a ground-breaking judgment in the case of Assessing Officer Circle (International Taxation) 2(2)(2) New Delhi v. Nestle SA, the Supreme Court of India (“SC”) has definitively addressed the contentious issues surrounding the Most Favoured Nation (“MFN”) clause in Double Taxation Avoidance Agreements (“DTAA”). Background of the Controversy A DTAA is an agreement between two or more countries designed to prevent the double taxation of income by establishing rules for...

Prior Sanction Of Approval From Competent Authority Mandatory Before The Reopening Of Assessment: ITAT

The Dehradun Bench of the Income Tax Appellate Tribunal (ITAT) has held that prior sanction of approval under Section 151 of the Income Tax Act from the competent authority is mandatory before the reopening of the assessment.The bench of Kul Bharat (Judicial Member) and M. Balaganesh (Accountant Member) has observed that no approval under Section 151 of the Income Tax Act is on record for the years under consideration; the assumption of jurisdiction under Section 147 becomes void ab initio.The...

Income Tax | Form-10 Under Rule 17(2) Supplied After Limitation But Before Completion Of Assessment to Be Considered By AO: Allahabad High Court

The Allahabad High Court has held that if Form-10 under rule 17(2) for claiming exemption has been supplied to the assessing authority after the prescribed period but before completion of assessment, it ought to be considered by the Assessing Authority for granting benefit of exemption under Section 11(2) of the Income Tax Act, 1961 in original assessment proceedings.Placing reliance on judgment of Supreme Court in Commissioner of Income-tax Vs. Nagpur Hotel Owners' Association and the decision...

CBDT Grants Income Tax Exemption To Godavari River Management Board, Hyderabad

The Central Board of Direct Taxes (CBDT) has notified the income tax exemption under section Sec.10(46) of the Income Tax Act for Godavari River Management Board, Hyderabad.Godavari River Management Board, Hyderabad' is a Board constituted by the Central Government in pursuance of section 85 of the Andhra Pradesh Reorganisation Act, 2014, in respect of the various income arising to the Authority.The income tax exemption is allowable on grants/Subsidies received from the Central Government,...

Explanations 6 & 7 Appended To Section 9(1)(i) Income Tax Act To Be Given Retrospective Effect: Delhi High Court

The Delhi High Court has held that Explanations 6 and 7 appended to section 9(1)(i) Of the Income Tax Act, 1961 to be given retrospective effect.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that Section 9(1)(i) of the Income Tax Act inter alia seeks to impose tax albeit via a deeming fiction qua all income accruing or arising, whether directly or indirectly, through or from any property in India or through or from any asset or through transfer of asset situate in...

CBDT Extends Time For Processing 'Non-Scrutiny ITRs' For AYs 2018-19 To 2020-21

The Central Board of Direct Taxes (CBDT) has extended the time for processing 'non-scrutiny ITRs' for AYs 2018-19 to 2020-21 till January 2024.It has been brought to the notice of the Central Board of Direct Taxes that due to certain technical issues or for other reasons not attributable to the assessees concerned, several returns for assessment years (AYs) 2018-19, 2019-20 and 2020-21, which were otherwise filed validly under section 139 or 142(1) or 119 of the Income-tax Act, 1961 could not be...

Tax Can't Be Imposed Presuming Possible Order Of The Small Causes Court: Bombay High Court

The Bombay High Court has held that one cannot tax the amount that has not accrued to the assessee and has not been received by the assessee on the assumption and presumption that in the future, the small Causes court will at least order the said sum in favour of the appellant or assessee.The bench of Justice G.S. Kulkarni and Justice Jitendra Jain has observed that the determination of the amount payable by the IDBI to the appellant as prayed for by the appellant in its suit is to be determined...

Bombay High Court Dismisses Petition Filed By Serum Institute Of India Challenging 2016 Amendment To Income Tax Act

The Bombay High Court has dismissed a petition filed by Serum Institute of India Pvt. Ltd. challenging a 2016 amendment to the Income Tax Act.The bench of Justice K. R. Shriram and Justice Neela Gokhale has observed that the amendment to Section 2(24) by insertion of the impugned sub-clause that includes various subsidies and concessions only indicates the well-established jurisprudential path ensuring that the income tax laws remain attuned to the economic realities and continue to serve as a...

Provisions For Self-Assessment Are More Onerous Than Regular Assessment Regime: Kerala High Court

The Kerala High Court has held that filing an untrue or incorrect return assumes more rigour in the teeth of the onerous obligation, resulting in the imposition of a penalty.The bench of Justice Dinesh Kumar Singh has observed that provisions for self-assessment create an obligation on the assessee to file a correct return, which is more onerous than in a regime that mandates regular assessment. Filing of an untrue or incorrect return in view of sub-clause (d) of Section 67(1) assumes more...

Tax Cases Monthly Round Up: November 2023

Supreme Court Supreme Court Affirms Penalty On 'Zarda' Manufacturers For Misclassifying Product As 'Chewing Tobacco' For Central Excise Duty Case Title: Commr. Of Cen. Exc. Ahmedabad v M/S Urmin Products P. Ltd. And Others Citation: 2023 LiveLaw (SC) 949 The Supreme Court while adjudicating a matter wherein the Assesssee deliberately misclassified the ‘Zarda’ produced by it as ‘Chewing Tobacco’ for evading payment of a high duty as applicable to ‘Zarda’, has affirmed the...

SAT Criticizes SEBI For Negligence in Unfreezing Kirloskar Family Demat Accounts Despite Orders; Imposes ₹5 Lakh Costs

On Monday, the Securities Appellate Tribunal (SAT) strongly criticized the Securities and Exchange Board of India (SEBI) for its failure to unfreeze the demat accounts of five Kirloskar family members, despite a previous order to do so last year.Presiding Officer Justice Tarun Agarwala and Technical Member Meera Swarup, constituting the Coram, instructed SEBI to pay a penalty of ₹5 lakh to the SAT Registry as a consequence of its "negligent handling" of the situation.“Considering the aforesaid,...

ITAT Allows Section 80G Registration To Trust Recycling Post-Consumer Plastic Waste

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has allowed the registration under Section 80G of the Income Tax Act to the trust recycling post-consumer plastic waste.The bench of Sandeep Singh Karhail (Judicial Member) and Amarjit Singh (Accountant Member) has observed that the assessee earned income only from donations, the sale of scraps, and the sale of finished goods, and no such service was rendered to any entity. A service, even if it is rendered by the assessee, will only be...