Income Tax Act | Payment To Consulting Doctors Appointed On Probation Is Not Salary; TDS Deductible U/S 194J, Not U/S 192: Bombay High Court

The Bombay High Court has held that payments to consultant doctors are not salary. Hence, TDS is deductible under section 194J and not under section 192 of the Income Tax Act. Justices B.P. Colabawalla and Firdosh P. Pooniwalla stated that there does not exist an employer-employee relationship between the assessee and consultant doctors, and the payments made to them by the assessee come under the purview of section 194J of the Income Tax Act. Section 194J of the Income Tax Act,...

In Tax Matters, Strict Letter Of Law Must Be Followed; No Tax Can Be Imposed By Inference Or Analogy : Supreme Court

The Supreme Court observed that no tax can be imposed by inference or analogy when the taxing statutes do not authorize the imposition of tax. It added that tax authorities cannot bypass statutory limitation periods by administrative sanction. “In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of law. If the revenue satisfies the court that the case falls strictly within the provisions of the law, the subject can be...

Income Tax Act | Draft Assessment Order Not Permissible U/S 144C(1) When TPO Makes No Variation: Bombay High Court

The Bombay High Court has held that a draft assessment order is not permissible under section 144C(1) of the Income Tax Act when the TPO (transfer pricing officer) makes no variation. Section 144C(1) of the Income Tax Act, 1961, provides that the Assessing Officer should forward a draft of the proposed assessment order to the eligible assessee if any variation of the income or loss returned is proposed to be made which affects the assessee negatively. Justices B.P. Colabawalla and...

Rajasthan High Court Partly Quashes CBIC Circular Restricting ITC Refund For Inverted Duty Structure Up To 18.07.2022

The Rajasthan High Court has quashed Point No. 2 of the Circular No. 181/13/2022-GST dated 10.11.2022, restricting ITC claims on the inverted duty structure prior to 18.07.2022. The bench, consisting of Justices Dinesh Mehta and Sangeeta Sharma, stated that if the impugned clarification is tested on the anvil of reasonableness, it falls foul to Article 14 of the Constitution of India, inasmuch as the right to claim refund of Input Tax Credit of the input tax on inverted duty structure ...

Failure To Mention Correct Value In GSTR-5A Filing Is Not Suppression U/S 74 CGST Act: Karnataka High Court

The Karnataka High Court has stated that a failure to mention the correct value in returns or apply the correct GST rate is not suppression under section 74 of the Central Goods and Services Tax (CGST). Justice S.R. Krishna Kumar stated that "...though the revenue alleged in the impugned SCN that the assessee failed to mention the value of services correctly in the GSTR-5A returns and apply the correct GST rate on the consideration received, the mere omission to mention the value...

Compensation For Breach Of Agreement To Sell Land Not Taxable As Declared Service U/S 66E(e) Of Finance Act: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that compensation for breach of agreement to sell land is not taxable as declared service U/S 66E(e) of the Finance Act. Section 66E(e) of the Finance Act, 1994 lists out “declared services” for the purpose of levy of service tax. It deems 'Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act' as a declared service. Binu Tamta (Judicial...

Rajasthan GST Act | HC Calls For 'Purposive' Interpretation Of S.107, Asks Why Assessment Orders Cannot Be Sent On Assessee's Email

The Rajasthan High Court has questioned why the tax department can send attachment orders via email, but not assessment orders, to ward off any communication gap or confusion about the date of communication.The Court was hearing a petition filed against the order of the Appellate Authority, State Tax, that had rejected an appeal preferred by the petitioner under Section 107(1) of the Rajasthan GST Act, 2017.The division bench of Justice Dinesh Mehta and Justice Sangeeta...

Supreme Court Allows Customs Duty Exemption To LG Electronics For Smart Watch Import From Korea

The Supreme Court recently granted relief to LG Electronics India from paying customs duty on imported 'G Watch W7' smartwatches from South Korea, holding that a certificate of origin from a country with which India has a full customs duty exemption agreement is sufficient to claim such exemption. A bench of Justice JB Pardiwala and Justice Sandeep Mehta heard the LG Electronics appeal against the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) order, that declined LG's plea for...

S. 67 CGST Act | Officer Below Rank Of Joint Commissioner Cannot Inspect Assessee's Premises Without Authorisation: Karnataka High Court

The Karnataka High Court has held that an officer below the rank of Joint Commissioner cannot, by himself, inspect the premises of the assessee without authorisation under Section 67 of the Central Goods and Services Tax. The bench further stated that there is no requirement to provide a copy of the authorisation and details of the order passed by the Joint Commissioner, but the delegate who inspects or confiscates any document or goods would be required to provide the details of...

S. 149 Income Tax Act | Reassessment Beyond Limitation Period Is Valid Where 'Bogus' Royalty Payments Exceed ₹50 Lakh: Bombay High Court

The Bombay High Court has stated that reassessment beyond 3 years is valid where bogus royalty expenses exceed Rs. 50 lakhs. Justices Bharati Dangre and Nivedita P. Mehta upheld the reassessment proceedings initiated beyond three years, in the present case, where the alleged bogus royalty expenses exceeded 50 Lakhs. The bench opined that Section 149(1)(b) of the Income Tax Act is a jurisdictional fact which must be established prior to reopening of assessment on the ground that...

Sale Proceeds Of Minor's Property Share Deposited Under Court Order Excluded From Father's Taxable Income: ITAT

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has stated that sale proceeds of a minor's property share deposited under court order are excluded from father's taxable income. S.S. Viswanethra Ravi (Judicial Member) held that the assessee cannot decide the utilization of his minor daughter's share as it is deposited as per Court's order and it is impossible to club the same in the assessee's (father) hand. In this case, the assessee filed return of income in response...

Tax Weekly Round-Up: September 08 - September 14, 2025

HIGH COURTSAllahabad HC[CGST Act] Tax Officers Expected To Know Law Laid Down By Higher Courts: Allahabad High CourtCase title: - M/S Rajdhani Udyog v. State Of U.P. And 2 OthersCase no.: WRIT TAX No. - 3684 of 2025While calling for personal affidavit from Principal Secretary, Institutional Finance, Government of U.P., Lucknow explaining the conduct of the tax officers in the State in not following the orders of the High Court, the Allahabad High Court observed that the Officers must know the...