Tax Department Cannot Sustain Reassessment On Other Grounds If Original Reason Fails: Supreme Court

The Supreme Court has recently ruled that the Income Tax Department cannot sustain reassessment proceedings on other grounds when the original reason for reopening the assessment is untenable. The court declared reassessment proceedings against LG Electronics India Pvt. Ltd. for Assessment Years 2006-07 to 2008-09 unenforceable. The case concerned the company's alleged failure to deduct Tax Deducted at Source (TDS) on payments to its Korean parent company and associated enterprises.A Bench of...

CESTAT Kolkata Allows CENVAT Credit On Sales Commission For Goods Sold Through Depots

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has ruled that commission paid to agents for procuring orders, arranging dispatches, and collecting payments for goods sold through a manufacturer's depots is eligible for CENVAT credit where the depot is the place of removal.A Bench comprising Judicial Member R. Muralidhar and Technical Member K. Anpazhakan held that the commission services qualified as input services under Rule 2(l) of the CENVAT Credit Rules, 2004. The...

Delhi High Court Refuses Refund Of ₹1 Crore Paid By Firm Towards Partner's Income Tax Dues, Calls It Inter-Se Dispute

The Delhi High Court has refused to direct a refund of ₹1 crore paid by a partnership firm towards the individual income tax dues of its partner, holding that the amount was voluntarily tendered and that the dispute essentially concerned an inter-se dispute between partners.The Division Bench of Justices Dinesh Mehta and Aditi Choudhary dismissed a writ petition filed by Surender Gupta, who sought refund of ₹1 crore along with interest. The amount had been paid through two fixed deposits of ₹40...

Employee Cannot Be Made To Pay Tax Already Deducted Due To Employer's TDS Default: Orissa High Court

The Orissa High Court has ruled that an employee cannot be made to pay income tax again to the extent tax has already been deducted from their salary, merely because the employer failed to deposit it or correctly report the deductions.A Division Bench of Justice Sanjeeb K. Panigrahi and Justice Murahari Sri Raman observed that employees should not suffer because of their employers' failure to deposit tax deducted at source (TDS) with the Income Tax Department.“As it is specific case of the...

How A Nation Taxes Its People Reflects Who Deserves Liberty, Right To Love: Same-Sex Partners Tell Karnataka HC In Tax Exemption Case

A same-sex couple has argued before the Karnataka High Court that the Income Tax law effectively makes them pay tax for expressing love for their partners, while married couples can exchange gifts without the same tax burden. Arguing that a nation's tax laws reflect the values it upholds, Advocate Dr. Dhruv Janssen Sanghvi, in a rejoinder, appearing for Anurag Kalia and Akhilesh Godi, a same-sex couple, submitted that excluding same-sex partners from the gift-tax exemption available to spouses...

Reassessment Notice For AY 2015-16 Issued In 2026 Time-Barred: Delhi High Court

The Delhi High Court has quashed an Income Tax reassessment notice issued for Assessment Year (AY) 2015-16, holding that the notice issued in 2026 was clearly beyond the permissible limitation period under Section 149 of the Income Tax Act, 1961.The Division Bench of Justices Dinesh Mehta and Aditi Choudhary allowed a writ petition challenging the notice dated March 31, 2026, issued under Section 148 of the Act seeking to reassess Petitioner's income for AY 2015-16.Petitioner contended that the...

Mobile Chargers Remain Independent Accessories, Toner And Cartridges Are Consumables: Patna High Court

The Patna High Court on 9 October held that mobile chargers sold with cellular phones in composite packs attract VAT at the residual rate of 13.5%, as they qualify as independent accessories rather than parts of the phones. A Division Bench of Justices Bibek Chaudhuri and Rana Vikram Singh also held that toner and cartridges do not qualify for lower VAT rates applicable to computer peripherals and their parts and accessories, and dismissed appeals filed by Ingram Micro-India Private Limited...

CENVAT Credit Cannot Be Denied On Works Contract Goods Outside Service Tax Levy: CESTAT Chennai

On 9 October, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Chennai, held that the Explanation to Rule 3 of the CENVAT Credit Rules, 2004, does not bar CENVAT credit on duty-paid capital goods transferred under a works contract, as the value of such goods falls outside the service tax levy. A Bench of Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao allowed appeals filed by Toshiba JSW Power Systems Private Limited and set aside the denial of CENVAT...

Karnataka High Court Refuses Relief in ₹22 Lakh Foreign Investment Case and Wealth Tax Return Default

The Karnataka High Court on 9 October dismissed two criminal petitions by Pradeep, a taxpayer, which sought to quash prosecution for allegedly failing to file wealth tax returns and to challenge the rejection of his discharge application in a separate case involving alleged false statements about investments worth approximately Rs. 22 lakh in two foreign companies. Justice H.P. Sandesh held that prosecution for failure to furnish wealth tax returns can proceed without a completed assessment...

Customs Cannot Detain Cattle Feed As Prohibited Goods Without Sufficient Grounds: Madras High Court

The Madras High Court on 28 September held that Customs authorities cannot treat imported cattle feed as prohibited goods merely on allegations of diversion for human consumption, particularly when laboratory reports indicate that the goods are unfit for human consumption.A Division Bench comprising Justices Anita Sumanth and S. Raveekumar upheld the direction to release the consignment against sufficient indemnity in an appeal filed by Customs authorities against S.R. Rajarajendiran, proprietor...

Madras High Court Sets Aside ₹5.50 Crore GST Demand Based On Projected Revenue From Unbuilt Construction

The Madras High Court has set aside a ₹5.50 crore GST demand against Shree Velu Builders Private Limited, holding that tax cannot be levied on projected revenue from two building blocks merely because their plans had been approved. The court noted that construction had not commenced in either block.Justice Krishnan Ramasamy remanded the matter to the State Tax Officer for fresh consideration, subject to the company depositing ₹50 lakh within four weeks.The case arose from an order passed against...

Income Tax Department Cannot Wait For Certified Copy When Digitally Signed Order Is Available: Bombay High Court

The Bombay High Court has ruled that the Income Tax Department cannot wait for a certified copy of a court order to compute the limitation period for completing an assessment when a digitally signed copy has already been received by the relevant tax authorities.“In this era of electronic filing and electronic uploading, and in order to alleviate difficulties of the litigants before us, this is a practice which this Court has adopted. Instead of asking a litigant to apply for a certified copy of...