TODAY'S CASE (DIRECT TAX)

Nov 30, 2023

++ I-T - ITO shall provide provide CPCITR link to assessee to raise his/her grievances: HC

++ I-T - Since CBDT is not empowered to fix time limit for filing application for compounding of offences, time of 12 months fixed by it is contrary to the provisions of Section 279(2): HC

++ I-T - Since communication of notice is complete when it is received by person to whom it is addressed to, merely posting of date of hearing of Miscellaneous Petition in Cause List is not sufficient: HC

++ I-T - If after issuing notice u/s 148, AO accept contention of assessee that income which initially formed reason to believe of escaped assessment, did not actually escaped, it is not open to him independently assess other income: HC

++ I-T - Since absence of notice u/s 143(2) impregnates proceedings with jurisdictional defect, hence it renders notice by Revenue Dept. at assessee's wrong address as improperly served, invalid: HC

++ I-T - Income computed in accordance with notified accounting standards should not be rejected: HC

Nov 29, 2023

++ I-T - Purpose of Section 40(a)(ia) is to disincentivize non-deduction of tax at source by disallowing, as deduction, amount paid to resident/payee: HC

++ I-T - If AO did not have tangible material on record that could have persuaded him to form belief that income otherwise chargeable to tax, had escaped assessment, notice u/s 148 deserves to be quashed: HC

++ I-T - Time spent by applicant while pursuing review proceedings deserves to be excluded even under principles analogous to Sec 14 of Limitation Act, if he acted in good faith: HC

++ I-T - Since ROI was filed though after search and seized cash was offered by assessee under then prevailing regime, it is to be treated as the advance tax and thus there is no default in payment of advance tax : HC

++ I-T- Since loan received from M/s Godavari is routed through regular banking channel and reflected duly in annual accounts not require addition u/s 68 of Act : ITAT

++ I-T- If assessee is corporate entity then ad hoc disallowance of expenditure without pointing out any specific defect is not permissible : ITAT

Nov 28, 2023

++ I-T - Since assessee is merely manufacturer of handloom sarees, pre-deposit ordered by PCIT appears to be on higher side, which should be reduced: HC

++ I-T - Power u/s 119(2)(b) being quasi-judicial in nature and which could result in adverse civil consequence, it must be exercised in compliance with principles of natural justice : HC

++ I-T - Order passed u/s 254 (2) cannot be construed to be an order within meaning of Section 260A to make it appealable before Writ Court: HC

++ I-T- Once AO assumes jurisdiction to reopen the proceedings under Section 148, he cannot independently make additions in respect of other income which escapes assessment : ITAT

++ I-T - ad hoc disallowance of agricultural income is not tenable when Assessee has had agricultural income for many of the past AYs & where disallowance is not backed by any reasoning: ITAT

++ I-T - AO cannot convert limited scrutiny into the complete scrutiny: ITAT

Nov 27, 2023

++ I-T - Failure to provide opportunity of personal hearing to assessee before leving penalty calls for readjudication of case: HC

++ I-T - Opportunity for personal hearing should be provided to assessee before passing any assessment or penalty: HC

++ I-T - If assessee is categorical that he has not received any income in previous AY but has claimed notional expenditure in next AYs while declaring capital gain, merit of such claim shall be considered before concluding escapement: HC

++ I-T- AO has to abide by the Instructions of CBDT while completing limited scrutiny assessment and should be scrupulous about maintenance of note sheets in assessment folders : HC

++ I-T- Re-assessment merits being quashed, where based solely on assumptions & presumptions and where AO lacks jurisdiction to commence such proceedings: HC

++ I-T- Addition of share capital can not be made as there is no incriminating material found during course of search warranting addition based on seized material : ITAT

++ I-T- Depreciation cannot be disallowed in respect of machinery which has been acquired through an open auction conducted by a bank under the SARFAESI Act : ITAT

++ I-T- Since Erode District Central Co-operative Bank is governed by Tamil Nadu Co-operative Societies Act, assessee is eligible for claim of deduction u/s 80P(2)(d) of Act : ITAT

Nov 25, 2023

++ I-T- On basis of principle of maturity income earned from members in respect of holding seminars, exhibitions, and other activities is not taxable : ITAT

++ I-T- CCIT is not justified in branding assessment order erroneous and prejudicial to interest of Revenue as CCIT did not make out any valid ground for revision :ITAT

++ I-T- Mere non-appearance of buyer who has since expired cann't be held against assessee : ITAT

++ I-T- Since there is close nexus between assessee and firm, contention raised by assessee cannot be rejected without any strong reason : ITAT

Nov 24, 2023

++ I-T- Expenditure incurred for improvement of asset or title liable to be deducted from long term capital gain on sale of said asset: ITAT

++ I-T-Penalty shall not be imposable on the assessee u/s 271B of the Act when assessee has a reasonable cause for not getting the books of account audited: ITAT

++ I-T- Power of revision under Section 263 is rightly exercised where AO does not enquire into certain cash deposits pertaining to assessee & passes a cryptic order : ITAT

++ I-T- Donations given for compliance u.s 135 of the Companies Act, to the institutions mentioned in section 80G(2) of the Act are qualified for deduction under section 80G of the Act: ITAT

++ I-T -As per settled position in law, disallowance of payment made towards employees' contribution to PF & ESI is valid, where remittance is made after due date prescribed in respective Acts, even if made before due date of filing ITR : ITAT

++ I-T- No addition u.s 68 can be made when assessee-firm maintained all books of account during the year: ITAT

++ I-T- There cannot be any addition u/s 68 without specific reason and evidence to establish that amount is not explained : ITAT

++ I-T- Since value of edible oil brand in books of transferor company is NIL, any change in its value subsequently, has to be ignored : ITAT

++ I-T- Unexplained investment - Additions sustained as Assessee unable to give credible explanation for massive amounts deposited in bank account: ITAT

Nov 23, 2023

++ I-T- Under section 54F, if assessee invested net consideration for purchase of new residential house property, then deduction is allowed towards entire amount of capital gains: ITAT

++ I-T- Excess application of income of the previous years can be set off from the subsequent year's surplus income: ITAT

++ I-T - While calculating average aggregate advances of rural branches u/s 36(1)(viia), both advance outstanding as well as fresh advances are to be considered : ITAT

Nov 22, 2023

++ I-T - Profits earned due to price fluctuation cannot be included or treated as derived from business of export income, hence, ineligible for Sec 80 HHC deduction: SC

++ I-T - Belated return filed only after issuance of show cause notice u/s 153A attracts prosecution u/s 276CC for wilful concealment: HC

++ I-T - Co-operative society is entitled to avail benefit of Sec 80P(2)(d) on interest income earned by them: HC

++ I-T- Since, AO has passed ex parte assessment order, in absence of necessary evidence to determine correct income, issue needs to go back to file of AO for fresh consideration : ITAT

++ I-T- An assessment order passed pursuant to directions given by PCIT in exercise of revisionary powers u/s 263 of I-T Act, would sustain, where revisionary order itself is set aside: ITAT

++ I-T- Case needs to be remanded as assessee did not get proper opportunity to rebut adverse material collected by AO and there is violation of natural justice : ITAT

++ I-T- Penalty order u/s 271(1)(c) is bad in law if notice issued u/s 274 is defective: ITAT

++ I-T- Case can be remanded back to determine nature of land sold as assessee has to prove that it is a fixed asset and not stock in trade : ITAT

Nov 21, 2023

++ I-T - When Revenue in MA has not pointed out any specific mistake in order which is apparent from record and issue raised by it requires long drawn argument, same is not allowed u/s 254(2): HC

++ I-T - Since delay in depositing TDS was due to COVID-19 Pandemic, which is reasonable cause, assessees cannot be said to have committed offence punishable u/s 276B: HC

++ I-T - 'Due date' in respect of Contribution to PF /ESI not to be reckoned from month of actual payment of salary and but from month in which salary becomes payable: HC

++ I-T- Once repayment of loan has been established based on documentary evidences, credit entries cannot be looked into isolation after ignoring debit entries: ITAT

++ I-T- Deduction should be allowed towards finance charges including prepaid finance charges when actual payment has been made: ITAT

++ I-T- Re-assessment notice issed to assessee in individual capacity, whereas subsequent order issued in capacity as legal heir of deceased assessee; order quashed due to such incongruity which is in breach of law: ITAT

++ I-T- Sec 271(1)(c) - Joint reading of Explanations I & III entails that addition/disallowance is sine qua non for imposition of penalty u/s 271(1)(c) - Only exception is where ITR only after receiving notice u/s 148: ITAT

++ I-T-As per setttled precedent, disallowance of expenditure u/s 14A of the I-T Act is not tenable, when no dividend income is earned in the relevant AY : ITAT

++ I-T- case can be remanded back to lower authority as AO has not passed consequential rectification order after DVO submits report : ITAT

Nov 20, 2023

++ I-T - Where in spite of sufficient opportunity, assessee did not respond to show cause notice, then ex-parte assessment cannot be termed as violation of natural justice: HC

++ I-T - Since assessee had filed modified return in accordance with Section 170A, scrutiny assessment should be carried out by AO: HC

++ I-T - Since assessee did not get reasonable opportunity of being heard before passing of assessment orders u/s 144B, such assessment deserve to be set aside: HC

++ I-T - Since amount received by the assessee in form of arbitral award was for relinquishment of her rights and claim as a partner and as inheritance, it cannot be capital receipt: HC

Nov 18, 2023

++ I-T - AO shall pass speaking order u/s 148A in accordance with law after giving opportunity of hearing to assessee or his authorised representative and after considering reply to notice u/s 148A(b): HC

++ I-T- As per settled position in law, deduction on Employee's contribution to PF & ESI is not allowed where contribution payment is made after due dates prescribed in respective Acts: ITAT

++ I-T-Deductions claimed by the Assessee are rightly disallowed where the ITR of the assessee was filed beyond the due date prescribed for filing ITR: ITAT

++ I-T- Additions framed on account of on-money are valid, where Assessee admits undisclosed income during relevant AY but same is not accepted by AO & is instead attributed to a different AY : ITAT

++ I-T- Interest on late payment of TDS is not in nature of penalty, same is allowable u/s 37 of Act - ITAT

Nov 17, 2023

++ I-T- Revisionary power cannot be exercised if PCIT has difference of opinion with AO over which course of action is most suited, out of several courses of action permissible in law: HC

++ I-T - If assessee did not reveal major part of jewellery in statement under VDI Scheme, 1997, irrespective of fact that it was wilful concealment or not, penalty u/s 271(1)(c) was rightly imposed : HC

++ I-T - Once there was failure on part of assessee to make proper declaration as is contemplated Section 245D, question of Settlement Commission proceeding further cannot be countenanced: HC

++ I-T - Merely because search was conducted when Tamil Nadu State Assembly Model Code of Conduct from State Assembly Election was in force, does not mean issuance of notice u/s 153A/ 153C would be excluded: HC

++ I-T - No addition can be made u/s 41(1) unless liability ceased to exist during previous AY and assessee writes off same in its books of accounts: HC

++ I-T - Merely because proceedings are initiated against assessee's sister concern, does not restrict AO to grant Certificate to assessee against application made u/s 197(1): HC

++ I-T - Re-opening u/s 148 merely on basis of change of opinion deserves to be quashed: HC

++ I-T- AO erroneously deems a residential property to be a commercial property - disallowance of deduction u/s 54F unwarranted: ITAT

++ I-T- Sale of agricultural land - AO omitted to check whether consideration received by assessee was as per SRO value - power of revision u/s 263 rightly exercised by PCIT: ITAT

++ I-T- Assessee is not involved in benami transaction but earning income from commission from cheque discounting business : ITAT

++ I-T- Case can be remanded back as CIT(E) has not conducted proper inquiries before rejecting application filed by assessee for grant of approval u/s 80G(5) : ITAT

Nov 16, 2023

++ I-T - If assessment has almost come to closure while issuing notice u/s 148A(b) and assessee was able to establish its case, consequential reopening order cannot be sustained: HC

++ I-T - No further adjudication required on PIL based on CBDT's roadmap for disposal of appeals, if such map drawn by CBDT has adequately addressed concerns regarding disposal of appeals raised by AIFTP: HC

++ I-T - Since for re-opening of assessment u/s 148, no objection was raised by the Comptroller and Auditor General of India, it cannot be allowed merely on the basis of change of opinion: HC

++ I-T - Expression 'valuable article'/'thing' being of wide amplitude and inclusive in nature would by all means include liquor : HC

++ I-T - Order passed without affording opportunity of personal hearing by not following prescribed procedure laid down as per section 144B, for Faceless assessment, merits to be quashed – YES: HC

++ I-T - AO would not assume jurisdiction to reassessment unless he records his own independent satisfaction to effect that he has reason to believe that income chargeable to tax has escaped assessment: HC

++ I-T - If there was concededly mistake in reassessment proceedings against assessee based on wrong name introduced by Investigation Wing, reopening notice u/s 148(d) deserves to be quashed: HC

Nov 15, 2023

++ I-T - Disallowance ought to be calculated under Rule 8D should factor in only investments made by assessee to earn exempt income: HC

++ I-T - To quantify deduction u/s 80IA(1) of assessee for AY post initial AY in which such deduction is claimed, profits & gains of 'eligible' business should be computed as if it is only source of income: HC

++ I-T - Reassessment proceedings triggered against assessee without due application of mind by AO about information received from Investigation Wing, merits to be quashed: HC

++ I-T- Assessment order seeking to levy TDS on a certain amount, is invalid, where issue of taxing such receipt is not raised through a Show Cause Notice preceeding the order : HC

++ I-T - Investments in Time Deposits and Mutual Funds made from NRE Accounts cannot be declared as unexplained source of income: HC

Nov 14, 2023

++ I-T - Application for stay of demand need to be disposed of in accordance with law and by passing a reasoned and speaking order after giving an opportunity of hearing: HC

++ I-T - If particular deduction is amenable within periphery of I-T Act and inadvertently assessee has not claimed same, Section 264 can be triggered for making such correction: HC

++ I-T - Dues payable to creditors, including statutory creditors, for periods which precede date when RP is approved, can only be paid as per terms contained in Resolution Professional: HC

++ I-T - Since revenue had framed assessment u/s 143(3) r.w.s. 144B without issuing show cause, principles of natural justice are violated and hence such assessment deserves to be quashed: HC

++ I-T - Once assessee has availed Direct Tax Vivad Se Vishwas scheme and Department had also issued Form 3, then capital gain availed by assessee shall be adjusted for capital gain tax liabilities: HC

++ I-T - Order passed u/s 147 r/w/s 144B without supplying reasons for reopening and without issuing draft assessment order violates principles of natural justice: HC

++ I-T - Payments made by assessee to related concerns violated Section 40A(3) if they were not made through banking channel: HC

++ I-T - Once assesee had given up his rights, he cannot claim it back as he lost his opportunity : HC

Nov 13, 2023

++ I-T - Assessment order cannot be passed once company is struck off, since same will be construed as passing of order against dead person: HC

++ I-T - If assessee has not replied to reopening notice u/s 148, Revenue Department were justified in passing Assessment Order u/s 148A(d): HC

++ I-T - Additions deleted by ITAT after finding no incriminating materials merits to be sustained in subsequent years as well in case of idential facts in preceding years: HC

++ I-T -Penalty notice issued u/s 271(1)(c) gets invalidated if contradictory wordings of AO reflect lack of clarity on as to whether Assessee concealed particulars of income or furnished inaccurate particulars of income: HC

++ I-T- Delay in disbursal of refund citing technical issues at CPC - Court raps Department for squandering public money through payment of interest on delayed refunds and for needlessly adding to judiciary's workload - copy of order marked to PMO, Fin Min, Law Min, AGI & CBDT for necessary action: HC

++ I-T - In appropriate case, Revenue Authority is empowered to grant suitable relief as far as pre-deposit : HC

Nov 11, 2023

++ I-T- Where subsidiaries and associate companies of assessee-company are independent assessees in eyes of law & have declared financial statements independently, then profit & loss declared by subsidiaries & associate companies, cannot be made taxable for a second time in hands of assessee-company : ITAT

++ I-T- Assessee-company is neither registered shareholder nor beneficial owner and deemed dividend cannot be assessed in hands of assessee : ITAT

Nov 10, 2023

++ I-T - Assessment order passed without affording opportunity of hearing to assessee, merits to be set aside: HC

++ I-T - Weighted deduction on in-house R&D cannot be denied solely because the authority concerned failed to send an intimation about such activity, to the AO in course of assessment proceedings : HC

Nov 09, 2023

++ I-T - Since late fee u/s 234E could be imposed on TDS processed u/s 200A only after 2015, it cannot be imposed for AYs 2012-2013 to 2014-2015: HC

Nov 07, 2023

++ I-T- Only 3-day' time given to file reply to Show Cause Notice violates principles of natural justice; fresh hearing be conducted after considering each submission raised: HC

++ I-T- Re-assessment notice & consequent order quashed where application for approval, recommendation for approval and grant of approval, are all done in mechanical manner without due application of mind : HC

++ I-T- PCIT rejected Assessee's application filed u/s 264 without considering on merits & in limine directed Assessee to approach ITO (HQ) without personal hearing; order stands quashed: HC

++ I-T - Expenditure incurred in connection with obtaining loan is not capital expenditure: HC

Nov 06, 2023

++ I-T-Where re-assessment proceedings are to be conducted after 3 years from end of relevant AY but less than 10 years therefrom, the approval for such proceedings is to be accorded by the PCIT and not by the ACIT or JCIT: HC

++ I-T-Re-assessment is unwarranted where it is based on incorrect factual assumption that Assessee had not filed ITRs for relevant AYs: HC

++ I-T - Assessee unable to participate in personal hearing due to unavailability of Chartered Accountant due to illness; de novo hearing to be conducted: HC

++ I-T - Once order of assessment & penalty u/s 143(3) r/w/s 153A stands quashed, no prosecution can be made till fresh assessment: HC

++ I-T - Merely because loan processing are amortized over period of 5 years, deduction of entire charges in lump sum in year in which same are paid can not be denied to assessee : HC

++ I-T - Since search is concluded on April 29, 2021, it is implausible to assert that assessment order of March 31, 2023 notified u/s 153A exceeds 12 month limitation period : HC

++ I-T - Show Cause Notice issued 7 days before assessment would be time-barred - Assessee deprived of sufficient time to file reply to Show Cause Notice - Case remanded: HC

++ I-T - Repayment of loan does not constitutes expenditure - invoking provisions of Section 69C on account of unexplained expenditure unwarranted, where Assessee explains source of funds used to repay loan - Revisionary power invoked to apply provisions of Section 69C, also unwarranted: HC

++ I-T - Even part of income accounted for in current year can be claimed as bad debts : HC

++ I-T - Provisions of Section 270A(9) are inapplicable in a matter which involves neither misreporting of income nor under reporting of income : HC

Nov 03, 2023

++ I-T- Non deduction of TDS by assessee due to operational difficulties caused by COVID pandemic; reasons given for such lapse are reasonable; order sanctioning criminal prosecution for non-deduction of TDS merits being quashed, more so where passed mechanically & without proper application of mind: HC

++ I-T- Amendment with effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee cannot be made u.s 154 of the Act unless notice is issued to the assessee in this regard : ITAT

Nov 02, 2023

++ I-T- Substitution of opinion of Pr.CIT in name of inadequacy in inquiry by AO is not possible when AO in its wisdom, after verification of records has agreed with explanation offered by assessee : ITAT

++ I-T - If DRP is satisfied that assessee had provided all relevant material before AO and remand report of AO was also before it in regard to that material, then DRP should conclude instead of directing re-verification by AO: ITAT

++ I-T- Addition for unexplained money u/s 69A for cash seized can not be made as explanation offered by assessee establish genuineness and credit worthiness of donors : ITAT

Nov 01, 2023

++ I-T - Proceedings u/s 264 would cover situation where assessee erroneously has not put forth legitimate claim at time of filing of return and error is subsequently discovered and is raised for first time: HC

++ I-T - Sec 80P(4) does not apply to cooperative housing society and rather they are eligible for deduction u/s 80P(2) on interest earned from investment in cooperative banks: ITAT

++ I-T- As per provisions of section 115UB, Alternative Investment Fund is a pass through entity for investors and whatever gain or loss derived by such fund is assessable in the hands of unit holders : ITAT

++ I-T- As per settled precedent, penalty notice issued under Section 274 of the Act is invalidated where it omits to specify the exact charge against the Assessee as per Section 271(1)(c), based on which penalty is proposed to be imposed: ITAT

++ I-T- Penalty u/s 271(1)(c) cannot be imposed automatically after an assessee does not challenge assessment order raising tax demand and proceeds to pay the tax demand raised: ITAT