1. S.2(14)(iii) : Capital asset – Agricultural land – Mango, orchard – Situated beyond 8 kms. of City corporation – Sale proceeds of land is entitled to exemption. [S.45]

   Held that in remand report by Assessing Officer clearly showed that said land continued to be mango orchard and there was no sign of any development. The land was situated beyond 8 Kms. limits of the City corporation. Sale proceeds of land were entitled to exemption (AY. 2011-12)

   K.M. Bopanna (HUF) v. Dy. CIT (2023) 290 Taxman 298 (Karn)(HC)

2. S. 2(22)(e): Deemed dividend – Trade advances – Security by way of mortgage – Deletion of addition is justified. [S. 132, 153A]

   Dismissing the appeal of the Revenue the Court held that the advance which were in nature of commercial transactions would not fall within ambit of word advance in section 2(22)(e) of the Act.

   PCIT v. Dwarka Prasad Aggarwal (2022) 140 taxmann.com 32 (Delhi)(HC)

   Editorial SLP dismissed as withdrawn due to low tax effect, PCIT v. Dwarka Prasad Aggarwal (2022) 288 Taxman 16 (SC)

3. S. 9(1)(i): Income deemed to accrue or arise in India – Business connection – Liaison office – Supply of information having preparatory or auxiliary character-Would not constitute Permanent Establishment – DTAA-India- Mauritius [Art. 5, 2(c), 5(3)(ii)]

   Dismissing the appeal of the Revenue the Court held that place of business of assessee in India was only for supply of information having preparatory or auxiliary character and same would fall under article 5(3)(e)(ii) and did not constitute ‘PE’ as per article 5(2)(c) of Indo- Mauritius DTAA. Order of Tribunal affirmed. (AY. 1998-99)

   CIT (IT) v. J. Ray Mc Dermott Eastern Hemisphere Ltd (2022) 288 Taxman 574 (Bom)(HC)

   Editorial: Affirmed, ADIT v. J. Ray Mc Dermott Eastern Hemisphere Ltd (2016) 158 ITD 923 /180 TTJ 660 (Mum)(Trib)

4. S. 9(1)(vi) : Income deemed to accrue or arise in India – Royalty –Non-resident – Providing satellite transmission services is not royalty – Order of Tribunal affirmed – DTAA-India- Netherland. [S. 260A Art. 12]

   Dismissing the appeal of the Revenue the Court held that receipts earned for providing satellite transmission services are not royalty. Followed order in DIT v. New Skies Satellite BV (2016) 238 Taxman 577/ 382 ITR 114/ 285 CTR 1 (Delhi) (AY. 2016-17)

   CIT (IT) v. New Skies Satellite BV (2023) 290 Taxman 170 (Delhi)(HC)

5. S. 10(13A) : House rent allowance – Stayed at accommodation provided by employer –

   Surrendered the accommodation to stay at a hotel at his own expense – Not eligible to receive any HRA from his employer. [IT Rules 1962, R. 3]

   Dismissing the petition the Court held that where petitioner was accommodated at guest house by employer-company immediately on his transferred posting, however petitioner stayed there only for a short while and after surrenderring said accommodation went on to stay at a hotel at his own expense, petitioner would not be eligible to receive any HRA from his employer.

   Arup Ratan Gooptu v. Coal India Ltd. (2022) 288 Taxman 189 (Cal)(HC)

6. S. 10(20) : Local authority – Development authority – Not state Separate legal entity – fees collected for infrastructure development would be treated as income of assessee and would be liable to be taxed – [U.P Urban, Planning and Development Act, 1973, Constitution of India, 1950, Art. 289]

   Assessee-development authority was constituted under U.P Urban, Planning and Development Act, 1973. Assessee collected fees and maintained an infrastructure fund as per directions of State Government out of which infrastructure related expenses were incurred. Assessee claimed that State Government had a overriding title on these receipts and they did not form part of its income. Assessing Officer allowed infrastructure expenses but rejected claim of assessee with respect to diversion of receipts by overriding title and made addition with respect to balance infrastructure funds in hands of assessee. Order was affirmed by CIT(A) and Tribunal. On appeal the High Court held that assessee being a separate legal entity with its own assets and liabilities, would be distinct from State Government, thus, fees collected for infrastructure development would be treated as income of assessee and would be liable to be taxed in hands of assessee. (AY. 2006-07, 2007-08)

   Mussoorie Dehradun Development Authority v. Add. CIT (2022) 288 Taxman 113 (Uttarakhand) (HC)

7. S. 10AA: Special economic zones – Export turnover – Telecommunication expenses were to be excluded from export turnover.

   Dismissing the appeal of the Revenue the Court

   held that telecommunication expenses were to be excluded from export turnover in computing deduction. (AY. 2009-10)

   Subex Ltd v. Addl.CIT (2022) 145 taxmann.com 176 (Karn)(HC)

   Editorial: SLP of Revenue dismissed, Addl. CIT v. Subex Ltd. (2023) 290 Taxman 102 (SC)

8. S. 11 : Property held for charitable purposes – Grant- in-aid – One time grant-in-aid from Government of India with a specific purpose of upgradation and strengthening of institutions- Not assessable as Revenue receipts [S. 2(24)(iia), 2(24)(xviii), 10(23C) (iiiab) 12, 12AA 13, Himachal Pradesh Nursing Registration Council Act, 1977]

   The assessee an institution created by Himachal Pradesh Nursing Registration Council Act, 1977 received one time grant-in-aid from Government of India with a specific purpose of upgradation and strengthening of institutions. The Assessing Officer assessed the grant in aide as income and denied exemption u/s 12AA of the Act.

   Order of the Assessing Officer was affirmed by the Tribunal On appeal the Court held that the amount received by assessee could not be termed to be revenue receipt and the assessment order was set aside. (AY. 2011-12)

   H.P. Nursing Registration Council v. PCIT (2022) 288 Taxman 275 / 220 DTR 129/ 329 CTR 737 (HP) (HC)

9. S. 11 : Property held for charitable purposes – Construction activities under State PWD department – 2.5 per cent supervision charges- Not entitle to exemption [S. 2(15) 12A]

   Assessee-society was registered under section 12A with main objective to take up construction work of any nature to establish a chain of retail outlets. It undertook construction activities under State PWD department in lieu of 2.5 per cent supervision charges and accordingly claimed certain amount as applied for charitable purposes. Assessing Officer held that construction work was an activity of trade, commerce or business for consideration and assessee could not claim status under section 12A since activities carried on by it did not fall within meaning of charitable purpose warranting exemption from income tax. Order was affirmed by Tribunal. On appeal High Court held that where assessee executed construction work for benefit of Government and received certain amount from Government for same, purpose of such construction work could not be accepted as an activity coming within meaning of advancement of other object of general public utility. It further held that since assessee was involved in carrying on of any activity in nature of trade, commerce or business, proviso to section 2(15) would be attracted and assessee would not be entitled to benefit under section 11 of the Act. (AY. 2009-10, 2013-14)

   Nirmithi Kendra v. Dy. CIT (E) (2022) 141 taxmann. com 495 (Ker)(HC)

   Editorial : Notice issued in SLP filed by the assessee, Nirmithi Kendra v. Dy. CIT (E) (2022) 288 Taxman 663 (SC)

10. S. 12AA: Procedure for registration

    –Trust or institution- Registration

    -Trust cannot be assessed as an AOP- Order of Tribunal is affirmed. [S. 11]

    Assessing Officer assessed income of assessee-

    trust as an Association of Persons (AOP). Tribunal held that only reason why Assessing Officer assessed income of assessee as an ‘AOP’ was that registration granted to assessee under section 12AA was cancelled by Commissioner. Order of cancellation of registration was set aside by Tribunal and, therefore, direction was issued to Assessing Officer to assess assessee as a trust and not as ‘AOP’. Dismissing the appeal of the Revenue the Court held that Trust cannot be assessed as an AOP. (AY. 2009-2010)

    CIT v. Guru Nanak Educational Trust (2022) 288 Taxman 97 (Cal)(HC)

11. S. 12AA : Procedure for registration –Trust or institution- Cancellation of registration
    • Survey – Donation – Accommodation entries -Money laundering activity – Not brought on record anything to show that activities of assessee were not genuine or activities were not being carried out in accordance with objects of society- Cancellation of registration is not valid. [S. 2(15), 11, 133A]

      During survey conducted upon an organisation its director recorded a statement that said organisation was engaged in money laundering and providing accommodation entries to different individuals and organizations by way of accepting donations and returning same to donors through web of financial transactions after retaining commission. Based on the statement Commissioner (E) held that donation received by assessee from said organisation was bogus, thus, trust was indulged in money laundering accordingly, he cancelled registration granted to assessee under section 12AA(3) of the Act. On appeal the Tribunal held that the donation was received by cheque and duly accounted for in profit and loss account as corpus donation which was applied for objects of trust. Commissioner (E) had not brought on record anything to show that activities of assessee were not genuine or activities were not being carried out in accordance with objects of society, further, there was not an iota of evidence brought on record by Commissioner (E) to connect assessee with money laundering activities of said organisation, further, director on whose statement Commissioner (E) relied was not presented for cross-examination. Accordingly the Tribunal held that cancellation of Registration is bad in law. On appeal by Revenue the Court held that cancellation of registration by Commissioner (E) solely for reason that it received donation from an organisation which was engaged in money laundering activity was unjustified. (AY. 2011- 12)

      CIT (E) v. Sanskriti Sagar (2022) 288 Taxman 153 (Cal)(HC)

12. S. 14A: Disallowance of expenditure – Exempt income – No expenditure was incurred in earning dividend income- Disallowance cannot be made [R.8D]

    Dismissing the appeal of the Revenue the Court

    held that in order to attract applicability of provision of section 14A there has to be a pay- out, i.e. expenditure and since assessee-bank

    had not incurred any expenditure in earning dividend income, disallowance under section 14A could not be made. (AY. 2009-10)

    CIT v. Canara Bank (2022) 141 taxmann.com 566 (Karn)(HC)

    Editorial : SLP granted to Revenue, CIT v. Canara Bank (2022) 288 Taxman 655 (SC)

13. S. 14A: Disallowance of expenditure – Exempt income – Bank – Shares held as stock in trade – No disallowance of expenditure could be made. [R. 8D]

    Dismissing the appeal of the Revenue the Court

    held that where shares were held by assessee- bank as stock-in-trade and not as investment, main purpose was to trade in those shares and earn profits therefrom and therefore section 14A was not attracted and expenditure could not be disallowed (AY. 2010-11)

    PCIT v. Punjab National Bank (2022) 449 ITR 468/ 288 Taxman 127 (Delhi)(HC)

14. S.14A : Disallowance of expenditure – Exempt income – No exempt income received during the year –Disallowance cannot be made [R. 8D]

    Held that where no exempt income is received or

    receivable during the relevant previous year no disallowance can be made.(AY. 2012-13)

    PCIT v. Amadeus India (P.) Ltd. (2023) 290 Taxman 201 (Delhi)(HC)

15. S. 28(i) : Business loss – Advance of money – Irrecoverable amount – Capital loss not allowable as business loss [S. 36(1)(iii), 37(1)]

    Assessee advanced certain amount on interest. After some years the loan was written off as irrecoverable amount and claimed as business loss Assessing Officer disallowed claim on ground that money lending and banking were not principal activities and that advances were transactions on capital account and, therefore, loss suffered by assessee was capital loss which was neither admissible under section 36(1)(iii) nor under section 37(1) of the Act. Commissioner (Appeals) confirmed order of Assessing Officer on premise that putting surplus money as inter corporate deposit for earning of interest could not be said to be incidental to business or during ordinary course of business. Tribunal held that loss incurred by assessee in respect of loan advanced was in nature of capital loss and was not allowable under section 28(1) of the Act. (AY. 2000-01).

    Ashok Leyland Ltd v. ACIT (2022) 288 Taxman 514 (Mad)(HC)

16. S. 32 : Depreciation – Lease of assets – Depreciation is allowable. Dismissing the appeal of the Revenue the Court held that the assessee had furnished evidences in form of sanction letters, master/supplement lease agreements, purchase invoices, installation certificates, inspection reports conducted by bank officials, independent valuation report in respect of assets lease out to companies as well as inspection reports pertaining to pre-search and post search period, to prove genuineness of assets leased out to companies. Tribunal is justified in allowing the depreciation. (AY. 2009 -10)

    CIT v. Canara Bank (2022) 141 taxmann.com 566 (Karn)(HC)

    Editorial : SLP granted to Revenue, CIT v. Canara Bank (2022) 288 Taxman 655 (SC)

17. S. 32: Depreciation – Intangible asset – Geographical report – Entitled to depreciation. [S. 35E]

    Assessee was involved in mining of coal and for such purpose had purchased a geographical report. Assessee capitalized it under head plant and machinery for which depreciation was claimed at 25 per cent. Assessing Officer disallowed depreciation. Tribunal allowed the claim of the assessee. On appeal by the Revenue dismissing the appeal the Court held that since report was highly technical and was a basic document based on which assessee got a right to mine apart from assessing quantity of mineral that could be exploited from said mines, formation of dyke and other technical details, Tribunal was justified to allow depreciation on geographical report as intangible asset and by not considering expense under section 35E of the Act. (AY.2003-04)

    CIT v. Integrated Coal Mining Ltd.(2022) 288 Taxman 783/ 218 DTR 303/ 329 CTR 517 (Cal)(HC)

18. S. 32 : Depreciation – Securities – Stock in trade – Depreciation on account of fall in value of securities allowable.

    Dismissing the appeal of the Revenue, the Court held that depreciation on account of fall in value of securities allowable. (AY. 2008-09)

    CIT v. Karnataka Bank Ltd. (2022) 142 taxmann.com 64 (Karn)(HC)

    Editorial : SLP granted to Revenue, CIT v. Karnataka Bank Ltd. (2022) 288 Taxman 725 (SC)

19. S. 32 : Depreciation – Additional Depreciation – All component/ parts of a plant acquired prior to 31-3-2005 – Fitted to plant thereafter – Eligible additional depreciation [S. 32(1)(iia)]

    Held that all component/parts of a plant acquired prior to 31-3-2005 but fitted to plant thereafter would be eligible for additional depreciation under section 32(1)(iia) for assessment year 2006-07. (AY. 2006-07)

    National Aluminium Co. Ltd. v. CIT (2022) 288 Taxman 36 / 215 DTR 375/ 327 CTR 340 (Orissa) (HC)

20. S. 32 : Depreciation – Bottles and crates – Business of manufacturing and sales of soft drinks – Plant – Bottles and crates used for bottling soft drinks manufactured would be included in definition of plant – Eligible for 100 per cent depreciation. [S. 32(1)(i), 43(3)]

    Assessee-company, engaged in business of manufacturing and sale of soft drinks, had purchased bottles and crates from various suppliers. For purpose of distribution to customers, soft drinks manufactured were filled in bottles and stacked in crates by assessee. Assessee claimed 100 per cent depreciation on such bottles and crates. Assessing Officer denied the claim of depreciation on ground that table of Plant and machinery under Income-tax Rules, 1962 framed under rule 5 does not have any reference of bottles and crates in listed items, therefore, same could not be considered as plant and rather should be treated as stock-in-trade. Tribunal affirmed the order. On appeal the Court held that since ‘bottles and crates’ were used by assessee for bottling soft drinks manufactured by it, same would be included in definition of ‘plant’ and, thus, would be eligible for 100 per cent depreciation under section 32(1)(i) of the Act. Court also held that depreciation could not be disallowed merely on argument of revenue that bottles and crates could not be included in definition of ‘plant’ as they do not fall under categories listed in Income-tax Rules, 1962. (AY. 1989-90)

    Parle Bisleri (P) Ltd v. Dy. CIT (2022) 288 Taxman 673 (Bom)(HC)

21. S.37(1): Business expenditure

    – Road development – Public

    – Road – Road belonged to Zila Parishad – Allowable as revenue expenditure. [S. 35E]

    Assessee claimed expenses incurred for development of road which belonged to Zila Parishad as allowable business expenditure. Assessing Officer held that road belonged to Zila Parishad and it was only a coincidence that assessee used road for transportation and as road belongs to Government, expenditure could not be allowed as business expenditure. Tribunal allowed the claim of the assessee. On appeal dismissing the appeal of the Revenue the Court held that since assessee stood benefitted from construction of road from mine to railway station as coal could be efficiently and profitably transported, expenses incurred by assessee was to be allowed as same were incurred for business purposes even if road was a public road. (AY.2003-04)

    CIT v. Integrated Coal Mining Ltd.(2022) 288 Taxman 783 / 218 DTR 303/ 329 CTR 517 (Cal) (HC)

22. S.37(1): Business expenditure – Revised return – Revised computation claiming further loss during scrutiny assessment – Direction to consider the claim on merits is held to be justified [S. 139(5), 254(1)]

    The assessee-company had claimed certain amount of business expenditure during original assessment proceedings and during scrutiny of assessment had filed a revised computation of income claiming further loses, Tribunal directed the Assessing Officer to entertain claim on merits and decide the issue. On appeal High Court affirmed the order of the Tribunal and held that the Tribunal was justified in allowing said claim of deduction made through revised computation and not through a revised return of income since assessee had not claimed any additional deductions or exemption or made a fresh claim. Referred Circular No 14 (XI-35 dt 11-4-1955, CIT v. Pruthvi Brokers & Shareholders (2012) 349 ITR 336 (Bom)(HC) (AY. 2008-09)

    CIT v. Perlo Telecommunication and Electronic Components India (P) Ltd. (2022) 141 taxmann.com 387 (Mad)(HC))

    Editorial: Notice issued in SLP filed by Revenue, CIT v. Perlo Telecommunication and Electronic Components India (P) Ltd. (2022) 288 Taxman 399 (SC)

23. S.37(1): Business expenditure – Transportation charges – Reimbursement of expenses – Disallowance is not justified.

    Assessing Officer disallowed the amount incurred towards transportation charges. On appeal the Court held that confirmation letter issued by BDA addressed to assessee stated that RLD had issued credit notes of ` 4.91 lacs out of which ` 4.02 lacs was towards reimbursement of transportation charges (carriage inward) borne by assessee at time of delivery of stocks. Accordingly the disallowance of transportation charges was deleted (AY. 1998-99)

    Maa Mangala Enterprises v. ITO (2022) 288 Taxman 124 (Orissa) (HC)

24. S.37(1): Business expenditure – Commission – Directors or relatives – None of them was shown to have any expertise in procuring Iron Ore Fines (IOF) from Indian markets – Disallowing is justified.

    Assessee was engaged in business of manufacturing and sale of P.P. woven sacks meant for packing of fertilizer and cement etc. Assessee had obtained an export order for supply of Iron Ore Fines (IOF) and paid commission expenses to seven persons for procurement of quality IOF. Assessing Officer partly allowed commission expenses. On appeal, Commissioner (Appeals) as well as Tribunal dismissed appeal On appeal the Court held that all persons to whom commission was paid were either Directors of Company or their relatives and none of them was shown to have any expertise in procuring IOF from Indian markets for enabling assessee to meet purchase order placed on it for IOF. Order of Tribunal is affirmed. (AY. 2010-11)

    Oripol Industries Ltd v. JCIT (2022) 288 Taxman 772/ 215 DTR 444/327 CTR 606 (Orissa)(HC)

25. S. 37(1) : Business expenditure – Capital or revenue – Premium paid to allottee on redemption of debentures – Allowable as revenue expenditure

    The assessing Officer held that the premium paid on redemption would be arising out of reserves and surplus and, thus, the same would constitute capital expenditure and could not be allowed as a deduction. Held that premium paid to allottee on redemption of debentures was allowable as revenue expenditure. (AY. 2011-12)

    Nitesh Housing Developers (P.) Ltd. v. Dy. CIT (2023) 290 Taxman 474 (Kar.)(HC)

26. S. 37(1) : Business expenditure – Capital or revenue – Payment to State Power Corp. towards the construction of a transmission line and other supporting work – Allowable as revenue expenditure.

    During the year the assessee had made a payment of a certain amount to State Power Corp. towards the construction of a transmission line and other supporting work. Assessing Officer held that said the expenditure was capital in nature. On appeal the Court held that power transmission lines which were laid by assessee were, upon erection, to constitute the exclusive property of State Power Crop. State Power Crop. was only consumer of electricity generated by the assessee and assessee had incurred said expenditure to facilitate its own business. Further, the fixed capital of assessee was untouched and there was no capital accretion for the assessee. Accordingly, the expenditure which was incurred by assessee in the laying of the transmission line was revenue expenditure.

    CIT v. Bannari Amman Sugars Ltd. (2023) 290 Taxman 311 (Mad.)(HC)

27. S. 37(1) : Business expenditure – Interest payment to DGFT on account of excess availment of export incentive is not penal nature – Allowable as business expenditure.

    Assessing Officer disallowed interest paid on account of such exports not being in ‘technical textile’ category as penal in nature. CIT(A) held that interest was allowable as a deduction. On appeal, the Tribunal held that the amount paid was not penal in nature as it was as per the declared policy of the government and occasioned by the failure of the assessee to meet its obligations. The amount being interest was compensatory and penal in nature. High Court affirmed the order of the Tribunal. (AY. 2014-15)

    PCIT v. Attire Designers (P.) Ltd. (2023) 290 Taxman 551 (Delhi)(HC)

28. S. 40(a)(ia): Amounts not deductible – Deduction at source
    • Commission or brokerage, etc.
    • Service charges – Not liable to deduct tax at source [S. 194H] 

      Dismissing the appeal of the Revenue the Court held that service charges paid by assessee

      to National Financial Switch and Cash Tree consortium for routing transactions of payments made by its customers to acquiring bank would not be liable to TDS under section 194H of the Act. (AY. 2008-09)

      CIT v. Karnataka Bank Ltd.(2022) 142 taxmann.com 64 (Karn)(HC)

      Editorial : SLP granted to Revenue, CIT v. Karnataka Bank Ltd. (2022) 288 Taxman 725 (SC)

29. S. 40(a)(ia): Amounts not deductible – Deduction at source – TDS deposited before last date of filing return – No disallowance can be made. [S. 139(1)]

    Dismissing the appeal of the Revenue the Court held that where assessee had deducted and deposited TDS on contractual payments under consideration before due date of filing of return of income, disallowance under section 40(a)(ia) was not warranted.(AY. 2010-11)

    PCIT v. Punjab National Bank (2022) 449 ITR 468/ 288 Taxman 127 (Delhi)(HC)

30. S. 40(a)(ia): Amounts not deductible – Deduction at source – Contractors – Delay in filing Form 26Q – Filed before the competition of assessment – Order of Tribunal deleting the addition was affirmed [S. 194C, Rule 31A]

    Assessee made payments towards freight charges to transporters without deducting TDS as the assessee had filed PAN number of transport contractors. The assessing Officer held that Form 26Q in terms of rule 31A was belatedly filed hence the assessee was liable to deduct tax at source on said payment hence disallowed the payment. On appeal, the Tribunal held that the assessee has filed Form No 226Q before completion of the assessment delay being technical disallowance was deleted. On appeal,

    High Court affirmed the order of the Tribunal. (AY. 2012-13)

    PCIT v. L.G.W. LTD. (2023) 290 Taxman 250 (Cal.) (HC)

31. S. 41(1) : Profits chargeable to tax – Remission or cessation of trading liability – Method of accounting – Interest subsidy – Taxable on actual remission or cessation of liability. [S. 145]

    Dismissing the appeal of the Revenue the Court

    held that Tribunal rightly held that interest subsidy should be deemed as income under section 41(1) and though accrued in assessment year 2001-02 will be charged in assessment year 2002-03. (AY. 2001-02)

    CIT v. Vivada Inland Waterways Ltd. (2022) 288 Taxman 99 (Cal)(HC)

32. S.43B: Deductions on actual payment – Electricity duty – Captive power plant (CPP)- Amount deposited as per order of Court – Amount was received by Government – Allowable as deduction – Matter was remanded to Assessing Officer to verify the amounts released to State Government.

    Assessee-company had its own captive power plant (CPP) and electricity duty was payable by assessee to Government of Odisha on electricity generated in its CPP. With effect from 10-10-2001, Government of Odisha issued a notification raising electricity duty payable from 12 paisa per unit to 20 paisa per unit. On appeal, Court permitted assessee to continue to pay electricity duty at 12 paisa per unit and assessee deposited differential 8 paisa per unit in a fixed deposit with State Bank of India (SBI) as directed. Further, as directed by Court, assessee transferred ` 130 crores from fixed deposits lying in SBI to State Government. Assessee filed its returns for assessment years 2003-04 to 2006- 07 and claimed deduction under section 43B towards electricity duty paid including amounts deposited by it with SBI. Revenue disallowed above amount by treating it as a deposit in a designated bank account and not as payment of electricity duty. On appeal the Court held that the amount had not only been parted with by assessee under direction of Court, but had also been received by Government therefore, deduction under section 43B as claimed by assessee could not have been denied. Matter was to be remanded to Assessing Officer to verify the amount released to State Government. (AY. 2006-07)

    National Aluminium Co. Ltd. v. CIT (2022) 288 Taxman 36 / 215 DTR 375/ 327 CTR 340 (Orissa) (HC)

33. S. 44 : Insurance business – Computation of profits – Loss was computed by aggregating its reporting under shareholders account and policy holders account as prescribed under Insurance regulatory and development authority (IRDA) [S.115B, 260A]

    Assessee is engaged in business of life insurance, had filed its return of income declaring certain losses. Loss was computed by aggregating its reporting under shareholders account and policy holders account as prescribed under Insurance regulatory and development authority (IRDA) Assessing Officer held that income relating to policy holders was different from income of shareholders and both such income being derived from different sources could not be mixed up as life insurance to avail concessional rate. He accordingly completed assessment under section 143(3) and taxed surplus under shareholders account as income from business

    at normal rates. On appeal Tribunal allowed the claim of the assessee. On appeal by Revenue High held that since assessee is engaged in only life insurance business and was not carrying on any other business, section 44 read with rule 2 of First Schedule was applicable and thus surplus with deficit as per shareholder’s account was to be aggregated with surplus with deficit in policyholder’s account for determining profit or loss of assessee under section 44 of the Act. (AY. 2011-12 to 2013-14)

    PCIT v. PNB Metlife India Insurance Co. Ltd. (2022) 140 taxmann.com 86 (Karn)(HC)

    Editorial : Notice issued in SLP filed by Revenue, PCIT v. PNB Metlife India Insurance Co. Ltd. (2022) 288 Taxman 1 (SC)

34. S. 48: Capital gains – Computation – Share purchase agreement – Full value of consideration – Tax component – Allowable as deduction while computing capital gains [S. 45]

    Assessee and her husband entered into share purchase agreement to sell her shares in four companies. In the computation the assessee claimed that consideration agreed between parties for sale of its shares was ` 2.70 crores minus tax component of ` 90.74 lakhs. Assessee had agreed to pay tax component as per clause 7(1) of share purchase agreement. She claimed deduction under ‘capital gains’ on tax component under section 48 of the Act Assessing Officer disallowed the claim. Commissioner (Appeals) allowed appeal in part and appeal before Tribunal, had been dismissed. On appeal the Court held that value of shares would be amount agreed between parties excluding tax components but tax component should be distributed among both sellers. Therefore, assessee would be entitled for deduction of only 50 per cent of tax component proportionate to her shareholding. Relied on CIT v. Gillanders Arbuthnot & Co (1973) 87 ITR 407 (SC), CIT v. George Henderson & Co Ltd (1967) 66 ITR 622 (SC)

    Durga Kumari Bobba v. Dy. CIT (2022) 288 Taxman 695 (Karn)(HC)

35. S. 54F : Capital gains – Investment in a residential house –Payments were made before the sale of an original asset – Test ought to be when construction of the residential house was completed – Matter remanded to CIT(A) [S. 45

    The assessee had purchased land in 2007 along with his husband and the same was transferred in March 2013. She purchased another land for the construction of a residential house, which went on from 2007 to 2015. Accordingly, on the sale of the original asset, the assessee claimed exemption under section 54F. The Assessing Officer denied the claim on the ground that since payment for the purchase and construction of the residential house was made six years before the original asset was sold, exemption towards the same was not allowable under section 54F. CIT(A) allowed the exemption. Tribunal reversed the order of the CIT(A). On appeal, the Court held that the Tribunal has given importance only to the time of the payments made by the assessee or sanction of the loan by the Bank in favour of the assessee’s husband. The test ought to be when the residential house was completed. Accordingly, the matter was reamended to the file of CIT(A) to decide in accordance with the law. (AY. 2013-14)

    Bindu Premanandh v. CIT (2023) 290 Taxman 457 (Ker.)(HC)

36. S. 68 : Cash credits – Inflated credit balance – Not furnished evidence in spite of sufficient opportunity was granted – Addition is held to be justified.

    Assessee gave an explanation, but Assessing Officer considered it to be vague, unsubstantiated and illogical and therefore rejected it. Accordingly, inflated credit balance of RIL was added as income of assessee. On appeal the Court held that -sufficient opportunity was granted to assessee to furnish evidence to prove genuineness of such credit balance, however, assessee was unable to avail of such opportunity. Addition on account of unexplained/non- existence alleged sundry creditors was justified. (AY. 2003-04)

    Jaiswal Plastic Tubes Ltd. v. ACIT (2022) 288 Taxman 779 / 215 DTR 161/ 327 CTR 757 (Orissa) (HC)

37. S. 68 : Cash credits – Search – Statement of director – Deletion of addition is held to be justified [S. 132, 153A]

    Assessing Officer solely based on statements of Directors recorded during a search operation conducted under section 132 on assessee, made addition under section 68 without probing deeper into income tax returns of creditor companies and without scrutinizing documents furnished by assessee to prove genuineness of such credits. On appeal Tribunal deleted the addition. High Court affirmed the order of the Tribunal.

    PCIT v. Dwarka Prasad Aggarwal (2022) 140 taxmann.com 32 (Delhi)(HC)

    Editorial : SLP dismissed as with drawn due to low tax effect, PCIT v. Dwarka Prasad Aggarwal (2022) 288 Taxman 16 (SC)

38. S. 68 : Cash credits – NRI gifts – Search and seizure – Denial by donors – Addition was as cash was affirmed [S. 132]

    Dismissing the appeal the Court held that the Donors have affirmed that they have not given

    a gift and it was an arrangement of commission. Order of Tribunal was affirmed (AY. 2002-03)

    P.R. Ganapathy v. Dy. CIT (2023) 290 Taxman 68 (Mad.)(HC)

39. S. 68 : Cash credits – Loans – Search – Accommodation entries – Through banking channels- Deletion of addition by the Tribunal was affirmed [S. 132]

    Held that the assessee disclosed loans in returns filed and during search accounts of assessee proved that disclosed loan amount was received through banking channels. No incriminating material was found during the search. Order of Tribunal was affirmed.(AY. 2012-13 and 2013-14)

    PCIT (C) v. E-City Projects Lucknow (P.) Ltd. (2023) 290 Taxman 281/ 223 DTR 468 (Orissa)(HC)

40. S. 68: Cash credits – Sundry creditors – Bogus purchases – Sundry creditors – Credit sales – Books of account not rejected – Sales accepted as genuine – Order of Tribunal deleting the addition was affirmed.

    The assessee had purchased goods from sundry creditors on a credit basis. The Assessing Officer treated the transactions as bogus purchases and made additions. CIT(A)deleted the addition on the ground that the assessee has produced sufficient documentary evidence during the course of assessment proceedings to prove the identity and creditworthiness of creditors and the genuineness of transactions of purchases and no defect was pointed out by the Assessing Officer in same. Tribunal also upheld the finding of the Commissioner (Appeals). High Court affirmed the order of the Tribunal. (AY. 2014-15)

    PCIT v. Attire Designers (P.) Ltd. (2023) 290 Taxman 551 (Delhi)(HC)

41. S.68 : Cash credits – Identity, creditworthiness and genuineness of loan transactions were established – Notice issued under section 133(6) was responded – Order of Tribunal deleting the addition was affirmed [S. 133(6)]

    Dismissing the appeal of the Revenue the Court held that the assessee has established identity, creditworthiness and genuineness of loan transactions. Notice issued under section 133(6) was responded to by lenders. Order of Tribunal affirmed. (AY. 2012-13)

    PCIT (C) v. Ambe Tradecorp (P.) Ltd. (2023) 290 Taxman 471 (Guj.)(HC)

42. S. 68: Cash credits – Share premium and share capital – Identity creditworthiness and genuineness of transactions were established – Order of Tribunal affirmed [S. 260A]

    Dismissing the appeal of the Revenue the Court held the assessee had established the Identity, creditworthiness and genuineness of transactions. Appellate authorities also recorded that the entire amount had been received by assessee by account payee cheques or demand drafts. Order of Tribunal affirmed (AY. 2012-13)

    PCIT v. Satkar Infrastructure (P.) Ltd. (2023) 290 Taxman 400 (Delhi)(HC)

43. S. 68 : Cash credits – Violation of the principle of natural justice is not fatal – Issue on the identical issue pending before Appellate Authority – Writ petition against the assessment order was dismissed.[Art. 226]

    The assessee challenged the assessment order on the ground of violation of the principle of natural justice wherein the Assessing Officer made an addition in respect of the Loan received from Mr. R. Srnivasan. Dismissing the petition the Court held that the lender has given the loan to the Company in which the assessee is also one of the directors. The appeal of the company is pending before the CIT(A). The court held that on the facts the violation of the principle of natural justice is not fatal. The assessee was directed to file an appeal before the CIT(A). The Court also held that the powers of an appellate authority are co-terminus with that of an Assessing authority to ensure that the asseee was granted the full opportunity to put forth the case in appeal. (AY. 2012-13) (SJ)

    Kariyagoundanur Muthusamy Chettiar Chinnadurai v. ACIT (2023) 290 Taxman 308 (Mad.)(HC)

44. S. 69A : Unexplained money – The direction of CIT(A) to give credit of ` 50 lakhs was not complied with by the Assessing Officer – Court directed the petitioner to file an appeal before CIT(A) [Art.226]

    The assessee challenged the order by filing

    a writ petition for not giving credit of Rs 50 lakh. The court that assessee was granted liberty to challenge the order of the Assessing Officer by way of appeal against non- grant of credit of ` 50 lacs as directed by Commissioner (Appeals).

    SNJ Distillers (P.) Ltd. v. DIT (Inc.) (2023) 290 Taxman 264 (Mad.)(HC)

45. S. 80G : Donation – Capitalisation fee – Show cause notice for cancellation of registration- Remanded to Commissioner to pass a fresh order on an application filed by assessee after further order was passed in show cause notice seeking to cancel the registration granted. [S. 12A, 80G(5), R. 11A]

    The application for a grant of approval under section 80G(5) was rejected by the Commissioner. The tribunal allowed the application of the assessee. On appeal, the Revenue contended that a show cause notice was issued to the assessee with respect to the cancellation of recognition granted under section 12A. Assessee challenged the same in the writ petition and consequential order was passed remanding the matter before Commissioner. The court held that since issue as to whether assessee was eligible for deduction under section 80G would depend on the continuance of registration granted to assessee under section 12A(a) which was the subject matter of a show cause proceeding and was pending before the Commissioner in terms of the order passed in the writ petition, the order passed by Tribunal was quashed and the case was remanded to Commissioner to pass afresh order in accordance with law after deciding the issue of registration.

    CIT v. Madras Medical Mission (2023) 290 Taxman 556 (Mad.)(HC)

46. S. 92C: Transfer pricing – Arms’ length price –No addition can be made when any arrangement or transaction is an international transaction.

    Dismissing the appeal of the Revenue the Court

    held that No addition can be made when any arrangement or transaction is an international transaction. (AY. 2012-13)

    PCIT v. Amadeus India (P.) Ltd. (2023) 290 Taxman 201 (Delhi)(HC)

47. S.113, S.158BFA(1) : Person other than searched person liable to pay interest for late filing of return under Section 158BC of the Act- No surcharge leviable and proviso to Section 113 is not declaratory/ clarificatory. [S.158BC, S.158BD]

    Where the assessee is an individual and a person

    other than the searched party, and the assessee has received a notice for the block period and is required to file the return under Section 158BC and delays filing the return, interest would be payable for delay in filing the return at the time when the return is filed under Section 140A of the Act. Therefore, amendment to Section 140A by the Finance Act, 1999 is clarificatory and the tax as well as the interest for delay in filing of the return have to be paid under Section 140A. However, no surcharge is leviable since the proviso to Section 113 is prospective as declared by the Finance Act, 2003.(Civil Appeal 3704 of 2012 decided on January 13, 2023)(AY: 1-4-1986 to 13-2-1997)

    K.L Swamy v. CIT & Anr. (2023) 451 ITR 1 (SC)

48. S. 115JB : Book profit – Minimum alternate tax – Banking companies – Provision is not applicable. [Companies Act, 1956, S. 211(1)]

    Dismissing the appeal of the Revenue the Court held that where Companies Act, 1956 has excluded insurance, banking companies or electricity generating or supplying companies from purview of section 211(1) of Companies Act, 1956, provisions of section 115JB would not be applicable to bank whose books of account were drawn in conformity with Banking Regulation Act, 1939. (AY. 2008-09)

    CIT v. Karnataka Bank Ltd.(2022) 142 taxmann.com 64 (Karn)(HC)

    Editorial : SLP granted to Revenue, CIT v. Karnataka Bank Ltd.(2022) 288 Taxman 725 (SC)

49. S. 115JB : Book profit – Minimum alternate tax – Electricity companies – Provisions of section 115JB as it stood prior to its amendment by virtue of Finance Act, 2012, would not be applicable to an electricity generating company.

    Dismissing the appeal of the Revenue the Court held that provisions of section 115JB as it stood prior to its amendment by virtue of Finance Act, 2012, would not be applicable to an electricity generating company. (AY. 2003-04)

    PCIT v. Ajmer Vidyut Vitran Nigam Ltd. (2022) 140 taxmann.com 660 (Raj)(HC))

    Editorial : Notice issued in SLP filed by Revenue, PCIT v. Ajmer Vidyut Vitran Nigam Ltd. (2022) 288 Taxman 485 (SC)

50. S. 115JB: Book profit – Interest subsidy and excise refund – Capital receipt for purpose of book profit [S. 4]

    Dismissing the appeal of the Revenue the Court held that Interest subsidy and excise refund should be treated as capital receipts for the purpose of computing book profit. (AY. 2012-13)

    PCIT v. Krishi Rasayan Exports (P.) Ltd. (2023) 290 Taxman 567 (Cal.)(HC)

51. S. 119: Central Board of Direct Taxes – Intimation – Defective return – Failure to file audit report – Commissioner has the power to condone the delay – Order rejecting the application was quashed. [S. 119(2)(b), Form 3CB, Art. 226]

    Assessee made an application seeking condonation of delay and claimed that due to health reasons and the non-availability of his auditor, he was unable to comply with rectify the intimation. Principal Commissioner placed reliance on Circular No. 9/2015, dated 9-6-2015 and rejected the application on the ground that the assessee had not filed an audit report in Form 3CB. On writ, the Court held that CBDT Circular No. 9/2015, dated 9-6-2015 indicate that revenue was empowered/authorized to condone delay in terms of said Circular and application could not be rejected merely on basis of said CBDT Circular. Accordingly, the application for condonation of delay was allowed and the assessee was to be directed to submit form 3CB. (SJ)

    Narayanan Kollakkil Kutty v. PCIT (2023) 290 Taxman 577 (Kar.)(HC)

52. S.142(2A): Inquiry before assessment – Special audit – Pre- decisional hearing- Principle of natural justice – No opportunity of hearing was given before directing to get its accounts audited – order was quashed.[Art, 226]

    Assessee challenged order passed by Assessing Officer directing it to get its accounts audited through a Special Auditor under section 142(2A) on ground that no opportunity of hearing was given to it before passing impugned order. Revenue submitted that principles of natural justice did not apply to section 142(2A) of the Act. Court held that since no opportunity of hearing was given to assessee before directing assessee to get its accounts audited, orders were vitiated by failure to observe principles of natural justice. (AY. 2002-03)

    Narendra Polyplast v. Pranab Kumar Das. ITO(2022) 288 Taxman 567 (Bom)(HC)

53. S. 143(2) : Assessment – Notice –Jurisdiction – Transferred from Assessing Officer, Circle VIII to Assessing Officer, Circle 8(1) – Notice under section 143(2) was issued by ACIT, who had no jurisdiction over assessee – Assessment order was set aside [S.124(3)(a), 143(3), 144, Art, 226]

    Assessee filed its return of income and same was selected for scrutiny. A notice under section 143(2) was issued by ACIT, who had no jurisdiction over assessee. Assessing Officer, Circle 8(1), in pursuance to said notice issued by ACIT, passed an ex parte assessment order. The assessment order was challenged by assessee by filing writ before the High Court. Allowing the petition the Court held that since Assessing Officer, who had jurisdiction over assessee, passed impugned assessment order without issuing notice under section 143(2) within time limit prescribed, order was set aside.

    S.K. Industries v. ACIT (2022) 141 taxmann.com 568 (Delhi)(HC)

    Editorial : SLP of Revenue dismissed since no good ground and reason to condone delay was found, ACIT v. S.K. Industries (2022) 288 Taxman 651 (SC)

54. S. 143(3): Assessment – Search and seizure – Opportunity of hearing – Alternative remedy – Writ petition was dismissed [S. 127, 153A, Art. 226]

    Writ petition was filed against the assessment order. Dismissing the petition the Court held that assessee having failed to make out a case of denial of reasonable opportunity of being heard, no interference was warranted. (AY. 2013-14 to 2018-19 & 2019-20)

    Ravi Shankar Singh v. Dy. CIT (2022) 288 Taxman 559 (MP)(HC)

55. S. 144B : Faceless Assessment – Reassessment – Ex parte order- Natural justice – Permitted to put in their objections against assessment order which was to be treated as draft assessment order and after filing of objections Assessing Officer shall proceed to complete assessment. [S. 147, 148,Art. 226]

    Assessing Officer sent show cause notice along with draft assessment order to assessee through online mode. Assessee did not open their inbox on account of ill health and as a result of which they could not respond to show cause notice within date fixed for compliance. National Faceless Assessment Centre passed ex parte assessment order. On writ challenging assessment order on ground of violation of principles of natural justice. The Court held that the assessee was to be permitted to put in their objections against assessment order which shall be treated as draft assessment order and after filing of objections Assessing Officer shall proceed to complete assessment. Referred Tin Box Co v. CIT(2001) 249 ITR 216 (SC)

    Biki Overseas P. Ltd. v. UOI (2022) 288 Taxman 578 (Cal)(HC)

56. S. 144B : Faceless Assessment – Reassessment – Ex-parte order – Notice uploaded only in web portal – Demise of father – Order was set aside and remanded.[S. 147, 148, Art. 226]

    Revenue issued a notice under section 148 and same was uploaded in ITBA Portal. Subsequently, an assessment order under section 147 read with sections 144 and 144B was passed. On writ the assessee contended that since notice was posted only in web portal, which were retrieved by him belatedly due to demise of his father, there was no visible opportunity given to him to respond to same and thus, subsequent assessment order passed by revenue raising a huge demand was ex parte and did not reflect actual taxable income. High Court set aside the matter and remanded. (AY. 2016-17)(SJ))

    Chittbabu Dinakaran v. NFAC (2022) 288 Taxman 110 (Mad)(HC)

57. S. 144B : Faceless Assessment – Natural justice – Personal hearing – Video conferencing – Order passed without providing it with an opportunity of hearing by not following prescribed procedure for faceless assessment- Assessment order was quashed – Matter remanded.[S.80P, 144B(7), Art, 226]

    Assessee-society, engaged in business of providing credit facilities to its members, had filed its return of income claiming deduction under section 80P. Said return was selected for scrutiny and a show-cause notice-cum- draft assessment order was issued on assessee. Assessee sought for an opportunity of personal hearing through video conference and requested for directions under section 144A of the Act. The Assessing Officer passed an assessment order without providing desired video conference and thereafter issued a show-cause notice under section 270A to initiate penalty proceedings against assessee. On writ the Court held that no draft assessment along with show cause notice as required under section 144B(1) and section 144B(7) was given to assessee. Since assessment order was passed by Assessing Officer in violation of principles of natural justice without affording an opportunity of personal hearing by not following prescribed procedure laid down as per provisions of section 144B for Faceless assessment, assessment order was quashed. Matter remanded. (AY. 2018-19)

    Dediyasan Industrial Co-op. Credit Society Ltd v. ACIT (2022) 288 Taxman 682 (Guj)(HC)

58. S. 144B : Faceless Assessment – Natural justice – Opportunity of hearing – Addition was made without issuing notice -cum draft assessment order – Order was quashed – Matter remanded [S. 144B(7), Art. 226]

    Return of assessee was selected for scrutiny and revenue issued a show-cause notice to assessee, to which assessee furnished a detailed reply requesting to provide opportunity of hearing. Revenue passed final assessment order making addition to returned income of assessee. On writ the Court held that since no notice-cum-draft assessment order was passed under section 144B(1) and 144B(7) and no opportunity of hearing was provided to assessee so as to enable it to give explanation for proposed addition before passing final assessment order, the order being passed in violation of principles of natural justice as well as provisions of section 144B(7) the order was quashed. Matter remanded.

    Gujarat State Financial Services Ltd. v. ACIT (2022) 288 Taxman 755 (Guj)(HC)

59. S. 144B : Faceless Assessment – Natural justice – One day time to give response – Order was set aside and remanded [S. 142(1), Art. 226]

    Notice under section 142(1) was issued to assessee on 27-3-2022 giving one day time to assessee to give his response Assessee had requested an adjournment to authorities and sought for seven days time to provide necessary particulars Thereafter, on 31-3-2022 show cause notice was issued giving one hour time to assessee to respond and on same day and as assessee did not file any objections assessment order had been passed. On writ allowing the assessment order was set aside and matter was to be remanded back to revenue to consider assessee’s request of affording a reasonable opportunity of hearing. (SJ)

    Pichila Jayachandra Reddy v. NFAC (2022) 288 Taxman 95 (Karn)(HC)

60. S. 144B : Faceless Assessment – Natural justice – Personal hearing was not granted – Order was quashed and set aside [Art. 226]

    In response to show cause notice the assessee requested for personal hearing. The order was passed without granting any opportunity of personal hearing. On writ the Court held that order of assessment was liable to be set aside on ground of violation of principles of natural justice. Directed to pass fresh assessment order within a period of four months.

    Premlata Ramakant Fatehpuria v. PCIT (2022) 288 Taxman 54 (Bom) (HC)

61. S. 144B : Faceless Assessment – Natural justice – Filed objection with supporting evidence – No infringement of principles of natural justice- Alternative remedy – Writ petition was dismissed. [S. 147, Art. 226]

    Assessee challenged order of assessment issued under section 147 on ground that, sufficient opportunity was not granted to him to object to proposed assessment, thereby violating principles of natural justice. Dismissing the petition the Court held that even though, time- limit provided to assessee was very short and bordered on verge of denying an opportunity to effectively explain, still, since assessee utilised opportunity granted and even filed his objection with supporting documents, there was no infringement of principles of natural justice, requiring interference of Court under article 226 of Constitution. In such circumstances, only remedy available to assessee, if any, was to move Appellate Authority challenging order of assessment issued under section 147 of the Act. (SJ)

    Shanavas M. v. NFAC (2022) 288 Taxman 550 / 218 DTR 145/329 CTR 549 (Ker)(HC)

62. S. 144B : Faceless Assessment – Principle of natural justice – Only four days’ time was given – Order was quashed and set aside [S. 11, Art, 226]

    Assessee filed nil return and claimed exemption under section 11 of the Act. The assessment was completed by assessing the Income at Rs 10, 40, 93, 124. The assessee was not given reasonable time to file the reply. On writ, the Court held that period of four days given to the assessee included Saturday and Sunday. Since in effect, only two working days were given to assessee to file a response, principles of natural justice were egregiously violated. Order was set aside and the matter was remanded back to pass fresh assessment. (AY. 2018-19)

    Urdu Education Society v. NFAC (2023) 290 Taxman 449 (Bom.)(HC)

63. S. 144C : Reference to dispute resolution panel – Transfer pricing – Limitation – Order of Appellate Tribunal received by the AO in 2016 remanding the matter to DRP– DRP passed the order on 28-2-2020 – Limitation for passing the order expired on 31-3 207 – Direction and order passed by DRP on 28-2-2020 was barred by limitation. [S. 92CA, 153, 254(1) Art. 226]

    The petitioner challenged the direction issued by DRP on 28-2-2020 was barred by limitation. Allowing the petition the Court held that the order of the Appellate Tribunal received by the AO in 2016 remanding the matter to DRP. The limitation for passing the order expired on or before 31-3-2017. DRP passed the order on 28-2-2020. Accordingly, the direction and order passed by DRP on 28-2-2020 were barred by limitation. (AY. 2009-10)

    Sanmina – SCI India (P) Ltd v. Dy CIT (2023) 290 Taxman 560 (Mad)(HC)

64. S. 145 : Method of accounting – Unexplained investments Undervaluation of stock – Statement of director in the course of survey – Solely relying on statement of director addition cannot be made [S. 69, 133A]

    Assessee-company was engaged in business of selling sarees. During survey conducted at business premises of assessee, Assessing Officer relied on statement of director of assessee- company and made additions on account of undervaluation of stock. Commissioner (Appeals) held that disclosure made in course of survey should not be relied upon and assessment should be based on papers found and impounded during course of survey Addition was deleted. Order of CIT(A) is affirmed by Tribunal. On appeal by the Revenue dismissing the appeal the Court held that Tribunal was right in deleting addition made by Assessing Officer on account of undervaluation of stock by solely relying upon statement of director of assessee- company which was recorded during course of survey proceedings. (AY. 2011-12)

    PCIT v. Ambika Sarees (P) Ltd (2022) 288 Taxman 174 (Cal) (HC)

65. S. 145 : Method of accounting – Rejection of accounts – Wholesale trader – Estimation of GP at 2% is held to be proper [S. 260A]

    Assessee, a wholesale trader, disclosed gross profit at the rate of 0.13 per cent. The assessing Officer issued notices to twenty sundry debtors of the assessee, however, nineteen of the parties did not respond and only the sundry debtor who did respond to Assessing Officer denied any transaction with assessee. Assessing Officer rejected the account books of account and estimate the GP at 2% of gross sales. On appeal, the assessee contended d for deduction of statutory taxes, i.e., CST by holding that while estimating gross profit all expenditure had been accounted for and this included expenditure towards taxes. Tribunal rejected the contention and affirmed the estimate of GP at 2% estimated by the Assessing Officer. High Court affirmed the order of the Tribunal. (AY. 2013-14)

    Narender Kumar Anand v. PCIT (2023) 290 Taxman 386 (Delhi)(HC)

66. S. 147 : Reassessment – Within four years- Capital gains – No failure to disclose material facts – Reassessment notice and order disposing of the objection was quashed. [S. 45, 68, 148, Art. 226]

    The assessing Officer issued a reopening notice on the ground that consideration received on sale had not been filed by the assessee in returns and thus there was a reason to believe that income had escaped assessment. On writ allowing the petition, the Court held that the assessee had made full disclosure of consideration received in its returns and the same was not disputed by Assessing Officer. Notice issued was only on premises that the assessee had received a certain amount of consideration and no other reasons. Accordingly, the notice and order disposing of the objection were quashed. (AY. 2008-09)

    Wilfred D’Souza v. ITO (2023) 290 Taxman 267 (Karn)(HC)

67. S.147: Reassessment – After the expiry of four years – Court cannot go into the sufficiency of reasons assigned – Writ petition was dismissed. [S. 148, Art. 226]

    Assessee filed his return of income which was accepted and assessment was completed. After four years, Assessing Officer issued a reopening notice upon assessee in view of provisions of Explanation 1 to section 147 that material and books of account furnished by assessee qua relevant assessment year were insufficient despite exercise of due diligence to discover escaped income. Writ petition was filed to quash the notice. Dismissing the petition the Court held that in writ jurisdiction the court could not go into sufficiency of reasons assigned specially when case was pending before Assessing Authority to adjudicate upon in regard to alleged escapement of income for relevant year. Writ was dismissed. (AY. 2013-14)

    Jiyand Ram Ahuja v. PCIT (2022) 288 Taxman 746/ 329 CTR 126 (MP)(HC)

68. S.147: Reassessment – After the expiry of four years – Long term capital gains – Bogus claim – Dead person – Reopening of assessment for same reason – Matter was remanded back to Assessing Officer to verify reasons for reopening and only if different reason was given on earlier occasion, Assessing Officer could proceed to finalize impugned reopening proceedings.[S. 10(38), 45, 148, Art. 226]

    Reassessment proceedings in case of original assessee who had expired was completed. Subsequently, another reopening notice was issued against assessee on ground that he had received accommodation entries by way of bogus LTCG so as to claim exemption under section 10(38) of the Act. Petitioner i.e., assessee’s son filed writ petition challenging said reopening notice on grounds that very same reason was given for reopening assessment of assessee on an earlier occasion which was already concluded, thus, impugned reopening on same reason was not permissible. Court held that the fact as to whether same reason was given by revenue  to initiate reopening against assessee on an earlier occasion or not could not be decided now because no document to that effect was filed by petitioner contending that this all happened during lifetime of original assessee, i.e., father of petitioner. On facts, matter was remanded back to Assessing Authority to verify reason given for reopening and only if different reason was given on earlier occasion, such reason was to be revealed to petitioner in writing and thereafter impugned reopening proceedings under section 147 could be proceeded. (AY. 2013-14).(SJ)

    Krishnakumar J. Desai v. ITO (2022 288 Taxman 309 (Mad)(HC)

69. S.147: Reassessment – After the expiry of four years – Change of opinion – Deduction allowed unit wise – Reasons for reassessment notice was the assessee should have been allowed deduction of 30 per cent and not 100 per cent- Reassessment notice and order disposal of objection was quashed. [S.80IC, 148, Art. 226]

    Assessee had six industrial undertakings in State of Himachal Pradesh. It claimed deduction under section 80-IC in respect of its two units at rate of 100 per cent. Assessing Officer allowed the claim and passed the order u/s 143(3) of the Act. Reassessment notice was issued after expiry of four years reopened such assessment for reasons that assessee should have been allowed deduction of 30 per cent and not 100 per cent. On writ allowing the petition the Court held that in assessment order Assessing Officer had discussed on unit wise details of income and expenses claimed under various heads as 80-IC units and non 80-IC units and had also disallowed certain interest hence it was a clear case of change of opinion. Re assessment notice and order disposal of objection was quashed and set aside. Followed PCIT v. Aarham Softronics

    (2019) 412 ITR 623 / 261 Taxman 529 (SC) (AY. 2012-13)

    Pidilite Industries Ltd v. UOI (2022) 288 Taxman 227 (Bom)(HC)

70. S.147: Reassessment – After the expiry of four years – Business expenditure – Reply to queries in respect of said expenses were furnished – Reassessment notice and order disposing objection was quashed [S. 37(1), 148, Art. 226]

    The assessment was completed u/s 143(3) of

    the Act. Assessing Officer issued notice under section 148 dt. 30-3-2021 to assessee alleging that assessee had claimed excess amount of deduction on account of other expenses in profit and loss account statement. The Assessing Officer rejected the objection of the assessee. On writ it was submitted that in scrutiny assessment, assessee had submitted details of all expenses, even reply to queries in respect of other expenses, unsecured loans were also furnished. High Court quashed the Reassessment notice and order disposing objection. (AY.2013- 14)

    Rajeshwar Land Developers (P) Ltd v. ITO (2022) 288 Taxman 186 (Bom)(HC)

71. S.147: Reassessment – After the expiry of four years – Depreciation – Straight line method – Written down value method – No failure on part of assessee to disclose facts, reopening of assessment was not justified [S. 10A, 32, 148, Art. 226]

    The assessee filed its return of income under

    section 139(1) declaring total income at ` Nil after claiming depreciation on straight line method It was stated so in notes to account in balance sheet filed along with return of income

    in respect of exemption under section 10A. Assessment order was passed under section 143(3), after scrutiny, was issued on 31-1-2001. Notice under section 148 was issued to assessee, proposing to reassess income of assessee. On writ allowing the petition the Court held that there was not even an assertion that there was failure on part of assessee to disclose fully and truly all material facts, which was a mandatory requirement to assume jurisdiction by Assessing Officer. Assessing Officer proceeded on ground that assessee had applied straight line method instead of written down value method in respect of depreciation which was a clear change of opinion. Accordingly there being absolutely no failure on part of assessee to disclose facts, reopening of assessment was not justified. (AY. 1998-99)(1997-98)

    Sunjewels India (P) Ltd v. ITO (2022) 288 Taxman 562 (Bom)(HC)

72. S.147: Reassessment – After the expiry of four years – Business income – Unsecured non-convertible redeemable debentures was actually sale consideration received in respect of sale of flats and that had escaped assessment- Issue of debentures had been a subject of consideration of assessment proceedings- Reopening on same basis was not permissible.[S. 28(1), 148, Art. 226]

    Assessee-company was engaged in business of

    construction of residential building. It recouped cost of construction of building by issue of redeemable debentures to shareholders. During assessment proceedings, assessee explained how it issued further debentures for covering cost of construction. Assessing Officer completed assessment accepting income as per return of income filed by assessee. Assessing Officer

    issued notice u/s 148 of Act on the ground that amount which assessee received against new unsecured non-convertible redeemable debentures was actually sale consideration received in respect of sale of flats and that had escaped assessment. On writ allowing the petition the Court held since issue of debentures had been a subject of consideration of assessment proceedings, reopening of assessment after four years on same basis relying on same primary facts disclosed was not permissible. Reassessment notice and order disposing the objection was quashed. (AY. 2001-02)

    Tanna Builders Ltd v. ITO (2022) 288 Taxman 300 (Bom)(HC)

73. S.147: Reassessment – After the expiry of four years – Information from DDIT (Inv) – Accommodation entries – Bogus capital gains and losses – Penny stock scrips – Original assessment proceedings transaction was treated as bonafide – Even if it was assumed that Assessing Officer had committed a mistake, still, assessment could not have been reopened to remedy error – Reassessment notice and order disposing the objection was quashed [S. 45,69, 148, Art. 226]

    Assessment was sought to be reopened on

    ground that information was received from office of DDIT (Inv) that company JRI Industries was involved in providing accommodation entries in form of bogus long term capital gains/short term capital lossess in penny stock scrips to beneficiaries by manipulating stock market and assessee was one of persons/beneficiaries who had traded in scrip of JRI Industries and entire consideration from sale of shares of said scrip remained unexplained. The objection for recorded reason was dismissed. On writ

    allowing the petition the Court held that in assessment proceedings, assessee had furnished particulars of transaction in JRI Industries and same was treated by Assessing Officer as bona fide transactions. Even if Assessing Officer had no means to know that transactions in scrip of JRI Industries were not bona fide and even if it was assumed that Assessing Officer had committed a mistake, still, assessment could not have been reopened to remedy error. Reassessment proceedings was quashed and set aside. Referred Gemini leather Stores v. ITO (1975) 100 ITR 1 (SC) (AY. 2013-14)

    Sunil Hanskrishna Khanna v. ACIT (2022) 139 taxmann.com 555/ 288 Taxman 46 (Bom)(HC)

74. S. 147 : Reassessment – After the expiry of four years – Sales commission – Survey – Change of opinion – Order of Tribunal quashing the reassessment was affirmed. [S. 133A, 148, 260A]

    Assessing Officer reopened assessment on mere

    ground that expenditure incurred by assessee- company, engaged in business of manufacturing and export of garments, towards sales commission were huge. On appeal the Tribunal held that reason for reopening was based on same set-of information which was available at time of original assessment proceedings, wherein no disallowance towards sales commission was made, reopening of reassessment based on mere change of opinion was invalid and not permissible. On appeal the Court held that there was no further tangible material available with Assessing Officer which warranted reopening of concluded assessment, thus, no interference was required. (AY. 2005-06)

    PCIT v. Fibres and Fabrics International (P) Ltd. (2022) 139 taxmann.com 561 (Karn)(HC)

    Editorial: SLP of Revenue dismissed, PCIT v. Fibres and Fabrics International (P) Ltd. (2022) 288 Taxman 20 (SC)

75. S.147: Reassessment – After the expiry of four years – Interest on borrowed capital – No failure to disclose material facts – Change of opinion – Reassessment notice and order disposing the objection was quashed [S. 36(1)(iii), 148, Art. 226]

    Assessment was sought to be reopened in case of

    assessee on ground that disallowance of sum of

    ` 8.98 crore only under section 36(1)(iii) instead of ` 13.04 crore in assessment order had resulted in escapement of income of ` 4.06 crore. The objection of the assessee was rejected. On writ allowing the petition the Court held that the Assessing Officer failed to make out any case that alleged escapement of income was due to any omission or failure on part of assessee in disclosing fully and truly material facts necessary in course of regular assessment. Accordingly notice under section 148 and all subsequent proceedings on basis of aforesaid impugned notices are quashed. (AY. 2010-11)(SJ)

    Tinplate Company of India Ltd v. Dy. CIT (2022) 288 Taxman 587 / 216 DTR 131/327 CTR 792 (Cal) (HC)

76. S. 147 : Reassessment – With in four years- Income as per annual information statement in Form No. 26AS was higher than shown by assessee in P/L account- Non disclosure of primary facts – Notice issued after investigation – Reassessment notice is valid [S. 148, 194A 194C 194J, Form No 26AS, Art. 226]

    Assessing Officer issued on assessee a notice

    under section 148 seeking to reopen assessment for reasons that as per Form No. 26AS assessee’s total receipt under sections 194A, 194C and 194J was of ` 5.23 crores; whereas in profit and loss account it had shown total receipts at ` 2.61

    crores which was short by 2.62 crores and this gave rise to a reason to believe that assessee did not truly and fully disclose all material facts because of which income amounting to ` 2.62 had escaped assessment. On writ dismissing the petition the Court held that notice under section 148 had been issued after conducting an investigation and after recording a reason to believe that assessee did not truly and fully disclose all material facts, impugned notice did not suffer from any illegality. (AY. 2013-14)

    Distributors India C and F v. UOI (2022) 288 Taxman 230 (All)(HC)

77. S. 147 : Reassessment – Natural justice – Loan – Search – Neither furnished copy of statement nor an opportunity of cross examination was provided – Reassessment notice and order disposing the objection was quashed and set aside – Matter Remanded back to Assessing Officer to take a fresh decision after furnishing all details and documents sought for by asseseee [S. 69C, 148, Art. 226]

    Notice under section 148 was issued based on

    the search conducted upon Wadhwa group. Assessee had filed elaborate objection in reply to said notice along with a specific request seeking relevant details and documents related to escapement of income. However, Assessing Officer disposed off objections on ground that there was no legal requirement to share entire material collected during course of search in case of Wadhwa group at stage of reopening. Thereafter, assessment proceedings were concluded. On writ allowing the petition the Court held that the Assessing Officer had reopened and concluded reopening proceedings solely on basis of information obtained from Jt. Commissioner which admittedly was a third

    party information collected in case of Wadhwa- group. This information was not disclosed to assessee. Further, assessee was also not given opportunity of cross-examination of concerned person who was stated by Assessing Officer to have given a statement against assessee. Non- furnishing of relevant information to assessee would render reopening proceedings in violation of principles of natural justice and, thus, same was quashed and matter was remanded back to Assessing Officer to take a fresh decision after furnishing all details and documents sought for by assessee.

    Sarwan Kumar Poddar v. UOI (2022) 288 Taxman 763 /220 DTR 120/ 329 CTR 764 (Cal)(HC)

78. S. 147 : Reassessment – Unexplained expenditure – Recorded reasons refers transaction amounting ` 45 lakhs – Documentary evidence was filed to show that no transaction of

    ` 45 lakhs was entered during the financial year – Reassessment notice and order disposing objection was quashed – Cost of ` 5000 was imposed on the Revenue. [S. 68, 148, Art. 226]

    Assessing Officer issued reopening notice on

    ground that petitioner entered into a transaction amouting to ` 45 lakhs. Petitioner filed its objection by submitting documentary evidences which showed that no transaction amounting to ` 45 lakhs was entered by petitioner during year under consideration. The order was passed disposing the objection. On writ allowing the petition the Court held that Revenue submitted counter affidavit where no response was provided for query raised with respect to reason to believe for issuance of reopening notice. Furthermore, reassessment order specifically mentioned that on perusal of documentary evidence submitted by petitioner no inference

    could be drawn in connection with amount of

    ` 45 lakhs. Since reasons to believe recorded by Assessing Officer were totally unfounded, reopening notice was without jurisdiction and reassessment order was quashed. High Court also imposed cost of `5000 on Revenue.

    Uphill Farms (P) Ltd v. UOI (2022) 288 Taxman 144/ 213 DTR 410/ 326 CTR 671 (All)(HC)

79. S.148 : Notice issued to amalgamated non-existent entity – Notice and assessment order liable to be quashed [S.147]

    Where the notice under Section 148 is issued to a

    non existent entity which has amalgamated with another company by a scheme of amalgamation, simply because the assessment order is passed in the name of the amalgamated entity will not suffice and the notice as well as assessment order are liable to be quashed(WP/2001/2022 decided on 6.5.2022)

    TLG India Private Ltd. vs. National Faceless Assessment Centre, Delhi and Ors. (2023) 330 CTR 207 (Bom)

80. S.148 : There must be failure on the part of the assessee to fully and truly disclose all material facts if notice is issued after 4 years have elapsed from the end of the relevant assessment year- Notice quashed. [S.147]

    The AO in the reasons recorded has not

    mentioned what material facts were not disclosed by the assessee during the course of assessment proceedings and has simply recorded the amount of income which has escaped tax and the department has by affidavit sought to state what material facts were not disclosed which is impermissible. Even if the reasons are taken holistically, what material facts are not disclosed is not pointed out and therefore the notice is

    liable to be quashed.(WP 1061/2019 decided on 7th December, 2022)(AY:2012-2013)

    Tumkur Minerals Pvt. Ltd. vs. JCIT & Ors. (2023) 330 CTR 177 (Bom)

81. S.148 : AO cannot travel beyond show cause notice- CBDT Circular dated 11.52022 applicable if amount of income which has escaped tax is less than ` 50 lakhs

    Where the assessee has received a notice under

    Section 148A(b) with certain information then the AO cannot travel beyond the show cause notice and pass an order under Section 148A(d) on other grounds.(WP/254/2022 decided on 1st December, 2022)

    U.S Associates v. PCIT (2023) 330 CTR 217(Chattisgarh)

82. S.148 : Change of opinion- When documents furnished by the assessee during course of assessment proceedings showing receipt of keyman insurance premium no addition sustainable[S.147]

    The assessee furnished documents pertaining

    to keyman insurance policy such as audited annual accounts, balance sheet etc. hence the reopening on the ground of keyman insurance policy income is unsustainable on the ground of mere change of opinion and liable to be quashed. The Section 14A disallowance is unwarranted and based on change of opinion since the addition was made in the assessment order. (SCA/20436/2018 decided on January 6, 2023) (AY:2012-2013)

    Shahlon Silk Industries P. Ltd. v. ACIT (2023) 451 ITR 184

83. S.148 : Reason to believe income chargeable to tax has escaped assessment – AO must have reason to believe income has escaped assessment and also if documents produced during assessment proceedings then there can be no failure to disclose material facts.[S.147]

    Where it is was the case of the AO that the

    assessee was a beneficiary of accommodation entries to the tune of ` 2.1 crore, but however the assessee supplied all documents and information to the AO during the course of assessment proceedings such as bank statement and bank interest, then the AO cannot conduct a roving inquiry when the amount received was admittedly returned. Notice quashed. (SCA/19010/2018 decided on 16.12.2022) (AY:2011-2012)

    Vijay Ramanlal Sanghvi v. ACIT (2023) 330 CTR 424 (Guj.)

84. S.148 : Reply to show-cause notice – Objections/reply not adequately considered – No failure of natural justice-Judgments relied upon by petitioner not applicable [S.147]

    Where the order was passed disposing off the

    petitioner’s objections, simply because the reply of the petitioner was not adequately considered cannot occasion a failure of natural justice. The judgments relied by the Petitioner in Divya Capital and Rithala Education deal with different situations and are not relevant. Notice and speaking order upheld.(WP/37527/2022 decided on 7.12.2022)(AY:2016-2017)

    Viswabharathi Medicals v. ITO (2023) 330 CTR 445 (Ker)

85. S.148A : Reassessment – Conducting inquiry, providing opportunity before issue of notice – Response filed to notice not considered – Proceedings not concluded – Interim stage – Writ petition was dismissed [S. 148A(b), 148A(d), Art. 226, 227]

    Assessee, a partnership firm, received notice under section 148A(b) – Details of information and enquiry on basis of issuance of notice were supplied to assessee along with said notice. Assessee raised objections which were decided vide order passed under section 148A(d). Assessee filed writ petition challenged notice under section 148A(b) and order passed under

    section 148A(d) on ground that stand of assessee had not been taken into consideration resulting in miscarriage of justice. Dismissing the petition the Court held that at stage where proceedings had not even been concluded by statutory authority, writ Court could not have interfered at such pre-mature stage. Therefore, when proceedings initiated were yet to be concluded by a Assessing authority, interference by High Court in exercise of jurisdiction under article 226/227 of Constitution at this intermediate stage was not warranted. (AY. 2018-19)

    FTC Overseas v. CBDT (2022) 288 Taxman 321 (P & H)(HC)

86. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Reassessment proceeding was at its intermediate stage and was yet to be concluded by statutory authority – Writ petition was dismissed. [S. 148, Art. 226, 227]

    Assessing Officer issued a reopening notice

    under section 148 of the Act. While reassessment proceedings were in process, assessee filed a writ petition against said reopening of assessment.

    Dismissing the petition the court held that reassessment proceeding was at its intermediate stage and was yet to be concluded by statutory authority. (AY. 2018-19)

    Gian Castings (P) Ltd v. CBDT (2022) 140 taxmann. com 318 (P& H)(HC)

    Editorial: SLP of assessee dismissed, Gian Castings

    (P) Ltd v. CBDT (2022) 288 Taxman 167 (SC)

87. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Unexplained expenditure – Bogus purchase- Non supply of clear and legible copies – Cannot be adjudicated in the writ proceedings – Three working days to file reply – Natural justice not violated – Writ petition was dismissed [S. 148, 148(d), Art. 226]

    The reassessment notice was issued to the

    assessee. The Assessee filed a petition seeking to quash the order and notice issued on ground that said order was passed by relying on completely ineligible and unreadable documents and without granting sufficient time to respond to notice was in violation to principle of natural justice. Dismissing the petition the Court held that the Revenue had furnished legible copies of documents based on which reopening was initiated to assessee at initial stage itself.The reassessment notice was issued on the basis of one of alleged supplier of assessee had made a statement that he had not carried out transactions with assessee which were appearing in his bank account. High Court held that in view of testimony of supplier a prima facie case of escapement of income was made out and, thus, matter was to be proceeded further and Assessing Officer was to decide matter on its own merits. Court observed that “ It is settled law that ‘principle of natural justice is no unruly horse and no lurking land mine’ as held by

    Mr. Justice Krishna Iyer in Chairman, Board of Mining Exam & Chief Inspector of Mines v. Ramjee [1977] 2 SCC 256. In fact, in S.Tikara v. State of M.P. AIR 1997 SC 1691, it has been held that the principles of natural justice cannot be petrified or fitted into rigid moulds. They are flexible and turn on the facts and circumstances of each case. Consequently, the questions that arise are whether there has been any unfair deal by the respondent?” (AY. 2013-14)

    Indure (P.) Ltd. v. PCIT (2022) 142 taxmann.com 66(Delhi)(HC)

    Editorial: SLP of assessee dismissed, Indure (P.) Ltd.

    v. PCIT (2022) 288 Taxman 721 (SC)

88. S.148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Response to show cause notice was not considered – No jurisdiction error – Writ petition was dismissed [S. 148, 148A(d), Art. 226, 227]

    Assessee challenged order passed under section

    148A(d) and consequential notice issued under section 148 on ground that order under section 148A(d) had been passed without considering reply filed by assessee raising objections to notice issued to assessee under section 148A(b). Dismissing the petition the Court held there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction and for rectification of errors statutory remedy has been provided. On facts when proceedings initiated were yet to be concluded by a statutory authority, interference by High Court in exercise of jurisdiction under article 226/227 of Constitution at this intermediate stage was not warranted. (AY. 2018-19)

    Krishana Goel v. PCIT (2022) 288 Taxman 213 (P& H)(HC)

89. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Failure to consider the submission – Proceedings not concluded – Writ petition was dismissed [S. 148, 148A(b), 148A(d), Art. 226, 227]

    Assessee filed writ petition challenged order

    passed under section 148A(d) along with notice issued under section 148 on ground that response filed by assessee to notice under section 148A(b) had not been considered. Dismissing the petition the Court held that proceedings initiated were yet to be concluded by a Assessing authority exercise of jurisdiction under article 226/227 of Constitution at this intermediate stage was not warranted.(AY. 2018 -19)

    Red Chilli International Sales v. ITO (2022) 288 Taxman 107 (P&H)(HC)

90. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Long term capital gain – Verified in the original assessment proceedings – Reopening notice and reassessment order is set aside and remanded back for fresh consideration. [S. 45, 147 148, Art.

    226]

    Reassessment notice was issued on the ground that the assessee had not disclosed sale of a property and long term gain in its ITR filed. In the course of original assessment proceedings the Assessing Officer deliberated and verified the claim of capital gains. On writ allowing the petition the Court quashed the reopening notice and reassessment order and remanded back for fresh consideration. (AY. 2013-14)

    Seema Gupta v. ITO (2022) 288 Taxman 519 (Delhi) (HC)

91. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Natural justice – Period of 7 days was to be granted to assessee to file reply [S. 147, 148, Art. 226]

    Assessees were issued notices under section

    148A on 25-3-2022, requiring them to show cause by 1-4-2022 as to why reassessment proceedings should not be initiated against them. On writ allowing the petition the Court held that the assessees have a statutory right to reply to show cause notices issued under section 148A within 7 days of its receipt, hence, assessees were to be given 7 days to reply to show cause notice. Fresh decision was to be taken thereafter in accordance with law. (SJ)

    Shini Satheeshkumar v. ITO (2022) 288 Taxman 548 (Ker)(HC)

92. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Submitted a reply along with some documentary evidence showing that there was no escapement of income – Assessing Officer ought to have considered material produced on record by assessee- Matter is remitted back to Assessing Officer to give an opportunity of hearing and thereafter pass a detailed order.[S. 148, 189, Art. 226]

    Assessee was an ex-partner of a partnership

    firm consisting of two individuals. Said firm was dissolved and entire business lock, stock and barrel was taken over by one of its partner having a different PAN Number. Since firm was dissolved and was not carrying business, there was no taxable income during assessment

    year 2018-19 and thus, its return of income for assessment year 2018-19 had not been filed. Show-cause notice under section 148A(b) was issued asking assessee to show cause as to why a notice under section 148 should not be issued. Assessee filed reply and in reply disclosed about dissolution of partnership firm clarifying that PAN Number which was allotted to partnership firm continued in bank account till 2021. Thereafter order under section 148A(d) was issued for reopening of assessment of assessee for assessment year 2018-19. On writ the Court held that since in compliance of notices under section 148A(b), assessee had submitted a reply along with some documentary evidence showing that there was no escapement of income, respondent Authority before passing impugned order ought to have considered material produced on record by assessee Since respondent Authority had not examined details supplied by assessee order was quashed and set aside and matter was remitted back to respondent Authority for adjudication afresh. (AY.2018-19)

    Studio Virtues v. ITO (2022) 288 Taxman 62 (Guj) (HC)

93. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Notice dated 31-3-2021, signed and issued on 31 -3-2021 – Alternative remedy – Writ petition dismissed [S. 143(3), 147, 148, Art.

    226]

    Reassessment notices dated 31-3-2021 were issued under unamended section 148 Assessment order was passed consequent thereto on 29- 3-2022. As per assessee in both cases, notices were communicated on 6-4-2021 and 10-4-2021 respectively i.e. after 31-3-2021, hence, impugned notice under unamended section 148 was bad in law in view of amendment carried out by

    Finance Act, 2021 bringing into force section 148A which requires a preliminary enquiry before initiating reassessment proceedings and since impugned notice was bad in law, any assessment undertaken thereunder would necessarily be without jurisdiction and void. On writ the Court held that there was nothing on record to show that they were issued after 31-3- 2021 and on contrary, assessment order as also impugned notices themselves showed that they were signed and issued on 31-3-2021 hence plea of assessee was not sustainable. Since assessment proceedings having been concluded pursuant to notice dated 31-3-2021 issued upon assessee, assessee should avail alternative remedy of appeal.

    Tanuja Singh v. UOI (2022) 288 Taxman 171 (Jharkhand)(HC)

94. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Natural justice – Opportunity of hearing was not given – Order was set aside and matter remanded back to consider case a fresh. [S. 147, 148, 148A(b), 148A(d), Art.

    226]

    Order was passed without giving an opportunity of personal hearing. On writ allowing the petition the Court held that there was no material on record to show that assessee had been given an opportunity of being heard which was mandatory as per section 148A(b) before passing of impugned order under section 148A(d). Accordingly the order and notice under section 148 was set aside and matter was remanded back to revenue to consider case of assessee afresh after giving an opportunity of being heard. (AY. 2018-19)(SJ)

    Zoomcar India (P) Ltd v. UOI (2022) 288 Taxman 761 (Karn)(HC)

95. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Cash credits – Bogus accommodation entries -No details mentioned – Order was set aside for fresh determination [S. 148, 148A(b) 148A(d), Art. 226]

    In response to the show, cause notices the

    assessee filed a detailed reply stating that the assessee had never entered into any transactions with the alleged accommodation provider. However, the Assessing Officer passed an order under section 148A(d) on the assessee and issued a notice under section 148 of the Act. On writ allowing the petition the Court held that the order passed under section 148A(d) as well as notice issued under section 148 was set aside and the matter was to be remanded to Assessing Officer for fresh determination. (2017-18)

    Boutique International (P.) Ltd. v. Dy. CIT (2023) 290 Taxman 403 (Delhi)(HC)

96. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Unexplained money – Misuse of GST number by third party- Factual issue – Writ petition was dismissed – Directed the Assessing Officer to consider merits of the controversy and decide according to the law. [S. 148A(b), Art. 226]

    Dismissing the petition the Court held that

    the submissions made by assessee that misuse of GST number by a third party was a factual issue were all factual pleas that which Assessing Officer should duly consider and adjudicate during assessment proceedings after examining evidence. The court also held that merits of controversy could not be examined by writ

    Court and therefore, the petition was disposed of with liberty to the assessee to raise all her pleas and contentions before the Assessing Officer. (AY. 2018-19)

    Sangeeta Arora (Mrs) v. ITO (2023) 290 Taxman 391 (Delhi)(HC)

97. S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Violation of the principle of natural justice – Mandatory to give the minimum time of seven days – Reply of assesee was not considered – Order and notice was set aside [S. 148A(b)), 148A(d), Art. 226]

    On Writ, the Court held that notice is required to

    be given to filing a reply of not less than seven days as provided in clause (b) of section 148A. Further section 148A(c) casts a duty on Assessing Officer to consider the reply of assessee in response to notice under section 148A(b) before making an order under section 148A(d) of the Act. On fact, the notice and order were quashed and set aside (AY. 2015-16)

    Nidhi Bindal v. ITO (2023) 290 Taxman 306 (Delhi) (HC)

98. S. 151 : Reassessment – Sanction for issue of notice – After the expiry of four years – Corporate social responsibility – Sanction of Commissioner or Principal Commissioner is a pre-requisite for issuance of a reopening notice under section 148 after expiry of four years from end of relevant assessment year – Reopening notice with sanction of Additional

    Commissioner was quashed and set aside. [S.35AC, 80G, 92CA, 147, 148, 151(2), Art. 226]

    Assessee-company, engaged in business of air-

    conditioning and refrigeration, had filed its return and claimed certain amount of expenses towards corporate social responsibility (CSR) as deduction under sections 35AC and 80G. Assessment was completed under section 143(2) read with section 92CA. After four years, a reopening notice under section 148 was issued after receiving sanction from Additional Commissioner under section 151 of the Act. The objection for reassessment notice and recorded reasons was dismissed. On writ allowing the petition the Court held that except for a general statement in reasons for reopening, Assessing Officer had not disclosed what material facts were not disclosed by assessee. It was further noted that sub-section (1) of section 151 provides that no notice shall be issued under section 148 by Assessing Officer, after expiry of a period of four years from end of assessment year, unless PCCIT/CCIT/PCIT/CIT was satisfied that reasons of reopening were fit for case. Since four years had expired from end of relevant assessment year, sanction under section 151 could only be granted by PCIT/CIT. Accordingly notice issued with sanction of Additional Commissioner was quashed and set aside. (AY. 2015-16)

    Voltas Ltd v. ACIT (2022) 288 Taxman 506/ 213

    DTR 169/ 327 CTR 748 (Bom)(HC)

99. S. 153 : Assessment – Reassessment – Limitation – Limitation starts only from last date of financial year wherein notice was served on assessee and not from when notice was issued or sent by revenue. [S. 147, 148, 153(2), Art. 226]

    A reopening notice under section 148 was issued

    on assessee on 30-3-2018 and served on 3-4-

    2018 and assessment was completed. On writ the assesssee contended that assessment order passed was barred by limitation as prescribed under section 153(2) of the Act on the ground that since reopening notice was issued on 30- 3-2018, limitation would start from 1-4-2018 upto 5-6-2018 and then resume after stay was vacated i.e. from 27-4-2021. Thus assessment ought to have had been completed on or before 20-11-2021. Court held that since serving date of reopening notice fell in financial year 2018- 19, last date of financial year in which notice was issued would be 31-3-2019 and accordingly limitation would start from 1-4-2019 only and not from 1-4-2018. Accordingly the order passed under section 147 on 21-2-2022 was well within limitation. (AY. 2011-12)

    Rajesh Gupta v. NFAC (2022) 288 Taxman 553 (Mad)(HC)

100. S. 153A: Assessment – Search or requisition-No incriminating material was found – Deletion of addition by the Tribunal was justified. [S. 132, 69B]

     Dismissing the appeal of the Revenue the Court

     held that the Tribunal, upon the appreciation of documents on record, concluded that documents referred to by the Assessing Officer as ‘incriminating’ were admittedly not found from the address of assessee. The order of Tribunal was affirmed. (AY. 2010-11)

     PCIT v. Suman Agarwal (2023) 290 Taxman 301 (Delhi)(HC)

101. S.153C(2) : Assessment in the AY pertaining to year of search – Would have to be included since the time taken to transfer materials for assessment of third person has to be taken into account. [S.153A]

     The financial year in which the search has been undertaken by the revenue would be included for purpose of block assessment since the intention of Section 153(2) is to absorb the time taken to transfer the seized materials for the purpose of assessment on the third party. (WP/34213/2020 decided on 16.9.2022)(AY:2015- 2016)

     Savithri Naidu v. ACIT (2023) 330 CTR 200 (Mad)

102. S.154 : Rectification of mistake – Proceedings for rectification of mistake under Section 154 pending – No reassessment proceedings permissible till Section 154 proceedings finalized- Order of High Court quashed and set aside and ITAT order restored. [S.147]

     When a proceeding for rectification of mistake

     under Section 154 is pending against the assessee, it was impermissible for the High Court in appeal to quash that proceeding when the proceeding under section 154 was not the subject matter before the High Court and only proceedings for reassessment were before it. The order of the ITAT quashing the reopening proceedings under Section 147 and not interfering with the Section 154 proceedings was upheld and restored.(Civil Appeals 3612- 3613 of 2012 decided on December 7, 2022)(AY:

     1995-1996)

     S. M. Overseas Pvt. Ltd v. CIT [2023] 450 ITR 1 (SC)

103. S. 194C: Deduction at source – Contractors – Clearing and forwarding agent – Reimbursement of expenditure- Tax had to be deducted at source even in respect of reimbursements

     which had been incurred by agent. [S. 260A]

     Dismissing the appeal of the Court held that

     the assessee failed to produce any document to establish their stand, despite opportunity being given at appellate stage, Tribunal rightly held that tax had to be deducted at source even in respect of reimbursements which had been incurred by agent. (AY. 2005-06)

     Surendra Commercial & Exim (P) Ltd v. ITO (2022) 288 Taxman 580 / 220 DTR 35 (Cal)(HC)

104. S. 194J: Deduction at source – Fees for professional or technical services – Supply of rolling stock – Payment to consortium not liable to deduct tax at source. [S. 201(IA)]

     Dismissing the appeal of the Revenue the Court

     held that where contract entered into by assessee with a consortium of companies in connection with contract for designing, manufacturing, supply, testing, commissioning of passenger rolling stock and training was an indivisible contract and dominant object of contract was supply of rolling stock and work taken up was ancillary to supply of rolling stock and did not amount to professional or technical service, payment made by assessee to consortium is not liable to deduct tax at source. (AY. 2011-12)

     CIT v. Bangalore Metro Rail Corporation Ltd.(2022) 449 ITR 431/ 288 Taxman 539 (Karn)(HC)

105. S. 194J : Deduction at source – Fees for professional or technical services – Not liable to deduct TDS on telecom service provider, on payment of interconnect user charges as it could not be categorized as fee for technical services.[S. 9(1)(vii), 201]

     Dismissing the appeal of the Revenue the Court held that the assessee is not liable to deduct TDS on telecom service provider, on payment of interconnect user charges as it could not be categorized as fee for technical service. Followed CIT, TDS v. Vodafone South Ltd. (2016) 241 Taxman 497 (Karn)(HC)

     CIT (TDS) v. Tata Teleservices Ltd.(2022) 288 Taxman 775 / 217 DTR 453 (Delhi(HC)

106. S. 194J: Deduction at source – Fees for professional or technical services – Salary – Hospital – Retainership fees paid to doctors – Provisions of section 194J are applicable not provision of section 192 of the Act [S. 192]

     Dismissing the appeal of the Revenue the Court

     held that with respect to Retainership fees paid to doctors, provisions of section 194J are applicable not provisions of section 192 of the Act. (AY. 2018-19)

     CIT, TDS v. Mewar Hospital (P.) Ltd. (2023) 290 Taxman 389 (Raj.)(HC)

107. S. 234B : Interest – Advance tax – Interest would be computed up to date of admission of application by Settlement Commission under section 245D(1) and not up to date of order of settlement Commission under section 245D(4)- Natural justice – Order was passed without giving an opportunity to the Revenue – Order of by High Court was quashed and the matter was remanded to decide writ petition afresh [S. 245D(1) 245D(4)]

     Allowing the petition of Revenue the Court

     held that since the judgment was passed by

     High Court without any notice and thereby without giving any opportunity to revenue, said order was in violation of the principle of natural justice. Accordingly, the order passed by High Court was quashed and the matter was remanded to decide the writ petition afresh.

     UOI v. G.M. Foods (2023) 290 Taxman 446/ 223

     DTR 239 (SC)

     Editorial: Arising out of order of High Court in.

     G.M. Foods v. IT& WT Settlement Commission (2015) 58 taxmann.com 16 /231 Taxman 793 (Cal) (HC)

108. S.194N- TDS on withdrawals from banking company by co-operative society- Challenge to circular issued by Banks must fail since challenge is premature-Banks have sought to insulate themselves and have done nothing illegal

     The circulars issued by banks for TDS deduction

     at 2% of withdrawals was merely to insulate/ protect themselves(banks) from the wrath of the Department for non deduction of TDS which is mandated by Section 194N and nothing illegal can be found with the Circulars for 2% TDS under Section 194N.(WP/17136/2022 decided on November 4, 2022)(AY:Not applicable)

     S. N. 299 Molasi Primary Agricultural Co-Operative Credit Society Ltd. And Ors. v. Ito & Anr. [2023] 451 ITR 127 (Mad)

109. S. 220 : Collection and recovery – Assessee deemed in default – Stay
     • Deposited 20 percent of demand
     • Pendency of stay application
     • Recovered entire amount in a ex parte manner – Assessing Officer was directed to refund excess amount already recovered from assessee and he would be

       entitled to keep only 20 per cent of demand until appeal was decided. [Art. 226]

       Assessee filed its return of income which came in

       scrutiny and high pitched additions were made. Demand of ` 12.63 lakhs was created against assessee. Assessee preferred appeal against said order and suo moto deposited 20 per cent of demand created. As a matter of precaution, stay application was also filed by assessee, requesting for keeping demand in abeyance till disposal of appeal. Assessing Officer, without disposing stay application filed by assessee, without considering fact that assessee had himself deposited 20 per cent of demand, initiated coercive recovery and recovered entire amount of ` 12.63 lakhs from bank account of assessee in a ex parte manner. On writ the Court directed the Assessing Officer to refund excess amount already recovered from assessee and he would be entitled to keep only 20 per cent of demand until appeal of assessee pending before Commissioner (Appeals) was decided. (AY 2017-18)

       Ram Gopal Sharma v. ITO (2022) 288 Taxman 211 (Raj)(HC)

110. S. 220 : Collection and recovery – Assessee deemed in default – Stay – Directed to deposit 10 percent of outstanding demand [S. 220(6), 246A, Art. 226]

     Assessment order was passed making additions

     to income of assessee. Assessee preferred first appeal against assessment order under section 246A before Commissioner (Appeals) and also filed a separate application under section 220(6), before Assessing Authority for stay of entire disputed demand in said application. Assessing Authority directed assessee to pay 20 per cent of alleged outstanding as a condition precedent to consider application under section 220(6) of the Act. On writ the Court held that as per section 220 (2), assessee has to pay 1-1.5 per cent interest for every month for outstanding

     amount, therefore, appeal was to be disposed of after affording an opportunity to assessee and meanwhile, assessee was directed to deposit 10 per cent of outstanding demand. (SJ)

     Yeswath Kavitha v. ITO (2022) 288 Taxman 120 (Mad)(HC)

111. S. 252 : Appellate Tribunal
     • Members – Qualification
     • Appointment of Members Contempt – Not appointing the members of the Tribunal – Recommendations of the Search cum selection commission
     • Before recommendations are formulated and in exceptional cases where certain material comes to light after submission of recommendations, that must also be drawn to attention of SCSC so as to enable it to consider whether any modification of its recommendations is necessary. [Tribunals Reforms Act, 2021, S. 3]

       The petitioner had filed contempt petition on the

       ground that the ACC placed reliance on certain reports and feedback obtained subsequent to the recommendations of the Search cum selection commission (SCSC) none of which have been placed before SCSC and further, 19 persons were yet to be appointed and 19 new vacancies have since arisen as a result 38 vacancies remained unfiled in the Tribunal. Court held that when Search cum selection commission (SCSC) recommended 41 persons for appointment as members of Tribunal and Appointments Committee of Cabinet (ACC) after considering said recommendations selected only 22 persons by placing reliance on certain reports and feedback which were not placed before SCSC, since all inputs bearing on candidature of each prospective applicant for post of Tribunal

       member under consideration, ought to be placed on record of SCSC, before recommendations are formulated and in exceptional cases where certain material comes to light after submission of recommendations, that must also be drawn to attention of SCSC so as to enable it to consider whether any modification of its recommendations is necessary. The proceedings listed before the Court on 1 July 2022.(CP (C) No.708 of 2021, WP No. 502 of 2021 dt 17-5-2022)

       Advocate Association Bengaluru v. Anoop Kumar Mendiratta (2022) 288 Taxman 8 (SC).

112. S. 254(1) : Appellate Tribunal – Duties- Limitation – Share capital – Cash credits – Revision – Lack of enquiry – Appeal dismissed on the ground that issues raised in appeals were covered by several orders passed by Tribunal – Not dealt with merits – Matter was sent back to Tribunal to take a decision [S. 68, 260A, 263]

     An order was passed by Principal Commissioner

     under section 263 on ground that there was lack of proper enquiry as to issue of share capital premium. Assessee preferred an appeal before Tribunal against said order on ground that order under section 263 was barred by limitation. Tribunal held that issues raised in appeals were covered by several orders passed by Tribunal including order in case of Subhlakshmi Vanijya (P.) Ltd. v. CIT [2015] 60 taxmann.com 60/155 ITD 171 (Kol)(Trib.). Tribunal has not dealt with merit of the case. On appeal allowing the appeal the Court held that Tribunal not having touched upon merits of assessee’s case, matter was sent back to Tribunal to take a decision on merits and in accordance with law. (AY. 2009-10)

     Olympus Suppliers (P) Ltd v. PCIT (2022) 288 Taxman 41 (Cal)(HC)

113. S. 255 : Appellate Tribunal – Appointment of Member – Waiting list – Appointed pursuant directions of Apex Court -Shall be entitled for consideration of notional seniority and other consequential benefits-Entitled to pay only from date of his assuming charge. [Art. 32, 226, 227]

     In course of examination for appointment of

     Members of Tribunal, petitioner was placed in waiting list but his appointment was not confirmed and later he had been appointed in his position in waiting list pursuant to directions of Apex Court, ‘in his position in waiting list’. The applicant submitted several representations to consider his notional seniority and consequential benefits from the date of the Selected List.i. e. 22-9-2005 and the same was not considered. The applicant filed application before CAT Bangalore with a prayer inter alia to direct the respondents to consider his representations and to restore his seniority with consequential benefits. On writ the Court held that he shall be entitled for consideration of notional seniority and other consequential benefits and he shall be placed at end of last person appointed in Select List. Thereafter, applicant filed a Misc. Application seeking a clarification that applicant’s name shall be placed in the Select List dated 22-9-2005 and to fix the pay with effect from October 2007, on notional basis. The said Misc. application was disposed of with a clarification that applicant would be eligible to be considered in the first list of selection and the seniority benefits would be granted except the salary for the period which he had not worked. The UOI filed writ petition challenging the order of the CAT. Dismissing the petition the Court held that once applicant has been appointed pursuant to the directions of the Apex Court, ‘in his position in the waiting list’, he shall be entitled for consideration of notional seniority and other consequential benefits. He shall be

     placed at the end of the last person appointed in the Select List. He shall be entitled for pay only from the date of his assuming charge, which the CAT has rightly granted. Referred Ms.Neelima Shangla Ph.D. Candidate v. State of Haryana (1986) 4 SCC 268.

     Induri Rama Rao v. PCIT (2022) 288 Taxman 56 (Karn)(HC)

114. S. 260A: Appeal – High Court – Writ – Statutory remedy – Alternative remedy – Writ petition was pending for 13 years- Affirming the order of a single judge division bench held that as a proposition of law, it cannot be countenanced that once a writ petition is entertained and admitted, same can’t be dismissed on the ground of availability of alternative remedy at the time of hearing [Art. 226]

     Both appellant and respondent had applied

     to an advertisement for the appointment of Anganwadi Karyakarta in respect of Janpad Panchayat, Bhilaigarh and after a selection process, the appellant was appointed for the same by an order dated 12-10-2017. Respondent preferred an appeal before Collector, and subsequently, Collector set aside the appointment of the appellant. Thereafter, the respondent was appointed for the said position on 25-6-2018. The appellant filed a writ petition challenging her removal from service by collector. Single Judge passed a stay order However, said writ petition was subsequently dismissed for failure to comply with certain directions which were peremptory in nature. Assessee filed a writ appeal on the ground that once the writ petition was admitted, Single Judge ought not to have relegated such admission by directing the petitioner to avail alternative remedy. Division Bench held that as a proposition of

     law it cannot be countenanced that once a writ petition is entertained and admitted, same cannot be dismissed on grounds of availability of alternative remedy at the time of the hearing. Further, since it was not a case where the writ appellate court ought to have exercised discretion to entertain the writ petition, there was no infirmity with the view taken by the Single judge.

     Mangali Mahinag v. Sushila Sahu (2023) 290 Taxman 563 (Chhattisgarh)(HC)

115. S. 260A : Decision of Court – High Court – Delay of 535 days – Condonation of delay was allowed.

     There was delay of 535 days in filing appeal by

     revenue against an order passed by Tribunal. Condoning the delay the Court held that since delay had occasioned after application for condonation of delay was approved and returned to Ministry of Law and Justice on 16- 3-2020 and fact that from 15-3-2020 onwards country was under lock down could not be lost sight, from 15-3-2020 period of limitation stood excluded and, condonation of delay was allowed. to be allowed. (AY. 2009-10)

     PCIT v. Kalinga Metalics Ltd.(2022) 288 Taxman 688 (Cal)(HC)

116. S.260A- Deduction under Section 80-IA to be allowed to assessee- Audit report not filed within time could not be considered by tribunal. [S.80-IA]

     The appeal of the revenue before the tribunal

     was not alleging that the audit report filed by the assessee was not within the time limit. Hence, the tribunal could not consider such an issue. In such circumstances, the appeal of the assessee is to be allowed and deduction to be given by the AO.(ITAT/237/2022 decided on 22nd November, 2022)(AY:2014-2015)

     Winro Commercial (India) Ltd. v. PCIT (2023) 330 CTR 598 (Cal)

117. S. 263 : Commissioner – Revision of orders prejudicial to revenue – Deduction of tax at source – Contractors/sub-contractor – Cash payment – Survey – Tribunal was justified in quashing revisionary proceedings on ground that order passed by AO was neither erroneous nor prejudicial to interest of revenue. [S.40(a))(ia), 40A(3), 194C, R.6DD]

     Assessee is engaged in business of

     manufacturing of dairy products. PCIT passed revision order and remanded the matter on the ground that the assessee paid cash who was claimed to be assessee’s employee. During survey, it was admitted by assessee that he was contractor hence disallowable u/s 40A(3) of the Act. On appeal the Tribunal held that during assessment proceedings, assessee submitted cash payment register and explained each item of proposed addition as per show cause notice issued by Assessing Officer and Assessing Officer after going through cash payment register and explanation of each item, did not make addition. Tribunal quashed revisionary proceedings on ground that order passed by Assessing Officer was neither erroneous nor prejudicial to interest of revenue. On appeal by Revenue High Court affirmed the order of the Tribunal. (AY. 2013-14)

     PCIT v. Shukla Dairy (P) Ltd (2022) 288 Taxman 750 (Guj)(HC)

118. S. 263 : Commissioner – Revision

     of orders prejudicial to revenue

     -Appeal before Commissioner (Appeals) – Issue was not subject matter of appeal before

     Commissioner (Appeals) – Book profit – Revision is valid – Revisionary order passed by Commissioner under section 263 could not be said to be without jurisdiction merely because document identification number (DIN) of order was intimated one day after said order was passed. [S. 9(1)(vii), 115JB, 250, 263(1)(c), Art, 226]

     During scrutiny, Assessing Officer held that

     services provided by petitioner were to be treated as consultancy services and would be taxable in India. Petitioner preferred an appeal before Commissioner (Appeals) against final assessment order. Subsequently, Commissioner invoked section 263 to revise assessment order on ground that Assessing Officer failed to note that since petitioner had a PE in India it could be taxed as per provisions of MAT under section 115JB. The petitioner challenged the revision order by filling the writ petition on the ground that order is without jurisdiction. Dismissing the petition the Court held that scope of appeal before Commissioner (Appeals) was confined to taxability of receipts towards services rendered by petitioner, thus, there was no embargo under section 263 for Commissioner to pass revisionary order as matter was not considered in appeal. Court also held that revisionary order could not be said to be without jurisdiction merely because document identification number (DIN) of order was intimated one day after said order was passed.(AY. 2015-16)(SJ)

     Texmo Precision Castings UK Ltd v. CIT (IT) (2022) 288 Taxman 251 (Mad)(HC)

119. S. 263 : Commissioner – Revision of orders prejudicial to revenue – Pendency of appeal before Tribunal -Stay of proceedings
     • Assessing Authority could complete assessment proceedings pursuant to findings given by revisional authority – No notice of demand should be made by Assessing Authority pursuant to such order till said appeal before Tribunal was disposed off. [S.254(1) Art. 226]

       Against the revision order the assessee

       preferred an appeal before the Tribunal which is pending for final disposal. The Assessing Officer issued notice to give effect to the order of the Commissioner. The assessee filed writ petition before the court seeking writ of mandamus for barring the respondents to proceed further pursuant of the order passed by the Commissioner. Court held that even if an appeal against revision order passed under section 263 was pending before Tribunal, Assessing Authority could proceed to complete assessment proceedings pursuant to findings given by revisional authority in such order passed under section 263, however, no notice of demand should be made by Assessing Authority pursuant to such order till said appeal before Tribunal was disposed off. (AY. 2016-17)(SJ)

       VIP Housing and Properties v. ITAT (2022) 288 Taxman 296 (Mad)(HC)

120. S. 263 : Commissioner – Revision

     of orders prejudicial to revenue

     • Unexplained investments – Assessing Officer has not enquired into any documentary evidence – Revision was held to be justified [S. 69]

       The Tribunal has upheld the revision order

       passed by the Commissioner. On appeal the Court held that the assessee had not submitted bank statements of either himself or society to specify the nature of the transaction made for

       the purchase of property and the source thereof – Moreover, assessee had neither submitted any document stating that property had been subsequently transferred to society nor any statement of current ownership of property and status thereof in support of his claim that property belonged to society. Further, during assessment proceedings, Assessing Officer had also not enquired into or called for any documentary evidence relevant to the above issues. Order of Tribunal upheld. (AY. 2016-17)

       Himanshu Kukreja v. PCIT (2023) 290 Taxman 453 (Uttarakhand)(HC)

121. S. 263: Commissioner – Revision of orders prejudicial to revenue – Revision was done twice – Revision for the third time is held to be not valid. [S. 143(3), 153A]

     Assessee filed its returns in response to the

     notice issued under section 153 and the assessment was completed under section 153A, read with section 143(3)of the Act. Subsequently, Principal Commissioner initiated proceedings under section 263 and passed an order directing Assessing Officer to pass a fresh order. In compliance with said order of the Principal Commissioner, a new assessment order was passed under section 143(3) read with section 263 of the Act. Principal Commissioner again initiated revision proceedings for the second time by again cancelling the non-existent first assessment order and further directed Assessing Officer to pass a fresh order. The second assessment order was never cancelled and as such remained valid. Since the assessee’s income was scrutinized and examined twice i.e. in the original proceedings and the second assessment order passed after 263 order, thus, the order passed by the Principal Commissioner in the second round of revision directing the Assessing Officer to scrutinize the accounts of the assessee for the third time was not permissible in law. Dismissing the appeal of the Revenue the Court

     held that the third assessment order passed pursuant to the second order under section 263 passed by the Principal Commissioner had no legal effect hence bad in law. Order of Tribunal affirmed. (AY. 2012-13)

     PCIT (C) v. Padma Kumar Jain (2023) 290 Taxman 394 (Jhakahd)(HC)

122. S.263 : Commissioner – Revision of other orders – Appeal not filed – Rejection of revision petition is held to be not valid – Commissioner is directed to hear the petition on merits [S. 250, Art, 226]

     Against the assessment order, the assessee

     preferred a Revision application. The Commissioner dismissed the petition on the ground that the assessee had wrongly filed a revision instead of a statutory appeal. On writ, the Court held that if the assessee has chosen not to avail of statutory appeal before the first appellate authority against the assessment order the revision petition was to be heard and disposed of on merits. (AY. 2009-10)

     Vikas Nagelia v. CIT (2023) 290 Taxman 258 (Cal.) (HC)

123. S. 264: Commissioner – Revision of other orders – Temporary advance in respect of nine concerns – Interest on borrowed capital – Reassessment – Rejection of revision application is held to be not valid [S. 36(1)(iii), 147, 148, Art. 226]

     Assessment was reopened on ground that the

     assessee had provided temporary advance of

     ` 7.96 crores in respect of nine concerns for non-business purpose and raised huge secured loan and claimed interest expenses on such

     secured loan which were utilized for providing temporary advance to sister concerns and accordingly, claim of interest expenses was not at all related to business. Assessee submitted that he had sufficient funds other than borrowed funds to make such advances and there was no nexus between borrowed funds and such advances and, consequently no part of interest paid by assessee to banks/financial institutions was disallowable. The Assessing Officer passed the reassessment order disallowing the interest. The assessee filed revision application before the Principal Commissioner. Commissioner rejected the application. On writ allowing the petition order of commissioner and reassessment order was set aside (AY. 2008-09)

     D.R Patanaik v. CCIT (2022) 288 Taxman 584 (Orissa)(HC)

124. S. 268A : Appeal – Tax effect less than the monetary limit of Rs 1 crore – Appeal of revenue was dismissed [S. 260A]

     The tax effect in revenue’s appeal before the

     High court was lower than the increased monetary limit of ` 1 crore in terms of Circular No. 17/2019, dated 8-8-2019. The appeal was dismissed. (AY. 2004-05)

     CIT v. Flow Link Systems (P.) Ltd. (2023) 290 Taxman 447 (Mad.)(HC)

125. S. 270A: Penalty for under

     -Reporting and misreporting of income – Immunity from imposition – Furnished all details of transactions – Disallowance cannot be considered misreporting – In absence of details as to which limb of section 270A was attracted and how ingredient of sub-section (9) of

     section 270A was satisfied, mere reference to word misreporting by revenue in penalty order to deny immunity from imposition of penalty and prosecution makes impugned order manifestly arbitrary – Penalty was quashed- Revenue was directed to grant immunity under section 270AA of the Act [S. 14A, 270A(9), 270AA Art, 226]

     Assessee had made a disallowance of ` 3.20

     crores which was recomputed by Assessing Officer at ` 6.82 crores. The Assessing Officer levied penalty under section 270A alleging misreporting of income. The assessee made petition for waiver of penalty under section 270AA of the Act, which was rejected. The assessee filed writ challenging the sid rejection. Allowing the petition the Court held that whether underreporting allegedly done by assessee could not amount to misreporting as assessee had furnished all details of transactions relating to disallowance made under section 14A and Assessing Officer as well as assessee had used same details to arrive at different conclusions i.e. differing quantum of disallowances under section 14A. This by no stretch of imagination could be held to be ‘misreporting’. In absence of details as to which limb of section 270A was attracted and how ingredient of sub-section (9) of section 270A was satisfied, mere reference to word ‘misreporting’ by revenue in penalty order to deny immunity from imposition of penalty and prosecution makes impugned order manifestly arbitrary. Therefore penalty order was to be quashed and revenue was to be directed to grant immunity under section 270AA of the Act. (AY. 2018-19)

     Prem Brothers Infrastructure LLP v. NFAC (2022) 288 Taxman 768 (Delhi)(HC)

126. S. 271(1)(c) : Penalty –

     Concealment – Disallowance of claim [S. 45, 94, 260A]

     Assessee-HUF claimed short-term capital loss on

     sale of shares. Assessing Officer held that shares were acquired within period of three months prior to record date and same was sold within 3 months of record date, disallowed said loss as per provisions of section 94(7). The assessment was accepted. Penalty was levied. On appeal, Tribunal allowed and deleted penalty. On appeal by the Revenue the Court up held the order of Tribunal. (AY. 2015-16)

     PCIT v. Harish Kumar HUF (2022) 288 Taxman 316/ 219 DTR 62/ 329 CTR 781 (Delhi)(HC)

127. S. 271(1)(c) : Penalty –

     Concealment – Provision of interest twice – Bonfide mistake – Deletion of penalty is justified.

     The assessing Officer made an additional

     repeated amount in assessee’s total income and also levied a penalty under section 271(1)(c) of the Act. Tribunal held that though assessee had accounted for the provision of interest twice by mistake since upon realising such a mistake it passed necessary rectification entries in the subsequent year by showing said interest expense as prior period income the penalty levied was deleted. On appeal, High Court affirmed the order of the Tribunal. (AY. 2007-08)

     PCIT v. Gujarat State Electricity Corporation Ltd. (2023) 290 Taxman 77(Guj.)(HC)

128. S. 276B : Offences and prosecutions – Failure to pay to the credit tax deducted at source – Not managing director – Not in charge of day to day activities of the company – No error was committed by Trial

     Court in discharging assessee – Revision petition of Revenue was dismissed. [S. 2(35)(b)]

     In the notice issued under section 2(35) in

     complaint that assessee was Managing Director of accused company and was responsible for day-to-day business and conduct of accused company. Assessee filed an application before Trial Court for discharge contending that he was not Managing Director of company and only Director and hence did not fall under section 2(35)(b). Trial Court after considering grounds urged in petition and considering material available on record, allowed application and discharged assessee. On revision, revenue prayed for setting aside order discharging assessee. Dismissing the petition the Court held that notice issued to assessee was not in consonance with section 2(35) as there was no specific averment in notice that assessee was in charge of day-to-day affairs of company – Trial Court took note of notice and came to conclusion that assessee was only asked to show cause why prosecution should not be initiated against him for offence punishable under section 276B, but nothing was contained therein with regard to contents of section 2(35),, therefore, Trial Court committed no error in discharging assessee. (FY. 2016-17) (SJ)

     ITD v. Jenious Clothing (P) Ltd. (2022) 288 Taxman 521 (Karn)(HC)

129. S. 276C : Offences and prosecutions – Wilful attempt to evade tax – Order of CIT(A)) was set aside by the Tribunal- Prosecution launched on alleged failure to comply demand notice will not survive – Criminal petition was allowed. [S. 256, 276(2), 278E

     Assessing Officer in view of order passed

     by Commissioner (Appeals) determined tax

     payable by assessee at certain amount and issued demand notice under section 156 As assessee failed to comply demand notice, Deputy Commissioner after obtaining sanction to prosecute lodged a private complaint against assessee under section 276C(2) read with section 278E. Assessee filed petition to quash private complaint on the ground that pending prosecution initiated based on order passed by Commissioner (Appeals), she preferred an appeal against order of Commissioner (Appeals) before Tribunal and Tribunal set aside order of Commissioner (Appeals) and, therefore, very foundation of prosecution against her for alleged wilful default to demand falls to ground and prosecution had to be quashed. Court held that in view of order of Tribunal assessee could not be liable to pay demand based on order passed by Commissioner (Appeals) and criminal prosecution laid based on alleged failure to comply demand notice will not survive. Accordingly petition was allowed. (AY. 2014-15)(SJ)

     A. Latha v. Dy. CIT (2022) 288 Taxman 565 (Mad) (HC)

130. S. 276CC : Offences and prosecutions – Failure to furnish return of income – Survey – Delay of several months – Launching of complaint is justified – Petition to quash the proceedings dismissed [S. 133A, 139, 148, 271(1)(c), 276(1),

     277]

     During survey conducted at business premises of petitioner, it was noted that petitioner had concealed income for relevant six assessment years. Consequently, reopening notice was issued and petitioner filed his return of income. Thereafter, tax payable was determined and penalty was levied under section 271(1)(c). Revenue filed complaints on grounds that petitioner committed offences punishable under sections 276CC, 276C(1) and 277 the Act. The

     petitioner filed petition to quash the prosecution proceedings and contended that assessment order was passed after accepting returns filed by him and amount due was also paid thus, there could be no prosecution on ground of making false statements. The court observed that substantial amount of income which was suppressed by petitioner came into light only after survey. Return of income was filed by petitioner in response to reopening notice with a delay of several months.. Petitioner was involved in wilful and deliberate concealment of true and correct income by not filing return within stipulated time and complaint filed by revenue was justified. (AY. 1999-2000 to 2004- 05) (SJ)

     Dharampal R. Pandia v. ACIT (2022) 288 Taxman 177 (Mad) (HC)

131. S. 276CC : Offences and prosecutions – Failure to furnish return of income – Tribunal quashing the order on ground of limitation – Criminal prosecution initiated against petitioner for committing offences under sections 276CC and 276 could not be quashed [S. 139,148, 153A, 276C, 278E]

     Petitioner failed in complying with statutory

     requirements under sections 139(1), 148 and 153A for relevant assessment years. Petitioner was issued show cause notice for prosecution under section 276CC for concealing his true income by not filing return and on failure to pay advance tax. Consequently, a complaint was filed stating that petitioner committed offences under sections 276CC and 276. Petitioner made an application for quashing the complaint on ground that Tribunal declared assessment orders as null and void and, thus, prosecution of criminal cases would not be sustainable. Court held that adjudicating proceedings would

     not be binding on proceedings for criminal prosecution and both proceedings could be launched simultaneously. Where Tribunal in adjudicating proceedings disposed appeals merely on ground of limitations and merits raised in complaint with regard to non-filing of return of income, non-payment of advance tax, non-payment of tax demanded, suppression of true and correct income were not considered, criminal prosecution initiated against petitioner could not be quashed. (AY. 2002-03 to 2006-07) (SJ)

     S.J. Surya v. Dy. CIT (2022) 288 Taxman 621 / 214

     DTR 361 (Mad)(HC)

132. S.281B : Provisional attachment to protect interest of revenue- Cannot be done without providing proper reasons for attachment of property

     The attachment of the assessee’s bank accounts

     in thousands of crores was not valid and arbitrary and mechanical since the Revenue has simply stated that large demands will be raised and to protect the interests of the revenue, the attachment is made. This will not suffice and the revenue must disclose proper reasons why the attachment of property is being made. Petitioner given liberty to obtain overdrafts and the attachment is valid to the extent the petitioner does not divert funds/profits being royalty payments outside India.(WP/16692/2022 decided on 16.12.2022)

     Xiaomi Technology India Private Limited vs. DCIT (2023) 330 CTR 113 (Kar)

133. Income Declaration Scheme, 2016- Writ Petition initially dismissed for non-compliance with payment of third instalment under the scheme- On writ appeal held that prima facie the petitioner has paid

     the tax before the cut-off date stipulated by Finance Act, 2019 amendment- Trial writ court to consider afresh plea of petitioner

     The assessee failed to make payment of the

     third instalment under the Income Declaration Scheme, 2016 within the due date but however in view of the amendment by the Finance Act, 2019 to the provisions of the scheme where interest is payable under the scheme for late payment and the due date extended, the trial court which dismissed the petition is to examine afresh whether the scheme is applicable to the applicant since the payment was made before the cut off date stipulated after amendment. (M.A.T 406/2019 decided on 16th December, 2022)

     Satyajit Bose v. DCIT (2023) 330 CTR 233 (Cal)

134. Form 3 Direct Tax Vivaad Se Vishwas Act, 2020- Failure to pay the amount of disputed tax before the last date- Declarations ought to be accepted and payment to be made with simple interest @9% within four weeks

The assessee having filed declarations under the

Direct Tax Vivaad Se Vishwas Act, 2020, even if it failed to make payment before the last date stipulated for paying the disputed tax due to the death of one of the directors of the company, it ought to be allowed an extended time to make payment within four weeks with simple interest @9% since COVID-19 was prevalent at the relevant time and the assessee could not bona- fide make the payment due to the aforesaid reason and no prejudice would be caused to the Department.(WP(C)/3560/2022 decided on 2nd November, 2022)

Srishtii Infra Housing Pvt. Ltd. v. PCIT (2023) 330 CTR 167(Del)