Daily Archives: May 22, 2025

Reassessment Justified When Source of Investment, Including Contribution from Mother, Remains Doubtful Issue: Whether a reassessment notice is justified when an assessee fails to file an income tax return and, upon inquiry regarding an unexplained investment in immovable property, claims a part of the investment was made by a family member (mother), but the source… Read More »

Reassessment Notice Beyond 3 Years Invalid if Escaped Income Below Rs. 50 Lakhs Issue: Whether a reassessment notice issued under Section 148 after three years from the end of the relevant assessment year is valid if the income that has escaped assessment does not amount to, or is not likely to amount to, Rs. 50… Read More »

Reassessment Based on “Change of Opinion” Without New Tangible Material Held Invalid Issue: Whether a reassessment notice issued after four years from the end of the relevant assessment year, based on information already available to the Assessing Officer (AO) during the original assessment proceedings (completed under Section 143(3)), amounts to a mere “change of opinion”… Read More »

Disallowance of Interest Expense on FDs as Security for Business Loans Unjustified Issue: Whether interest expenditure paid by a business entity on bank loans, against which Fixed Deposits (FDs) held as security deposits are earning interest income, can be disallowed under Section 57 of the Income-tax Act, 1961, when the assessee offers only the net… Read More »

Section 54F Exemption Claim in Reassessment Proceedings, Matter Remanded for Verification Issue: Whether an assessee can claim an exemption under Section 54F of the Income-tax Act, 1961, for the first time in a return filed in response to a reassessment notice under Section 148, and if so, whether the Assessing Officer is obligated to consider… Read More »

Favorable Rulings for Assessee on Energy Tax, Section 80-IA, and UPS Depreciation This case combines three distinct rulings, all in favor of the assessee for the assessment year 2010-11. I. Unpaid Energy Tax Not Disallowable Under Section 43B Issue: Whether unpaid energy tax, which was not payable under the Delhi Municipal Corporation bye-laws, could be… Read More »

Income of Scheduled Tribe Member Posted in Specified Area is Exempt Under Section 10(26) Issue: Whether an individual belonging to a Scheduled Tribe, as recognized in their home state, is entitled to exemption from income tax on their salary under Section 10(26) of the Income-tax Act, 1961, when posted in a “specified area” as defined… Read More »

Charitable Trust Registration Matter Remanded, CA’s busy schedule reasonable cause for not sealing/signing documents. Issue: Whether an application for permanent registration of a charitable trust under Section 12(1)(ac)(iii) should be rejected solely because the furnished income and expenditure account was not in the prescribed format or lacked the seal and signature of a Chartered Accountant,… Read More »

Delay in Filing Return and Forms for Charitable Trust Exemption Justified, Matter Remanded Issue: Whether a charitable trust, engaged in the upliftment of the poor, should be denied exemption under Section 11(2) of the Income-tax Act, 1961, solely due to an 18-day delay in filing its return of income and accompanying Forms 9A and 10B,… Read More »