IMPORTANT INCOME TAX CASE LAW 30.05.25 Section Case Law Title Brief Summary Citation Relevant Act 2(14) Dharampal Saghera v. Income-tax Officer Compensation received in family settlement for relinquishing possession and claim of property is capital gain, not income from other sources. Click Here Income-tax Act, 1961 10(23C) Institute Management Committee ITI Jhalawar v. Income-tax Officer… Read More »
I. Section 50C Inapplicable if Actual Sale Price Exceeds Stamp Duty Value. Issue: Whether Section 50C of the Income-tax Act, 1961, applies to make an addition based on a Valuation Officer’s determination, when the actual sale consideration declared by the assessee for a residential flat already exceeds the stamp duty value. Facts: For Assessment Year… Read More »
Section 43CA’s 10% tolerance band applies retrospectively, being a beneficial and curative amendment, thus no addition warranted if the difference between DVO and sale consideration is within 10%. Issue: Whether the proviso to Section 43CA of the Income-tax Act, 1961, which introduces a tolerance band (initially 5%, later 10%) for the difference between the sale… Read More »
Donation for scientific research auditorium is deductible under Section 35(1)(ii), even if capital in nature or named after a director’s father. Issue: Whether a donation made by an assessee-company to an approved scientific research association (Indian Institute of Science) for the construction of a state-of-the-art auditorium can be denied deduction under Section 35(1)(ii) of the… Read More »
Rectification application for tax credits and interest calculation not decided within six months is remanded, with AO directed to complete rectification within one month. Issue: When an assessee files a rectification application under Section 154 of the Income-tax Act, 1961, providing relevant information regarding tax payments, interest calculations, and TDS credits, but the Assessing Officer… Read More »
Reopening notice beyond 3 years is invalid if the escaped income for the specific year is below Rs. 50 lakhs, even if cumulative undercharging across multiple years exceeds the threshold. Issue: Whether an Assessing Officer (AO) can issue a notice for reassessment under Section 148 of the Income-tax Act, 1961, for Assessment Year 2018-19, beyond… Read More »
Reassessment order under Section 69 quashed due to AO’s failure to dispose of assessee’s objections to reopening with a speaking order, violating natural justice. Issue: Whether a reassessment order passed by the Assessing Officer (AO) under Section 147 of the Income-tax Act, 1961, making an addition under Section 69 (unexplained investments), is valid if the… Read More »
I. PCIT cannot revise depreciation on goodwill under Section 263 if it was allowed in prior years, accepted by the Tribunal, and no factual/legal changes occurred. II. PCIT cannot revise Section 80-IA deduction under Section 263 if the AO made inquiries and accepted the claim based on furnished reconciliation, without clear findings of error or… Read More »
Denial of trust registration is remanded for fresh adjudication, as the Commissioner failed to prove non-charitable objectives or non-genuine activities, despite financial discrepancies. Issue: Whether the Commissioner (Exemptions) is justified in denying registration to a charitable trust under Section 12AB of the Income-tax Act, 1961, solely based on the financial statement not showing costs incurred… Read More »
I. Delay of 33 days in filing appeal against 12AB/80G order condoned due to assessee’s limited staff, infrequent email checks, and delayed notification by CA. II. Rejection of 12AB registration application reversed and remanded, allowing assessee to cure non-compliance (trust deed, Form 10AB, state registration, activity genuineness). I. Condonation of Delay in Filing Appeal Against… Read More »