A reopening of assessment is invalid if the sanction for it is not obtained from the correct, higher-level authority as prescribed by law for cases older than three years. Issue Is a notice for reopening an assessment valid if it’s sanctioned by an authority lower than the one specified in Section 151 of the Income-tax… Read More »
Genuine STCG can’t be reclassified as unexplained cash credit without adverse material. Issue Can an Assessing Officer treat a fully documented Short-Term Capital Gain (STCG) from transactions on a recognized stock exchange as unexplained cash credit under Section 68 of the Income-tax Act, 1961, without any concrete evidence of wrongdoing by the assessee? Facts The… Read More »
There’s no legal bar on paying partners’ remuneration in cash; such payments are fully deductible if they meet the conditions of Section 40(b) of the Income-tax Act, 1961. Issue Can remuneration paid by a partnership firm to its partners be disallowed simply because the payment was made in cash rather than through a bank? Facts… Read More »
When the source of payment for purchases is known but the supplier isn’t genuine, the disallowance should be made under Section 37(1) of the Income-tax Act, 1961, not the harsher Section 69C. Issue If an assessee’s purchases are found to be non-genuine, but the payments for them are properly documented through bank accounts, should the… Read More »
No separate TP adjustment should be made for overdue receivables from an associated enterprise if a working capital adjustment has already been granted under the TNMM. Issue Can a separate transfer pricing (TP) adjustment be made by charging notional interest on overdue receivables if the financial impact of these delayed payments is already factored into… Read More »
A taxpayer can retract a mistaken suo moto disallowance under Section 14A if there’s a valid basis, such as having sufficient own funds to cover investments. Issue Can an assessee withdraw a disallowance under Section 14A that was mistakenly made in the return of income, and what are the grounds for deleting such a disallowance?… Read More »
The rule of consistency applies when facts and law remain unchanged for tax exemption. Issue Is a charitable trust entitled to an exemption under Section 10(23C)(iv) of the Income-tax Act, 1961, based on the rule of consistency, when the same exemption has been granted to it in numerous prior years on identical facts and law?… Read More »
An AO’s order is not erroneous for not examining issues outside limited scrutiny’s scope. Issue Can an assessment order passed under the limited scrutiny framework be considered “erroneous” for the purpose of revision under Section 263 of the Income-tax Act, 1961, simply because the Assessing Officer did not examine an issue that was outside the… Read More »
The Institute of Chartered Accountants of India Direct Taxes Committee The Institute of Chartered Accountants of India 30th July, 2025 Public Announcement Limit on number of tax audits (effective from 1.4.2026) In order to ensure the quality of tax audit, the Council of the Institute has, at its 442nd meeting held on 26th and 27th… Read More »
IMPORTANT INCOME TAX CASE LAWS 23.09.25 SECTION CASE LAW / CIRCULAR TITLE Brief Summary CITATION RELEVANT ACT Interest Waiver CBDT waives interest on demand for disallowance of Sec. 87A rebate The CBDT has waived interest u/s 220(2) on tax demands arising from the incorrect allowance of the Sec. 87A rebate, provided the demand is… Read More »