IMPORTANT INCOME TAX CASE LAW 11.11.2025 Section Case Law Title Brief Summary Citation Relevant Act Section 4 ACIT, Exemption v. Urban Improvement Trust An Urban Improvement Trust, constituted under State law, was considered an instrumentality of the State (Article 12) and entitled to immunity from Union taxation (Article 289). Thus, its income (from grants, land… Read More »
HC: Writ Against 148A(d) Order is Maintainable Despite Alternative Appeal Remedy. Issue Whether a High Court is barred from exercising its discretionary writ jurisdiction under Article 226 of the Constitution to entertain a challenge against an order passed under Section 148A(d) of the Income-tax Act, given that a statutory appeal against such an order is… Read More »
TDS Credit Allowed on Bond Maturity Even When Income Was Taxed on Accrual. Issue Can the tax department deny a taxpayer credit for Tax Deducted at Source (TDS) in the year of maturity of a bond, on the grounds that the taxpayer had already offered the corresponding interest income to tax on an accrual basis… Read More »
AO Cannot Hold Assessee in Default Under Section 194I for EDC Payments to HUDA. Issue Whether an assessee can be held in default under Section 194I (TDS on Rent) for non-deduction of tax on External Development Charges (EDC) paid to a state authority (HUDA), especially when the final order relies exclusively on this section even… Read More »
Reassessment Notice Quashed as it Was Issued Beyond the “Surviving Time” Limit. Issue Whether a reassessment notice issued under Section 148 on August 30, 2022 (for AY 2016-17) is legally valid, or if it is barred by limitation because it was issued after the expiry of the “surviving time” available to the department under the… Read More »
HC Quashes Case Transfer, Citing Stale Reasons and New Faceless Assessment Regime. Issue Whether a fresh order under Section 127 to transfer an assessee’s case for “uniformity in assessment” is legally valid and justifiable, when the original reason for the transfer (a group assessment) is now stale, and the implementation of the faceless assessment regime… Read More »
Reassessment Based on Third-Party Data Without a Live Nexus is an Invalid Fishing Inquiry. Issue Can an Assessing Officer (AO) validly initiate reassessment proceedings against taxpayers (petitioners) on the suspicion that they paid “on-money” (cash) for property purchases, based solely on (1) loose papers seized from a third party (‘D’) relating to a different, later… Read More »
AO Must Include Previous Owner’s Costs in “Cost of Improvement”; Matter Remanded for Verification. Issue Whether the “cost of improvement” for the purpose of calculating capital gains must include improvement costs incurred by the previous owner (as per Section 49(1)), and whether an Assessing Officer (AO) can disallow such a claim without examining crucial additional… Read More »
PR/Communication is an “Agency Business,” Ineligible for 44AD Presumptive Taxation. Issue Whether an assessee engaged in a Public Relations (PR) and communication business, which is in the nature of an “agency business,” is eligible to compute their income under the presumptive taxation scheme of Section 44AD of the Income-tax Act, 1961. Facts The assessee filed… Read More »
Section 40(a)(ia) Applies Only to Claimed Deductions, Not to Capitalized Expenditure. Issue Can an Assessing Officer (AO), during summary processing under Section 143(1)(a), make a disallowance under Section 40(a)(ia) for non-deduction of TDS on an expenditure that the assessee has capitalized and has not claimed as a revenue deduction? Facts The assessee filed its return… Read More »