I. Section 14A Disallowance: Capped at Exempt Income & Only Yielding Investments Issue Can the disallowance of expenditure under Section 14A exceed the total exempt income earned during the year? Should Rule 8D calculations consider all investments or only those that actually yielded exempt income? Decision Cap on Disallowance: The Tribunal reiterated the settled principle… Read More »
Addition in Reassessment deleted as Primary Reason for Reopening was dropped; Ranbaxy Principle applied Issue Whether an Assessing Officer (AO) can validly make an addition on a new issue (unexplained credits) during reassessment proceedings under Section 147, if no addition is ultimately made on the primary ground (turnover mismatch) for which the case was originally… Read More »
Reassessment Order against NRI Quashed; Regular ITO lacks Jurisdiction over Non-Resident Issue Whether a reassessment order passed against a Non-Resident Indian (NRI) is valid if the initial notice under Section 148 was issued by a regular/local Income Tax Officer (ITO) instead of the ITO (International Taxation) who holds the specific jurisdiction over non-residents. Facts Assessee… Read More »
Reopening Notice for AY 2014-15 issued in July 2022 held Time-Barred; TOLA extension cannot breach 6-year absolute limit Issue Whether a notice under Section 148 issued on 27-07-2022 for Assessment Year 2014-15 is barred by limitation under the first proviso to Section 149, given that the 6-year limit under the old regime had expired, and… Read More »
Reopening Notice beyond 3 years quashed; Sanction from Wrong Authority (Pr. CIT) fatal Issue Whether a notice under Section 148 (for reopening assessment) issued beyond three years from the end of the relevant assessment year is valid if the sanction was obtained from the Principal Commissioner, whereas Section 151(ii) mandates approval from the Principal Chief… Read More »
Ex-Parte CIT(A) order set aside despite non-compliance; One final opportunity granted for Natural Justice Issue Whether an appellate order passed by the Commissioner (Appeals) dismissing an appeal due to non-prosecution (failure to reply to notices) should be set aside to grant one more opportunity to the assessee, considering the principles of natural justice. Facts The… Read More »
IMPORTANT INCOME TAX CASE LAWS 10.12.2025 Relevant Act Section Case Law Title Brief Summary Citation Income-tax Act, 1961 Section 2(15) (Charitable Purpose) Malanadu Farmers Society v. DCIT, Exemption Assessee’s dominant purpose was relief of poor, small, and marginal farmers. Milk procurement/processing activities were incidental and inseparable from this charitable objective, qualifying for exemption under section… Read More »
No Penalty u/s 270A for Under-reporting where tax paid before notice and explanation is bona fide Issue Whether penalty for “under-reporting of income” under Section 270A can be levied when the assessee failed to file the original return u/s 139(1) but subsequently filed a return in response to a Section 148 notice, admitted the income… Read More »
Revision order u/s 263 Quashed; AO’s order passed with Section 153D approval cannot be termed “Erroneous” merely on change of opinion Issue Whether the Principal Commissioner (PCIT) can invoke revisionary jurisdiction under Section 263 to set aside an assessment order passed under Section 153C (search assessment), when the Assessing Officer (AO) had conducted due enquiries,… Read More »
Assessment against Dead Person is a Nullity; Order passed without notifying Legal Representative quashed Issue Whether an assessment order passed in the name of a deceased assessee is valid if the Assessing Officer (AO) failed to issue notice to the legal representative (LR) and bring them on record, even though the death occurred while proceedings… Read More »