Interest on Refunds (Section 244A): System Glitches and the Burden of Proof This ruling for AY 2014-15 is a landmark for taxpayers facing technical issues with the e-filing portal. It clarifies that a “system glitch” cannot be used by the Revenue to deny statutory interest on a legitimate refund. The Legal Issue Can the Assessing… Read More »
TDS Compliance Rulings: Late Fees, Default Interest, and Post-Demand Penalties These rulings clarify the interplay between pandemic-era reliefs and the standard penalty provisions of the Income-tax Act for AY 2021-22 and 2022-23. I. Section 234E: Late Fee for TDS Returns The Legal Issue Can the Supreme Court’s general extension of limitation periods (due to COVID-19)… Read More »
Reassessment of Amalgamated Entities: Jurisdiction and Section 170 This ruling for AY 2013-14 and 2014-15 reinforces the principle that a “dead” company cannot be taxed. Once a company is amalgamated and ceases to exist, it loses its status as a “legal person,” and any notice issued in its name is considered a nullity. The Legal… Read More »
Section 80G Approval and the Finance Act 2024 Amendment: New Timelines for Charitable Trusts This ruling addresses a common procedural trap for charitable trusts caught between old deadlines and new legislative relaxations. It clarifies that the Finance Act 2024 provides a “permanent window” for trusts to apply for 80G approval, superseding previous restrictive circulars. The… Read More »
Income Tax Rulings: Discounts on Property & Section 54F Exemptions (AY 2021-22) These two rulings provide essential clarity for property buyers regarding the taxation of builder discounts and the eligibility criteria for capital gains exemptions when owning multiple properties. I. Builder Rebates/Discounts: Not “Income from Other Sources” The Legal Issue Can a contractual discount or… Read More »
Refund Adjustments vs. Stay of Demand: The 20% Rule Violation This ruling for AY 2005-06 and 2020-21 is a significant victory against “high-handed” recovery tactics. It clarifies that the Income Tax Department cannot override a judicial stay order by unilaterally adjusting refunds, and if they do, they must return the excess with interest. The Legal… Read More »
Reopening Assessment on a “Change of Opinion”: The Finality of Section 35(2AB) Deductions This ruling for AY 2013-14 reinforces the legal boundary between “reassessment” and “review.” It confirms that once an issue has been thoroughly examined during a regular scrutiny assessment, the tax department cannot use reopening provisions to simply take a “second look” at… Read More »
IMPORTANT INCOME TAX CASE LAWS 11.03.2026 Relevant Act Section Case Law Title / Authority Brief Summary Citation PBPT Act, 1988 Sec 2(9)(A) & 24 Smt. Radhamani A. v. ACIT Attachment is sustainable even if beneficial owners aren’t fully identified, provided the “benamidar” fails to prove a lawful source of funds. Click Here Income Tax Act… Read More »
Benami Property Transactions: Burden of Proof and the Search for the Beneficial Owner This ruling under the Prohibition of Benami Property Transactions Act (PBPT), 1988, highlights the high threshold required for an assessee to prove the “genuine source” of funds and the powers of the Initiating Officer (IO) to trace complex webs of “joint beneficial… Read More »
LTCG on Penny Stocks: When Documentation Trumps General Allegations The Legal Issue The core dispute for AY 2016-17 was whether the Assessing Officer (AO) can treat Long-Term Capital Gains (LTCG) from the sale of shares as “unexplained cash credit” under Section 68, simply because the company in question was classified as a “penny stock” by… Read More »