IMPORTANT INCOME TAX CASE LAWS 28.10.25
| Section | Case Law Title | Brief Summary | Citation | Relevant Act |
| Section 9 of the Income-tax Act, 1961 | Huawei International Pte. Ltd. v. ACIT, International Taxation | Where a Singapore-based ICT company sold telecom equipment and software offshore to Indian customers without a Permanent Establishment (PE) in India, the reopening of assessment based on Form 26AS data merely to conduct a detailed investigation into the taxability of receipts was unjustified. | Click Here | Income-tax Act, 1961 |
| Section 14A of the Income-tax Act, 1961 | Deputy Commissioner of Income-tax v. Small Industries Development Bank of India | Where the assessee made a suo motu disallowance under Section 14A for administrative expenditure based on a pro-rata employee calculation, and the Assessing Officer did not give a specific finding on the books of accounts, the assessee’s suo motu disallowance was to be accepted. | Click Here | Income-tax Act, 1961 |
| Section 36(1)(vii) of the Income-tax Act, 1961 | Deputy Commissioner of Income-tax v. Small Industries Development Bank of India | Where a financial institution claimed deduction for bad debts under Section 36(1)(vii) and provision for bad and doubtful debts under Section 36(1)(viia)(c), and proved no duplication or excess claim, the restriction under the proviso to Section 36(1)(vii) was not applicable, and the disallowance was deleted. | Click Here | Income-tax Act, 1961 |
| Section 36(1)(viii) of the Income-tax Act, 1961 | Deputy Commissioner of Income-tax v. Small Industries Development Bank of India | Deduction claimed by a financial institution under Section 36(1)(viii) (for reserve created from eligible business profits) must be computed without reducing the total income by the deduction allowed under Section 36(1)(viia)(c), as both operate on different bases. | Click Here | Income-tax Act, 1961 |
| Section 37(1) of the Income-tax Act, 1961 | Midas Metacast (P.) Ltd. v. ITO | Deduction claimed for commission expenses paid through banking channels and supported by evidence like TDS deduction, bank statements, invoices, and ledgers was found genuine and incidental to business; the addition for unverifiable payments was unsustainable. | Click Here | Income-tax Act, 1961 |
| Section 40(a)(ia) of the Income-tax Act, 1961 | Midas Metacast (P.) Ltd. v. ITO | Disallowance of job-work expenses under Section 40(a)(ia) for alleged non-deduction of TDS was not sustainable when the assessee furnished Form 16A and Form 26AS showing that TDS had been duly deducted and matched with vendor entries. | Click Here | Income-tax Act, 1961 |
| Section 43B of the Income-tax Act, 1961 | Dalip Singh Rathore v. Income-tax Officer | No disallowance under Section 43B was warranted for amounts like VAT, GST, etc., if they were neither debited to the profit and loss account nor claimed as a deduction by the assessee, even if not paid before the due date of filing the return. | Click Here | Income-tax Act, 1961 |
| Section 68 of the Income-tax Act, 1961 | Arris Estates (P.) Ltd. v. Assessment Unit | Where the Assessing Officer passed an assessment order raising a demand based on proposed additions under Section 68 (cash credit) without providing a requested video conferencing hearing, the order was passed in violation of natural justice and was remanded for a fresh order after giving an opportunity of hearing. | Click Here | Income-tax Act, 1961 |
| Section 80G of the Income-tax Act, 1961 | MRT No. 1 Charitable Trust v. Commissioner Income (Exemption) | A trust inadvertently applying for Section 80G registration under the wrong clause (iv) instead of (i) was entitled to registration for five years; the matter was remanded to the Commissioner (Exemption) to consider the application as filed under the correct clause (i) and grant registration. | Click Here | Income-tax Act, 1961 |
| Section 80G of the Income-tax Act, 1961 | Commissioner of Income-tax (Exemption) v. Dignity Education Society | An education society with existing Section 12AA registration deserved Section 80G(5) approval, even if it generated a surplus from student fees, as its charitable status was already recognized. ITAT’s direction to grant approval was legally valid. | Click Here | Income-tax Act, 1961 |
| Section 270A of the Income-tax Act, 1961 | Bharatkumar Jaishinh Soni v. Income Tax Officer | A claim for exemption of leave encashment relying on a plausible construction of law and anticipation of a constitutional court’s observation (later formalized by CBDT Notification No. 31/2023) could not be branded as ‘misreporting’; therefore, the penalty under Section 270A(9) was to be deleted. | Click Here | Income-tax Act, 1961 |