INCOME TAX CASE LAWS 18.05.2026

Relevant Act	Section	Case Law Title	Brief Summary	Citation
PBPT Act, 1988	Sec 2(9)	Manjula v. D.A. Srinivas	Employer-employee and commercial contractual relationships under an MOU do not qualify as a “fiduciary capacity” exception to a benami transaction.	Click Here
PBPT Act, 1988	Sec 3	Manjula v. D.A. Srinivas	The 2016 Benami Amendment Act’s declaratory, procedural, and curative provisions apply retrospectively. Penal provisions creating new offences or enhancing punishment apply only prospectively.	Click Here
PBPT Act, 1988	Sec 4	Manjula v. D.A. Srinivas	A suit seeking title declaration based on a Will is liable for rejection under Order VII Rule 11 CPC if the plaint reveals the properties were actually purchased using the plaintiff’s funds in a deceased person’s name (benami arrangement), despite clever drafting.	Click Here
Income-tax Act, 1961	Sec 5	CIT-LTU v. Mahindra Holidays and Resorts (India) Ltd.	Deferring upfront long-term time-share membership fees and recognizing income over the tenure using the matching principle is permissible under the mercantile system.	Click Here
Indian Contract Act, 1872	Sec 10	Manjula v. D.A. Srinivas	MOUs signed to fund agricultural land purchases in a deceased person’s name to deliberately circumvent the Karnataka Land Reforms Act are void under Section 23 as they defeat the statutory mandate.	Click Here
Income-tax Act, 1961	Sec 24	DCIT v. Offbeat Developers (P.) Ltd.	Dual-income mall operators who make reasonable suo-moto disallowances for House Property allocation cannot be subjected to further proportionate AO disallowances for employees’ remuneration, legal fees, and common miscellaneous expenses. Repairs, maintenance, and security charges for common areas recovered from tenants via CAM charges are fully deductible under the business head.	Click Here
Hindu Succession Act, 1956	Sec 25	Manjula v. D.A. Srinivas	A person accused of murdering the deceased who suppresses a pending criminal investigation is disqualified from inheriting via testamentary succession (Will). A formal conviction is not a prerequisite for this disqualification.	Click Here
PBPT Act, 1988	Sec 27	Manjula v. D.A. Srinivas	Double Jeopardy: Confiscation proceedings are civil and distinct from criminal prosecution; Article 20(2) of the Constitution does not apply. Procedure: Once a transaction is judicially declared benami and final, the property can be confiscated under Section 27 directly without fresh Section 24 to 26 adjudication.	Click Here
Income-tax Act, 1961	Sec 35	Ultramarine & Pigments Ltd. v. ACIT	Rejection of a rectification application under Section 154 is invalid if it seeks to quantify Section 35(2AB) R&D deductions using a DSIR-approved Form 3CL that was already available on the jurisdictional record.	Click Here
Income-tax Act, 1961	Sec 36(1)(va)	TJSB Sahakari Bank Ltd. v. DCIT	Additions made automatically during CPC processing for delayed EPF contributions based purely on audit report data must be remitted back for factual verification of documents.	Click Here
Income-tax Act, 1961	Sec 36(1)(vii)	TJSB Sahakari Bank Ltd. v. DCIT	Section 36(1)(vii) bad debt deductions for assets written off in current books cannot be denied to a cooperative bank simply because the NPA classification happened prior to April 1, 2006 (when Section 36(1)(viia) wasn’t applicable to them).	Click Here
Income-tax Act, 1961	Sec 41(1)	TJSB Sahakari Bank Ltd. v. DCIT	Making a separate Section 41(1) addition on written-off loans that were already recovered, credited to the P&L account, and offered to tax by the bank leads to unsustainable double taxation.	Click Here
Income-tax Act, 1961	Sec 50C	Nasa Agro Industries (P.) Ltd. v. DCIT	Section 50C applies to the transfer of leasehold rights in land and buildings. However, factual disputes over stamp duty disclosure in a legacy reassessment require a remand to verify the original assessment files.	Click Here
Income-tax Act, 1961	Sec 54B	Gajarsingh Mangusingh Rathod v. ITO	Revenue records or certificates only establish a legal presumption; they do not conclusively prove agricultural use. Exemption is disallowable if the assessee fails to produce concrete proof like sale bills or purchase invoices.	Click Here
Income-tax Act, 1961	Sec 68	PCIT v. Sanjaykumar Damjibhai Gangani	SLP dismissed against HC order. Penny stock additions under Section 68 are unjustified if the assessee presents full evidence (contract notes, demat data, bonus share details) and the AO produces zero adverse proof.	Click Here
Income-tax Act, 1961	Sec 68	Audinarayana Reddy Papareddy v. DCIT	Unsecured loans and sundry creditors claimed as opening balances must be set aside for ledger/credit-period verification; genuine brought-forward balances cannot be taxed as Section 68 current year credits.	Click Here
Income-tax Act, 1961	Sec 68	R.K. Stockholding (P.) Ltd. v. ACIT	Reassessment orders are void if the AO fails to provide recorded reasons upon request and issues notices under the new reassessment regime while continuing the proceedings under the old unamended law.	Click Here
Income-tax Act, 1961	Sec 69	Audinarayana Reddy Papareddy v. DCIT	Unreconciled sundry debtor entries on survey loose sheets are taxable as unexplained investments, but only to the extent of the profit element (estimated at an 8% net profit margin on the differences).	Click Here
Income-tax Act, 1961	Sec 69A	Audinarayana Reddy Papareddy v. DCIT	If the net profit element of unreconciled debtors has already been taxed, a separate addition based on a partner’s statement admitting the identical discrepancy cannot be sustained concurrently.	Click Here
Income-tax Act, 1961	Sec 147 / 144B	S. Palani v. AO	Passing an ex-parte assessment order without ensuring the assessee actually received notices (which were uploaded only to a portal or sent to a new email ID) violates the principles of natural justice and vitiates the order.	Click Here
Income-tax Act, 1961	Sec 148	R.K. Stockholding (P.) Ltd. v. ACIT	Notices issued after April 1, 2021, that bypass the new mandatory statutory procedures and follow the old unamended framework are illegal, rendering the resultant assessments null and void.	Click Here
Income-tax Act, 1961	Sec 148	Asro Arcade v. ITO	A reassessment notice bearing the printed name and designation of the issuing officer satisfies the authentication standards under Section 282A(2), even without a physical or digital signature.	Click Here
Income-tax Act, 1961	Sec 148A	PCIT-7 v. Jyoti Bhatia	SLP dismissed. Reassessment proceedings are bad in law if the final order shifts focus to a completely different material ground (e.g., sham dividends) unrelated to the initial reasons recorded (e.g., fictitious derivative losses).	Click Here
Income-tax Act, 1961	Sec 149	S. Palani v. AO	A reopening notice issued on March 31, 2022, for AY 2018-19 involving an alleged tax evasion of Rs. 4.87 crores is valid as it falls cleanly within the extended limitation limits prescribed under Section 149.	Click Here
Income-tax Act, 1961	Sec 149	Damanjeet Singh Oberoi v. DCIT	A fresh Section 148 notice issued on July 26, 2023, for AY 2015-16 under the new regime is barred by limitation. TOLA provisions cannot extend the timeline for notices issued on or after April 1, 2021, for this AY.	Click Here
Income-tax Act, 1961	Sec 151	Audinarayana Reddy Papareddy v. DCIT	Time spent resolving writ petitions and court directions must be excluded from the 3-year timeline via the 6th proviso to Section 149(1)(b). Consequently, approval from the Principal CIT (Central) remains valid.	Click Here
Income-tax Act, 1961	Sec 250	DCIT v. Offbeat Developers (P.) Ltd.	The CIT(A) holds wide powers under Section 250 to admit a fresh or additional claim for house property tax deductions filed during the appellate stage, directing the AO to verify and execute it.	Click Here
Income-tax Act, 1961	Sec 276CC	B. Mohammad Iqbal v. ACIT	Criminal prosecution for non-filing under Section 276CC is an abuse of process and must be quashed if initiated by an ACIT without a Section 127/129 transfer order, before a regular assessment determines if the tax exceeds the threshold, and where no Section 271F penalty was initiated.	Click Here