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Books of account cannot be rejected due to a simple typographical error in the tax audit report, especially when the error has been explained and rectified. Issue Can an Assessing Officer (AO) reject a taxpayer’s entire books of account under Section 145(3) of the Income-tax Act, 1961, and estimate their profits, based solely on discrepancies… Read More »

A tax demand is invalid if it is based on a clear typographical error in the tax audit report, and a revised report can be used to correct such an error. Issue Can a prima facie adjustment made by the Centralized Processing Center (CPC) under Section 143(1)(a) of the Income-tax Act, 1961, which arises from… Read More »

An application for registration under Section 80G cannot be rejected without the authority properly considering the assessee’s explanation regarding the nature of its expenses. Issue Can an application for approval under Section 80G(5) of the Income-tax Act, 1961, be rejected on the grounds of excessive religious expenditure without the adjudicating authority properly considering the assessee’s… Read More »

The stamp duty value on the date of the agreement should be considered for Section 56(2)(x) if part of the payment was made at that time through a banking channel. Issue For the purpose of applying the deeming provision of Section 56(2)(x) of the Income-tax Act, 1961, should the stamp duty value be taken on… Read More »

The requirement to maintain books of account under Section 44AA of the Income-tax Act, 1961, does not apply to a “Local Authority” that is not engaged in a business or profession. Issue Can a penalty be legally levied under Section 271A of the Income-tax Act, 1961, on a “Local Authority” for an alleged failure to… Read More »

Additional evidence cannot be used to contradict an income already declared in a return. Issue Can a taxpayer, who has already voluntarily declared a sum of seized cash as their “income from other sources” in their filed income tax return, be allowed to introduce new and additional evidence at a late appellate stage to try… Read More »