IMPORTANT INCOME TAX CASE LAWS 05.02.2026 Relevant Act Section Case Law Title Brief Summary Citation PBPT Act, 1988 Section 2(9)(A) DCIT (BPU-2) Mumbai v. Surge Ahead Solutions Pvt. Ltd. [Non-Application of Mind] Benami allegations failed where the Initiating Officer (IO) attached closed bank accounts and relied on regulatory suspicion without identifying the original benami property… Read More »
Invalidation of Section 153C Proceedings Based on Search Date and Satisfaction Note (AY 2018-19 to 2020-21) I. Deemed Date of Search and Applicability of Section 153C In search-and-seizure cases, Section 153C allows the Revenue to assess a person other than the one originally searched. However, a specific legal fiction exists regarding the timing. The Conflict:… Read More »
Bar Against Direct Tax Demand When TDS is Deducted but Not Deposited 1. The Core Dispute: The “Kingfisher Pilot” Predicament The case involved employees (primarily pilots) of Kingfisher Airlines who received salaries after the deduction of Tax Deducted at Source (TDS). While the employer issued Form 16 (TDS certificates), it failed to deposit the collected… Read More »
Stamp Duty Adjustments to WDV and CSR Deductions u/s 80G (AY 2020-21) I. Section 50C Deeming Fiction vs. Written Down Value (WDV) The assessee sold an office property that was part of a “block of assets” (Buildings). The Assessing Officer (AO) attempted to reduce the WDV of that block by the Stamp Duty Value (SDV)… Read More »
Interest Deductibility Nexus and the “Ceiling” on Section 14A Disallowances (AY 2018-19) I. Interest on Borrowed Capital: The “Nexus” Requirement (Section 36(1)(iii)) The assessee, a wholesale trading company, refinanced its original share investment loans by issuing redeemable non-convertible debentures and taking short-term loans. It claimed the interest paid on these fresh borrowings as a business… Read More »
Source of Consideration vs. Registered Title in Benami Transactions 1. The Core Dispute: Financial Capacity and Source of Funds The Initiating Officer (IO) challenged the lawfulness of a land purchase made by Appellant No. 1 for ₹50 lakhs. While the sale deed was registered in his name, an investigation by the Income Tax Department revealed… Read More »
High Court Quashes Bank Account Attachments for Lack of “Benami” Evidence 1. The Core Dispute: Suspicion vs. Proof The Initiating Officer (IO) sought to invoke the Prohibition of Benami Property Transactions (PBPT) Act by provisionally attaching bank accounts of the respondent. The IO alleged that these accounts were part of a benami transaction under Section… Read More »
IMPORTANT INCOME TAX CASE LAWS 04.02.2026 Relevant Act Section Case Law Title Brief Summary Citation Income-tax Act, 1961 Section 12AB (Condonation) Sunder Nagar Satsang Sabha v. CIT(E) [Finance Act 2024 Relief] Rejection of Form 10AB regularization solely due to a 16-month delay is unjustified. The Finance Act No. 2 of 2024 now empowers the Commissioner… Read More »
ITAT Ruling on Club Expenses, Section 14A Disallowance, and MAT Computation (AY 2017-18) In a significant decision for Assessment Year 2017-18, the Income Tax Appellate Tribunal (ITAT) provided clarity on the deductibility of corporate club expenses and the refined computation of disallowances related to exempt income. I. Corporate Club Expenses as Business Expenditure (Section 37)… Read More »
Assessment Order Quashed: Violation of Natural Justice in Faceless Proceedings (Section 144B) 1. The Core Dispute: Order Passed Before Scheduled Hearing In this case, the Faceless Assessment process reached a critical stage where the Assessing Officer (AO) proposed a variation (addition) to the assessee’s income. The Request: Upon receiving the Show Cause Notice (SCN) proposing… Read More »