IMPORTANT INCOME TAX CASE LAW 31.10.2025

By | November 3, 2025
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IMPORTANT INCOME TAX CASE LAW 31.10.2025

 

SectionCase Law TitleBrief SummaryCitationRelevant Act
SECTION 2National Payments Corporation of India v. CIT (Exemptions)Where an assessee charged nominal fees to recover costs for providing a platform for member banks, and the AO allowed section 11 exemption after specific inquiries, a revision under section 263 alleging violation of the proviso to section 2(15) (charitable purpose) was unjustified.Click HereIncome-Tax Act, 1961
SECTION 12ABSree Raja Rajeswari Educational Trust v. Commissioner of Income-tax, ExemptionsThe CIT(E)’s rejection of a trust’s registration application under section 12AB based on allegations of commercial activities and non-charitable use of income was incorrect. The enquiry at the registration stage is limited to examining the genuineness of charitable objects and activities, which were found to be charitable, mandating the grant of registration.Click HereIncome-Tax Act, 1961
SECTION 32Assistant Commissioner of Income-tax v. Baxter Pharmaceuticals India (P.) Ltd.SLP dismissed. Where an assessee acquired an injectable business on a slump sale basis and claimed depreciation on assets, they were entitled to claim depreciation based on a valuation report from an expert valuer who physically verified each asset, as the entire unit was purchased without individual asset values being assigned.Click HereIncome-Tax Act, 1961
SECTION 32Assistant Commissioner of Income-tax v. Baxter Pharmaceuticals India (P.) Ltd.SLP dismissed. Since the issue of depreciation on goodwill (acquired via slump sale) was considered during the original regular assessment, the Assessing Officer did not have jurisdiction to reopen the assessment on the same issue.Click HereIncome-Tax Act, 1961
SECTION 35Pharmanza Herbal (P.) Ltd. v. Principal Commissioner of Income TaxPost-Finance Act, 2015, the DSIR’s quantification of eligible R&D expenditure in Form 3CL is mandatory for claiming deduction under section 35(2AB). The AO must restrict the deduction to the approved and quantified extent, and failure to do so makes the assessment erroneous and prejudicial to the revenue.Click HereIncome-Tax Act, 1961
SECTION 43CADeputy Commissioner of Income-tax v. Amardeep ConstructionsThe 10 per cent tolerance limit introduced by the Finance Act, 2020, to section 43CA (full value of consideration for transfer of non-capital assets) is curative in nature and thus applicable retrospectively.Click HereIncome-Tax Act, 1961
SECTION 54FInamul Haq v. Income-tax OfficerAn assessee who sold an immovable property in his name and invested all sale proceeds in the purchase of land in his minor son’s name and raised construction thereon was eligible for the section 54F exemption on the amount invested in the construction of the new house.Click HereIncome-Tax Act, 1961
SECTION 68Dipesh Parasmal Jain HUF v. Income-tax OfficerA reassessment based on an excise search indicating suppressed sales for FYs 2012-13 to 2014-15 was initiated for AY 2017-18. Since the AO was uncertain about the correct year of taxability, the reopening for AY 2017-18 was held invalid and quashed.Click HereIncome-Tax Act, 1961
SECTION 68KMG Wires (P.) Ltd. v. National Faceless Assessment CentreWhere the AO computed the peak balance of loans from directors without sharing the working or basis with the assessee and without issuing a show cause notice before making the addition, the assessment order was passed in breach of natural justice, requiring a remand for reconsideration.Click HereIncome-Tax Act, 1961
SECTION 68Bipinbhai v. Income-tax OfficerWhere the AO was informed about the death of the assessee’s father, the impugned order and notice under section 148A(d) and section 148, respectively, issued against the deceased person were quashed and set aside.Click HereIncome-Tax Act, 1961
SECTION 69CNabeel Construction (P.) Ltd. v. Principal Commissioner of Income-taxDisallowance of purchases and wages (recorded and paid through banking channels) in a labour-intensive construction business could not be re-characterised as unexplained expenditure under section 69C. Thus, the PCIT was not justified in invoking section 263 merely for preferring a different provision.Click HereIncome-Tax Act, 1961
SECTION 69CKMG Wires (P.) Ltd. v. National Faceless Assessment CentreAddition for purchases based on a supplier’s non-response to a notice was invalid when the supplier had already filed a reply confirming transactions and provided documents before assessment completion. Non-consideration of evidence was a violation of natural justice, requiring a remand.Click HereIncome-Tax Act, 1961
SECTION 115BAAMaharishi Education Corporation P. Ltd. v. Income-tax OfficerFor a company opting for taxation under section 115BAA, the applicable rate of tax for the total income, including Long Term Capital Gain, would be 22 per cent as per section 115BAA, and not 20 per cent under section 112.Click HereIncome-Tax Act, 1961
SECTION 145Deputy Commissioner of Income-tax v. Amardeep ConstructionsAn assessee firm consistently using the Project Completion Method (PCM) for revenue recognition in real estate, which was accepted in all preceding years, cannot be forced to use the Percentage Completion Method (PCM) by the AO without pointing out any change in factual or legal position.Click HereIncome-Tax Act, 1961
SECTION 147Inamul Haq v. Income-tax OfficerAn assessment order passed under section 147 read with section 143(3) by an officer without proper jurisdiction (ITO, Ward-2) after proceedings were initiated by a different officer (ITO, Ward-3) was illegal and set aside.Click HereIncome-Tax Act, 1961
SECTION 244AJ & K Bank Ltd. v. Joint Commissioner Income-taxWhere interest on a refund was denied due to treating TDS certificates as defective, the matter was remanded for a fresh decision because the CBDT had issued a circular in 1989 regarding the waiver of mentioning challan details etc., an issue not thoroughly examined by the Commissioner (Appeals).Click HereIncome-Tax Act, 1961

For More :- Read IMPORTANT INCOME TAX CASE LAWS 30.10.25