IMPORTANT INCOME TAX CASE LAWS 25.09.2025

By | September 26, 2025
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IMPORTANT INCOME TAX CASE LAWS 25.09.2025

SectionCase Law TitleBrief SummaryCitationRelevant Act
Section 4Roomag Motors & Controls (P.) Ltd. v. Deputy Commissioner of Income-taxInterest income disputed by the payer and not accounted for in the relevant A.Y. 2014-15 was taxed in A.Y. 2017-18 upon resolution. Held: Based on the doctrine of real income, only the real accrued or received income is taxable, not hypothetical accrual. The addition in A.Y. 2014-15 was deleted.Click HereIncome-tax Act, 1961
Section 9Roomag Motors & Controls (P.) Ltd. v. Deputy Commissioner of Income-taxPayment of commission to a non-resident agent for introducing foreign buyers. Held: Since the non-resident agent had no PE or business connection in India and services were rendered outside India, the commission was not chargeable to tax in India, and the assessee had no obligation to deduct tax under Section 195.Click HereIncome-tax Act, 1961
Section 10AACIT v. Nuwave E Solutions (P.) Ltd.Assessee, a 100% EOU, claimed S. 10A deduction. AO excluded ‘arbitration award’ amount. Held: Assessee successfully showed this was a typographical error and the amount was actually sale of software by providing CA certificate, SOFTEX, FIRC, etc. The addition was deleted.Click HereIncome-tax Act, 1961
Section 10AACIT v. Nuwave E Solutions (P.) Ltd.Gains from foreign exchange fluctuations directly relatable to articles/things exported, where payment was received in convertible foreign exchange. Held: The gain, due to the timing difference, would be eligible for exemption under Section 10A.Click HereIncome-tax Act, 1961
Section 11St. Thomas High School v. Commissioner of Income-tax (Exemption)A charitable trust filed Form No. 10B with a 29-day delay due to the accountant’s health issues. The Commissioner never doubted the factual situation. Held: Rejection of the condonation on the grounds of no reasonable cause was unjustified.Click HereIncome-tax Act, 1961
Section 14ARoomag Motors & Controls (P.) Ltd. v. Deputy Commissioner of Income-taxAssessee had investments yielding exempt income and debited finance cost. Held: Assessee’s capital and reserves significantly exceeded investments, and the AO failed to establish a nexus between the interest expenditure and the investments. No disallowance of interest expenditure was warranted under Section 14A read with Rule 8D(2)(ii).Click HereIncome-tax Act, 1961
Section 36(1)(v)SREI Equipment Finance Ltd. v. Commissioner of Income-tax (Appeals)ESI contribution was deposited one day late (on 16-10-2017) as the due date (15-10-2017) was a public holiday (Sunday). Held: The disallowance of the ESI contribution was to be deleted, and the deduction was allowed.Click HereIncome-tax Act, 1961
Section 37(1)SREI Equipment Finance Ltd. v. Commissioner of Income-tax (Appeals)Amount transferred to a special reserve pursuant to Section 45 IC of the RBI Act, 1934. Held: This is an appropriation of profit, not an allowable deduction or excludable expense. The amount was required to be added back to book profit under Section 115JB.Click HereIncome-tax Act, 1961
Section 37(1)Roomag Motors & Controls (P.) Ltd. v. Deputy Commissioner of Income-taxAssessee created a warranty provision for supply of pumping systems with a five-year warranty. Held: The provision was created pursuant to a contractual obligation and based on commercial prudence and past experience; hence, it was to be allowed under Section 37(1).Click HereIncome-tax Act, 1961
Section 37(1)Roomag Motors & Controls (P.) Ltd. v. Deputy Commissioner of Income-taxReimbursement of medical expenses of a director by a company manufacturing engineering goods. Held: The expenditure was incurred pursuant to a valid Board resolution, partook the character of business expenditure, and was allowable under Section 37(1).Click HereIncome-tax Act, 1961
Section 40(a)(i)ACIT v. Nuwave E Solutions (P.) Ltd.Assessee deducted TDS at 10% on buy-back payments to NRI, but the AO held 20% was applicable and made a disallowance. Held: In case of lower deduction of tax, the provisions of Section 40(a)(i) are not attracted. The disallowance was deleted.Click HereIncome-tax Act, 1961
Section 44ABTax Bar Association v. Union of IndiaDue to persistent technical glitches on the e-filing portal and delayed release of audit utilities, the court issued an interim direction to extend the Tax Audit Report (TAR) filing date for A.Y. 2025-26 from 30-09-2025 to 31-10-2025.Click HereIncome-tax Act, 1961
Section 57Nautilus Premise Owners Association v. Income-tax OfficerAssessee, an AOP, claimed a deduction for maintenance and operational expenses against interest and rental income, which the AO disallowed for lack of nexus. Held: Under Section 57(iii), proportionate expenditure connected to earning interest income was allowable. The matter was remanded to the AO for fresh consideration.Click HereIncome-tax Act, 1961
Section 68Zoom Insurance Brokers (P.) Ltd. v. Assistant Commissioner of Income-taxReopening notice was issued on the ground that a search on insurance entities suggested the assessee was involved in a bogus transaction of Rs. 82.25 lakhs. Held: The writ petition against the reopening notice was dismissed as the notice was issued to check if the sum was a result of a spurious transaction, resulting in income escaping assessment.Click HereIncome-tax Act, 1961
Section 80GSREI Equipment Finance Ltd. v. Commissioner of Income-tax (Appeals)CSR expenditure is not allowable under S. 80G(2)(a)(iiihk) and (iiihl), but provisions of S. 80G are not applicable to other CSR expenditure. Held: Assessee would be entitled to deduction under Section 80G even if the amount was donated under CSR expenses.Click HereIncome-tax Act, 1961
Section 80GRadhe Krushna Gau Sala Trust v. CIT (Exemption)Assessee mentioned a wrong code in the original application for S. 80G(5) approval and rectified it by filing another Form 10AB within the extended time frame. Held: The new application, rectifying the error, should be considered the original application, and its rejection was incorrect. The Commissioner was directed to consider the application.Click HereIncome-tax Act, 1961
Section 115BAAKN Support Services (P.) Ltd. v. Deputy Commissioner of Income-taxAssessee-company opted for the concessional tax rate under Section 115BAA but filed Form 10-IC after the due date of filing the return under Section 139(1). Held: Since the assessee acted in a bona fide manner and paid tax at 22%, the delay in filing Form 10-IC (a procedural requirement) should not invalidate the right to claim the benefit of Section 115BAA.Click HereIncome-tax Act, 1961
Section 115JBSREI Equipment Finance Ltd. v. Commissioner of Income-tax (Appeals)Amount transferred to an income tax special reserve as per Section 36(1)(viii). Held: This amount is taxable only in the year it is withdrawn from the reserve. Accordingly, it shall not be included in book profit under Section 115JB.Click HereIncome-tax Act, 1961
Section 139Nararshabh Sharma v. Assessing Officer, Ward-7(3), PuneAssessee’s consultant mistakenly filed an updated return under Section 139(8A) with excess income and TDS, burdening the assessee with extra tax. Held: Since there was no mechanism to revise such a return, the matter was restored to the JAO to allow the assessee to file a correct return or correct computation.Click HereIncome-tax Act, 1961
Section 143Punjab National Bank v. Income-tax OfficerAssessment was passed in the name of the non-existent Oriental Bank of Commerce despite prior intimation of the merger and a request for PAN cancellation. Held: Little verification would have avoided litigation. A token cost of Rs. 10,000 was imposed on the AO for negligent assessment and over-reliance on software systems.Click HereIncome-tax Act, 1961
Section 148AIncome-tax Officer v. Venkatal Iyyappa RajannaIn view of the Supreme Court’s decision in Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70, notices issued under Section 148 on or after 01-04-2021 for A.Y. 2015-16 were liable to be dropped.Click HereIncome-tax Act, 1961
Section 148AIncome-tax Officer v. Venkatal Iyyappa RajannaA notice issued under Section 148A(b) did not provide the required minimum period of seven days to respond. Held: The notice was to be treated as contrary to law.Click HereIncome-tax Act, 1961
Section 249Rishabh Dev v. Income-tax OfficerAssessee filed appeals with a delay of 1386 days against ex-parte orders, claiming non-receipt of notices as they were sent to the jail Superintendent while the assessee’s father was in jail. Held: Since the assessment was made without serving notice to the assessee, the delay was condoned, and the matter was restored to Commissioner (Appeals).Click HereIncome-tax Act, 1961

For More:- Read IMPORTANT INCOME TAX CASE LAWS 24.09.2025