INCOME TAX CASE LAW 11.08.2026

Relevant Act	Section	Case Law Title / Matter	Citation	Brief Summary
Tribunals Reforms Act	Legislative Update	Tribunals Reforms Bill, 2026	Click Here	The Lok Sabha passed the Tribunals Reforms Bill, 2026, repealing the 2021 Act to set up an independent National Tribunals Commission overseeing appointments and service conditions across tribunals.
Prohibition of Benami Property Transactions Act, 1988	Section 2	Initiating Officer & ACIT (Benami Prohibition) v. Parshvanath Comtrade LLP	Click Here	Held to be a benami transaction where the transferee paid only nominal upfront consideration for ₹100 crore shares, lacked capacity for the balance, relied on share dividends to pay, and seller retained a lien.
Income-tax Act, 1961	Section 12A	Madhya Pradesh Jesuits v. State of Chhattisgarh	Click Here	Municipal property tax exemption was denied and demand notice upheld after the assessee submitted a Section 12A registration certificate belonging to a different institution instead of its own.
Income-tax Act, 1961	Section 41(1)	Deputy Commissioner of Income-tax v. State Bank of India	Click Here	Write-back of provision for employee benefits is taxable only if a corresponding deduction was allowed in prior years; taxability must reflect earlier appellate orders to prevent double taxation.
Income-tax Act, 1961	Section 45	Giju Purapadathil Mathai v. Commissioner of Income-tax	Click Here	Capital gains liability arises on auction/distress sale of mortgaged property by a bank even if entire proceeds settled third-party debt and no funds reached the assessee; gain is computed using statutory indexation.
Income-tax Act, 1961	Section 50C	Kanubhai Purshottam Merchant v. Income-tax Officer	Click Here	Section 50C cannot be invoked based solely on stamp duty valuation when the registered instrument is a tenancy agreement and no transfer of ownership or extra consideration is established.
Income-tax Act, 1961	Section 68	Agarwal Industries (P.) Ltd. v. DCIT	Click Here	Deletion of Section 68 additions upheld as the assessee discharged its onus by proving credits came via account-payee cheques with proper documentation, including loan repayments.
Income-tax Act, 1961	Section 68	Deputy Commissioner of Income-tax v. Falcon Bus Lines (P.) Ltd.	Click Here	Rejection of Section 68 addition; AO cannot make additions solely based on an uncorroborated survey statement when surrendered income was duly recorded in books and disclosed in the ITR.
Income-tax Act, 1961	Section 69	Mahesh Chandra Sharma v. ACIT	Click Here	Additions under Section 69 deleted as impounded Tally credit balances reflected trust funds spent on behalf of the trust, with no evidence establishing unexplained cash loans from personal sources.
Income-tax Act, 1961	Section 69A	Mahesh Chandra Sharma v. ACIT	Click Here	Confirmed Section 69A addition for a ₹2 lakh cash loan as the lender’s creditworthiness was unproven and the story of accumulating cash via periodic withdrawals/redeposits was contrary to human probabilities.
Income-tax Act, 1961	Section 147	Kalyanasundaram Swaminathan v. Deputy Commissioner of Income-tax	Click Here	As per Explanation 3 to Section 147, reassessment additions or disallowances are not restricted to reasons recorded for reopening and can encompass any other issue arising during reassessment.
Income-tax Act, 1961	Section 147	Roy Kurian v. Principal Commissioner of Income-tax	Click Here	Rejection of witness statements on agricultural income claims on grounds of time expiry was unjustified when no formal order rejecting the extension request had been passed by the AO.
Income-tax Act, 1961	Section 147	Roy Kurian v. Principal Commissioner of Income-tax	Click Here	Reassessment and penalty orders quashed for violation of natural justice as AO relied on official agricultural reports without giving the assessee an opportunity to cross-examine those officers.
Income-tax Act, 1961	Section 80P	Aditya Vivdhoddeshagala Sahakara Sangha Niyamita v. Income-tax Officer	Click Here	Interest income earned by a Souharda credit co-operative society from depositing idle/surplus funds in banks is eligible for deduction under Section 80P(2)(a)(i).
Income-tax Act, 1961	Section 80P / 139(1)	Aditya Vivdhoddeshagala Sahakara Sangha Niyamita v. Income-tax Officer	Click Here	Deduction under Section 80P claimed in a return filed under Section 148 cannot be denied for delayed filing; 6th proviso to Section 139(1) is inapplicable and Section 80A(5) requires only a valid return.
Income-tax Act, 1961	Section 143(2) / 147	Kalyanasundaram Swaminathan v. Deputy Commissioner of Income-tax	Click Here	Issuance of Section 143(2) notice was legally impossible where the statutory deadline for completing the reassessment order under Section 147 read with Section 153 expired prior to that date.
Income-tax Act, 1961	Section 153C	Bipinbhai Maganbhai Virani v. Income-tax Officer	Click Here	Where documents belonging to an assessee are seized during a search on a third party, assessment must be initiated under Section 153C; reopening under Section 147 is without jurisdiction.
Income-tax Act, 1961	Section 234D	Deputy Commissioner of Income-tax v. State Bank of India	Click Here	Section 234D interest requires fresh computation post-appellate orders; if no excess refund demand remains after ITAT order effect, no interest under Section 234D is chargeable.
Income-tax Act, 1961	Section 244A	Deputy Commissioner of Income-tax v. State Bank of India	Click Here	While computing Section 244A interest, refunds already granted must be adjusted first against the interest component and only thereafter against principal tax.
Income-tax Act, 1961	Section 260A	Principal Commissioner of Income-tax v. Jajodia Finance Ltd.	Click Here	ITAT order deleting bogus share loss addition was set aside as perverse for relying on a statement retraction made two years post-admission and post-assessment without evidentiary backing.
Income-tax Act, 1961	Section 270A	Ishwar Chand Agro (P.) Ltd. v. Deputy Commissioner of Income Tax	Click Here	Section 270A penalty quashed as invalid because the AO initiated proceedings for under-reporting due to misreporting, but levied penalty for under-reporting without citing specific sub-clauses.