INCOME TAX CASE LAWS 07.07.2026

Relevant Act	Section	Case Law Title	Citation	Brief Summary
Income-tax Act, 1961	Section 2(14)	Sundaramahalingam Narayanan v. Income-tax Officer	Click Here	No capital gains are chargeable if the Revenue fails to prove that the agricultural land sold falls within a municipality covered by a valid notification under Section 2(14)(iii)(b).
Income-tax Act, 1961	Section 10(37)	Sundaramahalingam Narayanan v. Income-tax Officer	Click Here	Exemption on compulsory acquisition compensation cannot be denied merely due to the absence of agricultural income in tax returns if revenue records classify the land as agricultural.
Income-tax Act, 1961	Section 12AB	G.D. Education Society v. DCIT/ACIT	Click Here	Retrospective cancellation of trust registration before 1 April 2022 based on “specified violations” under Section 12AB(4) is impermissible, as the concept was introduced only from that date.
Income-tax Act, 1961	Section 12AB	G.D. Education Society v. DCIT/ACIT	Click Here	Invocation of Clause (e) of Explanation to Section 12AB(4) to cancel registration due to alleged financial irregularities is unjustified if there is no adverse finding on the genuineness or charitable objects.
Income-tax Act, 1961	Section 12AB	G.D. Education Society v. DCIT/ACIT	Click Here	Cancellation of registration solely based on alleged benefits to related parties under Section 13(3) is unsustainable if operations continue without material indicating sham activities or diversion of income.
Income-tax Act, 1961	Section 24	Gogia Developers v. Assessment Unit Income-tax Department	Click Here	The allowability of interest deduction on a loan raised by mortgaging a let-out property and utilizing the proceeds for another property requires a fresh enquiry and is remanded to the AO.
Income-tax Act, 1961	Section 24	Gogia Developers v. Assessment Unit Income-tax Department	Click Here	Rental income from letting out fully furnished premises under a leave and license agreement without systematic business activity is taxable as ‘Income from House Property’ (eligible for Sec 24(a) deduction); GST collection doesn’t change this character.
Income-tax Act, 1961	Section 28(i)	Deputy Commissioner of Income-tax v. Ambuja Cements Ltd.	Click Here	Sales tax incentive or subsidy is a capital receipt, hence not chargeable to tax and to be excluded from the computation of book profit under Section 115JB.
Income-tax Act, 1961	Section 45	Surendra Singh v. Income-tax Officer	Click Here	Capital gains are chargeable in the year of registered sale deeds, not the year of an unregistered agreement, if possession was not handed over in part performance under Section 53A of the TopA.
Income-tax Act, 1961	Section 49	Surendra Singh v. Income-tax Officer	Click Here	The DVO’s failure to consider the assessee’s timely objections invalidates the acquisition cost assessment, requiring a remand for fresh DVO valuation and LTCG recomputation.
Income-tax Act, 1961	Section 50B	Crescent Steels v. Assessment Unit of Income-tax Department	Click Here	If a business transfer is taxed as a slump sale under Section 50B in one AY, Revenue cannot separately tax capital gains on a constituent land parcel in a later year just because its conveyance deed was registered later.
Income-tax Act, 1961	Section 50C	Surendra Singh v. Income-tax Officer	Click Here	The AO must adopt the stamp duty value as on the date of the agreement under the first proviso to Section 50C(1) if part consideration was received via account payee cheque before the registered sale deeds.
Income-tax Act, 1961	Section 54	Surendra Singh v. Income-tax Officer	Click Here	Exemption cannot be denied on the sole ground that the plot was purchased outside the prescribed period, provided only the construction cost incurred within three years of transfer is claimed; remanded for verification.
Income-tax Act, 1961	Section 54	Ramautar Saraf (HUF) v. ITO	Click Here	Section 54 exemption cannot be denied merely because construction wasn’t completed within three years due to delays in municipal plan approvals, as final completion/approval is not a mandatory condition.
Income-tax Act, 1961	Section 68	ITO v. Khanna Sales (India) (P.) Ltd.	Click Here	Cash deposits during demonetization matching books and VAT returns cannot be added under Section 68 purely due to a departure from earlier trading patterns, unless defects in books/stocks are proved.
Income-tax Act, 1961	Section 68	Jigna Ashutosh Bhatt v. ITO	Click Here	Section 68 addition cannot be sustained based solely on a third-party statement alleging a cash loan, without a credit entry in the assessee’s books, specific identification, or independent corroboration.
Income-tax Act, 1961	Section 68	Action Tie-up (P.) Ltd. v. DCIT	Click Here	Sale proceeds of unlisted equity investments purchased through banking channels in earlier years cannot be treated as unexplained cash credits when purchasers respond to notices and the original investment was never doubted.
Income-tax Act, 1961	Section 69A	Principal Commissioner of Income-tax Central v. Platinum Properties	Click Here	Section 263 revision is unjustified if the AO took a plausible view to tax on-money under the project completion method after due verification of facts.
Income-tax Act, 1961	Section 69A	Rameshwar Dayal v. Income-tax Officer	Click Here	Matter remanded to the AO for verification where an ex-serviceman explained cash deposits as his wife’s agricultural land sale proceeds in a joint account, backed by bank statements and sale deeds.
Income-tax Act, 1961	Section 142(2A)	Huawei Telecommunications (India) Co. (P.) Ltd. v. ACIT	Click Here	AO is justified in directing a special audit when the assessee provides voluminous, discrepant ERP data instead of standard books; however, the direction falls if the reassessment itself is quashed.
Income-tax Act, 1961	Section 148A	Qjaswini Retailers (P.) Ltd. v. Union of India	Click Here	Section 148A(3) order and notice are liable to be quashed for violating principles of natural justice if the AO fails to examine the assessee’s explanations on circular fund movements and commercial rationale.
Income-tax Act, 1961	Section 149	Rahul Kumar Shaw v. Union of India	Click Here	The extended ten-year limitation under Section 149(1)(b) does not apply if the alleged escaped income is less than ₹50 lakhs, making the delayed notice and assessment order time-barred.
Income-tax Act, 1961	Section 149	Huawei Telecommunications (India) Co. (P.) Ltd. v. ACIT	Click Here	Search material revealing unrecorded receivables from an AE’s warranty reimbursement obligations constitutes an “asset” under Section 149, validating a reassessment notice issued within 10 years.
Income-tax Act, 1961	Section 149	Huawei Telecommunications (India) Co. (P.) Ltd. v. ACIT	Click Here	Section 148 notice is liable to be quashed if reasons recorded merely question customer-claim provisions without alleging the existence of an escaped income represented in the form of an asset exceeding the statutory threshold.
Income-tax Act, 1961	Section 249	Ms. Neeta v. Income Tax Officer	Click Here	Delay in filing appeals before the CIT(A) must be condoned if the assessee establishes non-service of statutory notices and files the appeal promptly upon obtaining certified copies after discovering the demand.