IMPORTANT INCOME TAX CASE LAW 31.10.2025   Section Case Law Title Brief Summary Citation Relevant Act SECTION 2 National 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… Read More »

Denial of Refund Interest Based on Disputed TDS Certificate is Perverse, HC Remands Case. Issue Whether an order passed in a rectification proceeding under Section 154, which denies interest on a delayed refund by blaming the assessee for a “defective” TDS certificate, is legally sustainable if it ignores a binding CBDT circular that waives the… Read More »

SC Upholds Quashing of Reassessment on Slump Sale Depreciation. Issue Can the tax department reopen a completed assessment after four years to disallow depreciation on goodwill and assets acquired in a slump sale, by alleging either a “change of opinion” on previously examined facts or by relying on new information about the seller that is… Read More »

LTCG is Taxed at 22% for Companies Opting for Section 115BAA, Not 20%. Issue Whether a domestic company that has opted for the concessional tax regime under Section 115BAA is liable to pay tax on its Long-Term Capital Gains (LTCG) at the special rate of 20% under Section 112, or at the flat rate of… Read More »

Disallowance of a Recorded Expense Cannot Be Re-characterized as Unexplained Expenditure. Issue Can a Principal Commissioner (PCIT), using revisionary powers under Section 263, re-characterize a disallowance of a non-genuine business expenditure (made under Section 37(1)) as an “unexplained expenditure” under Section 69C to invoke the higher tax rate under Section 115BBE, especially when the expenditure… Read More »

Reassessment Notice Issued Against a Deceased Person is a Nullity and Must Be Quashed. Issue Whether a reassessment proceeding, including the notice under Section 148A and Section 148, can be validly initiated in the name of a person who is already deceased, and whether such a proceeding is legally sustainable. Facts The Assessing Officer (AO)… Read More »

HC Quashes Assessment Order for Ignoring Supplier’s Reply and Denying Hearing. Issue Is an assessment order legally sustainable if it is passed in violation of the principles of natural justice, specifically by (1) making an addition for “unverifiable purchases” while ignoring the supplier’s confirmatory reply already on record, and (2) making a separate addition for… Read More »

AO Cannot Forcibly Change Accounting Method Based Solely on Survey Statement Issue Whether an Assessing Officer (AO) can forcibly change a real estate developer’s consistently followed and accepted “Project Completion Method” (PCM) of accounting to the “Percentage Completion Method” (PCM) for a single assessment year without any change in facts or law. Whether a tax… Read More »

PCIT’s Revision Upheld as AO’s Failure to Apply Mandatory DSIR Limit is an Error. Issue Whether an assessment order passed by an Assessing Officer (AO), which allows a weighted R&D deduction under Section 35(2AB) in excess of the amount quantified and certified by the DSIR in Form 3CL, is an “erroneous and prejudicial” order, thereby… Read More »