IMPORTANT INCOME TAX CASE LAWS 02.01.2026 Relevant Act Section Case Law Title Brief Summary Citation Income-tax Act, 1961 Section 11 Goswami Bhagwan Lal Education Society v. ITO Denial of exemption under Section 11 for non-filing of Form 10B without giving an opportunity to rectify the defect under Section 139(9) is a debatable issue and cannot… Read More »

Sudden Departure of Accounts Staff in Remote Location Constitutes “Genuine Hardship”; High Court Condones Delay in Filing ITR Rejected by PCIT   ISSUE Whether the successive resignation of key employees handling accounts and tax compliances in a company located in a remote village constitutes “reasonable cause” and “genuine hardship” under Section 119(2)(b) for condoning the… Read More »

Department Cannot Retain Seized Jewellery for Joint Holder’s Tax Dues After Assessee Settles Own Liability under Vivad Se Vishwas Scheme   ISSUE Whether the Assessing Officer (AO) is justified in continuing to detain gold and diamond jewellery seized from a joint locker (held by the assessee and her mother-in-law) on the ground of outstanding demands… Read More »

Condonation of Delay Denied: Internal Dispute Between Directors is No Excuse for Late Filing when Returns for Adjacent Years were Filed on Time ISSUE Whether an inter se dispute amongst the directors of a company constitutes a “genuine hardship” under Section 119(2)(b) sufficient to condone a significant delay (30 months) in filing the Income Tax… Read More »

Search & Seizure: VDIS Declared Jewellery Cannot be Retaxed on Remaking; Section 115BBE Inapplicable to Estimated Business Income; Penalty u/s 270A Deleted Due to Statutory Bar u/s 271AAC   ISSUES Unexplained Investment (Jewellery): Whether jewellery found during a search at the premises of the assessee’s father and a third party can be added to the… Read More »

Reopening Quashed: Long Term Capital Gains (LTCG) from ‘Penny Stock’ Accepted as Genuine where Assessee Incurred Losses in Same Scrip in Future Years ISSUE Whether the Assessing Officer (AO) was justified in reopening the assessment under Section 147/148 and treating the sale consideration of shares as unexplained cash credit under Section 68 solely based on… Read More »

Pharma Manufacturing: Replacement of Magnets in Pipelines and Spares for Effluent Treatment Plant Allowed as Revenue Expenditure ISSUE Whether expenditure incurred on purchasing magnetic enclosures/bullets for removing contaminants in pipelines and for replacing parts of an Effluent Treatment Plant (ETP) constitutes capital expenditure (creating enduring benefit) or allowable revenue expenditure. FACTS Assessee: A company manufacturing… Read More »

Telecom Taxation: Variable License Fees Held Capital (Amortizable), While Spectrum Charges and KYC Penalties Allowed as Revenue Expenditure; No TDS on Prepaid Distributor Discounts ISSUES Variable License Fee: Whether variable license fees paid under the New Telecom Policy 1999 are capital in nature (amortizable u/s 35ABB) or revenue expenditure. Spectrum Charges: Whether Spectrum Usage Charges… Read More »