A revised Form 9A filed before the completion of an assessment must be considered by the Assessing Officer to correctly determine the income of a charitable trust. Issue Can an Assessing Officer (AO) ignore a revised Form 9A filed by a charitable trust to correct a genuine computational error, and proceed to make an addition… Read More »

Disallowance for Exempt Income Expenses Must Be Based Only on Investments That Actually Yielded Income. Issue For the purpose of disallowing expenditure under Section 14A, should the calculation be based on the assessee’s entire investment portfolio, or should it be restricted only to those specific investments that generated the exempt income during the relevant year?… Read More »

A disallowance for cash payments was remanded to the Assessing Officer to give the taxpayer a fresh opportunity to justify the payments under statutory exceptions. Issue Whether a disallowance under Section 40A(3) for cash payments exceeding the prescribed limit should be finalized without affording the assessee a complete opportunity to substantiate their claim that the… Read More »

An AO cannot make new additions after dropping the original reason for reassessment. Issue Can an Assessing Officer (AO) make additions on entirely new grounds during a reassessment proceeding if the original reason for reopening the assessment is dropped or accepted as explained by the assessee? Facts The assessee had not filed an Income Tax… Read More »

A company cannot claim the lower tax rate under Section 115BAA by filing a revised return if it failed to opt-in by the due date of the original return. Issue Can a domestic company avail the benefit of the concessional tax regime under Section 115BAA by filing a revised income tax return and Form 10-IC… Read More »

Assessment of a third party (under Section 153C) is invalid if based on non-incriminating material related to transactions already disclosed in their tax return.   Issue Can an Assessing Officer (AO) make an addition in proceedings under Section 153C by re-examining a transaction that was already disclosed in the assessee’s original income tax return, especially… Read More »

Reopening an assessment after four years is invalid without new material or proof of the assessee’s failure to disclose. Issue Can an assessment be reopened under Section 147 after four years from the end of the assessment year based on information that was already disclosed by the assessee during the original assessment proceedings? Facts The… Read More »