Prosecution Sanction for Delayed TDS Deposit: Not Justified if Voluntarily Deposited with Interest Before Show Cause Notice Issue: Whether a delayed deposit of TDS, even with interest, is sufficient grounds for the Commissioner (TDS) to grant sanction for prosecution under Section 276B of the Income-tax Act, 1961, against the assessee and its directors, especially when… Read More »

Consequence of Failure to Deduct or Pay TDS: Notice Under Section 201 Invalid if Lower Deduction Certificate Obtained Issue: Whether a notice issued under Section 201 of the Income-tax Act, 1961, for failure to deduct or pay TDS, is valid when the assessee had deducted tax at a lower rate based on a certificate obtained… Read More »

Credit for TDS: AO Directed to Accept Company’s Verification and Grant Credit Despite TRACES Data Unavailability Issue: Whether an assessee-firm can be denied credit for TDS for Assessment Year 2007-08 (Financial Year 2006-07) merely because the TDS data is not available on the TRACES portal (which commenced from FY 2007-08), even if the deducting company… Read More »

Reassessment of Cooperative Bank: Invalid if Based on Change of Opinion and No New Material Facts Issue: Whether a reopening notice issued after four years (beyond the four-year limit for cases where original assessment was completed under Section 143(3) and no failure to disclose material facts is alleged) to a cooperative bank for issues related… Read More »

Cash Credit Addition on Share Capital Not Involving Cash: Deleted Issue: Whether an addition under Section 68 of the Income-tax Act, 1961, can be made on account of unexplained cash credits in the form of share capital and share premium, when the assessee-company received shares of other private limited companies in lieu of its own… Read More »

Capital Gains on Property Received in Company Liquidation: FMV at Distribution Date as Cost of Acquisition Upheld Issue: Whether, upon receipt of an immovable property by an assessee during the liquidation of a company in proportion to its shareholding, the cost of acquisition for computing capital gains on the subsequent sale of that property should… Read More »

I. Charitable Trust Registration: Cancellation for Community-Specific Object Not Justified Due to Consistency Rule Issue: Whether the Commissioner (Exemption) was justified in cancelling the registration of an assessee-trust, established in 1930, on the ground that it was set up to impart religious education to a particular caste/community (Marwari Brahmin and Maheshwari Vaishyas), thereby deeming it… Read More »

Reassessment for Bogus LTCG: AO’s Application of Mind Upheld, Reopening Justified Issue: Whether the Assessing Officer (AO) mechanically reopened an assessment under Section 147 based solely on an investigation wing report, or if there was independent application of mind justifying the reopening to examine alleged bogus Long Term Capital Gains (LTCG) / Short Term Capital… Read More »

I. Interest on Inter-Corporate Deposits and Interest-Free Loans to Associates: Commercial Expediency Upheld Issue: Whether interest expenditure claimed by an assessee-company on inter-corporate deposits should be disallowed when it has also advanced interest-free loans to its associate concerns, given that the profitability of the associate concerns impacts the assessee’s financial status and business. Facts: The… Read More »