Tag Archives: ACIT

Assessee Bank Cannot Be Assessee-in-Default for Non-Deduction of TDS on LFC Governed by High Court’s Interim Stay

By | October 3, 2026
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Assessee Bank Cannot Be Assessee-in-Default for Non-Deduction of TDS on LFC Governed by High Court’s Interim Stay Issue Whether an employer-bank can be treated as an assessee-in-default under Section 201(1)/201(1A) for failing to deduct tax at source under Section 192 on Leave Fare Concession (LFC) reimbursements involving foreign travel, when non-deduction was made in compliance… Read More »

Expenditure for Business Closure Is Disallowed Under Section 37(1), While Foreign Exchange Loss Cannot Be Estimated

By | October 3, 2026
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Expenditure for Business Closure Is Disallowed Under Section 37(1), While Foreign Exchange Loss Cannot Be Estimated Issue Whether payments made for the closure of a business division are allowable under Section 37(1), and whether foreign exchange fluctuation losses can be disallowed on an estimated basis when actual data is available. Facts The assessee (a telecom… Read More »

Reassessment Orders Without Mandatory Section 143(2) Notice And Unsubstantiated Third-Party Ledger Additions Are Void

By | October 1, 2026
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Reassessment Orders Without Mandatory Section 143(2) Notice And Unsubstantiated Third-Party Ledger Additions Are Void Issue Whether a reassessment order passed under Section 144 read with Section 147 is valid when completed without issuing a mandatory notice under Section 143(2), despite the assessee demonstrating that a return was filed in response to a Section 148 notice.… Read More »

Section 270A penalty is unsustainable if underlying addition is deleted, unfinalized, or lack misreporting proof.

By | September 26, 2026
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Section 270A penalty is unsustainable if underlying addition is deleted, unfinalized, or lack misreporting proof. Issue Whether penalty levied under Section 270A of the Income-tax Act, 1961 for AY 2019-20 is sustainable when underlying additions are deleted, remanded for verification, based on bona fide claims, or where misreporting is vaguely alleged without applying prescribed rates.… Read More »

ITAT invalidates search additions based on uncorroborated digital evidence and quashes Section 143(3) assessment.

By | September 26, 2026
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ITAT invalidates search additions based on uncorroborated digital evidence and quashes Section 143(3) assessment. Issue Whether tax additions made solely on the basis of retrieved digital evidence (pen-drive/JSK Server and WhatsApp chats) are sustainable when there are procedural flaws, lack of Section 65B compliance, absence of custody proof, and no independent corroboration. Whether additions made… Read More »

Rejection of Transitional Form 10A Does Not Invalidate Pre-Existing Registration Under Section 12AA

By | September 26, 2026
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Rejection of Transitional Form 10A Does Not Invalidate Pre-Existing Registration Under Section 12AA Issue Whether the rejection of a transitional Form 10A application filed by an educational trust automatically cancels or invalidates its pre-existing registration under Section 12AA, thereby disentitling the trust from claiming income tax exemptions under Sections 11 and 12 for Assessment Year… Read More »

Section 270A misreporting penalty applies despite subsequent tax payment or bona fide explanation.

By | September 25, 2026
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Section 270A misreporting penalty applies despite subsequent tax payment or bona fide explanation. Issue Whether a penalty under Section 270A for under-reporting of income in consequence of misreporting can be sustained when the assessee voluntarily pays the due tax and interest during penalty appeal proceedings and offers a bona fide explanation. Facts Assessment Year: AY… Read More »

Excess stock found during survey, acquired from suppressed business profits, is taxable as business income, not under Section 69B.

By | September 25, 2026
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Excess stock found during survey, acquired from suppressed business profits, is taxable as business income, not under Section 69B. Issue Whether excess stock discovered during a Section 133A survey, consisting of regular trading commodities acquired out of suppressed business profits, is assessable as business income under normal provisions or as unexplained investment under Section 69B… Read More »

Additions for bogus purchases, unexplained WhatsApp cash, and ad hoc business expenses deleted for lack of proof.

By | September 24, 2026
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Additions for bogus purchases, unexplained WhatsApp cash, and ad hoc business expenses deleted for lack of proof. Issue Whether additions made towards alleged bogus purchases under Section 69C, unexplained cash inferred from an employee’s WhatsApp messages under Section 69A, and ad hoc disallowance of business expenses under Section 37(1) are legally sustainable without corroborative evidence… Read More »

Transfer Pricing Adjustments and Bona Fide Claims Do Not Attract Penalty Under Section 271(1)(c)

By | September 23, 2026
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Transfer Pricing Adjustments and Bona Fide Claims Do Not Attract Penalty Under Section 271(1)(c) Issue Whether penalty under Section 271(1)(c) for furnishing inaccurate particulars of income can be levied on transfer pricing adjustments, disallowance of leave encashment provision, and legal expenses on capital asset transfer when all relevant facts were fully disclosed and quantum additions… Read More »