INCOME TAX
FAOs And JAOs Have Concurrent Jurisdiction For Assessment, Re-assessment Or Re-Computation U/S 147 Income Tax Act: Madras High Court
The Madras High Court recently clarified that both the Faceless Assessment Officer and Jurisdictional Assessment Officer have concurrent jurisdiction as far as assessment, re-assessment or re-computation under Section 147 of the Income Tax Act. “As far as the assessment, re-assessment or re-computation in terms of the provisions of Section 147 of the IT Act is concerned, both the FAO...
Reassessment U/S 150 Of Income Tax Act Can't Be Initiated On Mere 'Incidental' Findings Of Appellate Authority: Delhi High Court
The Delhi High Court has held that Section 150 of the Income Tax Act, 1961 can be invoked for reassessment only to give effect to a 'conclusive finding' by an appellate authority regarding escapement of income by an assessee. Section 150 makes provision for cases where assessment is in pursuance of an order on appeal, etc. It empowers an Assessing Officer to issue reassessment...
Co-Accused Can Apply Separately For Compounding Of Offences Committed By Company Or HUF Under Income Tax Act: Delhi High Court
The Delhi High Court has held that co-accused are entitled to apply separately for compounding of offences committed by a Company or a Hindu Undivided Family under the Income Tax Act, 1961. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela ruled that the co-accused need not await filing of application for compounding by the company or the HUF. In...
Income From Capital Gains On Certain Assets Which Are Excluded U/S 10(38) Of IT Act Must Be Included While Computing Book Profits: Delhi HC
The Delhi High Court held that proviso to Sec 10(38) cannot be read in reverse to mean that if gains are not included as book profits u/s 115JB, the same are liable to be included as income for purposes of assessment to tax under the normal provisions.Even though, the gains are required to be excluded from income chargeable to tax u/s 10(38), added the Court. As per Section 10(38) of Income...
Belated Filing Of Form 9A Is Not Attributable To Trust: Bombay HC Allows Exemption U/S 11 After Condoning Delay Under IT Act
The Bombay High Court held that bonafide delay in filing Form 9A on part of trust, has to be construed as procedural lapse and shall be condoned by exercising powers u/s 119(2) of Income tax Act.The Division Bench of Justice G S Kulkarni and Justice Advait M Sethna observed that that the jurisdictional AO completely lost sight of the fact that at the time when assessee claimed deductions...
S.147 Of IT Act Doesn't Postulate Review Jurisdiction Such That Assessment Can Be Reviewed By AO Intending To Form Different Opinion: Bombay HC
The Bombay High Court ruled that the materials which were already available before AO and which ultimately were considered in passing assessment order u/s 143(3), cannot form basis of reopening, on ground that such materials were ignored in finalizing assessment.Section 147 does not postulate review jurisdiction, so that assessment can be reviewed by the Assessing Officer intending to...
Interest Earned On Borrowed Funds Kept For Acquiring Coal Mine Is Not Revenue Receipt If Coal Mine Is Aborted, Borrowings Are Repaid: Delhi HC
The Delhi High Court recently accepted that the interest received on borrowed funds, which were temporarily held in interest bearing deposit, is a part of the capital cost and is required to be credited to Capital Work In Progress.The Division Bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed that if the interest is earned on the amounts temporarily kept...
ITO Acted On Complete Change Of Opinion On Same Material With Intent To Review Assessment Order Passed By Him: Bombay HC Quashes Reopening
While setting aside the reassessment proceedings, the Bombay High Court held that 'change of opinion' or 'review of already completed assessment', is not permitted to AO.While holding so, the Division Bench of Justice G.S Kulkarni and Justice Advait M Sethna observed that there is no whisper of allegations against the assessee that income that has escaped assessment was attributable to...
No Penalty Can Be Levied U/S 271B Of IT Act If No Prejudice Is Caused To Dept On Account Of Belated Furnishing Of Audit Report: Kerala HC
The Kerala High Court held that circumstances under which AO can absolve a taxpayer from payment of penalty u/s 271B are discernible from a reading of Sec 273B, which states that no penalty can be imposed on an assessee u/s 271B for breach of the provisions, if he proves that there was "reasonable cause" for the said failure.The provision of Section 44AB of Income tax Act prescribes a...
Amendment In Finance Act Can't Retrospectively Affect Vested Right Of Taxpayer To Adjudicate Settlement Application U/S 245(D): Calcutta HC
The Calcutta High Court recently reiterated that when the settlement applications were filed before the date on which the Finance Act 2021 did not come into effect, then taxpayers had vested right of preferring the application in absence of any statute prohibiting the said application.The Division Bench of Justice Harish Tandon and Justice Hiranmay Bhattacharyya reiterated that...
There Cannot Be 'Disconnect' Between Reasons For Initiating Reassessment U/S 147 Of IT Act & Grounds On Which Final Order Is Passed: Delhi HC
The Delhi High Court has held that only 'original reasons' which formed the basis for initiating reassessment proceedings under Section 147 of the Income Tax Act can be taken into consideration by the Assessing Officer, for coming to the conclusion that income had escaped assessment. A division bench of Justice Yashwant Varma Hon'ble Mr. Justice Dharmesh Sharma observed that there...
Rule 8D Of IT Rules Can Be Invoked Only If Assessee's Computation Of Expenses Attributable To Earning Exempt Income Is Found Inadequate: Delhi HC
The Delhi High Court has held that recourse to Rule 8D of the Income Tax Rules, 1962 for computing disallowance under Section 14A of the Income Tax Act is available only if the Assessee's computation of expenses attributable to earning exempt income, is found to be inadequate. Rule 8D provides a mechanism to determine the expenditure in relation to exempt income. In the case at...