Notice of Assessment Issued Within Limitation, Assessment Order Valid Even If Passed Beyond Three-Year Period: Madras High Court

The Madras High Court stated that if notice for completing assessment issued within limitation, then assessment order is within time even if passed beyond period of three years. The Division Bench of Justices R. Suresh Kumar and C. Saravanan observed that “as per Section 24(5), no assessment shall be made after a period of three years from the end of the year to which the return under the Act relates. The test to be applied is whether the notice for completing the assessment was ...

Gauhati HC Criticizes ITAT For Inconsistent Views On Applicability Of Explanation To Section 14A Income Tax Act, Says It Applies Prospectively

The Gauhati High Court recently expressed discontent over the Income Tax Appellate Tribunal for taking inconsistent view on the date of applicability of Explanation to Section 14A of the Act of 1961 inserted by Finance Act, 2022. “Such a conduct of the members of an authority, which is discharging judicial functions, cannot be appreciated. Any authority discharging judicial functions is expected to maintain consistency in its views in respect of judicial matters because any unjust...

TOLA Extends Income Tax Reasssment Timelimit; Notices Can Be Issued After 2021 Under Old Regime : Supreme Court

The Supreme Court on Thursday (October 3) set aside the judgments of the High Courts which held that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021 will not extend the time limit for issuing notices for re-assessment under the Income Tax Act.A bench comprising Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Manoj Misra delivered the judgment allowing a batch of 727 appeals filed by the Income Tax Department against the various orders...

GST Input Tax Credit On Construction Costs Can Be Claimed If Building Construction Was Necessary For Renting Out Service : Supreme Court

The Supreme Court on Thursday (October 3) held that if construction of a building is essential for supplying services such as renting out, it could fall into the "plant" exception to section 17(5)(d) of CGST Act which provides that Input Tax Credit cannot be claimed for construction material (other than plant or machinery) for immovable property construction. “If the construction of a building was essential for carrying out activity of supplying services such as renting or giving on lease or...

Recovery Officer Can't Attach Taxpayer's Overdraft Account With Banks By Exercising Power U/s 226(3): Himachal Pradesh HC Quashes Attachment Order

Observing Cash Credit account or overdraft is capable of being attached u/s 226(3) of Income tax Act, the Himachal Pradesh High Court turned down the decision of Tax recovery officer in passing the order of attachment of Cash Credit Account. Explaining the relationship between debtor & creditor, the High Court clarified that bank does not become a debtor to its customers and cannot hold money for account of its customers merely because it has provided a facility of overdraft to...

[Tax Not Paid/ Short Tax] 'Summary Of Show Cause Notice' In GST DRC-01 Not A Substitute For SCN U/S 73(1) CGST Act: Gauhati HC

The Gauhati High Court has held that Summary of Show Cause Notice in Form GST DRC-01 along with an attachment of the 'determination of tax' does not constitute a valid Show Cause Notice (SCN) under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017. “The Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73(1) of the Central Act as well as the State Act. Irrespective of issuance of the Summary of...

District Bar Associations Election: Delhi High Court Exempts Taxation Bar Association Members From Court Appearance Requirement

The Delhi High Court exempted members of Taxation Bar Association from the Court appearance requirement. The Bench, consists of Chief Justice Manmohan and Justices Vibhu Bakhru and Yashwant Varma, noted that, in light of the judgment in Lalit Sharma and Ors. v. Union of India and Ors. [W.P.(C) 10363/2021], dated 19th March 2024, a majority of the advocate members of the Delhi Tax Bar Association, despite active practice, have now become ineligible to contest, vote, or participate in...

Self-Assessment U/S 143(1) Income Tax Act Doesn't Qualify As Assessment By AO, No Bar On Reopening Assessment U/S 147: Delhi HC

The Delhi High Court has held that merely because an assessee made self-assessment under Section 143(1) of the Income Tax Act 1961, is not reason to preclude reassessment proceedings initiated by the Department. “The assessment of tax under Section 143(1) of the Act is a self-assessment and in a strict sense cannot be stated as assessment framed by the AO,” observed a bench of Justices Vibhu Bakhru and Swarana Kanta Sharma. Section 143(1) relates to self-assessment of chargeable...

Retailer Can't Be Presumed To Fall Under 'Exceptions' From GST Registration Without Supporting Materials Placed On Record: Gauhati HC

The Gauhati High Court has held that a retailer cannot be presumed to fall within the exception from registration under the Assam Goods and Services Tax Act 2017, without any materials placed on record to support the exemption. A bench of Justice Sanjay Kumar Medhi observed that though certain entities are given exemption under the Act, there cannot be any presumption in that regard, “more so when the very purpose of the Act of 2017 is to bring all business under the purview of the...

Infrastructure Companies laying Roads On BOT Basis Are Not Owners, Can't Claim Depreciation On Toll Roads: Mumbai ITAT

Emphasizing that ownership is a sine qua non for availing depreciation, and roads/ bridges are public properties, the Mumbai ITAT held that an infrastructural development company which has laid down roads cannot claim depreciation over same. The Division Bench comprising Amarjit Singh (Accountant Member) and Sandeep Singh Karhail (Judicial Member) denied depreciation claim on toll road to a company engaged in the business of infrastructure development (assessee), who, in execution of...

No Reopening Is Permitted U/s 148 On Issues Which Were Answered In Favour Of Taxpayer During Course Of Revision U/s 263: Delhi HC

The Delhi High Court held that once the PCIT in the revisionary proceeding u/s 263, had decided in favour of assessee after having considered its reply, then AO had no authority to reassess and reopen the assessment u/s 148. The High Court held so, after finding that the reasons for issuing notice u/s 148A(b) were exactly similar to the reasons on which the PCIT had invoked Section 263. Section 263 of Income tax Act is a proactive step taken by tax authority to rectify potential...

Non-Payment Of Tax To Govt For 3 Months After Due Date Not Ground To Cancel GST Registration: Delhi HC

The Delhi High Court has made it clear that non-payment of dues in the form of tax, interest or penalty, by a registered entity to the account of Central/State Government beyond a period of three months after due date, is not a ground to cancel its registration under the Central Goods and Services Tax Act.A bench of Justices Vibhu Bakhru and Sachin Datta took note of Section 29 of CGST Act which prescribes for cancellation of a tax payer's GST registration and observed,“The only reason set out...