Topic
Income tax assessment in India refers to the process by which the Income Tax Department examines a taxpayer's return to verify income, deductions, and compliance with the Income Tax Act, 1961.
An unsigned or undated sanction under section 151 of the Income-Tax Act is invalid, making any subsequent section 148 notice jurisdictionless. The Delhi ITAT therefore quashed the assessment notice, safeguarding taxpayers from assessments based on defective approvals.
ITAT Kolkata ruled the Section 148 reassessment notice for AY 2015-16 was barred by Section 149(1)(b) and set aside the ₹20.04 crore share-capital addition treated as unexplained cash credit. The decision protects taxpayers from reassessment notices served outside the statutory limitation period.
ITAT Agra quashed unexplained bank deposits addition of Rs. 35,92,020 for CIT(A)'s failure to provide a reasoned order and violate natural justice under Section 250(6). The ruling underscores mandatory procedural compliance in appellate assessments, impacting pending unexplained income cases.
ITAT Delhi rules that proceedings under Section 153C of the Income Tax Act are invalid if incriminating material is handed over after 01.04.2021, even if the search occurred earlier. This holding establishes that the jurisdictional trigger is the date of handover, not the search date, impacting all pending assessments under the repealed provision.
ITAT Delhi ruled that reassessment notices under Section 148 of the Income Tax Act must be approved by the competent authority based on the timing of issuance. For notices issued after three years, only the Pr. Chief Commissioner-not the Pr. CIT-can grant approval. The Tribunal quashed the assessment order, reinforcing strict procedural compliance in tax reassessment.
ITAT Delhi rules that tax assessments under Section 147 against a merged entity are legally unsustainable, as proceedings cannot be initiated against a non-existent legal person. The ruling reinforces that jurisdictional defects render such assessments void, impacting tax authorities' powers in post-amalgamation scenarios.
ITAT Raipur ruled that revenue authorities cannot alter their position on identical factual matrices across assessment years without material change, setting aside a ₹64.32 lakh addition. The decision reinforces the binding nature of the 'principle of consistency' for tax assessments, protecting assessees from arbitrary reassessments.
The ITAT Kolkata has ruled that a faceless assessment under Section 151A is jurisdictionally void if the statutory notification empowering the National Faceless Assessment Centre was issued only after the assessment order was framed. This sets a critical precedent: procedural compliance with notification timelines is not optional but foundational to the validity of faceless assessments, affecting all taxpayers subject to centralized scrutiny under the Income Tax Act.
The ITAT Kolkata has ruled that the Centralized Processing Centre cannot make tax adjustments under Section 143(1) without first issuing a show-cause notice to the assessee, violating the foundational principle of natural justice. This sets a critical precedent for all taxpayers whose returns are processed automatically, ensuring procedural fairness in AI-driven tax assessments.
The ITAT Agra has ruled that income tax assessments cannot be framed directly against a legal heir unless they are formally recognized as the legal representative under Section 159 of the Income Tax Act. This clarifies that succession rights alone do not confer statutory authority to represent a deceased assessee, impacting how tax authorities must proceed in estate-related assessments and protecting heirs from procedural overreach.
A local authority is entitled to income tax exemption under Section 10(20) even if it mistakenly claimed deductions under Section 57, as long as its status as a qualifying local authority is established. This ruling protects municipal bodies from losing statutory exemptions due to technical filing errors, reinforcing that substance overrides form in tax exemption claims.
The ITAT Delhi has ruled that the Supreme Court's Covid-19 limitation extension order does not apply to mandatory timelines under Section 144C(13) of the Income-tax Act, reinforcing that statutory compliance in tax assessments remains unaffected by judicial relief meant for courts and tribunals. This clarifies that tax authorities cannot rely on pandemic-era extensions to bypass strict procedural deadlines, impacting compliance strategies for corporates and tax practitioners alike.
When an assessee denies a sale transaction, the Income Tax Department cannot rely solely on TDS portal records to justify an addition under reassessment. ITAT Delhi holds that conclusive evidence - such as sale deeds, consideration flow, or third-party verification - is mandatory, reinforcing the principle that mere administrative data does not discharge the Revenue’s burden of proof.
The ITAT Delhi has ruled that assessments under Section 153C cannot be sustained solely on Departmental Valuation Officer reports when no incriminating material links the assessee to the unexplained investments. This sets a critical precedent for taxpayers facing post-search assessments, requiring the revenue to establish a direct evidentiary connection beyond mere valuation discrepancies.
When a taxpayer in the informal sector declares business income but maintains no books, the ITAT Agra rules that unexplained cash deposits cannot be fully added under Section 69A without applying the peak credit theory. This ensures fair assessment by focusing on the highest balance reached during the year, not total inflows - a critical safeguard for small traders and cash-based businesses.