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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.
A SEZ unit’s claim for service tax refund was allowed despite filing beyond the six-month limit, because the SEZ Act’s substantive exemption prevails over procedural time bars. This clarifies that revenue authorities cannot reject refunds solely on limitation grounds for SEZ entities. The ruling benefits all SEZ manufacturers seeking tax refunds for pre-2011 periods.
The Kolkata ITAT ruled that the 10 % tolerance under Section 50C is retrospective, striking down the ₹9,94,312 addition for AY 2014-15 because the valuation gap was only 8.5 %. Taxpayers can therefore rely on the tolerance limit for past years, limiting exposure to Section 50C additions when the gap falls within the prescribed range.
The ITAT ruled that a higher TDS rate under Section 206AA cannot be imposed automatically if the deductor’s delay in filing returns is caused by the deductees’ failure to link or activate PAN-Aadhaar, a circumstance beyond the deductor’s control. Such matters must be remitted to the Assessing Officer for fresh assessment, shielding compliant deductors from unwarranted penalties. The decision benefits taxpayers who face third-party PAN linking delays.
ITAT ruled that the rebate under Section 87A can be claimed on tax payable on short-term capital gains taxed under Section 111A even when the assessee opts for the new tax regime (Section 115BAC). The decision confirms eligibility for AY 2024-25, benefiting taxpayers with STCG.
The ITAT ruled that an unsecured loan taken and fully repaid within the same financial year cannot be treated as unexplained income under Section 68, provided the assessee furnishes satisfactory documentary evidence. This prevents automatic tax additions on short-term loans and safeguards businesses from unwarranted tax liability.
The Delhi ITAT set aside assessment orders for AY 2016-17 and 2017-18, ruling that a single omnibus satisfaction note under Sec 153C is invalid without year-wise linkage of seized material to income. It also declared that notices served after the statutory 15-month limitation are void. Taxpayers must ensure separate satisfaction notes for each year and timely notices.
ITAT Delhi held that the discount on employee stock options is a deductible expense under Section 37(1) of the Income Tax Act, treating it as a composite expense under Section 57. Companies can now claim the ESOP discount against taxable income, reducing tax outgo. This benefits firms that grant ESOPs.
The ITAT Surat Bench set aside assessment orders for AY 2011-14 because the Commissioner of Income-Tax (Appeals) failed to obtain the mandatory prior approval of the Joint Commissioner under Section 153D. The ruling makes it clear that any assessment under special provisions is invalid without such approval, impacting both taxpayers and revenue officials.
The Delhi ITAT ruled that export incentives and cash discounts form part of a taxpayer’s operating revenue for the purpose of the Transactional Net Margin Method, requiring comparables to be selected on a fully adjusted basis. This clarifies the treatment of such items in transfer-pricing documentation and impacts exporters relying on TNMM benchmarks. Assessors must now ensure FAR-based comparables reflect these revenue components.
The ITAT Bangalore ruled that interest earned on deposits by a credit cooperative is an allowable deduction under Sec 80P(2)(a)(i), interpreting ‘attributable’ to mean income arising from the society’s credit activities. This clarifies that such interest can be claimed as business income, benefiting credit co-operatives seeking tax relief on deposit earnings.
CESTAT ruled that a refund of service tax paid under a mistake of fact attracts interest at 12% per annum, superseding the earlier 6% rate. This higher rate applies to any taxpayer seeking restitution for erroneous service tax payments, enhancing compensation for delayed refunds. The decision sets a binding precedent for future service tax refund claims.
Customs officials must possess a reasonable belief before seizing goods, and the onus under Sec 123 cannot be shifted to the accused without proper justification. This ruling curtails arbitrary confiscation of gold and safeguards importers from unjust seizure.
CESTAT ruled that an appeal lodged with an incorrect customs office does not lapse under the Limitation Act, allowing the appellant to pursue the refund of duty paid under protest. This clarifies that procedural misdirection does not defeat a taxpayer’s right to challenge duty assessments.
CESTAT quashed a Rs 22.84 crore service tax demand against HCL Infosystems, holding that the services do not fall within the negative-list taxable categories and are not deemed sales or advertising agency services. The ruling narrows the tax base under the negative-list regime, benefitting IT service providers offering consulting, maintenance and related services.