INCOME TAX CASE LAW 01.06.2026 INCOME TAX CASE LAW 01.06.2026 Income Tax Case Law Summary Section Case Law Title Brief Summary Citation Relevant Act Section 10(23C)(iiiab) Hidayatullah National Law University v. ACIT Exemption denied as Government grants received during the year were only 47.85% (less than the 50% threshold mandated under Rule 2BBB), failing the… Read More »
Organised tax evasion cases are exempt from low tax effect thresholds, requiring merits-based Tribunal review. Issue Whether a revenue appeal involving alleged fictitious share transactions and organized tax evasion can be dismissed by the Tribunal solely due to a low tax effect under CBDT Circular No. 5/2024, or if it falls within the “organized tax… Read More »
ITAT rightfully dismisses applications to recall ex parte orders filed after an unexplained fourteen-year delay. Issue Whether the Income Tax Appellate Tribunal (ITAT) can recall and restore an appeal dismissed ex parte under Rule 24 of the ITAT Rules, 1963, when the assessee files miscellaneous applications after a lapse of 14 years without establishing sufficient… Read More »
Compulsory acquisition compensation paid under a court-approved mediation agreement is exempt from TDS. Issue Whether a settlement reached through a court-referred mediation agreement constitutes a lawful settlement under the Code of Civil Procedure, and whether compensation paid for the compulsory acquisition of land pursuant to such an agreement is subject to deduction of tax at… Read More »
Reassessment notice is within limitation as time granted for filing response must be excluded. Issue Whether the reassessment order passed under section 148A(d) and the consequential notice issued under section 148 were within the prescribed statutory period of limitation, after excluding the time allowed to the assessee to file a reply as per the fifth… Read More »
Assessing Officer’s failure to state specific charging section invalidates addition of unexplained cash deposit. Issue Whether an addition of Rs. 1 crore on account of an unexplained single-day cash deposit under section 69A can be legally sustained if the Assessing Officer fails to explicitly invoke or pinpoint the relevant charging section in the assessment order.… Read More »
Industrial average determines gross profit rate while verifying undisclosed sales and telescope-backed cash explanations. Issue Whether the revenue was justified in applying an arbitrary 18% gross profit (GP) rate on declared and undisclosed turnover after rejecting the books of accounts following a search operation. Whether deductions for contra-entries, totaling errors, and past trader sales should… Read More »
Unexplained loan addition remanded for de novo verification as AO failed to evaluate banking trail and interest payments. Issue Whether the revenue was justified in confirming the addition of Rs. 1.25 crore as unexplained cash credit under section 68 when the assessee provided extensive documentary evidence of a banking-channel loan and its subsequent repayment with… Read More »
Interest provision falls when the underlying award is set aside, but statutory meeting expenses remain fully deductible. Issue Whether a provision for interest on an arbitral award is allowable as a business deduction under section 37(1) if the core arbitral award itself is subsequently set aside by the Supreme Court. Whether expenditure incurred by a… Read More »
CPC has jurisdiction for audit-based adjustments, but double disallowance under section 14A is legally impermissible. Issue Whether the Central Processing Centre (CPC) has the jurisdiction under section 143(1)(a)(iv) to make an adjustment based on disallowances quantified in a tax audit report but omitted by the assessee in their returned income, and whether a section 14A… Read More »