In this search-based assessment, the ITAT partly allowed Revenue’s appeal on bogus purchases by sustaining a 5% GP addition, while dismissing it on protective r

In this landmark penalty appeal, the Income Tax Appellate Tribunal, Mumbai, ruled in favor of the assessee, Shri Jagdish P. Purohit, by deleting penalty under Section 271(1)(c) for Assessment Year 2013-14. The Tribunal held that the penalty proceedings were fundamentally flawed because the Assessing Officer issued a notice under Section 274 without specifying whether the charge was for concealment of income or furnishing inaccurate particulars, as required by striking off irrelevant limbs. This ambiguity, coupled with inconsistent statements in the assessment and penalty orders, demonstrated non-application of mind and violated natural justice. The decision reinforces strict procedural compliance in penalty matters, following key precedents like Samson Perinchery, and underscores that defective notices render penalty proceedings invalid ab initio. For tax professionals, this judgment highlights the critical need for precision in penalty initiation to avoid legal challenges.

In this landmark judgment, the Delhi High Court quashed reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, for AY 2011-12, highlighting critical safeguards against arbitrary reopening of assessments. The Court ruled that when reassessment is initiated beyond four years, the Revenue must explicitly allege and prove failure by the assessee to disclose material facts, as per the first proviso to Section 147. Here, the reasons cited—based on material from AY 2012-13 and attributing escapement to AO’s ‘mistake’—constituted a mere change of opinion, which is impermissible. The decision reinforces judicial principles from Kelvinator and other precedents, protecting taxpayers from reopening based on hindsight or administrative lapses. It underscores that reassessment cannot serve as a tool for review, especially when identical claims were allowed in later years, ensuring consistency and fairness in tax administration.

In this landmark Calcutta High Court judgment, the Court upheld the treatment of Rs. 83.20 lakhs paid by United Spirits Limited to vacate sub-tenanted premises as capital expenditure, not deductible under Section 37(1) of the Income Tax Act, 1961. The Court emphasized that the expenditure secured an enduring right to possession—a capital asset—rather than merely facilitating business operations. This ruling reinforces the critical distinction between capital and revenue expenditure in property-related contexts, prioritizing the acquisition of permanent rights over transient business benefits.

In this landmark judgment, the Kerala High Court upheld the constitutional validity of Explanation 2 to Section 139(8)(a) of the Income Tax Act 1961, which requires interest on delayed returns by registered firms to be computed based on the tax payable if the firm were assessed as an unregistered firm. The Court rejected the petitioners’ challenge under Article 14, emphasizing the Legislature’s discretion in taxation matters and the conditional nature of registration benefits. Relying on the Supreme Court’s rationale in Jain Bros., the judgment reinforces that differential treatment for defaulting registered firms is a valid legislative classification, not arbitrary discrimination. This decision provides clarity and stability for tax administration regarding interest levy on firms.

In a significant ruling on search assessments, the Delhi ITAT clarified the scope of section 153A. For assessment years where the assessment was already completed (not pending) on the date of search, the Assessing Officer cannot make additions unless incriminating material related to those additions is found during the search. The Tribunal upheld the principle established by the Special Bench in All Cargo Global Logistics Ltd., distinguishing contrary High Court precedents as inapplicable to the specific legal question. The case was remanded to the AO to verify factual aspects: whether the assessment was pending and if incriminating material existed.

In this landmark ruling, the Ahmedabad ITAT bench decisively overturned the CIT(E)’s rejection of a charitable trust’s application for final registration under Section 80G(5), marking a significant precedent for procedural leniency in tax compliance. The tribunal held that the statutory timeline for filing Form 10AB is directory, not mandatory, aligning with CBDT’s consistent extensions for electronic filing hardships. By referencing key cases like Adani Education Foundation and leveraging Circular No. 7/2024, the judgment underscores that technicalities must not impede substantive justice, particularly in transitional regulatory phases. This decision empowers trusts by ensuring that provisional approvals and donor benefits remain protected, reinforcing a taxpayer-friendly interpretation amidst digital taxation reforms.

In this landmark ITAT Jabalpur decision, the tribunal overturned the CIT’s revision under section 263, ruling in favor of the assessee on both procedural and substantive grounds. Procedurally, the CIT’s order was timely due to retrospective application of amended limitation rules. Substantively, the tribunal affirmed that mere co-ownership of property, without a joint business venture, does not create an Association of Persons (AOP) for tax purposes. Crucially, it reinforced that the ITO’s discretionary choice to tax individual co-owners—rather than a hypothetical AOP—is a valid exercise of assessment power, not rendering the order ‘erroneous’ under section 263. This judgment underscores the narrow scope of revisionary jurisdiction and protects assessees from reassessment based on mere revenue prejudice.