What the courts have decided on section 142(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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PCIT v I-Ven Interactive Ltd
Supreme CourtHelps department
I moved my registered office and put the new address on my return and in Form 18 with the Registrar of Companies. The scrutiny notice went to the old address. Is the assessment bad?
No. The Supreme Court held that a notice under section 143(2) sent within the prescribed time to the address in the PAN database is sufficient compliance, and actual service afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely showing the new address in the return is not enough. The assessee must apply to have the PAN database changed, because scrutiny notices are generated by an automated system that picks the address from PAN. The appeal was allowed and the matter remanded to the CIT (Appeals) to decide the other grounds on merits.
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CIT v Tasgaon Taluka S.S.K. Ltd
Supreme CourtCuts both ways
The Assessing Officer has disallowed the whole difference between the statutory minimum cane price and the State advised price my sugar co-operative paid its members. Can he?
No — not the whole difference. The Supreme Court held that only that component of the final or additional cane price fixed under Clause 5A of the Sugarcane (Control) Order 1966 which represents profit is an appropriation of profit; the rest is deductible expenditure. The Assessing Officer must actually do the exercise of identifying the profit component from the accounts and the material supplied to the State Government, and all the orders below were set aside and the matters remitted for that purpose.
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CIT v Chhabil Dass Agarwal
Supreme CourtHelps department
Can I go straight to the High Court against an income-tax order instead of filing the statutory appeal?
Ordinarily no. The Supreme Court held that the Income-tax Act supplies a complete machinery for assessment and reassessment, and an assessee cannot abandon that machinery and invoke Article 226. The exceptions are narrow and have to be pleaded and made out — an order passed otherwise than in accordance with the enactment, in defiance of fundamental principles of judicial procedure, under repealed provisions, or in total violation of natural justice.
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Marshall Sons & Co (India) Ltd v ITO
Supreme CourtHelps taxpayer
Our scheme said the merger takes effect from 1 January but the NCLT only sanctioned it two years later. The Assessing Officer has issued notices to the transferor company for the two years in between. Which date governs?
The date specified in the scheme, unless the Court fixed another one. The Supreme Court held that every scheme of amalgamation has necessarily to provide a date with effect from which the amalgamation or transfer shall take place; that it is open to the Court while sanctioning the scheme to modify that date and prescribe such date as it thinks appropriate, in which case that date governs; but that where the Court does not prescribe any specific date and merely sanctions the scheme presented to it, it should follow that the date of amalgamation or transfer is the date specified in the scheme as the transfer date. On that footing the notices issued to the transferor company for the intervening period were not warranted in law, and the business carried on by the transferor in the meantime is to be deemed to have been carried on for and on behalf of the transferee.
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BVR Projects v Assessment Unit
High CourtHelps taxpayerJudgment not reachable
The faceless show-cause notice gave me four days to reply. Is that enough time?
No. The CBDT's Standard Operating Procedure of 3 August 2022 for faceless assessment requires seven days to answer a show-cause notice. A notice issued on a Saturday with a deadline at 1.02 p.m. the following Friday gave four working days to respond to a proposed addition of over Rs. 5.22 crores, and the assessment order was set aside on that ground alone.
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Benteler Automotive India Pvt Ltd v Union of India
High CourtHelps taxpayerNo later treatment found
The DRP issued its directions years ago and the Assessing Officer has still not passed a final assessment order. Is the assessment now dead, or can he pass one whenever he likes?
It is dead. Section 144C(13) requires the Assessing Officer, on receipt of the DRP's directions under s.144C(5), to complete the assessment in conformity with them within one month from the end of the month in which the directions are received, and he need not give any further hearing. Where that month passed — here even after the extension of the outer date under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 — and no order was passed, the Bombay High Court held the assessment barred by limitation and quashed the pending proceedings on the assessee's writ petition.
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AMNS Gandhidham Ltd v ACIT
High CourtHelps taxpayerNo later treatment found
My client took over a company through an IBC resolution plan. The assessing officer has begun assessments for years before the takeover and says he will examine whether the brought forward losses survive the change in shareholding. Can he?
On these facts, no. Where the resolution professional gave the jurisdictional Principal Commissioner the opportunity of being heard that s.79(2)(c) requires and the Principal Commissioner made no submissions before or at the approval of the resolution plan, the Bombay High Court held that the Revenue could not afterwards reopen the allowability of the carried forward losses, and quashed assessment proceedings relating to a period before the plan's implementation date.
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AMNS Khopoli Ltd v ACIT
High CourtHelps taxpayerNo later treatment found
Our company came out of the NCLT under an approved resolution plan. The department now says it will not recover anything but wants to complete the assessment for an earlier year to build a case against the old promoters. Can it?
No. Once the resolution plan is approved, claims that are not part of it stand extinguished and no proceedings in respect of them may be initiated or continued for any period before the effective date - and that covers the assessment itself, not merely recovery. The Bombay High Court quashed notices under s.143(2) and s.142(1) even though the Revenue had accepted on the record that it would not enforce any resulting demand.
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Chambal Fertilizers and Chemicals Ltd v PCIT, Udaipur
High CourtHelps taxpayer
Can the officer reject a s.270AA immunity application without a hearing and without saying which clause of s.270A(9) applies?
No. The Rajasthan High Court held that the Deputy Commissioner had violated the proviso to s.270AA(4) by giving no opportunity of hearing, that his order was wholly laconic and did not indicate under which part of s.270A(9) the case was said to fall, and that the revisional authority had, without cogent reasons, cursorily placed the case within clauses (a) and (c). On the facts the amount had not been detected by the department at all - it was disclosed voluntarily during scrutiny after ten other issues had been raised without any addition - so clauses (a) and (c) were not attracted. The Court quashed both orders and directed that immunity under s.270AA be granted.
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Limbabhai Ishwarbhai Jodhani v ACIT (Gujarat High Court) — section 50C fixes the stamp valuation authority's value; the Assessing Officer cannot assume a higher one
High CourtHelps taxpayerNo later treatment found
The stamp authority accepted my sale deed at the agricultural land rate and passed a final order on it. The Assessing Officer has reopened on the basis that the open land rate should have applied. Can he assume a valuation above the one the stamp authority itself adopted?
No. The Gujarat High Court quashed the reopening. Section 50C substitutes the value adopted or assessed or assessable by the stamp valuation authority, and the Explanation defines 'assessable' as the price that authority would have adopted or assessed if the transfer had been referred to it. On the record the sale deed described the property as agricultural land, the stamp paid had been accepted by the Deputy Collector, Stamp Valuation Department in an order dated 16 October 2017, and the government resolution prescribed a lower rate for agricultural land than for open plots; the officer was therefore trying to assume a valuation beyond the value prescribed by the stamp valuation authority.
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PCIT v Jai Maa Jagdamba Flour Private Limited
High CourtHelps taxpayer
After a search on or after 1 July 2012, can the officer levy penalty under s.271(1)(c) instead of s.271AAB?
No, not for the specified previous year. The Jharkhand High Court held that s.271AAB opens with a non obstante clause and excludes s.271(1)(c) where the undisclosed income relates to the specified previous year. Where the search was on 3 September 2014 the penalty, if any, had to be levied under s.271AAB, and because the assessee had admitted nothing in a s.132(4) statement and paid no tax on admitted income, the case fell under clause (c) of s.271AAB(1). The penalty actually levied under s.271(1)(c) could not stand. The Court also held it immaterial that no incriminating document had been found, because the statute keys the choice of section to the date of the search.
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Xiaomi Technology India Private Limited v DCIT
High CourtHelps taxpayer
The Assessing Officer has provisionally attached our deposits under s.281B saying a large demand is likely. Is an expected demand enough?
No. A mere apprehension that huge tax demands are likely to be raised on completion of assessment is not enough. The officer must record his own formation of opinion, on tangible material, that the assessee is likely to defeat the demand and that attachment is necessary - not merely expedient - to protect the revenue, and the attachment must be proportionate. An order resting on the Investigation Wing's and the Transfer Pricing Officer's findings is borrowed satisfaction, and the Principal Commissioner's approval is not an empty formality.
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Virdichand Bawandas HUF v National e-Assessment Centre
High CourtHelps taxpayer
You asked for time to reply to the draft order and were refused. Is the final order safe?
No. The scheme requires an opportunity to respond to the modifications proposed in the draft order. Refusing time and then finalising was held wrong, and the assessment and the penalty notice were set aside.
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Symphony Limited v ACIT
High CourtHelps taxpayerJudgment not reachable
The faceless unit finalised your assessment without issuing a draft order. Is that order good?
No. Under s.144B, a show cause notice issued along with the draft assessment order is a sine qua non. Without it the final order was passed without jurisdiction and was quashed.
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Bharat Aluminium Company Ltd v Union of India
High CourtHelps taxpayer
I asked for a personal hearing in the faceless assessment and was refused. Does the order survive?
No. The Court read 'may' in s.144B(7)(viii) as 'must': once the assessee asks for a personal hearing it has to be given, because a power carrying civil consequences attracts the rules of natural justice unless the statute excludes them, and s.144B embeds rather than excludes them. The assessment order and demand notice were set aside for a fresh reasoned order after hearing.
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Gandhi Realty (India) P Ltd v Asst/Jt/Dy CIT
High CourtHelps taxpayerSuperseded by amendment
The Department says it issued a draft assessment order, but nothing appeared on the portal. Who has to prove service?
The Department does. Where the Revenue claimed a draft assessment order had been placed and served but nothing was traceable on the portal, the Gujarat High Court quashed the assessment. Every step of s.144B has to be treated with the same seriousness, because s.144B(9), as it then stood and before its retrospective omission, made a non-compliant assessment non est.
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Trendsutra Client Services P Ltd v ACIT
High CourtHelps taxpayerSuperseded by amendment
The faceless order made additions but no show cause notice or draft order ever came. What is the order worth?
Nothing. Where the final order varies the returned income to the assessee's prejudice and no show cause notice or draft assessment order was served, the assessment is not made in accordance with s.144B and is non est. The Bombay High Court quashed it outright.
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Sanjay Aggarwal v National Faceless Assessment Centre
High CourtHelps taxpayer
You asked for a personal hearing and the faceless unit ignored it. Does 'may' mean they can?
No. Section 144B(7) uses 'may', but that usage cannot absolve the Revenue of the obligation to consider a request for a personal hearing. The assessment order was set aside.
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Vrinda Sharad Bal v ITO
High CourtHelps taxpayerNo later treatment found
CPC keeps adjusting my refunds against a demand that is under appeal, and says the Centralised Processing Scheme requires it. Does that scheme override the CBDT's stay instructions?
No. Clause 10 of the Centralised Processing of Return of Income Scheme, 2011 cannot be read in isolation; the power to set off a refund against an outstanding demand is circumscribed by the provisions of the Act and by the CBDT's subsisting instructions, circulars and office memoranda. The Court restrained recovery beyond what those instructions permit and directed that the excess already recovered be returned with interest, and that refunds not be adjusted until the appeal is decided.
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Trust for Reaching the Unreached v CIT
High CourtHelps taxpayer
Our audit report was not e-filed with the return and exemption was denied. Can the delay be condoned?
Yes. The requirement to furnish the audit report with the return is procedural and directory, so exemption under ss.11 and 12 cannot be refused merely for late filing. The Commissioner's refusal to condone was set aside because the s.119(2)(b) discretion must be exercised equitably and judiciously, not on an exclusively pro-revenue view.
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Jayesh T Kotak v DCIT
High CourtHelps taxpayerNo later treatment found
A company in which my client holds shares lent money to two other companies in which he also holds shares. He received nothing. Can the reassessment stand?
No, on these reasons. The Gujarat High Court quashed a s.148 notice issued more than four years after the assessment year, holding that where the reasons recorded show only that the lender advanced unsecured loans to sister concerns, and contain no information that the payment was made for the benefit of the petitioner, no obligation lay on him to disclose those transactions. Without a finding that income had accrued to him, the first proviso to s.147 was not satisfied.
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Kunal Structure (India) Pvt Ltd v Dy CIT
High CourtHelps taxpayer
My return was defective and I cured the defect ten months later. Does the s.143(2) clock run from the original filing or from the day I removed the defect?
From the original filing. Where the defect is removed within the time the Assessing Officer allowed, the return relates back to the date on which it was originally furnished, and the six-month limitation for a s.143(2) notice is counted from the end of the financial year in which that original return was filed. On the facts the scrutiny notice was issued nearly a year after that period had run out and was held barred. The Revenue's special leave petition was dismissed.
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Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd v DCIT
High CourtHelps departmentNo later treatment found
The department has attached my bank account under s.226(3) because I did not pay the 20%. I say I have already paid more than that. Will the High Court interfere?
Not if the payment you point to was self-assessment tax paid against your own returned income, and not against the assessment demand. The Court upheld the garnishee notice to the bank: the assessee was obliged under the CBDT circulars to pay 20% of the outstanding demand, it had not done so, and the department was therefore justified in proceeding under s.226(3).
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Rajendra Kumar Dwivedi v CIT, Kanpur
High CourtHelps department
I sold my agricultural land in small plots over several years, leaving roads and drains. The Assessing Officer has taxed part as business income and part as capital gains and invoked s.45(2). Can he split it like that?
Yes, on facts like these. The Allahabad High Court upheld a finding that land held in an urban area as a capital asset, carved into 43 plots of 60 to 1,815 sq. mtrs. and sold over seven years with roads and drainage provided, had been converted into stock-in-trade, so that s.45(2) applied and the profits on sale were business income. Both substantial questions were decided in favour of the Revenue and the appeals were dismissed.
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DIT v Ericsson AB
High CourtHelps taxpayer
We import telecom equipment that comes with embedded software, and the department wants to tax the software portion as royalty — is that right?
No. The Delhi High Court dismissed the Revenue's appeals on 23 December 2011, holding the consideration for the supply was not royalty. Property in the goods and the risk both passed outside India, so no taxable event occurred here, and the fact that the contract was signed in India was irrelevant. Hardware and software supplied as one piece of equipment could not be split for section 9(1)(vi). Since the payment was not royalty, the Explanation below section 9 inserted by the Finance Act 2010 had no application at all. Interest under section 234B was also deleted, tax being deductible at source on the income chargeable in India.
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Shri Jagannath Temple Managing Committee v CIT
High CourtHelps taxpayer
We are a statutory committee administering a religious endowment and have always been treated as exempt under s.10(23BBA). Can the department withdraw that and require returns?
Not on the facts here. The Orissa High Court held that s.10(23BBA) exempts the income of a body or authority set up by or under a Central, State or Provincial Act and entrusted with the administration of public religious or charitable trusts or endowments, and that where the proviso does not apply the exemption is a total unconditional exemption. The withdrawal order was quashed and the committee was held not required to file returns pursuant to the s.142(1) direction.
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Muniswamappa Ananda v. ITO, Ward 6(1)(1), Bengaluru (ITAT Bangalore) — population and aerial-distance certificates admitted as additional evidence under Rule 29, and the section 2(14)(iii) exclusion applied to delete a Rs 1.28 crore addition
ITATHelps taxpayerNo later treatment found
My client sold inherited farm land, filed no return because he thought it was exempt, and an ex parte assessment has taxed the whole sale consideration. He now has the population and distance certificates. Can he still produce them?
Yes, and it worked. The Tribunal admitted the population certificate and the distance certificate as additional evidence under Rule 29 of the ITAT Rules because they related to the core issue contested and had not been available before the revenue authorities, condoned a 180-day delay, and held on those documents that the land sold was agricultural land situated beyond the prescribed municipal limits and distance in section 2(14)(iii), so that it did not constitute a "capital asset" and the gain was not chargeable as capital gains under section 45. The addition of Rs 1,28,00,000 made ex parte under section 144 as undisclosed short-term capital gain, and sustained by the Commissioner (Appeals), was deleted and the appeal allowed.
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Bennur Siddegowda Santhosh v. ITO, Ward-1, Chikmagalur (ITAT Bangalore) — Rule 7B, not the general Rule 7, governs coffee, and coffee bought from other planters and processed carries no agricultural element at all
ITATCuts both waysNo later treatment found
We grow coffee, cure it in our own concern and also buy coffee from other planters. The Assessing Officer has applied Rule 7B and taxed forty per cent. We say Rule 7 applies. Who is right?
The Assessing Officer and the Commissioner (Appeals) were right that Rule 7B applies and the general Rule 7 does not. The Tribunal held that Rule 7 of the Income-tax Rules, 1962 provides for general agricultural income other than coffee and rubber, that Rule 7B is the specific provision for income from the manufacture of coffee, and that the assessee's case fell under Rule 7B(1A), so that forty per cent of the income is business income and sixty per cent is exempt as agricultural income. But it also held that coffee PURCHASED from other planters and processed and sold by the assessee's proprietary concern has no element of agricultural income at all and could not get the benefit of exemption, and it restored the whole issue to the Assessing Officer for the assessee to segregate the two streams.
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360 One Distribution Services Ltd v DCIT — s.80A(5) kills a s.80JJAA claim first made before the Commissioner (Appeals)
ITATHelps departmentNo later treatment found
We missed the s.80JJAA claim in the return and raised it for the first time in appeal, with the Form 10DA report in hand. Can the Commissioner (Appeals) or the Tribunal still allow it?
No. The Mumbai Tribunal held that s.80A(5) disentitles an assessee from claiming a deduction under s.80JJAA where the claim was not made in the return of income, and that this disposes of the matter without going into any other aspect. It was no answer that the chartered accountant's Form 10DA had been issued, because the Tribunal found nothing on record that prevented the assessee from raising the claim and filing Form 10DA before the Assessing Officer during the scrutiny proceedings, which ran on until the assessment order was passed. The appeal was dismissed.
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Acronis Asia Pte Ltd v. DCIT — distribution revenue was not fees for technical services, a Singapore resident cannot be tested under the India-Switzerland treaty, and the s.10(50) exemption follows once Explanation 1 does not bite
ITATHelps taxpayerNo later treatment found
My client paid two per cent equalisation levy on its Indian receipts and the department has still assessed the same receipts as fees for technical services and denied s.10(50). In what order should the argument be run?
Characterisation first, exemption second. The equalisation levy is charged by Chapter VIII of the Finance Act, 2016 and not by the Income-tax Act; the Act's only point of contact is section 10(50), whose Explanation 1 takes out of the exemption income chargeable as royalty or fees for technical services under the Act read with a treaty. The ITAT Mumbai held that a Singapore limited-risk distributor's revenue from Indian sub-distributors was not fees for technical services — it rendered no service, owned no intellectual property and made nothing available — and that the Dispute Resolution Panel could not test a Singapore resident under the India-Switzerland treaty merely because the group's software and intellectual property sat in Switzerland. Having so held, the Tribunal held that the bar in Explanation 1 to section 10(50) did not come into operation and the assessee was entitled to the exclusion, subject to verification of payment of the levy.
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Jaya Rinkubhai Bandukwala v ITO, Ward 3(3)(1), Surat
ITATCuts both waysNo later treatment found
The Assessing Officer has levied Rs 30,000 under section 272A(1)(d) — Rs 10,000 for each of three notices I did not answer. Can he multiply the penalty like that, and what can I actually get reduced?
Yes, the section provides a penalty of Rs 10,000 per default and the Assessing Officer may levy one for each unanswered notice; the Surat Bench said so in terms. But section 273B is not all-or-nothing on the facts: finding that reasonable cause existed for some of the defaults and not for others, the Tribunal restricted the total from Rs 30,000 to Rs 10,000.
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Vatsalabai Karbhari Deore v ACIT
ITATHelps taxpayerNo later treatment found
You missed the notices and got a best judgment assessment. Is the officer's estimate final?
Nothing was decided about the estimate. The Tribunal set the assessment aside and remitted every issue to the Jurisdictional Assessing Officer for de novo adjudication because the assessee had placed no details before either the Assessing Officer or the Commissioner (Appeals); that the 8 per cent rate was too high was counsel's submission, not a finding. The appeal was allowed for statistical purposes only.
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Balakumar Anusia v ACIT, International Taxation Circle, Madurai
ITATHelps department
My client answered neither the section 143(2) notice nor the section 142(1) notice, and the Assessing Officer has levied Rs 20,000 — Rs 10,000 for each. Is there any answer to that on appeal?
On these facts, no. Where the assessee simply did not respond to either notice, the Chennai Bench held that the Assessing Officer had rightly levied Rs 10,000 for each default under section 272A(1)(d) and dismissed the appeal — the section's own charging words are 'a sum of ten thousand rupees for each such default or failure'.
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Amit Jain v DCIT, Circle (International Taxation), Jaipur
ITATHelps taxpayerNo later treatment found
I asked the Assessing Officer for more time on a section 142(1) notice and then filed the reply within the time I had asked for. He has still levied Rs 10,000 under section 272A(1)(d). Is that sustainable?
No, on these facts. Where the assessee answered the notice by filing an adjournment request, and the Assessing Officer never rejected that request by a speaking order, the notice was attended to and there is no 'failure to comply' at all — the Tribunal deleted the Rs 10,000 penalty without needing to reach section 273B.
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Polynova Industries Limited v DCIT 14(1)(1), Mumbai
ITATHelps taxpayerNo later treatment found
An internal audit objection has produced a s.263 notice saying CSR spending is not voluntary and so is not a 'donation' at all for s.80G. Does that argument let the Commissioner revise my assessment?
No, not while the point remains genuinely open. The Tribunal held that the eligibility of CSR expenditure for s.80G is a question on which Benches differ — the Bangalore and Kolkata Benches allow it, the Delhi Bench in Agilent Technologies disallows it — so an Assessing Officer who allows it has adopted one of two reasonably possible views and the s.263 jurisdiction does not arise.
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Rohit Khandelwal v AC/DCIT, Central Circle, Muzaffarpur
ITATHelps taxpayerNo later treatment found
I disclosed the seized cash and paid the s.115BBE tax, but my return was a belated one under s.139(4). The AO says the proviso to s.271AAC(1) only saves a return under s.139(1). Is he right?
No. The proviso says "return of income furnished under section 139" and does not confine itself to s.139(1); the Tribunal held that where the legislature meant a particular sub-section it said so, and deleted the penalty on a belated return filed under s.139(4).
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Masudan Tanti v ITO — s.44AD is unavailable once the claimed turnover crosses the ceiling, but the deposits still cannot be added whole
ITATCuts both waysNo later treatment found
My client asked the officer to tax his bank deposits at eight per cent under s.44AD. The deposits are more than the s.44AD limit and the whole amount has been added. What now?
Where the deposits said to be the turnover themselves exceed the s.44AD ceiling, s.44AD does not apply — the ceiling is part of the definition of 'eligible business' in the Explanation, not a rate condition. But that does not entitle the Assessing Officer to add the entire deposits: even in a best judgment assessment he must estimate the income, and the Tribunal set aside the CIT(A)'s order for a fresh estimate after the assessee produced the evidence he had withheld below.
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Hanuman Prasad & Sons v DCIT/ACIT, NFAC
ITATHelps taxpayerNo later treatment found
I answered the section 142(1) notice late — after the show-cause notice — but the Assessing Officer used my reply and completed a section 143(3) assessment. Can he still levy Rs 10,000 under section 272A(1)(d)?
Not on this reasoning. Where the assessee complied, though belatedly, well before the assessment order was framed, and the Assessing Officer considered the reply and the documents in framing a section 143(3) assessment, the Allahabad Bench held the case does not fall in the category of non-compliance at all, and deleted the penalty. It added, independently, that in the first year of the shift from physical to electronic proceedings a delay caused by the change in the mode of communication is bona fide and not deliberate.
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Shri Madhusudan Dhakad v ITO-1, Harda
ITATHelps taxpayer
I am a farmer. Cash deposits in my bank account during demonetisation have been added under s.69A because I could produce bills and vouchers for only part of my crop sales. How much proof of cultivation is enough?
Enough to show that you had sufficient sources for the deposits, not vouchers for every rupee. The Indore Tribunal deleted an addition of Rs 9,42,063 where the assessee produced vouchers covering about 72 per cent of the year's total deposits, held 99.195 acres in the family with 40.90 acres in his own name, was a full-time agriculturist with government awards for yield, had made cash withdrawals of Rs 33,86,980 from the same accounts during the year, and had no other source of income. The Tribunal held the explanation that part of the crop was sold direct to consumers without bills deserved credence.
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JMS Mining Pvt Ltd v PCIT-2, Kolkata
ITATHelps taxpayer
I added back my company's CSR spend under Explanation 2 to s.37(1) and then claimed 50 per cent of it under s.80G. The Commissioner says s.37 blocks that and has revised the assessment under s.263. Is he right?
No. Explanation 2 to s.37(1) operates only while computing business income under Chapter IV-D; it says nothing about Chapter VI-A, so a CSR contribution that independently satisfies s.80G remains deductible under s.80G. Parliament carved out only two CSR items in s.80G itself — clauses (iiihk) and (iiihl), the Swachh Bharat Kosh and the Clean Ganga Fund — and by expressio unius that exclusion implies every other qualifying donation survives.
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Luxury Goods Retail Pvt Ltd v DCIT
ITATHelps taxpayerNo later treatment found
You filed a loss return on paper within the due date because the portal would not let you in. Has the carry-forward gone?
No. The Tribunal held that a return filed manually within the due date under s.139(1) is a valid return, and that filing it on paper rather than electronically makes it at best a defective return and not an invalid one. Section 292B protects a return that substantially complies with the intent of the statute, and the carry-forward of the loss could not be refused on that ground.
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Motorola Inc v DCIT
ITATHelps taxpayer
The Assessing Officer issued me a notice under section 142(1) calling for a return after the assessment year had already ended. Is the assessment made on that notice valid?
No. The Delhi Special Bench held that a notice under section 142(1)(i) calling for a return cannot be issued after the end of the relevant assessment year. Where no return has been filed and the year has closed, the case is one of escaped assessment and the Assessing Officer must proceed under section 148 after satisfying section 147 - recording reasons and forming a reason to believe. Allowing him to call for a return under section 142(1)(i) instead would let those requirements be sidestepped, and the two provisions cannot operate in the same field at the same time. The notices in Motorola's and Ericsson's cases were issued after the year ended, so those assessments were invalid.
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Statutory position — s.124: how an Assessing Officer gets jurisdiction over you, who decides a dispute about it, and the three deadlines in s.124(3) after which you cannot object at all
CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
The notice has come from an officer in a place I have nothing to do with. Can I say he has no jurisdiction, who decides that, and have I already lost the point by filing my return and answering him?
Jurisdiction reaches an Assessing Officer through section 120: the Board issues directions, those directions may authorise another authority to issue written orders, and section 124(1) then gives the officer vested with an area jurisdiction over a business whose place or principal place is in that area and over every other person residing in it. A dispute about whether he has jurisdiction is not for him and not for the Tribunal in the first instance: section 124(2) sends it to the Principal Director General, Director General, Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner, and to the Board if two of them disagree. The provision that decides cases is section 124(3), which fixes three deadlines — one for a person who has filed a return, one for a person who has not, one where there has been a search or requisition — after which no person shall be entitled to call the jurisdiction in question at all. Section 124(4) then obliges the officer, on a timely objection he does not accept, to refer the matter for determination before he makes the assessment. Whether the section 124(3) bar is absolute is genuinely disputed: the Delhi and Karnataka High Courts have applied it against assessees, and the Gujarat High Court has held it no answer where no order under section 127 transferred the case at all. For a tax year beginning on or after 1 April 2026 the provision is section 242 of the Income-tax Act, 2025, where the bar sits in sub-section (4).
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Statutory position — s.176: accelerated assessment on discontinuance, the fifteen-day notice in s.176(3), and the deeming of post-discontinuance receipts in s.176(3A) for a business and s.176(4) for a profession
CBDT Circulars & InstructionsCuts both ways
I shut my consultancy two years ago and money is still coming in for work I did before I closed. My accountant says section 176 taxes it. Which sub-section does that, what notice was I supposed to give when I closed, and how much time did I have?
Two different sub-sections do the deeming and it matters which one you are in. Section 176(3A) covers a discontinued BUSINESS: any sum received after the discontinuance is deemed to be the income of the recipient and charged to tax in the year of receipt, if it would have been included in the total income of the person who carried on the business had it been received before the discontinuance. Section 176(4) covers a discontinued PROFESSION, but only where the discontinuance was on account of the cessation of the profession by, or the retirement or death of, the person carrying it on, and it deems the sum received after discontinuance to be the income of the recipient charged to tax in the year of receipt on the same 'would have been included' condition. Separately, s.176(3) requires any person discontinuing any business or profession to give the Assessing Officer notice of the discontinuance within fifteen days of it.
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Ranchi Club Ltd v CIT (Patna)
High CourtHelps taxpayerOverruled
I filed my return on time and paid the self-assessment tax; the officer then added a disputed item in a best-judgment assessment and charged s.234A interest because I did not comply with a s.142(1) notice. Is that right?
The Patna High Court said no. Where the return was filed within time with proof of payment, the mere issue of a s.142(1) notice calling for accounts or information does not attract s.234A, because the s.142(1) notice that s.234A speaks of is the notice to FURNISH A RETURN issued to a person who has not filed one — not the notice under clauses (ii) and (iii) calling for accounts or particulars.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.