Section 144B

Section 144B — the law in short

What the courts have decided on section 144B, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• ITO v Tej Partap Singh Supreme CourtCuts both ways
  The High Court quashed my s.148 notice because the ward officer issued it instead of the faceless unit. Does that judgment still stand?
  No, not as it stands. On 10 April 2026 the Supreme Court set aside the High Court judgments that had quashed notices issued by the jurisdictional Assessing Officer, because s.147A, inserted by the Finance Act 2026 with effect from 1 April 2021, now defines the Assessing Officer for ss.148 and 148A as an officer other than the National Faceless Assessment Centre and the assessment units in s.144B(3). The Court remitted the matters, left the validity, scope, effect, retrospectivity and applicability of s.147A open for the High Courts, and stayed further assessment and reassessment proceedings in the meantime.
• Sarla Holdings P Ltd v PCIT Supreme CourtHelps department
  I did not tick s.115BAA in the return and filed Form 10-IC late. Can I still get the concessional rate?
  No, if the return itself did not opt. Section 115BAA(5) requires the option to be exercised in the prescribed manner on or before the s.139(1) due date, and Circular 6/2022 condones only a late Form 10-IC where the option was in fact exercised in the return. A company that marked 'None of the above' cannot claim the benefit later, and s.115JB applies.
• NFAC v Automotive Manufacturers P Ltd Supreme CourtCuts both waysJudgment not reachable
  The faceless order came without any show-cause notice or draft order. Will it just be annulled?
  No — expect a remand. The Supreme Court accepted that making a variation without serving the show-cause notice and draft assessment order breached s.144B and the principles of natural justice, but held the High Court should have sent the matter back to the Assessing Officer for a fresh order rather than simply setting the assessment aside.
• 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.
• Vijaya Agro Traders v ITO High CourtHelps taxpayerNo later treatment found
  The faceless unit has disallowed my purchases for not deducting under s.194Q and has said nothing at all about the Board's circular I quoted in my reply. Is that enough to get the order set aside?
  Yes. The Karnataka High Court set aside an order under s.143(3) read with s.144B, made in a s.194Q scrutiny, on the single ground that CBDT Circular No. 13/2021 had not been considered or appreciated by the assessing unit, and remitted the matter for fresh consideration in the light of that circular. Guidelines issued under s.194Q(3) are issued with the approval of the Central Government and the officer is not free to pass over them in silence.
• Sanjay Kumar Bijay Kumar v PCIT High CourtHelps taxpayerNo later treatment found
  The same cash deposits were already reassessed and accepted at nil. Can they reopen them again?
  No. The Orissa High Court held that where an earlier s.147 proceeding examined these very deposits, found them disclosed and assessed at NIL, and that order went unchallenged, a second reassessment on identical material is a change of opinion and an impermissible review.
• Saroj Kumar Sahoo v National Faceless Assessment Centre High CourtHelps departmentNo later treatment found
  My scrutiny assessment was still running when they searched me in November 2024. Section 158BA(2) says a pending assessment abates. Can I have the assessment order quashed in a writ on that ground alone?
  Not on that ground alone. The Orissa High Court accepted that a search initiated on or after 1 September 2024 puts the case in the revived block assessment regime of Chapter XIV-B and that s.158BA(2) abates a pending assessment for any year in the block period, but it refused to quash the order because nothing on the record showed that the search had unearthed any undisclosed income of this petitioner, and it relegated him to his appeal.
• Mohammed Kaleem Ullah v Principal Chief Commissioner of Income Tax High CourtHelps departmentNo later treatment found
  My client's return has been picked up for scrutiny and he now wants to put things right by filing an updated return. Can he still do it?
  No. The Telangana High Court held that clause (b) of the third proviso to s.139(8A) means what it says: no updated return may be furnished for an assessment year where any proceeding for assessment, reassessment, recomputation or revision is pending or has been completed for that year in the assessee's case. The petitioner's case had been selected for scrutiny under CASS by a notice under s.143(2), so the Assessing Officer was right to reject his request to file an updated return, and the writ petition against the assessment order was dismissed with liberty to pursue the appeal.
• Arris Estates P Ltd v Assessment Unit High CourtHelps taxpayerNo later treatment found
  The Department admits it refused the video hearing but says limitation was about to expire. Is that a defence?
  No. The Gujarat High Court quashed an assessment where the request for a video conference hearing made on 4 March 2024 was not granted and the order followed on 15 March 2024, rejecting the plea that earlier adjournments had left the Department no time before the 31 March deadline.
• Technovaa Plastic Industries Private Limited v Central Board of Direct Taxes High CourtHelps taxpayerNo later treatment found
  The resolution professional never filed the company's returns during the insolvency process. The new management filed them late and the carry forward of losses has gone. Will the Board condone the delay?
  It must, on these facts. The Gujarat High Court quashed the Board's order refusing condonation under s.119(2)(b) for Assessment Years 2018-19 and 2019-20 and condoned the delay itself, holding that where the suspended management had lost all powers from the date of admission under the Insolvency and Bankruptcy Code and the resolution professional had neither had the accounts audited nor filed the returns, and the new management filed them promptly after the resolution plan was approved, refusing condonation would frustrate the very purpose of the approved resolution plan and would amount to genuine hardship.
• T.K.S. Builders P Ltd v ITO High CourtHelps department
  Can the jurisdictional AO issue my s.148 notice, or must reassessment go through the faceless route?
  On this line of authority he can. The Delhi High Court held that the JAO and the faceless assessing officer have concurrent jurisdiction, that the Scheme notified under s.151A does not extinguish the JAO's power to issue notices under ss.148 and 148A, and that s.144B is procedural and is not itself a source of the power to assess or reassess.
• International Hospital Ltd v DCIT High CourtHelps taxpayerNo later treatment found
  The department is now citing Mahagun Realtors to say an assessment on the amalgamating company is curable. Has the Supreme Court moved away from Maruti Suzuki?
  On the Delhi High Court's considered view in this batch, no. Mahagun Realtors turned on the conduct of that assessee — who suppressed the amalgamation at search, filed a return in the amalgamating company's name recording 'not applicable' against business reorganisation, and litigated throughout in that name — and did not dilute or strike a discordant chord with Maruti Suzuki. Where the successor did tell the department of the merger and the notice or order still went out in the dead company's name, the defect remains fatal.
• Kanyakaparameshwari Co-operative Society Ltd v CCIT High CourtHelps taxpayerNo later treatment found
  My co-operative society filed its return late and lost section 80P because of section 80AC. If the delay is condoned under section 119(2)(b), does the deduction come back?
  On this Karnataka view, yes. The Court held that section 80AC does not say in express terms that the deduction becomes inadmissible if the delay in filing the return is condoned, so an order under section 119(2)(b) condoning the delay clears the way for the claim. It adopted its earlier decision in Sullia Taluk Womens Multi Purpose Co-operative Society and read the Central Board's circular of 26 July 2023, which directs the authorities to admit and decide condonation applications from audited co-operative societies for assessment years 2018-19 to 2022-23 on the merits. The rejection of the society's application was quashed and the delay condoned, and the Court went on to quash the completed assessment as well and remit the claim for fresh consideration.
• Jatinder Singh Bhangu v Union of India High CourtHelps taxpayerHigh Courts differ
  My reassessment notice under section 148 came from my own jurisdictional assessing officer, not through the faceless system. Is that notice good?
  No. The Punjab and Haryana High Court quashed section 148 notices issued by the Jurisdictional Assessing Officer, holding they contravene section 151A read with section 144B and the e-Assessment of Income Escaping Assessment Scheme, 2022 notified on 29 March 2022. Clause 3(b) of the scheme requires issuance of a section 148 notice through automated allocation and in a faceless manner. The Department's reliance on a CBDT office memorandum of 20 February 2023 and a Systems Directorate letter of 19 January 2024 failed: instructions and circulars can supplement but cannot supplant statutory provisions. Liberty was given to proceed in accordance with law.
• Hexaware Technologies Ltd v ACIT High CourtHelps taxpayerPartly overruled — read this first
  Your s.148 notice came from your own local officer, not from the faceless unit. Does that matter?
  In Bombay, yes. After the CBDT scheme notified under s.151A on 29 March 2022, only a Faceless Assessing Officer acting through automated allocation can issue a reassessment notice. There is no concurrent jurisdiction, and a notice from the jurisdictional officer was quashed.
• Satish Kumar Bansal HUF v NFAC High CourtHelps taxpayerNo later treatment found
  I asked for a personal hearing in my faceless assessment and never got one. Is the order bad?
  Yes. Allahabad held that once a request is made under s.144B(6)(vii), granting the hearing is mandatory and not discretionary; fixing the rescheduled hearing on a Sunday, the day after the adjournment application, was not a real opportunity.
• Kankanala Ravindra Reddy v ITO High CourtHelps taxpayerHigh Courts differ
  My section 148A(d) order and section 148 notice came from the local assessing officer after the 2022 faceless schemes started. Can I have them quashed on that ground alone?
  Yes. The Telangana High Court quashed the section 148A(d) orders and the consequential section 148 notices in a batch of over fifty writ petitions because they were issued by the local jurisdictional officer and not in the faceless manner required by section 151A read with section 144B and the two CBDT schemes of 28 and 29 March 2022. Where a statute requires a thing to be done in a particular manner, it must be done in that manner or not at all. The Department had also ignored the Supreme Court's direction in Ashish Agarwal to proceed under the substituted provisions. The consequential orders fell with the notices.
• GE Oil & Gas India P Ltd v Addl/Jt/Dy/Asst CIT High CourtCuts both waysPartly overruled — read this first
  You are an eligible assessee with a transfer pricing adjustment and the faceless unit passed a final order instead of a draft. What relief will the court give?
  The order goes, but not always as a clean quashing. The Madras High Court set aside a final order passed three days after the show cause notice cum draft assessment order and directed that the impugned order be treated as a draft assessment order, leaving the assessee to work out its remedies against it under s.144B.
• CS & Sons v NFAC High CourtHelps taxpayerNo later treatment found
  Can a faceless order stand if the mandatory procedure was skipped?
  Reported as setting aside a faceless assessment where the statutory procedure and natural justice were not followed.
• 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.
• Anil Kumar Malhotra v Union of India High CourtHelps departmentNo later treatment found
  My stay application was rejected on the 20% ground while my appeal is pending. Can I go straight to the High Court under Article 226 saying the assessment breached natural justice?
  This Court said no. Having already filed the statutory appeal, the assessee cannot simultaneously attack the assessment order in writ under the guise of challenging the rejection of his stay application; that is resort to two forums at once. The remedy against the rejection is the review route in clause 4(C) of the Office Memorandum dated 29.02.2016 read with a revision under s.264, and the writ petitions were dismissed with liberty to take that route.
• 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.
• 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.
• Mantra Industries Ltd v NFAC High CourtHelps taxpayerSuperseded by amendment
  The faceless order says I filed no reply when I did, and my hearing request was ignored. Is it valid?
  It was set aside. The final order reproduced the draft order word for word apart from one sentence, recorded that no response had been filed when two replies were on the record, and ignored the requests for adjournment and personal hearing — so it was held non est under s.144B(9) as it then stood. The Court warned that costs would be recovered from the Assessing Officer personally and entered in the service record if it recurred.
• 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.
• 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.
• Piramal Enterprises Ltd v Addl/Jt/Dy/Asst CIT High CourtHelps taxpayerNo later treatment found
  You asked for a video hearing after the show cause notice and the order came anyway. Is that fatal?
  Yes. Once you have responded to a show cause notice under s.144B and asked for a personal hearing, the request must be taken into account, and ordinarily it will not be refused. An order passed without dealing with that request is unsustainable, and the fact that a further remedy exists later in the process does not cure it.
• 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.
• Dinesh Chandra Das v ITO — s.44AD(6) shuts out the agent and the s.44AA(1) professional, but the whole receipt is still not income ITATCuts both waysNo later treatment found
  The Assessing Officer says my client, who runs a pathology sample collection centre, cannot use s.44AD at all and has added the entire understated receipt. Is that right?
  On the first point the department was upheld: s.44AD(6) excludes a person carrying on a profession referred to in s.44AA(1), a person earning income in the nature of commission or brokerage, and a person carrying on any agency business, and the Tribunal agreed the assessee was a commission agent so that s.44AD did not apply. On the second point the assessee got relief: the entire differential receipt could not be treated as income because expenses had to be incurred, and the Tribunal directed a net profit rate of forty-five per cent on the gross receipts the Assessing Officer had worked out.
• Avendus Enhanced Return Fund v ACIT — a Category III AIF is assessed in its own name, and a s.14A disallowance the fund overstated in its own return goes back to the Assessing Officer for verification ITATHelps taxpayerNo later treatment found
  My client is a Category III Alternative Investment Fund. It filed its own return, overstated a section 14A disallowance by more than a crore, and the Assessing Officer and the Commissioner (Appeals) both refused to correct it, citing Goetze. Is a revised computation before the Assessing Officer really worthless?
  No. The Mumbai Tribunal set aside the appellate order and restored the issue to the Assessing Officer, holding that Goetze (India) is confined to the powers of the Assessing Officer while the Bombay High Court in Pruthvi Brokers & Shareholders has held that the appellate authorities are competent to entertain a legitimate claim even if it was not made through a revised return. It did not decide the merits: because the nature and quantum of the exempt income, the applicability of section 115BBDA and the consequential section 14A disallowance all required verification from the assessment records, the matter went back with all contentions open. Note what the case also shows on the facts — a Category III AIF is assessed in its own name, on its own income, under the ordinary provisions; the section 115UB pass-through has nothing to do with it.
• Meetkumar Hasmukhbhai Chaturvedi v ITO ITATHelps departmentNo later treatment found
  I paid the political party by cheque and I hold the receipt. Is that enough to save my s.80GGC deduction when the department says the party was running an accommodation-entry racket?
  Not on this record. The Tribunal dismissed the appeal, holding that payment through banking channels and production of a donation receipt cannot override the search material showing that the recipient party systematically layered donations through shell entities and returned the cash. It also rejected the challenge to the s.148 notice.
• Hirabhai Karshanbhai Solanki v ITO, Rajkot ITATHelps taxpayerNo later treatment found
  In a s.147 reassessment the Assessing Officer has thrown out my s.80U disability deduction along with 80C and 80TTA because I produced nothing during the assessment. Can I still prove it in appeal?
  Yes, on this order. The Rajkot Tribunal deleted the whole Chapter VI-A disallowance where the assessee produced LIC premium receipts and notified mutual fund receipts for s.80C, and for s.80U produced a disability certificate issued by the competent medical authority — the assessee also appearing personally before the Tribunal — holding that "such evidence cannot be ignored".
• Embassy Office Parks REIT v DCIT — a REIT cannot amortise its IPO expenses under section 35D(2)(c) because it is not a company ITATHelps departmentNo later treatment found
  Our REIT incurred large expenses on its initial public offer and listing. Can it write them off over ten years under section 35D like a listed company?
  No, on the Bangalore Tribunal's reasoning. Clause (c) of section 35D(2) opens with the words 'where the assessee is a company', and a SEBI-registered Real Estate Investment Trust constituted under the Indian Trusts Act 1882 is neither a company under the Companies Act 2013 nor a company within section 2(17) of the Income-tax Act, so the deduction is unavailable however closely the public issue of units resembles a public issue of shares. The Tribunal held those opening words to be a conscious legislative limitation and not surplusage, refused to read units as shares, and dismissed the appeal.
• ITO v Primary Agricultural Cooperative Society Ltd — the Rs 60 lakh Tribunal limit applied, but with liberty to the department to have the dismissal recalled if an exception is shown ITATHelps taxpayerNo later treatment found
  The department's Tribunal appeal against my client is below the monetary limit. Will the Tribunal simply dismiss it, and is that the end of the matter?
  It will dismiss it, but the dismissal is not always final. The Tribunal applied CBDT Circular No. 09/2024 dated 17 September 2024, which fixes the monetary limit for a departmental appeal before the Tribunal at Rs 60,00,000, and dismissed the Revenue's appeals because the tax effect was below that figure; the assessee's cross-objections were allowed to that extent. But on the Departmental Representative's request the Tribunal expressly reserved liberty to the department to point out, after verification, that the appeals fall within one of the circular's exceptions and to seek recall and restoration.
• Rashtrotthana Sahitya and Mudrana Trust v ITO (Exemptions) Ward 2, Bangalore ITATHelps taxpayerNo later treatment found
  From AY 2022-23 my spending out of a bank loan is not application, and I claim it when I repay. The officer says that is a double deduction. How do I prove it is not?
  By showing that you reduced the application of income in the year you took the loan by the amount borrowed, and claimed nothing then. On that evidence the Bangalore Tribunal deleted the disallowance of Rs.1,63,86,245 of loan repayment: the trust had claimed application only on repayment and not when the borrowed funds were spent, so there was no double deduction, and the lower authorities had ignored the computations and accounts filed and proceeded on a presumption.
• Abhishek Rajeshbhai Karia v ITO, Ahmedabad ITATCuts both waysNo later treatment found
  My s.148 reassessment started over a political donation but the Assessing Officer has disallowed my 80D and 80DDB for my parents' medical expenses as well. Are those safe?
  On this order the s.80D claim of Rs 75,000 for health insurance premium and medical expenditure incurred for the assessee's parents was allowed outright, the Tribunal holding the disallowance unjustified because the expenditure was incurred for his parents and is deductible under s.80D. The s.80DDB claim of Rs 87,000 for a father diagnosed with cancer was NOT allowed: it went back to the Assessing Officer because eleven documents called for had never been produced either before him or before the CIT(A).
• Mohamed Asmi v ITO ITATHelps departmentNo later treatment found
  I filed under s.44AD and the officer has still added my whole bank credit under s.69A. Doesn't the presumptive return protect me?
  Not by itself. The Tribunal held that s.44AD and s.69A operate in distinct fields, and that a presumptive return cannot regularise deposits whose source and genuineness the assessee cannot establish; the entire addition of Rs 7,10,37,643 was sustained.
• 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.
• Ashokkumar Gokulchand Sananda v ACIT, Akola Circle ITATHelps taxpayerNo later treatment found
  The CBDT cancelled my donee's s.35(1)(ii) approval with retrospective effect two years after I donated, and the reassessment has taken away my 175 per cent weighted deduction and added a notional commission. Does the deduction survive?
  Yes, on these facts. The Explanation in s.35(1) says in terms that the deduction shall not be denied merely because the approval granted to the institution has been withdrawn after the payment, so a retrospective cancellation is by itself no ground for disallowance. A general Investigation Wing report about the donee, never furnished to the donor and never linked to his particular transaction, will not carry the disallowance either, and the consequential s.69C commission addition falls with it.
• Jyotsna Kunwar v ITO, Ward 41(1)(1), Mumbai ITATHelps taxpayerNo later treatment found
  The Assessing Officer says s.54GB died on 31 March 2017, that the most I can invest is Rs 50 lakh, and that I must invest the whole net consideration. Are any of those right?
  None of them. The proviso to s.54GB(5) substitutes a later date where the investment is in an eligible start-up — for the year before the Tribunal the substituted date was 31 March 2022 — so a transfer after 31 March 2017 is not automatically out. There is no Rs 50 lakh cap anywhere in s.54GB. And where less than the whole net consideration is invested, clauses (a) and (b) of s.54GB(1) give a proportionate exemption, not nil.
• Sahyadri Erectors P Ltd v National e-Assessment Centre ITATHelps taxpayerNo later treatment found
  You missed the writ window. Can the Tribunal still strike down an assessment for breach of s.144B?
  Yes. The Mumbai Bench held an assessment void ab initio because the mandatory procedure under s.144B was not followed, no show cause notice or draft assessment order having been issued, and allowed the appeal. The Commissioner (Appeals) had brushed the procedural ground aside without analysing it, and that was held to be wrong.
• Muhammed Arif Shaikh v Asst. Unit, Income Tax Department ITATHelps taxpayerNo later treatment found
  For one year the department accepted 8 per cent presumptive profit on my client's crypto sales; for the next year, on the same information, it has added the whole purchase figure under section 69C. Can it do that?
  Not on this decision. The Ahmedabad Bench held that where the same assessment unit had, for AY 2017-18, accepted a presumptive deemed profit at 8 per cent of the crypto sales, it could not for AY 2018-19 — reopened on the same common information and where the assessee had again offered 8 per cent of his crypto turnover, which the Assessing Officer accepted — go on to add the crypto purchases of Rs 17,52,838 as unexplained expenditure under s.69C. Taking inconsistent stands in the assessee's own case in two different assessment years was held not proper and against the provisions of law, and the addition was deleted.
• Edelweiss Crossover Opportunities Fund v ITO — a scheme of a registered Category II AIF does not lose the pass-through because the SEBI certificate is in the trust's name ITATHelps taxpayerNo later treatment found
  The Assessing Officer says my AIF scheme has its own PAN but no SEBI registration of its own, so it is not an 'investment fund' and section 10(23FBA) is gone. Is that right?
  No, on these facts. The Mumbai Tribunal held that exemption under section 10(23FBA) cannot be denied solely because the scheme has a separate PAN while the SEBI registration stands in the name of the trust, where the scheme is floated under a SEBI-registered Category II Alternative Investment Fund trust — and it pointed to Explanation 1 to section 115UB, which itself recognises a 'scheme of the investment fund'. The consequential addition treating the book surplus in excess of the distributed income as business income was also deleted, because once the pass-through applies the premise for that addition disappears, and because the difference was only statutory indexation under section 48.
• 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.
• Nashit Suhail Ansari v ITO ITATHelps taxpayerNo later treatment found
  My client has a section 148 notice for AY 2018-19 saying he sold bitcoin and did not file a return. He was a student and made a profit of Rs 48,000. Is there anything in the notice itself?
  There may well be. The Mumbai Bench held that where AY 2018-19 was reopened by a notice dated 19 April 2022, that is beyond three years from the end of the assessment year, so the sanction under s.151 had to come from the Principal Chief Commissioner or Chief Commissioner; approval taken from the Principal Commissioner was invalid, the notice under s.148 was invalid, and everything that followed including the assessment order was void ab initio. On the merits it also held that the addition of Rs 11,28,013 could not stand where the assessee had produced bank statements showing a purchase at Rs 4,10,000 and a sale at Rs 4,58,594 and the Assessing Officer had made the addition on information alone without bringing any adverse material on record or making any enquiry.
• 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.
• NFAC Delhi v NRB Developers ITATCuts both waysNo later treatment found
  The stamp duty value is above what I paid for the property. Does the 10% tolerance cover my earlier year?
  Yes. Only the amount by which the difference exceeds the 10% tolerance band can be added under s.56(2)(x), and the increase of the band from 5% to 10% is clarificatory, so it applies to earlier assessment years as well.
• Syeda Bibi Sadiqa v DCIT ITATHelps taxpayerNo later treatment found
  Is there a ceiling on the interest I can deduct on a house that is let out?
  No. The Tribunal held that the property was let out during the year — rent of Rs 4,74,69,381 having been received — and that there is accordingly no maximum limit on the deduction for interest on borrowed capital. The proof accepted was a certificate from the lending bank, supported by the same deduction having been claimed and allowed in earlier years, and by a finding that the loan had not been taken afresh for any renovation of the property.
• Statutory position — the Finance Act, 2026 and reassessment: s.147A, s.292BC, the thirty-day floor in s.148(1), and ss.153(10) and 153B(1A) CBDT Circulars & InstructionsCuts both waysUnder appeal
  The Finance Act 2026 seems to have changed the reassessment rules backwards in time. What exactly did it change, from which dates, and which of my grounds has it taken away?
  The Finance Act, 2026 (No. 4 of 2026), assented to on 30 March 2026, amended the Income-tax Act, 1961 through clauses 4 to 33, and six of those clauses are about assessment and reassessment. Clause 9 inserted section 147A, deemed in force from 1 April 2021, which makes the Assessing Officer for sections 148 and 148A an officer other than the National Faceless Assessment Centre or a section 144B(3) assessment unit, notwithstanding any judgment, section 151A or any scheme under it; clause 33 inserted section 292BC, also deemed in force from 1 April 2021, which makes an approval in any assessment or reassessment administrative and supervisory in nature and immune to attack for insufficient reasons or a missing digital signature. Clause 10 gave the section 148 notice a thirty-day floor from 30 March 2026, clause 11 substituted section 150 from 1 February 2026, and clauses 12 and 13 inserted section 153(10) and section 153B(1A), reaching back to 2009, to fix when a draft order under section 144C(1) may be made. Sections 147, 148A, 149, 151 and 151A were not amended at all. Section 147A has since been struck down by the Punjab and Haryana High Court in Jyoti Sareen v. Union of India on 10 September 2026, and that judgment was stayed by the Supreme Court on 18 September 2026, which hears the appeal on 3 December 2026.
• Statutory position — s.144C(1) to (5): the Assessing Officer must, notwithstanding anything to the contrary in the Act, forward a draft order to an eligible assessee before he makes any prejudicial variation, and the assessee has thirty days to accept or to object to the Dispute Resolution Panel AND to the Assessing Officer CBDT Circulars & InstructionsCuts both ways
  The Assessing Officer has served a final assessment order on our foreign company raising a transfer pricing addition, without ever serving a draft order. Was he obliged to serve one first, and what was I supposed to do with it if he had?
  He was obliged to serve one first, if the company is an eligible assessee and the variation is prejudicial. Section 144C(1), as printed on the departmental edition stamped Year 2025, reads: "The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee." Three things follow from the words themselves. The obligation is cast in the mandatory "shall"; it operates "notwithstanding anything to the contrary contained in this Act", so it overrides the ordinary assessment machinery; and it bites "in the first instance", that is, before and not after the order that would otherwise be the assessment order. Sub-section (2) gives the eligible assessee thirty days of the receipt by him of the draft order to do one of two things: "(a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,— (i) the Dispute Resolution Panel; and (ii) the Assessing Officer." The "and" in clause (b) is conjunctive: an objection is filed with the Panel and with the Assessing Officer, not with one or the other. Sub-section (3) requires the officer to complete the assessment on the basis of the draft order if the assessee intimates acceptance of the variation or if no objections are received within the period specified in sub-section (2). Sub-section (4) fixes the time for that order — one month from the end of the month in which the acceptance is received or the period of filing objections expires, notwithstanding s.153 or s.153B. Sub-section (5) is the Panel's charging provision: where any objection is received under sub-section (2), the Panel "shall ... issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment".

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.