Section 250

Section 250 — the law in short

What the courts have decided on section 250, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Jute Corporation of India Ltd v CIT Supreme CourtCuts both ways
  Can you raise a ground before the CIT(A) that you never raised before the officer?
  Yes, where the ground is raised bona fide and could not reasonably have been raised earlier. The appellate authority's powers are co-terminus with the officer's, and nothing in the Act restricts the right to raise an additional ground.
• CIT v Kanpur Coal Syndicate Supreme CourtCuts both ways
  How wide are the first appellate authority's powers when it disposes of an appeal?
  An association of persons was assessed as a single unit; it argued the members should have been assessed individually. The Supreme Court held that the first appellate authority has plenary powers in disposing of an appeal, coterminous with those of the Assessing Officer, and can direct the officer to do what he has failed to do. This is the foundation of every later statement about the CIT(A)'s powers under s.251.
• CIT v Rai Bahadur Hardutroy Motilal Chamaria Supreme CourtCuts both ways
  Can the CIT(A) use the enhancement power to tax a source of income the Assessing Officer never examined?
  The first appellate authority enhanced the assessment by bringing in amounts which the Income-tax Officer had not examined from the point of view of taxability. The Supreme Court held the enhancement power is confined to the subject-matter of the assessment, that is, to sources the officer had considered expressly or by clear implication. Material merely lying in the assessment record is not enough.
• CIT v S. Chenniappa Mudaliar Supreme CourtCuts both ways
  Can an appellate authority under the Income-tax Act throw out an appeal because the appellant did not turn up?
  The Supreme Court struck down the rule that allowed the Appellate Tribunal to dismiss an appeal for default of appearance, holding it ultra vires the statutory obligation to dispose of an appeal on the merits. The reasoning - that the statute commands a decision, not a disposal - is the source of the settled position that the CIT(A) too must decide, not dismiss for non-prosecution.
• High Vista Buildcon P Ltd v NFAC High CourtHelps taxpayerValidity unconfirmed
  I asked NFAC for a video hearing in my appeal and never got a link. Can that order stand?
  No. A virtual hearing is mandatory once it is specifically requested in faceless appellate proceedings, and passing the appellate order without ever providing the video-conference link violated natural justice. The order was set aside, the appeal restored for a proper virtual hearing, and the consequential penalty orders under ss.271AAC(1) and 270A were quashed with it.
• Kulwinder Paul Singh v CBDT High CourtHelps taxpayerValidity unconfirmed
  My appeal before the Commissioner (Appeals) has been pending for years. Can I get the High Court to make him decide it?
  Yes. The Punjab and Haryana High Court held that although section 250(6A) says the Commissioner (Appeals) may decide an appeal within one year from the end of the financial year in which it is filed 'where it is possible', the intent of the legislature is unequivocally in favour of time-bound disposal. On an appeal filed in January 2020 and still undecided five years later, the court issued a mandamus to decide it within three months of receipt of the order. It went on to lay down a general standard for the first appellate authorities and directed that its order be circulated to the CBDT and the field.
• Genpact India P Ltd v DCIT High CourtHelps taxpayer
  My refund came out of an appeal effect order and was paid years late. Can the department refuse the extra interest by blaming its own portal?
  No. Where the refund arises from giving effect to an appellate order, the additional interest is statutory. It can be refused only in the one situation the Act allows, namely delay attributable to the assessee. A broken departmental portal, an amalgamation the department was told about, and the pandemic are not delays attributable to the assessee.
• CIT v Premkumar Arjundas Luthra (HUF) High CourtHelps taxpayer
  You did not appear before the CIT(A). Can the appeal simply be dismissed for non-prosecution?
  No. Once an appeal is filed the CIT(A) must dispose of it on merits by a written order stating the points for determination, the decision and the reasons. There is no power to dismiss for non-prosecution — and no right to withdraw either.
• Bharat Petroleum Corporation Ltd v ITAT High CourtCuts both ways
  What happens if an appeal is dismissed for want of prosecution and the recall application is filed late?
  The appellant did not appear and its appeal was dismissed for want of prosecution. The Bombay High Court held that there is no power to dismiss an appeal for non-appearance and that the appeal had to be decided on merits after hearing the respondent. The dismissal was irregular, but because the recall application came after the four-year limit it could not be undone.
• Smt. Prabhavati S. Shah v CIT High CourtCuts both ways
  If additional evidence does not fit any of the four gateways in Rule 46A, is the CIT(A) powerless to look at it?
  The Bombay High Court held that Rule 46A fetters the assessee's right to produce evidence but does not fetter the CIT(A)'s own powers under s.250(4) and s.250(5). Where the appellate authority considers evidence necessary to examine the claim, it can direct an inquiry or the production of documents even though the assessee could not have brought the evidence in as of right.
• Bicholim Electricity Employees Cooperative Credit Society Ltd v ITO ITATHelps taxpayerValidity unconfirmed
  My co-operative credit society filed Form 10-IF opting into s.115BAD and then claimed deduction under s.80P in the same return. CPC has disallowed the whole s.80P deduction under s.143(1). Is there anything to be said?
  There is an argument, and the Tribunal let it be run — but it did not decide it. On these facts the Tribunal restored the matter for fresh adjudication on the merits, recording the case that the society did not satisfy the conditions in s.115BAD(2) and had filed Form 10-IF erroneously, and that the adjustment made under s.143(1) was not within the permissible adjustments. The underlying rule is unforgiving and should be understood before any co-operative society files Form 10-IF: s.115BAD(2)(i) requires total income to be computed 'without any deduction ... under any of the provisions of Chapter VI-A other than the provisions of section 80JJAA', and s.80P is in Chapter VI-A.
• Dr. Rangasamy Sudha v ITO, Erode ITATHelps taxpayerValidity unconfirmed
  I meant to stay in the new regime but a wrong Form 10-IE put me back in the old one, and CPC has taxed me under the old regime with no Chapter VI-A deductions because I claimed none in the return. Can I claim them now?
  Yes. The Chennai Tribunal held that a fresh claim of deduction made for the first time before the first appellate authority has to be entertained, and directed the Assessing Officer to recompute the income allowing Rs 2,00,000 of Chapter VI-A deductions — Rs 1,50,000 under s.80C and Rs 50,000 under s.80TTB — that had never been claimed in the return. If CPC has processed the return on the old regime, the assessee is entitled to the old regime's deductions.
• Gokulakrishna v DCIT (ITAT Chennai) ITATHelps taxpayerValidity unconfirmed
  A new partner came into an LLP, my profit share fell and an amount was credited to my current account. Am I taxable on it?
  On this order, for a pre-2021 year, no. The Chennai Tribunal held that where an existing partner does not retire but simply sees his profit-sharing ratio reduced on the admission of a new partner, there is no transfer under s.2(47), because during the subsistence of the firm a partner has no defined share in its assets and nothing is relinquished. The Tribunal also held that the revaluation of the LLP's assets, credited to partners' accounts before the new partner came in, did not by itself give rise to capital gains. It recorded expressly that s.9B and the substituted s.45(4) are prospective and had no application to assessment year 2017-18.
• Mohd. Farooque Mohd. Rafique Bagban v ITO ITATHelps taxpayerValidity unconfirmed
  Your first appeal is more than a year late because of illness. Is it too late?
  Not necessarily. Illness during the pandemic was accepted as sufficient cause, a delay of about thirteen to fourteen months was condoned, and all three appeals were sent back to the CIT(A) to be decided on merits.
• Abdulrahiman Abdulkadar v ITO ITATHelps taxpayerValidity unconfirmed
  The CIT(A) refused your additional evidence, saying no Rule 46A application was filed — but you filed one.
  Then the refusal cannot stand. Where the application was in fact on record, additional evidence could not be shut out on the ground that none was filed. The order was set aside and the matter remanded.
• K.R. Madhusudhan (HUF) v ACIT (CPC) ITATHelps taxpayerValidity unconfirmed
  CPC has denied my HUF the s.80GG deduction for rent paid, saying only an individual can claim it. Is that right?
  The Bangalore Tribunal held it is not. Section 80GG speaks only of an "assessee" and does not confine the deduction to an individual, so the deduction cannot be refused on that ground alone — but the Tribunal made the relief conditional on the assessee filing Form No. 10BA under Rule 11B, and remitted the matter to the Assessing Officer for that purpose.

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.