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 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.
• 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 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.
• High Vista Buildcon P Ltd v NFAC High CourtHelps taxpayerNo later treatment found
  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 taxpayerNo later treatment found
  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.
• CIT v Jagat Novel Exhibitors Pvt Ltd — the Commissioner (Appeals) must actually decide the section 249(4)(b) exemption and record reasons; admitting the appeal is not a silent exercise of the discretion High CourtCuts both ways
  No return was filed and no advance tax was paid, but the Commissioner (Appeals) admitted the appeal and decided it. The department now says the appeal was never maintainable. Can the Tribunal presume that the Commissioner (Appeals) exercised her power to exempt?
  No. The Delhi High Court held that the proviso to s.249(4)(b) requires the Commissioner (Appeals) to decide, and to record in writing, whether there were good and sufficient reasons to exempt the assessee from paying an amount equal to the advance tax, and that this is mandatory. The Tribunal in that case had reasoned that because the Commissioner (Appeals) had admitted and adjudicated the appeals, it could be assumed she had exercised her discretion and found good and sufficient reasons; the High Court held the requirement had simply not been complied with. Note carefully that at paragraph 24 the Court expressly declined to dispose of the appeals on this reasoning and said it had referred to the section only to clarify the legal position.
• CIT v Tony Electronics Limited High CourtHelps departmentHigh Courts differ
  The mistake is in my original assessment order from years ago. Is the section 154 notice time barred if an appeal order intervened?
  Not necessarily. The Delhi High Court held that once an appeal is decided the assessment order merges into the appellate order, so for s.154(7) the four years run from the appellate order, and it is no answer that the error occurred in the original assessment and was not the subject matter of the appeal. Hind Wire Industries decides that the word 'order' in s.154(7) is unqualified and means any order, including an amended or rectified one.
• 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.
• Ramamoorthy Sundar v ITO ITATHelps taxpayerNo later treatment found
  My client sat on an NFAC order restricting his leave encashment exemption for over a year, and only came to me after hearing that the limit is now Rs 25,00,000. Is the appeal dead on limitation?
  Not necessarily. The Tribunal condoned a delay of the order of five hundred days and then allowed the enhanced exemption of Rs 25,00,000 under s.10(10AA), treating the subsequent development on the judicial front and the CBDT notification as themselves part of the sufficient cause for the delay.
• Adit Nilesh Shah v Deputy Commissioner of Income Tax ITATHelps taxpayerNo later treatment found
  My consultant filed Form 10-IEA opting me out of the new regime by mistake, but my return was computed under s.115BAC(1A). The CPC has processed me under the old regime. Can the return prevail over the form?
  Yes, on these facts. The Bangalore Tribunal directed the CPC to process the return for AY 2025-26 under the new regime under s.115BAC(1A) as opted in the return, holding that a bona fide procedural mistake in filing Form 10-IEA should not subject the assessee to a regime contrary to the choice clearly reflected in the return filed afterwards. It rejected the Commissioner (Appeals)' view that digital verification of the Form made it conclusive.
• 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.
• Arun Pratap Singh v ITO, New Delhi ITATHelps departmentNo later treatment found
  The Assessing Officer has disallowed my s.80GGC deduction and, on top of that, added five per cent of the donation under s.69C read with s.115BBE as commission I am presumed to have paid. Will the Tribunal delete at least the commission?
  Not necessarily. The Delhi Bench dismissed the appeal in its entirety, holding that where a search under s.132 on the recipient party produced sworn statements of the President and key office bearers admitting that donations received through banking channels were returned to donors in cash after deducting commission, the payment through NEFT and a valid donation receipt do not save the deduction. The order does not separately deal with the s.69C addition; it upholds the impugned order as a whole.
• Humanitarian Hands v ITO (Exemptions) Ward-1, Bengaluru ITATCuts both waysNo later treatment found
  Our auditor filed Form 10BB when Form 10B was required for AY 2023-24, and CPC has taxed us under s.13(10). We filed the right form only in 2025 and the condonation application is still pending. What can the Tribunal do?
  The Tribunal remitted the matter to the Assessing Officer to pass an order in accordance with the outcome of the pending s.119(2)(b) condonation application before the CIT (Exemptions). It recorded that this was not a case of no audit report at all but of a report filed both belatedly and in the incorrect form, and that CBDT Circular No. 2/2024 did not rescue the trust because that circular only covered wrong-form reports furnished on or before 31 October 2023.
• 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.
• DCIT v Sundaram Alternative Opportunities Series High Yield Secured Debt Fund — an Assessing Officer cannot re-label a Category II AIF's investment income as business income without enquiry ITATHelps taxpayerNo later treatment found
  The Assessing Officer has re-characterised my Category II AIF's interest, gains and processing fees as business income and denied the section 10(23FBA) exemption on the whole lot. What is the answer?
  The Chennai Tribunal dismissed the Revenue's appeals. Income of a Category I or Category II AIF becomes business income only where the nature of the activities shows a systematic and organised commercial venture undertaken with the dominant intention of earning trading profits rather than making investments, tested by the ordinary badges — frequency and volume, holding period, intention at acquisition, treatment in the books, infrastructure and manner of execution — and here the re-characterisation had been made with no enquiry, no rejection of books, no show-cause notice on that head, and on the further erroneous footing that the assessee was a venture capital fund governed by section 10(23FB) and section 115U.
• ACIT v Md. Illyas Hussain — the section reads "issue", not "serve": the Revenue's side of the section 143(2) point in a block assessment ITATHelps departmentNo later treatment found
  The Commissioner (Appeals) annulled the block assessment because no section 143(2) notice was served. Can the department save it by showing the notice was issued?
  The Patna Tribunal held that it could. It read section 158BC as requiring only the ISSUE of a notice under section 143(2) and not its service, found on the record that a notice had been issued on 20 August 1999 and received at the assessee's address, and added that in any event the assessee's block return, filed after the time allowed, was an invalid return so that no section 143(2) notice was required at all. It set aside the annulment and restored the appeal to the Commissioner (Appeals) to be decided on the merits.
• ITO v Western Developers Private Limited — once the s.115BAA option stands, s.115JB has no application at all ITATHelps taxpayerNo later treatment found
  CPC has processed our return under s.143(1), rejected the s.115BAA option because Form 10-IC was late, and raised a demand by computing book profit under s.115JB. Can it do both?
  No. Sub-section (5A) of s.115JB says in terms that the section shall not apply to a person who has exercised the option under s.115BAA or s.115BAB. Once the option is held good, the MAT provisions cease to apply and the tax liability must be computed under s.115BAA without invoking s.115JB — and here the option was held good because it had been accepted for three earlier years on a Form 10-IC filed in March 2021.
• Khalsae-Vehicles Pvt. Ltd. v DCIT, Circle-3(1)(1) ITATHelps taxpayerNo later treatment found
  I filed Form 10-ID and my first return under s.115BAB after the s.139(1) due date but within the s.139(4) time. The CPC has now denied me the 15 per cent rate in a later year. Is the option gone for good?
  Not on these facts. The Delhi Tribunal held that where the substantive conditions of s.115BAB are undisputedly satisfied, the failure to file Form 10-ID on or before the s.139(1) due date is a procedural lapse and is not a fatal flaw, and allowed the appeal for AY 2023-24. The Form there had been filed in the very first year, along with a first return that was belated but within the s.139(4) window.
• IMC Trust v ITO (Exemption) Ward 1(3), Mumbai ITATCuts both waysNo later treatment found
  My Form 10 described the purpose of accumulation in the words of the trust's objects. The Assessing Officer says that is not a 'specific purpose'. Is he right?
  On these facts the Tribunal agreed with him: a purpose stated as 'hold seminars/workshops/conferences/buyers sellers meets/etc. to promote trade and develop knowledge' was not specified with the required clarity and precision, and the trust had not demonstrated the specific purpose for which the accumulated funds were to be used. But the Tribunal did not tax the accumulation — following the Gujarat High Court in Bochasanwasi Shri Akshar Purushottam it restored the matter to the Assessing Officer to verify how the money was actually spent within the five years.
• 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.
• ACIT v Citigroup Global Markets India Pvt Ltd ITATCuts both waysNo later treatment found
  The CIT(A) held my TPO order time barred because it was digitally signed a day after the date printed on it. The Revenue is now relying on a new sub-section. Where does that leave me?
  The Tribunal applied clause (c) of s.92CA(3AA) — then still the proposed clause 4 of the Finance Bill 2026, enacted three days after the order was pronounced — and held the TPO's order within time. The order was dated 31 October 2019 but digitally signed and issued on 1 November 2019, and the CIT(A) had annulled the transfer pricing adjustment on the footing that a 31 December 2019 assessment deadline required the TPO's order by 31 October. Because s.92CA(3AA)(c) deems that where limitation expires on 31 December the order may be made up to 1 November, the Tribunal allowed the Revenue's grounds on limitation and remanded the merits of the adjustment to the CIT(A), who had never decided them.
• Lodha Maharana Pratap Nagar Co-operative Housing Society Limited v ITO ITATCuts both waysNo later treatment found
  The CPC taxed my society's receipts from members. Can I get that corrected under section 154, or have I lost the claim by not making it in the return?
  Section 154 will not carry it. The Mumbai Tribunal agreed with the Assessing Officer and the CIT(A) that mutuality and eligibility under s.80P require examination of foundational facts and cannot be a mistake apparent from the record. But the claim was not lost: Goetze (India) restricts only the Assessing Officer, not the appellate authorities, so the Tribunal restored the matter to the Assessing Officer to examine the claim on merits.
• ITO (TDS-3), Ahmedabad v. Tarun Santramdas Varma (ITAT Ahmedabad) — rural agricultural land is outside section 194-IA, and the Revenue's appeal against deletion of a Rs 1.69 crore section 201 demand was dismissed ITATHelps taxpayerNo later treatment found
  The TDS officer says I should have deducted under section 194-IA on land I bought, and has applied twenty per cent under section 206AA because the farmer-sellers had no PAN. The land is agricultural. Does that answer the demand?
  Yes, if you can prove the land is rural agricultural land. The Tribunal dismissed the Revenue's appeal and upheld the deletion of a Rs 1,69,34,640 demand, holding that the lands qualified as rural agricultural land and fell outside the scope of section 194-IA, so the assessee could not be treated as an assessee in default under section 201(1) and the section 201(1A) interest was not sustainable either.
• Bicholim Electricity Employees Cooperative Credit Society Ltd v ITO ITATHelps taxpayerNo later treatment found
  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.
• School Managing Society Capt. Gurcharan Singh v DCIT/ITO (Exemptions) ITATHelps taxpayerNo later treatment found
  We missed the s.12AB re-registration, CPC has taxed our entire gross receipts, and we never claimed s.10(23C)(iiiad) in the return. Can we claim it now, in appeal?
  Yes, on these facts. The Amritsar Bench held that a school whose annual receipts are well below the prescribed limit is legally entitled to s.10(23C)(iiiad) even though the claim was made for the first time before the appellate authorities, because it is a question of law arising from material already on record. The sub-clause requires no registration and no approval, so the loss of s.11 for want of s.12AB registration does not touch it.
• ACIT v Manikandan (ITAT Chennai) — money credited to a continuing partner for his 'sacrificing ratio' is not his capital gain, for years before AY 2021-22 ITATHelps taxpayerSuperseded by amendment
  A new partner came into our LLP and paid in a large sum, part of which was credited to the existing partners' accounts in their sacrificing ratio. The AO has taxed my share of it as short-term capital gain for an old year. Is that right?
  Not for a year before assessment year 2021-22. The Tribunal held that where the existing partners do not retire and merely their profit-sharing ratios are realigned on the admission of a new partner, there is no relinquishment of any share in the firm's assets, no transfer within section 2(47), and therefore no capital gain in the continuing partner's hands. It added that the amendments made by the Finance Act 2021 — the substitution of section 45(4) and the insertion of section 9B — take effect only from assessment year 2021-22 and had no application to the year before it, which was AY 2017-18.
• ACIT, Circle-1(1), Bilaspur v Anuj Prakash Gupta ITATHelps taxpayerUnder appeal
  The Assessing Officer disallowed my s.80GGC deduction purely because the political party was named in a search on registered unrecognised political parties. He has no evidence that I got anything back. Is that enough to sustain the disallowance?
  No. The Commissioner (Appeals) deleted the disallowance and the Tribunal upheld the deletion, holding that a disallowance in the hands of each donor requires primary evidence establishing that the particular transaction was not genuine — a bank trail, a statement or a confirmation linking that donor to the refund. General findings from a search in third-party cases, without confrontation or cross-examination, will not do.
• Rashmikant Bhaichandbhai Shah v ITO, Ward-5(3)(2), Ahmedabad ITATHelps taxpayerNo later treatment found
  The CPC disallowed my s.80GGA deduction in the s.143(1) intimation because I have business income. Can I still get relief for the same donation under s.35(1)(ii), and can I raise it in a s.154 application?
  The Ahmedabad Bench restored the matter to the Assessing Officer with a direction to examine the alternative claim under s.35(1)(ii) and to grant it if the assessee is found eligible. The Bench proceeded on the footing, recorded from the intimation, that s.80GGA is not available where the assessee has business income, and held that the authorities should assist an assessee in claiming eligible deductions rather than punish him for a bona fide mistake.
• 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.
• Kae Capital Fund v ITO — the live question whether a SEBI 1996-Regulations venture capital fund is an "investment fund" under s.115UB, and why the Tribunal never reached it ITATHelps taxpayerNo later treatment found
  The Commissioner (Appeals) has directed the Assessing Officer to allow my fund's section 10(23FB) exemption only if it proves it is not an investment fund under Explanation 1 to section 115UB, without ever hearing us. Has anyone decided whether a SEBI venture capital fund registered under the 1996 Regulations is inside section 115UB?
  Not in this order, and that is the point to take from it. The Mumbai Tribunal set the Commissioner (Appeals)' order aside and restored the appeal for de novo adjudication because a request for a personal hearing through video conferencing had been made and not granted, which clause 12 of the Faceless Appeal Scheme, 2021 does not permit — the Commissioner (Appeals) "shall allow such request". Having remitted on that ground the Tribunal expressly held that the assessee's other grievances did not call for adjudication at that stage. So the substantive question — whether a fund holding a certificate under the SEBI (Venture Capital Funds) Regulations, 1996 that has not migrated to the SEBI (Alternative Investment Funds) Regulations, 2012 is an "investment fund" within clause (a) of Explanation 1 to section 115UB, and so loses section 10(23FB) by the proviso inserted with effect from 1 April 2016 — remains undecided.
• Chromex v DCIT-17(1), Mumbai ITATHelps departmentNo later treatment found
  My client says the Explanation in s.35(1) protects him because the donee's approval was live on the day he paid. The department has the donee's own admission before the Settlement Commission that the money went back in cash. Is the statutory protection enough?
  No. The Mumbai Bench held that once the Revenue demonstrates through cogent material that the payment was an accommodation entry, the onus shifts to the donor to establish the genuineness of his own transaction, and failure to discharge it disentitles him to the weighted deduction. CIT v Chotatingrai Tea was distinguished on the footing that there was no finding of fraud there, whereas here the institution had admitted before the Settlement Commission that it did no significant research and refunded the donations.
• Dr. Rangasamy Sudha v ITO, Erode ITATHelps taxpayerNo later treatment found
  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.
• 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.
• Gokulakrishna v DCIT (ITAT Chennai) ITATHelps taxpayerNo later treatment found
  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 taxpayerJudgment not reachable
  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.
• 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.
• K.R. Madhusudhan (HUF) v ACIT (CPC) ITATHelps taxpayerNo later treatment found
  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.
• Shri Samadhan Rambhau Patil v ITO, Ward-1, Malegaon ITATHelps departmentNo later treatment found
  I explained my cash deposits as loans taken in cash from local farmers and filed their Aadhaar cards and 7/12 extracts. The Assessing Officer added the amount under s.69A because the farmers did not turn up. What happens on appeal?
  Identity documents and land records of the lenders are not enough by themselves. The Pune Tribunal held that Aadhaar cards and 7/12 extracts failed to serve any purpose once the lenders, when summoned, did not confirm the loans, and that the absence of the one-time settlement papers the loans were said to have funded left the explanation unverified at every stage. But because the assessee had in fact produced the farmer-lenders before the Assessing Officer on 20 October 2019 and they could not be examined owing to the officer's own unavailability, and because the Departmental Representative did not controvert that, the Tribunal remanded the issue for de novo verification and allowed the appeal for statistical purposes.
• Statutory position — s.150(2): a finding or direction cannot revive a year that was already time-barred when the order under appeal was passed, and from 1 February 2026 the notice itself has a deadline CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
  The officer has reopened a very old year and says he is only giving effect to a finding in an appellate order, so limitation does not apply. Is that right, and what stops him?
  Section 150(1) lifts the time limit in section 149: where an assessment, reassessment or recomputation is in consequence of or to give effect to a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may be issued at any time. Section 150(2) is the limit on that power and it is the provision that decides cases — sub-section (1) does not apply where the year in question could not have been assessed, by reason of any other time limit, at the moment the order that was the subject-matter of the appeal, reference or revision was made, so a year already dead on that date stays dead. The Supreme Court so held in K.M. Sharma, quashing notices for assessment years 1968-69 to 1971-72 and 1981-82, and the Constitution Bench in Murlidhar Bhagwan Das had already confined “finding” and “direction” to what was necessary for the year under appeal, so a remark about another year does not open it. Section 150 was substituted with retrospective effect from 1 February 2026: sub-section (1) is re-lettered and widened to a court in a proceeding under this Act, sub-section (2) gains a second measuring date, and a new sub-section (3) gives the department only three months from the end of the quarter in which the certified copy of the order reaches the jurisdictional Principal Commissioner or Commissioner. For a tax year beginning on or after 1 April 2026 the provision is section 283 of the Income-tax Act, 2025.
• Statutory position — s.234D: interest on a refund granted under s.143(1) that regular assessment shows should not have been granted — the rate, the period, the reduction under sub-section (2), and Explanation 2 for assessment years commencing before 1 June 2003 CBDT Circulars & InstructionsCuts both ways
  We were given a refund when the return was processed under s.143(1). On scrutiny the Assessing Officer has now raised a demand and has also charged interest under s.234D on the refund. Is that right, for how long does the interest run, and can he do it for an assessment year that is older than the section itself?
  Yes, on the conditions in sub-section (1). Section 234D charges simple interest where a refund is granted to the assessee under s.143(1) and either (a) no refund is due on regular assessment, or (b) the amount refunded under s.143(1) exceeds the amount refundable on regular assessment. The rate is one-half per cent, on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment. The section was inserted by the Finance Act, 2003 with effect from 1 June 2003, and the words "one-half per cent" were substituted for "two-third" by the Taxation Laws (Amendment) Act, 2003 with effect from 8 September 2003 — both recorded in footnotes printed against the section. Sub-section (2) provides that where, as a result of an order under s.154, s.155, s.250, s.254, s.260, s.262, s.263 or s.264, or an order of the Settlement Commission under s.245D(4), the refund granted under s.143(1) is held to be correctly allowed either in whole or in part, the interest chargeable under sub-section (1) shall be reduced accordingly. Explanation 1 makes a first-time assessment under s.147 or s.153A a regular assessment for the purposes of the section. Explanation 2, which the later editions of the section print and the earlier ones do not, reads: "For the removal of doubts, it is hereby declared that the provisions of this section shall also apply to an assessment year commencing before the 1st day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date." Which amending Act inserted Explanation 2, and from what date, is not established here — the editions of the section that print it carry no footnotes, and the editions that carry footnotes do not print it.
• Statutory position — rule 24 of the ITAT Rules, 1963: the Tribunal may dispose of the appeal on merits when the appellant does not appear, it may not dismiss it for default, and the proviso gives it the power to recall CBDT Circulars & InstructionsCuts both ways
  My appeal was called on a day my counsel was in another court and the Tribunal passed an order against me without hearing anybody on my side. Can that order be recalled, and under what?
  Under the proviso to rule 24, and it is expressed as a duty rather than a discretion. Rule 24 of the Income-tax (Appellate Tribunal) Rules, 1963, headed 'Hearing of appeal ex parte for default by the appellant', provides that where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent. The proviso then provides that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restoring the appeal. Rule 25 is the mirror image for a default by the respondent. What the rule does not permit is a dismissal for want of prosecution: the only course open on non-appearance is disposal on merits after hearing the other side.

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.