Evidence & Burden of Proof

Evidence & Burden of Proof — the law in short

Every authority in this library on evidence & burden of proof, with what each one decided.

• CIT (Exemption) v Batanagar Education and Research Trust Supreme CourtHelps department
  The Commissioner has cancelled my trust's registration because some corpus donations are said to be bogus — can he do that when the money was actually spent on the trust's objects?
  Yes. The Supreme Court held on 2 August 2021 that a trust which takes donations by cheque and returns the money in cash is misusing its section 12AA status and cannot keep it. The Managing Trustee had admitted in a survey that a major part of the corpus donations were accommodation entries, that part of each donation went back to the donors through named intermediaries by RTGS, and that those payments were booked as building capital expenditure. On that material the Commissioner and the Tribunal were right to cancel registration under section 12AA(3) and the consequent 80G approval, and the Calcutta High Court should not have interfered under section 260A.
• Vineeta Sharma v. Rakesh Sharma — the daughter is a coparcener by birth, and the father need not have been living on 9 September 2005 (Hindu Succession Act, 1956, not the Income-tax Act) Supreme CourtCuts both ways
  My client's father died in 1999 and her brothers say she cannot claim a share in the coparcenary because the 2005 amendment needed a living father on the date it came into force. Two Supreme Court benches had said different things. What is the position now?
  A three-Judge Bench of the Supreme Court settled it on 11 August 2020. Answering a reference, the Court held that the substituted section 6 of the Hindu Succession Act, 1956 confers the status of coparcener on a daughter born before or after the amendment in the same manner as a son, with the same rights and liabilities, and — this is the point that had divided the earlier benches — that "Since the right in coparcenary is by birth, it is not necessary that father coparcener should be living as on 9.9.2005." The Court overruled the contrary view in Prakash v. Phulavati and in Mangammal v. T.B. Raju, and partly overruled Danamma @ Suman Surpur v. Amar to the extent it is contrary. THIS IS NOT AN INCOME-TAX JUDGMENT: the Act construed is the Hindu Succession Act, 1956 as amended by the Hindu Succession (Amendment) Act, 2005, and what the Court decides is a partition claim, not the assessment of any income.
• CIT v Odeon Builders Pvt Ltd Supreme CourtHelps taxpayer
  The whole disallowance rests on an Investigation Wing report. Is that enough?
  No. A disallowance cannot rest on third-party information alone that has not been independently verified, especially where cross-examination was denied and the assessee had already produced bills, transport records, bank payments and the sellers' registrations and returns.
• Mangathai Ammal v Rajeswari Supreme CourtHelps taxpayerNo later treatment found
  The officer says my wife's property is mine because the money came from my account. Is that enough to make it benami?
  No, not by itself. The burden of proving that a purchase is benami rests throughout on the person asserting it, and the source of the purchase money has never been the sole consideration. What decides the question is the intention of the person who put up the money, drawn from the relationship of the parties, the motive for the arrangement and their conduct afterwards.
• P. Leelavathi v V. Shankarnarayana Rao Supreme CourtHelps taxpayer
  My father paid part of the price of a flat bought in my name. Does that make it his and not mine?
  No. Financial assistance from a parent, standing alone, does not make the purchase benami. The person asserting the benami must prove it, and the Court tests the claim against six circumstances of which the source of the money is only the first. Without evidence that the person who found the money intended to buy for himself or the family, the transaction stands as it appears.
• N.K. Proteins Ltd v DCIT Supreme CourtHelps departmentNo later treatment found
  Can the whole of a bogus purchase be added, rather than a percentage?
  On this line of authority, yes. The special leave petitions were dismissed, upholding the High Court, and the effect reported is that the 25% restriction was rejected and the entire fictitious purchase amount fell to be added.
• Common Cause v Union of India Supreme CourtHelps taxpayer
  The addition is based on loose sheets and a diary seized in a search. Is that admissible?
  Not on their own. Loose sheets and scraps are not 'books of account' under s.34 of the Evidence Act because they can be detached and replaced at will, and even entries in properly kept books are not by themselves sufficient to charge anyone with liability without independent evidence of the transaction.
• Kathiroor Service Co-operative Bank Ltd v CIT (CIB) Supreme CourtHelps departmentJudgment not reachable
  The department has asked my bank for the names and addresses of every customer whose cash transactions or deposits crossed one lakh over the last three years. There is no assessment or enquiry pending against anybody. Can a notice under section 133(6) be issued at large like this?
  Yes. The Supreme Court held that the powers under section 133(6) are in the nature of survey and a general enquiry to identify persons who are likely to have taxable income and whether they are in compliance with the provisions of the Act, and that they do not fall under the restricted domains of being area specific or case specific. The section does not refer to an enquiry about any particular person or assessee but to information in relation to such points or matters as the authority issuing the notice requires, so information of a general nature can be called for and the names and addresses of depositors holding deposits above a particular sum are certainly permissible. On the facts, the notice had been issued after obtaining the approval of the Commissioner of Income-tax, Cochin, and the appeal was dismissed.
• CIT v S. Khader Khan Son Supreme CourtHelps taxpayer
  They recorded your statement in a survey. Can the addition rest on that alone?
  No. Section 133A gives no power to examine anyone on oath, so a survey statement has no evidentiary value on its own and does not bind you — especially once it is retracted. Something more is needed.
• Vijay Kumar Talwar v CIT — when a finding of fact does and does not raise a substantial question of law under section 260A Supreme CourtHelps departmentNo later treatment found
  The Tribunal has decided against my client on the evidence. Is there any route into the High Court under section 260A, and what exactly must I show?
  Only by showing that the finding is perverse in a defined sense. The Supreme Court held that an appeal to the High Court lies only where a substantial question of law is involved, and that a finding of fact gives rise to such a question only where it is based on no evidence, or where relevant admissible evidence was not taken into account, or inadmissible evidence was taken into account, or legal principles were not applied in appreciating the evidence, or the evidence was misread. Finding none of that, the Court upheld the Delhi High Court's dismissal and dismissed the assessee's appeals with costs of Rs 20,000.
• Ajmera Housing Corporation v CIT Supreme CourtHelps department
  We filed a settlement application and then, when the Commissioner's report came in, filed a revised annexure with a much higher figure. Does that revision sink the application?
  Yes, it can. The Supreme Court held that a full and true disclosure of undisclosed income and of the manner in which it was derived is a pre-requisite of a valid application under section 245C(1), and that Chapter XIX-A contains no provision for revising an application once filed. Where the applicant raised the disclosure from about Rs. 1.94 crore to Rs. 11.41 crore and then went on adding piecemeal and ad hoc amounts, that was itself proof that the original application was not a full and true disclosure. The appeals were dismissed.
• CIT v Bharti Cellular Ltd Supreme CourtCuts both ways
  We pay interconnect and port charges to another telecom operator — is that fees for technical services on which we must deduct tax under section 194J?
  Unresolved, and the Supreme Court sent it back for evidence. On 12 August 2010 it held that the question turns on whether human intervention is involved in the technical operations by which one operator gives another interconnection, and that this cannot be decided without technical assistance on the record. Since 1979 the courts have read technical services narrowly, applying noscitur a sociis, because the words sit between managerial and consultancy services in Explanation 2 to section 9(1)(vii). The department had led no expert evidence. The matters were remitted to the Assessing Officer (TDS) to examine an expert, and no interest or penalty was to be levied for the past.
• ACIT v Dhariya Construction Co Supreme CourtHelps taxpayer
  The only thing behind my reopening notice is the Valuation Officer's report. Is that enough?
  No. The Supreme Court held that the opinion of the Valuation Officer is not by itself information on which an assessment can be reopened. The officer has to apply his mind to whatever material he has collected and form his own belief; adopting the valuer's figure is not that.
• Sargam Cinema v CIT Supreme CourtHelps taxpayerSuperseded by amendment
  The AO has sent my cost of construction to the Departmental Valuation Officer without saying a word about my books. Can he do that?
  Not under the section as it then stood. The Supreme Court held the assessing authority could not have referred the matter to the Departmental Valuation Officer without the books of account being rejected, and where the Tribunal had recorded that the books were never rejected, reliance on the DVO's report was misconceived. The appeal was allowed and the Tribunal's order restored. Read this with the caution below: s.142A was substituted with effect from 1 October 2014 and the substituted section says a reference may be made whether or not the officer is satisfied about the correctness of the accounts.
• CIT v P. Mohanakala Supreme CourtHelps department
  You gave particulars, paid by cheque and got a confirmation. Has the burden shifted?
  Not by itself. Furnishing particulars, payment by account payee cheque, or a confirmatory letter from the creditor is not enough on its own to shift the onus onto the Revenue under s.68.
• P.R. Metrani v CIT Supreme CourtHelps taxpayerSuperseded by amendment
  Can papers seized in a search be presumed true against me in the regular assessment?
  That was not the law as this case decided it: the s.132(4A) presumption operated only within the search proceedings and not in a regular assessment under s.143. Parliament changed that by inserting s.292C in 2007. What survives from this judgment is that the presumption is rebuttable and that seized documents can still be used as ordinary evidence even without it.
• Karnataka Bank Ltd v Secretary, Government of India Supreme CourtHelps department
  The bank has a s.133(6) notice asking for customer loan-repayment details and there is no assessment pending on anyone. Can the officer do that?
  Yes. After the second proviso was inserted in 1995, s.133(6) may be invoked when no proceeding is pending at all. The Supreme Court held that no enquiry need have commenced before the sub-section is used, and that the only safeguard is the prior approval of the Director or Commissioner. An omnibus notice to a bank about its customers is within the power.
• Miss P. Sarada v CIT Supreme CourtHelps department
  I have a running account with my company. I overdrew during the year, but the account was squared up by a journal adjustment on the last day of the year against another shareholder's credit balance. Can the withdrawals still be deemed dividend?
  Yes. The Supreme Court held that the legal fiction comes into play as soon as the money is paid, so each withdrawal made when the shareholder has no credit balance is a deemed dividend on the date it is made. A subsequent adjustment or repayment, even one made on the last day of the accounting year, does not alter the position.
• CIT v Electric Control Gear Mfg. Co. Supreme CourtCuts both ways
  The Assessing Officer says that because depreciation of a known amount was allowed on the assets over the years, that figure must be the excess over written down value and can be taxed. Nothing in our documents allocates the price. Can he do that?
  No. The Supreme Court held that where there is nothing to indicate the price attributable to the machinery, plant or building out of the total consideration, the balancing charge cannot be applied, and the mere fact that a particular sum had been allowed as depreciation does not make that sum the excess between price and written down value. The Revenue's appeal on that question failed.
• CIT v Vindhya Metal Corporation Supreme CourtHelps taxpayer
  The police seized cash from our employee and the Commissioner issued a section 132A warrant because he had no papers for it — is that authorisation valid?
  No. The Supreme Court declined to interfere with the Allahabad High Court's decision quashing an authorisation under section 132A. All the Commissioner had before him was that Rs 4,63,000 had been seized by the Railway Police from a person carrying it, that the person had no documents of ownership or possession, and that he was not on the General Index Register of assessees at Mirzapur. On that material no reasonable person could have entertained the belief that the money represented income that would not be disclosed. Mere unexplained possession, without anything more, is not enough. The Revenue's appeal was dismissed.
• CIT v P.K. Noorjahan Supreme CourtHelps taxpayer
  The officer says my explanation for an investment is unsatisfactory, so the money must be my income. Is he obliged to make the addition once he disbelieves me?
  No. Section 69 says the value of an unexplained investment may be deemed to be the income of the assessee, and the Supreme Court held that the word is deliberate. The clause in the Bill used 'shall'; on the recommendation of the Select Committee it was changed to 'may'. Parliament therefore conferred a discretion on the Income-tax Officer, and he is not obliged to treat an unexplained investment as income in every case where the explanation is found unsatisfactory. Whether it should be treated as income has to be considered in the light of the facts of each case. On these facts the Tribunal had found that the assessee, a woman of about twenty during the first of the two years, could not be credited with having earned the amounts at all; the discretion had not been properly exercised, the High Court agreed, and the department's appeals were dismissed.
• Sumati Dayal v CIT Supreme CourtHelps department
  Your paperwork is in order. Can the officer still look behind it?
  Yes. The apparent is to be treated as real only until there is reason to believe that it is not, and the taxing authorities are entitled to look at the surrounding circumstances and to apply the test of human probabilities. Documentary form alone does not end the enquiry.
• Smt. Sarifabibi Mohmed Ibrahim v CIT, Gujarat Supreme CourtHelps department
  My land is still entered as agricultural in the revenue records and I have paid land revenue on it right up to the sale. The Assessing Officer says it stopped being agricultural land years ago. Can he do that?
  Yes. Whether land is agricultural land is a question of fact to be decided on a cumulative consideration of all the circumstances, and the revenue entry is only one relevant fact, not a conclusive one. Where the land had not been cultivated for four years, was agreed to be sold to a housing society for building, and permission to sell it for a non-agricultural purpose had been applied for and obtained, the Supreme Court held it was not agricultural land on the date of sale even though it was still recorded as agricultural and land revenue was still being paid.
• Chuharmal v CIT Supreme CourtHelps department
  Valuables were found at my premises and I say they are not mine. Who has to prove ownership?
  You do. Title normally follows possession, and the principle in s.110 of the Evidence Act can be applied by taxing authorities even though the Act does not strictly govern them. Unexplained articles found in the assessee's possession were treated as his income under s.69A and the concealment penalty was confirmed.
• CIT v Mussadilal Ram Bharose Supreme CourtHelps taxpayerSuperseded by amendment
  My income was estimated at a higher profit rate after my books were rejected, so my return fell well short of the assessment. Does that by itself mean penalty for concealment?
  No. The Supreme Court held that the Explanation to section 271(1) raises a presumption, not a conclusion. Once the returned income falls below the stipulated proportion of the assessed income, the onus shifts to the assessee to show that the failure did not arise from fraud or gross or wilful neglect - but that onus is rebuttable. Where the fact-finding body, on relevant and cogent material, is satisfied that the assessee was not guilty and the Revenue leads no further evidence, no penalty follows. Whether the onus is discharged is a question of fact, and its answer raises no question of law.
• CIT v Orissa Corporation (P) Ltd Supreme CourtHelps taxpayer
  I gave the lenders' names, addresses and PAN and filed their confirmations, but I cannot produce them and the summonses came back unserved. Can the loans still be added under section 68?
  Not on these facts. The Supreme Court declined to disturb the Tribunal's finding that the assessee had discharged its burden. The assessee had given the names and addresses of the creditors, the Revenue knew they were income-tax assessees and had their index numbers on its own files, and beyond issuing summonses under section 131 at the assessee's request the Revenue did nothing - it never examined the creditors' sources to see whether they were creditworthy, and made no effort to pursue them. In those circumstances the assessee could do no more, and the Tribunal's conclusion was neither unreasonable, perverse nor without evidence.
• Kishinchand Chellaram v CIT Supreme CourtHelps taxpayer
  They have a letter from a bank that you have never seen. Can they use it against you?
  No. Material collected behind your back and relied on against you must be disclosed to you, with an opportunity to meet it. Because the bank's letter was never shown to the assessee, the addition could not stand.
• Anantharam Veerasinghaiah & Co v CIT Supreme CourtCuts both ways
  Additions were made to my book profits in earlier years. Can I use that money to explain a cash credit or an unexplained payment in a later year?
  You can put the argument, and the Supreme Court says it is a real argument, but it does not win by itself. The Court held that when an intangible addition is made to book profits in an assessment, the amount added is the undisclosed income of the assessee, is as much a part of his real income as the profits shown in his books, has the same concrete existence, and could be available to him just as the book profits could. Secret profits of an earlier year may therefore constitute a fund, concealed but real, from which he may later draw to meet expenditure or to introduce amounts into his books. The Court then put the limit on it in the same paragraph: it is quite another thing to say that any part of that fund must necessarily be regarded as the source of a later unexplained expenditure or cash credit, and the mere availability of such a fund cannot in all cases imply that no further secret profits were earned in the later year. All the facts and circumstances have to be looked at.
• Uttam Chand v ITO Supreme CourtHelps taxpayer
  The Tribunal has found that my firm was genuine. The department is still prosecuting me for filing false returns on the footing that it was not. Can the Supreme Court stop that?
  Yes. On a finding by the Income-tax Appellate Tribunal that, on an appraisal of the entire material on record, the disputed person was a partner of the assessee firm and the firm was a genuine firm, the Supreme Court said it did not see how the assessee could be prosecuted for filing false returns, and quashed the prosecution.
• Pooran Mal v Director of Inspection Supreme CourtHelps department
  The search on me was illegal. Can I stop the department using what it took?
  No. Indian tax law has no exclusionary rule. The Supreme Court upheld s.132 and rule 112 and held that even if a search contravened the section, the material seized was liable to be used, subject to law, before the income-tax authorities against the person from whose custody it was taken. Illegality in the search goes to relief against the search, not to the admissibility of what it produced.
• CIT v Daulat Ram Rawatmull Supreme CourtHelps taxpayer
  A fixed deposit stands in the name of a partner's son and my firm used it as security for its overdraft. The Assessing Officer says the money is really the firm's concealed income. Who has to prove what?
  The Department. The Supreme Court dismissed the Revenue's appeals and upheld the Calcutta High Court. The onus to prove that the apparent is not the real lies on the party who says so, and it was the Department that claimed the deposit standing in Biswanath's name belonged to the firm. Nothing showed the money came from the firm's coffers or went back into them; Biswanath himself drew the deposit. That his own explanation of where the money came from was false did not make it the firm's, and offering the receipt as security for the firm's overdraft did not make him anything but a surety.
• CIT v Khoday Eswarsa & Sons Supreme CourtHelps taxpayerNo later treatment found
  Additions were made to my income and confirmed on appeal. The penalty order simply relies on the reasons in the assessment. Is that enough to sustain a concealment penalty?
  No. The Supreme Court held that penalty proceedings are penal in character, so the Department must establish that the disputed receipt is the assessee's income, and must have before it, apart from the falsity of the assessee's explanation, cogent material or evidence from which it can be inferred that he consciously concealed particulars or deliberately furnished inaccurate ones. The original assessment order may be good evidence in the penalty proceedings, but penalty cannot be levied solely on the reasons given in it. Where the Tribunal cancels a penalty on findings of fact, no question of law arises and no reference can be directed.
• Pullangode Rubber Produce Co Ltd v State of Kerala Supreme CourtHelps taxpayer
  You admitted something and now want to retract it. Does the admission end the matter?
  No. An admission is extremely important evidence, but it is not conclusive. It is open to the person who made it to show that it is incorrect.
• CIT v Durga Prasad More Supreme CourtHelps department
  You have a document that says so. Does that settle it?
  Only until there is reason to believe the apparent is not the real. Where you rely on self-serving recitals, it is for you to establish their truth — and the authorities are entitled to look at the surrounding circumstances.
• CIT v Padamchand Ramgopal Supreme CourtHelps taxpayer
  The officer rejected my books without giving reasons and added half my interest receipts as concealed income for five years. Can he do that?
  No. The Supreme Court upheld the Calcutta High Court and held the additions bad. The officer gave no reason for rejecting the accounts. On appeal only two small errors were found, both in the first year, and nothing at all was found wrong with the accounts of the other four years. Adding half the gross interest receipts of each year as escaped income was, in the Court's words, arbitrary and the method highly capricious. Two insignificant mistakes in one year gave no basis for rejecting the books of the remaining years, and the Tribunal had simply adopted the first appellate authority's findings without examining the facts.
• Kale Khan Mohammad Hanif v CIT Supreme CourtHelps department
  My business income was estimated on a percentage of turnover because my books were rejected. Can unexplained credits in those same books still be added separately as income from undisclosed sources?
  Yes, on the way the question was framed. The Supreme Court held that the onus of proving the source of a sum received is on the assessee: if he disputes liability he must show either that the receipt was not income or that it was exempt, and failing that the officer may treat it as taxable income. And the fact that the income of a disclosed business was computed on an estimate does not preclude treating a credit entry in that business's books as income from another, undisclosed source. If it is income of an undisclosed source, it is not income of the disclosed source already taxed, so there is no double taxation.
• C. Vasantlal and Co v CIT Supreme CourtHelps department
  The Income-tax Officer examined witnesses behind my back and used their statements against me. Is that material evidence at all?
  It can be, provided it is disclosed to you. The Supreme Court held that the Income-tax Officer is not bound by the technical rules of the law of evidence and may collect material to facilitate assessment even by private enquiry, but if he wishes to use it he must inform the assessee of the material and give an adequate opportunity to explain it. Here nothing showed the material had been withheld, and in any event the Appellate Assistant Commissioner had summoned the two witnesses and allowed cross-examination. The Tribunal was therefore free to rely on their earlier statements and to disbelieve the later ones.
• Omar Salay Mohamed Sait v CIT Supreme CourtCuts both ways
  The order against me reads like a hunch dressed up as a finding. Is there an old authority that says the appellate authority has to decide on the evidence?
  Yes. This 1959 Supreme Court decision is the authority for the proposition that conclusions reached by the revenue authorities must be based on evidence, and that no addition can be made on the basis of suspicion, conjecture or surmise. It is cited to this day by the Tribunal for exactly that, and it is the counterweight to the line of cases that lets the authorities act on the probabilities of a case.
• Lakhmichand Baijnath v CIT Supreme CourtHelps department
  The credit the officer has added sits in my own business books. Does the entry being in the business books, by itself, let him tax it as business profit?
  The Supreme Court dismissed the appeals of a Calcutta Hindu undivided family of piecegoods merchants whose books carried six credits totalling Rs 2,30,346, explained as the proceeds of family ornaments sold at a partition. Every authority disbelieved the explanation on the evidence, and the Court said that when an amount is credited in business books it is not an unreasonable inference to draw that it is a receipt from business. It also held that an order under section 25A of the Indian Income-tax Act, 1922 decides only that a partition took place and how the assets were divided; it decides nothing about what the family's assessable income was. Read alongside A. Govindarajulu Mudaliar, decided seven weeks earlier, this is the case that fixes the character of an unexplained credit and not merely its taxability - the inference is that the money came out of the business.
• A Govindarajulu Mudaliar v CIT Supreme CourtHelps department
  The Assessing Officer rejected my explanation for cash credits. Must he then prove where the money actually came from before taxing it?
  No. The Supreme Court held that where an assessee fails to prove satisfactorily the source and nature of an amount of cash received during the accounting year, the Income Tax Officer is entitled to draw the inference that the receipt is of an assessable nature. The department need not adduce evidence of the source. Whether a receipt is to be treated as income depends largely on the facts of each case; here the sums stood credited to the assessee in a firm's books, his two explanations were rejected on the evidence, and it was open to the officer to treat them as concealed income.
• Mehta Parikh & Co v CIT Supreme CourtHelps taxpayer
  The officer accepted my books but still says I could not have held that much cash in high denomination notes, and has added part of it as undisclosed income. Can he do that?
  No. The Supreme Court held the addition was based on no evidence and set it aside. The cash book entries had been accepted as correct and the three affidavits explaining the receipt of notes were never challenged by cross-examination, so the Revenue could not question either. On that material it was within the range of possibility that the firm held the 61 notes, and an imaginary calculation could not displace the explanation. The Tribunal, having accepted the explanation for 31 notes, had no reason to reject it for the other 30; that was a rule of thumb and pure surmise. The High Court was wrong to treat the finding as an unassailable finding of fact.
• Dhakeswari Cotton Mills v CIT Supreme CourtCuts both ways
  Can the Assessing Officer estimate income on departmental material the assessee has never been shown?
  The officer estimated gross profit by comparing the assessee with other mills, without disclosing the comparative data or letting the assessee lead rebuttal evidence. The Supreme Court set the assessment aside, holding that an estimate cannot rest on pure guess and that the material relied on must be disclosed to the assessee. It is the foundational Indian authority on natural justice at the assessment stage.
• V.VR.N.M. Subbayya Chettiar v CIT Supreme CourtHelps department
  The karta of our HUF lives abroad but comes to India a few times a year to attend to family litigation and tax matters — is the family resident in India?
  It depends, and the onus is on the assessee. The Supreme Court held that an HUF is presumed resident in India unless it shows that the control and management of its affairs is situated wholly outside India. 'Control and management' means the controlling and directive power, the head and brain, functioning at a place with some degree of permanence; mere activity is not residence. Here the karta lived and was domiciled in Ceylon, but he produced no correspondence or other evidence that the Indian affairs were normally directed from Colombo, so the presumption stood and the family was held resident.
• Manohar Ramabtar Jhunjhunwala v PCIT High CourtHelps taxpayerNo later treatment found
  My employer deducted tax but never deposited it, so the credit was denied on processing, a demand now sits on the portal and my later years' refunds are being eaten by it. Do I get the credit and the refund, or only a promise that nobody will recover from me?
  You get the credit and the refund, not merely a bar on recovery. A Division Bench of the Bombay High Court, hearing a batch of such petitions with the assistance of an amicus, held that where an assessee establishes that tax was in fact deducted at source, the Department must grant appropriate TDS credit and cannot recover the corresponding amount from the deductee directly or indirectly, that the consequential relief including refund must follow, and that pending disposal of a credit application the demand must be marked in the system as stayed or not recoverable so that no coercive recovery or refund adjustment takes place.
• Alishan Complex P Ltd v Initiating Officer High CourtHelps taxpayerJudgment not reachable
  The benami attachment rests on a retracted statement and they refused cross-examination. Is that evidence?
  No. An untested and retracted statement, standing alone, is no evidence at all on which a benami finding can rest. Where such a statement is the only material against a party, the power in s.19(1)(b) of the Prohibition of Benami Property Transactions Act to summon and examine the witness stops being discretionary and becomes a duty, and income-tax assessment findings on the source and genuineness of the funds are relevant material the Initiating Officer is bound to consider.
• Public Political Party v Deputy Commissioner of Income Tax High CourtHelps departmentNo later treatment found
  My client's s.80GGC deduction has been disallowed because the recipient party is alleged to be an entry provider. Has any High Court decided what the party's own position is, and does that finding bind my client?
  Yes as to the party, no as to your client. The Delhi High Court dismissed the party's own appeals, holding that the Tribunal's finding that it issued bogus donation receipts to enable donors to claim deductions under s.80GGB and s.80GGC, and paid the money back to the persons from whom it was purportedly received, is a finding of fact not open to interference under s.260A. The party also lost its s.13A exemption for failing to file the report required by the second proviso to s.13A. The Court decided nothing about any identified donor: the finding is that this party issued bogus receipts and paid the money back, not that any particular donor received a refund.
• Sashi Bhusan Prasad Bhuian v State of Jharkhand High CourtHelps departmentNo later treatment found
  My clerk filed the return and I am illiterate. Is that a defence to a 277 prosecution?
  No. Under s.278E the court must presume a culpable mental state and it is for the accused to prove he had none. Pleading illiteracy or blaming an office clerk does not discharge that burden, and a conviction and six-month sentence for a refund claim built on a forged TDS certificate and a non-existent housing loan were upheld.
• CIT (International Taxation) v Nidra Hospitality Gujarat Pvt Ltd High CourtHelps taxpayerNo later treatment found
  The officer says I am in default under s.201 for not deducting under s.195 on payments abroad, although I have a Form 15CB from my chartered accountant for every remittance. Is that enough?
  On these facts, yes. The Gujarat High Court declined to admit the Revenue's appeal, holding that once the assessee had filed its TDS returns and submitted Form 15CB — the accountant's certificate on liability to deduct under Chapter XVII-B prescribed by Rule 37BB — for each remittance, and the Assessing Officer had not disputed those, the assessee could not be treated as an assessee in default under s.201. The Court also held that commission paid to travel agents and on hotel bookings made through websites and subsidiaries was not a sum covered by s.195.
• Nagendra Choudhary v Union of India High CourtHelps taxpayer
  The Tribunal deleted the penalty, but the department has filed an appeal under s.260A and it has been admitted. Can they keep the s.276C prosecution alive until that appeal is decided?
  Not without a stay. The Rajasthan High Court quashed a s.276C(1)(i) prosecution after the Tribunal had deleted the s.271AAB penalty, holding that the mere pendency of the department's s.260A appeal, even one admitted on substantial questions of law, does not resurrect factual findings that have been set aside. The Court expressly preserved the department's liberty to seek revival if the Tribunal's exoneration is reversed.
• Shyamsundar Sharma v ACIT High CourtHelps departmentNo later treatment found
  The Initiating Officer has issued a s.24 notice and attached my accounts on the strength of a spreadsheet found in someone else's search. Will the High Court interfere now?
  Not where the officer has set out his material. The Delhi High Court dismissed the writ petition, holding that the Initiating Officer had written in detail the reasons for believing the petitioner to be a benamidar — spreadsheets of bogus expenses recovered in a search, corroborated by statements of the beneficial owners — and that the Court would not interfere with that opinion when an efficacious remedy lay before the Adjudicating Authority under s.26, which can also revoke the attachment.
• Rajeshkumar Uggamrajji Mehta v ITO High CourtHelps taxpayerNo later treatment found
  The s.148A order says I failed to answer a s.133(6) notice I never received, and ignores the documents I did file. Is that enough to get it set aside?
  Yes, on these facts. The Court held that the order under s.148A and the notice under s.148 were passed without application of mind, quashed and set aside both, and remanded the matter. The officer had simply repeated the allegation of non-response while ignoring the purchase invoices, bank statements and ledger confirmations filed with the reply.
• PCIT v KRBL Infrastructure Ltd High CourtHelps taxpayerNo later treatment found
  The officer accepts my lender exists but says the lender's own purchases were bogus. Do I have to explain where the lender got the money?
  No, not for an assessment year before 2023-24. Once identity, creditworthiness and genuineness are established the assessee does not have to prove the genuineness of the funds in the lender's hands, and the officer cannot travel into the lender's own purchases without material connecting them to the assessee. The requirement to explain the source of the source of a loan came in with the Finance Act 2022 and operates from assessment year 2023-24.
• Vilas Babanrao Kalokhe v Principal Commissioner of Income Tax (Central), Pune High CourtHelps taxpayerNo later treatment found
  I filed my return but could not pay the self-assessment tax with it. I paid it a couple of months later. They have prosecuted me under s.276C(2). Can that stand?
  On these facts, no. The Bombay High Court quashed the complaint and the order issuing process, holding that s.276C(2) punishes a wilful attempt to evade payment of tax and not a mere failure to pay, and that the averments in the complaint fell short of any inference of wilfulness where the assessee had pleaded financial difficulty and had in fact paid the tax with interest.
• PCIT v Colo Colour Private Limited High CourtHelps taxpayer
  The officer accepted my purchases but estimated a profit element on them because the sales tax department listed my suppliers as hawala dealers. Can he then levy concealment penalty on that estimate?
  No. The Bombay High Court dismissed the Revenue's appeal, holding that no substantial question of law arose. The Assessing Officer had himself recorded that the purchases were not in doubt, because without the material the corresponding sales could not have been made, and had merely estimated 12.5 per cent of the purchase price as the benefit, with one per cent for commission. Penalty under section 271(1)(c) cannot be founded on an addition made on estimate or guesswork. Having accepted the assessee's material for assessment as not amounting to concealment, the Department could not relabel the same material as concealment under the garb of penalty proceedings.
• Tivoli Investment & Trading Co v ACIT High CourtHelps departmentNo later treatment found
  The officer says my declared rent is too low and has fixed a much higher annual value. Is he bound by the municipal rateable value?
  No. The Bombay High Court held that the municipal rateable value does not bind the Assessing Officer when he determines annual value under s.23(1)(a), and upheld an annual letting value of Rs 22,00,000 against a declared licence income of Rs 1,17,900 where the premises had been let to a bank for a nominal monthly fee alongside an interest-free security deposit of Rs 1.54 crore.
• Jaykumar B. Patil v JCIT High CourtHelps departmentNo later treatment found
  The company advanced money to me against pending job-work orders and I repaid the whole of it within two months, in the same year. The Assessing Officer has still treated it as deemed dividend. I have a running account with the company and I am relying on Circular 19/2017 — is that enough?
  No. The Bombay High Court held that a trade advance escapes s.2(22)(e) only if the money is actually applied to the business transaction it was said to be for; the stated purpose is not the test, the actual utilisation is. Neither the existence of a running account nor repayment within the same financial year makes any difference.
• Anurag Dalmia v Income Tax Office High CourtHelps taxpayerNo later treatment found
  The Tribunal has deleted the additions and the penalty has been cancelled. The criminal complaint is still pending on exactly the same allegations. Does it survive?
  No, where the complaint rests on the same material. The Delhi High Court quashed complaints under s.276C(1)(i), s.277(1) and s.276D, holding that once the Tribunal had set aside the additions on merits and the penalty had been cancelled, no offence survived and quashing of the prosecution followed automatically. It also held that the presumption of a guilty mind under s.278E arises only if a prima facie case is disclosed in the complaint.
• PCIT v Prabodh Kumar Tiwari High CourtCuts both waysNo later treatment found
  The department says the section 278E presumption means I must face the whole trial. Has any court actually held the presumption rebutted, and on what material?
  Yes. The Delhi High Court dismissed the department's leave petitions and let an acquittal under section 276CC stand, holding that the statutory presumption of a culpable mental state under section 278E had been rebutted. It applied the burden at its strictest - once the presumption is triggered the accused must disprove wilful default, and to the criminal standard - and still found it discharged on the Commissioner's own findings and the surrounding circumstances. But the Court reached that result on its own reasoning, and expressly rejected the appellate court's ground that cancellation of a penalty under section 271(1)(b) vitiates a prosecution under section 276CC.
• Mukundbhai Manubhai Patel v ACIT High CourtHelps taxpayerNo later treatment found
  I bought mutual fund units, took the dividend the same day and booked a short-term loss. The department calls it fictitious and has reopened. Can it?
  Not on that material alone. The Gujarat High Court quashed a s.148A(d) order and s.148 notice where the reopening rested on an allegation that the fund house had manipulated its distributable surplus: purchasing units and earning dividend on the same day is not impermissible, and allegations against the fund manager cannot be extended to the investor without something showing he knowingly participated.
• PCIT v Rajesh Suresh Chopra High CourtHelps taxpayerNo later treatment found
  If an estimate on the disputed purchases cannot be avoided, is there a High Court figure I can point to?
  Yes, on these facts. The Gujarat High Court dismissed the department's appeal against a Tribunal order that had confined the addition on roughly Rs 116.50 crore of alleged accommodation-entry purchases to 6 per cent, holding that no substantial question of law arose because the questions proposed were already answered by a coordinate bench, which had held 6 per cent of bogus purchases to be fair and reasonable. It is a percentage a High Court has let stand, not a rule — the figure follows the facts, and the department's contrary line on whole-invoice additions is unaffected.

The 60 strongest entries are summarised here. The other 190 entries are listed in full below, and each has its own page.

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.