Income Tax | Taxpayers Cannot Raise Fresh Claims Based On New Facts In Revision Proceedings: Supreme Court

The Supreme Court has recently reiterated that taxpayers cannot use revision proceedings to introduce fresh claims based on facts that were never placed before the Assessing Officer, bypassing the deadline for filing a revised income tax return.A bench of Justices Prashant Kumar Mishra and Shree Chandrashekhar held that the revisional authority can entertain a new question of law, but cannot consider a claim that goes beyond the facts available to the Assessing Officer.“In our considered view,...

Tax Department Cannot Sustain Reassessment On Other Grounds If Original Reason Fails: Supreme Court

The Supreme Court has recently ruled that the Income Tax Department cannot sustain reassessment proceedings on other grounds when the original reason for reopening the assessment is untenable. The court declared reassessment proceedings against LG Electronics India Pvt. Ltd. for Assessment Years 2006-07 to 2008-09 unenforceable. The case concerned the company's alleged failure to deduct Tax Deducted at Source (TDS) on payments to its Korean parent company and associated enterprises.A Bench of...

Electricity Subsidy Linked To Power Charges Is Revenue Receipt: Supreme Court

The Supreme Court has held that the “purpose test” is the governing test for deciding whether a subsidy is a capital or revenue receipt, and that the purpose must be determined from the scheme as a whole rather than from one broad policy objective.“The “purpose test” cannot be applied by isolating one general object clause while disregarding the operative provisions of the scheme. The scheme must be read as a whole, and when so read, the general object of industrial development is implemented...

Supreme Court Refuses To Interfere With Bombay HC Order Dismissing Income Tax Appeal Against Tata Realty

The Supreme Court has dismissed the Income Tax Department's plea challenging the Bombay High Court order dismissing its appeal against Tata Realty & Infrastructure Ltd. The dispute concerned the applicability of Section 14A disallowance of the Income Tax Act where Tata Realty had earned no exempt income and whether the ₹2.5 crore payment made by Tata Realty to vacate the premises so that it could occupy them under a 60 month leave and licence arrangement was allowable as revenue...

Tax On Employee Seconded From Us To India: Ernst & Young Challenges Delhi High Court Ruling In Supreme Court

Ernst & Young US LLP has approached the Supreme Court challenging a Delhi High Court ruling which held that payments received in connection with employees sent from the US to work with Indian entities were taxable as Fees for Technical Services (FTS).The dispute concerns whether the amounts received by the US entity were merely reimbursement of salaries and other employment costs or consideration for technical services taxable in India under the India-US Double Taxation Avoidance Agreement...

CBDT Circulars Reflect Executive's Understanding Of Law, Not Binding On Courts: Supreme Court

The Supreme Court on Friday held that CBDT circulars merely represent the Executive's understanding of a statutory provision and are not binding on the High Courts or the Supreme Court. The observation came while the court rejected an assessee's reliance on a CBDT Office Memorandum to claim a deduction under Section 80HHC of the Income Tax Act on premium received from the sale of export quotasA bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria held that such circulars merely reflect the...

Supreme Court Stays Punjab and Haryana HC Order Declaring Section 147A Income Tax Act Unconstitutional

The Supreme Court on Friday stayed the Punjab and Haryana High Court judgment declaring Section 147A of the Income Tax Act, 1961, unconstitutional. A bench comprising Justice JB Pardiwala and Justice K. Vinod Chandran stayed the High Court judgment until the final disposal of the Special Leave Petition filed by the Union Government challenging the ruling. “The impugned order shall remain stayed on the condition that assessment as well as reassessment proceedings shall not proceed...

Assessing Officer Cannot Reopen Income Tax Settlement Through Reassessment: Supreme Court

The Supreme Court on Wednesday ruled that once a taxpayer's case has been finally settled by the Income Tax Settlement Commission, the Assessing Officer cannot reopen matters covered by the settlement through the ordinary reassessment route under Section 148 of the Income Tax Act.The Court said the Revenue can seek to reopen a settlement on the ground of fraud or misrepresentation by moving the Settlement Commission under Section 245D(6). The Assessing Officer, however, cannot independently...

Centre Challenges Punjab & Haryana HC Verdict Striking Down S.147A Income Tax

The Union Government has approached the Supreme Court challenging the Punjab and Haryana High Court judgment declaring Section 147A of the Income Tax Act, 1961, unconstitutional.The matter was mentioned before Chief Justice of India Surya Kant by Additional Solicitor General N. Venkataraman, appearing for the Union. The ASG sought urgent listing of the Special Leave Petition, stating that the High Court ruling had created a legal vacuum concerning income tax reassessment proceedings. The Chief...

Centre Moves Supreme Court To Transfer Anil Ambani's Black Money Act Challenge From Bombay HC To Delhi HC

The Union Government has approached the Supreme Court seeking transfer of industrialist Anil Ambani's petition pending before the Bombay High Court, challenging provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 to the Delhi High Court.During today's hearing, a Bench comprising Chief Justice of India Surya Kant, Justices Joymalya Bagchi V. Mohana questioned the Centre's request to transfer the matter. “Why should we prefer one High Court...

Supreme Court Dismisses Revenue SLPs In Samsung India's Transfer Pricing Case Over 609 Days Gross Delay

The Supreme Court on 31 August dismissed the Income Tax Department's Special Leave Petitions (SLPs) against the Delhi High Court's judgment in Samsung India Electronics Pvt Ltd's transfer pricing dispute, citing unexplained delays of 609 days and 457 days while keeping the questions of law open. A Division Bench of Justices J.B. Pardiwala and K. Vinod Chandran dismissed the petitions on the ground of delay, finding no satisfactory explanation from the Revenue for the gross delays. The Court...

Supreme Court Refuses To Interfere With Delhi HC Ruling On GoDaddy Domain Fees Under India-US DTAA

The Supreme Court on Monday refused to interfere with the Delhi High Court order holding that payments received by GoDaddy.com LLC from Indian customers towards domain-name registration services are not chargeable to income tax in India under the India-US Double Taxation Avoidance Agreement (DTAA). A Bench of Justices K.V. Viswanathan and Arun Palli after hearing the parties, refused to interfere with the Delhi High Court's order. The Supreme Court was hearing the Income Tax...