Issue No. 260 / May 10^th, 2022   

Dear Professionals,    

We are glad to present to you the 260^th edition of ‘Taxsutra Database Bulletin’, where we keep you updated with current trends in the tax arena!  

***********************  

Judicial “forward & backward reference” 

a) (2017) 394 ITR 647 (Karnataka) replied in[TS-5104-HC-2022(Karnataka)-O]on unserved notices to creditors for taxability under Sec.41(1) & 68

b) [2000] 242 ITR 20 (Mad) followed in [TS-6723-HC-2021(Madras)-O], excess application of the earlier year can be set off against the income of the current year.

c) (2015) 127 DTR 318 (Chennai) sets aside by HC in, [TS-6723-HC-2021(Madras)-O]on excess application of income by trust

d) (2021) 90 ITR 1 (BANGALORE)(TRIB) followed in[TS-5086-ITAT-2022(Bangalore)-O]on Depreciation is not an item included u/s 40(a)(ia).

e) (2013) 356 ITR 0493 (Guj) relied in[TS-5583-HC-2021(GUJARAT)-O]on reason to believe that the income chargeable to tax had escaped assessment

***********************  

Key Takeaways from Handpicked Rulings 

1) SC: Dismisses SLP against HC order declining writ against prosecution for not depositing deducted tax - SC dismisses Assessee’s SLP against HC denying quashal of sanction order of CIT(TDS) u/s. 279(1) passed consequent to late deposit of TDS deducted; SC notes that a huge amount was deducted by the petitioner-Company as TDS, was not deposited in the Government treasury within the prescribed statutory time; Therefore, once there was a non-deposit, the necessary consequences shall follow including the prosecution; Whatever the submissions are made on behalf of the petitioner-assessee are all defenses which are required to be considered by the trial Court in the trial……………….. Click here to read and download SC Judgment

2) SC: Declines to interfere on prospective application of Sec.80IB(10) amendment for AY 2010-11 – SC dismisses Revenue SLP, holds that the amendment to Section 80IB(10)(e)/(f) came into effect from 1st April 2010 and has no application for AYs 2010-11 corresponding to FYs 2009-2010; HC allowed Sec.80IB(10) deduction to assessee-developer for AY 2010-11 despite violating Sec.80IB(10)(e)/ (f) conditions [which provide that deduction shall not be allowed if more than one residential unit is allotted to same person/his relative], holds that deduction cannot be denied where 'allotment' of residential units is completed before introduction of aforesaid conditions vide Finance Act 2009; HC held that the legislature has used the expression 'allotted' in clause (e) of Sec.80IB(10), explains that in case, a residential unit is 'allotted' prior to 01.04.2010, the conveyance in such a residential unit ……………………..Click here to read and download SC Judgment

3) SC: Dismisses Assessee’s SLP against HC denying quashal of 'reassessment notice' - Revenue issued reassessment notice in respect of information received of trading in penny stock scrip, which was dismissed by HC for existence of 'alternative remedy' of appeal. HC noted that assessee offered short term capital gains (STCG) on penny stock only after the notice u/s 148 of the Act; Observed that even if, we hold that the reasons are not very happily worded, still the fact that assessee offered STCG after almost 6 years and after receiving the notice u/s 148 filed return showing upward revision, itself would mean that the AO would be entitled to reopen the assessment; Though, we would agree that reopening of the assessment is not permitted for fishing or roving inquiry or for verification purpose, still the fact that assessee has filed returns in response to the notice u/s 148 of the Act and disclosing therein that STCG earned in F. Y.-2011-2012 was not offered to tax, would itself entitle the AO to issue notice u/s 142(1) of the Act calling for further details. ……………………..Click here to read and download SC Judgment

4) SC: Dismisses Assessee’s SLP; HC ruled that for condonation of delay one has to satisfy genuineness of reasons - SLP was filed against HC ruling that reversed ITAT order condoning delay and granting registration to assessee-Society; Notes that ITAT had condoned the delay getting itself influenced with the fact that it is a matter of educational institution; Holds that “... for condonation of delay, purpose or objective with which Trust or Institution has been constituted is not relevant but for the purpose of condonation of delay one has to satisfy about genuineness of the reasons causing delay in filing application for registration which was not explained by respondent-Society at all”; However, rejects Revenue’s argument that there was no power vested in Commissioner to cancel such registration once granted without the Commissioner being satisfied that activities of institution are not genuine or are not being carried out in accordance with object of Trust or Institution ……………………..Click here to read and download SC Judgment

5) SC: Dismisses review petition against denial of Sec 10(23C) exemption over remunerating doctors at par with commercial hospitals – SC dismisses review petition against its earlier order dated September 15, 2021 denying exemption u/s 10(23C)(via) to Assessee’s appeal, denies to interfere in the decision on facts made by the competent authority and affirmed by  HC that "cannot be said to be perverse or having complete absence of rationality"; Assessee for AYs 1999-00 to 2002-03, was held not eligible exemption u/s 10(23C)(via) since it distributed the IPD earnings to doctors at the rates charged at par with other hospitals run on commercial basis;  SC takes note of the Assessee's pleadings before the Bombay HC and holds that "while referring to the remuneration payable to member doctors with regard to IPD patients receipts, the same is not confined to the doctors performing the task. Learned counsel for the appellant did seek to canvas, despite this, as if only doctors performing the task in the IPD are paid. However, that would run contrary to the own pleading of the appellant ... which makes it clear that the receipts from IPD are distributed across the board for doctors."; SC observes that the benefits in terms of the Section 10(23C)(via) are available to any hospital existing solely for philanthropic purposes and not for purposes of profit which is same as the erstwhile provisions of Section 10(22A) and the only change is due to the words “may be approved by the prescribed authority” which appears to ……………….Click here to read and download SC Judgment

6) SC: Dismisses Assessee’s SLP where HC upheld addition u/s 68 as genuineness not established. HC had ruled that though the transaction done by the assessee was through banking channels and it was done well much prior to 15.05.2013 on which date the membership of the broker was cancelled was considered not only by the ITAT as well as by CIT(A) and the factual finding has been recorded as to how the genuineness has not been established; HC noted that ITAT in its order finds that “The genuineness of the Contract Notes issued by the said broker even prior to 15.05.2013 was found to be doubtful and the letter issued by NMCE stating that he was never active on the Exchange further corroborated the same”, further it was also revealed that the said broker was indulging in issuing fraudulent Contract Notes which resulted into his expulsion from the membership of the Exchange from 15.05.2013. ……………….Click here to read and download SC Judgment

-----------------------------------------------

About Taxsutra Database!

“Taxsutra Database”, a true Income-tax research tool, is an archive of over 116740+  Income  Tax  Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:  

a) Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;

b) Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;

c) Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.  

d) Judicial “forward & backward reference” 

The Taxsutra Database comes at a very special Annual Subscription price of 4200+ GST AND includes an annual license to the Taxsutra Library.

Copyright © TAXSUTRA. All Rights Reserved