Direct Tax Weekly Flashback for the period 10 November 2024 to 16 November 2024.
Table of Contents – Direct Tax Weekly Flashback
Supreme Court
TDS Is Deductible On Salaries Of Nuns And Priests Working In Aided Schools: Supreme Court
Case Title: Institute Of The Franciscan Missionaries Of Mary Versus UOI
The Supreme Court while upholding the decision of Madras High Court has held that under Income Tax Act TDS is deductible on salaries of nuns and priests working in aided schools.
The bench of Chief Justice D Y Chandrachud, Justice J.B. Pardiwala and Justice Manoj Misra have observed that the money is given to the school in the form of a salary grant, therefore it cannot be exempted from TDS.
Madhya Pradesh High Court
Share Received By Assessee From AOP/BOI After Payment Of Due Taxes Can’t Be Taxed Again In Hands Of Recipient Assessee: Madhya Pradesh High Court
Case Title: Principal Commissioner Of Versus Shri Ramesh Chandra Rai
The Jabalpur bench of Madhya Pradesh High Court has held that the share received by the assessee from such Association of Persons (AOP)/ Body Of Individuals (BOI) after payment of due taxes cannot be taxed again in the hands of the recipient assessee.
The bench of Justice Sushrut Arvind Dharmadhikari and Justice Anuradha Shukla has observed that the assessee was a member of an association of persons or body individuals, share of members of such association of persons or body individuals were determinate and known. Such associations of persons or body individuals were chargeable to tax on their total at the maximum marginal rate or any higher rate.
The bench held that the share of profit/income received by the assessee from association of persons or body individuals/syndicates fall under the clause (a) of the first proviso to section 86 r.w.s 67A of the Act and, thus, the AO was not justified in making the addition in the hands of the assessee on account of his share in profits of syndicates and on account of his share of inadmissible expenses incurred by the syndicates.
Delhi High Court
Sale Deed Is Not A Revenue Document To Certify Agricultural Nature Of Land For Taxation Purpose: Delhi High Court Upholds PCIT’s Action Of Invoking S. 263 Power
Case Title: PR. COMMISSIONER OF INCOME TAX DELHI v/s MS. SANGEETA JAIN
The Delhi High Court has upheld the invocation of Revision Power under Section 263 of the Income Tax Act by the Principal Commissioner of Income Tax (PCIT) and held that sale deed is not a revenue document to certify agricultural nature of land for taxation purpose.
The bench of Justice Vibhu Bakhru and Justice Swarana Kanta Sharma has observed that the sale deed executed between the assessee and Vallabham Buildcon mentioned that the land was not fit for agricultural purposes. The PCIT concluded that the evidence provided by the assessee had no evidentiary value compared to the substantial evidence possessed by the department, which proved that no agricultural operations had been conducted by either the assessee or the buyer on the land.
Delhi High Court Refuses To Condone AO’s 2 Minutes Delay In Issuing Reassessment Notice; Quashes Notice Being Time Barred
Case Title: ACROPOLIS REALTY PVT. LTD Versus ITO
The Delhi High Court has refused to condone 2 minutes delay in issuing reassessment notice by the Assessing Officer (AO).
The bench of Justice Vibhu Bakhru and Justice Swarana Kanta Sharma has observed that notice could not have been issued prior to the same being signed. The fact that the steps to generate the impugned notice commenced on 31.03.2023 cannot be a ground to hold that the impugned notice was issued on 31.03.2023. The date of the notice is correctly reflected as 01.04.2023.
ITAT
Assessment Can’t Be Reopened Merely On The Basis Of Information By Investigation Wing : ITAT
Case Title: ACIT Versus M/s. Sahara Prime City Ltd.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that assessment cannot be reopened merely on the basis of information by the investigation wing.
The bench of Vikas Awasthy (Judicial Member) and Naveen Chandra (Accountant Member) has observed that section 147 of the Income Tax Act mandates the Assessing Officer to record reasons to believe that any income chargeable to tax has escaped assessment. It is no more res intigra that borrowed satisfaction for reopening the assessment vitiates reassessment proceedings.
