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585 orders · Page 7 of 12
The High Court has not decided the substantive issue regarding the validity of Section 147-A of the Income Tax Act. Instead, the Court has issued procedural directions. It has ordered that all Writ Petitions challenging the validity of Section 147-A be transferred to the Principal Seat of the High Court. This is in compliance with a Supreme Court judgment and to facilitate a consolidated hearing of similar matters. Petitioners are permitted to amend their petitions to specifically challenge Section 147-A within one week. If amendments are not carried out before transfer, they can be done within one week after the transfer. The Court also noted that petitioners could file a Pursis if they did not wish for their matters to be transferred.
The High Court has not decided the substantive issue regarding the validity of Section 147-A of the Income Tax Act. Instead, the Court has issued procedural directions. It has ordered that all Writ Petitions challenging the validity of Section 147-A be transferred to the Principal Seat of the High Court. This is in compliance with a Supreme Court judgment and to facilitate a consolidated hearing of similar matters. Petitioners are permitted to amend their petitions to specifically challenge Section 147-A within one week. If amendments are not carried out before transfer, they can be done within one week after the transfer. The Court also noted that petitioners could file a Pursis if they did not wish for their matters to be transferred.
The High Court has not decided the substantive issue regarding the validity of Section 147-A of the Income Tax Act. Instead, the Court has issued procedural directions. It has ordered that all Writ Petitions challenging the validity of Section 147-A be transferred to the Principal Seat of the High Court. This is in compliance with a Supreme Court judgment and to facilitate a consolidated hearing of similar matters. Petitioners are permitted to amend their petitions to specifically challenge Section 147-A within one week. If amendments are not carried out before transfer, they can be done within one week after the transfer. The Court also noted that petitioners could file a Pursis if they did not wish for their matters to be transferred.
The High Court condoned the delay of 156 days in filing the appeal. The Court found itself in agreement with the contentions advanced on behalf of the Applicant/Revenue. It held that the memo of the application demonstrated sufficient cause, particularly the contention that the delay was not intentional or willful but bona fide, which was not specifically denied by the Respondent. The Court rejected the Respondent's argument that the application was mechanical or stereotyped, stating that the insertion of dates in handwriting is a common practice to avoid errors and does not invalidate the application, especially when the contents materially explain the delay. The Court emphasized that the Revenue had to follow a procedure involving opinions and approvals, and considering the principles laid down by the Supreme Court, the delay was sufficiently explained. The Court directed that the appeal be numbered within three weeks and listed thereafter for admission.
The High Court disposed of both petitions with specific directions. Firstly, acknowledging the Petitioner's willingness to comply with paragraph 7 of the impugned order dated January 14, 2026, the Court directed the Petitioner to pay Rs. 10,00,000/- per month, commencing from September 2026, after adjusting any installments already paid. Secondly, as the assessee agreed to pay the installments, the Court directed that paragraph 9 of the impugned order, which reserved the right to review the arrangement periodically, shall not be exercised by the Department. Thirdly, the Court directed that the pending CIT appeal with Respondent No. 3 be decided expeditiously, and in any event, within a period of six months from the date of the order. The Court did not explicitly leave any issue undecided.
The High Court allowed the Writ Petition, quashing the notice dated March 30, 2021, issued under Section 148 of the Income Tax Act, 1961. Regarding the first ground for reopening, concerning the share premium received from M/s. Viren Jewellers LLC, the Court found the Revenue's case unsustainable. The Court reasoned that the Revenue's argument that the Petitioner used its own cash to make M/s. Viren Jewellers LLC a substantial shareholder (28.82%) was absurd based on the test of human probabilities, as it would imply the Petitioner using its own funds to invest in its own company through a stranger who would then gain substantial control. The Court found no connection between Mr. Manoj Jain (associated with M/s. Viren Jewellers LLC) and the Petitioner other than the investment. Concerning the second ground, relating to employee fund contributions, the Court noted that the notice was issued on March 30, 2021. At that time, the law, as laid down by the Bombay High Court in CIT v. Ghatge Patil Transports Ltd. [2014] 368 ITR 749 (Bom), stipulated that such contributions only needed to be deposited by the due date of filing the Return of Income under Section 139. The Petitioner had complied with this. Although the Supreme Court later overruled Ghatge Patil Transports Ltd. in Checkmate Services (P) Ltd. v. CIT-1 [2022] 143 taxmann.com 178 (SC) on October 12, 2022, this did not affect the Assessing Officer's belief on March 30, 2021, as the law then prevailing supported the Petitioner's position. Therefore, the Assessing Officer could not have had a reason to believe that income had escaped assessment on this count when the notice was issued. The Court made the rule absolute and disposed of the Writ Petition.
The High Court allowed the writ petition. It held that the material on record clearly shows that the petitioner was not a Nominee Director of the Accused No. 1 company during the period of the alleged offence (April 1, 2016, to March 31, 2017). The petitioner was appointed as a Nominee Director only on May 9, 2017. Therefore, the sanction order dated March 8, 2018, and the complaint case No. SW/0000909/2018, including the order issuing process dated September 14, 2018, were quashed and set aside specifically qua the petitioner (Accused No. 4). The Court clarified that the sanction order and the order issuing process remain in operation against other accused, and the complaint case will proceed against them. The ratio is that a person cannot be prosecuted for offences committed prior to their association with the company, even if they later become a director.
The High Court of Judicature at Bombay dismissed the Writ Petition No. 1843 of 2023 for want of prosecution. The Court observed that the Petitioner had been consistently absent on multiple hearing dates, indicating a lack of interest in pursuing the matter. The Revenue did not need to present arguments as the dismissal was based on the Petitioner's failure to prosecute the case. No decision was made on the merits of any underlying tax dispute.
The Bombay High Court allowed the writ petition in part. For AY 2010-11, the Court held that the Department cannot deny credit for TDS if the assessee establishes that tax was indeed deducted at source, even if the deductor failed to deposit it. The Court referred to its earlier decision in Manohar Ramabtar Jhunjhunwala, directing the jurisdictional Assessing Officer to verify the Petitioner's claim and grant appropriate TDS credit. The Court rejected the Revenue's objection regarding the Petitioner's claim being admitted by the Resolution Professional, agreeing with the Petitioner that the admitted claim pertained to unpaid dues, not the TDS amount already deducted. For AY 2011-12, the Court held that a demand cannot be enforced without the mandatory service of an intimation under Section 143(1) of the Act, as such intimation is deemed a notice of demand under Section 156. Since the Revenue admitted that proof of service of the Section 143(1) intimation was not traceable, the demand for AY 2011-12 was quashed and set aside. The Respondents were directed not to recover the demand or adjust refunds against it, and if already adjusted, refunds were to be issued with interest within one month.
The High Court held that the approach adopted by the Revenue was hyper-technical. The delay in question pertained solely to filing a corrected Return by changing the nomenclature of the firm, while the original Return was filed within the statutory limitation. Crucially, the correction did not seek to alter the declared income, tax liability, or any substantive claim. The only correction involved adding the prefix "M/s." to the partnership firm's name. The Court found that the object of Section 119(2)(b) is to advance substantial justice and prevent genuine hardship, not to defeat legitimate claims on technical grounds. No prejudice was demonstrated to have been caused to the Revenue by condoning the delay. Refusal to condone the delay on such a technical ground resulted in the denial of substantive justice to the assessee. Therefore, the Court found sufficient cause for condoning the delay, considering the omission to be purely clerical and not affecting the assessment of income. The impugned order was quashed and set aside, the delay was condoned, and the Respondents were directed to treat the corrected Return as validly filed and process it accordingly.
The Tribunal held that the assessee is entitled to an exemption from deducting tax at source under Section 194A(3)(v) of the Income Tax Act for interest amounts paid to its depositor non-member co-operative societies. The Court reasoned that the plain language of Section 194A(3)(v) indicates that the exemption from TDS continues to apply to interest credited or paid by a co-operative society to another co-operative society. The Court distinguished Section 194A from Section 80P, stating that Section 194A operates at the transactional stage, while Section 80P operates at the assessment stage to determine tax liability. The Court found the Assessing Officer's approach of intermixing these provisions to be ill-founded. Consequently, the assessee cannot be held as an assessee-in-default under Section 201(1) read with Section 201(1A) of the Act. The impugned judgment and order of the Tribunal were quashed and set aside. The substantial questions of law were answered in favor of the assessee.
The High Court held that the assessee is entitled to an exemption from deducting tax at source under Section 194A(3)(v) of the Income Tax Act for interest amounts paid to its depositors who are non-member co-operative societies. The Court reasoned that the plain language of Section 194A(3)(v), particularly after the amendment by the Finance Act, 2015, continued to provide an exemption for interest paid by a co-operative society to another co-operative society. The Court also relied on the Madras High Court's decision in Coimbatore District Central Co-operative Bank Ltd. vs. Income-tax Officer, which held that no distinction is made between a co-operative society engaged in banking business and a co-operative bank in relevant enactments. Consequently, the assessee cannot be held to be an assessee-in-default under Section 201(1) read with Section 201(1A) of the Act. The appeals were allowed, quashing the impugned judgment and order of the Tribunal and answering the substantial questions of law in favour of the assessee.
The High Court held that the assessee is entitled to an exemption from deducting tax at source under Section 194A(3)(v) of the Income Tax Act, 1961, on interest amounts paid to its non-member co-operative society depositors. The Court reasoned that the plain language of Section 194A(3)(v), particularly after the amendment by the Finance Act, 2015, exempts interest paid by a co-operative society to another co-operative society. The Court also clarified that there is no distinction between a co-operative society engaged in banking business and a co-operative bank for the purposes of this provision, citing the Madras High Court in Coimbatore District Central Co-operative Bank Ltd. vs. Income-tax Officer. Furthermore, the Court held that the Assessing Officer's reference to Section 80P was misplaced, as Section 80P operates at the assessment stage for determining tax liability, while Section 194A operates at the transactional stage for TDS obligations. Consequently, the assessee cannot be held as an assessee-in-default under Section 201(1) read with Section 201(1A). The impugned judgment and order of the Tribunal were quashed and set aside.
The High Court allowed the appeals, quashing and setting aside the impugned judgment and order of the Tribunal. The court answered the substantial questions of law in favor of the assessee. Firstly, it held that the assessee is entitled to an exemption from deducting tax at source under Section 194A(3)(v) of the Income Tax Act concerning interest amounts paid to its depositors who are non-member co-operative societies. The reasoning was based on the plain language of Section 194A(3)(v), which, after amendments, continued to exempt interest paid by a co-operative society to another co-operative society. The court distinguished the operation of Section 80P from Section 194A, stating that Section 80P pertains to income deduction at the assessment stage, while Section 194A deals with the transactional stage of TDS obligations. Secondly, consequent to the first finding, the court held that the assessee cannot be treated as an assessee-in-default under Section 201(1) read with Section 201(1A) of the Act. The operative direction was to allow the appeals, with no costs.
The High Court allowed the appeals, quashing and setting aside the impugned judgment and order of the Tribunal. On the first substantial question of law, the Court held that the assessee is entitled to an exemption from deduction of tax at source under Section 194A(3)(v) of the Income Tax Act, 1961, concerning interest amounts paid to its non-member co-operative society depositors. The reasoning was that the plain language of Section 194A(3)(v), as interpreted in light of amendments and judicial precedents like the Madras High Court's decision, supports this exemption for interest paid by a co-operative society to another co-operative society. The Court also clarified that Section 80P operates at the assessment stage for determining tax liability, while Section 194A operates at the transactional stage for TDS obligations, and they should not be intermixed. Consequently, on the second question, the Court held that the assessee cannot be treated as an assessee-in-default under Section 201(1) read with Section 201(1A) of the Act. The operative direction was to allow the appeals in terms of these findings.
The High Court allowed the appeals, quashing and setting aside the impugned judgment and order of the Tribunal. On the first substantial question of law, the Court held that the assessee is entitled to an exemption from deducting tax at source under Section 194A(3)(v) of the Income Tax Act, 1961, concerning interest amounts paid to its depositors who are non-member co-operative societies. The reasoning was that the plain language of Section 194A(3)(v) created a self-operating mechanism where the exemption continued for interest paid by a co-operative society to another co-operative society, irrespective of whether the payer was a co-operative bank. The Court distinguished the applicability of Section 80P from Section 194A, stating they operate distinctly and at different stages. Consequently, on the second question, the Court held that the assessee cannot be treated as an assessee-in-default under Section 201(1) read with Section 201(1A) of the Act. The operative direction was to allow the appeals and answer the substantial questions of law in favor of the assessee.
The High Court allowed the appeals, quashing and setting aside the impugned order of the Tribunal. On the first issue, the Court held that the assessee is entitled to an exemption from deducting tax at source under Section 194A(3)(v) of the Income Tax Act for interest amounts paid to its depositors who are non-member co-operative societies. The Court reasoned that the plain language of Section 194A(3)(v) and the legislative intent, as reflected in judicial pronouncements like the Madras High Court's decision in Coimbatore District Central Co-operative Bank Ltd. vs. Income-tax Officer, supported this view. The Court also clarified that Section 80P operates at the assessment stage for determining tax liability, while Section 194A operates at the transactional stage for TDS obligations, and their intermixing by the Assessing Officer was not well-founded. Consequently, on the second issue, the Court held that the assessee cannot be treated as an assessee-in-default under Section 201(1) read with Section 201(1A) of the Act.
The High Court allowed the appeals, quashing and setting aside the impugned judgment and order of the Tribunal. On the first issue, the Court held that the assessee is entitled to an exemption from deducting tax at source under Section 194A(3)(v) of the Income Tax Act, 1961, concerning interest amounts paid to its depositors who are non-member co-operative societies. The reasoning was based on the plain language of Section 194A(3)(v) and supported by the Madras High Court's decision in Coimbatore District Central Co-operative Bank Ltd. The Court emphasized that no distinction is made in various enactments between a co-operative society engaged in banking business and a co-operative bank for the purpose of this section. The Court also clarified that Section 80P, which deals with deductions at the assessment stage, operates distinctly from Section 194A, which governs the obligation to deduct tax at source at the transactional stage, and the Assessing Officer's attempt to intermix them was not well-founded. Consequently, on the second issue, the Court held that the assessee cannot be treated as an assessee-in-default under Section 201(1) read with Section 201(1A) of the Act. The substantial questions of law were answered in favour of the assessee.
The Bombay High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it merely because the deductor failed to deposit the amount to the Central Government. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee. The Court also held that the absence of a formal certificate like Form 16 or Form 16A is not fatal; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the Assessing Officers to register applications for TDS credit, keep demands in abeyance pending disposal, mark demands appropriately to prevent coercive recovery or refund adjustments, undertake factual verification, and pass reasoned orders expeditiously, preferably within six months. The Court set aside orders/intimations raising demands on account of TDS deducted but not paid and remanded them to the respective Assessing Officers for fresh consideration, allowing the petitions and directing the respondents to verify claims, grant TDS credit, and make necessary corrections to demands.
The High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it solely because the deductor failed to deposit the amount. Upon verification, appropriate TDS credit must be granted, and any corresponding demand against the deductee cannot be enforced or continued, in line with Section 205 of the IT Act. The Court further held that the absence of Form 16 or Form 16A, or similar certificates, is not by itself fatal to a claim for TDS credit. Deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the jurisdictional Assessing Officer to register applications for TDS credit where tax was deducted but not paid, keep the demand in abeyance, mark it as stayed, undertake factual verification, and pass a reasoned order within six months. In the present batch of matters, the Court set aside the orders/intimations raising demands on account of TDS deducted but not paid and remanded them to the respective Assessing Officers for fresh consideration, allowing the petitions and directing the respondents to verify claims, grant TDS credit, and make necessary rectifications or deletions of demands.
The Bombay High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for such tax merely because the deductor failed to deposit the amount. Upon verification of prima facie supporting material, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee, in line with Section 205 of the IT Act. The Court further held that the absence of Form 16 or Form 16A, or similar certificates, is not by itself fatal to a claim for TDS credit, provided the deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the jurisdictional Assessing Officer to register applications for TDS credit, keep demands in abeyance pending disposal, mark demands as stayed, undertake factual verification, and pass reasoned orders expeditiously, preferably within six months. In the present batch of matters, the Court set aside the orders/intimations raising demands on account of TDS deducted but not paid and remanded them to the respective Assessing Officers for fresh consideration, allowing the petitions and directing the respondents to verify claims, grant TDS credit, and make necessary corrections to demands.
The High Court held that where tax has in fact been deducted at source from the income or payment of an assessee, the Department cannot deny the deductee the credit for such tax solely because the deductor failed to deposit the amount to the credit of the Central Government. Upon verification of prima facie supporting material, appropriate TDS credit must be granted, and any corresponding demand against the deductee cannot be enforced or continued. The Court clarified that the absence of a formal certificate like Form 16 or 16A would not be fatal if deduction can be established by other cogent material, such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the Department to follow specific procedures for dealing with applications for TDS credit where tax was deducted but not paid, including acknowledging the application, keeping demands in abeyance, marking demands as stayed, undertaking factual verification, and passing reasoned orders expeditiously. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The Petitioners were directed to produce records before the Assessing Officers to satisfy them about the deduction of TDS. The Court allowed the petitions, directing the respondents to verify claims, grant TDS credit, issue refunds if any, and make appropriate corrections/deletions of demands.
The Bombay High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for such tax merely because the deductor failed to deposit the amount to the Central Government. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee, in line with Section 205 of the IT Act. The Court further held that the absence of Form 16 or Form 16A, or similar forms, is not fatal to a claim for TDS credit. Deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the Department to follow a specific procedure for handling applications for TDS credit where tax was deducted but not paid, including acknowledging the application, keeping demands in abeyance, undertaking factual verification, and passing reasoned orders. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The assessees were allowed to pursue all remedies available to them if not satisfied with the Department's orders.
The High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it solely because the deductor failed to deposit the amount to the Central Government. Upon verification, appropriate TDS credit must be granted, and any corresponding demand against the deductee cannot be enforced or continued. The Court clarified that the absence of Form 16 or Form 16A is not by itself fatal; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the jurisdictional Assessing Officer to register applications for TDS credit where tax was deducted but not reflected in Form 26AS due to the deductor's default. The demand should be kept in abeyance pending disposal of the claim, marked as stayed/not recoverable/kept in abeyance to prevent coercive recovery or refund adjustment. The Assessing Officer must undertake factual verification and pass a reasoned order expeditiously, preferably within six months. The initial denial of credit in a Section 143(1) intimation may be mechanical, but the Department must adjudicate the matter in accordance with law once an application with prima facie material is received. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration, with directions to grant credit and make appropriate corrections.
The High Court held that where tax has been deducted at source from the income or payment of an assessee, the Department cannot deny the deductee the credit thereof merely because the deductor failed to deposit the amount to the credit of the Central Government. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee, in line with Section 205 of the IT Act. The Court also clarified that the absence of Form 16 or Form 16A, by itself, shall not be fatal to the claim for TDS credit, provided deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Department was directed to follow specific procedures for dealing with applications for TDS credit where tax was deducted but not paid, including keeping demands in abeyance and undertaking factual verification. The orders/intimation raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The assessees were allowed to pursue all remedies available to them if not satisfied with the Department's orders.
The Bombay High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it merely because the deductor failed to deposit the amount to the Central Government. The Court emphasized that upon verification, appropriate TDS credit must be granted, and any corresponding demand against the deductee cannot be enforced or continued, citing Section 205 of the IT Act. Regarding the absence of formal TDS certificates, the Court held that deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence; the absence of Form 16 or 16A by itself shall not be fatal. The Court also directed the Department to follow specific administrative procedures for handling such claims, including acknowledging applications, keeping demands in abeyance, marking demands as stayed, undertaking factual verification, and passing reasoned orders expeditiously. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration, with directions to grant credit and make necessary rectifications. The Court allowed the petitions on these principal common issues, keeping other contentions open.
The High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it solely because the deductor failed to deposit the amount. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced against the deductee, in line with Section 205 of the IT Act. The Court further clarified that the absence of formal certificates like Form 16 or 16A does not by itself prevent the establishment of TDS deduction, provided other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence is furnished. The Department was directed to follow specific procedures for applications seeking TDS credit where tax was deducted but not paid, including keeping demands in abeyance and undertaking factual verification. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The petitions were allowed, directing the respondents to verify claims, grant TDS credit, and make necessary corrections to demands.
The Bombay High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for such TDS merely because the deductor failed to deposit the amount to the Central Government. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee, in light of Section 205 of the IT Act. The Court also held that the absence of Form 16 or Form 16A, or similar forms, is not by itself fatal to a claim for TDS credit; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the jurisdictional Assessing Officer to register applications for TDS credit where tax was deducted but not reflected in Form 26AS due to deductor's default, keep the demand in abeyance, undertake factual verification, and pass a reasoned order within six months. The Court set aside demands raised on account of TDS deducted but not paid and remanded the matters to the respective Assessing Officers for fresh consideration, allowing the petitions and directing the respondents to verify claims, grant TDS credit, and make appropriate corrections to demands.
The High Court held that where tax has been deducted at source from the income or payment of an assessee, the Department cannot deny the deductee the credit thereof merely because the deductor failed to deposit the amount to the credit of the Central Government. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee. The Court also held that the absence of Form 16 or Form 16A, or similar formal certificates, shall not be fatal to the claim for TDS credit; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Department was directed to follow specific procedures for handling applications for TDS credit where tax was deducted but not paid, including keeping demands in abeyance and undertaking factual verification. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The petitions were allowed, directing the Respondents to verify claims, grant TDS credit, and make necessary corrections to demands.
The High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for that TDS merely because the deductor failed to deposit the amount to the Central Government. Upon verification of prima facie supporting material, appropriate TDS credit must be granted, and any corresponding demand against the deductee cannot be enforced or continued. The Court clarified that the absence of formal certificates like Form 16 or 16A is not fatal if deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the Assessing Officers to follow a specific procedure for handling applications for TDS credit where tax was deducted but not paid, including keeping demands in abeyance and undertaking factual verification. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The petitioners were directed to produce records to satisfy the Assessing Officers about the TDS deduction. The Court allowed the petitions, directing the Respondents to verify claims, grant TDS credit, and make necessary rectifications or deletions of demands.
The Bombay High Court held that where tax has in fact been deducted at source from the income or payment of an assessee, the Department cannot deny the deductee the credit for such tax merely because the deductor failed to deposit the amount to the credit of the Central Government. The Court reasoned that Section 205 of the IT Act protects the deductee from being asked to pay the tax again. Upon verification of the deduction, appropriate TDS credit must be granted, and any corresponding demand against the deductee cannot be enforced or continued. The Court also held that the absence of formal TDS certificates (Form 16 or 16A) is not fatal, and deduction can be established by other cogent material such as salary slips, bank statements, payment advices, etc. The Court directed the Assessing Officers to follow a specific procedure for dealing with such applications, including keeping demands in abeyance and passing reasoned orders. The orders/intimation raising demands on account of TDS deducted but not paid were set aside and remanded for fresh consideration.
The Bombay High Court held that where tax has been deducted at source from the income or payment of an assessee, the Department cannot deny the deductee the credit thereof merely because the deductor failed to deposit the amount to the credit of the Central Government. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee, in line with Section 205 of the IT Act. The Court also held that the absence of Form 16 or Form 16A, by itself, shall not be fatal to the claim for TDS credit; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Department was directed to follow specific procedures for dealing with applications for TDS credit where tax was deducted but not paid, including keeping demands in abeyance and undertaking factual verification. The orders/intimation raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The assessees were directed to produce records before the Assessing Officers to satisfy them about the deduction of TDS. The petitions were allowed, and the respondents were directed to verify claims, grant TDS credit, and make appropriate corrections to demands.
The High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it solely because the deductor failed to deposit the amount. Upon verification, appropriate TDS credit must be granted, and any corresponding demand against the deductee cannot be enforced or continued, in line with Section 205 of the IT Act. The Court clarified that the absence of formal TDS certificates (Form 16 or 16A) is not fatal; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the jurisdictional Assessing Officer to register applications for TDS credit where tax was deducted but not paid, keep the demand in abeyance, mark it as stayed, undertake factual verification, and pass a reasoned order within six months. The initial denial of credit in a Section 143(1) intimation is mechanical, but the Department must adjudicate upon receiving an application with prima facie material. The orders/intimations raising demands on account of TDS deducted but not paid were set aside and remanded to the respective Assessing Officers for fresh consideration. The assessees were directed to produce records before the Assessing Officers to satisfy them about the TDS deduction.
The High Court held that where tax has been deducted at source from the income or payment of an assessee, the Department cannot deny the deductee the credit thereof solely because the deductor failed to deposit the amount to the credit of the Central Government. Upon verification of prima facie supporting material, appropriate TDS credit must be granted, and any corresponding demand cannot be enforced or continued against the deductee, in line with Section 205 of the IT Act. The Court further held that the absence of Form 16 or Form 16A, or similar formal certificates, is not by itself fatal to a claim for TDS credit. Deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the jurisdictional Assessing Officer to register applications for TDS credit where tax was deducted but not paid, keep the demand in abeyance, mark the demand appropriately in the system to prevent coercive recovery or refund adjustment, undertake factual verification, and pass a reasoned order expeditiously, preferably within six months. The initial denial of credit in a Section 143(1) intimation may occur mechanically, but the Department must adjudicate the matter in accordance with law once an application with supporting material is received. The Court set aside demands arising from TDS deducted but not paid and remanded the matters to the respective Assessing Officers for fresh consideration, allowing the assessees to produce records to satisfy the officers about the TDS deduction. The assessees' claims for TDS credit were allowed, including the issue of refunds, with appropriate rectification or deletion of demands.
The Bombay High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it merely because the deductor failed to deposit the amount. Upon verification, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced against the deductee. The Court also held that the absence of Form 16 or Form 16A is not by itself fatal; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the Department to follow specific procedures when an assessee applies for TDS credit where tax was deducted but not paid, including acknowledging the application, keeping the demand in abeyance, marking the demand appropriately in the system, undertaking factual verification, and passing a reasoned order expeditiously. For the present batch of matters, the Court set aside the orders/intimations to the extent they raised a demand on account of TDS deducted but not paid, and remanded them to the respective Assessing Officers for fresh consideration, directing the petitioners to produce records to satisfy the officers about the TDS deduction.
The Bombay High Court held that where tax has been deducted at source from an assessee's income or payment, the Department cannot deny the deductee credit for it merely because the deductor failed to deposit the amount. Upon verification of prima facie supporting material, appropriate TDS credit must be granted, and the corresponding demand cannot be enforced or continued against the deductee, in line with Section 205 of the IT Act. The Court further held that the absence of Form 16 or Form 16A is not by itself fatal to a claim for TDS credit; deduction can be established by other cogent material such as salary slips, bank statements, payment advices, ledgers, invoices, rent records, correspondence, insolvency claims, and other surrounding evidence. The Court directed the jurisdictional Assessing Officer to register applications for TDS credit where tax was deducted but not reflected in Form 26AS due to deductor's default, keep the demand in abeyance, undertake factual verification, and pass a reasoned order preferably within six months. In the present batch of matters, the Court set aside the orders/intimations raising demands on account of TDS deducted but not paid and remanded them to the respective Assessing Officers for fresh consideration, allowing the petitions and directing the respondents to verify claims, grant TDS credit, and make appropriate corrections.
The High Court held that the ITAT's finding that the Assessee held the landed property as an investment and that its disposal would not convert a capital accretion into an adventure in the nature of trade was valid. The Court agreed with the ITAT's conclusion that the Assessee treated the landed property as an investment acquired over the years and did not engage in any commercial activity with reference to such land. The ITAT noted that the Assessee sold the land upon noticing favourable market conditions and fetched a good price, which did not justify the AO's action of treating the activities as an adventure in the nature of trade. The Court found no infirmity in the ITAT's impugned order giving rise to any substantial question of law. The Assessee's primary business was medical, and real estate transactions were not frequent or substantial, nor allied to the medical business. Properties were held for a low holding period, indicating an intent for long-term capital gain rather than trading. The Assessee had sufficient family funds, and no external borrowings were used for property investment, which is typical of commercial trading. The Assessee devoted less time to property transactions compared to their medical business. Crucially, the properties were never treated as stock-in-trade, and no evidence of advertising, development plans, or typical real estate trader activities was found.
The High Court agreed with the findings of the CIT(Appeals) and the ITAT. It held that the assessee, as a special purpose vehicle for road construction on a BOT basis, had a present obligation to incur future expenditure for major maintenance of the road, as evidenced by the Concession Agreement with the Government of Maharashtra. The agreement, along with a maintenance manual, indicated a requirement for major overhauling every 8 years. The CIT(Appeals) and the Tribunal found that the provisions made by the assessee were based on reliable estimates and a scientific assessment of the expenditure required to discharge this contractual liability. The ITAT had accepted the CIT(Appeals)'s view that if a business liability has definitely arisen in the accounting year and can be estimated with reasonable certainty, it should be allowed as a deduction, even if quantified and discharged later. The court found no substantial question of law arising from the ITAT's order, which upheld the assessee's claim for deduction of provisions for major repairs based on estimations supported by the contract and scientific assessment.
The High Court allowed the writ petition. The Court found that the Income Tax Department's attachment order, despite being dated December 17, 2018, was not given priority over the Petitioner's charge as a secured creditor. The reasoning was based on the Full Bench judgment in Jalgaon Janta Sahakari Bank Limited, which emphasized the procedural requirements for a valid attachment, including the issuance of a proclamation. The Court noted that the affidavit in reply filed by the Income Tax Department did not aver whether any steps beyond issuing the order of attachment were taken, such as beating of drums or affixing copies in customary modes, or if the order was displayed on the notice board of the Talathi office. The affidavit was also silent about compliance with specific steps mentioned in paragraphs 152 and 153 of the Full Bench judgment. Therefore, the Court held that simply ordering attachment without taking steps towards proclamation would not grant priority to the Income Tax dues over the secured creditor's dues under the SARFAESI Act, even if the attachment order predated the registration of the Petitioner's security interest with CERSAI. The Court also noted that the Income Tax Department had not registered its claim/attachment order with CERSAI. Consequently, the Petitioner, as a secured creditor, was held to have priority, and the encumbrance/charge of the Income Tax Department on the property ought not to prevail over the Petitioner's charge. The Petitioner was granted clear title to the secured asset upon sale. The Court clarified that this did not preclude the Income Tax Department from recovering its dues from other assets of the borrower.
The High Court held that the application for speaking to the minutes, seeking correction of the appearance recorded for the Respondent in the Judgment and Order dated 28.07.2026, should be allowed. This decision was made by consent of both parties. The court directed that the necessary corrections be carried out in the aforementioned judgment and order and that the corrected version be uploaded. The operative direction was to amend the previous order. No substantive tax issues were decided, and no specific tax provisions were discussed or interpreted.
The High Court held that the Petitioner's case is squarely covered by proviso (ii)(b) to Section 276CC of the Income Tax Act, 1961. The Court noted that the Petitioner is entitled to a refund of Rs. 1,64,340/-, which means there is no tax payable by him, and consequently, no loss to the revenue. The reasoning was based on the Supreme Court's decision in Guru Nanak Enterprises, where a similar situation involving a low tax liability (Rs. 1,360/-) led to the quashing of proceedings. The Court found that the prosecution was unwarranted and amounted to an abuse of the process of law. Therefore, the criminal prosecution was quashed, and the Writ Petition was allowed in terms of prayer clause (a). The Court also noted that the Commissioner of Income Tax failed to consider the TDS amount of Rs. 2,54,788/- when sanctioning the prosecution.
The High Court held that the assessment proceedings were vitiated by foundational jurisdictional errors under Sections 144C and 144 of the Income Tax Act, 1961, apart from a lack of proper jurisdiction in Respondent No. 1 and patent arbitrariness on merits. The Court found that the Assessing Officer had arbitrarily brushed aside the Petitioner's submissions that only one property was purchased for Rs. 50,00,000/-, with a stamp valuation of Rs. 51,15,200/-, and that the source of funds was explained through remittances from UAE into the Petitioner's NRE account. The Court noted that the Assessing Officer incorrectly observed that the assessee had not furnished documentary evidence and had not produced bank statements, and that the assessment was completed on the basis of available information due to expiring limitation, which demonstrated a wholly arbitrary approach. The Court was not persuaded by the Revenue's submission for remand, finding that the transaction was reported multiple times, the source of one purchase was duly explained, and therefore, the value of the transaction could not be added as income from other sources. Citing its own decision in Kedaara Captial Fund II LLP vs. Assessment Unit, National Faceless Assessment Centre (NFAC), Delhi, the Court exercised its discretionary jurisdiction under Article 226 to quash the impugned Assessment Order, Notice of Demand, and penalty proceedings, rather than remanding the matter. The Court found that the assessment order was completely illegal and prima facie without jurisdiction.
The High Court held that all the listed Writ Petitions and Civil Applications are to be transferred to the Principal Seat of the High Court. This decision was made in compliance with the judgment delivered by the Hon’ble Supreme Court of India on April 10, 2026, in the case of Income Tax Officer, Ward 2(1), Chandigarh vs. Tej Pratap Singh, along with connected Special Leave Petitions. The Court directed the Registry to effectuate this transfer. Furthermore, the Court considered the Civil Applications seeking amendments to the Writ Petitions due to subsequent events. For the reasons stated in these applications, the Court allowed them in terms of prayer clauses 'B' and 'C', directing that necessary amendments be carried out within four weeks of the matters being received at the Principal Seat.
The High Court dismissed the appeal filed by the Revenue. The Court relied on the Supreme Court's decisions in Samarth Lifters Private Ltd. Vs. DBN Geotechnics & Construction Private Limited & Anr., Vaibhav Goel & Anr Vs. Deputy Commissioner of Income Tax & Anr., and Ghanshyam Mishra & Sons Pvt.Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd. The Court held that once a Resolution Plan is approved by the NCLT under Section 31(1) of the IBC, all claims not part of the plan stand extinguished. The Revenue had not lodged any claim before the Committee of Creditors or the NCLT during the CIRP. Therefore, even if the Revenue were to succeed in its challenge to the CIT(A)'s order and a tax demand were to revive, such a claim could not be enforced unless it had been duly lodged and considered in the insolvency proceedings. Having failed to do so, the Revenue could not recover the alleged dues outside the approved Resolution Plan. The Court found that the questions of law sought to be raised by the Revenue were academic and no question of law arose for consideration in the given facts and circumstances. The dismissal of a Review Petition by the Supreme Court in Vaibhav Goel & Anr further solidified this legal position.
The High Court found substantial merit in the Petitioner's argument. It observed that the impugned order, particularly paragraph 6, clearly indicated that the Principal Commissioner had failed to consider the documentary evidence filed by the Petitioner during the revision proceedings. This evidence included a cash transaction summary, an appointment letter dated October 1, 2016, and delivery challans for the period October 25, 2016, to November 8, 2016, all pertaining to the Petitioner's business and bank account. The Court noted that the Principal Commissioner made a mere cursory statement about the lack of reliable evidence without addressing the specific documents filed. Given that the assessment order was ex parte and the evidence was not before the Assessing Officer when the assessment was made, the Court deemed it appropriate to remand the matter back to the Assessing Officer for a fresh consideration of the submissions and evidence. The impugned order under Section 264 and the assessment order under Section 144 were quashed and set aside.
The High Court found that the assessment proceedings culminating in the impugned Assessment Order appeared to have been completed without granting the Petitioner a fair and effective opportunity to respond to proposed additions. This was due to disputes with the Petitioner's Auditor, who resigned on January 21, 2022. Notices issued by the Respondents on the Auditor's email ID were not effectively communicated to the Petitioner. Consequently, the Court was satisfied that the Petitioner did not receive an adequate opportunity to present its explanation and supporting documents. The Court clarified that it had not examined the rival contentions on merits, including the validity of service under Rule 127, and these were expressly left open. The Court quashed and set aside the impugned Assessment Order and Notice of Demand, restoring the assessment proceedings to the Assessing Officer's file. The Assessing Officer was directed to provide an adequate opportunity for the Petitioner to file replies and documents, grant a personal hearing via video conferencing, and then pass a fresh speaking order within four months.
The High Court held that the impugned Assessment Order was clearly barred by limitation and thus bad in law. The Court found that the crucial fact was the date on which the Assessing Officer received the valuation report. Based on the Revenue's submission that the report dated February 16, 2022, was received on February 25, 2022, the Court calculated that the sixty-day period available for passing the Assessment Order would expire on April 26, 2022. The Court emphasized that the date of the order (April 13, 2022) was of no consequence when it was actually signed on May 26, 2022. An order comes into operation upon its signing, not its preparation. Therefore, the order dated May 26, 2022, was beyond the extended limitation period. The Court quashed and set aside the impugned Assessment Order and all consequential orders/proceedings. The Writ Petition was allowed in terms of Prayer Clause (a).
The High Court held that the impugned order passed by the ITAT required to be quashed and set aside. The appeals were allowed on the questions of law raised, and the delay in filing the appeals was condoned. The appeals were restored to the file of the CIT(A) to decide the appeals on merit. The reasoning was based on the pronouncements of various Supreme Court judgments, including Collector (LA) v. Katiji and Esha Bhattacharjee v. Raghunathpur Nafar Academy, emphasizing a liberal approach to condone delay when substantial justice is paramount and the delay does not indicate negligence or abandonment of the claim. The Court noted that the delay was primarily due to an inadvertent error by the assessee's Chartered Accountant in filing the required form. The Court applied the principle that justice on merits is to be preferred over technicalities that scuttle a decision on merits. The Court also referred to N.L. Abhyankar, Municipal Council, Ahmednagar v. Shah Hyder Beig, and Mool Chandra v. Union of India, highlighting that the real test for exercising discretion in condoning delay is not the physical running of time but whether the delay indicates negligence or has led to the disturbance of third-party rights without reasonable explanation. The Court found that the delay in this case did not fall into such categories and that the assessee's explanation was reasonable. The Court condoned the delay and directed the appeals to be heard on merits by the CIT(A).