“Section 295(1)”
The decision most relied on for Section 295(1) is 295 ITR 105 (Del) CIT v. Dharam Pal Prem (303 ITR 95), cited in 121 judgments on BharatTax.
Leading authorities on Section 295(1)
Statements recorded under Section 131 of the Act do not hold evidentiary value and cannot be relied upon to draw adverse inferences against the assessee, especially without corroborative evidence or proper enquiry.
A statutory corporation undertaking activities that generate income qualifies as a charitable entity under Section 2(15) if its dominant object is general public utility and it is legally obligated to apply its income solely for that purpose, even if the activities appear to be in the nature of trade or business. Such an entity is entitled to registration under Section 12A and exemptions under Section 11.
Penalty under section 271(1)(c) cannot be levied solely on the basis of findings in the assessment proceedings. The Assessing Officer must discharge the burden of proving concealment or inaccurate particulars with additional material.
Procedural law serves as an aid to justice, not an obstruction, and should not ordinarily be construed as mandatory; it is subservient to substantive justice.
The computation of deduction under Section 80HHC requires applying the formula: Profits derived from exports = (Profits of the business x Export Turnover) / Total Turnover. For this calculation, miscellaneous income, sundry sales, and income from services, if not directly relatable to export activity, are generally to be excluded from "profits of the business" and "total turnover".
Excess stock of regularly traded items or excess cash, when found during a survey and properly explained as arising from business, constitutes business income, thereby avoiding assessment under sections 69, 69A, 69B and the higher tax rate prescribed by section 115BBE.
Assessment orders passed by an Assessing Officer are liable to be set aside if they disregard binding instructions or circulars issued by the Central Board of Direct Taxes (CBDT), especially concerning the selection of returns for scrutiny. The CBDT circulars are binding on all officers of the Income-tax department.
Penalty proceedings under Section 271D or 271E are not justified if no regular assessment order has been framed; merely processing a return under Section 143(1)(a) is insufficient to initiate such penalty action.
