“Section 144(2)”
The decision most relied on for Section 144(2) is CIT v. Vegetable Products Ltd. (88 ITR 192), cited in 2,664 judgments on BharatTax.
Leading authorities on Section 144(2)
When two equally plausible interpretations of a taxing provision are possible, or when conflicting views exist from non-jurisdictional High Courts, the interpretation that favors the assessee must be adopted.
An appeal before the Income Tax Appellate Tribunal can be dismissed for non-prosecution or treated as unadmitted when the appellant fails to appear, cooperate, or show diligence, in accordance with Rule 19(2) of the Income-tax (Appellate Tribunal) Rules. The law aids the vigilant, not those who sleep on their rights.
The Commissioner of Income-tax (Appeals) cannot dismiss an appeal for non-prosecution or default in appearance. Under Section 250(6) of the Income-tax Act, the CIT(A) must decide the appeal on its merits, even in an ex parte proceeding.
When the cost of acquisition of a capital asset cannot be determined, the computation mechanism for capital gains fails, and thus no capital gains can be charged. This establishes a broader principle that a charging section cannot operate in the absence of specific machinery provisions for computation.
The issuance of a notice under Section 143(2) within the statutory time limit is mandatory for completing an assessment under Section 143(3), and the failure to do so renders the assessment invalid. This defect is not curable under Section 292BB of the Income Tax Act, 1961.
CBDT and CBEC circulars, along with administrative instructions, are binding on departmental authorities, who must not act in contravention of them. However, these circulars and instructions are not binding on courts or assessees.
The discount arising from the grant of Employee Stock Option Plans (ESOPs) is an allowable business expenditure under Section 37(1) of the Income-tax Act, 1961, as it is an ascertained liability, not a contingent one, and constitutes a revenue expense rather than a capital expense.
A notice issued under section 148 to a non-existent entity, such as an amalgamating company post-merger, is a substantive illegality, rendering assessment proceedings void ab initio. Participation in such proceedings does not estop the assessee from challenging the validity of the notice.
