“Section 119(1)”
The decision most relied on for Section 119(1) is PCIT v. Sapna Gupta (147 Taxmann.com 288), cited in 591 judgments on BharatTax.
Leading authorities on Section 119(1)
Approval under Section 153D for search assessments is not a mere formality; it requires the approving authority to apply its mind judiciously to the subject matter and ensure satisfaction of legal and procedural requirements for each assessment year.
Approval under Section 153D of the Income Tax Act is mandatory for assessment orders in search cases. While elaborate reasons for approval are not required, the approving authority must provide some indication that it has examined the draft orders and found them to meet the requirements of law.
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.
Strict adherence to approval protocols under Section 153D, including those in the Departmental Manual of Office Procedure, is essential for search assessments. An assessment is invalid if the approving authority fails to apply its mind or consider all relevant seized material before granting approval.
Late fees under section 234E can only be levied prospectively from June 1, 2015. Levying late fees for periods prior to this date is not permissible.
The requirement to file a certificate or form (e.g., Form 10CCB, 10-IC) along with the return of income for claiming a deduction (e.g., under sections 80-IB, 115BAA) is directory regarding its timing. Such a deduction is allowable if the requisite form is filed before the final order of assessment, as procedural requirements should not override substantive benefits.
The requirement to file an audit report along with the income tax return, as specified in provisions like Section 80J(6A) or 80-IA(7), is directory and not mandatory. Substantial compliance is achieved if the audit report is submitted at any time before the assessment is framed or completed, and benefits should not be denied merely due to a delay in furnishing it.
Exemption provisions under Chapter III, such as Section 10B(8), must be interpreted strictly, and any claim for such exemptions must be made in the return of income. The principles governing Chapter III (incomes not forming part of total income) differ from those for Chapter VIA (deductions in computing total income).
