“Section 295(2)”
The decision most relied on for Section 295(2) is CIT v. Gujarat Maritime Board (295 ITR 561), cited in 98 judgments on BharatTax.
Leading authorities on Section 295(2)
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.
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.
Proceedings under section 147 can be initiated if the Assessing Officer has reason to believe that income has escaped assessment. The satisfaction required for initiating reassessment proceedings under section 147 must be that of the Assessing Officer himself, based on recorded reasons, and any satisfaction required under section 151 must be endorsed on the Assessing Officer's reasons.
A mistake apparent from the record that prejudices a party is rectifiable under section 254(2) of the Act.
Obsolete inventory can be written off at 10% of its cost if supported by a certified auditor's report, even if sold at a lower price in the subsequent year. Interest income earned from customers is considered business profit for Section 80HHC deductions if it's inextricably linked to the business.
Interest paid by an Indian branch of a bank to its head office or overseas branches is chargeable to tax in India, even when tax treaty provisions and the assessee's contentions are considered.
If an Assessing Officer has raised questions and considered an issue during assessment proceedings, the fact that the issue is not discussed in the assessment order does not automatically mean the Assessing Officer did not apply their mind. A revisional authority cannot direct a fuller inquiry if the Assessing Officer has already conducted a proper inquiry and adopted a possible view.
