“Section 163(1)”
The decision most relied on for Section 163(1) is Madras in Venkatakrishna Rice Co. v. CIT (163 ITR 129), cited in 95 judgments on BharatTax.
Leading authorities on Section 163(1)
The expression 'prejudicial to the interests of the revenue' under Section 263 of the Income Tax Act involves acts or orders that are subversive of the administration of revenue. This requires a grievous error in the Assessing Officer's order that might set a bad trend or pattern for similar assessments.
This case established a principle regarding the application of Double Taxation Avoidance Agreements (DTAAs) versus domestic tax law, particularly concerning the use of more beneficial provisions for an assessee, though its specific impact has been nullified by subsequent legal amendments.
Income received by a trust from sources like extra fees can be taxed at the maximum marginal rate, while other income remains eligible for exemption under Section 11 of the Income Tax Act.
An Assessing Officer, when disbelieving an assessee's explanation, must issue summons to the relevant parties for independent verification. No adverse inference can be drawn against the assessee without such an inquiry.
Additions to income based on alleged foreign bank accounts during a section 153A assessment are invalid if no incriminating material was found during the search and prior assessments were already completed.
The Income Tax Officer has a duty to assist the assessee in producing evidence by exercising powers such as summoning parties, and an assessee is prejudiced if this duty is not fulfilled.
Dividend income derived by an Indian resident from a foreign company is not liable to be taxed in India if the applicable Double Taxation Avoidance Agreement (DTAA) provides for such exemption.
A CBDT notification issued under section 90(3) of the Income-tax Act is clarificatory in nature and effective from April 1, 2004, the date section 90(3) was introduced.
