“Section 13(3)(ii)”
The decision most relied on for Section 13(3)(ii) is (ii) CIT v. Hindustan Bulk Carriers (3 SCC 57), cited in 131 judgments on BharatTax.
Leading authorities on Section 13(3)(ii)
Courts must reject interpretations that defeat the plain intention of the legislature, even if language is imprecise. A statute must be read as a whole, construing provisions harmoniously to avoid rendering any part otiose or a dead letter.
The absence of a specific limitation period for recovery of duty or tax does not, by itself, render a rule arbitrary or unconstitutional under Article 14, provided authorities act with expedition and adhere to principles of natural justice.
OECD Transfer Pricing Guidelines can be referred to for resolving transfer pricing disputes in India, even though India is not an OECD member, provided they are consistent with Indian statutory regulations. Availability of exemption under Section 10A does not bar the applicability of Section 92C and 92CA.
Disallowance under Section 14A of the Income-tax Act, 1961 cannot exceed the actual amount of exempt income earned by the assessee during the relevant previous year. This principle applies to assessment years prior to the amendment by Finance Bill 2022.
Salary received by a non-resident for services rendered outside India accrues outside India and is not taxable in India. Only salary earned for work performed in India is regarded as income arising in India and is taxable.
Charging fees, even when having regard to the economic status of beneficiaries, is permissible for the sustenance of charitable activities, provided it is necessary for operation and running expenses and does not amount to carrying on trade or commerce. This applies even after the introduction of the proviso to Section 2(15) of the Income Tax Act, 1961.
Once an Assessing Officer forms a reason to believe that income has escaped assessment and issues a notice under section 148, they can assess or reassess income related to other issues not originally included in the reasons recorded.
The burden of proof lies on the Assessing Officer (AO) to establish that a trust or charitable institution is hit by the provisions of Section 13. General allegations or mere transactions with interested persons are insufficient unless concrete benefit is proven.
