Section 115BBG of the Income Tax Act
Income-tax Act, 2025: s.194
Section 115BBG of the Income-tax Act, 1961 corresponds to section 194 (Tax on certain incomes) of the Income-tax Act, 2025.
Read section 194 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 115BBG is CIT v. My Home Power Ltd. (365 ITR 82), cited in 123 of the 37 judgments on BharatTax that turn on this section.
Leading authorities on Section 115BBG
Receipts from the sale of carbon credits are capital receipts, not business income, as they arise from environmental concerns and not from business operations. Such receipts are not taxable under Sections 2(24), 28, 45, or 56 of the Act, especially prior to the introduction of Section 115BBG.
Receipts arising from the sale of Carbon Emission Reduction (CERs) or carbon credits are capital receipts, not revenue receipts, for assessment years preceding the introduction of Section 115BBG.
If a property is not let out at all, notional income must be computed, and the benefit of section 23(1)(c) (vacancy allowance) cannot be extended. However, section 23(1)(c) can apply to properties let out for two or more years that remain vacant for the entire previous year.
Courts must interpret taxing statutes strictly based on the literal wording, disregarding considerations of hardship, injustice, or equity. No room exists for implication or intendment when interpreting tax laws.
An assessee is permitted to correct or modify a deduction once claimed under a particular section, as the Income Tax Act does not debar such modifications. The Assessing Officer retains the authority to examine the deduction claim and make necessary additions or disallowances.
A capital receipt, not falling within the definition of 'income' under Section 2(24), cannot be brought to tax under the Minimum Alternate Tax (MAT) provisions of Section 115JB, even if it relates to incentives like interest or power subsidy.
Courts and tribunals cannot extend relief if the legislative intent is otherwise clear. Once an assessee falls within the letter of the law, they must be taxed regardless of perceived hardship.
Courts and tribunals cannot extend relief against explicit legislative intent, even if hardship results. The plain text of a tax law must be followed.
Courts and tribunals cannot extend relief against statutory provisions when the legislative intent is clear, adhering strictly to the letter of the law even if it appears to cause hardship.
Courts and tribunals cannot grant relief that contradicts legislative intent, even if it appears harsh, as the law must be applied as written.
