Section 253 of the Income Tax Act
Income-tax Act, 2025: s.362
Section 253 of the Income-tax Act, 1961 corresponds to section 362 (Appeals to Appellate Tribunal) of the Income-tax Act, 2025.
Read section 362 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 253 is Shivsagar Veg Restaurant v. ACIT (317 ITR 433), cited in 202 of the 1,318 judgments on BharatTax that turn on this section.
Leading authorities on Section 253
Orders that are inordinately delayed are liable to be recalled and heard afresh, and the Appellate Tribunal President should frame guidelines for timely disposal of appeals.
When the valuation of closing stock is adjusted to include CENVAT or Modvat credit under Section 145A, a corresponding adjustment must also be made to the opening stock.
The Commissioner (Appeals) has the power to enhance an assessment under section 251(2) of the Income Tax Act, 1961, provided the assessee has been given a reasonable opportunity of being heard.
The Income Tax Appellate Tribunal cannot enhance an assessment or take back a benefit granted to an assessee by the Assessing Officer. The Tribunal's power under section 254(1) is not to enhance the assessment.
Interest paid on borrowed funds is not allowable as a deduction under Section 36(1)(iii) of the Income-tax Act to the extent such funds are diverted to provide interest-free advances for non-business purposes, such as to sister concerns or promoter companies.
When an assessee has mixed funds from both own sources and borrowings in a cash credit account, the debit balance is presumed to have been met from the company's own funds. This principle is applied to assess the allowability of interest deduction under Section 36(1)(iii) for capital borrowed for business purposes.
A judicial decision is authority only for what it actually decides, which is its ratio decidendi, and not for every observation or what logically follows from general expressions. A decision must be read as applicable to the facts proved, with general expressions qualified by the specific context in which they are found.
Gains from the indirect transfer of shares in a foreign company holding Indian shares are not taxable in India under the relevant tax treaty, which is considered a self-contained code to be interpreted plainly. Creating corporate structures or special purpose vehicles for investment to secure tax benefits is a legitimate business activity.
The power to impose penalty under section 271 of the Income-tax Act depends on the Assessing Officer's satisfaction, which must be recorded during the proceedings. If the officer is not satisfied and has not recorded this satisfaction, the penalty cannot be exercised.
Income from a deferred VAT rebate granted by a state government for sales tax incentives is not considered income derived from an industrial undertaking and is therefore not eligible for deduction under Section 80IC.
