Section 61 of the Income Tax Act
Income-tax Act, 2025: s.97
Section 61 of the Income-tax Act, 1961 corresponds to section 97 (Chargeability of income in transfer of assets) of the Income-tax Act, 2025.
Read section 97 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 61 is (CIT v. Cochin Co. Pvt. Ltd. (104 ITR 655), cited in 32 of the 82 judgments on BharatTax that turn on this section.
Leading authorities on Section 61
A protective assessment is permissible when the assessing officer has doubt regarding who is in receipt of income, but a recovery based on a protective assessment is not allowed. If an assessment is intended to be protective, it must be clearly stated as such.
When reopening an assessment, the assessing officer must provide the assessee with a copy of the superior officer's approval, including their comments, name, designation, and date, not merely state the reasons in a letter. This ensures transparency in the reassessment process.
A protective assessment is permissible only at the initial assessment stage, as higher appellate or revisional authorities can definitively determine the liable assessee.
A protective assessment must be expressly stated as such by the Income Tax Department. It is made out of abundant caution when there is doubt as to who has received the income.
The decision in ADIT vs Legg Mason Sia (Ex Japan) Analyst Fund and Capital International Emerging Markets Funs vs DIT supports the assessee where non-STT paid funds are concerned.
