Case Studies of Landmark Income Tax Judgments | TaxPundit

The High Court at Calcutta, in WPO 212 of 2026, allowed the writ petition of Pricewaterhouse Coopers Private Limited challenging the Assessment Order dated March 30, 2026 passed under Section 143(3) of the Income Tax Act, 1961 for AY 2024-25. The court found that the assessee was not given an effective opportunity of hearing, as the show cause notice was issued on March 28, 2026 requiring reply by March 30, 2026, and the order was passed on the same day without proper consideration of the replies. The court rejected the revenue’s argument of alternative remedy, citing established exceptions for violation of natural justice. The assessment order, along with consequential demand and penalty proceedings, was quashed and set aside, and the matter was remanded to the Assessing Officer for fresh assessment after providing a meaningful opportunity of hearing. The court directed completion within eight weeks.

The assessee, Versuni India Home Solutions Ltd., challenged the assessment order for AY 2020-21 as time-barred. The DRP issued directions on 27.06.2024, so the final order had to be completed by 31.07.2024 per section 144C(13). The Assessing Officer signed the order on 31.07.2024 but emailed it to the assessee only on 21.08.2024. The Tribunal, referring to the E-Assessment Scheme, 2019 and judicial precedents, held that ‘completion’ requires the order to be communicated to the assessee. Since it was dispatched beyond the limitation period, the order is invalid. The appeal was allowed.

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, allowed the appeal of M/s. Padmavati Developers, a partnership firm, against the addition of Rs. 11,16,500/- made under section 56(2)(x)(b)(B) of the Income Tax Act, 1961 for Assessment Year 2018-19. The addition arose from the difference between the purchase consideration of Rs. 1,50,00,000/- and the stamp duty valuation of Rs. 1,61,16,500/- (7.44% variation). The Assessing Officer and CIT(A) had held that the enhanced tolerance limit of 10% introduced by Finance Act, 2020 applies prospectively from A.Y. 2021-22. However, the ITAT, following a consistent line of its own decisions (Sunil B. Dalal, Glory Shipmanagement, Balkrishna Venkappa Bhandary, NRB Developers), held that the amendment is curative and retrospective. The Tribunal distinguished the Supreme Court’s decision in Vatika Township, noting that beneficial provisions may be given retrospective effect. Consequently, the addition was deleted. The appeal was allowed.

This appeal by the assessee challenged the CIT(A)’s order upholding a rectification under section 154 of the Act, which sought to disallow bonus to directors under section 36(1)(ii) based on the tax audit report. The ITAT allowed the appeal, holding that the rectification was invalid because it required a detailed inquiry beyond an apparent mistake. The Tribunal followed the Supreme Court’s landmark decision in T.S. Balram vs. Volkart Brothers, which mandates that section 154 rectification is only for correcting obvious errors. Consequently, the impugned rectification was quashed, and the other grounds were not adjudicated.

The Income Tax Appellate Tribunal, Delhi, allowed the appeals of three assessees against the assessment orders under section 153C of the Income Tax Act, 1961. The searches were conducted on Shri Sumit Jindal, and incriminating material was found. The Assessing Officer issued notices under section 153C based on an omnibus satisfaction note that did not identify year-wise incriminating material or explain how the seized documents had a bearing on the assessee’s income. The ITAT, following the decision of the Supreme Court in ACIT v. Kishore Kumar Sharma, held that such a satisfaction note is invalid, and the proceedings under section 153C are vitiated. The assessment orders were quashed. The Tribunal did not adjudicate on other grounds as the legal ground alone was sufficient to allow the appeals.

DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE (HQ… vs GAMESKRAFT TECHNOLOGIES PRIVATE LIMITED AND ORS. SHARE CASE STUDY:WhatsAppLinkedInFacebookTwitter / X In this Case Study Intro Facts Reasoning Nature of Betting and Gambling GST Framework

The Income Tax Appellate Tribunal, Delhi Bench, in S & P Global Ratings Singapore Pte. Ltd. v. ACIT, allowed the assessee’s appeal. The Tribunal held that income from credit rating and annual surveillance services provided by the Singapore-based company to Indian clients is not taxable as royalty or fee for technical services under the India-Singapore Double Taxation Avoidance Agreement (DTAA) or the Income Tax Act, 1961. The Tribunal observed that the services do not involve the transfer or making available of any technical know-how, commercial experience, or secret process. The assessee merely provides a rating opinion based on its expertise, and the clients do not acquire any right to use the underlying methodology. Following the precedent in ICICI Bank Ltd. v. DCIT (2008), the Tribunal deleted the addition of Rs. 73,22,67,191 and allowed the appeal.

This judgment by the Income Tax Appellate Tribunal, Mumbai B Bench, dismisses two appeals filed by the Revenue against the CIT(A)’s order deleting additions made in reassessment for AYs 2016-17 and 2018-19. The core legal issue pertained to the validity of reassessment notices issued under section 148 after the expiry of three years from the end of the relevant assessment years. The Tribunal held that the approval under section 151(ii) was required from the Principal Chief Commissioner, not the Principal Commissioner, and the failure to obtain such approval from the specified authority rendered the reassessment proceedings void ab initio. The Tribunal relied on binding decisions of the Bombay High Court and the Supreme Court’s dismissal of the Revenue’s SLP, thereby confirming the CIT(A)’s order. The appeals were dismissed on this legal ground, with other issues left open.