Delay in Filing Forms under Income Tax Rules, 1962 : High Court Allows Writ Petition and Quashes Tax Department's Order

Delay in Filing Forms under Income Tax Rules, 1962 : High Court Allows Writ Petition and Quashes Tax Department's Order

Allowing the writ petition dealing with delay in filing Form 10B and Form 10, it was noted that as regards delay in filing Application for Condonation of Delay is concerned, after perusing the record of the appellate proceedings annexed to the Writ Petition, there was no doubt that Z was bonafidely pursuing its appellate remedies against the Intimation under Section 143(1) of the Income-tax Act, 1961 and subsequently preferred to file an Application before Tax Commissioner whilst the appeal proceedings were ongoing. 

Dakuben Saremalji Sancheti (Nadol Charitable Trust v. CIT (E) [2025] GCtR 1902 (Bombay)

Tax / Income Tax : Role and Power of Income Tax Department in Reopening the Income Tax Assessments under Income-tax Act, 1961

Tax / Income Tax : Role and Power of Income Tax Department in Reopening the Income Tax Assessments under Income-tax Act, 1961

The decision of CIT v. Kelvinator of India Ltd [2010] GCtR 5571 (SC) has explained noting Direct Tax Laws (Amendment) Act, 1987 and S.147 of Income-tax Act, 1961, that from the changes made to Section 147 of the Income-tax Act, 1961 it can be noted that prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment.

Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words “reason to believe” failing which Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion”, which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess.

But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of “change of opinion” as an in-built test to check abuse of power by the Assessing Officer. 

Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. This view gets support from the changes made to Section 147 of the Act. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words “reason to believe” but also inserted the word “opinion” in Section 147 of the Act.

Parliament re-introduced the said expression and deleted the word “opinion” on the ground that it would vest arbitrary powers in the Assessing Officer.  

Income Tax (No.2) Bill, 2025 : Essential Features [Part 1]

 Income Tax (No.2) Bill, 2025 : Essential Features [Part 1]

S.2 (5) defines "agricultural income". 

S.2 (20) defines "Business".

S.2 (48) defines "hearing" ; it includes communication of data and documents through electronic mode.

S.2(49) defines income. It says in S.2(49)(d) that income includes value of perquisite or profit in lieu of salary taxable under Sections 17 and 18. 

S.2 (100) defines a senior citizen means an Indian resident individual citizen of 60 years and above.

S. 2(101)(a) is useful to understand short term capital asset ; maximum period of 24 months and 12 months are given. 

S.13 talks about classification of income for purposes of income tax. There are 5 types of incomes. 

S.15 (4) says salary by partner of a firm shall not be regarded as salary for purposes of S.15. 

Chapter 22 of this Bill deals with offences and prosecution. S.496 (1)(a) says "shall be triable only by the Special Court". S.492 declares offences under S.476, 478, 479, 480, 482, or 484 to be deemed to be non cognizable. 

S.479 (1) uses the words "wilfully". S.479 (2) puts restriction on S.479 (1). 

S.474 on the other hand does not uses words "wilfully". S.474 simply uses "fails to do so". S. 475 uses words "fraudulently" 

Income Tax and Registration and Taxation of Trusts under Income-tax Act, 1961

Income Tax and Taxation of Trusts under Income-tax Act, 1961

Income-tax Act, 1961 - S.12A - "Income of Trusts" - T was a trust which applied for registration under S.12A - T was registered on 12.3.2010 and provisional approval was received on 22.03.2022  - After expiry of provisional registration, fresh application was filed - CIT (E) found T not eligible for registration under S.12A(1)(ac)(vi)-ITEM(B)  - Incorrect section was mentioned in Form 10AB -  It was seen that mistake on the part of the assessee, if any, had occurred in the application for provisional registration and not in the application for regular registration - Held, CIT(E) has rightly rejected the application under S.12A(1)(ac)(vi) as non-maintainable. - Gayatri Parivar Shodash Sanskar Kendra Gotri v CIT (E) [2025] GCtR 1353 (ITAT, Ahmedabad) 

Income Tax - Delay in Filing Form 10B and Its Consequences

Income Tax - Delay in Filing Form 10B and Its Consequences

In the recent case [Mirae Asset Foundation v. PCIT [2025] GCtR 1347 (Bombay)], the delay in filing Form 10B is only 24 days. The ground on which delay was not condoned by Tax Authorities is that even after the filing of Form 10B with a delay of 24 days, no application for condonation of delay was filed immediately and the same was submitted only about 9 months later. Therefore, the delay was not condoned. This was challenged by assessee.

As far as the condonation of delay is concerned, it was seen that admittedly there was only 24 days delay in filing Form 10B. It is true that the application seeking condonation of delay was filed after about 9 months. 

It was held that if this delay is not condoned, there will be genuine hardship to the Petitioner, inasmuch as, the Petitioner would be denied the exemption otherwise claimed under the provisions of Section 11 of the IT Act, 1961 and which is a substantial amount. 

In such cases, approach of the Authorities ought to be equitious, balancing and judicious and availing of exemption should not be denied merely on the bar of limitation. This is more so, when the legislature has conferred wide discretionary powers to condone the delay on the authorities concerned.