Latest Updates on Income Tax, GST & Corporate Law: 1 February 2025
Income Tax
Update-1: Tax on income from house property to be levied basis who derived benefit from property: Delhi High Court
The High Court overturned the ITAT’s decision, ruling that the Income Tax Act does not assume equal ownership solely based on a person’s name in the property deed. It emphasized that taxation under Section 22 should be focused on identifying the person entitled to receive income from the property rather than just the legal owner.
The Bench referenced a Supreme Court ruling, stating: “The focus for taxation purposes is to determine who actually receives the income.”
The court also highlighted the distinction in the Income Tax Act between income derived from house property and an interest in property. Consequently, the appeal was allowed, with the court noting: “The Tribunal and authorities below proceeded on the incorrect assumption that since the appellant was a signatory to the sale deed, the income should be deemed to arise in her hands to the extent of 50%.”
Update-2: TDS credit should be granted if the related income has been reported for taxation, subject to verification.
In a recent update, in the case of DCIT (Exemptions) Vs Deendayal Port Authority Administrative Officer, the Income Tax Appellate Tribunal (ITAT) Ahmedabad upheld the Commissioner of Income Tax (Appeals) [CIT(A)]’s decision to allow ₹168.61 crore as TDS credit to Deendayal Port Authority Administrative Officer for AY 2019-20. The Revenue had contested this, arguing that the credit should be limited to ₹165.66 crore, as originally claimed in the ITR. However, the assessee cited an updated Form 26AS, reflecting a higher credit due to delayed payments and revised TDS filings by Port users.
The CIT(A) accepted this explanation and instructed the Assessing Officer (AO) to verify and allow the correct credit. During the ITAT proceedings, the Departmental Representative (DR) admitted that the Revenue did not dispute the correctness of the TDS credit per Form 26AS. The ITAT found no fault in the CIT(A)’s order and reaffirmed that TDS credit should be granted if the related income has been reported for taxation, subject to verification. Consequently, the tribunal dismissed the Revenue’s appeal and advised tax authorities to exercise discretion in filing appeals to prevent unnecessary litigation and judicial delays.
Goods & Services Tax (GST)
Update-1: The Jharkhand high court emphasized procedural fairness in tax assessment and remitted the matter back to the Tax department
In the case of VE Commercial Vehicles Ltd. vs Union of India, the Jharkhand High Court reviewed a writ petition challenging an order issued under Section 73 of the JGST Act, 2017, for the financial year 2019-20.
The petitioner objected to the assessment order passed by the 5th respondent following ASMT-10 notices under Rule 99, arguing that it was unclear how tax liabilities in GSTR-3B returns were compared with e-way bill data, as both datasets originate from different sources and serve different purposes. The petitioner also raised concerns about the technical feasibility of such a comparison.
Despite submitting a detailed response on May 24, 2024, the respondent dismissed the objections without proper consideration, merely stating that the reply was “not satisfactory.” The court noted that ASMT-10 serves to engage taxpayers and allow their concerns to be addressed, which was not done appropriately in this case. Consequently, the court quashed the assessment order and directed the respondent to furnish a clear breakdown of the tax discrepancies within two weeks. The petitioner was granted four weeks to respond, after which a personal hearing was to be conducted.
Also Read: Key Updates on Tax & Corporate Law- 29 January 2025
