Tax laws are constantly evolving, and judicial decisions play a crucial role in interpreting and shaping their practical application. Staying updated with key rulings from courts and tribunals is therefore essential for taxpayers, professionals, and businesses alike. In this post, I have compiled some important and recent tax decisions that provide valuable clarity on contentious issues and offer meaningful guidance on compliance and litigation. These rulings highlight how the law is being applied in real-life situations and can help readers better understand their rights, obligations, and planning opportunities under the tax framework.
1. GST / Indirect Tax : “Opportunity of Hearing”
In case of Walsons Services Pvt Ltd v. STO [2025] GCtR 1732 (Delhi), since Assessee did not get a proper opportunity to be heard and no reply to the SCN issued by GST Department has been filed by the assessee, the matter was remanded back to the concerned Adjudicating Authority, as the challenge to the Notifications was pending consideration. Order imposing tax was set aside.
2. GST / Indirect Tax : Application of S.17 (5) of SGST Act, 2017 and Input Tax Credit
In case of Arraycom India Ltd v. State of Gujarat [2025] GCtR 1733 (Gujarat) it was held that it is clear from the S.17 (5) of SGST Act, 2017 that it is applicable only in cases where input tax credit has been sought in respect of motor vehicle. In this case, when it is clear that the GST Department has not considered the insurance policy of the assessee which is for stock and the property and not for motor vehicle then the findings of GST Department are contrary to the facts and hence liable to be quashed and set aside.
3. GST / Indirect Tax : Tax Department’s Notice Found without Jurisdiction & Seizure Order Quashed
In case of Gospell Press Pvt Ltd v. State of UP [2025] GCtR 1734 (Lucknow, Allahabad), the notice issued by GST Department was said to be without jurisdiction. It was held that in this case notice issued under Section 130 of the UPGST Act, 2017 cannot be issued in alleged violation of the Section 35 of the UPGST Act, 2017 and the proceedings initiated by the GST department are without any jurisdiction and law. The seizure order issued by GST Department has also been quashed.
4. GST / Indirect Tax : Effect of S.75 (7) of SGST Act, 2017 on Department’s Order
In the case of Kisan Brick Field v. State of UP [2025] GCtR 1735 (Lucknow, Allahabad) on account of violation of provisions of Section 75(7) of the UPGST Act, 2017 the Order of GST Department was found unsustainable. In this case a show cause notice was issued in Nov 2024 under S.74 ; notice was uploaded on ‘Additional Notices and Orders’ tab and the assessee, being unaware of the same, could not file any response to the said show-cause notice. A reminder was issued to the assessee fixing 27.01.2025 as the date by which the reply could be filed. However, as no appearance was made, the same led to passing of the order dated 16.02.2025 raising the tax demand which was challenged by assessee.
Assessee had argued that action of Tax Department in raising demand to the tune of Rs.6,52,259.04/- which includes penalty and interest is contrary to the show-cause notice issued to the petitioner and in violation of Section 75(7) of the Act inasmuch the same is beyond the show-cause notice wherein a demand to the tune of Rs.6,52,259.04/- against tax, interest and penalty was sought to be recovered.
It was held that a perusal of S.75 (7) of UPGST Act, 2017 would reveal that Section 75 deals with general provisions relating to determination of tax and sub-section (7) specifically stipulates that the amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice.
Admittedly, in this case, the show-cause notice merely indicates the amount of Rs.2,34,626.52/- as representing the tax, interest and penalty and the demand qua the three components has been raised at Rs.6,52,259.04/-, which was held to be ex facie contrary to the provisions of Section 75(7) of the UPGST Act, 2017.
5. GST / Indirect Tax : Principles of Refund and Avenues to Challenge Denial of Refund
In case of Century Products v. State of WB [2025] GCtR 1736 (Calcutta), a writ petition was filed with prayer to forthwith process the refund application dated 05.06.2025 and disburse the refund amount of ₹ 1,55,096/- (i.e., ₹ 77,548/- each under the heads of CGST and SGST) for the tax period of February’ 2025, along with the applicable interest for delayed disbursement of the said claim, in accordance with Section 56 of the CGST/WBGST Act read with Section 54(3)(ii) of the CGST/WBGST Act, and Rule 89 of the CGST/WBGST Rules.
But during pendency of writ petition, ultimately an order was passed by the adjudicating authority on October 31, 2025 under Section 54 of the CGST Act, 2017/WBGST Act, 2017 thereby rejecting the assessee’s request for refund.
It was held that where the petitioner had approached High Court seeking expeditious disposal of his application for refund and such application has been disposed of, the assessee should not be permitted to challenge the order disposing of the petitioner’s application for refund by way of an application.
Although in fit cases, High Court is not powerless to set aside orders passed during pendency of the writ petition notwithstanding availability of alternative remedy yet, HC was of the view that this is not such a case where HC should interfere with the order impugned on the basis of an application.
It was observed that there does not appear to be such a jurisdictional error so as to persuade HC to intervene. The very fact that the assessee applied before the relevant authority for processing and dealing with his application for refund puts it beyond doubt that the authority concerned had jurisdiction to both allow the request as well as to reject the request.
6. GST / Indirect Tax : Principles of Penalty under SGST Act & E-Way Bill Issues
In case of Sachin Jain v. State of UP [2025] GCtR 1737 (Lucknow, Allahabad), it was held that without arriving at a satisfaction regarding intent to evade tax by the assessee, the penalty cannot be imposed under UPGST Act, 2017. In this case penalty imposed because e-way bill has expired was held to be unjustified. Penalty order was quashed.
7. GST / Indirect Tax : GST Reg – 19 and Cancellation of Registration and Law
In case of Vipul Kumar Singh v. State of UP [2025] GCtR 1738 (Lucknow, Allahabad), GST Department’s action of cancelling GST Registration of assessee was set aside. It was seen that SCN dated 14th May 2024 showed that the said notice proposes for cancellation of the assessee’s GST registration under the UPGST Act, 2017. Thereafter, the order dated 19.06.2024 was passed by the GST Department, whereby the GST registration of the assessee was cancelled. Thereafter, the assessee filed an appeal under Section 107 of the GST Act, which was also dismissed on the ground of delay in submission of the appeal. The GST department was directed to issue a fresh show cause notice upon the assessee by email or by registered post. Once the same is done, the assessee should appear and after granting a personal hearing to the assessee, the necessary orders should be passed within a period of eight weeks.
8. GST / Indirect Tax : ITC Availment and Procedure to Challenge Order Imposing Tax & Penalty
In case of Samarth Traders v. Assistant Commissioner of Central Tax [2025] GCtR 1739 (Delhi), allegations related to wrongful availment of Input tax credit were made and GST Department had imposed penalty and tax on “S”. “S” invoked A.226 to file petition in HC to challenge the action of GST Department. Considering that the substantial amount of penalty has been imposed upon “S”, “S” was allowed to avail of its appellate remedy under Section 107 of the Central Goods and Service Tax Act, 2017 by 15th December along with the requisite pre-deposit. If the same is filed by 15th December, 2025, the same shall not be dismissed on the ground of limitation and shall be adjudicated on merits.
9. GST / Indirect Tax : Procedural Fairness in Matters Concerning GST
In case of Om Timbers v. State of UP [2025] GCtR 1740 (Lucknow, Allahabad), another order of GST Department was set aside by HC. The case concerns orders under S.74 of UPGST Act, 2017. It was observed that rules of natural justice ensure fairness in proceedings. Once the GST authority had fixed the matter for hearing then it was incumbent on that authority either to pass the order or to fix another date and communicate the same to the petitioner. Communication of the other date was necessary as according to the assessing authority the assessee failed to appear before it on the previous date. Upon a perusal of the documents, it was observed that the order passed by GST Department was passed ex parte and was not passed on the date fixed for hearing and for subsequent date no notice was given to the assessee.
10. GST / Indirect Tax : GST Portal and Utility of Uploading Notices
In case of Critique Communication Pvt Ltd v. State Tax Officer [2025] GCtR 1741 (Delhi) the law around uploading notices in “Additional notices Tab” in matters concerning Delhi GST Act, 2017 was explained. It was seen that the intention of law is to ensure that the Assessee is given an opportunity to file its reply and is heard on merits and that orders are not passed in default. Assessee argued that his case is that he had not received the SCN issued by GST Department and, therefore, he had no opportunity to respond to the same ; for the same reason, the assessee claimed that he had not appear for a personal hearing before the Adjudicating Authority. The matter was remanded to Adjudicating Authority and Order of GST Department was set aside.
11. GST / Indirect Tax and Cancellation of GST Registration
In case of Stalwart India Alloys Ltd v. Union of India [2025] GCtR 1747 (Delhi) issue was related to cancellation of GST Registration. It was alleged that assessee “S” was found absent from premises when inspection was done. It was held that “if an SCN does not contemplate retrospective cancellation of GST Registration, the cancellation cannot be given retrospective effect” ; as a result, cancellation of GST Registration of “S” was set aside.
12. Tax / Income Tax : Benefit and Applicability of S.12AA of Income-tax Act, 1961
In case of CIT v. Yadvindra Public School [2025] GCtR 1748 (SC), the petition filed by Tax Department was dismissed. S.12AA of Income-tax Act, 1961 deals with procedure for registration of trust or institution. The issue revolved around S.12AA of Income-tax Act, 1961 where the Order of Tax Department in refusing to register association was set aside. Assessee was held entitled to registration under S.12AA and Order of Tax Department was set aside and petition filed by Tax Department was dismissed.
13. Tax / Income Tax : Requirement of Satisfaction – Note under Income-tax Act, 1961
In case of Parag Ramesh Gathani v. ITO [2025] GCtR 1729 (Gujarat), CBDT Circular No.24/2015 was referred which was issued in light of the provisions of Section 153C of the Income-tax Act, 1961 clarifying the recording of the satisfaction note at three stages. It was categorically held that “recording of the satisfaction note in three stages apply to the proceedings under Section 153C of the Act.” The notice issued by Tax Department under S.153C of the Act was quashed.
14. Tax / Income Tax : Assessee Secures Relief in Case Involving Allegations of Bogus LTCG and S.68 of Income-tax Act, 1961
In the case of Anju Parekh v ITO [2025] GCtR 1749 (ITAT, Raipur), appeal of assessee was allowed. It was observed that the Revenue, through the order of the A.O, has not brought any direct nexus as to the colourable device being adopted by the assessee knowingly that the scrips of “NCL Research & Finance Services Pvt. Ltd.” was rigged one and also no nexus has been established vis-à-vis transaction entered into by the assessee regarding the said scrips of “NCL Research & Finance Services Pvt. Ltd.” so to suggest that it was conscious decision of the assessee to get the benefit of bogus LTCG through the transaction. The additions made under S.68 of Income-tax Act, 1961 to income were deleted.
15. Tax / Income Tax : Tax Liability on Partnership Firm Found to be Without Authority of Law
In case of Khandelwal Industries v. ITO [2025] GCtR 1750 (ITAT, Raipur), the addition made/sustained by the lower authorities was held to be misplaced, illegal and without authority of law and accordingly, the same was deleted. The case was related to S.68 read with S.115BBE of Income-tax Act, 1961 where partnership firm was the assessee. It was held that the quasi-judicial authority needs to examine and deal with merits of each of the submissions raised by the assessee and as per the mandate of Section 250 (4) & (6) of the Income-tax Act, 1961 the CIT(Appeals)/NFAC should have conducted necessary inquiry regarding the genuineness of the submissions made by the assessee that cash in hand was formed from withdrawal of amount.
16. Tax / Income Tax : Charitable Institution’s Right to Seek Registration and S.12AB of Income-tax Act, 1961
In case of Bhavnagar Dashashrimali Kantibandh v CIT (E) [2025] GCtR 1751 (ITAT, Ahmedabad), it was held that where the assessee had pursued registration under section 12AB of Income-tax Act, 1961 through multiple applications owing to procedural misunderstanding, a charitable institution’s right to seek registration should not be defeated on account of technical or procedural lapse if bona fide intent and charitable character are evident.
17. Tax / Income Tax : Legal Principles of Notice under S.148 of Income-tax Act, 1961
S.148 of Income-tax Act, 1961 deals with notice when income has escaped assessment. In the case of Lalita Agarwal v. ACIT [2025] GCtR 1752 (ITAT, Delhi), it was noted that notice under section 148 of Income-tax Act, 1961 was issued in the name of a deceased assessee stating his PAN Number. Further the assessment orders were also farmed in the name of the deceased assesse stating his PAN Number. It was held that there is no legal requirement that legal representative should report death of an assessee to the income tax department. The sustenance of a notice under section 148 of the IT Act, 1961 is the foundation stone on which subsequent re-assessment proceedings are built up. To acquire the valid jurisdiction necessarily such notices are to be addressed to the correct person and not a deceased.
18. Tax / Income Tax : ESI/PF Contributions and Income Tax Issues
In case of Crown Gaskets Pvt Ltd v. ITO [2025] GCtR 1753 (ITAT, Delhi), issue was related to PF/ESI and tax liability under S.36 (1) of Income-tax Act, 1961. The appeal of assessee was allowed. In this case, assessee has filed the revised tax report and challans for payments of PF/ESI to prove that payment was made within time, before the appellate authority. In the revised tax report correct details of the contribution of the ESI/PF were provided. It was held that CIT(A) should have considered the revised Tax Audit Report and other documents submitted by the assessee at the time of passing the order.
If the assessee has deposited the contribution of the ESI/ PF of the employees within time as stated by him, then the benefit should have given to the assessee. Such facts should be verified by the AO.
19. Tax / Income : High Court Explains Whether Filling up Forms under Income Tax Rules are Mandatory ?
In case of Swasth Foundation v. CIT [2025] GCtR 1754 (Bombay), Tax Department has passed an Order holding that that even though the mandatory electronic filing of Form No.9A started from A.Y. 2016-17 onwards, the Petitioner was still required to file Form No.9A manually (for A.Y. 2015-16) regarding the option to be exercised in clause (2) of the Explanation to Section 11 (1). By the Order of Tax Department Department also refused to condone the delay in filing Form No.9A. Consequently, the accumulation claimed by the Petitioner under clause (2) of the explanation to Section 11(1) of the Income-tax Act, 1961 has been denied to the Petitioner by the Department.
High Court observed that Assessee (“SF”) had filed its return of income for the concerned A.Y. 2015-16 within the specified extended due date, i.e. 30.10.2015. In clause 9(iv) of Part B – TI of the return of income, “SF” specified that it had exercised its option for Rs.2,21,56,903/- under Clause (2) of the Explanation to Section 11(1). Also “SF” had filed its audit report in Form No.10B before filing its return of income wherein “SF” had specified that it had exercised its option for Rs.2,21,56,903/- under Clause (2) of the Explanation to Section 11(1). Hence, HC held that there is sufficient material on record to demonstrate that Assessee had clearly expressed its intention to accumulate its income of Rs.2,21,56,903/- under Section 11(1) of the Act.
It was held that assessee was not required to file the said Form No. 9A for A.Y. 2015-16 for exercising the option referred to in clause (2) of the Explanation to sub-section (1) of Section 11 of the Act as the requirement for filing of the said Form No. 9A was introduced into the statute vide Finance Act, 2015 w.e.f. 1st day of April, 2016. However, the present case pertained to the earlier year, i.e. A.Y. 2015-16.
20. Tax / Income Tax : Search by Income Tax Department and Legality of the Panchnama
In the case of H.K. Jewels India Pvt Ltd v. ADIT [2025] GCtR 1755 (Bombay), the actions of Income Tax Department were challenged by assessee. The petition of assessee was allowed and items seized by Tax Department were directed to be released to assessee.
In this case search was conducted on 12 May 2024 but the valuation of the seized gold was done by the Income Tax Department on 17th May 2024 ; yet, the Panchanama dated 1st June 2024 records that the search commenced on 1st June 2024 at 6.15 p.m. and was concluded on the same date at 8.30 p.m. In other words, the Panchnama seems to suggest that the gold was seized on 1st June 2024. It was held that from the record, it appears that no reliance can be placed on the Panchanama of Income Tax Department and it is clear that the gold jewellery was in the custody of the Income Tax Department long before the Panchanama was prepared.
21. Tax / Income : Role, Concurrent Jurisdiction and Powers of Authorities under Income-tax Act, 1961
In case of Inder Dev Gupta v. ACIT [2025] GCtR 1756 (Delhi) the issue was related to reassessment proceedings by Jurisdictional Assessing Officer (JAO) and statutory scheme under Section 151A of the Income-tax Act, 1961 read with “E-Assessment of Income Escaping Assessment Scheme, 2022”.
It was held that the legal position stands settled in TKS Builders v. Income Tax Officer [2024] GCtR 3317 (Delhi), which though under challenge before the Supreme Court, has not been stayed.
It was held that both JAO and Faceless Assessing Officer (FAO) possess concurrent jurisdiction to initiate reassessment proceedings under Section 148 of the Income-tax Act, 1961.
22. Tax / Income Tax : Under Billing and Impact on Tax Liability
In case of DCIT v. Koya and Company Construction Ltd [2025] GCtR 1758 (ITAT, Delhi), it was noted that there was no material brought on record to show that the assessee had involved in any under billing. The assessee had consistently declared 2% margin in the project. Therefore, the addition proposed by Assessing Officer/TPO is not reasonable. Appeal by Income Tax Department was dismissed.
23. Tax/ Income Tax : Technicalities of Filing Audit Report and Income Tax Return and Legal Issues
In the case of Mahernagar Co-op Housing Service Society Ltd v. CCIT [2025] GCtR 1759 (Gujarat), the issue was related to filing of return under Income -tax Act, 1961 and the aspects of Audit Report. Petition was filed to condone the delay of 29 days in filing return of income for A.Y. 2018-19.
Tax Department has denied to condone delay of 29 days caused in filing the return of income under the provision of section 139(1) of the Income Tax Act, 1961 for the Assessment Year 2018-19. Assessee has placed reliance on the Circular No.13 of 2023 dated 26.07.2023, which deals with the condonation of delay in filing the return of income for the purpose of permitting deduction under section 80P of the Act.
Assessee also pointed out the Audit Report prepared by the Sub-auditor of the Cooperative Societies, Surat for the period from 01.04.2014 to 31.03.2018 and it was admitted that the Subauditor of the Cooperative Societies did not make any appointment of the Auditor till 31.10.2018 and hence, the Return of Income (ROI) was not filed within prescribed time limit.
After looking at S.119 (2) of the Act, High Court noted that Auditor Report is of the year 2019 and the Tax Department ought to have allowed the application filed by the petitioner-Society. Further, CBDT Circular No.13 of 2023 dated 26.07.2023 more particularly, paragraph No.6(ii) was relied on by HC. The delay of getting the accounts audited and filing of Audit Report belatedly by the Sub-auditor appointed by the State will come within the purview of the provisions of paragraph No.6(ii) of the said Circular. High Court has quashed the Tax Department’s Order and held that the Department shall allow the petitioner-Society to file a fresh return of income within a period of one month for the Assessment Year 2018-19, as per section 139(1) of the IT Act, 1961.
24. Tax / Income Tax : NRI Wins Income Tax Case and Findings of AO were Quashed
In case of Yogesh Gandhi v. ACIT [2025] GCtR 1760 (ITAT, Delhi), assessee was an NRI ; his appeal filed against finding of AO were allowed in a case related to income from house property and from other sources.
In AY 2019-20, the NRI-assessee has declared the full value of consideration of Rs.2,97,50,000/- of property and offered to tax the above said income and claimed only the TDS actually deducted by the buyer during the AY 2019-20. The assessee has also brought Development Agreement and confirmation of developer i.e. Veera Developers and prayed that during the impugned assessment year, assessee has only claimed the TDS deducted by the developer on part payment.
It was observed that NRI – assessee has sold the property and declared long term capital gain by declaring the full value in AY 2019-20 and assessee has paid the due tax after taking credit only to the extent of tax deducted at source by the purchaser which assessee has brought to our notice which is Form 26AS in which the developer had paid only Rs.1,97,50,000/- and deducted the TDS of Rs.47,24,200/- and assessee also claimed only to that extent in their return of income. It was held that since the assessee has received part payment/ settlement during the AY 2023-24, the purchaser has deducted TDS and paid the net amount to the assessee and the same is reflected at Form 26 AS for the AY 2023-24.
On verification of both the Form 26AS for AY 2019-20 and AY 2023-24, it matches sale consideration declared by the assessee in AY 2019-20. Therefore it was held that an income can be taxed only once. The NRI-assessee has declared full value of sale consideration in AY 2019-20 and offered the tax.
Therefore, the deduction of TDS at the time of part settlement has to be allowed to the assessee and findings of AO were found unsustainable.
25. Tax / Income Tax : Total Non-Application of Mind by Income Tax Department Employees
In case of PCIT v. Citron Infraprojects Limited [2025] GCtR 1761 (Bombay), it was commented that correct inference has been drawn that the prior approvals under Section 153D of Income-tax Act, 1961 were the product of total non-application of mind. Dismissing the appeal of Tax Department it was held that in the absence of valid approvals, the action under Section 153A cannot be justified and was rightly not upheld by the ITAT. The ITAT cannot be faulted for not adverting to the merits of the matter because in the absence of fulfilment of the jurisdictional requirement of a valid and prior approval under Section 153D, the action under Section 153A would be legally vulnerable. In an Appeal under Section 260A of the IT Act, it is not for High Court to sit in appeal over factual findings unless a case of perversity is made out.
26. Tax / Income Tax : AO’s Order Disallowing Losses on Sale of Shares Set Aside Explaining Accounting under Income-tax Act, 1961
In case of JCIT v. H B Leasing & Finance Co. Ltd [2025] GCtR 1762 (ITAT, Delhi), the assessee company was engaged in the business of sale and purchase of shares and securities. Pursuant to the search and seizure operation under section 132 of the Act at the premises of the Assessee company on 07.08.1997, a notice under Section 158BC of Income-tax Act, 1961 was issued by the assessing officer.
The assessing officer completed the assessment by disallowing losses on sale of shares in various years.
Setting aside the Order of AO, it was held that losses have been disallowed as bogus by relying upon and making comparisons with rough and incomplete papers without pointing out any instance of any transaction which may have been found in the seized material but not found recorded in the books of accounts. The transactions which are recorded in the books of accounts can be considered in the regular assessments and not in the Block assessment under section 158BC of the Income-tax Act. The observations of the A.O. that the company was having different accounting year for the purpose of Companies Act and for the purposes of the Income-tax Act is no ground for drawing adverse inference. At the relevant time, there was no bar under the law for having different accounting years for the purpose of Companies Act and for the purposes of the Income-tax Act. Once the transactions have been shown in regular books of accounts and the returns on the basis of regular books of accounts have been filed, then on that basis no income or loss can be added or disallowed while making the assessment under Chapter XIV-B of the IT Act, 1961.
27. Tax / Indirect Tax : HC Quashes Tax Department’s Order ; Department’s Order Found Contrary to Law
In case of Merck Life Sciences Pvt Ltd v. Union of India [2025] GCtR 1776 (Karnataka), the orders passed by Tax Department holding that the refund claim is barred by limitation was contrary to facts and law and it was set aside by holding that the refund application/claim of the petitioner is within time and is not barred by limitation.
A plain reading of Section 77(1) of the CGST Act, 2017 will clearly indicate that the taxpayer who pays tax to the Central Authority by oversight, inadvertence and erroneously, would be entitled to refund of the amount of taxes so paid in such manner and subject to such conditions as may be prescribed. Rule 89(1A) of the CGST Rules, 2017 stipulate that the refund claim under Section 77 of the CGST Act and Section 19 of the IGST Act would have to be made within a period of 2 years from the date of payment by filing an application in the prescribed format.
28. Tax / Indirect Tax : Meritless Review Petition in cases related to CGST Act, 2017 Dismissed Explaining S. 37 of CGST Act, 2017 and the Principles of Penalty
In case of Sriba Nirman Company v. Commissioner (Appeals) [2025] GCtR 1774 (SC), the review petition was dismissed and the review petition was found to be meritless.
In the Judgment under challenge it was observed that Section 37 of the CGST Act, which is in pari materia with the corresponding provision under the APGST and IGST Act, read with Sections 38 and 39, stipulates that every registered person, is required to furnish a return electronically of inward and outward supplies of goods and services or both, input tax credit available, tax payable, tax paid, and such other particulars, in the prescribed format, for every calendar month or part thereof, within 10 days of the expiry of the said month. Section 44 also requires an annual return to be filed by every registered person, within such time and format as may be prescribed. The prescribed time, for the purpose of this case, would be till 07,02.2020. The differentiation, between invocation of Section 73 and the invocation of section 74, is on the basis of the circumstances in which such tax has not been paid. Section 74 is to be invoked where non-payment of tax occurs on account of fraud, wilful misstatement or suppression of facts for the purpose of evading tax. Where non-payment or short payment is for reasons other than the aforesaid reasons set out under Section 74, the provisions of Section 73 of the GST Act would be applicable.
Non-payment of tax, would attract penalties, under Section 74 (1), in three circumstances. The first two circumstances are fraud and wilful mis statement. Both these require an intention to evade tax by unfair or illegal means. The third circumstance is suppression of fact, which is also defined, in Explanation-2, as non-declaration of relevant information. In view of the collocation of the terms, before this term, and in view of the requirement, under the two earlier terms of mens rea, the term “suppression of facts” would have to be read as wilful or deliberate suppression of fact, for evading tax. The term “evade” puts this issue beyond controversy, as this term means that the suppression must be for the purpose of evasion, which clearly requires intention and mens rea.
29. Tax / Income Tax : Interest on Loan and Deduction under Income-tax Act, 1961
In case of Cognizant Technology Solutions India Pvt Ltd v. CIT [2025] GCtR 1801 (Madras), while dealing with the issue as to whether the assessee, who earned miscellaneous income in the nature of interest on loan given to employees and sale of scrap, is entitled to claim deduction under Section 10A/10B of the Income – tax Act, 1961, the Assessing Officer denied the claim by stating that miscellaneous income does not have direct nexus with the business of the eligible undertaking. It was the case of the assessee that though the issue was upheld by the CIT(A), it was not adjudicated by the ITAT in the Order of ITAT, though a specific ground was raised.
It was held that all profits and gains of the undertaking, including the incidental income by way of interest on bank deposits or staff loans, would be entitled to 100% exemption or deduction under Section 10A/10B of the Income-tax Act, 1961 as such interest income arises in the ordinary course of export business of the undertaking, even though not as a direct result of export.
30. Tax / Income Tax : Delayed Appeal of Tax Department Dismissed
In case of Acme Cleantech Solutions Ltd v. DCIT [2025] GCtR 1802 (ITAT, Delhi), the appeal of revenue was dismissed. While dismissing the appeal of Tax Department it was rightly observed that “we do not find any merit in the petition filed by the Revenue for condonation of delay and Revenue has failed to state reasonable cause for such an inordinate delay of 2445 days therefore, the appeal of the Revenue is dismissed as not admitted on account of delay.”
31. Tax / Income Tax : Joint Ownership of Property and Income Tax Liability
It has been held that in certain situations, joint ownership at the time of sale of original assets do not disentitled the assessee to claim deduction under Section 54F of the Income-tax Act, 1961. Therefore, the orders of the Ld. AO and Ld. CIT(A) are set aside.
Case reference is Kusum Sahgal v. ACIT [2025] GCtR 1812 (ITAT, Delhi).
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