25 Important Income Tax High Court Judgments of 2022***

Clipped from: https://www.taxscan.in/25-important-income-tax-high-court-judgments-of-2022/241279/

By Manu Sharma A S – On January 1, 2023 2:57 pm

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  1. Bank liable to pay Income Tax on Interest on Sticky Loans/NPAs on Receipt Basis: Himachal Pradesh HC – [Pr. Commissioner of Income Tax vs Kangra Central Co-op Bank Ltd – 2022 TAXSCAN (HC) 999]

The Himachal Pradesh High Court had held that, the assessee-Kangra Central Co-operative Bank Limited is liable to tax only on receipt of interest of Sticky Loans/Non-Performing Assets (NPAs).

  1. Quashing of Income Tax Penalty would Invalidate further Criminal Proceedings: Jharkhand HC – [Satendra Kumar Jalan vs State of Jharkhand – 2022 TAXSCAN (HC) 998]

A Single Bench of Justice Sanjay Kumar Dwivedi at Jharkhand High Court has recently set aside the entire criminal proceedings against Karta of a Hindu Undivided Family (HUF).

  1. Settlement Commission has No Jurisdiction to grant immunity from Liability of Interest: Bombay HC quashes Order – [Union of India vs Pratibha Construction Engineers & Contractors (India) Pvt.Ltd – 2022 TAXSCAN (HC) 1099]

Bombay High Court (HC) chaired by Justice Nitin Jamdar and Justice Gauri Godse quashed the order of the settlement commission as there was no jurisdiction to grant immunity for liability of interest as per the amendment of the Section 127H(1) of the Customs Act, 1962 was amended by the Finance Act, 2007.

  1. No Income Tax on Receipt of Compensation on Leasehold Rights Over A Plot: Delhi HC – [PR. COMMISSIONER OF INCOME TAX-7 vs PAWA INFRASTRUCTURE (P) LTD. – 2022 TAXSCAN (HC) 1069]

A division bench of the High Court has held that the leasehold rights shall be treated as “capital asset” and the compensation received on leasehold rights over a plot shall not be subject to income tax under the provisions of the Income Tax Act, 1961.

  1. Wrong PAN details mentioned in Order u/s 148A(d): Delhi HC quashes Notice and Order – [GDR FINANCE AND LEASING PRIVATE LIMITED vs INCOME TAX OFFICER – 2022 TAXSCAN (HC) 1101]

In a recent ruling, a Division Bench of the Delhi High Court, quashed the impugned notice and order for wrong mention of PAN number of receiver of an alleged bogus transaction by the assessee.

  1. IT Deduction for Affordable Houses cannot be Denied to Builder on ground of Subsequent Changes in Building on Completion of Statutory Conditions: Bombay HC – [Principal Commissioner of Income Tax vs Vardhan Builders – 2022 TAXSCAN (HC) 1055]

A Division Bench of the Bombay High Court has recently set aside the denial of income tax deduction under Section 80-IB(10) of the Income Tax Act, 1961 merely on ground of subsequent changes in building after compliance of statutory provisions.

  1. Absence of Notice cannot be Cured by Invoking S. 292BB of Income Tax Act: Delhi High Court – [PR. COMMISSIONER OF INCOME TAX-1 vs CONSORTIUM NUSSLI COMFORT NET – 2022 TAXSCAN (HC) 278]

A division bench of the Delhi High Court comprising Justice Manmohan and Justice Dinesh Kumar has held that the absence of a notice cannot be rectified and cured by invoking section 292BB of the Income Tax Act, 1961.

  1. Filing of Special Leave Petition invoking Constitutional Provisions is not a ‘Proceeding under Income Tax Act’: Kerala High Court – [UDAYA SOUNDS PULLEPPADY vs THE PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDING – 2022 TAXSCAN (HC) 231]

The Kerala High Court has held that the filing of a Special Leave Petition, being recourse by the assessee to the provisions of the Constitution, cannot be treated as “proceedings under the Income Tax Act, 1961.”

  1. Deposit in ‘no-lien/escrow account’ will not constitute ‘Actual Payment’, No Income Tax Deduction allowable: Orissa High Court – [M/s Indian Metal and Ferro Alloys Ltd vs Commissioner of Income Tax, Bhubaneswar – 2022 TAXSCAN (HC) 104]

A division bench of the Orissa High Court has held that deposit of amount in ‘no-lien/escrow account’ will not constitute ‘actual payment’ under Section 43-B of the Income Tax Act, 1961.

  1. Income Tax: CBDT Circular doesn’t empower Assessing Officers to take Advantage of Assessees’ Ignorance and collect More Tax, rules Karnataka High Court – [Sri. Devendra Pai VS The Assistant Commissioner of Income Tax, Circle 1(2) – 2022 TAXSCAN (HC) 127]

In an assessee-friendly ruling, the Karnataka High Court has held that the Assessing Officer cannot take advantage of the ignorance on the part of the assessee to collect more tax amount than is legitimately due relying on a circular issued by the Central Board of Direct Taxes (CBDT).

  1. Non-Profit Company imparting Education eligible for Income Tax Exemption for Charitable Activities: Calcutta High Court – [CREATIVE MUSEUM DESIGNERS vs INCOME TAX OFFICER, EXEMPTIONS, WARD-1(1), KOLKATA – 2022 TAXSCAN (HC) 132]

The Calcutta High Court has held that a non-profit organization under section 25 of the Companies Act imparting education is eligible for income tax exemption as the same would be treated as charitable activity for the purpose of the Income Tax Act, 1961.

  1. Information from Property Broker Firms and Websites cannot be relied upon to determine adequacy of Rent received for invoking Sec 13(2)(b) of Income Tax Act: Delhi High Court – [COMMISSIONER OF INCOME TAX (EXEMPTIONS) DELHI vs HAMDARD NATIONAL FOUNDATION (INDIA) – 2022 TAXSCAN (HC) 157]

The Delhi High Court has held that in the absence of an independent inquiry, the revenue authorities cannot solely rely on the opinion of property broker firms and websites to determine the adequacy of rent received for invoking section 13(2)(b) of the Income Tax Act, 1961.

  1. Madras High Court set aside Reassessment Notices issued under Old Income Tax Act as Taxation Relaxation Act Does not apply on Repealed Provisions – [Vellore Institute of Technology vs Central Board of Direct Taxes – 2022 TAXSCAN (HC) 1106]

The Madras High court has set aside Reassessment notices issued under old Income Tax Act as Taxation Relaxation Act Does not apply on Repealed Provisions.

  1. Income Tax Department cannot raise fresh claims after a Resolution Plan is approved: Bombay High Court – [Murli Industries Ltd vs Assistant Commissioner of Income Tax MECL Building – 2022 TAXSCAN (HC) 169]

The Bombay High Court has held that the Tax department cannot raise fresh claims after a resolution plan is approved.

  1. No Income Tax on Receipt of Compensation on Leasehold Rights Over A Plot: Delhi HC – [PR. COMMISSIONER OF INCOME TAX-7 vs PAWA INFRASTRUCTURE (P) LTD. –   2022 TAXSCAN (HC) 1069]

A division bench of the High Court has held that the leasehold rights shall be treated as “capital asset” and the compensation received on leasehold rights over a plot shall not be subject to income tax under the provisions of the Income Tax Act, 1961.

  1. Cancellation of Income Tax Penalty automatically quashes Criminal Proceedings u/s 276: Allahabad HC– [Sudhan Chandra Basak vs Union Of India Thru Income Tax Officer H Ward – 2022 TAXSCAN (HC) 1065]

A Single Bench of Allahabad High Court has recently held that criminal proceedings arising out of orders of penalty will be quashed as soon as the penalty demand is quashed.

  1. Booking Function does not amount to Substantial Business Activity: Delhi HC grants Relief to Travelport L P USA – [THE COMMISSIONER OF INCOME TAX vs TRAVELPORT L.P. USA – 2022 TAXSCAN (HC) 731]

In hearing an appeal by the Commissioner of Income Tax – International Taxation, a Division Bench of the Delhi High Court upheld the order or the Income Tax Appellate Tribunal(ITAT) and Commissioner of Income Tax (Appeals) (CIT(A)) in favour of the assessee, Travelport L P USA that, performance of booking does not amount to substantial business activity carried out in India.

  1. Statutory Benefit of Capital Gain Exemption cannot be denied for Mere Inclusion of Wife’s Name on Purchase of New Property: Delhi HC quashes Re-Assessment – [KAMLESH KESWANI vs ASSISTANT COMMISSIONER OF INCOME TAX – 2022 TAXSCAN (HC) 723]

In a significant ruling, a division bench of the Delhi High Court has held that the statutory benefit under section 54 of the Income Tax Act, 1961 cannot be denied to the assessee merely for the reason that the name of the wife was included in the property newly purchased.

  1. Section 206AA cannot be invoked when Tax Deducted according to beneficial provisions of DTAA: Delhi HC orders in favour of Air India – [AIR INDIA LTD vs COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION –  2022 TAXSCAN (HC) 595]

The Delhi High Court held that Section 206AA of the Income Tax Act, 1961 cannot be invoked when tax is deducted according to beneficial provisions of Double Tax Avoidance Agreement (DTAA).

  1. No TDS Deduction by Insurance Companies on Interest on Compensation to Claimant prior to 1st June 2015: Punjab & Haryana HC – [New India Assurance Company Limited vs Ravinder Kumar – 2022 TAXSCAN (HC) 616]

In a major relief to those who are yet to receive long-pending insurance claims with interest, the Punjab and Haryana High Court has held that TDS cannot be deducted by the insurance companies on the interest on the compensation amount till 01.06.2015.

  1. Relief to Tata Teleservices: TDS deduction on Payment of Interconnect User Charges cannot be categorized as FTS, rules Delhi HC – [M/S TATA TELESERVICES LTD vs COMMISSIONER OF INCOME TAX –  2022 TAXSCAN (HC) 455]

The Delhi High Court bench consisting of Justice Manmohan and Justice Manmeet Pritam Singh Arora held that TDS deduction on payment of interconnect user charges cannot be categorized as the fee for technical service.

  1. Execution of Registered Sale Deed is a Valid ‘Transfer’: Telangana HC upholds Income Tax Addition – [Syed Sikandar Ali Vs PRINCIPAL COMMISSIONER OF INCOME TAX – 2022 TAXSCAN (HC) 810]

A division bench of the Telangana High Court has held that the execution of a registered sale deed shall be treated as a valid “transfer” within the meaning of Section 2(47)(V) of the Income Tax Act, 1961.

  1. Manufacturer of ‘Polyurethane Foam’ Used for Making Car Seats Eligible for Income Tax Deduction u/s 80-IB: Supreme Court – [M/s Polyflex (India) Pvt. Ltd vs Commissioner of Income Tax – 2022 TAXSCAN (SC) 201]

A two-judge bench of the Supreme Court, on Thursday held that a manufacturer of ‘polyurethane foam’ used for manufacturing car seats would be eligible for income tax deduction under section 80-IB of the Income Tax Act, 1961.

  1. Delay in Processing Income Tax Refund due to Technical Issues: Kerala HC Asks CPC to take Immediate Action, Allows Interest – [NEEMA NIDHI LTD Vs THE ASSISTANT COMMISSIONER OF INCOME TAX – 2022 TAXSCAN (HC) 938]

The Kerala High Court, while considering a writ petition against the delay in processing the income tax refund due to the technical glitches in the online portal, has directed the Centralized Processing Centre (CPC) to initiate the process and allow the refund to the assessee along with interest.

  1. Re-Assessment proceedings initiated beyond the Limitation Period are not sustainable: Calcutta HC – [SS Commotrade Private Limited vs Income Tax Officer – 2022 TAXSCAN (HC) 635]

The Calcutta High Court held that the reassessment proceedings initiated beyond the limitation period are not sustainable.

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