Direct Tax Alerts for December 2021: What you need to know

Direct Tax

Form 56FF has been notified by the CBDT for claiming deduction u/s 10A of Income Tax Act,1961.
CIT(A) is bound to allow requests for personal hearings in Faceless Assessment Scheme,2021

Important Judicial Precedents

The powers of ITAT under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. If the order passed by the ITAT was erroneous on merits, the remedy available to the Assessee was to prefer an appeal before the High Court. Therefore, as such, the order passed by the ITAT recalling its earlier order is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. [2021] 133 taxmann.com 41 (SC) SUPREME COURT OF INDIA-Commissioner of Income-tax (IT-4), Mumbai v. Reliance Telecom Ltd.

The amended provisions of Section 43B r.w.s. 36(1)(va) of the Act will apply from assessment year 2021-22 and subsequent assessment years,i.e. prospective application. [2022] 134 taxmann.com 56 (Chennai – Trib.)[08-12-2021]

An order cannot be treated as non-speaking order merely because it is epigrammatic or when it is terse. Where an order is tersely eloquent, it cannot be treated as non-speaking order unless it is laconic. Where the case of the trust was selected for scrutiny on the ground its registration had been cancelled and the Trust failed to upload registration certificate u/s 12AA despite repeated reminders and opportunities, the assessment order passed called for no interference in writ petition when it recorded the crux and gravamen of the matter i.e. trust was not entitled to exemption since its registration has been cancelled. [2021] 133 taxmann.com 303 (Madras)[16-12-2021]

The Delhi High Court has quashed more than 1,300 writ petitions challenging re-assessment notice issued by the Income-tax Dept. after 31-03-2021, under the old regime. The Court held that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 doesn’t empower the Government to extend the applicability of erstwhile provisions of re-assessment. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TLA 2020) empowers the Government to extend only the time limits. It does not delegate the power to legislate on provisions to be followed for initiation of re-assessment proceedings. The TLA 2020 does not give power to Government to extend the erstwhile sections 147 to 151 beyond 31-03-2021 or defer the operation of substituted provisions enacted by the Finance Act, 2021.Mon Mohan Kohli v. Asstt. CIT [2021] 133 taxmann.com 166 (Delhi) 396

Section 40(a)(i) and 40(a)(ia) provide for disallowance only in respect of expenditure, which is revenue in nature and, therefore, provision does not apply to assessee’s claim for depreciation. [2021] 123 taxmann.com 21 / 430 ITR 527 / 278 Taxman 357 (Kar.)

If FIR is lodged, prosecution can be said to have been instituted within the meaning of section 9(c) of DTVSV Act. The purpose and object of DTVSV Act is that the DTVSV Act has been formulated for resolution of disputed tax and for matters connected there with or incidental thereto. The DTVSV Act allows the eligible assessees to settle pending disputes on payment of the specified amount based on the percentage of the disputed tax. [2021] 133 taxmann.com 302 (Bombay)[23-12-2021]

The amount distributed or paid by way of dividend falls in the category of “income, profits or gains derived” within the meaning of section 50 of the SIDBI Act In view of section 50 of the SIDBI Act, SIDBI is not liable to pay DDT under section 115-O on the amounts transferred by it to IDBI under section 29(2) of the SIDBI Act for assessment years 1997-98 to 1999-20 and on dividends paid to shareholders during assessment year 2000-01.[2021] 133 taxmann.com 158 (Bombay)[02-12-2021]

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