Corrupt Practice - Whether election can be declared void due to her non-disclosure of income from her income tax returns and amounts to improper acceptance of nomination rendering election void under section 100(1)(d)(i) and corrupt practise under 100(1)(d)(iv) of RPA – Held, mere failure to disclose assets won't invalidate election unless they're substantial - The non-disclosure was...
Corrupt Practice - Whether election can be declared void due to her non-disclosure of income from her income tax returns and amounts to improper acceptance of nomination rendering election void under section 100(1)(d)(i) and corrupt practise under 100(1)(d)(iv) of RPA – Held, mere failure to disclose assets won't invalidate election unless they're substantial - The non-disclosure was not of a 'substantial nature' and did not materially affect the election result - A Court should not rush to invalidate an election based on a 'highly pedantic and fastidious approach' or on 'minor technicalities' that do not substantially impinge on the law or the integrity of the electoral process - Non-disclosure did not constitute a corrupt practice within the meaning of Section 123(2) of RPA, as it was not of a substantial nature - Appeal dismissed. [Paras 8-11] Ajmera Shyam v. Kova Laxmi, 2025 LiveLaw (SC) 814 : 2025 INSC 992
Debt Recovery Tribunal – Held, the e-auction notice and sale held by the DRT were invalid for non-disclosure of statutory dues of DDA and failure to comply with provisions of the Income Tax Act and Income Tax Certificate Proceedings Rules, 1962 regarding proclamation of sale - Banks failure to disclose encumbrances of property in auction notice invalidates sale - The auction purchaser, though innocent and bona fide, was entitled to restitution as the sale was in violation of lease terms and statutory provisions - The Court quashed and set aside the auction and sale confirmation, directing refund with interest to the auction purchaser while upholding the DDA's rightful claims - The principle of restitution flows from the very heart of justice that no one shall unjustly enrich himself at the instance of another and that those who suffered without fault should, so far as money can achieve, be restored to the position they once occupied - The jurisdiction to make restitution is inherent in every court and will be exercised wherever the justice of the case demands - Appeal allowed. [Para 23-27, 30-32] Delhi Development Authority v. Corporation Bank, 2025 LiveLaw (SC) 953 : 2025 INSC 1161
Departmental Circulars and Guidelines - Binding nature on revenue authorities – Held, Court relied on Circulars issued by Ministry of Finance and Central Board of Direct Taxes (CBDT), including the 2008 Circular and 2009 Prosecution Manual, which state that prosecution under Section 276C(1) should be initiated only after the IT Appellate Tribunal (ITAT) confirms a penalty for concealment of income - These Circulars are binding on the revenue authorities and can 'tone down the rigour of the statutory provision' - The revenue authorities in this case, failed to adhere to these binding instructions by filing the complaint before any such confirmation - The prosecution, lodged in defiance of the department's own binding circulars and continued even after the Settlement Commission's conclusive finding that there was no suppression of facts, amounted to a 'blatant disregard' of their own directives, citing such actions as a 'serious lapse' and are not justified - Set aside order of High Court and imposed costs of Rs. 2 lakhs on the revenue, payable to the appellant - Appeal allowed. [Paras 31-33, 35- 38] Vijay Krishnaswami @ Krishnaswami Vijayakumar v. Deputy Director of Income Tax (Investigation), 2025 LiveLaw (SC) 851 : 2025 INSC 1048
Disproportionate Assets - Income Tax Returns - Quashing of FIR - Economic Inflation - Long-Term Asset Valuation - The Appellant argued that his wife's income and other declared sources of income were not properly considered in the calculation of assets. The Appellant submitted income tax returns and other supporting documents to justify the declared assets. Held, the income of the Appellant's wife and other declared sources were not adequately considered by the Vigilance Department. It was observed that while calculating disproportionate assets over a long period (1996-2020), inflation and economic changes should be considered. Referring to State of Haryana v. Bhajan Lal, 1992 SCC (Cri) 426 the Court noted that powers under Article 226 of the Constitution could be exercised when allegations in the FIR do not constitute any offence. The Court found that the alleged disproportionate assets were not substantiated when the Appellant's and his wife's declared income was properly accounted for. The Supreme Court quashed the FIR registered against the Appellant. Consequently, the appeal was allowed. Nirankar Nath Pandey v. State of U.P., 2025 LiveLaw (SC) 90
Effect of Resolution Plan Approval - Post-Resolution Income Tax Demand - Held, once a Resolution Plan is approved by the Adjudicating Authority, all claims not included therein, including statutory dues owed to the Central Government, stand extinguished. (Para 8) Vaibhav Goel v. Deputy Commissioner of Income Tax, 2025 LiveLaw (SC) 330 : 2025 INSC 375 : (2025) 8 SCC 511
Income Assessment - Xerox copies of Income Tax Returns - Whether the High Court erred in assessing the deceased's income without proper proof - The Tribunal rightly disregarded xerox copies of Income Tax Returns and made a reasonable estimation of income based on surrounding circumstances. The High Court's assessment of the deceased's income, though based on assumptions, was reasonable given the circumstances and the age of the deceased. New India Assurance Co. Ltd. v. Sonigra Juhi Uttamchand, 2025 LiveLaw (SC) 18 : (2025) 3 SCC 23
Interpretation - Legislation by incorporation and Legislation by Reference - Legislation by incorporation - the provisions of the original act, once specified become an integral and independent part of the subsequent act, meaning only the provisions as they existed on the date of incorporation are applicable and subsequent amendments are not automatically carried - Legislation by reference - applying the law as it exists on the date of application, including any subsequent modification - Court applied the principle of “legislation by incorporation” for section 28A of the SEBI Act, thereby considering the provisions of Income Tax Act as they stood at the time of incorporation. [Paras 9.6, 9.9] Jaykishor Chaturvedi v. Securities and Exchange Board of India, 2025 LiveLaw (SC) 730 : 2025 INSC 846
Interpretation of Statutes - Statutory Interpretation - Harmonious Construction - Purposive Construction - Non-obstante Clause - A statute must be read as a whole and one provision construed with reference to others to achieve a consistent enactment, avoiding inconsistency or repugnancy - Courts should harmonize conflicting provisions - A construction that renders a provision futile or a 'useless lumber' is to be avoided - non-obstante clause operates only in case of a conflict to give enacting part an overriding effect, not otherwise - If the enacting part and non-obstante clause can be read harmoniously, they should be. [Paras 9.2-9.6] Assistant Commissioner of Income Tax v. Shelf Drilling Ron Tappmeyer Ltd., 2025 LiveLaw (SC) 783 : 2025 INSC 946
Permanent Establishment (PE) / Business Connection (BC) – Held, absence of a Permanent Establishment (PE) in India is not mandatory for a non-resident company to be considered as carrying on business or to have a Business Connection (BC) in India - A non-resident can be in business "de hors" the permanent establishment - The issue of PE is primarily relevant for availing the beneficial provisions of the Double Tax Avoidance Agreement (DTAA), which was not the core consideration for allowing deductions under the Income Tax Act in this case - The High Court's view that business communications from a foreign office meant the non-resident was not carrying on business in India was held to be "wholly fallacious and contrary to the very scheme of the Act" and "wholly anachronistic" with the modern globalized trade environment - Appeals allowed. [Relied on CIT v. Vikram Cotton Mills ((1988) 169 ITR 597 (SC); Paras 11, 12, 14, 15. 17-21] Pride Foramer S.A. v. Commissioner of Income Tax, 2025 LiveLaw (SC) 1015 : 2025 INSC 1247
Section 2(47) - "transfer" - Reduction of Share Capital - Capital Loss - Legal Principles - The definition of "transfer" includes the extinguishment of any rights in a capital asset, even if there is no sale or exchange. A reduction in share capital, resulting in the extinguishment of a shareholder's rights, constitutes a transfer under Section 2(47). The assessee is entitled to claim a capital loss when there is a reduction in share capital that results in the extinguishment of rights in the capital asset. The Supreme Court held that the reduction in share capital of the subsidiary company and the consequent reduction in the assessee's shareholding amounted to a transfer under Section 2(47) of the Income Tax Act, 1961. The assessee was entitled to claim a capital loss, and the petition filed by the Revenue was dismissed. Principal Commissioner of Income Tax-4 v. Jupiter Capital, 2025 LiveLaw (SC) 41 : (2025) 8 SCC 500
Section 2(47) - Whether the reduction in share capital of a subsidiary company, resulting in a proportionate reduction in the number of shares held by the assessee, constitutes a "transfer" under Section 2(47) of the Income Tax Act, 1961, thereby allowing the assessee to claim a capital loss. The respondent-assessee, M/s. Jupiter Capital Pvt. Ltd., held 99.88% shares in Asianet News Network Pvt. Ltd. (ANNPL). Due to financial losses, ANNPL filed for a reduction in share capital, which was approved by the High Court. The share capital was reduced from 15,35,05,750 shares to 10,000 shares, and the assessee's shareholding was proportionately reduced from 15,33,40,900 shares to 9,988 shares. The face value of the shares remained unchanged at Rs. 10. The assessee claimed a long-term capital loss of Rs. 164,48,55,840/- due to the reduction in share capital. The Assessing Officer disallowed the claim, stating that the reduction did not amount to a "transfer" under Section 2(47) of the Income Tax Act, as there was no extinguishment of rights or sale of shares. The CIT(A) upheld the Assessing Officer's decision, but the ITAT allowed the assessee's claim, holding that the reduction in share capital amounted to a transfer under Section 2(47). The High Court affirmed the ITAT's decision. The Supreme Court dismissed the Revenue's appeal, holding that the reduction in share capital amounted to a "transfer" under Section 2(47) of the Income Tax Act, 1961. The Court relied on its earlier decision in Kartikeya v. Sarabhai v. CIT (1997) 7 SCC 524, which held that the extinguishment of rights in a capital asset, even without a sale, constitutes a transfer. The Court emphasized that the reduction in the number of shares held by the assessee resulted in the extinguishment of rights in the capital asset, and the assessee was entitled to claim a capital loss. The Court also noted that the face value of the shares remaining unchanged did not negate the fact that the assessee's rights in the shares had been extinguished. Principal Commissioner of Income Tax-4 v. Jupiter Capital, 2025 LiveLaw (SC) 41 : (2025) 8 SCC 500
Section 10, 11 and 12-AA - Charitable Trust - Income Tax Exemption - Proposed Activities – Held, since Section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, the term 'activities' in the provision includes 'proposed activities'. Commissioner of Income Tax Exemptions v. International Health Care Education and Research Institute, 2025 LiveLaw (SC) 214
Section 10, 11 and 12-AA - The respondent, a charitable trust engaged in education and medical aid, sought registration under Section 12-AA for tax exemptions. The Commissioner denied registration, citing insufficient evidence of actual charitable activities. The Appellate Tribunal reversed this, directing registration, which the High Court upheld. The Commissioner challenged this via a Special Leave Petition. Held, Section 12-AA requires the Commissioner to verify the genuineness of a trust's objects and activities for registration to claim benefits under Sections 11 and 12. The Court relied on Ananda Social, (2020) 17 SCC 254, which clarified that “activities” under Section 12-AA include “proposed activities,” and the Commissioner must assess the trust's objects and their alignment with proposed activities. Appeal dismissed; High Court's decision upheld. (Para 9, 13, 15) Commissioner of Income Tax Exemptions v. International Health Care Education and Research Institute, 2025 LiveLaw (SC) 214
Section 10, 11 and 12-AA - Whether registration of a charitable trust under Section 12-AA of the Act, 1961, for income tax exemptions under Sections 10 and 11 should be based on the trust's proposed activities or actual activities. Held: The Supreme Court reiterated that registration under Section 12-AA of the Act, 1961, must be decided based on the trust's proposed activities rather than its actual activities, affirming the precedent set in Ananda Social, (2020) 17 SCC 254. The Commissioner must satisfy themselves of the genuineness of the trust's objects and proposed activities. However, mere registration does not guarantee exemptions under Sections 10 and 11, and the assessing officer may deny exemptions if the trust's materials are not convincing or genuine. The Supreme Court rejected the Revenue's contention that actual activities should be considered and declined to refer the Ananda Social decision to a larger bench. The High Court's order upholding the Appellate Tribunal's direction to grant registration was affirmed. Commissioner of Income Tax Exemptions v. International Health Care Education and Research Institute, 2025 LiveLaw (SC) 214
Section 32 - Income Tax Rules, 1962 (Rules, 1962) - Rule 5 - Accelerated depreciation - Tariff determination - Power Purchase Agreement (PPA) - State Instrumentality - Whether wind energy projects that did not avail accelerated depreciation were entitled to seek a separate tariff determination from the Gujarat Electricity Regulatory Commission (GERC), even after entering into PPAs with a fixed tariff applicable to projects availing accelerated depreciation – Held, tariff determination is an exercise of statutory power and not solely a matter of contractual volition, allowing for review by appropriate commission if public interest dictates - GUVNL-appellant is a State instrumentality and bound to promote the State's policy objectives, including development of renewable energy sources and cannot act as “model citizen” and cannot act like a “Shylock” - In IT Act and Rules, 1962, allow an assessee to choose between accelerated and normal depreciation at the time of filing their return for assessment year in which power generation commenced - This statutory liberty cannot be curtailed by appellant unilaterally fixing a binding price in a PPA entered into long before statutory option is to be exercised - Merely signing PPAs with a tariff applicable to projects availing accelerated depreciation did not bind respondent companies to that price for entire life of their projects - Appellant's conduct, seeking to bind the companies to an inapplicable tariff, was patently unfair and did not reflect positively on a State instrumentality - Appeals dismissed. [Paras 13, 14, 17, 20, 24] Gujarat Urja Vikas Nigam Ltd. v. Green Infra Corporate Wind Pvt. Ltd., 2025 LiveLaw (SC) 767 : 2025 INSC 922
Section 36(1)(viii) – Deduction for Special Reserve – Profits "Derived From" Long-Term Finance – - Interpretation of "Derived From" vs. "Attributable To"- Scope and Interpretation- Supreme Court dismissed the appeals filed by the National Cooperative Development Corporation (NCDC), holding that specific income heads- namely dividend income from shares, interest on short-term bank deposits, and service charges for monitoring Sugar Development Fund (SDF) loans- do not qualify for deduction under Section 36(1)(viii) of the Act- Supreme Court emphasized that the phrase "derived from" is narrower than "attributable to.”- Following the amendment by the Finance Act, 1995, the legislature intended to "ring-fence" this fiscal benefit to only those profits having a direct, first-degree nexus with the core activity of providing long-term finance- Any income that is even a "step removed" from such core activity is excluded. [Relied on Cambay Electric Supply Industrial Co. Ltd. v. CIT (1978) 2 SCC 644; Paras 9-16] National Cooperative Development Corporation v. Assistant Commissioner of Income Tax, 2025 LiveLaw (SC) 1193 : 2025 INSC 1414
Section 37(1) - Business Expenditure – Deduction – Held, a "lull in business" for a non-resident company engaged in oil drilling activities, due to the non-procurement of a contract during the relevant assessment years (1996- 97, 1997-98, 1999-2000), does not amount to a "cessation of business" - Where the company continued to engage in systematic and organized activities, such as continuous business correspondence with ONGC regarding manpower supply and submitting an unsuccessful bid, it demonstrated a clear intention to carry on business - the company was entitled to claim deduction of business expenditure (administrative charges, audit fees, etc.) under Section 37(1). Pride Foramer S.A. v. Commissioner of Income Tax, 2025 LiveLaw (SC) 1015 : 2025 INSC 1247
Section 71 - Set-off of Loss from Other Heads - Interpretation of 'Business' – Held, the expenditure, though disallowed as a deduction under the head 'Income from Business' by the ITAT (as the only income was 'Interest on Tax Refunds' taxable as 'Income from Other Sources'), was allowed to be set off against the 'Income from Other Sources' under Section 71 of the Act, on the finding that the appellant was still carrying on business - The word 'business' has a wide import and connotes a "real, substantial and systemic or organised course of activity or activity with a set purpose" - The expression 'for the purpose of business' is wider than 'for the purpose of earning profits' and includes "many other acts incidental to the carrying on of a business". Pride Foramer S.A. v. Commissioner of Income Tax, 2025 LiveLaw (SC) 1015 : 2025 INSC 1247
Section 80-IA(9) - Scope of - Deductions under Sections 80-IA/80-IB and 80-HHC – Deductions under Sections 80-IA/80-IB (industrial undertaking profits) and Section 80-HHC (export profits) can be computed independently. Resolving the split verdict in Assistant Commissioner of Income Tax v. Micro Labs Limited, (2015) 17 SCC 96, the Court held that Section 80-IA(9) does not mandate reducing the gross total income by the Section 80-IA/80-IB deduction before computing deductions under Section 80-HHC. Instead, it restricts the aggregate deductions under heading 'C' of Chapter VI-A to the extent of eligible business profits, preventing double benefits on the same profits. Approving the High Court's reasoning in Associated Capsules (P) Ltd. v. Deputy Commissioner of Income Tax, (2011) SCC OnLine Bom 27, the Court clarified that Section 80-IA(9) limits the allowability, not the computability, of deductions. For example, if business profits are Rs. 100 and Rs. 30 is allowed under Section 80-IA, a computed deduction of Rs. 80 under Section 80-HHC would be restricted to Rs. 70 to ensure the total deduction does not exceed the profits. The reference was answered accordingly, permitting independent computation of deductions while capping their aggregate to the eligible profits. (Para 20, 21 & 23) Shital Fibers v. Commissioner of Income Tax, 2025 LiveLaw (SC) 606 : 2025 INSC 743
Section 132 and 271AAA - During search u/s. 132 at assessee's premises, assessee admitted undisclosed income of Rs. 2,27,65,580 for AY 2011-12 in statement u/s. 132(4) and later substantiated source, paying tax with interest (albeit delayed). Penalty imposed u/s. 271AAA on this amount and additional sum detected via sale deeds obtained from housing society post-search. Tribunals/High Court upheld penalty; assessee appealed to Supreme Court. Held, Appeal partly allowed - No penalty on admitted income of Rs. 2,27,65,580 as Section 271AAA(2) conditions complied with; 10% penalty payable only on additional undisclosed income from sale deeds, held to be "found in the course of search". Matter remitted for recomputation of penalty on latter amount. (Para 29, 31, 33, 35, 40, 41) K. Krishnamurthy v. Deputy Commissioner of Income Tax. 2025 LiveLaw (SC) 202 : 2025 INSC 208
Section 132 and 271AAA - Penalty for undisclosed income - Held, Penalty leviable only where conditions satisfied; expression "found in the course of search" not confined to documents seized from assessee's premises but extends to materials obtained in continuation thereof, e.g., sale deeds procured from third party (society) triggered by initial search. K. Krishnamurthy v. Deputy Commissioner of Income Tax. 2025 LiveLaw (SC) 202 : 2025 INSC 208
Section 132 and 271AAA - Penalty for undisclosed income - Search and seizure - Levy of penalty u/s. 271AAA(1) - Discretion of Assessing Officer – Mere surrender of undisclosed income during search insufficient to attract penalty; Assessing Officer must prove that income was "found in the course of search" as defined in Explanation to s. 271AAA(1) - Discretion to levy penalty not arbitrary but must be exercised judiciously, guided by law. K. Krishnamurthy v. Deputy Commissioner of Income Tax. 2025 LiveLaw (SC) 202 : 2025 INSC 208
Section 144C v. Section 153 – Assessment – Limitation - Dissenting Opinion (Nagarathna, J.) – Held, provisions of section 144C and section 153 are not mutually exclusive but are mutually inclusive - the period of limitation prescribed under Section 153(2A) or 153(3) is applicable, even when matters are remanded - the non-obstante clause in section 144C(1) does not extend to the timelines prescribed under section 153 - The timelines under Section 153 does not automatically include the process conceived under Section 144C - the entire proceedings, including the hearing and directions by the Dispute Resolution Panel (DRP), must be issued within 9 months as contemplated under Section 144C(12) of the Income Tax Act - the Act is workable even if Section 144C proceedings are subsumed within the limitation prescribed under Section 153(1) or (3) - no final assessments orders can be passed in these cases as same would be time-barred - Appeal Dismissed. [Para 15] Assistant Commissioner of Income Tax v. Shelf Drilling Ron Tappmeyer Ltd., 2025 LiveLaw (SC) 783 : 2025 INSC 946
Section 144C v. Section 153 – Assessment – Limitation - Supreme Court delivers split verdict on time limit for assessments under Section 144C - Interpretation of section 144C in light of Section 153 of IT Act – Held, Section 144C was introduced as an alternative dispute resolution mechanism to facilitate expeditious resolution of tax disputes, especially for foreign companies - To reduce the time consumed in making assessment orders for eligible assesses - Satish Chandra Sharma; J. held that timelines in 144C (4) & (13) are independent and in addition to the timeline under Section 153(3) and that section 153(3) applies only to the passing of the draft assessment order - If entire Section 144C procedure were subsumed within Section 153(3), it would make the system unworkable and lead to a “complete catastrophe for recovering tax” - Section 153(3) applies to the passing of draft assessment order and Section 144C extends the timeline for the final order - Appeal allowed. [Paras 6.1, 6.2, 8] Assistant Commissioner of Income Tax v. Shelf Drilling Ron Tappmeyer Ltd., 2025 LiveLaw (SC) 783 : 2025 INSC 946
Section 220-227 - Section 28A of the SEBI Act - effective from July 18, 2013, incorporates sections 220-227 of the Income Tax Act, 1961, for the recovery of amounts due, including penalties - This means that section 220(2) of the Income Tax Act which imposes simple interest at 1% per month (12% p.a.) on unpaid amounts, applies to SEBI dues - Under Section 220(1) of IT Act read with section 28A of SEBI Act, interest becomes due upon failure to meet demand and then appellants are rendered as 'defaulters' under section 220(4) of IT Act - Appeals dismissed. [Relied on Calcutta Jute Manufacturing Co. and Another v. Commercial Tax Officer 1997 106 (STC) 433; Paras 9.4, 11.2, 11.3] Jaykishor Chaturvedi v. Securities and Exchange Board of India, 2025 LiveLaw (SC) 730 : 2025 INSC 846
Section 245HA – Revival of Appellate Proceedings – Held, Appellate proceedings will stand revived and Section 245HA of the 1961 Act will be applicable only if the application for settlement is rejected without providing for terms of settlement - The stand of the Revenue that the assessee must give up his right to contest the assessment order on merits, if the settlement application is rejected without providing for terms of settlement, is misconceived and must be rejected - Where an application is pending before the Settlement Commission, the Commissioner of Income Tax (Appeals) should keep the appellate proceedings in abeyance till the disposal of the application by the Settlement Commission in terms of the 1961 Act - Income Tax Appellate Tribunal (ITAT) was Justified in condoning delay and setting aside the order of the Commissioner of Income Tax (Appeals) and restoring the first appeal, considering the peculiar facts of the case - Appeal dismissed. [Paras 3 - 7] Principal Commissioner of Income Tax-1 Surat v. M. D. Industries Pvt Ltd., 2025 LiveLaw (SC) 1111
Section 263 - Power of Commissioner to revise assessment - Distinction between failure to investigate and wrong decision by Assessing Officer - Where Assessing Officer conducts investigation but makes no addition, it implies acceptance of assessee's plea - Commissioner can revise under Section 263 by deciding on merits and making additions, not by remanding for lack of investigation - Remand justified only if superficial or random investigation established with recorded error and prejudice to Revenue - High Court and Tribunal orders upheld - Special Leave Petition dismissed. Principal Commissioner of Income Tax-1 v. V-Con Integrated Solutions, 2025 LiveLaw (SC) 435
Section 269ST, 271DA - Prohibition of Cash Transactions Exceeding ₹2,00,000 - Mandatory Reporting by Courts and Sub-Registrars - Disciplinary Action for Non-Compliance - Role of Income Tax Authorities - Circulation of Judgment - Section 269ST of the Income Tax Act, 1961 prohibits cash transactions of ₹2,00,000 or more in a single transaction, aggregate per day, or for a single event, except through account payee cheque, bank draft, or electronic clearing systems. Violations attract penalties under Section 271DA to promote digital transactions and curb black money. Courts are obligated to report to the jurisdictional Income Tax Department any suit involving cash transactions of ₹2,00,000 or more to verify compliance with Section 269ST. Sub-Registrars must report documents (e.g., sale agreements) presented for registration indicating cash payments of ₹2,00,000 or above. Failure to report by officials will lead to disciplinary action initiated by the Chief Secretary of the State/Union Territory. The jurisdictional Income Tax Authority shall investigate reported transactions for potential violations. The Registrar (Judicial) was directed to circulate this judgment to all High Court Registrar Generals, Chief Secretaries of States/Union Territories, and the Principal Chief Commissioner of Income Tax for strict compliance. The case involved a property dispute where a charitable trust, in possession since 1929, challenged a 2018 sale agreement claiming ₹75,00,000 in cash, violating Section 269ST. The Supreme Court set aside the High Court's dismissal of the trust's revision petition, dismissed the respondents' suit as defective and speculative, and emphasized mandatory reporting of high-value cash transactions by courts and Sub-Registrars to ensure compliance with tax laws. Appeal allowed. (Para 18) Correspondence RBANMS Educational Institution v. B. Gunashekar, 2025 LiveLaw (SC) 429 : 2025 INSC 490
Section 271AAA - Exemption from penalty u/s. 271AAA(2) – Conditions - Assessee admits undisclosed income in statement u/s. 132(4) during search; substantiates manner of derivation; pays tax together with interest - No specific time-limit prescribed for payment - Delayed payment does not disentitle assessee from exemption. K. Krishnamurthy v. Deputy Commissioner of Income Tax. 2025 LiveLaw (SC) 202 : 2025 INSC 208
Section 271AAA - Exemption from penalty u/s. 271AAA(2) –Held, If conditions (i)-(iii) of s. 271AAA(2) fulfilled, 10% penalty normally not leviable, even with delay in tax payment. K. Krishnamurthy v. Deputy Commissioner of Income Tax. 2025 LiveLaw (SC) 202 : 2025 INSC 208
Section 276C(1) - Wilful attempt to evade tax - Quashing of prosecution - Whether the continuation of the prosecution, initiated before the Settlement application, was abuse of court's process – Held, the Settlement Commission's order was conclusive, and it found that the appellant had made a full and true disclosure of his income, satisfying the conditions of Section 245H - Commission's finding that there was no suppression of material facts meant there was no 'wilful attempt' to evade tax, a key element required for a successful prosecution under Section 276C(1). [Paras 12, 18-21] Vijay Krishnaswami @ Krishnaswami Vijayakumar v. Deputy Director of Income Tax (Investigation), 2025 LiveLaw (SC) 851 : 2025 INSC 1048
Section 276CC, 279(2) - Compounding of offences - "First offence" under Guidelines for Compounding of Offences under Direct Tax Laws, 2014 - Interpretation - Assessee filed delayed returns for AY 2011-12 (due 30.09.2011, filed 04.03.2013) and AY 2013-14 (due 31.10.2013, filed 29.11.2014), leading to prosecution proposals under Section 276CC - Compounding application for AY 2011-12 accepted on 11.11.2014 post show-cause notice dated 27.10.2014 - For AY 2013-14, show-cause notice issued 12.03.2015; compounding rejected on ground it was not "first offence" due to prior compounding – High Court upheld rejection – Held, Offence u/s 276CC committed on day immediately following due date for filing return (01.10.2011 for AY 2011-12; 01.11.2013 for AY 2013-14), relying on Prakash Nath Khanna v. CIT, (2004) 9 SCC 686 - Subsequent belated filing does not erase commission of offence - "First offence" u/para 8.1 of 2014 Guidelines (superseding 2008 Guidelines) means offence committed prior to issuance of show-cause notice or intimation of prosecution, whichever earlier - Both offences here preceded respective show-cause notices - Prior compounding for AY 2011-12 immaterial as each offence assessed independently against "first offence" criteria - Rejection of compounding for AY 2013-14 set aside; assessee directed to file fresh application within 2 weeks - If accepted, trial proceedings abate - Appeal allowed. (Para 35, 41, 44, 69, 70) Vinubhai Mohanlal Dobaria v. Chief Commissioner of Income Tax, 2025 LiveLaw (SC) 173 : 2025 INSC 155
Section 276CC, 279(2) - Compounding of offences - "First offence" under Guidelines for Compounding of Offences under Direct Tax Laws, 2014 - Interpretation - Assessee filed delayed returns for AY 2011-12 (due 30.09.2011, filed 04.03.2013) and AY 2013-14 (due 31.10.2013, filed 29.11.2014), leading to prosecution proposals under Section 276CC - Compounding application for AY 2011-12 accepted on 11.11.2014 post show-cause notice dated 27.10.2014 - For AY 2013-14, show-cause notice issued 12.03.2015; compounding rejected on ground it was not "first offence" due to prior compounding – High Court upheld rejection – Held, Offence u/s 276CC committed on day immediately following due date for filing return (01.10.2011 for AY 2011-12; 01.11.2013 for AY 2013-14), relying on Prakash Nath Khanna v. CIT, (2004) 9 SCC 686 - Subsequent belated filing does not erase commission of offence - "First offence" u/para 8.1 of 2014 Guidelines (superseding 2008 Guidelines) means offence committed prior to issuance of show-cause notice or intimation of prosecution, whichever earlier - Both offences here preceded respective show-cause notices - Prior compounding for AY 2011-12 immaterial as each offence assessed independently against "first offence" criteria - Rejection of compounding for AY 2013-14 set aside; assessee directed to file fresh application within 2 weeks - If accepted, trial proceedings abate - Appeal allowed. (Para 35, 41, 44, 69, 70) Vinubhai Mohanlal Dobaria v. Chief Commissioner of Income Tax, 2025 LiveLaw (SC) 173 : 2025 INSC 155
Specific Heads of Income Disallowed- Dividend Income- Held that dividends are a return on investment in share capital, not a "loan or advance."- A shareholder is not a creditor and cannot sue for debt; thus, the nexus to "long-term finance" is absent- Interest on Short-term Deposits: Interest earned on idle surplus funds parked in banks is "at best attributable" to the business but not "derived from" the activity of long-term financing- Supreme Court distinguished between the broad genus of "Business Income" and the specific species of profits defined under Section 36(1)(viii)- Held that since the funds belonged to the Government and the appellant acted only as a nodal agency/intermediary without risking its own capital, the service fee received is an agency commission and not profit from providing finance- Held that The 1995 Amendment was specifically designed to prevent financial corporations from claiming deductions on diversified, non-core income. The appellant's receipts failed the strict rigor of the "derived from" test and the definition of "long-term finance" provided in the Explanation to Section 36(1)(viii)- Appeals dismissed. [Relied on Bacha F. Guzdar v. CIT (1954) 2 SCC 563; Paras 21-28] National Cooperative Development Corporation v. Assistant Commissioner of Income Tax, 2025 LiveLaw (SC) 1193 : 2025 INSC 1414
Supreme Court set aside the order of High Court wherein it was held that a debt created by a cash transaction above Rs. 20,000 in violation of the IT Act, cannot be considered as a 'legally enforceable debt' under Section 138 NI Act - Held that an accused need not be heard at the pre-cognizance stage of complaints filed for dishonour of cheque as per section 138 of NI Act - Noted that the massive backlog of cheque bouncing cases and the fact that service of summons on the accused in a complaint filed under section 138 NI Act continues to be one of the main reasons for the delay in disposal of the complaints as well as the fact that punishment under NI Act is not a means of seeking retribution but is more a means to ensure payment of money and to promote credibility of cheques as a trustworthy substitute for cash payment - Held that approach of some courts below to not give effect to the presumptions under section 118 and 139 of NI Act is contrary to mandate of Parliament - Appeal allowed. [Relied on Indian Bank Association vs. Union of India, (2014) 5 SCC 59; Damodar S. Prabhu vs. Sayed Babalal H., (2010) 5 SCC 663; Paras 15-18, 22-24] Sanjabij Tari v. Kishore S. Borcar, 2025 LiveLaw (SC) 952 : 2025 INSC 1158
Supreme Court set aside the order of High Court wherein it was held that a debt created by a cash transaction above Rs. 20,000 in violation of the IT Act, cannot be considered as a 'legally enforceable debt' under Section 138 NI Act - Held that an accused need not be heard at the pre-cognizance stage of complaints filed for dishonour of cheque as per section 138 of NI Act - Noted that the massive backlog of cheque bouncing cases and the fact that service of summons on the accused in a complaint filed under section 138 NI Act continues to be one of the main reasons for the delay in disposal of the complaints as well as the fact that punishment under NI Act is not a means of seeking retribution but is more a means to ensure payment of money and to promote credibility of cheques as a trustworthy substitute for cash payment - Held that approach of some courts below to not give effect to the presumptions under section 118 and 139 of NI Act is contrary to mandate of Parliament - Appeal allowed. [Relied on Indian Bank Association vs. Union of India, (2014) 5 SCC 59; Damodar S. Prabhu vs. Sayed Babalal H., (2010) 5 SCC 663; Paras 15-18, 22-24] Sanjabij Tari v. Kishore S. Borcar, 2025 LiveLaw (SC) 952 : 2025 INSC 1158
Whether the interest on the unpaid penalty should accrue from the expiry of 45 day period stipulated in Adjudicating Officer's order or from expiry of 30 days following the SEBI's notices – Held - Supreme Court affirmed that interest on penalties imposed by the SEBI's Adjudicating officer is payable from the expiry of 45 day-compliance period following the adjudication order, not from a subsequent demand notice - Section 220(1) of IT Act does not envisage the issuance of demand notice - notice is served under section 156 of IT Act, requiring payment within 30 days - Since section 156 IT Act is not incorporated into section 28A of SEBI Act, the expression 'notice of demand' for recovery under SEBI Act must be understood to include adjudication orders issued under chapter VIA of the SEBI Act - That subsequent demand notices issued by the Recovery Officers are merely reminders and liability for interest accrues from initial period stipulated for compliance in the adjudication order itself - Held that interest on unpaid penalty applicable retrospectively, liability accrues from adjudication order. [Para 11, 11.5] Jaykishor Chaturvedi v. Securities and Exchange Board of India, 2025 LiveLaw (SC) 730 : 2025 INSC 846