Delhi High Court Direct Tax: Annual Digest 2025

Co-Accused Can Apply Separately For Compounding Of Offences Committed By Company Or HUF Under Income Tax Act: Delhi High CourtCase title: Sumit Bharana v. UoICase no.: W.P.(C) 16701/2024The Delhi High Court has held that co-accused are entitled to apply separately for compounding of offences committed by a Company or a Hindu Undivided Family under the Income Tax Act, 1961.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela ruled that the co-accused need not await filing of application for compounding by the company or the HUF.Designated Authority Under Direct Tax Vivad Se Vishwas Act Cannot Reopen Assessment After Issuance Of Final Certificate: Delhi HC ReiteratesCase title: S A N Garments Manufacturing Private Limited v. Pr Commissioner Of Income Tax 7 And AnrCase no.: W.P.(C) 932/2024The Delhi High Court has reiterated that a designated authority under the Direct Tax Vivad Se Vishwas Act, 2020 cannot reopen an assessment after a final certificate is issued under Section 5 of the Act and all disputes with regard to the 'tax arrear' stand concluded.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “once a declarant is issued a certificate (Form No.5) in terms of Section 5 of the DTVSV Act, and the declarant deposits the determined amount, the Designated Authority is proscribed from initiating any action or proceedings in respect of 'tax arrear'. The dispute stands settled.”Reassessment U/S 150 Of Income Tax Act Can't Be Initiated On Mere 'Incidental' Findings Of Appellate Authority: Delhi High CourtCase title: The Pr. Commissioner Of Income Tax - Central -1 v. Capital Power Systems Ltd.Case no.: ITA 501/2024The Delhi High Court has held that Section 150 of the Income Tax Act, 1961 can be invoked for reassessment only to give effect to a 'conclusive finding' by an appellate authority regarding escapement of income by an assessee.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed that invocation of the provision requires a “strict and cautious application” of the terms 'findings' and 'direction' to prevent the reopening of assessments based on findings or directions that are only incidental, tangential, or beyond statutory authority.Uploading Information On Insight Portal Not A Substitute For Handing Over Material To AO For Non-Searched Entity U/S 153C Of IT Act: Delhi HCCase title: ATS Township Pvt Ltd v. Assistant Commissioner Of Income Tax Circle 1(1) Delhi & OrsCase no.: W.P.(C) 13790/2024The Delhi High Court has held that the provision under Section 153C of the Income Tax Act, 1961 for the Assessing officer of a searched person to record 'satisfaction' and handover documents regarding undisclosed income of another person cannot be substituted by merely uploading such information on the Department's insight portal.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “Uploading of information by the investigation wing of the Income Tax department would not be a substitute for recording of a satisfaction note by the AO of a searched person and handing over the assets, books of accounts or other material to the AO of the person other than the searched person for the purpose of initiation of proceedings under Section 153C of the Act.”Assessee Must Clearly Establish 'Movement Of Goods' To Defend Allegations Of Accommodation Entries: Delhi HCCase title: Abhishek Bansal v. Income Tax Officer, Ward 58(3), DelhiCase no.: W.P.(C) 17300/2024The Delhi High Court has made it clear that merely producing transaction documents to establish that payments were made to an entity is not sufficient to defend the allegations of accommodation entries.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The documents provided by the petitioner would establish that the payments had been made to Shri Ajay Gupta through banking channels. However, the same does not address the allegation of purchases reflected were accommodation entries…In the present case, the petitioner was required to clearly show the movement of goods to establish that the goods had in fact moved from Shri Ajay Gupta to the petitioner. However, it does not appear that any such information was provided by the petitioner to the AO.”Income Tax Dept Can Invoke S.159 When Reassessment Notice Was Issued During Lifetime Of Deceased Assessee: Delhi HCCase title: Late Sh. Lal Chand Verma Through His Legal Heir v. Union Of India & Anr.Case no.: W.P.(C) 8184/2023The Delhi High Court has held that Section 159 of the Income Tax Act can be invoked to proceed against the legal representative of an assessee, only in cases where the reassessment notice was issued to the assessee during his lifetime, not after.Division bench of Justices Yashwant Varma and Dharmesh Sharma noted that “Section 159 of the Act is applicable when proceedings are initiated and pending against an...

Delhi High Court Direct Tax: Annual Digest 2025

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