Karnataka High Court Tax Annual Digest 2025

Direct TaxProceedings Initiated Against Income Tax Assessee After His Death Cannot Be Continued Against Legal Representative: Karnataka HCCase Title: The Income Tax Officer & ANR Preeti VCase No:WRIT APPEAL NO. 1407 OF 2024The Karnataka High Court has said proceedings initiated against an Income Tax Assessee by issuing notice after his demise cannot be continued against his/her legal representative.A division bench of Justice Krishna S Dixit and Justice G Basavaraja said, “Had the proceedings been initiated against the Assessee during his lifetime, they could have continued against the legal representatives of the deceased Assessee.”Merely Paying Penalty For Wilful Delay In Filing Income Tax Returns Does Not Exonerate Assessee From Being Prosecuted: Karnataka High CourtCase Title: Rajkumar Agarwal v. Income Tax Department.Case No: CRIMINAL PETITION NO. 201214 OF 2023 (482(Cr.PC)/528(BNSS)) C/W CRIMINAL PETITION NO. 201213 OF 2023 CRIMINAL PETITION NO. 201215 OF 2023 CRIMINAL PETITION NO. 201216 OF 2023The Karnataka High Court has refused to quash prosecution initiated by the Income Tax Department against an assessee who had willfully failed to submit his income tax returns in time for the Assessment Years 2012- 13 to 2015-16 and thereby committed the alleged offence.A single judge, Justice S Vishwajith Shetty dismissed the petitions filed by Rajkumar Agarwal. It said, “Delay in filing of the income tax returns would not only result in payment of penalty, but it also results in prosecution as provided under Chapter 22 of the Act. Therefore, merely for the reason that petitioner has paid the penalty levied by the Competent Authority for the delay in filing of the returns, the same does not exonerate the petitioner from being prosecuted.”Fair Market Value Of Shares Determined By Statutory Methods Can't Be Rejected By Income Tax Department: Karnataka High CourtCase Title: The PR. Commissioner of Income TaxCase Number: INCOME TAX APPEAL NO. 425 OF 2023The Karnataka High Court stated that fair market value of shares determined by statutory methods can't be rejected by the income tax department.The Division Bench of Justices Krishna S Dixit and Ramachandra D. Huddar was addressing a case where the revenue has challenged the order passed by the Tribunal where the Tribunal held that the valuation report on DCF Method produced during assessment proceedings was a valid report justifying valuation of shares.Gram Panchayat Cannot Levy Property Tax On Industrial Establishment Within Notified Industrial Areas: Karnataka High CourtCase Title: M/S. KALPATHARU BREWERIES & DISTILLERIES PRIVATE LIMITED AND State of Karnataka & OthersCase No: WRIT PETITION NO.26031 OF 2017The Karnataka High Court has held that the Gram Panchayat cannot levy or collect property taxes in respect of Industrial establishments located within areas notified by the Karnataka Industrial Areas Development Board (KIADB). Mere execution of a lease-cum-sale agreement or any administrative communication cannot vest power in the Gram Panchayat to levy tax in the absence of express delegation or statutory backing.Justice Sachin Shankar Magadum held thus while allowing a batch of petitions and quashing the demand notices issued by the Sompura Gram Panchayat levying property tax on the industrial property of the petitioners located within the notified industrial area established and maintained by the respondent-Karnataka Industrial Areas Development Board (KIADB).Karnataka High Court Directs CBDT To Extend Tax Audit Due Date To 31st OctoberThe Karnataka High Court today directed the Central Board of Direct Taxes to extend the due date for filing Tax Audit Reports under Section 44AB of the Income Tax Act, 1961, by one month to 31st October, 2025.The Court took into consideration the difficulties faced and directed the CBDT to extend the due date until the end of October.Income Tax Act | Interest On Loan Advanced To Company Not Deductible Against Salary Income: Karnataka High CourtCase Title: Sri Mukesh Gupta v. The Deputy Commissioner of Income TaxCase Number: ITA NO 283 OF 2022The Karnataka High Court has held that a loan raised by mortgaging property and advancing to a company does not constitute business expenditure, and the interest is not deductible against salary income.The bench opined that unless expenditure is incurred in the course of the business or professional service, the assessee is not entitled to a deduction, merely due to it being incurred on the amount borrowed and advanced to the company.Income Tax Act | Documents Seized From Actor Yash's Residence Make Him 'Searched Person': Karnataka High Court Quashes Order U/S 153CCase Title: Mr. Yash v. Deputy Commissioner of Income TaxCase Number: WRIT PETITION NO. 6530 OF 2021 (T-RES)The Karnataka High Court has held that the search conducted at Actor Yash's residence makes him a 'searched person' under the Income Tax Act, as documents were seized from him, during the search and a panchanama was drawn. ...

Karnataka High Court Tax Annual Digest 2025

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