Madras High Court Annual Tax Digest 2025

Direct TaxFAOs And JAOs Have Concurrent Jurisdiction For Assessment, Re-assessment Or Re-Computation U/S 147 Income Tax Act: Madras High CourtCase Title: Mark Studio India Private Limited v. Income Tax Officer and OthersCase No: W.P.Nos.25223 & 25227 of 2024The Madras High Court recently clarified that both the Faceless Assessment Officer and Jurisdictional Assessment Officer have concurrent jurisdiction as far as assessment, re-assessment or re-computation under Section 147 of the Income Tax Act.Justice Krishnan Ramasamy made it clear that for issuance of notice under Section 148 of the IT Act, the JAO had exclusive jurisdiction. The court added that in matters of international taxation, central Circle charges and search and seizure cases also, the JAO had exclusive jurisdiction and the FAO, in such cases, did not have jurisdiction to make assessment, re-assessment or re-computation.Sections 43B & 40A Income Tax Act | Which Provision Prevails When Both Commence With Non-Obstante Clause? Madras High Court ClarifiesCase Title: M/s Sanmar Speciality Chemicals Limited v. The Assistant Commissioner of Income-TaxCase Number: T.C.(A).No.493 of 2013The Madras High Court while referring to sections 43B and 40A Income Tax Act explained which provision prevails when both commence with a non-obstante clause.The Division Bench of Justices Dr. Anita Sumanth and G. Arul Murugan stated that “the Rule that a general provision should yield to specific provision springs from the common understanding that when two directions are given one encompassing a large number of matters in general and another to only some, the latter directions should prevail as being more specific in nature.”Digital Marketing Is Business, Not Profession; Audit Report Not Required For Turnover Below ₹5 Crores: Madras High CourtCase Title: Vajra Global Consulting Service LLP v. Assistant Director of Income TaxCase Number: W.P.No.18560 of 2023The Madras High Court held that digital marketing is a business and not a profession; and an audit report is not required for turnovers below Rs. 5 crores.Justice Krishnan Ramasamy stated that “Digital Marketing is the business for persons who carry out the said activities. In the event anybody carrying on the business of Digital Marketing with cash transactions both on the aspect of receipts and payments in cash below 5% of the turnover, which is below Rs.5 Crores as per the proviso to Section 44 AB (a), the said assessee is not required to file an audit report and they are exempted.”S.263 Income Tax Act | Commissioner Cannot Revise Assessment Merely Because Detailed Reasoning Was Not Given: Madras High CourtCase Title: M/s Arul Industries v. The Asst. Commissioner of Income TaxCase Number: TCA No.340 of 2016The Madras High Court stated that the Income Tax commissioner cannot revise an assessment merely because detailed reasoning was not given in the order.Chief Justice Manindra Mohan Shrivastava and Justice Sunder Mohan stated that, "an order cannot be termed as erroneous unless it is not in accordance with law. If the Income Tax Officer, acting in accordance with law, makes certain assessment, the same cannot be branded as erroneous by the Commissioner, simply because, according to the Commissioner, the order should have been written more elaborately."Approval From Higher Authority Mandatory For Issuing Notice U/S 148 Income Tax Act After Expiry Of 3-Year Limitation: Madras High CourtCase Title: D. Tamilselvi v. The Income Tax OfficerCase Number: W.P.(MD)Nos.30938The Madras High Court has held that under the new regime, approval from a higher authority, such as the Principal Chief Commissioner of Income Tax or the Principal Director General, is mandatory to issue a notice under Section 148 of the Income Tax Act after the expiry of a three-year limitation period.Justice C. Saravanan stated that …three years from the end of the Assessment Year 2016-2017, 2017-2018 and 2018-2019, to issue Section 148 Notice under the new regime had already expired on 31.03.2020, 31.03.2021 and 31.03.2022. However, Section 148 Notices were issued for these Assessment Years only on 29.07.2022 with approval from the Principal Commissioner instead of approval from the Principal Chief Commissioner in terms of amended provisions as in force for the period in dispute were in time…Income Tax Act | Trust's Legitimate Tax Exemption Cannot Be Denied For Delay In Filing Form 10B: Madras High CourtCase Title: Sivestar Educational Trust v. Commissioner of Income Tax (Exemption)Case Number: W.P.No.6814 of 2025The Madras High Court held that delay in filing Form 10B required under Section 44AB for the purpose of Section 12A(1)(b) of the Income Tax Act, 1961, is not a ground to deny legitimate exemption tax exemptions.Justice C. Saravanan observed that the assessee was registered as a “Trust” in the year 2017. Effectively, the assessee would have carried on operation as a “Trust” from 01.04.2017 onwards, which would fall under the Assessment Year...

Madras High Court Annual Tax Digest 2025

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