Supreme Court Direct & Indirect Tax: Annual Digest 2025

Judgments With CitationsDirect TaxMotor Accident Claims - Tax Returns Can Be Accepted To Determine Income Only If They Are Appropriately Produced : Supreme CourtCase name: New India Assurance Co. Ltd. V. Sonigra Juhi Uttamchand.Case no.: SLP (C) No. 30491 of 2018Citation : 2025 LiveLaw (SC) 18The Supreme Court, recently (on January 02), while deciding a motor accident compensation claim case, observed that monthly income could be fixed after taking into account the tax returns. However, the details of tax payment must be properly brought into evidence to enable the Tribunal/Court to calculate the income.The Bench of Justices C.T Ravikumar and Sanjay Karol were deciding a batch of appeals preferred both by the insurer and the claimant. While the claimant prayed for the enhancement of compensation, the insurer pleaded for the reduction.Reduction In Share Capital Amounts To Transfer Of Capital Asset Under Income Tax Act : Supreme CourtCase Name: PRINCIPAL COMMISSIONER OF INCOME TAX-4 & ANR v. M/S. JUPITER CAPITAL PVT. LTD.Case no.: SPECIAL LEAVE PETITION NO. 63 OF 2025Citation : 2025 LiveLaw (SC) 41The Supreme Court (recently on January 02) reiterated that reduction in share capital is covered under Section 2(47) of the Income Tax Act, 1961, which talks about transfer of a capital asset. It explained that such reduction would come under the expression “sale, exchange or relinquishment of the asset” used in the provision.The Bench of Justices J.B. Pardiwala and R. Mahadevan said that this provision provides an inclusive definition of transfer, covering relinquishment of an asset or extinguishment of any right.Income Tax Act | Offence Committed Before Show-Cause Notice Compoundable As Covered By 'First Offence' In Compounding Guidelines: Supreme CourtCase title: VINUBHAI MOHANLAL DOBARIA Vs CHIEF COMMISSIONER OF INCOME TAXCase no.: SPECIAL LEAVE PETITION (C) NO. 20519 OF 2024Citation : 2025 LiveLaw (SC) 173The Supreme Court on January 7 set aside the Gujarat High Court's judgment dated March 21, 2017, through which the rejection to the compounding application of the Appellant for the assessment year 2013-2014, for having filed the belated income tax return, was upheld on the ground that only for the "first offence" compounding of offence is possible. Since the Appellant had filed delayed income tax for 2011-2012 and his compounding application was accepted, it now cannot be accepted.However, the Supreme Court observed that the "first offence" is the offence committed prior to the show cause notice, which was the case here for both years.Income Tax Act | No Penalty Under S.271AAA If Undisclosed Income Is Admitted, Explained & Tax Paid Even With Delay : Supreme CourtCase Name: K KRISHNAMURTHY VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX.Case no.: CIVIL APPEAL NO. 2411 OF 2025Citation : 2025 LiveLaw (SC) 202The Supreme Court, while determining a tax matter, observed that the undisclosed income, under Section 271AAA(1) of the Income Tax Act, surrendered by the assessee during the search, is not sufficient to levy the penalty.Charitable Trust's Registration For Income Tax Exemption To Be Decided Based On Proposed Activities & Not Actual Activities : Supreme CourtCase Title: COMMISSIONER OF INCOME TAX EXEMPTIONS VERSUS M/S INTERNATIONAL HEALTH CARE EDUCATION AND RESEARCH INSTITUTECase no.: SPECIAL LEAVE PETITION (CIVIL) Diary No. 19528/2018Citation : 2025 LiveLaw (SC) 214The Supreme Court reiterated that when a charitable trust registers under Section 12-AA of the Income Tax Act (“Act”) for income tax exemptions (under Sections 10 and 11), the tax authorities should check if the charity's proposed activities match its charitable goals, as stated in the Ananda Social case.The Court, however, clarified that mere registration under Section 12-AA would not entitle a charitable trust to claim exemption under Sections 10 and 11 respectively of the Act, 1961, and the authorities can decline the grant of exemption if the materials produced by the trust does not seem convincing for grant of exemption.Courts & SROs Must Report To Income Tax Authorities If Suits/Deeds Mention Cash Transactions Above ₹2 Lakh: Supreme CourtCase Title: The Correspondence RBANMS Educational Institution VERSUS B. Gunashekar & AnotherCase no.: CIVIL APPEAL NO. 5200 OF 2025Citation : 2025 LiveLaw (SC) 429In a significant ruling aimed at combating black money and tax evasion, the Supreme Court today (April 16) directed courts and registration authorities to report cash transactions exceeding ₹2 lakhs to the Income Tax Department. The Court ruled that whenever any suit is filed claiming that a consideration of Rs. 2 Lacs or above is paid towards a transaction, then it becomes obligatory upon the Court to intimate the jurisdictional Income Tax Department for verification whether there's a violation of Section 269ST of the Income Tax Act, 1961 (IT Act).Income Tax Commissioners Must Not Routinely Remand Matters Just Because Assessing Officer Could Not Find...

Supreme Court Direct & Indirect Tax: Annual Digest 2025

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Supreme Court Direct & Indirect Tax: Annual Digest 2025

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