Tax Quarterly Digest: January - March, 2025

SUPREME COURTMotor 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 2018The 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 2025The 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.Supreme Court Sets Aside Excise Duty Demand On Oil Marketing Companies For Inter-Supply Of Petroleum ProductsCase Title: Bharat Petroleum Corporation Ltd. versus Commissioner of Central Excise Nashik Commissionerate (and connected matters)Case no.: CIVIL APPEAL NO. 5642 OF 2009In a significant relief for Oil Marketing Companies (OMCs), the Supreme Court ruled (Jan. 20) that prices under the MoU for inter-supply of petroleum products, designed to ensure smooth nationwide distribution, do not constitute "transaction value" and are exempt from excise duty due to their non-commercial nature.The Court emphasised that the inter-supply arrangement was not solely price-driven but aimed at facilitating seamless distribution, rendering it ineligible for excise duty.'Badly Drafted Petition' : Supreme Court Dismisses PIL Challenging TDS System Of Income Tax ActCase title: Ashwini Upadhyay v Union of IndiaCase no.: W.P.(C) No. 20/2025The Supreme Court today (January 24) refused to entertain a Public Interest Litigation challenging the provisions of the Income Tax Act which impose an obligation on private employers to deduct tax at source (TDS) on the salaries paid by them.A bench comprising Chief Justice of India Sanjiv Khanna and Justice Sanjay Kumar said that the petition filed by BJP leader Ashwini Upadhyay was "badly drafted" and asked him to approach the High Court.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 2024The 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.'Every Statute Prima Facie Prospective Unless Stated Otherwise' : Supreme Court Says 2002 Amendment To CST Act Won't Affect Accrued RightsCase Name: THE STATE OF MAHARASHTRA & ORS. V. PRISM CEMENT LIMITED & ANR.Case no.: CIVIL APPEAL NO.13928 OF 2015The Supreme Court yesterday (on February 12) held that though after the amendment of Section 8(5) of the Central Sales Tax Act, the State Government's right to grant exemption from tax has ceased to exist, the amendment is prospective. Thus, it would not apply to the cases where an absolute exemption has already been granted. The amended Act nowhere stipulates that rights previously accrued stand nullified or all previous exemptions stand cancelled or revoked., the Bench of Justices P.S. Narasimha and Pankaj Mithal said.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 2025The Supreme Court, while determining a tax matter, observed that the undisclosed income, under Section 271AAA(1) of the Income Tax Act,...

Tax Quarterly Digest: January - March, 2025

Kapil Dhyani