Supreme Court Annual Digest 2022-Income Tax

Income Tax Act, 1961Income Tax Act, 1961 - Appeal against Gujarat High Court judgment extending the immunity under the "Income Declaration Scheme" (IDS) to an assessee who was not the declarant under the scheme - Allowed - The High Court fell into error, in holding that the sequitur to a declaration under the IDS can lead to immunity (from taxation) in the hands of a non-declarant. Deputy Commissioner of Income Tax v. MR Shah Logistics, 2022 LiveLaw (SC) 323 : 2022 (5) SCALE 395Income Tax Act, 1961 - The ‘fee’ or ‘charge’ as mentioned in Section 40(a)(iib) is clear in terms and that will take in only ‘fee’ or ‘charge’ as mentioned therein or any fee or charge by whatever name called, but cannot cover tax or surcharge on tax and such taxes are outside the scope and ambit of Section 40(a)(iib)(A) and Section 40(a)(iib)(B) of the Act. (Para 14.3) Kerala State Beverages Manufacturing & Marketing Corporation Ltd. v. Assistant Commissioner of Income Tax Circle 1(1), 2022 LiveLaw (SC) 4: AIR 2022 SC 309 : (2022) 4 SCC 240Income Tax Act, 1961 - The aspect of ‘exclusivity’ under Section 40(a)(iib) has to be viewed from the nature of undertaking on which levy is imposed and not on the number of undertakings on which the levy is imposed- Exclusivity is to be considered with reference to nature of licence and not on number of State-owned Undertakings. (Para 14.2) Kerala State Beverages Manufacturing & Marketing Corporation Ltd. v. Assistant Commissioner of Income Tax Circle 1(1), 2022 LiveLaw (SC) 4: AIR 2022 SC 309 : (2022) 4 SCC 240Income Tax Act, 1961 - The surcharge on sales tax and turnover tax, is not a fee or charge coming within the scope of Section 40(a)(iib)(A) or 40(a)(iib)(B), as such same is not an amount which can be disallowed under the said provision. (Para 16) Kerala State Beverages Manufacturing & Marketing Corporation Ltd. v. Assistant Commissioner of Income Tax Circle 1(1), 2022 LiveLaw (SC) 4 : AIR 2022 SC 309 : (2022) 4 SCC 240Income Tax Act, 1961 - Turnover tax is also outside the purview of Section 40(a) (iib)(A) and 40(a)(iib)(B). (Para 15) Kerala State Beverages Manufacturing & Marketing Corporation Ltd. v. Assistant Commissioner of Income Tax Circle 1(1), 2022 LiveLaw (SC) 4 : AIR 2022 SC 309 : (2022) 4 SCC 240Section 2 (1A) - "Agricultural Income"Income Tax Act, 1961; Section 2 (1A) - Companies Act, 1956; Section 394 (2), 481 - Despite amalgamation, the business, enterprise and undertaking of the transferee or amalgamated company- which ceases to exist, after amalgamation, is treated as a continuing one, and any benefits, by way of carry forward of losses (of the transferor company), depreciation, etc., are allowed to the transferee - Whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case. (Para 42) Principal Commissioner of Income Tax v. Mahagun Realtors (P) Ltd; 2022 LiveLaw (SC) 346 : AIR 2022 SC 1672Section 2 (15) - "Charitable Purpose"Income Tax Act, 1961; Section 2(15) - Tax exemption for charitable purposes - An assessee advancing general public utility cannot engage itself in any trade, commerce or business, or provide service in relation thereto for any consideration-However, in the course of achieving the object of general public utility, the concerned trust, society, or other such organization, can carry on trade, commerce or business or provide services in relation thereto for consideration, provided that the activities of trade, commerce or business are connected to the achievement of its objects of GPU; and the receipts do not exceed the quantified limit. (Para 253) Assistant Commissioner of Income Tax v. Ahmedabad Urban Development Authority, 2022 LiveLaw (SC) 865Income Tax Act 1961; Section 2(15) - Tax exemption for charitable purposes - for achieving a general public utility object, if the charity involves itself in activities, that entail charging amounts only at cost or marginal mark up over cost, and also derive some profit, the prohibition against carrying on business or service relating to business is not attracted - if the quantum of such profits do not exceed 20% of its overall receipts. (Para 172) Assistant Commissioner of Income Tax v. Ahmedabad Urban Development Authority, 2022 LiveLaw (SC) 865Income Tax Act 1961; Section 2(15) - Amounts charged by statutory authorities, corporations, statutory regulatory authorities for their public activities can't be treated as commercial receipts-However, if the amounts collected are significantly higher than the costs incurred, it can be treated as commercial income. (Para 253) Assistant Commissioner of Income Tax v. Ahmedabad Urban Development Authority, 2022 LiveLaw (SC) 865Income Tax Act 1961; Section 2(15) - Tax exemption for professional bodies like ICAI- bodies which regulate ...

Supreme Court Annual Digest 2022-Income Tax

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