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Name of the
Case
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Held
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Engineering Analysis Center for Excellence v.
Commissioner of Income Tax, 2021 SCC Online SC 159
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Settling an important issue in the Income Tax Law, a
the Supreme Court held that the amounts paid by Indian companies for the use
of softwares developed by foreign companies do not amount to ‘royalty’ and
that such payment do not give rise to income which is taxable in India.
Therefore, there is no liability for Indian companies to deduct tax at source
with respect to purchase of software from foreign companies.
|
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Principal
Commissioner of Income Tax (Central) – 2 v. Mahagun Realtors (P) Ltd.,
2022 SCC Online SC 407
|
The
Supreme Court clarified a seemingly settled point of law regarding the
validity of an Income Tax notice issued to a transferor company after its
amalgamation. While the common belief was that transferor entities cease to
exist, having undergone corporate death upon amalgamation, the Supreme Court
held that an amalgamation does not automatically invalidate an assessment
order issued in the name of the transferor company.
|
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Principal
Director of Income Tax (Investigation) v. Laljibhai KanjiBhai Mandalia, 2022
SCC Online SC 872
|
The
Supreme Court reiterated the principles governing writ jurisdiction in the
context of search and seizure under Section 132 of the Income Tax Act. It
noted that the adequacy or insufficiency of the reasons recorded cannot be
examined when assessing the validity of an authorization for search and
seizure. The recorded belief is justiciable only in light of the Wednesbury
Principle of Reasonableness.
|
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K.L. Swamy v. Commissioner of
Income Tax, 2023 SCC Online SC 44
|
The
Supreme Court affirmed that the revenue was justified in imposing interest
under Section 158BFA(1) of the Income Tax Act for the late filing of returns
for the block period, even without a notice under Section 158BC and for the
period prior to June 1, 1999. The Court examined the rationale, objectives,
and purpose of Chapter XIV-B, which governs block assessments, noting that
this provision establishes a special procedure for cases involving searches.
The primary aim of including this provision was to address tax evasion, and
to expedite and simplify the assessment process in such cases.
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Income Tax Officer
v. Vikram Sujitkumar Bhatia, 2023 SCC Online SC 370
|
The
Supreme Court observed that the amendment to Section 153C of the Income Tax
Act, 1961, introduced by the Finance Act, 2015, applies to searches conducted
under Section 132 before June 1, 2015, the date of the amendment. The purpose
of Section 153C is to address issues involving individuals other than the
person directly searched. The 2015 amendment was introduced to address the
narrow interpretation of “belong/belongs” in Section 153C by the
Delhi High Court in the Pepsico Holdings case. This narrow interpretation had
previously prevented the Revenue from taking action against third parties
even when incriminating material related to them was discovered during search
proceedings under Section 132.
|
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SAP Labs India Pvt. Ltd. v. Income Tax Officer, Circle
6, Bangalore, 2023 SCC Online SC 449.
|
The
Supreme Court has ruled that the High Court is not barred from reviewing the
arm’s length price determined by the Income Tax Appellate Tribunal (ITAT)
under its powers pursuant to Section 260A. The bench also stated that there
is no absolute rule that the Tribunal’s determination of arm’s length price
is final and immune from scrutiny by the High Court in an appeal under
Section 260A.
|
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Mansarovar
Commercial Pvt. Ltd. v. Commissioner of Income Tax, Delhi, 2023 SCC Online SC 386
|
The
Supreme Court upheld the jurisdiction of the Assessing Officer in New Delhi
to tax the income of assessees incorporated under the Registration of
Companies (Sikkim) Act, 1961, for assessment years prior to when the Income
Tax Act, 1961 was extended to Sikkim. Since the control and management of the
assessee companies were based in New Delhi with their auditor, the Income Tax
Act, 1961 applied to them. Consequently, these companies, incorporated under
Sikkim’s company law, were considered resident Indian companies, and their
income accrued or earned in India for assessment years before April 1, 1990,
was taxable under the Income Tax Act.
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Excise Commissioner Karnataka & v. Mysore Sales
International Ltd., 2024 SCC Online SC 1660
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The
Supreme Court ruled that a vendor who purchases liquor from state
manufacturers without going through an auction and sells it at a fixed price
is excluded from the definition of ‘buyer’ under Section 206C of the Income
Tax Act. Such transactions are exempt from Tax Collected at Source (TCS). The
Court clarified that to be excluded from the ‘buyer’ definition under Section
206C(1) as per Explanation (a)(iii), two criteria must be met: (a) the goods
must be obtained without auction, and (b) they must be sold at a price fixed
by the state government.
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In this Landmark Judgment Series celebrating 8 years of Jurisedge, we turn our focus to the Landmark Series for the Tax Law 2020-2024.
The landscape of Tax Law from 2021 to 2024 has been marked by significant judicial pronouncements, making it important and attractive subjects for examiners. The Supreme Court has delved into various topics such as taxation of payments for software developed by foreign entities, impact of amalgamation on tax assessments, principles governing the validity of search and seizure authorizations, application of interest for late filing of returns under specific provisions, applicability of amendments related to third-party issues in search cases, The scope of High Court review over ITAT’s arm’s length price determinations, The jurisdiction of tax authorities over companies incorporated under Sikkim’s laws, The definition of ‘buyer’ and exemptions from Tax Collected at Source (TCS) for liquor transactions.
We have already covered various subjects like Constitutional Law, Administrative Law, Indian Penal Code, Evidence Law, Environmental Law and Company Law.
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