BHARAT BANSAL VS. NATIONAL FACELESS ASSESSMENT CENTRE DELHI
The Hon’ble Delhi High Court recently held that the Assessing Officer (AO) need not specify the nature of scrutiny in a notice issued under Section 143(2). The Court ruled against the assessee on the validity of a notice under Section 143(2) that did not conform to the format prescribed under CBDT Instruction F. No. 225/157/2017/ITA.II dated 23 June 2017.
The Court held that it is not mandatory for the AO to state in the Section 143(2) notice the reasons for selecting a case for scrutiny, i.e. whether it is a case of limited scrutiny, complete scrutiny or compulsory manual scrutiny. An assessee cannot claim, as a matter of right, disclosure of such details.
Harigovind v. Assistant Commissioner of Income-tax Non-corporate Madaras HC
Where the search was conducted at third-party premises and the seized material was handed over to the Assessing Officer of the assessee on 25.11.2022, the said date is to be construed as the date of initiation of search against the assessee. Since the initiation of search was subsequent to 01.04.2021, the provisions of section 153C would not apply, and notice under section 148 of the Act ought to have been issued, if at all. Thus, the impugned notice issued under section 153C is liable to be quashed.
PR. COMMISSIONER OF INCOME TAX – 1 v. M/S AGROHA FINCAP LTD.
Hon’ble Delhi High Court, recently while allowing an appeal filed by the Revenue against an ITAT order, held that the usage of the language “Yes, I am convinced it is a fit case for re-opening of the assessment u/s 147 by issuing notice u/s 148” meets the requirement of proper approval by the Competent Authority as per Section 151 of the Income Tax Act, 1961.
Hon’ble Court reiterated the proposition that the statute requires that the satisfaction of the Competent Authority has to be recorded, which can be reflected in the briefest possible manner.
Commissioner Of Income Tax-Tds-01 v. Diamond Tree
The Delhi High Court has held that the Common Area Maintenance Charge (CAM) paid by a showroom owner to the mall does not qualify as ‘rent’ and is not liable to TDS under Section 194I of the Income Tax Act 1961.
Section 194I stipulates that TDS applies if the total rent paid or payable in a financial year exceeds a specified limit.
The High Court observed that “CAM charges can be covered under provisions of 194C of the Act of 1961”.
Section 194C governs TDS on payments made to contractors and subcontractors for work contracts.
The High Court cited Commissioner of Income Tax (TDS)-1, Delhi v. Liberty Retail Revolutions Limited where it was held that CAM charges are in the nature of a contractual payment made to a person for carrying out the work in lieu of a contract.
It was further held that CAM charges are completely dependent and separate from rental payments, and are fundamentally for availing common area maintenance services which may be provided by the landlord or any other agency, therefore, the same cannot be brought within the scope and gamut of the definition of terminology “rent”.
Thus stating that only payments made for use of premises/ equipment is covered by Section 194-I of the Act, the High Court ruled that CAM “cannot be construed as payment of rent for occupying the premises in question.”
As such, it dismissed Revenue’s appeal.