Direct Tax Updates of March 2025
NOTIFICATION G.S.R. 207(E) [NO. 23/2025/F. NO. 370142/10/2025-TPL], DATED 28-3-2025
The CBDT amends Form 3CD; new clause 36B inserted to report sum received for buyback of shares applicable for AY 2025-26.
NOTIFICATION G.S.R. 195(E) [NO. 22/2025/F.NO. 370142/08/2025-TPL], DATED 27-3-2025
The CBDT notifies amendment in Form 26Q & 27Q to include TDS on payment of salary, remuneration, etc. to partner.
Lok Sabha passes Finance Bill 2025 with amendments; abolishes the equalisation levy
The Lok Sabha has passed the Finance Bill 2025, incorporating over 30 modifications to the original bill introduced on February 01, 2025. The Finance Bill 2025, as passed by Lok Sabha, has abolished the provisions related to equalisation levy.
Important Judicial Precedents
No question of law arises if sec. 68 additions deleted as assessee proved genuineness of share transactions: SC
[2025] 172 taxmann.com 572 (SC) PCIT vs. Divyaben Prafulchandra Parmar
INCOME TAX : SLP dismissed against order of High Court that where assessee had held shares in question for two and half years and same were sold through recognized stock exchange after paying STT, claim of assessee for exemption of LTCG under section 10(38) could not be held to be bogus in absence of any contrary evidence brought on record by revenue
Block period for Sec. 153C notice to be reckoned from end of AY in which seized doc. was handed over to AO: HC
[2025] 172 taxmann.com 723 (Delhi –HC) Synod Farms and Infra Developers (P.) Ltd. vs. Chief Commissioner of Income-tax Central, Delhi
INCOME TAX: Period of limitation of ten years for issuance of notice under section 153C was required to be reckoned from end of assessment year relevant to financial year in which decision to take action for reopening assessments was initiated.
No disallowance u/s 40A(2) without justifying excessive expenses claimed by assessee: SC
[2025] 172 taxmann.com 434 (SC) CIT vs. Technip Energies Italy S.P.A
SLP dismissed against order of High Court that where Assessing Officer made additions by attributing 10 per cent of gross receipts to assessee’s PE in India by invoking section 40A(2), however he failed to justify invocation of section 40A(2)(b) and all material particulars had been duly placed before DRP and Assessing Officer Tribunal was justified in holding that expenses claimed by assessee with respect to related parties were not excessive and disallowance of assessee’s claim was unsustainable.
Whether reassessment under Section 148 of the Act must be based on concrete information, not mere assumptions – YES: HC
2025-TIOL-501-HC-AHM-IT_R/Special Civil Application No. 10786 Of 2023 _ MAHATMA GOBARJI SEVA SANSTHAN ILOL Vs. ITO WARD – 1 HIMMATNAGAR
The Court held that the reassessment proceedings were without jurisdiction as there was no tangible material suggesting escaped income. It found that the Assessing Officer had accepted the petitioner’s explanation regarding the alleged cash deposits but had subsequently shifted the basis for reopening to an unrelated issue without proper justification. Furthermore, the petitioner had incurred excess expenditure over income, negating any tax liability. The Court emphasized that reassessment under Section 148 of the Act must be based on concrete information, not mere assumptions. Since no valid reasons existed for reopening the assessment, the impugned order and notice were quashed and set aside. The petition was allowed, with no order as to costs.
No reassessment if trust had no taxable income; excess of exp. over income is not escaped income: HC
[2025] 172 taxmann.com 89 (Gujarat-HC) Mahatma Gobarji Seva Sansthan ILOL vs. Income-tax Officer Ward – 1
INCOME TAX : Where Assessing Officer issued reopening notice against assessee-trust on ground that assessee had deposited certain amount in its bank account, however, it was clear from reasons recorded in notices issued under section 148A(a) and section 148A(b) that there was no cash deposit made by assessee in any of bank accounts and there was no information of any escaped income with Assessing Officer so as to initiate reopening proceedings, Assessing Officer could not have assumed jurisdiction to reopen assessment.
No sec. 56(2)(x) additions if new flat was received by assessee in lieu of old flat surrendered by him: ITAT
[2025] 173 taxmann.com 51 (Mumbai – Trib.) Anil Dattaram Pitale vs. Income-tax Officer
INCOME TAX : Where assessee had purchased a flat and society underwent redevelopment and assessee got a new flat in lieu of old flat surrendered by him, it was not a case of receipt of immovable property for inadequate consideration that would fall within purview of provisions of section 56(2)(x), therefore, Assessing Officer was to be directed to delete addition made by him under section 56(2)(x).
Donation given by trust to other registered trusts to be considered as application of income: ITAT
[2025] 173 taxmann.com 99 (Chandigarh – Trib.) DCIT vs. Indo Global Education Foundation
INCOME TAX : Where assessee charitable trust, engaged in providing education, had given donations to other educational trusts, which were also registered under section 12AA, and claimed that by way of such donations object of providing education was fulfilled, said donations were to be considered as application of income and were to be allowed as exemption under section 11.
Trust not eligible for sec. 80G registration if objects allow future expenses outside India: ITAT
[2025] 172 taxmann.com 649 (Mumbai – Trib.) Hemlata Charities vs. CIT Exem
INCOME TAX : Where object clause of assessee-trust included grants of scholarships to deserving student studying in India or abroad, medical help and treatment to poor and deserving people in India and abroad, since object of trust left room for any potential future endeavour which might be undertaken by assessee resulting in expenditure outside India, assessee could not be granted final registration under section 80G unless relevant clause was modified or amended.
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