RNM Tax Alert – Direct Tax Part for November 2025

Important Judicial Precedents

• Writ challenging order passed by AO under section 148A(d) maintainable despite alternate appeal remedy: HC

[2025] 180 taxmann.com 207 (SIKKIM-HC) Zydus Healthcare Ltd vs. ACIT

Section 246A, read with section 148A, of the Income-tax Act, 1961 – Commissioner (Appeals) – Appealable orders (Order under section 148A(d)) – Whether section 246A(1)(b) provides scope for appeal against order under section 148A(d) – Held, yes – Whether power to issue prerogative writs under Article 226 of Constitution of India is plenary and discretionary in nature, and availability of alternative remedy does not bar exercise of such jurisdiction – Held, yes – Whether thus High Court, in exercise of its discretion, could entertain writ petition against order under section 148A(d) notwithstanding availability of alternative remedy – Held, yes [Paras 3 and 4] [In favour of assessee]

• Both JAO and FAO have concurrent jurisdiction to initiate reassessment proceedings under section 148: HC

[2025] 179 taxmann.com 619 (Delhi-HC) Yukti Export vs. Income-tax Officer

Section 147, read with sections 148 and 151A, of the Income-tax Act, 1961 – Income escaping assessment – Issue of notice for (Jurisdiction) – Whether both Jurisdictional Assessing Officer (JAO) and Faceless Assessing Officer (FAO) possess concurrent jurisdiction to initiate reassessment proceedings under section 148 – Held, yes [Paras 10 and 18] [In favour of revenue]

• AO must refund TDS if assessee furnishes valid Form 16A, even if not reflected in Form 26AS: HC

[2025] 179 taxmann.com 615 (Allahabad-HC) U.P. Rajya Nirman Sahakari Sangh Ltd. vs. Union of India Min.of Finance Dept.of Revenue

Where assessee claimed TDS refund by submitting Form 16A certificates but TDS was not reflected in Form 26AS, Assessing Officer could not deny refund solely due to mismatch and was obliged to verify Form 16A details, making assessee entitled to refund once such certificates were accepted by tax authority.

• Sec. 50C not applicable on sale of leasehold rights as transfer did not involve land or building: ITAT

[2025] 179 taxmann.com 567 (Delhi – Trib.) Neha Gupta vs. Income-tax Officer

Section 50C of the Income-tax Act, 1961 – Capital gains – Special provision for computation of full value consideration (Leasehold rights) – Assessment year 2009-10 – Assessee sold an industrial unit, which was a leasehold property – Assessing Officer adopted stamp duty valuation as full value of consideration and made addition under section 50C – It was noted that in case similar to assessee, High Court held that section 50C would not apply to a case of rights in land – Whether since what was sold by assessee was not ‘land or building’ or both but only lease rights in land, provisions of section 50C would have no application to facts of assessee’s case – Held, yes [Paras 8 to 10] [In favour of assessee]

• Payment for withdrawing suit claiming property rights is not capital gains; no transfer of asset: ITAT

[2025] 180 taxmann.com 478 (Mumbai – Trib.)  Shireen J. Dastur vs. ITO

Where assessee, a non-resident individual, received Rs. 15 crores from purchaser of an immovable property for withdrawing her civil suit claiming inheritance rights in that property, since her suit was still pending before High Court and any right in property would have accrued only upon adjudication, she had no existing enforceable right capable of transfer; therefore, withdrawal of suit did not amount to transfer of a capital asset under sections 2(14) and 2(47), and amount received could not be taxed under head ‘capital gains’

• Notice u/s 148 to be quashed as same was issued after expiry of limitation period prescribed by TOLA: HC

[2025] 179 taxmann.com 572 (Delhi-HC) Sarthak Gupta vs. Income-tax Officer

In view of decision in case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/469 ITR 46/301 Taxman 238 (SC), notices issued under section 148 on or after 01-04-2021 in respect of assessment year 2015-16 were liable to be dropped as they would not fall for completion during period prescribed under TOLA.

• HC deleted penalty as assessee disclosed acquisition of foreign assets in ITRs before any notice for penalty was issued

[2025] 180 taxmann.com 634 (Bombay-HC) PCIT vs. Shrem Alloys (P.) Ltd

Where assessee disclosed acquisition of foreign asset in original returns for relevant years as well as in books of account and again in section 153A return before any penalty proceedings, imposition of penalty for alleged non-disclosure in prescribed format was unwarranted.

• TDS credit can’t be denied to ex-employee merely because employer failed to comply with TDS provisions: ITAT

[2025] 180 taxmann.com 645 (Delhi – Trib.) Mani Madhukar Bansal vs. ACIT/DCIT, International Taxation

Where employer had not given any Form 16 to assessee after deducting TDS from salary and assessee had brought on record relevant salary slips to demonstrate that tax was deducted from salary, revenue could not deny tax credit to assessee.

• HC directs AO to verify info. available on ‘Insight Portal’ before issuing notice u/s 148A(1)

[2025] 180 taxmann.com 16 (Gujarat-HC) Vasuki Global Industrial Ltd. vs. PCIT

It is responsibility and liability of jurisdictional Assessing Officer to verify information made available on Insight Portal which suggests that income chargeable to tax has escaped assessment in case of assessee for relevant assessment year and if necessary, Assessing Officer must conduct inquiry with prior approval of specified authority with respect to such information and only after verification of information made available to Assessing Officer, provisions of section 148A(1) shall be invoked.

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