TaxTalks by CA. NRK

Delhi ITAT Remands Case, Ruling that Filing ITR-7 Instead of ITR-5 is a Rectifiable Technical Defect. In a landmark ruling for educational societies and small institutions, the Delhi ITAT has held that the mere filing of a return in the wrong ITR form cannot defeat an assessee's substantive right to claim lawfully incurred expenditures. The Tribunal emphasized that procedural rules are the "handmaid of justice" and should not be used to recover more than the lawful tax due. Case Background & The CPC Disallowance The assessee, New Surya Public School, a society registered under the Societies Registration Act, 1860, was running an educational institution. The dispute arose during the processing of the return for AY 2018-19: The Error: The society inadvertently filed its return using Form ITR-7 (applicable for charitable trusts/exempt entities) in...

Rajkot ITAT Quashes 100% Addition under Section 69A, Directs Taxation at Normal Rates. In a significant decision favouring small businessmen, the Rajkot Income Tax Appellate Tribunal (ITAT) has ruled that entire cash deposits representing trading receipts cannot be taxed as unexplained money under Section 69A . The Tribunal held that only the profit element embedded in such receipts should be taxed, and further, that this profit should be taxed at normal rates and not at the higher penalty rate under Section 115BBE . The Unjustified 100% Addition The case involved an assessee, a small trader in brass components, who had not filed a Return of Income for Assessment Year (AY) 2013-14. Information from the Insight Portal (STR) flagged cash deposits of ₹37.82 lakhs in his bank account. Assessee’s Explanation: The assessee explained that the deposits were sale p...

Delhi ITAT Upholds Set-Off under Section 70, Citing No Loss to Revenue. In a significant ruling, the Delhi Income Tax Appellate Tribunal (ITAT) has provided clarity on the inter-source set-off of capital losses. The Tribunal confirmed that capital losses (both Short Term and Long Term) can be set off against capital gains, even if the tax rates applicable to the loss sources differ from the tax rate on the capital gain.  The Dispute Over Differing Tax Rates The case pertained to Assessment Year (AY) 2023-24, where the assessee claimed the set-off of two types of capital losses against current year's Long Term Capital Gains (LTCG): Brought-forward Long-Term Capital Loss (LTCG loss). Current-year Short-Term Capital Losses (STCG loss) from sale of shares and redemption of mutual funds. The Revenue denied this set-off, arguing that the tax ra...

Hyderabad ITAT Rules on Jurisdictional Limit under Section 149(1)(b) Post-Lapse of Three Years. A crucial ruling from the Hyderabad Income Tax Appellate Tribunal (ITAT) has reinforced the importance of the monetary threshold for issuing reopening notices under Section 148 after the standard three-year period has lapsed. The Tribunal held that if the income that has escaped assessment is substantially less than the ₹50 lakh limit, the Assessing Officer (AO) is divested of jurisdiction to invoke the extended time limit 180 taxmann.com 709 (Hyderabad - Trib.)]. The Facts of the ₹19.31 Lakh Dispute The case pertains to Assessment Year (AY) 2016-17. The assessee had: Traded in shares and claimed Long Term Capital Gains (LTCG) as exempt under Section 10(38) . The AO subsequently issued a reopening notice on July 30, 2022, alleging that the assessee was a beneficiary...

GST Portal Implements Automatic System for Bank Account Details (Dec 5th, 2025). The GST Network has implemented crucial updates to the GST Portal to enforce compliance with Rule 10A , which governs the furnishing of bank account details. Taxpayers must be aware that failure to comply will now trigger an automatic suspension of their GST Registration, effective immediately following the specified deadline. Mandatory Deadline and Automatic Suspension As per the statutory requirement, taxpayers (excluding those under TCS, TDS, or Suo-moto registrations) must furnish their bank account details by the earliest of the following dates: 30 days of grant of registration , OR Before filing details of outward supplies in GSTR-1 or IFF (Invoice Furnishing Facility) . System Enforcement Update: I...

Advisory on Filing GSTR-3B with Auto-Populated Inter-State Supply Values (Dec 5th, 2025). This advisory from the GST Network announces a critical change to the filing procedure of Form GSTR-3B. To enhance data consistency and compliance, the values declared in Table 3.2—which captures inter-state supplies—will now be mandatory and non-editable, starting from the November 2025 tax period onwards. What is Captured in Table 3.2 of GSTR-3B? Table 3.2 of Form GSTR-3B captures the inter-state supplies made to three specific categories of recipients, taken out of the total supplies declared in Table 3.1 & 3.1.1 of GSTR-3B: Unregistered persons. Composition taxpayers. UIN (Unique Identification Number) holders. This data is auto-populated from corresponding supplies declared in GSTR-1, GSTR-1A, and IFF (Invoice Furnishing Facility) ...