Capital gains exemption under section 54 and 54F is available only when statutory conditions relating to timelines, asset type and reinvestment are strictly complied with. Capital gains exemption under sections 54 and 54F is one of the most frequently claimed but equally frequently denied tax benefits under the Income-tax Act, 1961. While these provisions offer … Read more
Section 263 revision allows the Principal Commissioner to revise an assessment order.But every erroneous order is not revisable. Statutory Preconditions for Invoking Section 263 Section 263 does not give unfettered powers to the Principal Commissioner. The provision is jurisdictional in nature and can be invoked only if the twin statutory conditions are satisfied simultaneously: Both … Read more
AIS TIS mismatch is increasingly resulting in income-tax additions and automated notices. In most cases, these mismatches arise due to reporting or timing issues and can be resolved online without resorting to litigation, provided timely and accurate action is taken. Why AIS TIS Mismatch Arises How AIS and TIS Data Is Generated AIS (Annual Information … Read more
Section 154 allows correction of mistakes apparent on record. It is powerful—but limited. Particular Section 154 Rectification Appeal (CIT(A)) Revision (Section 264) Nature Correction of mistake apparent on record Challenge to assessment/addition Discretionary relief by Commissioner Scope Very limited Wide Wide but discretionary Can decide debatable issues ❌ No ✅ Yes ❌ No Evidence allowed … Read more
Defective return under Section 139(9) is a problem faced by many taxpayers. Receiving a notice stating that your income-tax return is defective under section 139(9) often causes unnecessary anxiety. Many taxpayers assume it is a serious default or that penalties will follow immediately. In reality, a defective return notice is procedural, not punitive, and in … Read more
Reassessment based on audit objection has repeatedly been struck down by courts where the Assessing Officer has acted mechanically without forming an independent belief. Indian courts have consistently held that an audit opinion cannot substitute the statutory requirement of “reason to believe” for reopening assessments. Reassessment proceedings are frequently initiated on the basis of audit … Read more
CPC 143(1) adjustment is a common issue faced by taxpayers when the Centralised Processing Centre increases returned income or reduces a refund. Most such adjustments are mechanical in nature and can be corrected if responded to properly within time. What the law says (in simple words) Section 143(1) allows CPC to make prima facie adjustments … Read more
Audit objection reassessment under the Income-tax Act, 1961 is not permissible merely because an audit party has raised an objection. Reopening of an assessment can be sustained only if the Assessing Officer independently applies his mind and forms a valid “reason to believe” that income has escaped assessment. Mechanical reopening based solely on audit objection … Read more
Reassessment after 3 years under the Income-tax Act, 1961 is not automatic and can be initiated only if strict statutory conditions are satisfied. Many reassessment notices are issued after 3 years from the end of the relevant assessment year. Such cases are subject to stricter conditions. What the law says After 3 years, reassessment is … Read more
Notice under section 142(1) is one of the most common notices issued during income-tax assessment proceedings. It seeks information, documents, or explanations from the taxpayer to enable the Assessing Officer (AO) to complete the assessment. While the notice itself is procedural and lawful, the manner in which a taxpayer responds often determines whether the assessment … Read more