Tax INFORM- March 2024

The thirty-ninth issue of our monthly tax newsletter – Tax Inform, is out. Through these newsletters, we provide a compilation of key tax-related case laws, circulars, notifications, etc. issued by the authorities in the previous month, impacting entities and individuals operating in India.

The highlights of the current issue are:

Direct Tax – 

Domestic Tax Rulings:

  • Raipur ITAT confirms that FMV of preference shares cannot be determined based on ‘net asset value’ method, but takes note of ‘serious lapses’ in FMV determination by AO.
  • Income earned out of mutual funds taxable not in the hands of the revocable trust but its settler: Mumbai ITAT.
  • Madras HC agrees that delay in filing return was owing to pandemic, sets aside orders denying plea for condonation.
  • As notice issued under Section 148A(b) was based on incorrect information, subsequent order passed by AO ‘defies sense’: Bombay HC.

Notifications/ Circulars:

  • Certain payments made to IFSC units exempted from tax deduction.
  • Transfer of VDAs: Due date for reporting tax deduction extended.
  • Inter-trust donations: Balance 15% eligible for exemption.

Indirect Tax – 

Goods & Services Tax

Case Laws:
  • Considering that supply to SEZ unit was inadvertently reported as taxable supply in GSTR-1, Madras HC remands matter back to AO.
  • Issuance of summons for conducting inquiry is not initiation of proceedings under Section 6(2)(b) of CGST Act: Rajasthan HC.
  • Delhi HC lays stress on need to follow objective criteria in cancelling GST registration with retrospective effect.
  • Madras HC quashes assessment order which was passed disregarding reply to show cause notice.
  • Madras HC allows petitioner to reply to show cause notice in case involving claim of transitional credit.
Notifications/ Circulars:
  • Rectification of assessment orders: Delhi Govt issues instruction for correcting errors.