S. 271(1)(c):Penalty –Concealment -The AO cannot initiate penalty on the charge of ‘concealment of particulars of income’, but ultimately find the assessee guilty in the penalty order of ‘furnishing inaccurate particulars of income’ (and vice versa). In the same manner, he cannot be uncertain in the penalty order as to concealment or furnishing of inaccurate particulars of income by using slash between the two expressions. Such error is not procedural but goes to the root of the matter and is not saved by S. 292B. The error renders the penalty order unsustainable in law [ S.292B ]

S. 260A:Appeal- High Court-Strictures passed against the revenue for not following the assurance given earlier – Court observed that “ We are pained at this attitude on the part of the State to obtain orders of admission on pure questions of law by not pointing out that an identical question was considered by this Court earlier and dismissed by speaking order. Revenue has not carried out the assurance which was made earlier. Revenue should give proper explanation why assurance given earlier is not being followed. It is time responsibility is fixed and the casual approach of the Revenue in prosecuting its appeals is stopped”

S. 220 : Collection and recovery – Assessee deemed in default -Stay – CBDT’s OMs dated 29.02.2016 & 31.07.2017 by which AO’s have been directed to grant stay of disputed demand on payment of 20%/ 15% does not fetter the power of the AO & CIT to grant stay on payment of amounts lesser than 15%/ 20%. The AO/ CIT have to deal with the prima facie merits and give reasons for rejection of the stay application.

S. 151 : Reassessment – Sanction for issue of notice -If the AO reopens the assessment by obtaining the sanction of the Commissioner of Income Tax instead of the Additional Commissioner of Income -tax, there is a breach of S. 151 which renders the reopening void [ S.147, 148 ]

S. 50C : Capital gains-Full value of consideration- Stamp valuation-If the assessee has invested the entire sale consideration in new house property, the capital gains are exempt u/s 54F. The AO cannot apply s. 50C and treat the stamp duty valuation as the consideration and assess the difference between the stamp duty valuation and the actual valuation to capital gains.[ S.54F ]

S. 45: capital gains- Bogus capital gains from penny stocks-In order to treat the capital gains from penny stocks as bogus, the Dept has to show that there is a scam and that the assessee is part of the scam. The chain of events and the live link of the assesee’s action giving her involvement in the scam should be established. The Dept cannot rely on alleged modus operandi & human behavior and disregard the evidence produced by the assessee.[ S.48 ]

S. 45: Capital gains- Bogus long-term gains from penny stocks-The transaction cannot be treated as bogus until and unless a finding is given that the shares were acquired by the assessee from the person other than the broker claimed by the assessee. The enquiry conducted by the Investigation Indore is not a conclusive finding of fact in view of the fact that the shares were duly materialized & held in the d-mat account. Merely supplying of statement to the assessee at the fag end of the assessment proceedings is not sufficient to meet the requirement of giving an opportunity to cross examine. The AO cannot proceed on suspicion without any material evidence to controvert or disprove the evidence produced by the assessee. [S.10(38)]

S. 11 : Property held for charitable purposes – “advancement of objects of general public utility”- Income from organizing of Davis Cup up to the limit prescribed as per the second proviso to section 2(15), which for the assessment year under consideration is Rs. 25 lacs, will be treated as income from ‘charitable purposes’ and the assessee will be entitled to claim the exemption u/s 11 of the Act up to that extent in respect of the said income along with other income, if any, from the non-business activity of the assessee. However, the income over and above amount for Rs. 25 lacs from the business activity i.e. from the exploitation of its right to hold Davis Cup will be treated as ‘business income’ of the assessee and will be liable to include in its total income. The assessing officer, therefore, is directed to bifurcate the income from commercial activity and non-commercial activity and assess the income of the assessee as directed above. With the above observations, the appeal of the assessee is treated as partly allowed. [ S.2(15), 10(23C), 13 ]

Interpretation of taxing statues- Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. The ratio in Sun Export Corporation ,Bombay v. Collector of Customs Bombay ( 1997) 6 SCC 564 is not correct and all the decisions which took similar view as in Sun Export Case stands overruled.

S. 219 :Credit for advance tax –Succession of business – Receipt on account of Mobilisation advance under work order when assessee was partnership — Succession by Company — Credit should be given to the assessee in subsequent year whenever receipt or part of receipt recognised as income by Company.