17/10/2026
IMPORTANT INCOME TAX JUDGMENTS EVERY TAX PROFESSIONAL SHOULD KNOW!
⚖️ 1. DELHI HIGH COURT: PENALTY ORDER QUASHED WHILE ITAT APPEAL WAS PENDING
In BT Global Communications India Private Limited v. Assessment Unit, the Delhi High Court quashed an income-tax penalty order passed under Section 270A while the company's appeal against the underlying assessment was pending before the ITAT.
📌 What happened?
The Assessing Officer imposed a penalty of ₹24 March 2023 order, even though the assessment appeal was pending before the Tribunal.
The High Court held that Section 275(1)(a) required the penalty proceedings to remain in abeyance in the circumstances of the case.
The penalty order was quashed and set aside. The Department may take appropriate action afresh if the law permits, depending on the outcome of the appeal.
Key takeaway: Penalty proceedings must follow the statutory timelines and restrictions. An assessment appeal pending before the ITAT can have a direct impact on when a penalty order may lawfully be passed.
📚 2. SUPREME COURT: NO FRESH CLAIM UNDER SECTION 264 WITHOUT A TIMELY REVISED RETURN
In Orissa Rural Housing Development Corporation Ltd. v. Assistant Commissioner of Income Tax, the Supreme Court reiterated that an assessee cannot use revisional jurisdiction under Section 264 as a substitute for filing a revised return within the prescribed time.
📌 Facts of the case
For AY 2006–07, the assessee filed its return declaring a loss of approximately ₹1.94 crore.
It subsequently sought to revise its claim, but the Assessing Officer did not consider the request while completing the assessment.
The resulting tax demand, including interest under Section 234B, was approximately ₹10.08 crore.
The assessee approached the revisional authority under Section 264 to raise a fresh claim. The claim was rejected because the assessee had not filed a revised return within the prescribed period.
The matter eventually reached the Supreme Court.
⚖️ What did the Supreme Court hold?
The Court dismissed the assessee's appeal, reiterating that a fresh claim that should have been made through a timely revised return cannot ordinarily be introduced through Section 264 revision.
The Court observed that permitting such claims without the necessary foundational facts would make assessment proceedings endless.
📌 Key takeaway: Do not assume that a claim omitted from the original return can always be introduced later through revision. The statutory deadline for a revised return matters.
Case citation: Orissa Rural Housing Development Corporation Ltd. v. ACIT, 2026 INSC 1116; decision dated 8 October 2026.
Two important lessons:
✅ Penalty proceedings must comply with the statutory restrictions governing their timing.
✅ Revised-return deadlines cannot ordinarily be bypassed by invoking revisional jurisdiction.
