Non-acceptance of High Court decisions: Board classifies cases and directs prompt circulation of summaries to officers.
The Board summarised High Court decisions it did not accept during two recent quarters and classified them into Statement B (not appealed for reasons such as small revenue or similar pending matters), Statement C (appeals to the Supreme Court filed), and Statement D (Part I: High Court refusal of leave accepted by the Board; Part II: Special Leave Petitions not granted). Statement A (accepted High Court decisions) is discontinued. Copies of the classified summary were to be circulated promptly to officers and authorised representatives.

Wealth tax exemption for initial equity shares - company can obtain a certificate enabling shareholders to claim exemption.
Equity shares issued as an initial equity issue that satisfy the statutory company type criteria and timing may be exempt from wealth tax for shareholders; the company may apply to its assessing Income tax cum Wealth tax Officer for a prescribed certificate, which when issued and furnished to shareholders enables them to produce it to claim exemption for the specified assessment years following the company's commencement of operations.

Mistake apparent from records can be rectified when subsequent legal interpretation shows error, permitting corrective assessment if timely filed.
A subsequent authoritative interpretation showing an error in completed assessments qualifies as a mistake apparent from the records, allowing rectification provided the application is filed within the statutory time limit and is otherwise in order. Fresh timely applications may be entertained even if earlier ones were rejected, and pending appeals or references on the point are requested to be withdrawn.

Levy of wealth-tax on agricultural land faces constitutional challenge; assessments restrained where binding regional decision prevails.
The Finance Act, 1969 included agricultural land within the definition of assets for wealth-tax. Following a High Court ruling that such inclusion is ultra vires the Constitution, the administration has sought leave to appeal. Pending a contrary higher forum decision, wealth-tax officers within the jurisdiction bound by that ruling must take no further steps - including surveys or assessments - to tax agricultural assets; in other jurisdictions assessments should proceed under existing instructions.

Exemption for Ladakh residents extended to government servants, enabling tax refunds for qualifying resident income.
Exemption under section 10(26A) covers income of Ladakh residents from Ladakh or outside India, subject to residency rules (182 day and prior four year tests) and entity specific residence presumptions; amendment by the Finance (No. 2) Act, 1971 extended the period and allowed Government servants to claim refunds for qualifying income, with claims to be made to the assessing Income tax Officer and subject to statutory time limits and possible Board relaxation.

Tax deduction on routed interest: immediate bank discounting avoids TDS, agency collection requires TDS on interest.
Tax deduction at source on interest for a hundi routed through a bank depends on the bank's role. If the bank immediately discounts the usance bill/hundi and takes ownership, the net payment to the supplier is a price for the bill and not interest, so no tax is deductible by the bank or the buyer. If the bank merely acts as agent and collects on behalf of the supplier, the collection includes interest payable to the supplier and the buyer must deduct tax at source on that interest.

Interest exemption for deposits with nationalised banks affirmed; such banks treated as banking companies under tax law.
Nationalised banks are regarded as banking companies for Income-tax Act purposes because the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 treats corresponding new banks as Indian companies and the Banking Regulation Act, 1949 has been made applicable to them; accordingly, interest on deposits with nationalised banks qualifies for inclusion within the statutory exemption category under the relevant provision, subject to its limits and conditions.

Transfer of bank undertakings shifts pre-existing tax liabilities to the new bank while capital gains tax remains with the old bank.
Tax liabilities and proceedings arising from the transfer of bank undertakings under the 1970 Act follow the statutory succession: liabilities and proceedings subsisting on the appointed day transfer to the corresponding new bank as part of the undertaking, whereas liabilities arising only as a consequence of the transfer (not subsisting at commencement) remain with the existing bank. Capital gain on the transfer is chargeable to the existing bank and is computed by deducting cost (or substituted 1954 market value) and improvements from compensation; there is no balancing charge. Distributions of compensation are treated as dividends and refunds relating to the undertaking belong to the new bank.

Perquisite deduction limit restricts employer deductions for employee benefits, treating contractual bonuses as salary and gratuitous payments as perquisites.
Employer expenditures that provide benefits, amenities or perquisites to employees are deductible only to a limited extent, with the amount measured against salary as defined in rule 2(h) of Part A of the Fourth Schedule (including dearness allowance only where agreed). Reimbursements and in kind benefits (medical, utilities, domestic staff, rent free accommodation, motorcar, club bills, etc.) are treated as perquisites within that limit. Bonus or commission constitute salary when contractual, statutory, or otherwise binding; gratuitous or discretionary payments are perquisites.

Tax deduction on dividends to foreign companies: unified withholding rate applied after amendment standardising inter corporate dividend tax treatment.
Amendment removes the preferential dividend deduction for foreign companies receiving dividends from closely held Indian companies, lowering the allowable deduction and producing a uniform effective tax deduction at source of 24.5 per cent on dividends paid by any domestic company to a foreign company for payments after May 28, 1971. Transitional guidance requires shortfalls in withholding for dividends paid April 1-May 28, 1971 to be recovered via assessment where remitted, or by Reserve Bank insistence before remittance where not yet remitted.

Tax deduction at source from salaries: employers must apply prescribed rates and permitted deductions when withholding tax.
Employers must deduct income-tax at source from salaries for financial year 1971-72 only where estimated annual salary exceeds the exemption threshold, applying prescribed schedule rates and adjusting later in the year for earlier shortfalls; specified deductions (insurance, provident contributions and capped post office deposits) and category-based standard travel deductions (disallowed where conveyance allowance is paid) must be allowed in computing taxable salary, with rounding rules, disallowance of charitable donations at source except limited treatment for certain national funds, and penal consequences for failure to deduct or pay.

Tax deduction at source on interest on securities: specified rates apply and certified exemptions prevent deduction, follow procedures.
Deduct income-tax and surcharge at source from interest on Government securities in 1971-72 at specified differentiated rates by payee status and security type; accept and apply exemption or abatement certificates under section 197, and obey statutory exemptions (including specified Defence Loans, Gold Bonds and National Savings Certificates and exempt corporations) and resident-individual declaration conditions to avoid deduction. Round tax to the nearest rupee per the rounding rule and consult Income-tax Officers in case of doubt. Continue prior-year rates until the Finance Bill is enacted.

Pasting prohibition for minutes bars pasted records; chemical impression entries allowed with chairman's original signature on every page.
Minutes of general and board meetings cannot be typewritten and pasted into a bound minutes book or onto loose leaves because pasting is statutorily prohibited. Entry of minutes by a chemical or mechanical impression process that does not amount to attachment is permissible, provided each mechanically impressed page is authenticated by the original signature of the chairman.

Inter corporate dividend deduction calculated on gross dividend despite set off, limited by the overall deduction ceiling provision.
Deduction for inter corporate dividends is to be computed on the full dividend amount received because dividends form part of gross total income and are not excluded by subsequent set off; however, the resulting deduction is subject to the overall statutory limit on deductions from total income.

Winding up commencement deemed to start from petition presentation when an order is made, otherwise petition date is irrelevant.
Winding up is deemed to commence from the date of presentation of the petition only if and when a winding up order is made; if the petition is dismissed the presentation date has no relevance. Until the court issues a winding up order the company must continue to comply with obligations applicable to a company not in winding up, because actual winding up begins only after the order though the order operates retrospectively to the petition date.

Priority industry status for refining crude oil allows tax deductions and development rebates where statutory conditions are satisfied.
The term mineral oil includes crude petroleum and its derived liquid hydrocarbon products; profits from refining crude oil therefore qualify for the enhanced super tax rebate and, on parity, the refining business is treated as a priority industry for entitlement to investment and development rebates for machinery and plant, subject to fulfillment of the other statutory conditions.

Assessment Procedure Reform: summary assessments allow limited adjustments to returns while preserving notice and review safeguards.
The Act substitutes section 143 to permit Income tax Officers to make summary assessments on returns without the assessee's presence, authorising limited adjustments (arithmetical corrections; prima facie allowable or disallowable claims; specified carry forward items). Notices under section 143(2) may require books and evidence; prior approval is required for certain post summary enquiries. Safeguards include a one month objection window to invoke a fresh assessment under section 143(3), suspension of recovery and interest for disputed adjustments pending fresh assessment, and specified grounds and time limits for treating summary assessments as materially incorrect.

Tax deduction at source on interest: prescribed withholding rates vary by payee class and security, subject to exemptions.
Tax deduction at source is required on interest on Government securities at prescribed rates that vary by payee class - residents, non-residents and companies - and by security type, except where a valid exemption or abatement certificate is produced. Pre-existing operative certificates remain effective; certificates issued after the effective date determine rates for the specified person; specified bonds and savings instruments and certain exempt institutional holders and resident individuals meeting declaration and holding thresholds are not subject to deduction. Tax rounding and consultation requirements apply.

Approval requirement for loans by exempt companies does not apply to continuation of instruments after exemption ceases.
Loans, guarantees and securities made, given or provided by companies while exempt under the provisions remain outside the approval requirement when the exemption later ceases; therefore approval under the cited provisions is not required for the continuance of those existing instruments after cessation of the exemption.

Exemption status for company liabilities: no approval required to continue loans, guarantees or securities after exemption ends.
The Department advised that transactions (loans, guarantees or securities) made or provided by companies while exempt under section 370(2) remain outside the operative scope of section 370 after the exemption ceases, and therefore Company Law Board approval is not required to continue such instruments.