Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Case LawsIncome Tax
    Tax Credit Entitlement - Credit of TDS if deductor failed to deposit the TDS to the Government
    Case LawsIncome Tax
    A Landmark Judgment on Tax Credit Entitlement - Credit of TDS if deductor failed to deposit the TDS ...
    A Case of Coerced Input Tax Credit Reversal - GST recovery during search and seizure proceedings.
    Manner of compliance of conditions of pre-deposit - Debit of amount from electronic credit ledger (E...
    The need for clarity and concrete reasons in the cancellation of GST registrations.
    Case LawsIncome Tax
    Validity of reopening of assessment - need for a direct link between the portal's information and th...
    Case LawsBenami Property
    Application of provisions of section 5 of the Benami Transactions (Prohibition) Amendment Act, 2016 ...
    Case LawsCustoms
    Provisional release of imported goods (apples) - The dispute centers on the valuation of the import...
    Case LawsBenami Property
    Applicability of the Benami Transactions (Prohibition) Amendment Act, 2016
    Case LawsIncome Tax
    Disallowance of expenses - need for tax authorities to have a practical understanding of the nature ...
    Case LawsIncome Tax
    Disallowance of the assessee's business expenditure claims related to the purchase of sugarcane from...
    Case LawsIncome Tax
    Additions made u/s 69 and Section 56 in the absence of direct incriminating evidence linking the ass...
    Case LawsCustoms
    Whether penalty is to be imposed when the appellant has accepted the classification and paid the ent...
    Case LawsCustoms
    Liability for payment of customs duty on sale of excess liquor from the duty-free shop
    Case LawsCustoms
    Demand of customs duty beyond normal period of limitation on the ground of change in classification ...
    Case LawsCorporate Laws
    Stringent approach towards ensuring compliance with auditing standards - importance of auditors' res...
    Whether the appellant's claim can be classified as a Financial Debt or Operational Debt under the In...
    Scope of Approval of resolution plan - Allegations of undervaluation of the Corporate Debtor's asset...
    Denial of Input Tax Credit since the GST registration of the Supplier of Goods has been Cancelled wi...
    Input Tax Credit (ITC) is a vested right or concession - Can government impose conditions or restric...
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsIncome Tax
    Show AI Summary
    TDS credit entitlement affirmed: deductee entitled to credit despite deductor's non-deposit, preventing indirect recovery.
    Credit for tax deducted at source on interest payments is to be treated as tax paid on the deductee's behalf and does not depend on the deductor's remittance; statutory protections against indirect recovery prevent the revenue from seeking the same tax from the deductee when the deductor fails to deposit the deducted amount, and the deposit requirement in the applicable provisions does not negate the deductee's entitlement to such credit.
    Case LawsIncome Tax
    Show AI Summary
    Tax credit for TDS: deductee entitled to credit even if deductor failed to deposit the retained tax with government.
    The Court treats amounts retained by a deductor as remaining tax and concludes the statutory credit mechanism for tax deducted at source does not condition a deductee's entitlement on the deductor having deposited the retained amount with the government, thereby barring indirect recovery or adjustment against the deductee where tax has been deducted at source.
    Case LawsGST
    Show AI Summary
    Coercive tax collection prohibited; forced reversal of input tax credit during search deemed impermissible, with investigatory remedies preserved.
    Dispute involved a search under Section 67 and an alleged coerced reversal of Input Tax Credit from the petitioner's Electronic Credit Ledger for supplies from a supplier with retrospectively cancelled registration; the court found such coercive recovery during search impermissible and directed restoration of the ITC while preserving the department's power to investigate and, if ineligible or fraudulent ITC is found, pass appropriate protective orders.
    Case LawsGST
    Show AI Summary
    Pre-deposit payment method: Electronic credit ledger debit does not satisfy pre-deposit; cash ledger payment required for appeals.
    Pre-deposit for appeals under the CGST/BGST regime must be paid from the cash ledger; debit from the electronic credit ledger does not satisfy the statutory pre-deposit requirement. A revenue circular restricting ECRL use to certain output tax payments and excluding reverse charge, interest, penalties, fees, and similar amounts supports that ECRL cannot be used for pre-deposit. The court emphasized the statutory payment scheme and strict appeal filing timelines, rejecting arguments that ECRL debit could substitute for cash ledger payment.
    Case LawsGST
    Show AI Summary
    Requirement of clear reasons in GST cancellation: retrospective deregistration must be reasoned and consider input tax credit effects.
    Cancellation of GST registration must be supported by clear reasons and concrete factual findings in show cause notices and cancellation orders; labels that a registration is "liable to be cancelled" without specifying dues or factual basis constitute mechanical action. Retrospective cancellation cannot be applied routinely; authorities must follow statutory procedure, assess causes for non-filing, consider exceptional disruptions to business operations, and account for the impact on input tax credit before fixing an effective date of cancellation.
    Case LawsIncome Tax
    Show AI Summary
    Use of portal data: digital information needs a direct evidential link before reopening income tax assessments.
    Reopening assessments requires a direct evidential link between portal-derived information and the income alleged to have escaped assessment; portal data alone is insufficient without documentary support for transactions or gifts, and a show cause notice must provide adequate particulars and reflect proper consideration of the taxpayer's response before reassessment proceeds.
    Case LawsBenami Property
    Show AI Summary
    Non retrospective application of punitive benami provisions affirmed, limiting enforcement to post amendment transactions.
    Application of Section 5 of the Benami Transactions (Prohibition) Amendment Act, 2016 concerns whether punitive provisions enacted in 2016 apply to transactions predating the amendment. The Appellate Tribunal relied on Supreme Court precedent that such punitive provisions must be applied prospectively, and the High Court emphasized adherence to that interpretation while allowing parties to pursue further remedies pending the Supreme Court review.
    Case LawsCustoms
    Show AI Summary
    Provisional release of perishable imports allowed pending valuation, subject to provisional assessment and bond to protect revenue interests.
    The dispute concerns provisional release of perishable imported apples amid a valuation contest tied to a stayed minimum import price notification. The instrument requires provisional assessment of the Bill of Entry within a brief timeframe and permits conditional provisional release upon the importer furnishing a bond and meeting terms set by customs, thereby reconciling the protection of revenue interests with the practical need to avoid loss to perishable consignments pending final resolution of the notification's applicability.
    Case LawsBenami Property
    Show AI Summary
    Prospective application of punitive benami amendment upheld, limiting reach to post-enactment transactions and preserving pre-enactment protections.
    The Madras High Court affirmed that the enhanced punitive provision introduced by the Benami Transactions (Prohibition) Amendment Act, 2016 is substantive and applies prospectively; it endorsed the Tribunal's reliance on the Supreme Court's Ganapati Dealcom decision, treated a pending Supreme Court review petition as not displacing that precedent, and disposed of the appeals while allowing further proceedings consistent with prospectivity and prior constitutional findings.
    Case LawsIncome Tax
    Show AI Summary
    Disallowance of expenses must rest on specific documentation defects, not on blanket percentage adjustments.
    Disallowance of business expenses on a summary or estimate basis requires specific, pointed deficiencies and cannot rest on generalized conclusions about excessiveness; in businesses with routine small transactions, tax authorities must examine the nature of operations and identify particular defects in documentation before applying blanket percentage disallowances.
    Case LawsIncome Tax
    Show AI Summary
    Statutory Minimum Price interpretation: excess cane payments treated as appropriation of profits, not deductible business expense.
    The core issue is whether payments for sugarcane in excess of the Statutory Minimum Price (SMP) are deductible business expenditures or constitute an appropriation of profits. The Assessing Officer relied on standard accounting practice requiring provisions for liabilities at year end and treated post closing excess payments as distributions of operational surplus. The appellate view upheld that cooperative status does not alter the tax analysis and that payments beyond the SMP do not qualify as allowable business expenses absent proper provisioning within the accounting period.
    Case LawsIncome Tax
    Show AI Summary
    Direct incriminating evidence requirement: third party search materials alone cannot sustain unexplained investment additions.
    Additions alleged as unexplained investments and undisclosed interest income based on third party search materials require a demonstrable direct nexus between those seized records and the assessee; absent such direct incriminating evidence, reliance on third party statements or documents is insufficient. Procedural safeguards and transactional indicia-such as cross examination opportunities, banking records, documentary support, and TDS-reduce the probative value of seized material when direct linkage is lacking.
    Case LawsCustoms
    Show AI Summary
    Penalty under Section 114A: no justification where importer accepted correct classification and paid differential duty before notice.
    Issue: imposition of a penalty for alleged suppression when the importer accepted correct tariff classification and paid the differential duty with interest before issuance of a show cause notice. The importer attributed the earlier misclassification to an agent error and denied intent to evade duty. The authority observed the accurate product description, admission of correct classification and prompt payment, concluded absence of suppression of facts and determined that the statutory penalty provision was not justified on these facts.
    Case LawsCustoms
    Show AI Summary
    Liability under Section 72: duty rests with duty-free shop licence-holder when trade facility conditions are breached.
    Duty arises where a duty-free shop licence-holder breaches voucher and recordkeeping conditions under the trade facility; the licence-holder bears responsibility for payment of duty and interest when procedural requirements are violated, while penalty depends on culpability and may be disallowed where no intent to evade duty is established and customs were aware of the transactions.
    Case LawsCustoms
    Show AI Summary
    Extended limitation in customs demands inapplicable where no suppression, limiting reassessment for CVD on undeclared MRP entries.
    Reassessment and CVD demand arose from a post-clearance change in classification and retrospective reliance on MRP for past entries; the tribunal held that items described were essential refrigeration parts rather than accessories, that MRP-based reassessment requires clear factual basis, and that the Extended Period of Limitation is inapplicable where no suppression is established, although penalty issues may still be considered where omissions occur.
    Case LawsCorporate Laws
    Show AI Summary
    Auditor responsibility reinforced: regulatory findings against audit failures stress strict adherence to auditing standards and sanctions.
    NFRA found a statutory auditor guilty of professional misconduct for failures to comply with Standards on Auditing, including inadequate procedures to verify revenue, lack of physical inventory verification, insufficient going concern assessment, deficient materiality application, and inadequate communication with Those Charged with Governance, and applied regulatory sanctions to reinforce auditor responsibilities in preserving financial reporting integrity.
    Case LawsIBC
    Show AI Summary
    Operational debt classification confirmed for supplier's claim based on the transaction's nature under the insolvency framework.
    Whether a claim from a supply arrangement is a Financial Debt or an Operational Debt depends on the transaction's substantive character. The tribunal examined contractual terms-penalties for non-delivery, interest, and security cheques-and applied precedents on the financial-versus-operational distinction. It characterised the supplier's claim, filed under Section 9, as arising from the supply of goods and therefore as an operational debt, sustaining the Resolution Professional's and Adjudicating Authority's classification.
    Case LawsIBC
    Show AI Summary
    Commercial wisdom of committee of creditors governs resolution plan approval, limiting valuation and standing challenges by promoters.
    Exclusion of the creditor was non irregular as no claim was filed; undervaluation allegations were rejected since opportunities to raise them during the CIRP were not used; the resolution plan satisfied Committee approval requirements and reflected the Committee's commercial wisdom; and a suspended director/promoter lacked standing to challenge the approved plan, underscoring limited judicial interference post approval.
    Case LawsGST
    Show AI Summary
    Input tax credit denial over supplier deregistration; remanded for document verification and fresh adjudication to determine genuineness.
    Denial of Input Tax Credit was challenged where the supplier's registration was retrospectively cancelled; the petitioner paid through bank and the supplier appeared on records at the time. The High Court remanded the matter for fresh adjudication, directing the appellate authority to reconsider the petitioner's documentary evidence, hold a hearing, and pass a reasoned order verifying genuineness and timing of transactions; if purchases are genuine and occurred prior to cancellation, ITC is to be considered per precedent.
    Act RulesGST
    Show AI Summary
    Input Tax Credit as legislative concession: entitlement subject to statutory conditions, but retrospective deprivation of vested accruals is vulnerable.
    Input Tax Credit (ITC) is a legislative concession, not a vested right, so the legislature may lawfully prescribe eligibility conditions and procedural limits which taxpayers must strictly satisfy; however, retrospective amendments that destroy or diminish an already accrued entitlement are susceptible to challenge and have been treated as impermissible when they impair rights that vested before the amendment.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of section 261 "Interpretation." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      9 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 261 Interpretation.

      Income-tax Act, 2025

      At a Glance

      Clause 261 of the Income Tax Bill, 2025 (Old Version) sets out definitions used in the Chapter dealing with powers relating to search, seizure and requisition. It matters because definitional scaffolding determines the scope of search-and-seizure powers and the evidentiary status of electronic material; affected parties include taxpayers, authorised officers, and the Department. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hooks: Clause 261 sits in Chapter XIV (as the note indicates) of the Income Tax Bill, 2025. It supplies definitions of expressions used for the purposes of the Chapter that regulates powers (search, requisition and related procedural mechanisms). The clause lists definitional meanings for "approving authority," "asset," "authorised officer," "competent authority," "computer system," "date on which the last of the authorisations for search was executed," "material seized," "proceeding" and "virtual digital space." The text provides definitions but no express legislative history or policy rationale. Any statutory cross-references explicitly stated are to section 247 and section 248 (for search and requisition), and to the Income-tax Act, 1961 in the "proceeding" definition.

      Statutory Provision Mode

      Text & Scope

      The clause defines the following core terms:

      • Approving authority: enumerates senior posts (Principal Director General/Director General; Principal Chief Commissioner/Chief Commissioner; Principal Director/Director; Principal Commissioner/Commissioner).
      • Asset: defined as "any money, bullion, jewellery or other valuable article or thing, held in physical or virtual form." This is a broad property-oriented definition, purposely not limiting to corporeal assets.
      • Authorised officer: ranges from Joint Director/Additional Director through to Income-tax Officer/Tax Recovery Officer; this specifies the class of officers empowered under the Chapter.
      • Competent authority: similar enumeration to approving authority but broader, including Joint Director/Additional Director and Joint Commissioner/Additional Commissioner.
      • Computer system: broad language: "computers, computer systems, computer networks, computer resources, communication devices, digital or electronic data storage devices" whether stand-alone or networked, including remote server, cloud server or virtual digital space; describes both modes of use and examples of included infrastructure.
      • Date on which the last of the authorisations for search was executed: two alternatives:
        • (i) in the case of search, the date of conclusion as recorded in the last panchnama drawn for persons covered by a warrant;
        • (ii) in case of requisition u/s 248, the date of actual receipt of books, documents or assets by the requisitioning officer.
      • Material seized: defined expansively to include books of account, other documents, digital data storage devices, computer systems and extracts seized during searches u/s 247 or requisition u/s 248; explicitly mentions backups from specialised programmes and electronic records (tally, excel, word files) and says such material "shall be construed to mean as book of accounts maintained by the said person."
      • Proceeding: covers any proceeding in respect of any year whether under the Income-tax Act, 1961 or under this Act that may be pending on the date of authorisation of a search/requisition or completed on or before such date, and includes proceedings which may be commenced after such date.
      • Virtual digital space: defined as an environment created via computer technology, including email servers, social media accounts, online investment/trading/banking accounts, websites storing ownership details, remote/cloud servers, application platforms and similar spaces.

      Interpretation

      The clause evinces an interpretive approach that is expansive and technology-aware. "Asset" as "physical or virtual" and the separate definition of "virtual digital space" show intent to capture non-physical forms of value. The "computer system" definition emphasises functional coverage - whether standalone or networked - and expressly includes cloud and remote servers. The "material seized" provision equates seized electronic records/backups with books of account, indicating legislative intent to treat digital evidence on parity with traditional account books for purposes of assessment and proceedings. The "proceeding" definition adopts a temporal sweep, covering past, pending and future proceedings tied to the date of search/requisition.

      Exceptions/Provisos

      Not stated in the document.

      Illustrations

      • If during a search (authorised u/s 247), an authorised officer seizes a company's cloud-hosted accounting backup, that backup would fall within "material seized" and be treated as books of account maintained by the company (consistent with the definition).
      • If a requisitioning officer u/s 248 takes physical custody of a server containing transaction logs on a stated date, the "date on which the last of the authorisations for search was executed" (for purposes of related provisions) would be the date of actual receipt of that server (as "assets").
      • An online trading account held on a digital application platform falls within "virtual digital space" and accordingly may be captured by definitions of assets or material when relevant to a search/requisition.

      Interplay

      The clause expressly references sections 247 and 248 as the operative powers under which material may be seized or requisitioned. It cross-links to the Income-tax Act, 1961 in defining "proceeding." The provision states that electronic backups and specialised programme data are to be treated as books of account for purposes of the Chapter; this creates an internal evidentiary linkage between digital material and statutory accounting records. No explicit references to rules, notifications or circulars are contained in the text.

      Differences between the two provisions and practical impact

      • Terminology - "asset" includes "virtual digital asset": The Act (Document 1) expressly expands the definition of "asset" to include "virtual digital asset"; the Bill (Document 2) refers to "asset" as "any money, bullion, jewellery or other valuable article or thing, held in physical or virtual form" and does not explicitly use the phrase "virtual digital asset."
        • Practical impact: the Act's explicit inclusion of "virtual digital asset" clarifies legislative intent to capture cryptocurrencies and similar instruments; the Bill's broader but less explicit phrasing may leave room for interpretive disputes about whether specific crypto instruments fall within "virtual digital asset" or merely "virtual form" of an asset.
      • Scope of "material seized" vs "material seized or requisitioned": The Bill (Document 2) uses the heading "material seized" and describes items seized during search or requisition; the Act (Document 1) uses "material seized or requisitioned" as the term and expressly includes "computer systems" in the list and states that such material "shall be construed to mean as books of accounts maintained by the said person."
        • Practical impact: the Act clarifies that requisitioned material is explicitly included and equates seized electronic material to books of accounts, potentially broadening evidentiary reach and supporting treatment of electronic extracts as formal books; the Bill's framing is marginally narrower or less explicit on that declaratory equivalence.
      • Inclusion of "electronic form" and "electronic record" cross-references: The Act (Document 1) contains specific sub-clauses (g) and (h) that adopt terms from the Information Technology Act, 2000; the Bill (Document 2) does not include corresponding sub-clauses labelled (g) and (h) for those exact cross-references (in the Bill numbering, (g) is used for "material seized" and (h) for "proceeding").
        • Practical impact: the Act's explicit cross-references to the IT Act clarify that statutory notions of electronic documents and records are to be read consistently with established definitions; the Bill is less explicit about adopting those statutory definitions, possibly creating interpretive friction as to whether IT Act definitions are imported.
      • "Proceeding" definition present in the Bill but absent in the Act text provided: The Bill includes a definition of "proceeding" (Document 2, clause (h)) describing what proceedings are covered (including references to the Income-tax Act, 1961 and proceedings pending or completed on the date of search/requisition). The Act excerpt (Document 1) as provided does not contain that "proceeding" definition.
        • Practical impact: retention of an express "proceeding" definition in the Bill would have clarified temporal and substantive reach of actions triggered by searches/requisitions; its absence from the Act extract may mean either omission in the Act or that it is located elsewhere-if absent, scope of covered proceedings may be less explicitly delimited, creating uncertainty over retrospective or prospective application to earlier or later proceedings.
      • Computer system / computer resources phrasing: Both texts define "computer system" broadly, but the Bill starts with "computers, computer systems" and the Act begins with "computers, computer networks," etc. The Act explicitly repeats "computer resources, communication devices, digital or electronic data storage devices" and again includes "virtual digital space."
        • Practical impact: differences are largely stylistic; both convey a broad technological reach. The Act's inclusion of "virtual digital space" in the computer system clause and as a separate defined term strengthens the capture of cloud and online environments.
      • Requisition wording in definition of the date on which last authorisation was executed: The Bill's clause (f)(ii) refers to "actual receipt of the books of account or other documents or assets by the requisitioning officer"; the Act's clause (f)(ii) expands that to "books of account or other documents or computer system or assets."
        • Practical impact: the Act's explicit inclusion of "computer system" in what may be requisitioned tightens the statutory basis for claiming a requisitioned server or digital environment was effectively taken on a given date; the Bill might have been read to focus more on physical assets or documents.

      Practical Implications

      • Compliance and risk areas: Taxpayers with digital records or holdings in virtual spaces should expect those records to be treated as books of account when seized or requisitioned. The broad definition of "computer system" and "virtual digital space" increases the Department's practical reach into cloud servers, social media accounts and online financial platforms during investigations.
      • Record-keeping/evidence points: Entities should maintain clear, verifiable backups and audit trails for accounting software, spreadsheets and electronic records since the statute singles out backups from specialised programmes. Documentation that demonstrates provenance and linkage between digital files and formal accounts will be relevant where seized material is used as books of account.

      Key Takeaways

      • Clause 261 supplies a broad, technology-inclusive set of definitions to govern search, seizure and requisition powers in the Chapter.
      • "Material seized" explicitly includes digital backups and computer systems and is to be construed as books of account, elevating electronic records to evidentiary parity with traditional accounting records.
      • "Virtual digital space" is comprehensively defined to include email servers, social media, online investment/trading/banking accounts, websites holding ownership details, remote/cloud servers and application platforms.
      • "Proceeding" is defined to cover proceedings under the Income-tax Act, 1961 and the new Act, including pending, completed or subsequent proceedings linked to the date of search/requisition.
      • The clause casts a wide net over digital environments and assets, signalling administrative emphasis on accessing electronic data during tax investigations.

      Full Text:

      Section 261 Interpretation.

      Topics

      ActsIncome Tax