Principles of Taxation Law
HIDAYATULLAH NATIONAL LAW UNIVERSITY
B.A. LL.B. (Hons.) Batch of 2023-28
PRINCIPLE OF TAXATION LAW
Dr. Rana Navneet Roy
Course Code LLB-C-505 Faculty &
Dr. Anindhya Tiwari
Class Hours 60 hours Credits 4
Programme [Link].B. (Hons.) Year III Year
Session Duration 55 Minutes Semester V Semester
COURSE SUMMARY
The Principles of Taxation Law course introduces students to the foundational concepts, legislative
framework, and practical application of tax laws in India. It emphasizes the importance of taxation
as a major source of government revenue and explores its role in supporting infrastructure
development and national growth. The course is structured to provide a balanced understanding of
both direct and indirect tax regimes, with a particular focus on the Income Tax Act, 1961 and the
Goods and Services Tax (GST).
Students will engage with constitutional provisions governing taxation, including Articles 14, 265,
and those related to the distribution of taxing powers between the Union and States. The syllabus
covers critical areas such as the classification of taxes, tax administration, income that is exempt
from tax, and computation under the five heads of income – Salaries, House Property, Business or
Profession, Capital Gains, and Other Sources. The course also explores deductions, rebates, and
reliefs available under the Act.
The pedagogy combines theoretical instruction with practical assignments, case law analysis,
quizzes, and tutorials to develop analytical and computational skills. It prepares students to
critically interpret tax provisions, assess income tax liability, and understand the administrative
machinery of tax authorities.
Principles of Taxation Law
By the end of the course, students are expected to demonstrate a sound understanding of the
principles of taxation, apply statutory provisions to factual scenarios, and appreciate the dynamic
nature of tax law in the context of globalization and fiscal policy. The course is vital for any
aspiring legal professional aiming to work in taxation, corporate law, or public policy.
COURSE OBJECTIVES
CO 01 To identify and recall fundamental concepts, definitions, and provisions related to
taxation laws, including the Income Tax Act, 1961 and GST framework.
CO 02 To explain the objectives, structure, and constitutional basis of taxation in India,
and interpret statutory provisions in light of legal and fiscal policy contexts.
CO 03 To compute tax liabilities under various heads of income and apply relevant
deductions, rebates, and reliefs to real or hypothetical tax scenarios.
CO 04 To distinguish between tax avoidance, tax evasion, and tax planning, and examine
judicial decisions and statutory frameworks governing tax compliance and
administration.
CO 05 To critically evaluate existing tax laws, propose reforms or solutions to tax-related
legal issues, and draft reasoned opinions or advisory notes in complex tax matters.
COURSE OUTCOME:
1. Students will be able to define key terms and recall core principles of direct and indirect
taxation, including relevant statutory provisions under the Income Tax Act, 1961 and the
Constitution of India.
2. Students will demonstrate the ability to explain the rationale and objectives of tax laws,
interpret the distribution of taxing powers, and understand the legal distinctions between
tax, fee, cess, and surcharge.
3. Students will apply tax computation techniques to assess individual income tax liability,
calculate deductions and exemptions, and solve basic tax-related problems using statutory
provisions.
4. Students will analyze fact-based legal scenarios to distinguish between tax avoidance,
evasion, and planning, and assess the legal implications of judicial decisions and circulars.
5. Students will critically evaluate the effectiveness of existing tax regimes and propose
legally sound recommendations or reform measures, including policy-oriented suggestions
in light of recent amendments and international tax trends.
Principles of Taxation Law
TEACHING PEDAGOGY
The teaching pedagogy for Principles of Taxation Law follows Bloom’s Revised Taxonomy,
advancing from foundational knowledge to higher-order skills. At the remembering level, lectures,
charts, and quizzes help students recall definitions and statutory provisions. For understanding,
interactive discussions and case illustrations are used to explain the rationale behind tax laws and
constitutional principles. At the applying stage, students engage in tutorials and exercises to
compute tax liabilities and apply deductions practically. Analytical skills are developed through the
examination of judicial decisions and problem-based learning, helping students differentiate
between tax planning, avoidance, and evasion. Finally, in the evaluating and creating stages,
students draft tax advisory memos, critique policies, and participate in simulations like mock GST
council sessions to foster independent thinking and legal creativity.
COURSE PLAN
MODULE 1: TAXES – AT A GLANCE [10 Sessions]
Unit I History of Taxation in India
Unit II Classification of Taxes: Direct vs. Indirect
Unit III Difference between Tax, Fee, Cess, and Surcharge
Unit IV Characteristics and Objectives of Taxation
Unit V Canons of Taxation: Classical (Adam Smith) and Modern
Unit VI Taxation & Constitution of India
Unit VII Basic Concepts:
Tax Avoidance
Tax Evasion
Tax Planning
Landmar McDowell & Co. Ltd. v. CTO, (1985) 154 ITR 148 (SC) – Clarified the
k Case distinction between tax planning and tax evasion.
laws Azadi Bachao Andolan v. Union of India, (2004) 10 SCC 1 – Validated
legitimate tax planning and upheld the use of Double Taxation Avoidance
Agreements (DTAA).
CIT v. B.M. Kharwar, (1969) 72 ITR 603 (SC) – Discussed substance over form
in tax matters.
CIT v. A. Raman & Co., (1968) 67 ITR 11 (SC) – Reinforced the legality of tax
Principles of Taxation Law
planning.
Relevant 1. The Constitution of India, 1950
Laws Article 265 – No tax shall be levied or collected except by authority of law
Article 246 – Distribution of legislative powers
Union and State List Entries (List I & II of the Seventh Schedule)
2. General Clauses Act, 1897 – Interpretation provisions relevant to tax statutes
3. Income Tax Act, 1961 – Definitions of tax, person, income, etc.
4. Central Goods and Services Tax (CGST) Act, 2017 – For indirect tax
illustrations
Essential Dr. Vinod K. Singhania & Dr. Kapil Singhania, Direct Taxes Law and
Readings Practice, Taxmann Publications
Dr. Girish Ahuja & Dr. Ravi Gupta, Direct Taxes Law and Practice,
Wolters Kluwer
Constitution of India – Articles 14, 265, and 246
Income Tax Act, 1961 – Sections 2, 4, and 10 for foundational
understanding
Suggested Kanga and Palkhivala, The Law and Practice of Income Tax, LexisNexis
Readings S. Bhattacharya & H.R. Garg, Handbook of Direct Taxes, Eastern Law
House
Roy Rohatgi, Basic International Taxation, Taxmann
Mukesh Bhutani, Transfer Pricing – An Indian Perspective, LexisNexis
Klaus Vogel, Double Taxation Conventions, Kluwer Law International
Sampath Iyengar, Law of Income Tax, Bharat Law House
MODULE II: TAX AUTHORITIES AND TAX ADMINISTRATION [6 Sessions]
Unit I Introduction to Tax Administration in India
Unit II Appointment and Powers of Tax Authorities (Income Tax Act, 1961)
Unit III Summons
Unit IV Power of Search and Seizure under Section 132
Unit IV Doctrine of “Reason to Believe”
Principles of Taxation Law
Landmark Pooran Mal v. Director of Inspection (1974) 93 ITR 505 (SC): Held that
Case laws evidence collected during illegal search is admissible under tax laws,
though it may be illegal under criminal law.
ITO v. Seth Brothers (1969) 74 ITR 836 (SC): Laid down important
safeguards regarding arbitrary use of powers under Section 132.
CIT v. Vindhya Metal Corporation (1997) 224 ITR 614 (SC): Clarified the
scope of “reason to believe” for search and seizure.
Ajit Jain v. Union of India, (2000) 242 ITR 302 (Del.): Judicial review of
the administrative discretion of the tax authorities under Section 132.
Khem Chand Mukim v. Principal Director of Income Tax (Inv.), 2021
SCC OnLine Del 3203: Reaffirmed that "reason to believe" must be based
on tangible material and not on mere suspicion.
Relevant 1. Income Tax Act, 1961
Law 2. Central Board of Direct Taxes (CBDT) Circulars and Notifications
3. Central Goods and Services Tax (CGST) Act, 2017
Essential 1. Dr. Vinod K. Singhania & Dr. Kapil Singhania, Direct Taxes Law and
Readings Practice, Taxmann
2. Dr. Girish Ahuja & Dr. Ravi Gupta, Direct Taxes Law and Practice,
Wolters Kluwer
3. Income Tax Act, 1961 – Bare Act (especially Sections 116–132)
4. CGST Act, 2017 – Bare Act (Sections 67–72)
Suggested Kanga and Palkhivala, The Law and Practice of Income Tax, LexisNexis
Readings Sampath Iyengar, Law of Income Tax, Bharat Law House
Rani N.R., Insights into the Basics of International Taxation, Young
Global Publications
Mukesh Bhutani, Transfer Pricing – An Indian Perspective, LexisNexis
CBIC and CBDT official portals – for latest circulars, FAQs, and
administrative updates
[Link]
[Link]
Principles of Taxation Law
MODULE III: BASIC CONCEPTS & IMPORTANT TERMS [ 10 Sessions]
Unit I Assessee
Unit II Assessment Year and Previous Year
Unit III Income
Unit IV Person
Unit V Residential Status of Assessee
Unit VI Scope of Total Income
Unit VII Agricultural Income and Its Tax Treatment
Landmark CIT v. Raja Benoy Kumar Sahas Roy, AIR 1957 SC 768
Case laws CIT v. Sodra Devi, (1957) 32 ITR 615 (SC)
CIT v. Sunil J. Kinariwala, (2003) 179 CTR (SC) 137
L.W. Russel v. CIT, (1964) 53 ITR 91 (SC)
Karanpura Development Co. Ltd. v. CIT, (1962) 44 ITR 362 (SC)
CIT v. G.R. Karthikeyan, (1993) 201 ITR 866 (SC)
Relevant Income Tax Act, 1961
Law General Clauses Act, 1897
Constitution of India, 1950
Essential Dr. Vinod K. Singhania & Dr. Kapil Singhania, Direct Taxes Law and
Readings Practice, Taxmann Publications
Dr. Girish Ahuja & Dr. Ravi Gupta, Direct Taxes Law and Practice,
Wolters Kluwer
Income Tax Act, 1961 – Sections 2, 3, 4, 5, 6, 10
Suggested Kanga and Palkhivala, The Law and Practice of Income Tax, LexisNexis
Readings Sampath Iyengar, Law of Income Tax, Bharat Law House
Roy Rohatgi, Basic International Taxation, Taxmann
Rani N.R., Insights into the Basics of International Taxation, Young
Global Publications
H.R. Garg & S. Bhattacharya, Handbook of Direct Taxes, Eastern Law
Principles of Taxation Law
House
MODULE IV: VARIOUS HEADS OF INCOME [16 Sessions]
Unit I Part I – Income from Salaries
Basis of Charge
Characteristics of Salary
Employer-Employee Relationship
Allowances and Perquisites
Deductions from Salary
Unit II Part II – Income from House Property
Basis of Charge
Annual Value and its Computation
Deemed Ownership
Unit III Part III – Profits and Gains from Business or Profession
Scope of Business or Profession
Chargeability and Deductions
Depreciation and Disallowed Expenses
Unit IV Part IV – Capital Gains
Definition of Capital Asset
Short-Term vs. Long-Term Gains
Computation of Capital Gains
Unit V Part V – Income from Other Sources
Nature and Scope of Residual Income
Family Pension, Dividend Taxation, and Other Items
New development (Sec. 68 onwards)
Landmar CIT v. L.W. Russel, (1964) 53 ITR 91 (SC)
k Case Gestetner Duplicators v. CIT, (1979) 117 ITR 1 (SC)
laws Raja Rameshwar Rao v. CIT, (1961) 42 ITR 179 (SC)
East India Housing & Land Development Trust Ltd. v. CIT, (1961) 42 ITR 49 (SC)
CIT v. Podar Cement Pvt. Ltd., (1997) 226 ITR 625 (SC)
CIT v. Manmohan Das, (1966) 59 ITR 699 (SC)
Principles of Taxation Law
CIT v. B.C. Srinivasa Setty, (1981) 128 ITR 294 (SC)
CIT v. D.P. Sandu Bros. Chembur (P.) Ltd., (2005) 273 ITR 1 (SC)
Radhasoami Satsang v. CIT, (1992) 193 ITR 321 (SC)
Dr. Prakash K. Shah v. ITO, (1982) 134 ITR 673 (Bom)
Relevant Law Income Tax Act, 1961
Sections 15–17: Income from Salaries
Sections 22–27: Income from House Property
Sections 28–44: Profits and Gains from Business or Profession
Sections 45–55: Capital Gains
Sections 56–59: Income from Other Sources
Essential Dr. Vinod K. Singhania & Dr. Kapil Singhania, Direct Taxes Law and
Readings Practice, Taxmann
Dr. Girish Ahuja & Dr. Ravi Gupta, Direct Taxes Law and Practice, Wolters
Kluwer
Income Tax Act, 1961 – Bare Act Provisions on all Five Heads of Income
Suggested Kanga and Palkhivala, The Law and Practice of Income Tax, LexisNexis
Readings Sampath Iyengar, Law of Income Tax, Bharat Law House
H.R. Garg & S. Bhattacharya, Handbook of Direct Taxes, Eastern Law
House
Roy Rohatgi, Basic International Taxation, Taxmann
T.N. Manoharan & G.R. Hari, Direct Tax Laws and International Taxation,
Snow White Publications
MODULE V: DEDUCTIONS, REBATE AND RELIEF [3 Sessions]
Unit I Introduction
Unit II Important Deductions
Unit III Relief and Rebate in Respect of Income-Tax
Landmar CIT v. Dr. M. A. Muthiah, (1993) 200 ITR 1 (SC)
k Case
Principles of Taxation Law
laws CIT v. Smt. P.K. Kochammu Amma Peroke, (1980) 125 ITR 624 (SC)
CIT v. Sanyasi Mahapatra, (1987) 168 ITR 375 (Ori)
CIT v. M. Ramalingam & Bros, (2000) 245 ITR 287 (Mad)
CIT v. S. Ramaswamy Iyer, (1977) 110 ITR 364 (Mad)
Relevant Law Income Tax Act, 1961
o Chapter VI-A: Sections 80C to 80U – Deductions
o Section 87A – Rebate for resident individuals
o Section 89(1) – Relief in respect of salary received in arrears
or advance
Essential Dr. Vinod K. Singhania & Dr. Kapil Singhania, Direct Taxes Law and
Readings Practice, Taxmann Publications
Dr. Girish Ahuja & Dr. Ravi Gupta, Direct Taxes Law and Practice, Wolters
Kluwer
Income Tax Act, 1961 – Bare Act: Chapter VI-A and Sections 87A & 89
Suggested Kanga and Palkhivala, The Law and Practice of Income Tax, LexisNexis
Readings Sampath Iyengar, Law of Income Tax, Bharat Law House
H.R. Garg & S. Bhattacharya, Handbook of Direct Taxes, Eastern Law
House
T.N. Manoharan & G.R. Hari, Direct Tax Laws and International Taxation,
Snow White Publications
Roy Rohatgi, Basic International Taxation, Taxmann
Principles of Taxation Law
MODULE VI: INTERNATIONAL TAXATION [8 Sessions]
Unit I Introduction to International Taxation
Unit II Double Taxation Avoidance Agreements (DTAA)
Unit III Permanent Establishment
Unit IV Transfer Pricing
Unit V General Anti-Avoidance Rules (GAAR)
Landmar Azadi Bachao Andolan v. Union of India, (2004) 10 SCC 1 – Dealt with the
use of DTAAs and their validity.
k Case
Union of India v. Azadi Bachao Andolan – Examined the application of
laws Double Taxation Agreements.
M/S. Castrol Ltd v. DCIT (2000) 245 ITR 201 – A case on taxation of
foreign companies and transfer pricing.
Relevant Law 1. The Income Tax Act, 1961 – Sections on international taxation
2. Double Taxation Avoidance Agreements (DTAA)
3. OECD Model Tax Convention
4. Multilateral Instrument (MLI)
Essential Roy Rohatgi, Basic International Taxation, Taxmann
T.N. Manoharan & G.R. Hari, Direct Tax Laws & International Taxation,
Readings
Snow White Publications
OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax
Administrations
Suggested Kanga & Palkhivala, The Law and Practice of Income Tax, LexisNexis
H.R. Garg & S. Bhattacharya, Handbook of Direct Taxes, Eastern Law
Readings
House
Mukesh Bhutani, Transfer Pricing – An Indian Perspective, LexisNexis
Klaus Vogel, Double Taxation Conventions, Kluwer Law International
T.N. Manoharan & G.R. Hari, Direct Tax Laws and International Taxation,
Snow White Publications
Roy Rohatgi, Basic International Taxation, Taxmann
MODULE VII: INDIRECT TAX – AN OVERVIEW [7 Sessions]
Unit I Constitutional Background of GST
Principles of Taxation Law
Unit II Structure and Framework of GST
Unit III GST Council – Composition and Powers
Unit IV Key Concepts – Supply, Levy, and Collection
Landmar Jindal Stainless Ltd. v. State of Haryana, (2016) 11 SCC 1
k Case Govind Saran Ganga Saran v. CST, AIR 1985 SC 1041
laws Mohit Minerals Pvt. Ltd. v. Union of India, (2022) 448 ELT 3 (SC)
State of Karnataka v. M/s M.K. Agro Tech Pvt. Ltd., (2022) SCC OnLine SC 1225
Union of India v. VKC Footsteps India Pvt. Ltd., (2022) 2 SCC 603
Patanjali Ayurved Ltd. v. Union of India, (2023) SCC OnLine SC 567
Relevant Law Constitution of India, 1950
The Central Goods and Services Tax (CGST) Act, 2017
The Integrated Goods and Services Tax (IGST) Act, 2017
The Union Territory GST (UTGST) Act, 2017
The Customs Act, 1962
The Constitution (One Hundred and First Amendment) Act, 2016
Essential Taxmann’s GST Manual
Readings Bare Act of CGST Act, 2017
Bare Act of the Constitution of India – Articles 246A, 269A, 279A
CBIC’s FAQs and official circulars
Suggested V.S. Datey, GST Law and Practice, Taxmann
Readings Dr. Sanjiv Agarwal, GST: A Ready Reckoner, Bharat Law House
R.K. Jain, GST Acts and Rules with Forms, Centax Publications
Nitya Tax Associates, Nitya's GST Primer, Wolters Kluwer
D.D. Basu, Introduction to the Constitution of India (for constitutional
aspects)
READING LIST
Essential Reading List
Principles of Taxation Law
1. Vinod K. Singhania & Kapil Singhania – Direct Taxes: Law & Practice, Taxmann
2. Girish Ahuja & Ravi Gupta – Direct Taxes: Law & Practice, Wolters Kluwer
3. Girish Ahuja, Ravi Gupta & Kriti Chawla – Principles of Taxation Law, Commercial
Law Publishers
4. Taxmann – GST Manual (CGST, IGST, UTGST Acts & Rules)
5. Constitution of India – Bare Act (Articles 14, 246, 265, 269A, 279A, 301–305,
366(29A))
6. Income Tax Act, 1961 – Bare Act (esp. Sections 2–10, 14–59, 80C–80U, 87A, 89, 116–
132)
7. CGST Act, 2017 – Bare Act
8. Customs Act, 1962 – Bare Act (selected provisions relevant to GST and Module 7)
9. CBDT & CBIC official websites – for circulars, notifications, FAQs, forms
Suggested Reading List
1. Kanga & Palkhivala – The Law & Practice of Income Tax, LexisNexis
2. Sampath Iyengar – Law of Income Tax, Bharat Law House
3. H.R. Garg & S. Bhattacharya – Handbook of Direct Taxes, Eastern Law House
4. Roy Rohatgi – Basic International Taxation, Taxmann
5. T.N. Manoharan & G.R. Hari – Direct Tax Laws & International Taxation, Snow
White Publications
6. V.S. Datey – GST Law & Practice, Taxmann
7. Dinesh Ahuja & Ravi Gupta – Systematic Approach to Income Tax
8. H.C. Mehrotra – Income Tax Law & Practice
9. Bhupal Bhattacharya – Principles of Taxation Law, University Book House
10. Ullas Kumar Saha – Principles of Taxation Laws, Central Law Publications
11. Ramamurthy S. – Introduction to Taxation: A Textbook for Law Students
12. CBIC Tax Guides and GST Practitioner Journals
13. Online Research Papers & Articles:
a. Taxation and Social Justice – Boyan Durankev
b. Circular Trading in GST using Graph Learning – Priya Mehta et al. (ArXiv)
Note: The topics, legislations and cases mentioned are not exhaustive. The instructor of the course
shall be at liberty to add new topics/legislations/cases.
