HIGH COURTS
Delhi HC
Case Title : Pr. Commissioner Of Income Tax, Central-3, Delhi v. Jindal Saw Ltd.
Case Number : ITA 689/2025
CITATION : 2026 LLBiz HC (DEL) 155
The Delhi High Court has upheld an order of the Income Tax Appellate Tribunal (ITAT) holding that excise duty refund received by Jindal SAW Ltd. under the Kutch district incentive scheme is a capital receipt and not taxable as income. While dismissing the Income Tax Department's appeal, the Division Bench of Justices Dinesh Mehta and Vinod Kumar agreed with ITAT's view that the refund was granted under the Incentive Scheme 2001 for Economic Development of Kutch District, notified by the Government of Gujarat in the aftermath of the devastating 2001 earthquake, issued by the Government of Gujarat in Novermber 2011 after the earthquake in the Kutch area.
Reassessment Must Be Based On AO's Independent 'Reason To Believe,' Not Borrowed: Delhi High Court
Case Title : PR Commissioner Of Income Tax - 4, New Delhi v. M/S NTPC Ltd
Case Number : ITA 113/202
CITATION : 2026 LLBiz HC (DEL) 157
The Delhi High Court has dismissed the Income Tax Department's appeals against NTPC Ltd., holding that reassessment proceedings cannot be initiated merely on the basis of an audit objection and that the statutory requirement of “reason to believe” must be from independent satisfaction of the Assessing Officer (AO). A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed, “the provision expressly used the language 'reason to believe' and the same has been interpreted by Hon'ble the Supreme Court and this Court that 'reason to believe' must be of the AO himself and must be based on sound reasoning. The reason and satisfaction has to be that of the authority exercising jurisdiction and not borrowed.”
Case Title : Narayan Industries v. ACIT Circle 60(1) New Delhi
Case Number : ITA 489/2022
CITATION : 2026 LLBiz HC (DEL) 159
The Delhi High Court has held that while duty drawback receipts are not eligible for deduction under Section 80-IC of the Income Tax Act, the excise and customs duties paid by a taxpayer on raw materials are required to be deducted/subsumed from the duty drawback while recomputing income in the facts of the case. A Division Bench of Justices Dinesh Mehta and Vinod Kumar partly allowed the appeal filed by Narayan Industries against ITAT order denying its claim for deduction under Section 80-IC in respect of duty drawback income.
Case Title : Financial And Risk Organisation Limited v. The Income Tax Officer Circle Int. Tax 1(3)(1) New Delhi
Case Number : W.P.(C) 17641/2025
CITATION : 2026 LLBiz HC (DEL) 160
The Delhi High Court has strongly criticised the Income Tax Department for relying on a long-set-aside assessment order to deny withholding tax relief, holding that such an approach amounts to a revenue-driven exercise contrary to law and judicial discipline. A Division Bench of Justices Dinesh Mehta and Vinod Kumar set aside the order passed under Section 197 of the Income Tax Act, 1961, which had directed deduction of tax at 15% instead of issuing a nil withholding certificate to a a UK-based company providing subscription-based financial information and software products.
Case Title : Sapphire Foods India Ltd v. Assistant Commissioner Of Income Tax Acit (Osd) Delhi & Ors.
Case Number : W.P.(C) 6159/2023
CITATION : 2026 LLBiz HC (DEL) 161
The Delhi High Court on Monday held that a completed income tax scrutiny assessment can't be reopened merely on the basis of an audit objection when no fresh tangible material has come to the Assessing Officer's notice. A Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar observed, “reopening the assessment on the basis of the objections of the Audit Party, shall in the above facts, amount to reviewing the assessment already made, as the relevant material was available with the assessing officer during that assessment.”
Case Title : Pr Commissioner Of Income Tax 4 New Delhi v. HCL Infotech Pvt Ltd
Case Number : ITA 26/2026
CITATION : 2026 LLBiz HC (DEL) 165
The Delhi High Court has recently held that the question whether delay in processing TDS refund is attributable to the assessee/taxpayer, for the purpose of denying interest under Section 244A(2) of the Income Tax Act, can be decided only by the Principal Commissioner/Commissioner and not by the Assessing Officer (AO).
A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed, “Looking at the language used in sub-section (2) of Section 244A of the Act of 1961, we are of the firm opinion that in case, the Assessing Officer is of the view that the delay in processing the request for refund has been caused for reasons attributable to the assessee, it is „Principal Chief Commissioner or Chief Commissioner‟ or „Principal Commissioner or Commissioner‟ who shall decide the question as to which period is to be excluded.”
Orissa HC
Orissa High Court Grants Fresh Hearing To Taxpayer With Neurological Illness, Quashes Ex Parte Order
Case Title : Sri Susil Nath v. Income Tax Officer, National Faceless Centre, New Delhi & Anr.
Case Number : W.P.(C) No.154 of 2026
CITATION : 2026 LLBiz HC (ORI) 10
The Orissa High Court on 2 February set aside an ex parte assessment order against Sri Susil Nath, the taxpayer, as he could not participate due to neurological illness. A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman noted: “As it appears from the record that the invoices along with vehicle particulars issued by the Government Authority could not be placed before the said Authority in view of the circumstances beyond the control of the petitioner.”
ITAT
ITAT Chennai Rules Cash Deposits Can Be Set Off Against Earlier Advances, Deletes ₹20 Lakh Addition
Case Title : Dhanabalan Selvamuthu Kumar v. ITO, Ward-1(5), Erode
Case Number : ITA No.1011/Chny/2025
CITATION : 2026 LLBiz ITAT(CHE) 27
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February deleted an addition of Rs. 20 lakh on a taxpayer out of the total Rs. 39.95 lakh made towards unexplained cash deposits and bank credits, observing that earlier bank deposits or cash advances can be set off against the said deposits. The matter was heard by Judicial Member Manu Kumar Giri and Accountant Member S.R. Raghunatha. The Bench noted that cash deposits of Rs. 20,00,000 in UCO Bank, made by Dhanabalan Selvamuthu Kumar, the assessee, on three different dates, had been treated as unexplained solely because no separate explanation was furnished for these deposits.
ITAT Chennai Cancels Rs 1.5 Lakh Penalty For Delayed Audit Filing, Cites Reasonable Cause
Case Title : Sahana Jewellery Exports Private Limited v. ITO, Corporate Ward-3, Coimbatore
Case Number : ITA No.3474/Chny/2025
CITATION : 2026 LLBiz ITAT(CHE) 28
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February deleted a penalty of Rs. 1,50,000 imposed on a jewelry export company for delayed filing of its audit report under Section 44AB of the Income-tax Act, 1961. A Bench of Judicial Member Abhy T. Varkey and Accountant Member S.R. Raghunatha, observed that penalty provisions could not to be mechanically invoked and that the assessee was prevented by “reasonable cause.”
Reopening Of Assessment Invalid If AO Fails To Show Reason To Believe: ITAT Chennai
Case Title : Aryan Share & Stock Brokers Ltd. v. ITO, Corporate Ward-1(1), Chennai
Case Number : ITA No.2756/Chny/2025
CITATION : 2026 LLBiz ITAT(CHE) 29
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February quashed the reopening of assessment against a SEBI-registered stock broker, holding that the Assessing Officer failed to satisfy the “reason to believe” requirement under Section 147 of the Income Tax Act, 1961. Judicial Member Abhy T. Varkey and Accountant Member S.R. Raghunatha observed that the recorded reasons were “extremely scanty and vague.”
They further held: “According to us, the reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the AO. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons.”
ITAT Delhi Quashes Tax Revision Against Senior Advocate Mukul Rohatgi For AY 2020–21
Case Title : Mukul Rohatgi vs. Principal Commissioner of Income Tax
Case Number : ITA No. 2427/Del/2025
CITATION : 2026 LLBiz ITAT (DEL) 30
The Delhi Bench of the Income Tax Appellate Tribunal on Monday quashed a revision order passed against Senior Advocate Mukul Rohatgi for Assessment Year 2020–21, holding that the Income Tax Department lacked material to exercise its revision powers for an assessment of Rs.133.46 crore. Section 263 allows a senior tax officer to revise a completed assessment if it is found to be erroneous and prejudicial to the interests of the Revenue. In Rohatgi's case, the Tribunal held that these statutory conditions were not satisfied.
ITAT Mumbai Upholds Fresh Examination of Ambuja Cements' AY 2019–20 Assessment For Lack Of Inquiry
Case Title : Ambuja Cements Limited Vs Principal Commissioner of Income Tax, Mumbai
Case Number : ITA No.3474/MUM/2025
CITATION : 2026 LLBiz ITAT(MUM) 31
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed Ambuja Cements Limited's appeal against a revision order that had set aside its completed tax assessment for fresh verification, holding that the original assessment was passed “without due examination and verification.” The company had challenged the Principal Commissioner of Income Tax's order under Section 263 revising and setting aside its Assessment Year 2019–20 assessment on the ground that the Assessing Officer had failed to verify material issues. The Tribunal has now upheld that revision, meaning the assessment remains set aside and will be examined afresh.
ITAT Delhi Quashes Revision Order Against Studds, Flags Lack of Clear Findings
Case Title : Studds Accessories Limited v. PCIT, Faridabad
Case Number : ITA No. 3570/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 35
The Delhi Bench of the Income Tax Appellate Tribunal has recently set aside a revision order passed against Studds Accessories Limited for Assessment Year 2020–21, holding that the Principal Commissioner failed to show how the assessment was “erroneous as well as pre-judicial to the interest of the revenue.” Studds Accessories Limited is a popular two-wheeler helmet manufacturer. Allowing the appeal, the Bench of Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman said the Principal Commissioner “has not even whispered the mistake” on the detailed submissions made by the assessee.
ITAT Chennai Deletes Penalty for Under-Reporting Of Income After Finding 99% Tax Covered by TDS
Case Title : Shri Santhosh Abraham v. Income Tax Officer, Ward 1, Kancheepuram
Case Number : ITA No. 3950/CHNY/2025 & S.A. No. 137/CHNY/2025
CITATION : 2026 LLBiz ITAT(CHE) 34
The Chennai Bench of the Income Tax Appellate Tribunal has recently deleted a Rs. 2.57 lakh penalty imposed under Section 270A of the Income Tax Act (penalty for under-reporting of income) on an individual salaried taxpayer. The tribunal noted that TDS (tax deducted at source) on the assessee's salary had almost covered 99% of the total tax demand and held that, “When tax liability is covered by TDS, there is no manafide intention on the part of the assessee to conceal any particulars of income or under reporting his income. Therefore, the explanation of the assessee that he was prevented from filing the return of income for the relevant assessment year due to suffering Covid-19 is a bonafide explanation and covered u/s.270A(6)(a) of the Act.”
'Cannot Wear Cap of A Businessman': ITAT Delhi Deletes ₹53.30 Lakh Disallowance Against Zeta
Case Title : Zeta Buildtech Pvt. Ltd. Vs. DCIT
Case Number : ITA No. 3449/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 32
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has granted relief of Rs. 53.30 lakh to Zeta Buildtech Pvt. Ltd., a distributor of liquor and beverages, by deleting disallowances on payments to independent service providers and holding that the Revenue cannot question the commercial wisdom of such expenditure. For Assessment Year 2020–21, Zeta had declared total income of ₹98.48 lakh.The Assessing Officer had disallowed Rs. 31.80 lakh paid to S.P. Jindal Financial Services Limited towards internal audit and MIS services, Rs. 3 lakh paid to Bigthink Media Pvt. Ltd., and Rs. 18.50 lakh paid to S.P. Jindal Marketing Limited. The Commissioner of Income Tax (Appeals) upheld the additions.
Case Title : DCIT Vs. Shri Irfan
Case Number : ITA Nos. 3519 & 3520/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 33
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Revenue's appeals and upheld deletion of a protective addition of Rs.175.03 crore and an estimated commission addition of about Rs.1.75 crore made against a livestock supplier on allegations of providing accommodation entries to HMA Agro Industries Ltd. The Bench of Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman held that once the transactions were found to be genuine business transactions, the additions could not be sustained.
TDS Not Required Where Income Not Chargeable To Tax In India: ITAT Ahmedabad
Case Title : ACIT, Circle-2(1)(1), Ahmedabad v. Ms. Jagson Colorchem Limited
Case Number : ITA No. 1437/Ahd/2024
CITATION : 2026 LLBiz ITAT(AHM) 38
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of a Rs. 5.63 crore disallowance made against Jagson Colorchem Limited, holding that commission paid to foreign agents for services rendered outside India is not chargeable to tax in India. The Bench of Judicial Member T R Senthil Kumar and Accountant Member Narendra Prasad Sinha, observed: “Once the income is not chargeable to tax in India, the question of deducting TDS thereon under the provision of section 195 of the Act and disallowance of the entire payment under the provisions of section 40(a)(i) of the Act does not arise."