SUPREME COURT
Tax Department Cannot Sustain Reassessment On Other Grounds If Original Reason Fails: Supreme Court
Case Title : Principal Officer, LG Electronics India Pvt. Ltd. Through Its Authorized Signatory Mr. Ashish Agrawal v. Assistant Commissioner of Income Tax, Noida & Anr.
Case Number : Civil Appeal Nos. 18067/2017
CITATION : 2026 LLBiz SC 330
The Supreme Court has recently ruled that the Income Tax Department cannot sustain reassessment proceedings on other grounds when the original reason for reopening the assessment is untenable. The court declared reassessment proceedings against LG Electronics India Pvt. Ltd. for Assessment Years 2006-07 to 2008-09 unenforceable. The case concerned the company's alleged failure to deduct Tax Deducted at Source (TDS) on payments to its Korean parent company and associated enterprises.
Case Title : Orissa Rural Housing Development Corporation Ltd. v. The Assistant Commissioner of Income Tax & Ors.
Case Number : Civil Appeal Nos. 7249–7250 of 2015
CITATION : 2026 LLBiz SC 331
The Supreme Court has recently reiterated that taxpayers cannot use revision proceedings to introduce fresh claims based on facts that were never placed before the Assessing Officer, bypassing the deadline for filing a revised income tax return. A bench of Justices Prashant Kumar Mishra and Shree Chandrashekhar held that the revisional authority can entertain a new question of law, but cannot consider a claim that goes beyond the facts available to the Assessing Officer.
HIGH COURTS
Andhra Pradesh HC
Andhra Pradesh High Court Strikes Down Section 147A Of Income Tax Act As Unconstitutional
Case Title : Bala Sreenivas Rao Somisetty v. The Income Tax Officer
Case Number : WP No.28520 OF 2023
CITATION : 2026 LLBiz HC(APH) 55
The Andhra Pradesh High Court on Monday struck down Section 147A of the Income Tax Act, 1961, as unconstitutional. Introduced retrospectively through the Finance Act, 2026, the provision clarifies that Jurisdictional Assessing Officers (JAOs), rather than the National Faceless Assessment Centre or an assessment unit, can act as the Assessing Officer for issuing reassessment notices under Sections 148 and 148A.
Bombay HC
Case Title : Breach Candy Hospital Trust v. Chief Commissioner of Income Tax & Ors.
Case Number : Writ Petition Nos. 2462 of 2010
CITATION : 2026 LLBiz HC(BOM) 568
The Bombay High Court has ruled that a hospital seeking income tax exemption on philanthropic grounds cannot be denied the benefit merely because it earns a surplus, charges patients for treatment, or collects professional fees on behalf of consultant doctors. The question is whether its actual activities and use of funds establish that it exists solely for philanthropic purposes and not for profit.
Bombay High Court Upholds Tata Chemicals' Tax Deduction For Non-Compete Fee Paid To Former Employee
Case Title : Principal Commissioner of Income Tax-2 v. Tata Chemicals Ltd.
Case Number : Income Tax Appeal No. 2390 of 2018
CITATION : 2026 LLBiz HC(BOM) 570
The Bombay High Court on 8 October held that payments made to a former employee under a non-compete agreement qualify as revenue expenditure for income tax purposes, even when paid in instalments across multiple financial years. A Division Bench comprising Justices Suman Shyam and Gautam A. Ankhad dismissed the Income Tax Department's appeal against Tata Chemicals Ltd., upholding deductions claimed by the company for non-compete compensation and expenditure on projects that were later written off.
Vodafone Idea Tax Dispute: Bombay HC Directs Income Tax Dept To Pass Orders In 13 Matters In 6 Weeks
Case Title : Vodafone Idea Limited v. The Deputy Commissioner of Income Tax, Circle-5(2)(1), Mumbai & Ors.
Case Number : Writ Petition (L) No. 32594 of 2026
CITATION : 2026 LLBiz HC(BOM) 571
The Bombay High Court has recently directed the Income Tax Department to pass orders in 13 tax matters involving Vodafone Idea and its group companies within six weeks. The company remains free to argue that the statutory deadline for passing those orders has already expired. The court also continued its interim protection against the recovery of ₹699.54 crore refunded to Vodafone Idea. The amount must remain in a fixed deposit and cannot be used without further orders.
Calcutta HC
Calcutta High Court Allows Birla Corporation's Cross-Objections In Income Tax Appeal Under CPC
Case Title : Principal Commissioner of Income Tax, Kolkata 2, Kolkata v. Birla Corporation Limited
Case Number : ITA No. 124 of 2019
CITATION : 2026 LLBiz HC (CAL) 256
On 14 October, the Calcutta High Court allowed Birla Corporation Limited to maintain cross-objections in the Income Tax Department's appeal, subject to the requirement that they raise substantial questions of law. A Division Bench comprising Justices Rajarshi Bharadwaj and Sudip Deb held that Section 260A(7) of the Income Tax Act, 1961, incorporates the relevant provisions of the Code of Civil Procedure, 1908 (CPC), including the right to file cross-objections.
Single Business Transaction Cannot Justify Income Tax Case Transfer: Calcutta High Court
Case Title : Loknath Prasad Gupta v. Union of India and Ors.
Case Number : WPA 4002 of 2026
CITATION : 2026 LLBiz HC (CAL) 259
The Calcutta High Court on 13 October held that a single business transaction, without evidence establishing a link between a taxpayer's business activities and a group under investigation, cannot justify transferring an income tax case to another city. Justice Smita Das De allowed a petition filed by Loknath Prasad Gupta challenging the transfer of his income tax case from Kolkata to Delhi for a coordinated investigation into his alleged links with the NML Group.
Delhi HC
No Reassessment If Entire Payment Already Disallowed In Earlier Assessment: Delhi High Court
Case Title : Indofil Industries Limited v. Deputy Commissioner Of Income Tax Central Circle 14 & Anr.
Case Number : W.P.(C) 14875/2026
CITATION : 2026 LLBiz HC (DEL) 1102
The Delhi High Court has prima facie observed that reassessment proceedings under Section 148 of the Income Tax Act, 1961 may not be permissible where the entire amount in question had already been disallowed in an earlier assessment, as there would prima facie be no income escaping assessment. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary made the observation while hearing a writ petition challenging a notice issued to Petitioner under Section 148A(1), an order under Section 148A(3) and the consequential notice under Section 148 for Assessment Year 2021-22.
Reassessment Notice For AY 2015-16 Issued In 2026 Time-Barred: Delhi High Court
Case Title : Rita Kumari v. Assistant Commission Of Income Tax Central Circle 27
Case Number : W.P.(C) 9112/2026
CITATION : 2026 LLBiz HC (DEL) 1104
The Delhi High Court has quashed an Income Tax reassessment notice issued for Assessment Year (AY) 2015-16, holding that the notice issued in 2026 was clearly beyond the permissible limitation period under Section 149 of the Income Tax Act, 1961. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary allowed a writ petition challenging the notice dated March 31, 2026, issued under Section 148 of the Act seeking to reassess Petitioner's income for AY 2015-16.
Case Title : Surender Gupta v. Asstt. Commissioner Of Income Tax, Circle - 59( 1 ), & Anr.
Case Number : W.P.(C) 7958/2019
CITATION : 2026 LLBiz HC (DEL) 1108
The Delhi High Court has refused to direct a refund of ₹1 crore paid by a partnership firm towards the individual income tax dues of its partner, holding that the amount was voluntarily tendered and that the dispute essentially concerned an inter-se dispute between partners. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary dismissed a writ petition filed by Surender Gupta, who sought refund of ₹1 crore along with interest.
Delhi High Court Refuses To Quash ₹8.12 Crore Income Tax Reassessment Notice Against Pernod Ricard
Case Title : Pernod Ricard India Private Limited v. Assistant Commissioner Of Income Tax, Central Circle -31, New Delhi And Anr.
Case Number : W.P.(C) 5162/2022
CITATION : 2026 LLBiz HC (DEL) 1120
The Delhi High Court has refused to quash an income tax reassessment notice issued to Pernod Ricard India Private Limited, the maker of popular liquor brands Royal Stag and Blenders Pride, over an alleged discrepancy of more than ₹8 crore between its turnover declared in Value Added Tax (VAT) returns and its income tax records for the assessment year 2013-14. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary dismissed the company's writ petition challenging the notice issued under Section 148 of the Income Tax Act, 1961, holding that the company's explanations for the discrepancy involved factual issues that could be examined during the assessment proceedings.
PAN Misuse | Delhi High Court Quashes ₹3.91 Crore Income Tax Demand Against Security Guard
Case Title : Lalit v. Union of India & Ors.
Case Number : W.P.(C) 9365/2025
CITATION : 2026 LLBiz HC (DEL) 1121
The Delhi High Court has quashed an income tax assessment order raising a demand of approximately ₹3.91 crore against a contractual security guard, observing that the assessment was based solely on portal data without any independent inquiry to establish his connection with the alleged transactions. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary held that the assessment violated the principles of natural justice, as the Assessing Officer failed to provide the material relied upon to Petitioner despite his request and did not properly consider his response alleging misuse of his Permanent Account Number (PAN).
Delhi High Court Quashes Income Tax Penalty Order Passed During Pendency Of ITAT Appeal
Case Title : BT Global Communications India Private Ltd v. Assessment Unit, National Faceless Assessment Centre & Anr.
Case Number : W.P.(C) 4767/2023
CITATION : 2026 LLBiz HC(DEL) 1127
The Delhi High Court has quashed an income tax penalty order passed against a private company under Section 270A of the Income Tax Act, 1961, during the pendency of the company's appeal before the Income Tax Appellate Tribunal (ITAT). The Division Bench of Justices Dinesh Mehta and Aditi Choudhary held that Section 275(1)(a) of the Income Tax Act mandates that penalty proceedings remain in abeyance when an appeal against the relevant assessment order is pending before the ITAT.
Case Title : Baleshwar Sharma v. Deputy Commissioner of Income Tax
Case Number : W.P.(C) 15244/2026
CITATION : 2026 LLBiz HC(DEL) 1128
The Delhi High Court has observed that an assessee's failure to remain available for cross-examination of a witness despite receiving at least 10 days' prior notice reflects an indolent and negligent approach towards the proceedings. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary made the observation while setting aside an income tax assessment order passed against Petitioner and directing the Assessing Officer to provide a fresh opportunity to cross-examine two witnesses.
Gujarat HC
Case Title : Commissioner of Income Tax v. Shantaben K. Patel
Case Number : R/Tax Appeal No. 1439 of 2006 and R/Tax Appeal No. 1054 of 2007
CITATION : 2026 LLBiz HC (GUJ) 150
The Gujarat High Court on 9 October held that the Rs. 50 crore received by Shantaben K. Patel from the sale of the 'Nirma' and 'Nima' trademarks was not taxable as long-term capital gains because their cost of acquisition was unascertainable. A Division Bench comprising Justices Bhargav D. Karia and Pranav Trivedi dismissed the Revenue's appeals against the Income Tax Appellate Tribunal's orders and upheld the Tribunal's findings on the taxability of the receipt, the binding nature of the arbitration award and the deletion of the penalty.
Karnataka HC
Case Title : K.R. Pradeep v. The Income Tax Department
Case Number : CRIMINAL PETITION NO.7772 OF 2019
CITATION : 2026 LLBiz HC (KAR) 193
The Karnataka High Court on 9 October dismissed two criminal petitions by Pradeep, a taxpayer, which sought to quash prosecution for allegedly failing to file wealth tax returns and to challenge the rejection of his discharge application in a separate case involving alleged false statements about investments worth approximately Rs. 22 lakh in two foreign companies. Justice H.P. Sandesh held that prosecution for failure to furnish wealth tax returns can proceed without a completed assessment determining tax liability and observed that the question of whether the taxpayer knowingly made false statements about his foreign investments must be decided at trial.
Case Title : ANURAG KALIA vs UNION OF INDIA
Case Number : WP 28761/2025
A same-sex couple has argued before the Karnataka High Court that the Income Tax law effectively makes them pay tax for expressing love for their partners, while married couples can exchange gifts without the same tax burden. Arguing that a nation's tax laws reflect the values it upholds, Advocate Dr. Dhruv Janssen Sanghvi, in a rejoinder, appearing for Anurag Kalia and Akhilesh Godi, a same-sex couple, submitted that excluding same-sex partners from the gift-tax exemption available to spouses raises questions about whose relationships receive equal treatment under the law.
Kerala HC
Discount On Shares Issued Under ESOP Is Deductible Business Expenditure: Kerala High Court
Case Title : The Principal Commissioner of Income Tax v. Geojit Financial Services Ltd.
Case Number : ITA No. 21 of 2025
CITATION : 2026 LLBiz HC(KER) 197
The Kerala High Court has held that the discount arising from the allotment of shares to employees under an Employee Stock Option Plan (ESOP) constitutes revenue expenditure deductible under Section 37(1) of the Income Tax Act, 1961. A Division Bench of Justice Devan Ramachandran and Justice Basant Balaji dismissed the Revenue's appeal against Geojit Financial Services Ltd and affirmed the order of the Income Tax Appellate Tribunal, Cochin Bench.
Orissa HC
Employee Cannot Be Made To Pay Tax Already Deducted Due To Employer's TDS Default: Orissa High Court
Case Title : Nirupama Nanda v. State of Odisha & Ors.
Case Number : W.P.(C) No. 12607 of 2026
CITATION : 2026 LLBiz HC(ODI) 27
The Orissa High Court has ruled that an employee cannot be made to pay income tax again to the extent tax has already been deducted from their salary, merely because the employer failed to deposit it or correctly report the deductions. A Division Bench of Justice Sanjeeb K. Panigrahi and Justice Murahari Sri Raman observed that employees should not suffer because of their employers' failure to deposit tax deducted at source (TDS) with the Income Tax Department.
Rajasthan HC
Case Title : Commissioner of Income Tax, Udaipur v. M/s Hindustan Zinc Ltd., Yashad Bhawan, Udaipur
Case Number : D.B. Income Tax Appeal No. 183/2014
CITATION : 2026 LLBiz HC (RAJ) 57
The Rajasthan High Court has upheld Hindustan Zinc Ltd.'s claim for additional depreciation of ₹18.87 crore on new plant and machinery installed at its captive power plant and wind power plant. The court held that electricity generation falls within the scope of “production”, which has a wider connotation than “manufacture”. It also held that an assessee engaged in manufacturing or producing an article or thing can claim additional depreciation on qualifying power-generation machinery, regardless of whether electricity generation itself amounts to production of an article or thing.
Sikkim HC
Sikkim High Court Quashes Zydus Healthcare Reassessments, Says Audit Objection Isn't New Evidence
Case Title : Zydus Healthcare Limited v. Assistant Commissioner of Income Tax
Case Number : W.P.(C) 39/2022, 13/2024 and 50/2025
CITATION : 2026 LLBiz HC(SIK) 4
The Sikkim High Court on 14 October quashed income tax reassessment proceedings against Zydus Healthcare Limited for three assessment years, holding that an audit objection expressing a contrary opinion on an issue examined during the original assessment cannot, by itself, justify reopening the assessment. Justice Bhaskar Raj Pradhan observed that the language used in Section 149(1)(b) of the Income Tax Act “clearly contemplates new evidence and not new opinion.”
Uttarakhand HC
Case Title : Sachin Kumar Gupta v. Principal Commissioner of Income Tax & Anr.
Case Number : Writ Petition (MS) No. 3129 of 2024
CITATION : 2026 LLBiz HC(UTT) 14
The Uttarakhand High Court has recently directed the Income Tax Department to reconsider a taxpayer's claim for relief under the Income Declaration Scheme, 2016, after his final tax installment was credited after the deadline despite the cheque being deposited on time. Justice Manoj Kumar Tiwari was hearing a petition filed by Sachin Kumar Gupta, whose declaration under the scheme was treated as void because his final payment was credited on October 5, 2017, instead of by September 30, 2017.