LiveLawBiz Direct Tax Weekly Round-Up: September 07 - September 13, 2026
HIGH COURTS
Bombay HC
Case Title : Flyjac Logistics Private Limited v. Deputy Commissioner of Income-Tax, Transfer Pricing-2(1)(1), Mumbai and Ors.
Case Number : Writ Petition No. 2279 of 2023
CITATION : 2026 LLBiz HC(BOM) 499
The Bombay High Court has ruled that notices issued by a Transfer Pricing Officer seeking information from a taxpayer cannot substitute the show cause notice required before determining the arm's length price. A Division Bench of Justice B.P. Colabawalla and Justice Farhan P. Dubash observed, “Further the notice issued by the Transfer Pricing Officer under Section 92CA(2) of the Act seeking information from an Assessee cannot be said to be a Show Cause Notice issued as per the proviso to Section 92C(3) of the Act.”
Bombay High Court Says Income Tax Assessment Cannot Stand On Quashed Revision Order
Case Title : Principal Commissioner of Income Tax 2 Mumbai v. The Bombay Dyeing and Manufacturing Co. Ltd.
Case Number : Income Tax Appeal (L.) No. 20200 of 2024
CITATION : 2026 LLBiz HC(BOM) 507
The Bombay High Court has ruled that an assessment order cannot survive when the revision order on which it was based has already been quashed by the income tax tribunal. Justice G.S. Kulkarni and Justice Dr. Neela Gokhale observed that the Assessing Officer could not have proceeded with the assessment after the tribunal had quashed the underlying Section 263 order. The court also rejected the Revenue's contention that the pending challenge against the tribunal's decision changed this position.
Case Title : Prayas Goel v. Assistant Commissioner of Income Tax, Circle 22(1), Mumbai & Ors.
Case Number : Writ Petition No. 2489 of 2023
CITATION : 2026 LLBiz HC(BOM) 512
The Bombay High Court has ruled that an income tax assessment cannot be reopened where the record shows that an issue was examined during scrutiny and the assessee's claim was accepted, even if the original assessment order did not expressly discuss the issue. The bench of Justice B.P. Colabawalla and Justice Farhan P. Dubash observed that “it is not necessary for an Assessing Officer to discuss each and every issue elaborately to disclose his satisfaction” when accepting an assessee's claim.
Delhi HC
Case Title : Pr Commissioner Of Income Tax 4 New Delhi v. NTPC Ltd.
Case Number : ITA 89/2026
CITATION : 2026 LLBiz HC (DEL) 945
The Delhi High Court has rejected the Income Tax Department's appeal challenging the annulment of reassessment proceedings against NTPC Limited, holding that the subsequent Assessing Officer (AO) had initiated the proceedings merely because he disagreed with the view taken by his predecessor. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed that the reassessment was a "classic case of change of opinion", particularly since the issues forming the basis of reassessment had already been examined during the original scrutiny assessment.
Tax Paid Twice On Same Income Is 'Unjust Enrichment' By Government: Delhi High Court
Case Title : Sojitz Asia Pte. Ltd. v. The Commissioner Of Income Tax (International Tax), New Delhi & Ors.
Case Number : W.P.(C) 7495/2026
CITATION : 2026 LLBiz HC(DEL) 950
The Delhi High Court has held that refusal to allow an assessee to correct an inadvertent double taxation of the same income would amount to “unjust enrichment” on the part of the Union of India. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta added that the Government can charge tax only once on a particular income. The Court made the observation while allowing a petition where Petitioner had inadvertently offered the same interest income of ₹7,58,90,455 to tax in two assessment years.
Gauhati HC
Income Tax Prosecution Cannot Survive Once Assessment Is Set Aside On Merits: Gauhati High Court
Case Title : M/s Flamingo Breweries Pvt. Ltd. & 2 Others v. Income Tax Department
Case Number : Crl.Pet. No. 896/2022
CITATION : 2026 LLBiz HC(GAU) 31
The Gauhati High Court on 2 September held that an income tax prosecution cannot continue when the assessment on which it is based has been set aside on merits, and that separate complaints against company directors for the same alleged offence are not maintainable when the company itself has not been arraigned as an accused. Justice Robin Phukan allowed three petitions filed by Flamingo Breweries Private Limited and its two directors and quashed the criminal complaints pending before the Judicial Magistrate First Class, Kamrup (M), Guwahati.
Gujarat HC
Gujarat High Court Quashes DVO Reference Made A Day Before Assessment Became Time-Barred
Case Title : Slimtile Private Limited v. Assistant Commissioner of Income Tax & Anr.
Case Number : R/Special Civil Application No. 13575 of 2023
CITATION : 2026 LLBiz HC (GUJ) 123
The Gujarat High Court has quashed an Assessing Officer's reference to the Departmental Valuation Officer (DVO) made just a day before the assessment was due to become time-barred. The court held that the reference was a colourable exercise aimed at extending the time available to complete the assessment. A bench comprising Justice A.S. Supehia and Justice Vaibhavi D. Nanavati found that the material relating to the company's assets and payments was already available with the Assessing Officer.
Case Title : Oil and Natural Gas Corporation Ltd. (ONGC) v. Income Tax Officer, TDS Circle, TDS, Vadodara & Anr.
Case Number : R/Special Civil Application No. 6494 of 2026 with allied petitions
CITATION : 2026 LLBiz HC (GUJ) 125
The Gujarat High Court has ruled that the tax department cannot rely on the three-month time limit for passing a consequential order under the Income-tax Act to justify delaying refunds under the Vivad se Vishwas scheme. It held that the department was required to pass the necessary order and issue the refund by July 31, 2021, as prescribed by the Central Board of Direct Taxes (CBDT), and directed it to pay interest at 6% per annum on the delayed refund from August 1, 2021 to March 2, 2024.
Karnataka HC
TPO Cannot Reject Comparables Merely To Adopt Department's Preferred Set: Karnataka High Court
Case Title : SAP Labs India Private Limited v. Income Tax Officer & Connected Matters
Case Number : ITA No.10 of 2011 & Connected Appeals
CITATION : 2026 LLBiz HC(KAR) 156
The Karnataka High Court on 28 August held that a Transfer Pricing Officer (TPO) cannot reject comparable companies selected by a taxpayer merely to replace them with a standard set of comparables preferred by the Income Tax Department, holding that the selection or exclusion of comparables must satisfy the requirements under the Income Tax Act and Rule 10B of the Income Tax Rules. A Division Bench of Justices S.G. Pandit and K.V. Aravind allowed the batch of transfer pricing appeals, including one by SAP Labs India Private Limited, and noted that the TPO must justify the selection or exclusion of comparable companies based on the statutory requirements.
Madras HC
Case Title : The Commissioner of Income Tax Chennai v. Sohanraj Uttamchand
Case Number : T.C.A.Nos. 714 and 721 of 2018
CITATION : 2026 LLBiz HC(MAD) 257
The Madras High Court on 28 August upheld the Income Tax Appellate Tribunal's orders deleting tax additions of Rs. 32.90 crore and Rs. 38.05 crore in cases concerning Long Term Capital Gains claimed from the sale of shares in PFL Infotech Limited and Risa International Limited. A Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed the Revenue's appeals and the connected appeals concerning penalty under Section 271(1)(c) of the Income Tax Act, 1961 (penalty for concealment of income or furnishing inaccurate particulars of income).
Individual Notice To Partners Not Needed For Firm's Tax Recovery: Madras High Court
Case Title : S Venkataramanan v. The Principal Commissioner Of Income Tax-4
Case Number : WP Nos. 2711 of 2026
CITATION : 2026 LLBiz HC(MAD) 259
The Madras High Court on 24 August held that individual notice to partners is not required when the Income Tax Department initiates recovery proceedings against the assets of a defaulting partnership firm. It clarified that individual notice is necessary where recovery proceedings are initiated against the personal assets of an individual partner. Justice Senthilkumar Ramamoorthy disposed of four connected writ petitions concerning the recovery of income tax dues from RJK Investments and the auction of its properties.
Punjab & Haryana HC
Case Title : Jyoti Sareen v. Union of India and others
Case Number : CWP No.15791-2024 (O&M)
CITATION : 2026 LLBiz HC(PNH) 51
The Punjab & Haryana High Court has held that the retrospective insertion of Section 147A could not validate reassessment notices issued by jurisdictional Assessing Officers when the statutory provision governing faceless reassessment under Section 151A remained unchanged. A Division Bench of Justice Deepak Sibal and Justice Rupinderjit Chahal accordingly struck down Section 147A as unconstitutional, holding that the provision did not cure the legal defect identified in earlier judicial decisions concerning the authority of jurisdictional Assessing Officers to issue reassessment notices.
Rajasthan HC
Rajasthan High Court Upholds TDS Disallowance Against Hindustan Zinc On UK Know-How Payment
Case Title : Hindustan Zinc Ltd. v. The D.C.I.T. (Assessment)
Case Number : D.B. Income Tax Appeal No. 65/2009
CITATION : 2026 LLBiz HC(RAJ) 43
The Rajasthan High Court on 5 September dismissed Hindustan Zinc Limited's appeal against an Income Tax Appellate Tribunal order sustaining the disallowance of a tax deduction claimed by the company for payment made towards technical know-how to a UK-based company. A Division Bench comprising Justices Pushpendra Singh Bhati and Praveer Bhatnagar upheld the disallowance for Assessment Year 1994-95, holding that the payment made to Davy McKee (Stockton) Limited (DML) was subject to tax deduction at source under Section 195 of the Income Tax Act.
Telangana HC
Telangana High Court Sets Aside 20% Pre-Deposit Condition For Tax Demand Stay In VSAIPPL-SMC Case
Case Title : M/s. VSAIPPL-SMC(JV) v. The Income Tax Officer
Case Number : WRIT PETITION Nos.27454, 27512 and 27534 of 2026
CITATION : 2026 LLBiz HC(TEL) 67
The Telangana High Court on 20 August set aside orders directing VSAIPPL-SMC (JV) to pay 20% of its outstanding tax demand as a condition for staying recovery of the remaining demand, while allowing three writ petitions concerning Assessment Years 2022-23, 2023-24 and 2024-25. A Division Bench comprising Justices P. Sam Koshy and Vakiti Ramakrishna Reddy noted that authorities cannot mechanically impose a condition requiring payment of 20% of an outstanding tax demand for granting stay of recovery and must independently exercise their discretion based on the facts and circumstances of each case.
ITAT
Omission Of Specified Domestic Transactions From Transfer Pricing Regime Prospective: ITAT New Delhi
Case Title : M/s Dixon Technologies (India) Ltd. v. Addl. CIT, Special Range-3, New Delhi
Case Number : ITA No. 6528/Del/2017
CITATION : 2026 LLBiz ITAT(DEL) 277
The Delhi Income Tax Appellate Tribunal (ITAT) on 2 September held that the omission of specified domestic transactions from the transfer pricing regime cannot operate retrospectively where the legislature has expressly provided that the amendment will apply prospectively. A Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal upheld the transfer pricing proceedings against Dixon Technologies (India) Ltd. for Assessment Year 2013-14 involving an adjustment of Rs. 5.12 crore.
Turnover Filter Cannot Be Applied Mechanically To Exclude Transfer Pricing Comparables: ITAT Delhi
Case Title : GE India Industrial Pvt. Ltd. v. DCIT
Case Number : ITA Nos. 3695/Del/2015 & 2781/Ahd/2012
CITATION : 2026 LLBiz ITAT(DEL) 278
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 9 September held that transfer pricing comparables cannot be excluded merely by applying a rigid turnover filter where the entities are otherwise functionally comparable. A Division Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal partly allowed twin appeals filed by GE India Industrial Pvt. Ltd. for assessment years 2007-08 and 2008-09 against transfer pricing adjustments and various corporate tax disallowances made by the Assessing Officer.
Case Title : DCIT v. I Energizer Holdings Ltd.
Case Number : ITA No. 4654/Del/2015 with Cross Objection No. 397/Del/2015
CITATION : 2026 LLBiz ITAT(DEL) 279
The Income Tax Appellate Tribunal, Delhi Bench, has ruled that tax authorities must issue a draft assessment order to an eligible taxpayer before passing a final order if they propose a change prejudicial to the taxpayer's interests. A foreign company is expressly included in the definition of an “eligible assessee” for this purpose. The tribunal observed that the Assessing Officer “firstly has to mandatorily forward a draft” of the proposed assessment order when such a prejudicial variation is proposed.