LiveLawBiz Direct Tax Weekly Round-Up: September 14 - September 20, 2026
SUPREME COURT
Assessing Officer Cannot Reopen Income Tax Settlement Through Reassessment: Supreme Court
Case Title : Assistant Commissioner of Income Tax & Anr. v. M/s Omaxe Limited
Case Number : Civil Appeal No. 9190 of 2013
CITATION : 2026 LLBiz SC 310
The Supreme Court on Wednesday ruled that once a taxpayer's case has been finally settled by the Income Tax Settlement Commission, the Assessing Officer cannot reopen matters covered by the settlement through the ordinary reassessment route under Section 148 of the Income Tax Act. The Court said the Revenue can seek to reopen a settlement on the ground of fraud or misrepresentation by moving the Settlement Commission under Section 245D(6). The Assessing Officer, however, cannot independently reopen the settled assessment.
Case Title : Union Of India v Bharat Industrial Enterprises Pvt. Ltd
Case Number : SLP(C) No. 033196/2026
The Supreme Court on Friday stayed the Punjab and Haryana High Court judgment declaring Section 147A of the Income Tax Act, 1961, unconstitutional. A bench comprising Justice JB Pardiwala and Justice K. Vinod Chandran stayed the High Court judgment until the final disposal of the Special Leave Petition filed by the Union Government challenging the ruling. “The impugned order shall remain stayed on the condition that assessment as well as reassessment proceedings shall not proceed further till final disposal of the main matter. Notify this appeal for the final hearing on 3rd December.”, the court ordered.
CBDT Circulars Reflect Executive's Understanding Of Law, Not Binding On Courts: Supreme Court
Case Title : Orient Crafts Limited v. Commissioner of Income Tax, New Delhi
Case Number : Civil Appeal Nos. 143-144 of 2013
CITATION : 2026 LLBiz SC 311
The Supreme Court on Friday held that CBDT circulars merely represent the Executive's understanding of a statutory provision and are not binding on the High Courts or the Supreme Court. The observation came while the court rejected an assessee's reliance on a CBDT Office Memorandum to claim a deduction under Section 80HHC of the Income Tax Act on premium received from the sale of export quotas A bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria held that such circulars merely reflect the Executive's understanding of a statutory provision and cannot bind courts while interpreting the Income Tax Act.
HIGH COURTS
Andhra Pradesh HC
Andhra Pradesh High Court Quashes ₹6.23 Lakh Tax Demand Over Expired DTVSV Payment Deadline
Case Title : N. Venu Gopal Reddy v. Union Of India and Others
Case Number : WRIT PETITION NO: 32115 of 2023
CITATION : 2026 LLBiz HC(APH) 51
The Andhra Pradesh High Court on 24 August held that the Income Tax Department cannot require a Direct Tax Vivad Se Vishwas Scheme (DTVSV) declarant to meet a payment deadline that had expired before the Department issued the revised payment certificate. A Division Bench comprising Justices Ninala Jayasurya and T.C.D. Sekhar set aside a Rs. 6,23,708 demand raised against N. Venu Gopal Reddy, a works contractor, and directed the Income Tax authorities to issue the final order under the scheme.
Bombay HC
Bombay High Court Directs Department Not To Reassess Taxpayers Challenging Income Tax Act Sec. 147A
Case Title : Bharat Petroleum Corporation Limited v. Assistant Commissioner Income-Tax, Circle 2(1)(1), Mumbai
Case Number : Writ Petition No. 4310 of 2024 [OS]
CITATION : 2026 LLBiz HC(BOM) 515
The Bombay High Court on 2 September directed the Income Tax Department not to proceed with reassessment proceedings against taxpayers who have challenged and pressed the constitutional validity of Section 147A of the Income Tax Act, 1961, including in petitions not presently listed with the main batch of cases. A Division Bench of Justices B.P. Colabawalla and Farhan P. Dubash passed the interim order in a batch of petitions led by Bharat Petroleum Corporation Limited. The judges extended the interim protection already granted in several petitions to other pending matters challenging Section 147A.
Bombay High Court Quashes Fresh Scrutiny Of Thomson Reuters Over Modified Return Filed After Merger
Case Title : Thomson Reuters International Services Private Limited v. Assessment Unit, Income Tax Department & Ors.
Case Number : Writ Petition (L) No. 15691 of 2026
CITATION : 2026 LLBiz HC(BOM) 519
The Bombay High Court on 8 September quashed the fresh scrutiny and transfer pricing proceedings initiated against Thomson Reuters International Services Private Limited for Assessment Year 2022-23. A Division Bench of Justices B.P. Colabawalla and Farhan P. Dubash held that filing a modified return after a business reorganisation does not require a fresh assessment when proceedings for the same year are already pending. Under Section 170A(2)(b) of the Income Tax Act, the modified return must be considered as part of the pending assessment.
Case Title : GIA India Laboratory Pvt. Ltd. v. Assessment Unit, Income Tax Department, National Faceless Assessment Centre, New Delhi & Ors.
Case Number : Writ Petition No. 2604 of 2026
CITATION : 2026 LLBiz HC(BOM) 524
The Bombay High Court has held that imposing an income tax penalty on account of a reduction in an expenditure claim pursuant to a position settled under an Advance Pricing Agreement (APA) is contrary to the scheme of the Income-tax Act and cannot be sustained. A division bench of Justice B.P. Colabawalla and Justice Farhan P. Dubash observed that the APA framework, introduced to reduce tax litigation, would be rendered ineffective if consequential penalties could be imposed after an expenditure claim was reduced pursuant to a position settled under an APA.
Case Title : The Pr. Commissioner of Income Tax–17, Mumbai v. Mile Stone Real Estate Fund
Case Number : Income Tax Appeal No. 1209 of 2022
CITATION : 2026 LLBiz HC(BOM) 525
The Bombay High Court on Thursday held that a Venture Capital Fund (VCF) registered with SEBI does not need separate registration for each scheme it operates to claim exemption under Section 10(23FB) of the Income Tax Act. A Division Bench comprising Justice B.P. Colabawalla and Justice Farhan P. Dubash dismissed the Revenue's appeal against Milestone Real Estate Fund. The court upheld the Fund's eligibility for the exemption.
Calcutta HC
Calcutta High Court Quashes Income-Tax Reassessment Against McNally Bharat After IBC Resolution Plan
Case Title : McNally Bharat Engineering Company Limited v. Union of India and Others
Case Number : WPO 546 of 2024
CITATION : 2026 LLBiz HC (CAL) 224
The Calcutta High Court has quashed income-tax reassessment proceedings against McNally Bharat Engineering Company Limited, holding that the authorities failed to satisfy the statutory conditions for reopening the assessment and acted contrary to the company's NCLT-approved resolution plan. Justice Smita Das De allowed the company's writ petition and set aside the notice and order issued by the tax authorities along with all consequential proceedings. The authorities were also restrained from taking action contrary to the resolution plan.
Case Title : Principal Commissioner of Income Tax-1, Kolkata v. M/s Pricewaterhouse Coopers Private Limited
Case Number : ITA No. 51 of 2026
CITATION : 2026 LLBiz HC (CAL) 229
The Calcutta High Court has refused to condone a 1,480-day delay in filing an income tax appeal, holding that the Income Tax Department cannot explain such an inordinate delay merely by pointing to its heavy workload and the number of matters it was handling. A Division Bench of Justice Rajarshi Bharadwaj and Justice Sudip Deb found that the Department had not shown due diligence in pursuing the appeal. The explanation offered for the delay was not sufficient to justify condoning it.
Delhi HC
Case Title : J J Foods Private Limited v. Deputy Commissioner Of Income Tax Circle 13 (1) Delhi &Anr.
Case Number : W.P.(C) 7705/2024
CITATION : 2026 LLBiz HC(DEL) 956
The Delhi High Court has set aside an order passed under Section 148A(d) of the Income Tax Act, 1961, after finding that the Assessing Officer (AO) curtailed the assessee's statutory opportunity to respond and subsequently ignored the reply that had been filed before the order was passed. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed that the assessee was entitled to 30 days to file its reply, whereas the AO had practically reduced the time available to it to around 15 days.
Delhi High Court Sets Aside 7 ITAT Orders In Patanjali Ayurved Tax Appeals Over Procedural Lapses
Case Title : Pr. Commissioner Of Income Tax, Central-1, Delhi v. Patanjali Ayurved Limited
Case Number : ITA 80/2026&CM APPL. 6824/2026
CITATION : 2026 LLBiz HC (DEL) 958
The Delhi High Court on 10 September set aside seven orders passed by the Income Tax Appellate Tribunal (ITAT) in tax appeals involving Patanjali Ayurved Limited, citing procedural lapses, non-application of mind and undue haste in passing a common order in seven appeals. A Division Bench comprising Justices Dinesh Mehta and Rajneesh Kumar Gupta set aside the orders after the Income Tax Department challenged four of them, noting that the seven appeals had been heard and pronounced on different dates but were disposed of through a common order.
Case Title : Pr. Commissioner of Income Tax-12, Delhi v. Smt. Saloni Narang
Case Number : ITA 437/2024
CITATION : 2026 LLBiz HC(DEL) 964
The Delhi High Court has dismissed the Income Tax Department's appeal against an ITAT order quashing a search assessment for AY 2006-07 on the ground of limitation, in light of its earlier judgment in Principal Commissioner of Income Tax, Central-1, Delhi v. Sanjay Jain which held time limit for completing search assessments cannot be extended merely by making a reference to a foreign tax authority if the information sought is not permissible under the applicable tax treaty.
Mere Payment By Indian Resident To Non-Resident Not Income Accruing In India: Delhi High Court
Case Title : Teva Pharmaceuticals Usa Inc. v. Deputy Commissioner Of Income Tax, Circle 3(1)(1), International Taxation, New Delhi
Case Number : W.P.(C) 10711/2017
CITATION : 2026 LLBiz HC(DEL) 968
The Delhi High Court has held that merely because a payment is made by an Indian resident to a non-resident, the payment cannot by itself be treated as income accruing or arising in India. The Division Bench of Justices Dinesh Mehta and Vinod Kumar made the observation while allowing a batch of petitions concerning the taxability of payments made by Ranbaxy Laboratories to Teva Pharmaceuticals Industries Israel and the validity of reassessment proceedings initiated against Teva Pharmaceuticals USA.
Case Title : Elsevier BV v. Assistant Commissioner Of Income Tax
Case Number : W.P.(C) 12114/2023
CITATION : 2026 LLBiz HC(DEL) 982
The Delhi High Court has held that an Assessing Officer (AO) cannot invoke reassessment proceedings under Section 148 of the Income Tax Act merely to make up for his own failure to record a finding on the existence of a Permanent Establishment (PE) in India, after having conducted an inquiry into the issue during the original assessment. The division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta made the observation while allowing a petition filed by Elsevier BV, a company incorporated and tax resident in the Netherlands, challenging reassessment proceedings initiated against it for Assessment Year 2016-17.
Case Title : Shri Krishna Industries Through It Proprietor Prop Mohan Lal v. Commissioner Of Central Goods And Services Tax And Ors.
Case Number : W.P.(C) 4897/2025
CITATION : 2026 LLBiz HC(DEL) 983
The Delhi High Court has held that proceedings under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017 (CGST Act) can co-exist where they concern distinct liabilities or contraventions. The Division Bench of Justices Anil Kshetarpal and Shail Jain made the observation while dismissing a plea filed challenging proceedings initiated by the Central GST authorities under Section 74 of the CGST Act in relation to alleged inadmissible Input Tax Credit (ITC) availed by Petitioner.
Delhi High Court Stays Income Tax Reassessment Against GoDaddy Over 'Over-Zealous' Approach Of AO
Case Title : GoDaddy.com LLC v. Assistant Commissioner of Income Tax, Circle 1(3), International Taxation, New Delhi & Anr.
Case Number : W.P.(C) 13368/2026
CITATION : 2026 LLBiz HC(DEL) 987
The Delhi High Court has stayed income reassessment proceedings initiated against domain registrar GoDaddy.com LLC, observing that the Assessing Officer (AO) was proceeding with an “over-zealous approach” and appeared to be guided by revenue considerations. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed that the AO had “ignored objectivity and basic tenet of tax adjudication system, being certainty and finality of the assessment proceedings.”
Case Title : Garima Vikas v. Union of India & Ors.
Case Number : W.P.(C) 5278/2026
CITATION : 2026 LLBiz HC(DEL) 988
The Delhi High Court has held that where a search was conducted between April 1, 2021 and September 1, 2024, the reassessment provisions under Sections 147 to 151 of the Income Tax Act, 1961, as they stood before the Finance Act, 2024 amendment, would continue to apply. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta accordingly upheld the issuance of a notice under Section 148 of the Income Tax Act without first following the procedure under Section 148A(b), (c) and (d).
Delhi High Court Upholds Delhivery's ₹51.48 Crore Deduction For ESOP Expenditure
Case Title : Pr. Commissioner of Income Tax (Central)-2 v. M/s Delhivery Pvt. Ltd.
Case Number : ITA 479/2024
CITATION : 2026 LLBiz HC(DEL) 989
The Delhi High Court has upheld Delhivery Pvt. Ltd.'s claim for deduction of ₹51.48 crore in ESOP expenditure, ruling that the Assessing Officer was also not justified in rejecting a Chartered Accountant's valuation report for an assessment year when such certification was permissible The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta dismissed the Revenue's appeal in its entirety and answered both questions raised before it in favour of the assessee.
Case Title : A.T. Kearney Limited – India Branch Office v. Union of India & Anr. (and batch)
Case Number : W.P.(C) 5178/2021
CITATION : 2026 LLBiz HC(DEL) 990
The Delhi High Court has directed the Union Government to file an affidavit disclosing the pendency of cases before the Boards for Advance Rulings and their benches, while also seeking details regarding the status of Chief Commissioners nominated by the Central Board of Direct Taxes (CBDT) as members of the Boards. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta passed the direction while hearing a batch of petitions, including those filed by Mitsubishi Electric and the Regents of the University of Michigan.
Gujarat HC
Case Title : Commissioner of Income Tax-I v. M/s J K Paper Limited
Case Number : R/Tax Appeal No. 290 of 2010 with R/Tax Appeal No. 900 of 2012
CITATION : 2026 LLBiz HC (GUJ) 132
The Gujarat High Court has upheld an Income Tax Appellate Tribunal finding that expenditure incurred by J K Paper Limited on supervising trees grown by farmers could not be treated as agricultural expenditure. The tribunal had also excluded expenditure on producing coppice shoots through a process that did not involve primary operations on land. A bench of Justice Bhargav D. Karia and Justice Pranav Trivedi upheld the tribunal's decision to restrict the disallowance of agricultural loss to ₹9.43 lakh, against the ₹78.12 lakh addition made by the Assessing Officer.
Karnataka HC
Case Title : Anurag Kalia v. Union of India
Case Number : WP 28761 of 2025
The Centre on Saturday told the Karnataka High Court that interpreting “spouse” to include same-sex partners under a provision of the Income Tax Act would indirectly recognise a same-sex matrimonial relationship, which is not recognised under Indian law. “Same-sex marriage is not a recognised marriage in the Indian context. So, if we understand spouse to mean same sex people, we indirectly recognise their matrimonial relationship. Therefore, spouse necessarily means husband and wife,” Solicitor General Tushar Mehta submitted before Justice B.M. Shyam Prasad.
Punjab & Haryana HC
Income-Tax Authorities Should Take Liberal Approach To Condoning Filing Delays: Punjab & Haryana HC
Case Title : Alaknanda Coop. Group Housing Society Ltd. v. Chief Commissioner of Income Tax & Ors.
Case Number : CWP No.24673 of 2026 (O&M)
CITATION : 2026 LLBiz HC(PNH) 53
The Punjab and Haryana High Court has recently observed that income-tax authorities should take a liberal approach while considering requests to condone delays in filing income-tax returns where genuine hardship is shown. A Division Bench of Justice Deepak Sibal and Justice Sunish Bindlish made the observation while setting aside an order of the Chief Commissioner of Income Tax, Panchkula, which rejected a cooperative society's request to condone a 34-day delay in filing its return for assessment year 2020-21.
Rajasthan HC
25-Year Pendency Cannot Allow Writ Court To Decide Disputed Facts In Tax Case: Rajasthan High Court
Case Title : Mahesh Kumar Gupta v. Union of India
Case Number : D.B. Civil Writ Petition No. 5872/2001
CITATION : 2026 LLBiz HC(RAJ) 49
The Rajasthan High Court on 21 August held that the mere pendency of a tax dispute for 25 years does not permit the Court to decide disputed questions of fact in writ proceedings on the basis of pleadings and affidavits, as this would bypass the fact-finding process under the Income Tax Act. A Division Bench of Justices Arun Monga and Ashutosh Kumar declined to interfere with reassessment notices issued to Mahesh Kumar Gupta for Assessment Years 1995-96 to 1999-2000, holding that the disputed factual issues should be examined by the competent Income Tax authorities.
Case Title : Secure Meters Ltd. v. ACIT, Circle-2, Udaipur
Case Number : D.B. Income Tax Appeal No. 19/2008
CITATION : 2026 LLBiz HC(RAJ) 50
The Rajasthan High Court on 5 September held that deductions available under different provisions of the Income Tax Act must be computed independently, and the restriction against double deduction can be applied only while allowing the deductions. A Division Bench of Justices Pushpendra Singh Bhati and Praveer Bhatnagar allowed Secure Meters Ltd.'s appeal and set aside the Income Tax Appellate Tribunal's finding on the computation of deductions under Sections 80-IA/80-IB and Section 80HHC for Assessment Year 2003-04.
Telangana HC
Case Title : M/s. Naandi Foundation v. The Assistant Commissioner of Income Tax
Case Number : WRIT PETITION Nos.30560 of 2025
CITATION : 2026 LLBiz HC(TEL) 71
The Telangana High Court on 7 September allowed a batch of petitions filed by Naandi Foundation challenging reassessment proceedings under the Income Tax Act, 1961 for the assessment year 2019-20 and set aside the order passed under Section 148A(3) and the consequential notice issued under Section 148. A Division Bench of Justices P. Sam Koshy and Narsing Rao Nandikonda held that the mere need for “further in-depth scrutiny” of transactions cannot constitute information suggesting escapement of income.
Telangana High Court Quashes Reassessment Against Cyberabad Citizens Over Demerged Business Income
Case Title : M/s. Cyberabad Citizens Health Services Private Limited v. Deputy Commissioner of Income Tax
Case Number : WRIT PETITION No.20450 of 2024
CITATION : 2026 LLBiz HC(TEL) 72
The Telangana High Court on 7 September set aside the order dated 16 April 2024 passed under Section 148A(d) of the Income Tax Act and the consequential notice under Section 148 issued to Cyberabad Citizens Health Services Pvt. Ltd. for Assessment Year 2019-20. A Division Bench of Justices P. Sam Koshy and Narsing Rao Nandikonda held that income already disclosed and offered to tax by the entity to which a business was demerged cannot be treated as escaped income merely because the related transactions appeared against the original company's PAN.
ITAT
ITAT Delhi Rejects Nil MFN Rate Under India-Netherlands DTAA Over Lack Of Specific Notification
Case Title : Travelport Global Distribution System BV v. ACIT
Case Number : ITA No. 2411/Del/2023
CITATION : 2026 LLBiz ITAT(DEL) 280
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that a 1999 notification amending the India-Netherlands tax treaty only reduced the tax rate on interest from 15% to 10% and did not extend the Nil-rate exemption available under the India-USA or India-Italy treaties. The bench of Judicial Member Vikas Awasthy and Accountant Member Naveen Chandra held that the absence of a specific notification extending the exemption meant that the benefit could not be imported through the treaty's Most Favoured Nation (MFN) clause.
Case Title : Universal Tractor Holding LLC v. DCIT
Case Number : ITA No. 2216/Del/2022
CITATION : 2026 LLBiz ITAT(DEL) 281
The Income Tax Appellate Tribunal (ITAT), Delhi, has held that interest awarded under a foreign arbitral award loses its separate character as “interest” once the award is enforced and deemed to be a decree by the Delhi High Court. The tribunal ruled that the interest received as part of the decree was not taxable in India. “To our mind therefore, the damages, including the interest has assumed the character of a 'judgement debt' and is beyond the purview of Indian Income Tax Act,” the tribunal observed.