Direct Tax Monthly Digest: February 2026
Kapil Dhyani
3 March 2026 12:34 PM IST
SUPREME COURT
Case Title : THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1) Vs ADANI WILMAR LIMITED
Case Number : SLP(C) 4944/2026
CITATION : 2026 LLBiz SC 35
The Supreme Court on Monday refused to interfere with a Gujarat High Court judgment that had quashed the reopening of Adani Wilmar Limited's income tax assessment for the 2013–14 assessment year, dismissing a special leave petition filed by the revenue. A Bench of Justice B. V. Nagarathna and Justice Ujjal Bhuyan said it was not inclined to step in after examining the record. “Having regard to the facts of this case, we are not inclined to interfere in the matter. The SLP is dismissed. The question of law, if any, shall be kept open,” the bench said.
Case Title : The Income Tax Officer & Ors. v. Man Mohan Agarwal HUF
Case Number : Petition(s) for Special Leave to Appeal (C) No(s). 4270/2026
CITATION : 2026 LLBiz SC 38
The Supreme Court has dismissed a Special Leave Petition filed by the Income Tax Department against a common Telangana High Court judgment setting aside reassessment notices issued against several taxpayers as time-barred. The plea challenged a common judgment of the Telangana High Court, which endorsed the Delhi High Court's view that mere generation or signing of a reassessment notice does not amount to issuance and that a notice is issued only when it is dispatched.
Case Title : DEPUTY COMMISSONER OF INCOME TAX CENTRAL CIRCLE 01 CHANDIGARH & ANR. VS FINDOC FINVEST PRIVATE LIMITED
Case Number : Diary No. 71435/2025
The Supreme Court on Monday issued notice on an appeal by the Income Tax Department against a Punjab and Haryana High Court judgment that held that an Assessing Officer abdicated his quasi-judicial function by repeatedly consulting superior officers before passing an assessment order. A bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe issued notice on both the application seeking condonation of delay and the Special Leave Petition. The matter is listed next on March 16, 2026.
PIL In Supreme Court Challenges Income Tax Law Allowing Search Of Digital Devices, Cloud Data
Case Title : Vishwaprasad Alva v. Union of India
Case Number : W.P.(C) No. 114/2026
A public interest litigation has been filed before the Supreme Court challenging the constitutionality of provisions in the Income Tax Act, 2025 that empower tax authorities to conduct searches of “computer systems” and “virtual digital space”, including personal electronic devices, cloud servers, emails and private communications. The plea, filed under Article 32 of the Constitution by entrepreneur Vishwaprasad Alva, assails Section 247 of the Income Tax Act, 2025, as well as the corresponding provisions under Section 132 of the Income Tax Act, 1961.
Case Title : Arun Singh v. Union of India
Case Number : Diary No. 50293/2025
The Supreme Court on Wednesday dismissed a plea seeking directions to introduce safeguards so that property buyers are not unknowingly penalised for failing to deduct tax at source (TDS) while purchasing property worth more than Rs 50 lakhs. A bench of Justice Vikram Nath and Justice Sandeep Mehta heard the matter and dismissed the petition after brief submissions.
Case Title : Sirez Limited vs. Union of India & Ors.
Case Number : Special Leave to Appeal (C) No.4721/2026
The Supreme Court is to examine whether a delay in filing a return of income can be condoned under Section 119(2)(b) of the Income Tax Act, 1961. A Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan issued notice in a Special Leave Petition filed by Sirez Limited challenging the judgment dated December 8, 2025, of the Delhi High Court.
Case Title : DEPUTY COMMISSIONER OF INCOME TAX 3 VS M/S RELIANCE INDUSTRIES LTD
Case Number : Special Leave to Appeal (C) No(s). 7819/2026
CITATION : 2026 LLBiz SC 92
The Supreme Court recently declined to entertain the Income Tax Department's Special Leave Petition against a Bombay High Court judgment that had quashed assessment orders passed in the names of Reliance Polyethylene Limited and Reliance Polypropylene Limited after they had ceased to exist following their merger with Reliance Industries Limited. A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe dismissed the petition after recording that, pursuant to the High Court's ruling, the department had already issued a fresh notice on July 17, 2025.
HIGH COURTS
Bombay HC
Bogus Purchases: Bombay High Court To Examine If ITAT Can Limit Disallowance To Profit Margin
Case Title : The Pr.Commissioner of Income Tax-17 Vs Chandrakant L. Nishar
Case Number : INCOME TAX APPEAL NO. 1879 OF 2019
CITATION : 2026 LLBiz HC(BOM) 88
The Bombay High Court has recently admitted an Income Tax Appeal filed by the Department and will examine the correct approach to disallowance in cases involving bogus purchases. A Division Bench of Justice M S Karnik and Justice S.M. Modak, by an order dated February 5, 2026, admitted the Revenue's appeal against Chandrakant L. Nishar.
Calcutta HC
Case Title : Principal Commissioner of Income Tax v. M/s Express Tradelink Pvt. Ltd.
Case Number : ITAT 95 OF 2025
CITATION : 2026 LLBiz HC (CAL) 41
The Calcutta High Court on 4 February held that in share capital assessments, income tax additions cannot be sustained on mere suspicion, when the investors are identifiable, the taxpayers and share subscriptions are backed by audited records, and clear there are clear banking trails for transactions. A Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar dismissed an appeal filed by the Principal Commissioner of Income Tax, Kolkata, against Express Tradelink Pvt. Ltd. (taxpayer) for the Assessment Year 2009-10.
Change Of Opinion Not Enough To Reopen Assessment: Calcutta High Court
Case Title : Principal Commissioner of Income Tax-1, Kolkata v. Russel Credit Limited
Case Number : ITAT 153 OF 2025
CITATION : 2026 LLBiz HC (CAL) 57
The Calcutta High Court on 20 February held that revisional powers under Section 263 of the Income Tax Act, 1961 cannot be invoked merely because the Principal Commissioner holds a different opinion on the nature of income. A Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar, dismissed an appeal filed by the Principal Commissioner of Income Tax, Kolkata, and upheld the order of the Income Tax Appellate Tribunal setting aside revisionary proceedings against Russel Credit Limited for the Assessment Year 2018–19.
'Reimbursements' Fixed As Percentage Of Sales Are Contractual, Liable For TDS: Calcutta High Court
Case Title : Deys Medical Pvt. Ltd. v. Principal Commissioner of Income Tax
Case Number : ITAT 160 OF 2024
CITATION : 2026 LLBiz HC (CAL) 58
The Calcutta High Court has upheld the disallowance of expenses claimed by Deys Medical Private Limited (appellant) on account of alleged reimbursements paid to its group companies, holding that payments calculated as a percentage of sales constituted contractual consideration liable for tax deduction at source (TDS). The appeal arose from an order of the Income Tax Appellate Tribunal, Kolkata, which had partially affirmed the Assessing Officer's disallowance of over Rs. 3.35 crore under the Income Tax Act for failure to deduct at source on payments made towards advertisement, sales promotion, marketing, handling, storage and collection services.
Delhi HC
Case Title : International Buddhist Confederation v. ITO
Case Number : ITA 18/2026
CITATION : 2026 LLBiz HC (DEL) 117
The Delhi High Court has granted tax exemption to the International Buddhist Confederation, a Non-Governmental Organisation holding that tax authorities can't deny statutory benefits merely because of an inadvertent disclosure error made in the income tax return. A division bench of Justices Dinesh Mehta and Vinod Kumar also criticised the Revenue for taking advantage of the assessee's ignorance of his rights while passing the scrutiny assessment.
Delhi High Court Cuts TDS To 0.5% for UK Company Travelport, Sets Aside 1.6% Certificate
Case Title : Travelport International Operations Limited v. Deputy Commissioner Of Income-Tax Circle Int. Tax 3(1)(1), Delhi & Ors.
Case Number : W.P.(C) 7633/2025
CITATION : 2026 LLBiz HC (DEL) 118
The Delhi High Court has granted partial relief to UK-based travel technology company Travelport International Operations Limited by setting aside a tax withholding certificate that required deduction of tax at 1.6%. A division bench of Justices Dinesh Mehta and Vinod Kumar directed the tax authorities to issue a fresh certificate providing deduction of tax at a reduced rate of 0.5%.
Case Title : Branch Metrics Inc v. Deputy Commissioner Of Income Tax Circle International Tax 1 1 2 New Delhi
Case Number : W.P.(C) 17222/2025
CITATION : 2026 LLBiz HC (DEL) 129
The Delhi High Court has flagged an administrative issue in the processing of applications under Section 197 of the Income Tax Act, noting that a mismatch between the dates on orders and certificates issued for lower or nil tax deduction can create a misleading impression of delay. The court noted that while the certificate may be issued later, the order deciding the application often bears the date of filing of the application.
Wrong Attachment In Reassessment Email Does Not Invalidate Income Tax Notice: Delhi High Court
Case Title : Pawan Sachdeva v. Income-Tax Officer, Ward 19(3), Delhi & Anr.
Case Number : W.P.(C) 1328/2026
CITATION : 2026 LLBiz HC (DEL) 130
The Delhi High Court has held that an inadvertent attachment of another assessee's notice along with a reassessment email doesn't invalidate proceedings under Section 148 of the Income Tax Act, 1961, so long as the substance of the communication clearly indicates that the statutory notice was intended for the concerned assessee. A division bench of Justices Dinesh Mehta and Vinod Kumar thus dismissed the writ petition filed by an assessee challenging the continuation of reassessment proceedings for Assessment Year 2012–13 on the ground that the email sent by the Assessing Officer had erroneously attached a notice pertaining to a third party.
Case Title : MHJ Metaltechs Pvt Ltd v. Income Tax Officer, Ward 16(1), Delhi
Case Number : W.P.(C) 880/2026
CITATION : 2026 LLBiz HC(DEL) 131
The Delhi High Court has held that an Assessing Officer is not required to supply the entire material on record to an assessee at the stage of issuing a notice under Section 148A of the Income Tax Act ,1961 (re-assessment stage) observing that such a requirement would unnecessarily protract reassessment proceedings and enable assessees to manufacture defences.
A division bench of Justices Dinesh Mehta and Vinod Kumar observed, “If it is held that every material has to be supplied to the assessee along with the notice under Section 148A(1) or Section 148A(b) (as applicable from time to time), it will result in protraction of the proceeding and giving assessee unwarranted opportunity to defend the transactions, which he had withheld while filing the return of income by way of getting the relevant material or defence manufactured.”
Case Title : The Pr. Commissioner Of Income Tax -Central -1 v. Sperry Plast Ltd.
Case Number : ITA 90/2026
CITATION : 2026 LLBiz HC(DEL) 132
The Delhi High Court has recently held that mere repayment of a loan within a short span of time, even within two days, does not by itself establish that the transaction was a sham or a bogus accommodation entry for the purposes of Section 68 of the Income Tax Act, 1961.
A division bench of Justices Dinesh Mehta and Vinod Kumar observed, “Simply because the loan has been paid within two days, it cannot be said with certitude that the loan was not a genuine loan and was only a paper entry. According to us, the other argument that no interest was paid to the creditor is also mis-placed because if the short-term loan for two-three days is taken, for whatever reason because of family or business relation or friendship, a creditor may advance the amount with lesser or even without interest.”
Case Title : Hitik Malhan v. UoI
Case Number : W.P.(C) 1604/2026
CITATION : 2026 LLBiz HC(DEL) 133
The Delhi High Court has reiterated that its writ jurisdiction under Article 226 of the Constitution cannot be invoked merely because a taxpayer disputes the correctness of facts or the material relied upon by the Assessing Officer in reassessment proceedings under the Income Tax Act, 1961.
A division bench of Justices Dinesh Mehta and Vinod Kumar observed, “A challenge to notice or proceedings can be considered normally, in case where the notice and proceedings are without jurisdiction. Simply because the petitioner thinks that the proceedings are not correct on facts and the material available with the Assessing Officer does not tally with the correct facts, the High Court's jurisdiction under Article 226 cannot be invoked.”
Delhi High Court Quashes Transfer Pricing Order After TPO Failed To Share Agreements Relied Upon
Case Title : Lindstrom Services India Private Limited v. Deputy/Assistant Commissioner Of Income Tax, Transfer Pricing - 2(2)(2) New Delhi & Anr.
Case Number : W.P.(C) 1721/2026
CITATION : 2026 LLBiz HC(DEL) 139
The Delhi High Court has recently has held that a Transfer Pricing Officer (TPO) is bound to furnish copies of agreements relied upon for benchmarking before finalising a transfer pricing adjustment. A division bench of Justices Dinesh Mehta and Vinod Kumar observed, “It is the settled position of law that any authority is bound to provide copies of the relied upon documents.”
Case Title : Commissioner Of Income Tax (Tds)-1, New Delhi v. M/S Mahagun (India) Pvt. Ltd.
Case Number : ITA 259/2025
CITATION : 2026 LLBiz HC (DEL) 141
The Delhi High Court has dismissed three appeals filed by the Income Tax Department challenging orders of the Income Tax Appellate Tribunal (ITAT) that had granted relief to Mahagun developers in a long-running dispute over deduction of tax at source (TDS) on lease rent payments made to the NOIDA Authority.
A Division Bench of Justices Dinesh Mehta and Justice Vinod Kumar rejected the appeals after noting that the controversy was squarely covered by its earlier ruling in Rajesh Projects (India) Pvt. Ltd. v. Commissioner of Income-tax (2017), which held that while TDS under Section 194-I of the Income Tax Act is applicable on lease rent paid to Greater Noida Developmental Authority, the law would operate prospectively from the date of that judgment.
Case Title : GoDaddy.com LLC v. Assistant/Deputy Commissioner Of Income Tax Circle 1(3)(1), International Taxation Delhi
Case Number : W.P.(C) 15023/2025
CITATION : 2026 LLBiz HC (DEL) 144
The Delhi High Court has held that domain name registration fees received by GoDaddy is not chargeable to income tax in India, in terms of the India-USA Double Taxation Avoidance Agreement. A division bench of Justices Dinesh Mehta and Vinod Kumar also criticised the Income Tax Department for refusing to grant a nil withholding tax certificate under Section 197 of the Income Tax Act, 1961, despite binding judicial precedent.
Case Title : Pr. Commissioner Of Income Tax, Central-3, Delhi v. Jindal Saw Ltd.
C ase 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.”
Case Title : British Airways PLC v. The Assistant Commissioner Of Income Tax Circle (Int. Tax) 1(1)(2), New Delhi & Anr.
Case Number : W.P.(C) 18856/2025
CITATION : 2026 LLBiz HC (DEL) 178
The Delhi High Court has set aside an order of the Income Tax Department issuing a 0.1% TDS certificate to British Airways under Section 197 of the Income Tax Act, 1961. A Division Bench of Justices Dinesh Mehta and Vinod Kumar directed the authorities to issue a NIL TDS certificate, holding that income from airline operations is exempt under the India–UK Double Taxation Avoidance Agreement (DTAA).
Case Title : Refinitiv US LLC v. The Income Tax Officer Circle Int. Tax 1(3)(1) New Delhi
Case Number : W.P.(C) 17674/2025
CITATION : 2026 LLBiz HC (DEL) 180
The Delhi High Court has recently set aside a 15% tax withholding certificate issued to Refinitiv US LLC, a financial market data company under Section 197 of the Income Tax Act, 1961. A Division Bench of Justices Dinesh Mehta and Vinod Kumar directed the tax authorities to issue a NIL TDS certificate in respect of income earned from its Matching Solutions services, holding that such income is not taxable in India under the India–US Double Taxation Avoidance Agreement (DTAA).
Case Title : Nayati Healthcare And Research Ncr Private Limited v. Assessment Officer, Income Tax Department
Case Number : W.P.(C) 1554/2026
CITATION : 2026 LLBiz HC (DEL) 181
The Delhi High Court has recently set aside an ex-parte best judgment assessment assessing the Nayati Healthcare and Research NCR Private Limited's income at Rs. 232 crore, which was passed while the company was undergoing Corporate Insolvency Resolution Process (CIRP). A Division Bench of Justice Dinesh Mehta and Vinod Kumar allowed the writ petition filed by the assessee, observing that at the relevant time the company was under CIRP and neither the suspended management nor the Interim Resolution Professional (IRP) was in a position to effectively represent the assessee before the Assessing Officer.
Delhi High Court Treats 5.25% Withholding Certificate Issued To EY As Nil
Case Title : Ernst & Young LLP v. Assistant Commissioner Of Income Tax, Circle International Tax-1-2-2, New Delhi
Case Number : W.P.(C) 2266/2026
CITATION : 2026 LLBiz HC (DEL) 182
The Delhi High Court has recently treated a 5.25% withholding tax certificate issued to Ernst & Young LLP (EY) under Section 195 of the Income Tax Act, 1961, as a NIL-rate certificate, holding that the tax officer acted contrary to an earlier binding order of the Court for the same assessment year. A Division Bench of Justices Dinesh Mehta and Vinod Kumar disposed of the writ petition filed by EY challenging the order of the Assistant Commissioner of Income Tax which had directed withholding at 5.25%.
Income Tax | Delay in Filing Form 67 Not Ground to Deny Foreign Tax Credit: Delhi High Court
Case Title : Real Time Data Services Private Limited v. Principal Commissioner Of Income Tax, Delhi-7 & Anr.
Case Number : W.P.(C) 959/2024
CITATION : 2026 LLBiz HC (DEL) 184
The Delhi High Court has held that a mere delay in filing Form 67, the prescribed declaration required to claim credit in India for taxes already paid abroad as required under Rule 128 of the Income Tax Rules, 1962 cannot be used to deny an assessee the substantive benefit of Foreign Tax Credit (FTC). A Division Bench of Justices Dinesh Mehta and Vinod Kumar made the observation while allowing a petition filed by Real Time Data Services Private Limited against the Principal Commissioner of Income Tax, Delhi.
Case Title : PGS Geophysical AS v. Income Tax Department, International Tax Circle 2(2)(2) New Delhi & Anr.
Case Number : W.P.(C) 9678/2025
CITATION : 2026 LLBiz HC (DEL) 185
The Delhi High Court has quashed a 7% withholding tax certificate issued to Norwegian company PGS Geophysical under Section 197 of the Income Tax Act, holding that seismic survey and data acquisition services rendered for offshore oil exploration cannot be characterised as “fees for technical services” (FTS) or royalty. A Division Bench of Justices V. Kameswar Rao and Vinod Kumar allowed the writ petition filed by the Norwegian company, which had been engaged by ONGC for conducting seismic data acquisition and related services in connection with oil and gas exploration activities.
Delhi High Court Quashes 15% TDS Certificate On SaaS Under India–US DTAA, Orders 2% Certificate
Case Title : Beeline Com LLC v. Income Tax Officer Ward Int Tax 11 2 Delhi & Anr.
Case Number : W.P.(C) 1867/2026
CITATION : 2026 LLBiz HC (DEL) 194
The Delhi High Court has quashed a 15% tax deduction at source (TDS) certificate issued under Section 197 of the Income Tax Act, in respect of payments made for Software-as-a-Service (SaaS) to a US-based company providing a web-based Vendor Management System (VMS) to Indian clients, including Infosys Ltd. A Division Bench of Justices Dinesh Mehta and Vinod Kumar held that the company had made out a prima facie arguable case on non-taxability under the India–US Double Taxation Avoidance Agreement (DTAA).
Case Title : Commissioner Of Income Tax – Exemption v. Kush Innovative Foundation
Case Number : ITA 115/2026
CITATION : 2026 LLBiz HC (DEL) 199
The Delhi High Court has held that the Income Tax Appellate Tribunal (ITAT) cannot direct the grant of registration under Sections 12AB (which grants income tax exemption to charitable trusts) and 80G (which allows donors to claim tax deductions on donations) of the Income Tax Act, 1961 without a proper inquiry into the genuineness of the charitable activities of the applicant trust. A Division Bench of Justices Dinesh Mehta and Vinod Kumar thus set aside an ITAT order which had directed the Department to grant registration to an assessee-trust, observing that registration under Section 12AB(1)(b), following provisional approval under Section 12AB(1)(c), is not automatic and requires statutory scrutiny by the competent authority.
Case Title : Mitsui Engineering & Ship.C v. The Asst. Director Of Income Tax
Case Number : W.P.(C) 6708/2005
CITATION : 2026 LLBiz HC (DEL) 205
The Delhi High Court has allowed the writ petition filed by a Japan-based maritime engineering and logistics company, seeking additional interest on a long-pending income tax refund, in light of the Supreme Court's ruling in Sandvik Asia Ltd. v. Commissioner of Income Tax. A Division Bench of Justices Dinesh Mehta and Vinod Kumar set aside a 2005 order passed by the Director of Income Tax (International Taxation), which had rejected the petitioner's application under Section 154 of the Income Tax Act seeking additional interest under Section 244(1A) for Assessment Year 1988–89.
Gujarat HC
Case Title : Solvay Specialities India Private Limited vs. Assistant Commissioner of Income Tax
Case Number : R/Special Civil Application No.7905 of 2024
CITATION : 2026 LLBiz HC (GUJ) 13
The Gujarat High Court has recently set aside a tax deduction at source order against Solvay Specialities India, holding that the Income Tax Department failed to apply the mandatory “make available” test under the India–Singapore tax treaty. Under this test, tax authorities are required to first determine whether the foreign service provider actually passed on any technical knowledge, skill, or know-how in a way that allows the Indian company to use it independently in the future.
Ten-Year Block Under Section 153A Includes Search Year: Gujarat High Court
Case Title : Bankim Chandramanishanker Joshi vs. Deputy Commissioner of Income Tax
Case Number : R/Special Civil Application No. 1254 of 2026
CITATION : 2026 LLBiz HC (GUJ) 22
The Gujarat High Court on 23 February held that tax authorities must include the search year when computing the ten-year block for reopening assessments under Section 153A of the Income Tax Act, 1961. A Bench comprising Justice A.S. Supehia and Justice Pranav Trivedi quashed a notice issued in 2025 for Assessment Year 2014-2015, as it fell outside the ten-year period, with the tenth year being Assessment Year 2015-16.
Case Title : Gopal Bhachabhai Jatiya vs. ITO Ward-1, Gandhidham
Case Number : R/Tax Appeal No. 15184 of 2024
CITATION : 2026 LLBiz HC (GUJ) 25
The Gujarat High Court has recently quashed reassessment proceedings initiated under Section 148A of the Income Tax Act against an individual taxpayer after noting that the Assessing Officer failed to consider that two sale deeds had been cancelled on account of fraud and that the sale consideration had been reversed. A bench of Justice A.S. Supehia and Justice Pranav Trivedi recorded that the sale deeds dated August 28 and 29, 2018, were subsequently cancelled by a competent authority because they had been executed by fraudulent persons.
Karnataka HC
Case Title : Bhoruka Steel and Services Ltd. v. Assistant Commissioner of Income Tax
Case Number : WRIT PETITION NO. 17592 OF 2022
CITATION : 2026 LLBiz HC (KAR) 13
The Karnataka High Court has recently held that reassessment proceedings initiated after the expiry of the statutorily surviving period of limitation under the Income Tax Act are invalid. This remains so even where the revenue seeks to sustain the reassessment notice on the basis of the Supreme Court's directions in Union of India v. Ashish Agarwal.
Tax Authority Cannot Deny Interest Waiver Through A Cryptic Order: Karnataka High Court
Case Title : M/s Kanhaiyalal Dudheria v. The Chief Commissioner
Case Number : WRIT PETITION NO. 104240 OF 2025
CITATION : 2026 LLBiz HC (KAR) 17
The Karnataka High Court recently held that a tax authority cannot deny a taxpayer's request for interest waiver through a cryptic order. It must pass a reasoned, speaking order after objectively examining whether the income could have been anticipated at the relevant time. A Bench of Justice K.S. Hemalekha, partly allowed a writ petition filed by Kanhaiyalal Dudheria (petitioner) and partially set aside an order of the Chief Commissioner of Income Tax, that allowed waiver of the second and third advance tax instalments.
Kerala HC
BSNL VRS Retirees Absorbed From DoT Entitled To Leave Encashment Tax Exemption: Kerala High Court
Case Title : Sanchar Nigam Pensioners Welfare Association v. Union of India
Case Number : WP(C) NO. 16360 OF 2023
CITATION : 2026 LLBiz HC (KER) 35
The Kerala High Court has held that retired BSNL employees who were originally absorbed from the Department of Telecommunications (DoT) are entitled to full income-tax exemption on leave encashment under the Income Tax Act, 1961. The writ petition was filed by the Sanchar Nigam Pensioners' Welfare Association and two retired officers of Bharat Sanchar Nigam Limited, who had opted for the BSNL voluntary Retirement Scheme, 2019.
Madras HC
Transfer Pricing Reference During Extended Reassessment Period Invalid: Madras High Court
Case Title : Eaton Power Quality Private Limited v. The Deputy Commissioner of Income Tax
Case Number : W.P.No.15393 of 2022
CITATION : 2026 LLBiz HC (MAD) 38
The Madras High Court held that a reference to the Transfer Pricing Officer (TPO) made during the extended period available for completion of reassessment is invalid, rendering the proceedings time-barred. Justice C. Saravanan delivered the judgment while allowing a writ petition filed by Eaton Power Quality Private Limited which challenged the order passed by the TPO under Section 92CA(3) of the Income Tax Act by which the arm's length price of corporate service fees was determined at nil and a downward adjustment was proposed.
Case Title : C Joseph Vijay v. The Deputy Commissioner of Income Tax and others
Case Number : WP No. 21006 of 2022
The Madras High Court on Friday dismissed a plea by actor-turned-politician Vijay challenging a Rs 1.5 crore penalty imposed on him by the Income Tax Department in connection with alleged undisclosed income of Rs 15 crore for the financial year 2015–16. The judgment was pronounced by a single judge, Justice Senthilkumar Ramamoorthy, after reserving the same on January 23, 2026.
Orissa HC
Orissa High Court Grants Interim Relief to Taxpayer Against Non-Faceless IT Reassessment
Case Title : Bibekananda Parida v. Central Board of Direct Taxes (CBDT) and Others
Case Number : WP(C) No.22306 of 2025
CITATION : 2026 LLBiz HC(ORI) 9
The Orissa High Court on 2 February restrained the Income Tax Department from proceeding further on a reassessment notice issued to a Bhubaneswar-based taxpayer, after finding that the notice was not issued in accordance with the mandatory faceless procedure prescribed under the Income Tax Act, 1961. The Division Bench of Chief Justice Harish Tandon and Justice M.S. Raman was hearing a writ petition filed by Bibekananda Parida, challenging an order passed under Section 148A of the Income Tax Act along with a reassessment notice issued under Section 148.
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.”
Extraordinary Writ Jurisdiction Cannot Be Invoked In Factual Disputes: Orissa High Court
Case Title : Saroj Kumar Sahoo v. National Faceless Assessment Centre & Anr.
Case Number : W.P.(C) No. 30861 of 2025
CITATION : 2026 LLBiz HC(ORI) 11
The Orissa High Court on 18 February, held that questions involving disputed facts, including the existence and relevance of incriminating material, cannot be examined in writ proceedings under Articles 226 and 227 of the Constitution. A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman, while dismissing a writ petition filed by Saroj Kumar Sahoo, emphasised that extraordinary writ jurisdiction is not available where an effective alternative remedy exists under the Income Tax Act.
Punjab & Haryana HC
Case Title : Sanjeet Singh and others v. Principal Director of Income Tax (Investigation), Chandigarh and others
Case Number : CWP-31147-2025 (O&M)
CITATION : 2026 LLBiz HC (PNH) 10
The Punjab and Haryana High Court on 18 February, directed the Income Tax Department to immediately release jewellery seized from the Sanjeet Singh and other petitioners, holding that the department cannot demand a higher bank guarantee due to an increase in gold prices when the delay in release was solely attributable to administrative lapses of the authorities. A Division Bench of Justice Deepak Sibal and Justice Lapita Banerji allowed a writ petition which sought the release of jewellery seized during a search operation at the residential premises and bank lockers of Singh.
ITAT
Case Title : Chand Jewellers v. ITO
Case Number : I.T.A. No. 574/Asr/2025
CITATION : 2026 LLBiz ITAT(AMR)23
The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) last month remanded a demonetisation-related reassessment case to the Assessing Officer for fresh verification of purchase bills, sale bills, and receipt vouchers that were not examined at the assessment stage. A Bench comprising Manoj Kumar Aggarwal, Accountant Member, and Udayan Dasgupta, Judicial Member was hearing an appeal by Chand Jewellers, a partnership firm engaged in gold jewellery business against the confirmation of an addition of Rs. 1.03 crore as "unexplained cash deposits" during the demonetisation period.
Case Title : Hareon Solar Singapore Pvt. Ltd Vs DCIT
Case Number : ITA No.2226/Del/2024
CITATION : 2026 LLBiz ITAT(DEL) 24
The Income Tax Appellate Tribunal at New Delhi has denied capital gains tax exemption to Hareon Solar Singapore Pvt. Ltd. under the India–Singapore Double Taxation Avoidance Agreement, holding that the company was set up solely for claiming the tax benefit. The tribunal comprising Judicial Member Raj Kumar Chauhan and Accountant Member Ramit Kochar held, “Thus, we hold that the assessee company was created for the principal purposes of taking a tax advantage under the India-Singapore DTAA, while otherwise there is no economic substance or commercial justification for routing investment through assessee company based at Singapore. Thus, in the instant case, LOB clause 1 of Article 24A of India-Singapore DTAA is attracted.”
ITAT Mumbai Sets Aside ₹1.14 Crore Transfer Pricing Adjustment For Lack Of Proper FAR Analysis
Case Title : Corporate Worldwide Stay LLP v Assessment Unit, Income-tax Department
Case Number : ITA No. 5940/Mum/2024
CITATION : 2026 LLBiz ITAT(MUM) 25
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 6 January set aside a transfer pricing adjustment of Rs. 1.14 crore against Corporate Worldwide Stay LLP, after finding that the revenue authorities had proceeded on assumptions about the firm's functions and risks without a proper FAR analysis. The bench, comprising Judicial Member Anikesh Banerjee and Accountant Member Vikram Singh Yadav remitted to the assessing officer and transfer pricing officer for fresh adjudication.
Case Title : Dharamdas Charitable Trust v. CIT (Exemption), Ahmedabad
Case Number : I.T.A. No. 73/Ahd/2025
CITATION : 2026 LLBiz ITAT(AHM) 26
The Income Tax Appellate Tribunal at Ahmedabad has recently held that a charitable trust cannot be denied approval under Section 80G of the Income Tax Act merely because one of its objects provides for organising Ramkatha, Bhagwat Katha, and similar programmes for raising funds. A coram of Judicial Member Sanjay Garg and Accountant Member Narendra Prasad Sinha observed that object of the trust “cannot be said to be wholly or substantially religious in nature,” and that organising Ramkatha and Bhagwat Katha “cannot be said to be for the purpose of propagating any religion.”
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."
ITAT Ahmedabad Deletes ₹9.65 Crore Addition On Demonetisation Cash Deposits Backed by Recorded Sales
Case Title : Bhaumik Jewellers Private Limited v. ITO, Ward-1(1)(2), Ahmedabad
Case Number : ITA No. 1642/Ahd/2024
CITATION : 2026 LLBiz ITAT(AHM) 37
The Ahmedabad Bench of the Income Tax Appellate Tribunal recently held that once purchases are accepted and stock is not disputed, sales cannot be treated as unexplained cash credits merely because the cash was deposited during the demonetisation period. A bench of Judicial Member Sanjay Garg and Accountant Member Annapurna Gupta deleted an addition of Rs.9,65,97,834 made under Section 68 of the Income Tax Act, holding, “Once the purchases are accepted and the stock is not disputed, the sales flowing out of such stock cannot be treated as non-genuine.”
Entire Accommodation Entry Purchases Cannot Be Treated as “Unexplained Cash”: ITAT Mumbai
Case Title : Balaji Bullions And Commodities India Private Limited Vs DCIT, Central Circle 7(1), Mumbai, Aayakar Bhawan, Mumbai, Maharashtra.
Case Number : ITA No. 3755/MUM/2025 Assessment Year: 2017-18
CITATION : 2026 LLBiz ITAT(MUM) 42
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 23 February, held that even if purchases are accommodation entries, once they are recorded in regular books of account and routed through banking channels, they cannot be treated as “unexplained expenditure” under Section 69C of the Income Tax Act. The Bench, comprising Accountant Member Om Prakash Kant and Judicial Member Ms. Kavitha Rajagopal, was hearing cross-appeals in the case of Balaji Bullions and Commodities India Pvt. Ltd. for Assessment Year 2017–18.
ITAT Mumbai Holds CSR Donations Deductible Under Section 80G, Allows Aditya Birla's PF Contributions
Case Title : Aditya Birla Sun Life AMC Limited v. DCIT Circle-6(1)(1), Mumbai
Case Number : ITA Nos. 6663, 6701, 6702 & 6703/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 39
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 6 February, observed that CSR donations to approved institutions qualify for deduction under Section 80G of the Income Tax Act, 1961. The Bench also clarified that employees' provident fund contributions cannot be disallowed if deposited within the statutory due date. In the consolidated appeals filed by Aditya Birla Sun Life AMC Limited, the Bench of Judicial Member Amit Shukla and Accountant Member Makarand Vasant Mahadeokar, partly allowed the appeals relating to assessment years 2017-18, 2018-19, 2022-23, and 2023-24.
Case Title : Tata Chemicals Ltd. v. Dy. CIT-2(3)(1), Mumbai
Case Number : ITA No. 7912/MUM/2019
CITATION : 2026 LLBiz ITAT(MUM) 36
The Income Tax Appellate Tribunal has upheld a Rs. 146.73 crore interest disallowance against Tata Chemicals Ltd and affirmed a Rs. 3.62 crore transfer pricing adjustment, ruling against the company on the two biggest issues in its 2015-16 assessment. A Bench of Judicial Member Rahul Chaudhary and Accountant Member Om Prakash Kant said, “In view of the foregoing discussion, we find no infirmity in the order of the Dispute Resolution Panel affirming the action of the Transfer Pricing Officer in re-characterising the preference share investment as a loan transaction and benchmarking the same accordingly.”
Case Title : Income Tax Officer v. Ratna Aggarwal
Case Number : ITA No.21/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 40
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Revenue's appeal against an individual taxpayer, Ratna Aggarwal, holding that, in the facts of the case, a property received pursuant to a family settlement was not taxable under Section 56(2)(vii)(b) of the Income Tax Act. Section 56(2)(vii)(b) provides that where an individual receives immovable property without consideration from a person who is not a specified "relative," the stamp duty value of such property is taxable as income from other sources.
TDS On Consultant Doctors To Be Deducted As Professional Fees, Not Salary: ITAT Delhi
Case Title : DCIT v. Agilus Diagnostics Ltd.
Case Number : ITA No.2836/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 41
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Revenue's appeal against Agilus Diagnostics Ltd and held that consultant doctors engaged by the company were independent professionals, not employees. Agilus Diagnostics Ltd. is engaged in the business of establishment, maintenance and management of clinical reference laboratories in India.
Tax Exemption Cannot Be Denied For Mere Registration Of Land In Trustees' Names: ITAT Chennai
Case Title : The ACIT (Exemptions), Chennai v. Everwin Educational & Charitable Trust
Case Number : ITA No.2811/Chny/2024
CITATION : 2026 LLBiz ITAT(CHE) 43
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 24 February, held that exemption under Section 11 of the Income Tax Act cannot be denied to Everwin Educational & Charitable Trust, merely because land acquired for construction of a school was registered in the names of its trustees. A Bench comprising Judicial Member Aby T. Varkey and Accountant Member Amitabh Shukla dismissed the Revenue's appeal for Assessment Year 2016-17 and upheld the order of the Commissioner (Appeals), who had deleted the addition.
Case Title : Ganna Vikas Parishad v. Assessment Unit, Income Tax Department
Case Number : ITA No.7788/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 45
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded to the Assessing Officer the case of Ganna Vikas Parishad, Nanauta, holding that the authorities below had not examined the constitution and activities of the taxpayer while sustaining an addition of Rs 32,91,119 and denying its claim of exemption. Judicial Member C.N. Prasad observed that although he “could not find fault with the reasoning of the Ld. CIT(A) in sustaining the addition,” the authorities had failed to examine the nature of the assessee.
ITAT Delhi Remands Dispute Over ₹32.13 Lakh Addition Based On Seized Excel Sheet
Case Title : Anuradha Singh v. Circle 5(1)(1), Gautam Budh Nagar
Case Number : ITA No.8303/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 44
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has restored to the Assessing Officer a dispute in relation to the addition of Rs 32.13 lakh made against a Greater Noida taxpayer in connection with the purchase of a commercial unit. The tribunal directed that all material relied upon must be furnished to the taxpayer and cross-examination allowed if any statements are used to sustain the addition.
OTHER DEVELOPMENTS
Interest On Motor Accident Compensation To Be Tax-Free Under Budget Proposal
Interest received on compensation awarded by Motor Accident Claims Tribunals may soon be taken out of the income-tax net. While presenting the Union Budget 2026–27, Finance Minister Nirmala Sitharaman announced a proposal to exempt such interest from tax and remove the requirement of tax deduction at source.
Budget 2026-27 Proposes Penalty Relief, Decriminalisation And Litigation Reduction In Income Tax Law
The Union Budget 2026–27 on Sunday proposed wide-ranging changes to the income tax penalty and prosecution framework, including immunity schemes, decriminalisation of certain offences and procedural measures to reduce litigation. Presenting her direct tax proposals, Finance Minister Nirmala Sitharaman said, “Multiplicity of proceedings are a hindrance to the ease of doing business.” She proposed to “integrate assessment and penalty proceedings by way of a common order for both.”
Budget 2026–27 Keeps Income Tax Slabs And Standard Deduction Unchanged
Finance Minister Nirmala Sitharaman on Sunday presented her ninth Union Budget since taking charge in 2019, keeping income tax slabs under the new tax regime unchanged from changes made last year
Union Budget 2026–27: Buyback Proceeds To Be Taxed As Capital Gains, Promoters Face Additional Levy
The Union Budget 2026–27 has introduced a significant reform in the taxation of share buybacks by shifting the tax incidence to shareholders and aligning buyback income with the capital gains framework. Under the new proposal, proceeds received by all categories of shareholders, including retail investors, institutional investors, and foreign shareholders from share buybacks will be taxed as capital gains, instead of being subject to a separate buyback distribution tax at the company level. This marks a departure from the earlier regime, where companies had to bear the tax burden and shareholders largely received tax-exempt income.
Budget 2026-27: Centre Proposes MCA–CBDT Panel To Integrate ICDS Into IndAS
The Union Budget of 2026 has proposed the constitution of a Joint Committee of the Ministry of Corporate Affairs and the Central Board of Direct Taxes (CBDT) to incorporate the requirements of the Income Computation and Disclosure Standards (ICDS) into the Indian Accounting Standards (IndAS).
Budget Proposes 14% Minimum Alternate Tax Final Levy For Companies Opting New Regime From April 2026
The Union Budget 2026–27 on Sunday proposed changes to the Minimum Alternate Tax (MAT) regime applicable to companies, to take effect from April 1, 2026, alongside the implementation of the Income Tax Act, 2025. Presenting the budget, Finance Minister Nirmala Sitharaman said, “I propose to make Minimum Alternate Tax a final tax for companies opting for the new tax regime.”
Union Budget 2026: FM Proposes Major Income Tax Changes
Presenting the Union Budget 2026, the Finance Minister Nirmala Sitharaman proposed the replacement of the Income Tax Act, 1961 with a new Income Tax Act, 2025, to come into force from April 1, 2026, alongside a series of reforms to the direct-tax regime. The Finance Minister said a comprehensive review of the six-decade-old law, announced in July 2024, had been completed in record time. Simplified Income Tax Rules and new return forms will be notified shortly, with the stated objective that “ordinary citizens can comply without difficulty”.
Any Delay In Income Tax Audit Report May Attract ₹75,000 Late Fee, Proposes Finance Bill 2026
A single day's delay in furnishing a tax audit report may attract a fee of ₹75,000 under the proposed Income-tax Act, 2025, as per the scheme set out in the Finance Bill, 2026. Under the existing law, failure to comply with tax audit requirements attracted a penalty linked to turnover, capped at ₹1.5 lakh, and the penalty could be waived if the taxpayer showed a reasonable explanation for the delay.
Budget 2026-27: No TAN Needed For Resident Buyers To Deduct TDS On Property Purchases From NRIs
As per a proposal in the Union Budget 2026 tabled by Finance Minister Nirmala Sitharaman today, resident individuals and Hindu Undivided Families (HUFs) purchasing immovable property from a non-resident (NRI) will no longer be required to obtain a Tax Deduction and Collection Account Number (TAN) for the purpose of deducting tax at source. Instead, the tax deducted can be deposited using the Permanent Account Number (PAN) of the buyer.
Budget 2026-27 Proposes Tax Relief On Compensation Received For Compulsory Land Acquisition
In the Union Budget 2026, the Finance Minister has proposed to exempt income in respect of any award or agreement arising from the compulsory acquisition of land under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) from income tax, with effect from Assessment Year 2026–27. Under the existing framework, Schedule III of the Income-tax Act provides certain exemptions in respect of capital gains, but does not expressly cover all forms of compensation received on the compulsory acquisition of land.
Budget 2026-27 Introduces One-Time Disclosure Scheme For Small Taxpayers' Undisclosed Foreign Assets
The Union Budget 2026 has introduced the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 through the Finance Bill, 2026. The scheme proposes to offer a one-time opportunity for eligible taxpayers to come forward and declare undisclosed foreign assets or foreign income. On making a valid declaration and payment, taxpayers can obtain immunity from penalty and prosecution under the Black Money law.
The Union Budget 2026 has proposed an income-tax exemption for foreign companies supplying capital goods, equipment, or tooling to Indian electronic goods manufacturers operating in customs bonded warehouses under Section 65 of the Customs Act, 1962. At present, Section 11 read with Schedule IV of the Income-tax Act specifies categories of income that are excluded from the total income of eligible non-residents, foreign companies, and specified persons.
Budget 2026-27 Proposes 12-Month Window From Assessment Year End To File Revised Income Tax Returns
As per the proposals in the Union Budget 2026–27, the government has proposed extending the time limit for filing a revised income tax return from the existing nine months to twelve months from the end of the relevant assessment year. At present, the deadlines for filing a belated return under Section 139(4) and a revised return under Section 139(5) coincide, both expiring nine months from the end of the relevant assessment year. As a result, taxpayers who file a belated return towards the end of the permitted period do not get an opportunity to revise their return.
CBDT Issues Draft Income Tax Rules And Forms For New Act With 34% Fewer Rules
The Central Board of Direct Taxes (CBDT) has released the draft Income Tax Rules, 2026 along with the draft forms, in connection with the Income Tax Act, 2025, which is scheduled to come into force from April 1, 2026. The draft rules and forms have been placed in the public domain to invite comments and suggestions from stakeholders and the general public. As per the CBDT, the draft Income Tax Rules, 2026 will remain open for public feedback for a period of 15 days, up to February 22, 2026.
CBDT Issues Draft Income Tax Rules 2026 Navigator Mapping Existing Rules To New Framework
With the Income Tax Act, 2025 set to come into force on 1 April 2026, the Central Board of Direct Taxes (CBDT) has released the Draft Income Tax Rules, 2026 for public consultation. To assist stakeholders in navigating the transition, the CBDT has also published an official navigator that maps each of the 333 draft rules to their corresponding provisions under the existing Income Tax Rules, 1962, which currently comprise 511 rules.