LiveLawBiz Direct Tax Monthly Digest: May 2026
Kapil Dhyani
3 Jun 2026 5:50 PM IST
SUPREME COURT
Supreme Court Dismisses Income Tax Appeal Against IDBI Bank Over Delay Of 275 Days
Case Title : DEPUTY COMMISSIONER OF INCOME TAX AND ORS. Versus IDBI BANK LTD
Case Number : Diary No. 19495-2026
The Supreme Court on Monday dismissed the Income Tax Department's plea against IDBI Bank Ltd over a 275-day delay, refusing to interfere with the Bombay High Court's decision quashing reassessment proceedings for AY 2016-17. The High Court, in its order dated March 24, 2025 held that the reasons recorded by the Assessing Officer were factually incorrect, reflected non-application of mind, and amounted to an impermissible review based on change of opinion.
Case Title : Sanand Properties Pvt. Ltd. v. Joint Commissioner of Income Tax, Range 6 & Ors.
Case Number : Civil Appeal No. 9107 of 2012 with Civil Appeal No. 744 of 2013 and Civil Appeal No. 19487 of 2017
CITATION : 2026 LLBiz SC 186
The Supreme Court has held that the 35% share of gross sale proceeds received by Sanand Properties Pvt Ltd from an Association of Persons (AOP) formed for a Pune housing project was taxable business income and not an exempt share of profit, holding that the payment was insulated from project expenses and therefore bore the character of revenue rather than profit. A bench led by Justice J.B. Pardiwala and Justice K V Viswanathan delivered the ruling in a dispute arising out of a joint development arrangement through an AOP named Fortaleza Developers.
Case Title : THE PR. COMMISSIONER OF INCOME TAX & ANR. VERSUS M/S KARNATAKA BANK LTD.
Case Number : Petition(s) for Special Leave to Appeal (C) No(s). 18972/2026
CITATION : 2026 LLBiz SC 198
The Supreme Court on Monday declined to interfere with Karnataka Bank Ltd's tax relief in a dispute over deduction for diminution in the value of its held-to-maturity (HTM) investments, which are securities that banks buy with the intention of holding until maturity rather than trading. A Bench of Justices Manoj Misra and Manmohan dismissed the Revenue's special leave petition against the Karnataka High Court's August 2025 judgment that had upheld relief granted to the bank.
Case Title : PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL 3 vs PERNOD RICARD INDIA PRIVATE LIMITED
Case Number : Diary No. 74598-2025
The Supreme Court on Tuesday dismissed the Income Tax Department's challenge to a Delhi High Court ruling in favour of Pernod Ricard India Pvt Ltd. It declined to interfere with the judgment that had held AMP and brand-building expenses could not be disallowed in the absence of evidence showing an arrangement with the foreign associated enterprise. The top court declined to entertain the Revenue's plea on account of a 384-day delay in filing the appeal.
Supreme Court Refuses To Interfere With Delay Condonation In Income Tax Dept's Appeal Against IFUNA
Case Title : M/S INDIAN FEDERATION OF UNITED NATION ASSOCIATION VERSUS COMMISSIONER OF INCOME TAX (EXEMPTIONS)
Case Number : Petition(s) for Special Leave to Appeal (C) No(s). 16497 16498/2026
CITATION : 2026 LLBiz SC 200
The Supreme Court on Monday refused to interfere with a Delhi High Court order that condoned the Income Tax Department's delay in filing and re-filing its appeal against Indian Federation of United Nations Association (IFUNA). The delay was 154 days in filing the appeal and 112 days in re-filing it. The Delhi High Court had on March 24, 2026 condoned the delay observing that though the delay was substantial and not properly explained, a “lenient view in the interest of justice” was required.
Supreme Court Seeks Attorney General's Intervention Over Long-Vacant Administrative Posts In ITAT
Case Title : PARVEEN KUMAR BANSAL VERSUS UNION OF INDIA & ORS.
Case Number : Writ Petition(s)(Civil) No(s). 617/2026
The Supreme Court on May 26 expressed concern over longstanding vacancies in the administrative establishment of the Income Tax Appellate Tribunal (ITAT) and sought the intervention of the Attorney General for India to ensure that the posts are filled expeditiously. The petition filed by Parveen Kumar Bansal, sought directions for immediate initiation and completion of the recruitment process for vacant posts including Deputy Registrar and Assistant Registrar, besides convening long-pending Departmental Promotion Committees for promotions to posts such as Senior Private Secretary and Private Secretary, which were stated to be pending since 2015 and 2017.
Supreme Court Grants IT Dept. Liberty To File HC Appeal In Google Ireland ₹116 Crore Tax Dispute
Case Title : THE ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) Versus GOOGLE IRELAND LIMITED
Case Number : Diary No. 25127-2026
CITATION : 2026 LLBiz SC 210
The Supreme Court on Thursday declined to entertain the Income Tax Department's challenge to a Karnataka High Court judgment dated June 3, 2025, which had quashed assessment orders passed against Google Ireland for AYs 2009-10 and 2010-11. The Court held that the Revenue must first pursue the available intra-court appeal before the High Court. A Bench of Justices Aravind Kumar and Prasanna B. Varale dismissed the Revenue's Special Leave Petition, holding that an intra-court appeal against the Single Judge's order was available under Section 4 of the Karnataka High Court Act. The Bench granted liberty to the Revenue to pursue that remedy.
HIGH COURTS
Allahabad HC
No Rectification For Debatable Points Under Section 254(2) Of Income Tax Act: Allahabad High Court
Case Title : Abusaad Ahmad Versus The Assistant Commissioner Of Income Tax Central Circle – 1 Lko
The Allahabad High Court on 6 May held that only mistakes apparent from the record can be rectified under Section 254(2) of the Income Tax Act, 1961, and that debatable issues fall outside its scope. A Division Bench of Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary dismissed the appeal filed by Abusaad Ahmad, upholding the Income Tax Appellate Tribunal's refusal to rectify its earlier order rejecting condonation of delay.
Bombay HC
Case Title : Foseco India Ltd. vs. Assistant Commissioner of Income Tax & Ors.
Case Number : Income Tax Appeal No. 1123 of 2025 and connected matters
CITATION : 2026 LLBiz HC (BOM) 252
The Bombay High Court has referred to a larger bench the question of whether companies paying Dividend Distribution Tax (DDT) can claim the benefit of lower tax rates under the India–UK tax treaty. The court was hearing appeals filed by Foseco India Ltd. challenging the denial of a refund of excess income tax paid. The issue, though arising in the context of the India–UK tax treaty, could also affect how similar provisions in other tax treaties are applied.
Bombay High Court Condones 430-Day Delay By Charitable Trust In Filing Declaration For Tax Exemption
Case Title : Bombay Prathana Samaj Vs The Union of India and Ors.
Case Number : WRIT PETITION NO. 2039 OF 2025
CITATION : 2026 LLBiz HC(BOM) 267
The Bombay High Court has condoned a 430-day delay by Bombay Prathana Samaj, a charitable trust, in submitting a mandatory declaration required for claiming a tax exemption benefit, after finding that the trust had shown reasonable cause for the delay and would otherwise suffer genuine hardship. “The approach of the authority ought to be equitious, balancing and judicious and availing of exemption should not be denied merely on the bar of limitation,” the Court observed while referring to the Gujarat High Court's decision in Sarvodaya Charitable Trust v. ITO (E).
Case Title : Commissioner of Income Tax (Exemptions), Mumbai Versus Impact Foundation (India)
Case Number : INCOME TAX APPEAL NO. 126 OF 2024
CITATION : 2026 LLBiz HC(BOM) 274
The Bombay High Court has dismissed the Income Tax Department's appeal against Impact Foundation (India), holding that revisionary proceedings under the Income Tax Act could not be sustained merely because the Commissioner believed the assessing officer should have conducted further enquiry. “The ITAT has therefore rightly come to the conclusion that the CIT (Exemptions), could not have initiated proceedings with a view to start de novo or a fishing inquiry in matters or orders which are already concluded, unless he was able to hold that the AO's view on the issue was unsustainable in law”
Case Title : Jigar Nemichand Sanghvi Versus Assistant Commissioner of Income Tax Circle-19(1), Mumbai & Ors.
Case Number : WRIT PETITION NO. 3261 OF 2024
CITATION : 2026 LLBiz HC(BOM) 276
The Bombay High Court has waived re-verification of amended pleadings in pending writ petitions challenging income tax reassessment notices, where assessees now seek to challenge the newly inserted Section 147A following the Supreme Court's ruling in Income Tax Officer, Ward 2(1), Chandigarh v. Tej Pratap Singh. A Division Bench of Justice G.S. Kulkarni and Justice Aarti Sathe said re-verification need not be insisted upon, noting that a large number of similar reassessment matters were pending before the Court.
No TDS Payable On National Highways' Land Acquisition Arbitral Awards: Bombay High Court
Case Title : Tukaram Kana Pawara (Deceased) Thr. Legal Heirs v. The Project Director Project Implementation Unit
Case Number : Writ Petition No. 914 of 2026 and connected matters
CITATION : 2026 LLBiz HC (BOM) 288
The Bombay High Court has held that deducting TDS from compensation awarded under arbitral awards in National Highways acquisition cases is impermissible, holding that forcing land losers to seek tax refunds would defeat the purpose of the land acquisition law's tax exemption. Referring to Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the Court observed, "Any interpretation which requires deduction of tax at source and thereafter compels land losers to seek refund from the Income Tax Department would defeat the very purpose of the legislation. Such an approach, which forces farmers and land losers to move from one authority to another, is clearly contrary to the objects and reasons of the 2013 Act."
Calcutta HC
Case Title : Graphite India v. Commissioner of Income Tax-IV Kolkata
Case Number : ITA 407 OF 2008
CITATION : 2026 LLBiz HC (CAL) 99
The Calcutta High Court has ruled that deductions claimed on profits from captive power generation and export businesses must be computed independently and cannot be reduced against each other where the incomes arise from distinct sources. “The deduction granted under Section 80-IA cannot be reduced while computing profits eligible for deduction under Section 80HHC where the deductions arise from independent businesses,” the court held.
Delhi HC
Case Title : Kapil Agarwal v. CPIO
Case Number : W.P.(C) 8481/2021
CITATION : 2026 LLBiz HC (DEL) 448
The Delhi High Court has held that a husband's income tax returns constitute “personal information” and are exempt from disclosure under the Right to Information (RTI) Act unless a larger public interest justifies such disclosure. The court set aside a Central Information Commission (CIC) order directing their disclosure to his wife in a matrimonial dispute. Justice Purushaindra Kumar Kaurav ruled that income-related details sought by the wife did not fall within the “larger public interest” exception and that disclosure would amount to an unwarranted invasion of privacy.
Delhi High Court Refuses To Condone Delay In Late Filing To Opt Lower Corporate Tax Regime
Case Title : Mentaura Technologies Pvt Ltd v. Principal Commissioner Of Income Tax Delhi
Case Number : W.P.(C) 4449/2026
CITATION : 2026 LLBiz HC (DEL) 451
The Delhi High Court has recently refused to condone delay by a company in opting for a concessional corporate tax regime, holding that its application filed beyond the three-year limit prescribed under a CBDT circular was not maintainable. The division bench of Justices Dinesh Mehta and Vinod Kumar thus dismissed the writ petition filed by a company challenging the rejection of its application under Section 119(2)(b) of the Income Tax Act seeking condonation of delay in filing Form 10-IC for Assessment Year 2020–21.
Case Title : Vijender Pal Jain L/H Late Rishi Raman Jain v. Assistant Commissioner Of Income Tax Circle 28(1) Delhi & Ors.
Case Number : W.P.(C) 12617/2022
CITATION : 2026 LLBiz HC(DEL) 515
The Delhi High Court has held that the father of a deceased assessee can be treated as a “legal representative” under the Income Tax Act even if he is not a Class-I heir under the Hindu Succession Act. A Division Bench of Justices Dinesh Mehta and Amit Mahajan observed, “A person need not be a legal heir, much less a Class I heir under the Hindu Succession Act to fall within this definition. The test is not one of inheritance; it is one of representation vis-à-vis the estate of the deceased.”
Case Title : Sanjeev Kumar Bidhuri v. National Faceless Appeal Centre, New Delhi
Case Number : W.P.(C) 3934/2026
CITATION : 2026 LLBiz HC(DEL) 517
The Delhi High Court has quashed an income tax assessment order and demand notice after finding that a taxpayer was denied a fair hearing. The tax department failed to communicate whether his adjournment request had been accepted or rejected. It also passed the order without considering the reply he had filed. A Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed, “It is clear that the petitioner's right of being heard has been infracted and the violation of petitioner's Fundamental Right guaranteed by Article 14 of the Constitution of India is apparent.”
Case Title : Pr. Commissioner Of Income Tax – 1 v. M/S. American Express (India) Pvt. Ltd.
Case Number : ITA 656/2019
CITATION : 2026 LLBiz HC(DEL) 520
The Delhi High Court has held that a company with a vastly different turnover and scale of operations may not be a proper comparable for transfer pricing analysis. A division bench of Justices V. Kameswar Rao and Vinod Kumar observed that huge differences between the tested entity and the comparable would necessarily require the exclusion of the comparable. The court made the observation while dealing with an appeal filed by the Income Tax Department against an order of the Income Tax Appellate Tribunal in the case concerning American Express India (assessee).
Company's Car, Telephone Costs Not 'Personal' Despite Being Separate Legal Entity: Delhi High Court
Case Title : Raunaq International Ltd v. Commissioner Of Income Tax I N
Case Number : ITA 113/2006
CITATION : 2026 LLBiz HC(DEL) 523
The Delhi High Court has held that telephone and car expenses incurred by a company cannot be disallowed as “personal” expenses merely because a company is treated as a separate legal person. A division bench of Justices Dinesh Mehta and Vinod Kumar allowed the company's appeal and set aside an order of the Income Tax Appellate Tribunal (ITAT), which had upheld disallowance of one-sixth of the company's telephone and car expenses on the ground of possible personal use.
'Left No Stone Unturned To Harass': Delhi HC On IT Dept's Delay In Releasing KVPs, IVPs
Case Title : Pradeep Misra v. UoI & Ors.
Case Number : W.P.(C) 2470/2006
CITATION : 2026 LLBiz HC(DEL) 524
The Delhi High Court has pulled up the Income Tax Department for delaying the release of seized Kisan Vikas Patras (KVPs) and Indira Vikas Patras (IVPs) even after the assessee deposited the settlement amount, observing that the authorities had “left no stone unturned to harass” the petitioner. A division bench of Justices Dinesh Mehta and Om Prakash Shukla directed the tax authorities to compensate the petitioners for loss of interest caused due to wrongful retention of the instruments.
Gauhati HC
In Faceless Assessment, Income Tax Revision Cannot Be Decided Without Inquiry: Gauhati High Court
Case Title : Jennyfar Lalzarliani Hrahsel v. Union of India & Ors.
Case Number : WP(C) No. 27/2025
CITATION : 2026 LLBiz HC(GAU) 13
The Gauhati High Court has held that the revisional authority cannot dispose of revision proceedings in a mechanical manner under the Income Tax Act (Section 264), which allows a taxpayer to seek revision of an order through a faceless process without making, or causing, an enquiry. This is especially so where the assessee claims difficulty in producing voluminous records and seeks verification at the place of business. The court referred to an earlier Division Bench ruling that held that revision under the Income Tax Act (Section 264) is an alternative remedy to appeal.
Madras HC
Madras High Court Refuses To Quash Tax Evasion Case, Says Wilfulness Is Matter For Trial
Case Title : Abdul Khader Mohammed Farook v. Deputy Commissioner of Income Tax
Case Number : Crl.O.P.No.9848 of 2026
CITATION : 2026 LLBiz HC(MAD) 118
The Madras High Court has refused to quash criminal proceedings against a taxpayer accused of failing to pay admitted income tax dues, noting that the issues raised had already been urged before the trial court and could not be re-agitated at a belated stage. A single-judge bench of Justice M. Niraml Kumar was dealing with a petition filed by Abdul Khader Mohammed Farook seeking to quash proceedings pending before the Additional Chief Metropolitan Magistrate (Economic Offences), Egmore, for alleged wilful attempt to evade payment of tax under Section 276C(2) of the Income Tax Act.
ITAT
ITAT Chennai Expunges Direction To Reopen Assessments For Years Not Under Appeal
Case Title : Mr. Chandanmal Nagaraj v. Assistant Commissioner of Income Tax
Case Number : ITA No. 3855/CHNY/2025
CITATION : 2026 LLBiz ITAT(CHE) 119
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has expunged a direction issued by the Commissioner of Income Tax (Appeals) to reopen the earlier assessments of individual taxpayer Chandanmal Nagaraj, holding that such directions are beyond its powers. The coram comprising Judicial Member Manu Kumar Giri and Accountant Member Inturi Rama Rao passed the order on April 30, 2026. The case related to Assessment Year 2017–18. While granting relief for this year, the CIT(A) had also directed the Assessing Officer to reopen the individual taxpayer's assessments for AY 2015–16 and 2016–17.
Case Title : Income Tax Officer (Exemptions) v. Madras Motor Sports Trust
Case Number : ITA No. 2720/CHNY/2025
CITATION : 2026 LLBiz ITAT(CHE) 120
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has recently reiterated that the principle of estoppel has no application in tax proceedings and appellate authorities can entertain new claims from taxpayers even if they were not made in the original return. “the law is well settled to the extent that the decision of Hon'ble Supreme Court in the Goetze India Ltd. Vs. CIT (2006) 284 ITR 323 (SC) is confined to the power of Assessing Officer alone. There are no fetters on the appellate authorities to entertain a new claim, because the principle of estoppel have no application in tax proceedings.”, the tribunal observed.
Case Title : Capgemini IT Solutions India Private Limited v. ACIT Circle-15(1)(2)
Case Number : ITA No. 1102/Mum/2026
CITATION : 2026 LLBiz ITAT(MUM) 121
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that Capgemini IT Solutions India Private Limited cannot be charged interest for delay in paying advance tax for the period before it started its business in October 2019. “The levy of interest under section 234C in respect of the instalments falling due prior to 17.10.2019 is not sustainable in law.”, it observed. The bench of Judicial Member Kavitha Rajagopal and Accountant Member Makarand Vasant Mahadeokar passed the order on April 30, 2026, while allowing the company's appeal against the Commissioner of Income Tax (Appeals).
Cash Deposits In Education Trust Account Not Taxable In Individual's Hands: ITAT New Delhi
Case Title : Assistant Commissioner of Income Tax v. Deepak Gupta
Case Number : ITA No. 5276/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 122
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), on 30 April, held that cash deposits in a bank account of a separate legal entity cannot be taxed in an individual's hands merely because he is an authorised signatory, unless there is evidence establishing beneficial ownership or undisclosed income. A Bench comprising Judicial Member Raj Kumar Chauhan and Accountant Member Brajesh Kumar Singh dismissed the Revenue's appeal and upheld the CIT(A)'s order deleting an addition of Rs. 4,94,69,000 made under Section 68 of the Income Tax Act.
Receipts From Capital Asset Transfer Cannot Be Taxed Under Residuary Head: ITAT Mumbai
Case Title : DCIT v. Dinesh Gulab Mirchandani
Case Number : ITA No. 692/Mum/2026
CITATION : 2026 LLBiz ITAT(MUM) 123
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 30 April 2026 held that once a receipt is characterised as arising from the transfer of a capital asset, the tax authority cannot reclassify it under the residuary head of income merely because computation under the capital gains provisions is disputed or fails. The Bench comprising Judicial Member Pawan Singh and Accountant Member Makarand Vasant Mahadeokar dismissed the Revenue's appeal against the order of the Commissioner of Income Tax (Appeals) dated 27 November 2025, which had deleted an addition of Rs. 3.67 crore made under the head “Income from Other Sources”.
ITAT New Delhi Sets Aside Rejection Of Trust Registration Over Missing Irrevocability Clause
Case Title : Social Welfare Public Trust v. Commissioner of Income Tax (Exemption)
Case Number : ITA No. 304 & 305/Del/2026
CITATION : 2026 LLBiz ITAT(DEL) 124
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 30 April held that absence of an irrevocability clause in a Trust Deed is not, by itself, fatal to registration where the defect is subsequently cured and set aside the rejection of registration of a charitable Trust. A Bench of Judicial Member Raj Kumar Chauhan and Accountant Member Brajesh Kumar Singh allowed the appeal filed by Social Welfare Public Trust and set aside the orders dated 3 December 2025 passed by the Commissioner of Income Tax (Exemption), Delhi, rejecting registration under the Income Tax Act and consequent approval for tax-deductible donations.
NFAC Must Decide Appeal on Merits, Cannot Dismiss for Non-Prosecution: ITAT Delhi
Case Title : Pritam Singh v. ITO Ward-3 Panipat
Case Number : ITA No. 677/DEL/2026
CITATION : 2026 LLBiz ITAT(DEL) 125
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 30 April held that the National Faceless Appeal Centre (NFAC) cannot dismiss an appeal for non-prosecution and must decide it on merits under Section 250 of the Income Tax Act. A Bench comprising Judicial Member Sudhir Kumar and Accountant Member Manish Agarwal heard an appeal against the NFAC order dated 11 September 2025 for Assessment Year 2012-13 and condoned a delay of 53 days after accepting the taxpayer's explanation of illness supported by a medical certificate. It held: “The appeal should have been decided on merit as per the provision of the section 250 of the Act. The appeal was decided ex-parte without giving the opportunity of being heard to the assessee.”
ITAT Mumbai Allows Deduction For Donation To PM Relief Fund Despite Being Part Of CSR
Case Title : Landmark Worldwide Breakthrough Technologies Pvt. Ltd. v. Deputy Commissioner of Income Tax
Case Number : ITA No. 1303/MUM/2026
CITATION : 2026 LLBiz ITAT(MUM) 126
The Income Tax Appellate Tribunal (ITAT), Mumbai, has allowed Landmark Worldwide Breakthrough Technologies Pvt. Ltd. to claim a deduction on its donation to the Prime Minister's National Relief Fund, even though the payment formed part of its CSR expenditure. The bench comprising Judicial Member Pawan Singh and Accountant Member Girish Agrawal held that such a claim cannot be denied merely because the donation was made to meet CSR obligations. The taxpayer had filed its return declaring a total income of Rs. 6.83 crore. It had incurred CSR expenditure, which it disallowed under Section 37(1), but separately claimed a deduction of Rs. 22.94 lakh under Section 80G for a donation to PMNRF.
ITAT Mumbai Holds Section 68 Applies Only to Fresh Credits, Deletes ₹1.20 Crore Addition
Case Title : Viking Technology & Trade Pvt. Ltd. v. Deputy Commissioner of Income Tax
Case Number : ITA No. 8514/Mum./2025
CITATION : 2026 LLBiz ITAT(MUM) 127
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 4 May held that additions under Section 68 of the Income-tax Act, 1961 cannot be made in the absence of any fresh credit arising during the relevant previous year, and remanded the matter for fresh verification. A Bench comprising Accountant Member Bijayananda Pruseth and Judicial Member Sandeep Singh Karhail set aside the orders of the Assessing Officer and the Commissioner of Income Tax (Appeals), who had sustained an addition of Rs. 1.20 crore against Viking Technology & Trade Pvt. Ltd.
ITAT Mumbai Restores Fees Regulating Authority Matter Pending Section 10(46) Notification Outcome
Case Title : Fees Regulating Authority v. Assistant Commissioner of Income Tax
Case Number : ITA No. 4865/Mum./2025
CITATION : 2026 LLBiz ITAT(MUM) 128
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 30 April held that the taxability of the Fees Regulating Authority cannot be conclusively decided while its application for notification under Section 10(46) of the Income-tax Act, 1961 remains pending before the Central Board of Direct Taxes (CBDT). A Bench comprising Accountant Member Bijayananda Pruseth and Judicial Member Sandeep Singh Karhail allowed the appeal for statistical purposes and set aside the impugned order.
ITAT Mumbai Upholds Deletion Of ₹11.11 Crore Disallowance On Related-Party Business Expenses
Case Title : DCIT-3(1)(1), Mumbai v. Riverside Industries Private Limited
Case Number : ITA No. 9523/MUM/2025
CITATION : 2026 LLBiz ITAT(MUM) 130
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 7 May upheld deletion of a disallowance of Rs. 11.11 crore towards business development and business promotion expenses paid by a pharmaceutical company to related parties. A Bench of Judicial Member Pawan Singh and Accountant Member Makarand Vasant Mahadeokar dismissed the Revenue's appeal against Riverside Industries Private Limited for Assessment Year 2017-18, holding that it could not adopt an inconsistent stand when it had accepted similar expenses and agreements in subsequent assessment years on identical facts.
Case Title : Ultramarine & Pigments Ltd. v. Assistant Commissioner of Income Tax
Case Number : ITA No. 5996/Mum./2025
CITATION : 2026 LLBiz ITAT(MUM) 131
Today, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that a taxpayer cannot be denied deduction for research and development (R&D) expenditure under Section 35(2AB) of the Income Tax Act merely for not separately filing Form 3CL during assessment proceedings, where the approval had already been transmitted to and was available with the Assessing Officer. Judicial Member Justice Sandeep Singh Karhai and Accountant Member Bijayananda Pruseth allowed the appeal filed by Ultramarine & Pigments Ltd. and set aside the earlier orders, remanding the matter to the Assessing Officer for recomputation of the deduction in accordance with the DSIR-approved figures.
ITAT Mumbai Upholds Denial Of Tax Deduction On ₹25 Lakh Donation To Kisan Party Of India
Case Title : Mihir Bipinbhai Parekh v. Deputy Commissioner of Income Tax
Case Number : ITA No. 1173/MUM/2026 (Assessment Year 2019-20)
CITATION : 2026 LLBiz ITAT(MUM) 132
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the denial of a tax deduction claimed by a Mumbai chemical trader for a ₹25 lakh donation to the Kisan Party of India. The tribunal found several circumstances that cast doubt on whether the contribution was genuine. A bench of Judicial Member Sandeep Singh Karhail and Accountant Member Bijayananda Pruseth noted that the taxpayer was a chemical trader with no apparent connection to a Bihar-registered political party claiming to work for agriculturists.
Genuine Sales Bar Full Disallowance Of Purchases From Entry Provider: ITAT Mumbai
Case Title : Hemantkumar Sumermal Bhansali v/s Deputy Commissioner of Income Tax
Case Number : ITA No. 1568/MUM/2026
CITATION : 2026 LLBiz ITAT(MUM) 133
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 7 May held that where sales are accepted as genuine and supported by invoices and delivery challans, the entire purchase amount cannot be treated as bogus merely because the supplier was found to be an accommodation entry provider. Judicial Member Sandeep Singh Karhail and Accountant Member Vikram Singh Yadav held that only the profit element embedded in such purchases can be brought to tax and partly allowed an appeal filed by Mumbai-based steel trader Hemantkumar Sumermal Bhansali, proprietor of Pushpak Steel and Engineering Co.
Cash Deposits From Recorded Sales Cannot Be Taxed Again As Unexplained: ITAT Mumbai
Case Title : Raju Samsurat Yadav Vs. ITO Ward 1(1), Kalyan
Case Number : ITA No. 6866/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 134
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 7 May observed that once sales are recorded in the books of account and offered as business turnover, the same amount cannot again be taxed as unexplained cash credit under Section 68 of the Income Tax Act. Judicial Member Amit Shukla and Accountant Member Makarand Vasant Mahadeokar were hearing an appeal filed by Raju Samsurat Yadav, an electronics trader operating through proprietary concerns SKS Enterprises and Omega Marketing.
Case Title : Lodha Developers Limited v. DCIT
Case Number : ITA No. 7695/Mum/2025 & ITA No. 7875/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 135
On 13 May, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that Section 43CA of the Income Tax Act does not apply to flats booked and allotted before the provision came into force, even if the sale deed is registered later. The provision deems stamp duty value as sale consideration for taxing real estate business transfers when it exceeds the declared price. Accountant Member Om Prakash Kant and Judicial Member Anikesh Banerjee deleted an addition of Rs. 2.05 crore made by the Income Tax Department on Lodha Developers Limited.
Case Title : Catwalk Worldwide Limited v. Assistant Commissioner of Income Tax
Case Number : I.T.A. No. 6291/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 135
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has recently deleted a ₹36.54 crore tax addition made on share premium received by footwear company Catwalk Worldwide Ltd, holding that the tax department wrongly rejected the company's share valuation by comparing business projections with actual later performance “The Assessing Officer ought not to have disturbed the method adopted by assessee or cannot adopt the figures by replacing the projections with actual financials.”
ITAT Kolkata Upholds Interest Deduction On Loans Advanced On Commercial Expediency Grounds
Case Title : DCIT, Circle-11(1), Kolkata v. South City Projects (Kolkata) Ltd.
Case Number : I.T.A. Nos. 94 & 1000/Kol/2025
CITATION : 2026 LLBiz ITAT(KOL) 138
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) on 18 May upheld the deletion of disallowance of interest expenditure claimed by South City Projects (Kolkata) Ltd., holding that loans advanced to its subsidiary for overseas real estate projects were made on grounds of commercial expediency and qualified for deduction under the Income Tax Act. Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey dismissed the Revenue's appeals for Assessment Years 2021-22 and 2022-23 against an order passed by the Commissioner of Income Tax (Appeals).
Case Title : Deputy Commissioner of Income Tax v. Trent Limited
Case Number : ITA No. 5243/Mum/2025 and ITA No. 5167/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 137
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 22 April held that an assessing officer cannot invoke Rule 8D under Section 14A of the Income Tax Act without recording dissatisfaction with the taxpayer's suo motu disallowance. Judicial Member Sandeep Gosain and Accountant Member Girish Agrawal dismissed the Revenue's appeal and partly allowed Trent Limited's appeal for Assessment Year 2016–17, holding that brand equity fees paid to Tata Sons Ltd. are deductible under Section 37(1).
Case Title : Deputy Commissioner of Income Tax (Central Circle)-1(2) v. Lohitka Properties LLP
Case Number : ITA No. 6925 & 6926/MUM/2025
CITATION : 2026 LLBiz ITAT(MUM) 140
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has remanded to the Assessing Officer a tax dispute involving Lohitka Properties LLP's revised income computation for its “Montana” real estate project. The Tribunal held that the assessee's revised estimates and the Revenue's objections require detailed factual verification. A bench of Judicial Member Anikesh Banerjee and Accountant Member Om Prakash Kant observed: “Neither the approach adopted by the Assessing Officer in outrightly rejecting the revised estimates nor the acceptance thereof by the learned CIT(A) without exhaustive verification fully sub-serves the ends of justice. The matter, therefore, warrants comprehensive factual verification so as to ascertain the correctness of the computation of profits under the POCM method adopted by the assessee.”
Case Title : Aspri Spirits Pvt. Ltd. v. NFAC/DCIT
Case Number : ITA No. 8396/MUM/2025 & ITA No. 8643/MUM/2025
CITATION : 2026 LLBiz ITAT(MUM) 139
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that while taxpayers may file additional evidence at the appellate stage in appropriate cases, the appellate authority cannot rely on such fresh material without first giving the Assessing Officer an opportunity to examine it and respond. Referring to Rule 46A of the Income-tax Rules, 1962, which governs admission of additional evidence before the appellate authority, a bench of Judicial Member Anikesh Banerjee and Accountant Member Om Prakash Kant and observed: “Compliance with Rule 46A is not a mere procedural formality but a substantive safeguard intended to preserve fairness in adjudication.”
ITAT Ahmedabad Deletes ₹74.64 Lakh Addition After Waste Stock Discrepancy Was Adequately Explained
Case Title : Shakti Polyweave Private Limited v. Dy. CIT
Case Number : ITA Nos. 2403 & 2404/Ahd/2025
CITATION : 2026 LLBiz ITAT(AHM) 141
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) deleted a ₹74.64 lakh addition made against Shakti Polyweave Private Limited towards estimated gross profit. The tribunal held that the company had adequately explained the alleged discrepancy in wastage stock reported in its tax audit report and that rejection of its books of account was unjustified. The bench of Judicial Member Siddhartha Nautiyal and Accountant Member Annapurna Gupta partly allowed the assessee's appeals for Assessment Years 2018-19 and 2019-20, with the latter being partly allowed for statistical purposes.
Case Title : Pallavi Nileshbhai Shah v. Income Tax Officer
Case Number : ITA No. 376/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 142
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has deleted a ₹28.92 lakh addition made against a taxpayer after finding that the Assessing Officer could not selectively treat only the year-end outstanding creditor balances as unexplained while accepting the rest of the same transactions as genuine. The bench of Accountant Member Annapurna Gupta and Judicial Member Suchitra Kamble observed: “The AO has not made addition of the entire credits on account of transaction carried out that the said parties, but, only of the outstanding balance of credit as at the end of the year, which means that he has partly accepted as genuine the credit which was repaid during the year while the balance he has treated ingenuine without assigning any reason for this distinctive treatment.”
Case Title : ARVR Education Society v. Income Tax Officer (Exemption)
Case Number : ITA No. 5300/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 143
The Income Tax Appellate Tribunal (ITAT) has deleted a ₹15.96 crore addition made against ARVR Education Societya charitable society after rejecting the tax department's claim that corpus donations received by the charitable society from four parties were unexplained cash credits rather than genuine voluntary contributions. A Delhi bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Naveen Chandra framed the central issue as, “The first and foremost question which arises for the tribunal's apt adjudication herein is as to whether such a disallowance of corpus donation claim raised under section 11(1)(d) of the Act could attract section 68 unexplained cash credit additions or not.”
Case Title : Sham Sunder Dhingra v. ACIT, Central Circle-8, New Delhi
Case Number : ITA NO. 6191/DEL/2025
CITATION : 2026 LLBiz ITAT(DEL) 144
The New Delhi Bench of the Income Tax Appellate Tribunal on 26 May held that authorities cannot sustain additions under Section 69A of the Income Tax Act in the absence of recovery of unexplained money, bullion, jewellery or other valuable articles from the taxpayer, and cannot invoke the provision merely on the basis of digital material indicating alleged transactions. Judicial Member Sudhir Kumar and Accountant Member Manish Agarwal partly allowed the appeal filed by Sham Sunder Dhingra for Assessment Year 2020–21 and directed the Assessing Officer to tax only 20% of the alleged commission receipts instead of treating the entire amount as unexplained income. The Bench stated that "..in the absence of any unexplained money or article, the provisions of section 69A cannot be invoked…”
ITAT Delhi Grants Relief To Welkin Industries, Holds Form 10-IC Delay Cannot Deny 115BAA Benefit
Case Title : Welkin Industries Private Limited v. ITO Ward 27(1)
Case Number : ITA No.8126/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 145
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 26 May held that a procedural delay in filing Form 10-IC cannot deny a taxpayer the benefit of the concessional 22% corporate tax regime under Section 115BAA of the Income Tax Act, 1961. Accountant Member S. Rifaur Rahman and Judicial Member Sudhir Kumar allowed the appeal filed by Welkin Industries Private Limited against the order of the Commissioner of Income Tax (Appeals), Lucknow, for Assessment Year 2022-23, and directed the Assessing Officer to recompute its tax liability under Section 115BAA.
ITAT Mumbai Quashes Bang Overseas Reassessment, Holds PCIT Sanction Invalid Under Section 151(ii)
Case Title : Bang Overseas Limited v. DCIT
Case Number : ITA No. 8930/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 146
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 25 May quashed reassessment proceedings initiated against Bang Overseas Limited, holding that the sanction for issuing notice under Section 148 of the Income Tax Act, 1961 violated Section 151(ii) of the Act. Vice President Saktijit Dey and Accountant Member Prabhash Shankar clarified that where authorities issue a notice after the expiry of three years from the end of the relevant assessment year, they must obtain approval from the Principal Chief Commissioner of Income Tax or the Chief Commissioner of Income Tax, and not from the Principal Commissioner of Income Tax (PCIT).
Case Title : ITO v. First Class Infrabuild Pvt. Ltd.
Case Number : ITA No. 7905/Del/2019
CITATION : 2026LLBiz ITAT(DEL) 147
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 26 May dismissed the Revenue's appeal against First Class Infrabuild Pvt. Ltd. and held that the Tax Department cannot force a taxpayer to adopt the Net Asset Value (NAV) method when the law permits valuation under the Discounted Cash Flow (DCF) method for determining fair market value under Section 56(2)(viib) of the Income Tax Act. Judicial Member Satbeer Singh Godara and Accountant Member M. Balaganesh upheld the order of the Commissioner of Income Tax (Appeals) and deleted the addition for Assessment Year 2015–16.
Case Title : Shri 108 Gupti Sagar Dham Jain Trust v. CIT (Exemption)
Case Number : ITA No.- 7551/Del/2025
CITATION : 2026LLBiz ITAT(DEL) 148
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 26 May held that authorities cannot deny approval under Section 80G of the Income Tax Act to a trust or institution merely because it undertakes religious activities, so long as its expenditure on such activities does not exceed five per cent of its total income in the relevant year. Judicial Member Raj Kumar Chauhan and Accountant Member Brajesh Kumar Singh allowed the appeal filed by Shri 108 Gupti Sagar Dham Jain Trust and set aside the order of the Commissioner of Income Tax (Exemptions), Chandigarh, which had rejected the trust's application for approval under Section 80G.
ITAT Delhi Remands Cargill India's Intra-Group Services TP Dispute To TPO
Case Title : Cargill India Private Limited v. DCIT
Case Number : ITA Nos. 3938/Del/2019 & 4033/Del/2019
CITATION : 2026 LLBiz ITAT(DEL) 149
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded transfer pricing adjustments relating to intra-group services received by Cargill India Pvt. Ltd., after observing that the Arm's Length Price (ALP) of various services had been determined at nil without discussing the evidence produced by the taxpayer. A bench comprising Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman and partly allowed cross-appeals filed by Cargill India Pvt. Ltd. and the Revenue for Assessment Year 2009-10.
Case Title : Baker Hughes Energy Technology UK Ltd. v. ACIT
Case Number : ITA No. 2081/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 150
On 27 May, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that Section 44BB of the Income Tax Act could not be invoked to tax offshore supply receipts in the absence of a Permanent Establishment (PE) in India and deleted an addition of Rs.99.50 crore made against Baker Hughes Energy Technology UK Ltd. Judicial Member Vikas Awasthy and Accountant Member Renu Jauhri observed: “The burden of establishing existence of a PE rests upon the Revenue. Not a single piece of evidence has been brought on record by the Assessing Officer to establish that the assessee had any kind of PE in India in the year under consideration.”
ITAT Bangalore Allows 80P Deduction On Interest Income Earned From Co-Operative Bank Deposits
Case Title : Hamdard Co-operative Society Ltd. v. Addl./JCIT (A)-2 & Anr.
Case Number : ITA No. 1873/Bang/2025
CITATION : 2026 LLBiz ITAT(BLR) 151
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) on 20 May held that a co-operative credit society is entitled to deduction under Section 80P of the Income Tax Act on interest income earned from deposits placed with co-operative banks, as the income remains attributable to its business of providing credit facilities to members. A single-member Bench comprising Vice-President Shri Prashant Maharishi also held that transactions with nominal members do not disentitle the society from claiming the deduction and allowed an appeal by Hamdard Co-operative Society Limited.
ITAT Ahmedabad Deletes ₹20 Crore+ 14A Disallowance Against Axis Bank, Bars Mechanical Use of Rule 8D
Case Title : Axis Bank Limited v. Assistant Commissioner of Income Tax & Connected Appeals
Case Number : ITA No. 611 & 612/Ahd/2025 and ITA No. 563 & 564/Ahd/2025
CITATION : 2026 LLBiz ITAT(MUM) 152
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 20 May held that disallowance under Section 14A of the Income Tax Act cannot be made by mechanically invoking Rule 8D unless the Assessing Officer first records dissatisfaction with the taxpayer's own computation of expenditure relatable to exempt income. Judicial Member Sanjay Garg and Accountant Member Annapurna Gupta allowed the appeal filed by Axis Bank Limited and directed deletion of the disallowance made under Section 14A.
OTHER DEVELOPMENTS
Income Tax Dept. Releases ITR-1, ITR-4 Utilities 45 Days After Court Indicated April 1 Timeline
Despite a judicial direction that income tax return filing utilities be made available from April 1 every year, the Income Tax Department on Friday (May 15) released the ITR-1 and ITR-4 utilities for Assessment Year 2026-27, formally opening the return filing season for salaried taxpayers and small businesses. The utilities for ITR-1 (Sahaj) and ITR-4 (Sugam) were made available on the Income Tax Department's e-filing portal, allowing eligible taxpayers to begin preparing and filing returns for income earned during Financial Year 2025-26 corresponding to Assessment Year 2026-27.