LiveLawBiz Direct Tax Monthly Digest: October 2026
Kapil Dhyani
5 Nov 2026 9:49 AM IST
SUPREME COURT
Case Title : PR. COMMISSIONER OF INCOME TAX 2 VS. TATA REALTY AND INFRASTRUCTURE LTD.
Case Number : DIARY NO. - 51036/2026
CITATION : 2026 LLBiz SC 322
The Supreme Court has dismissed the Income Tax Department's plea challenging the Bombay High Court order dismissing its appeal against Tata Realty & Infrastructure Ltd. The dispute concerned the applicability of Section 14A disallowance of the Income Tax Act where Tata Realty had earned no exempt income and whether the ₹2.5 crore payment made by Tata Realty to vacate the premises so that it could occupy them under a 60 month leave and licence arrangement was allowable as revenue expenditure.
Supreme Court Refuses To Interfere With Delhi HC Order Reading Down CBDT Circular On AIF Taxation
Case Title : THE CENTRAL BOARD OF DIRECT TAXES VS. EQUITY INTELLIGENCE AIF TRUST
Case Number : DIARY NO. - 2801/2026
The Supreme Court on Wednesday refused to interfere with the Delhi High Court judgment reading down CBDT Circular No.13/2014 concerning taxation of Category-III Alternative Investment Funds (AIFs) at the Maximum Marginal Rate (MMR). Allowing Equity Intelligence's writ petition, the Delhi High Court held that the SEBI framework itself made it impossible for a Category-III AIF to name its investors in the original Trust Deed before registration and investment. Applying lex non cogit ad impossibilia, the Court held that the law cannot compel an entity to perform an impossible act.
Electricity Subsidy Linked To Power Charges Is Revenue Receipt: Supreme Court
Case Title : M/s Mepco Industries Ltd. v. Commissioner of Income Tax, Madurai
Case Number : Civil Appeal No. 8694 of 2012
CITATION : 2026 LLBiz SC 328
The Supreme Court has held that the “purpose test” is the governing test for deciding whether a subsidy is a capital or revenue receipt, and that the purpose must be determined from the scheme as a whole rather than from one broad policy objective. “The “purpose test” cannot be applied by isolating one general object clause while disregarding the operative provisions of the scheme. The scheme must be read as a whole, and when so read, the general object of industrial development is implemented through a specific subsidy on power charges, calculated with reference to actual energy charges and available only for a defined period after production commences. It is this immediate and operative purpose of the financial assistance that determines its character in the hands of the assessee,” the court observed.
Tax Department Cannot Sustain Reassessment On Other Grounds If Original Reason Fails: Supreme Court
Case Title : Principal Officer, LG Electronics India Pvt. Ltd. Through Its Authorized Signatory Mr. Ashish Agrawal v. Assistant Commissioner of Income Tax, Noida & Anr.
Case Number : Civil Appeal Nos. 18067/2017
CITATION : 2026 LLBiz SC 330
The Supreme Court has recently ruled that the Income Tax Department cannot sustain reassessment proceedings on other grounds when the original reason for reopening the assessment is untenable. The court declared reassessment proceedings against LG Electronics India Pvt. Ltd. for Assessment Years 2006-07 to 2008-09 unenforceable. The case concerned the company's alleged failure to deduct Tax Deducted at Source (TDS) on payments to its Korean parent company and associated enterprises.
Case Title : Orissa Rural Housing Development Corporation Ltd. v. The Assistant Commissioner of Income Tax & Ors.
Case Number : Civil Appeal Nos. 7249–7250 of 2015
CITATION : 2026 LLBiz SC 331
The Supreme Court has recently reiterated that taxpayers cannot use revision proceedings to introduce fresh claims based on facts that were never placed before the Assessing Officer, bypassing the deadline for filing a revised income tax return. A bench of Justices Prashant Kumar Mishra and Shree Chandrashekhar held that the revisional authority can entertain a new question of law, but cannot consider a claim that goes beyond the facts available to the Assessing Officer.
Case Title : Ernst & Young U.S. LLP v. Commissioner of Income Tax
Case Number : Special Leave Petition(C) No. 36320/2026
The Supreme Court on Monday (October 26) issued notice on a plea filed by Ernst & Young U.S. LLP challenging a Delhi High Court judgment holding that payments received towards employees deputed (seconded) to Indian entities were taxable as Fees for Technical Services (FTS). A bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran agreed to examine whether salary reimbursements to EY US can be taxed as FTS when the deputed employees work under the control of Indian entities and tax has already been deducted from their salaries.
Income Tax Deduction Not Claimed By Taxpayer Cannot Be Disallowed: Supreme Court
Case Title : M/s. Lakshmi Sugar Mills Co. Ltd. v. Commissioner of Income Tax, Delhi-II
Case Number : Civil Appeal No. 8932 of 2013
CITATION : 2026 LLBiz SC 343
The Supreme Court on Tuesday (October 27) ruled that an Assessing Officer cannot disallow an amount that an assessee never claimed as a deduction under the Income Tax Act, 1961. “Disallowing an amount not treated as an allowance by the Assessee is impermissible under the Act, 1961. The negative impact on the taxable income stated by the Assessee should have been taken into account; i.e., by factoring in this entry, the income has come down, and therefore the tax has come down,” a bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria ruled.
Income Tax Reassessment Cannot Be Reopened On Mere Change Of Opinion: Supreme Court
Case Title : Chetan Sabharwal v. Assistant Commissioner of Income Tax Circle 28(1), New Delhi
Case Number : Civil Appeal No. 13953 of 2026 and connected appeals.
CITATION : 2026 LLBiz SC 344
The Supreme Court on Wednesday held that a mere change of opinion cannot justify reopening an income tax assessment, reiterating that an assessing officer has the power to reassess but not review an earlier decision. It can, however, reopen an assessment when there is tangible material suggesting that income has escaped assessment. A bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran made these observations while dismissing appeals filed by Chetan Sabharwal and his brother Nitin Sabharwal against reassessment notices issued by the Income Tax Department for the assessment years 2008-09 and 2009-10.
Case Title : Principal Commissioner of Income Tax, Bhubaneshwar v. Orissa Mining Corporation Ltd. (Connected Appeals)
Case Number : Special Leave petition(C) No. 14546 of 2026
CITATION : 2026 LLBiz SC 347
The Supreme Court has held that the Income Tax Department cannot complete reassessment proceedings without issuing a mandatory notice under Section 143(2) of the Income Tax Act, 1961. A taxpayer's participation in the proceedings cannot make up for the absence of such a notice, the court ruled. A bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva observed that Section 292BB of the Act can protect the department against certain objections concerning the service of a notice. However, it cannot cure a situation where the notice was never issued.
HIGH COURTS
Andhra Pradesh HC
Andhra Pradesh High Court Strikes Down Section 147A Of Income Tax Act As Unconstitutional
Case Title : Bala Sreenivas Rao Somisetty v. The Income Tax Officer
Case Number : WP No.28520 OF 2023
CITATION : 2026 LLBiz HC(APH) 55
The Andhra Pradesh High Court on Monday struck down Section 147A of the Income Tax Act, 1961, as unconstitutional. Introduced retrospectively through the Finance Act, 2026, the provision clarifies that Jurisdictional Assessing Officers (JAOs), rather than the National Faceless Assessment Centre or an assessment unit, can act as the Assessing Officer for issuing reassessment notices under Sections 148 and 148A.
Bombay HC
AO Must Decide Reassessment Objections Before Scrutiny Can Begin: Bombay High Court
Case Title : H. P. Diamonds India Pvt. Ltd. v. Deputy Commissioner of Income Tax, 14(2)(1), Mumbai & Ors.
Case Number : Writ Petition No. 3233 of 2019
CITATION : 2026 LLBiz HC(BOM) 544
The Bombay High Court has ruled that an Assessing Officer cannot issue a notice under Section 143(2) of the Income Tax Act to scrutinise a return in reassessment proceedings before deciding the assessee's objections to reopening the assessment. A Division Bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla held that issuing a Section 143(2) notice amounts to proceeding with the assessment. The Assessing Officer must therefore first dispose of the assessee's objections to reopening through a speaking order.
Case Title : Farah Khurshed Titina v. Income Tax Officer, Ward 22(1)(6), Mumbai & Ors.
Case Number : Writ Petition No. 4002 of 2026
CITATION : 2026 LLBiz HC(BOM) 557
The Bombay High Court has ruled that taxpayers can seek waiver of income tax penalties even in cases of misreporting of income under the amended Section 270AA of the Income Tax Act, 1961. It also held that an earlier rejection does not prevent a taxpayer from applying again under the amended law. “However, we note that the position has changed considerably as a result of the amendments made by the Finance Act, 2026 w.e.f. 1st March 2026. As is evident from the amendments made, an application for waiver of penalty already levied, can now be made and the same will have to be considered by the AO even in circumstances where penalty is levied for under-reporting of income which is in consequence of misreporting of income” the court ruled.
Case Title : Sanjay Nathalal Shah v. The Assistant Commissioner of Income Tax, Central Circle 5(2), Mumbai & Ors.
Case Number : Writ Petition (L) No. 29400 of 2026
CITATION : 2026 LLBiz HC(BOM) 559
The Bombay High Court has ruled that the Income Tax Department cannot wait for a certified copy of a court order to compute the limitation period for completing an assessment when a digitally signed copy has already been received by the relevant tax authorities. “In this era of electronic filing and electronic uploading, and in order to alleviate difficulties of the litigants before us, this is a practice which this Court has adopted. Instead of asking a litigant to apply for a certified copy of the order on payment of fees, a digitally signed copy of the order can be produced before a party, and such order has to be acted upon,” a Division Bench of Justices B.P. Colabawalla and Farhan P. Dubash observed.
Case Title : Breach Candy Hospital Trust v. Chief Commissioner of Income Tax & Ors.
Case Number : Writ Petition Nos. 2462 of 2010
CITATION : 2026 LLBiz HC(BOM) 568
The Bombay High Court has ruled that a hospital seeking income tax exemption on philanthropic grounds cannot be denied the benefit merely because it earns a surplus, charges patients for treatment, or collects professional fees on behalf of consultant doctors. The question is whether its actual activities and use of funds establish that it exists solely for philanthropic purposes and not for profit.
Bombay High Court Upholds Tata Chemicals' Tax Deduction For Non-Compete Fee Paid To Former Employee
Case Title : Principal Commissioner of Income Tax-2 v. Tata Chemicals Ltd.
Case Number : Income Tax Appeal No. 2390 of 2018
CITATION : 2026 LLBiz HC(BOM) 570
The Bombay High Court on 8 October held that payments made to a former employee under a non-compete agreement qualify as revenue expenditure for income tax purposes, even when paid in instalments across multiple financial years. A Division Bench comprising Justices Suman Shyam and Gautam A. Ankhad dismissed the Income Tax Department's appeal against Tata Chemicals Ltd., upholding deductions claimed by the company for non-compete compensation and expenditure on projects that were later written off.
Vodafone Idea Tax Dispute: Bombay HC Directs Income Tax Dept To Pass Orders In 13 Matters In 6 Weeks
Case Title : Vodafone Idea Limited v. The Deputy Commissioner of Income Tax, Circle-5(2)(1), Mumbai & Ors.
Case Number : Writ Petition (L) No. 32594 of 2026
CITATION : 2026 LLBiz HC(BOM) 571
The Bombay High Court has recently directed the Income Tax Department to pass orders in 13 tax matters involving Vodafone Idea and its group companies within six weeks. The company remains free to argue that the statutory deadline for passing those orders has already expired. The court also continued its interim protection against the recovery of ₹699.54 crore refunded to Vodafone Idea. The amount must remain in a fixed deposit and cannot be used without further orders.
Case Title : Swan Defence and Heavy Industries Ltd. v. Assistant Commissioner of Income Tax, Central Circle 6(3) & Ors.
Case Number : Writ Petition (L) No. 31588 of 2026
CITATION : 2026 LLBiz HC(BOM) 589
The Bombay High Court has recently reiterated that the Income Tax Department cannot reassess a company's income for a period before its insolvency resolution plan was approved. This applies even when the Department receives fresh information suggesting fraudulent transactions. A Division Bench of Justice B.P. Colabawalla and Justice Farhan P. Dubash quashed reassessment proceedings initiated against Swan Defence and Heavy Industries Ltd., formerly Reliance Naval and Engineering Ltd. The proceedings related to the 2020-21 assessment year.
Proportionate Rights Shares Allotment Not Taxable Merely Due to Price Difference: Bombay High Court
Case Title : Grasim Industries Limited v. Deputy Commissioner of Income-tax & Ors.
Case Number : Writ Petition No. 4298 of 2026
CITATION : 2026 LLBiz HC(BOM) 591
On Thursday, 22 October, the Bombay High Court held that the difference between the subscription price and fair market value of proportionately allotted rights shares cannot, by itself, be taxed under Section 56(2)(x) of the Income-tax Act when the shareholder's percentage holding remains unchanged and no disproportionate benefit is identified. A Division Bench comprising Justices B. P. Colabawalla and Farhan P. Dubash allowed Grasim Industries Limited's petition challenging reassessment proceedings over an alleged taxable benefit of Rs. 329 crore arising from its subscription to Vodafone Idea Limited's rights shares.
Case Title : Cine Artist Welfare Trust v. Commissioner of Income Tax (Exemptions) & Anr.
Case Number : Writ Petition No. 3976 of 2026
CITATION : 2026 LLBiz HC(BOM) 595
The Bombay High Court has condoned a 260-day delay by Cine Artist Welfare Trust in filing Form 10 (a form required to claim tax benefits on income set aside for future use) under the Income Tax Act, 1961. The court observed that denying the tax exemption could deplete the trust's funds and affect its charitable activities. A Division Bench of Justice B.P. Colabawalla and Justice Farhan P. Dubash set aside the Income Tax Department's order rejecting the trust's request to condone the delay. It directed the department to reconsider the trust's claim to accumulate ₹70 lakh for Assessment Year 2019-20.
Limitation For Appeal From ITAT Order Begins On Receipt, Not Pronouncement: Bombay High Court
Case Title : GS Strategic Investments Limited v. Assistant Commissioner of Income Tax
Case Number : Interim Application (L) No. 30896 of 2026 in Income Tax Appeal (L) No. 30455 of 2025
CITATION : 2026 LLBiz HC(BOM) 609
The Bombay High Court has held that the limitation period for filing an appeal against an Income Tax Appellate Tribunal (ITAT) order begins when the aggrieved party receives a copy of the order, not when it is pronounced. “Mere knowledge of the order, by way of pronouncement is not enough to hold that day to be the first day on which the limitation commences,” a division bench of Justice G.S. Kulkarni and Justice Dr. Neela Gokhale observed.
Calcutta HC
Calcutta High Court Quashes Pre-IBC Resolution Income Tax Proceedings Against Binani Cement
Case Title : Ultra Tech Cement Limited & Anr. v. Union of India & Ors
Case Number : WPA 2036 of 2020
CITATION : 2026 LLBiz HC(CAL) 239
The Calcutta High Court has quashed income tax notices, orders, and proceedings relating to the period before UltraTech Cement took over management of Binani Cement under an approved IBC resolution plan. The Court held that claims not forming part of the resolution plan could not survive after its approval. The Court also directed the Income Tax Department to refund amounts adjusted against such pre-transfer tax demands, along with applicable interest.
Calcutta High Court Upholds ITAT Order Deleting ₹11.35 Crore Addition For Alleged Cash Loans
Case Title : Principal Commissioner of Income Tax (Central)-2, Kolkata v. Suresh Kumar Banthia
Case Number : ITAT No. 171 of 2026
CITATION : 2026 LLBiz HC (CAL) 245
On 5 October, the Calcutta High Court dismissed the Revenue's appeal against the Income Tax Appellate Tribunal's (ITAT) September 2025 order deleting a Rs. 11.35 crore addition made against businessman Suresh Kumar Banthia for Assessment Year 2020-21. A Division Bench comprising Justices Rajarshi Bharadwaj and Sudip Deb held that although the strict rules of evidence do not apply to income-tax proceedings, tax authorities and tribunals are guided by the general principles underlying the law of evidence and natural justice.
Case Title : Principal Commissioner of Income Tax-2, Kolkata v. Superdeal Resources Private Limited
Case Number : ITAT No.162 of 2026
CITATION : 2026 LLBiz HC (CAL) 248
The Calcutta High Court on 5 October dismissed the Revenue's appeal against deletion of a Rs. 9.32 crore addition relating to sale proceeds from unlisted equity shares of Superdeal Resources Private Limited, finding that the Tribunal's conclusions were based on the evidence on record. A Division Bench comprising Justices Rajarshi Bharadwaj and Sudip Deb held that the Revenue cannot seek a fresh examination of factual findings in an appeal under Section 260A of the Income Tax Act in the absence of any substantial question of law, particularly where an addition is sought to be sustained on suspicion or generalised allegations.
Calcutta High Court Allows Birla Corporation's Cross-Objections In Income Tax Appeal Under CPC
Case Title : Principal Commissioner of Income Tax, Kolkata 2, Kolkata v. Birla Corporation Limited
Case Number : ITA No. 124 of 2019
CITATION : 2026 LLBiz HC (CAL) 256
On 14 October, the Calcutta High Court allowed Birla Corporation Limited to maintain cross-objections in the Income Tax Department's appeal, subject to the requirement that they raise substantial questions of law. A Division Bench comprising Justices Rajarshi Bharadwaj and Sudip Deb held that Section 260A(7) of the Income Tax Act, 1961, incorporates the relevant provisions of the Code of Civil Procedure, 1908 (CPC), including the right to file cross-objections.
Single Business Transaction Cannot Justify Income Tax Case Transfer: Calcutta High Court
Case Title : Loknath Prasad Gupta v. Union of India and Ors.
Case Number : WPA 4002 of 2026
CITATION : 2026 LLBiz HC (CAL) 259
The Calcutta High Court on 13 October held that a single business transaction, without evidence establishing a link between a taxpayer's business activities and a group under investigation, cannot justify transferring an income tax case to another city. Justice Smita Das De allowed a petition filed by Loknath Prasad Gupta challenging the transfer of his income tax case from Kolkata to Delhi for a coordinated investigation into his alleged links with the NML Group.
Delhi HC
Case Title : Neeraj Kukreja v. ITO
Case Number : W.P.(C) 1009/2024
The Delhi High Court has questioned the Income Tax Department over the issuance of two Permanent Account Numbers (PANs) in the name of the same person and directed the Department to produce the original records relating to both PAN cards. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary was hearing a petition filed by Neeraj Kukreja, who claimed that he holds only one PAN and had neither applied for nor obtained the second PAN attributed to him.
Case Title : Sahara India Sahara India Financial Corporation Ltd v. Income Tax Appellate Tribunal Delhi Bench & Ors.
Case Number : W.P.(C) 9868/2026
CITATION : 2026 LLBiz HC (DEL) 1055
The Delhi High Court has allowed a batch of writ petitions filed by Sahara India group companies and directed that their pending income tax appeals be heard by the Delhi Bench of ITAT , even though the Assessing Officer (AO) having jurisdiction over the assessees was situated in Lucknow. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary noted that more than 100 appeals concerning the assessee's group companies were already being heard by the Delhi Bench and that both the assessees as well as the Revenue had jointly expressed their preference for the appeals to be heard in Delhi.
Case Title : Zoom Insurance Brokers Pvt. Ltd. v. Assistant Commissioner of Income Tax, Circle 25(1) & Anr.
Case Number : W.P.(C) 13064/2026
CITATION : 2026 LLBiz HC (DEL) 1056
The Delhi High Court has dismissed a writ petition filed by Zoom Insurance Brokers challenging proceedings initiated under Sections 148A(3) and 148 of the Income Tax Act, 1961, observing that an identical challenge by the company for the preceding assessment year had already been rejected by a Coordinate Bench. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary noted that the facts of the present case were identical to those considered in Petitioner's earlier case, except for the assessment year.
Delhi High Court Quashes 2024 Reassessment Notice For AY 2010-11, Says It Is Beyond 10-Year Limit
Case Title : Shree Aggarsain North Ex Welfare Society v. Assistant Commissioner of Income Tax, Central Circle-28, Delhi & Anr.
Case Number : W.P.(C) 4168/2024
The Delhi High Court on 30 September held that proceedings under Section 153C of the Income-tax Act, 1961 cannot be initiated beyond the limitation period prescribed under Sections 153A and 153C, and quashed a notice issued for Assessment Year (AY) 2010-11. A Division Bench of Justices Dinesh Mehta and Aditi Choudhary allowed a petition challenging the notice dated 15 February 2024, issued under Section 153C pursuant to a satisfaction note recorded by the Assessing Officer on 7 February 2024. The judges observed that the “impugned notice is, thus, time-barred.”
Case Title : Preeti Chadha v. Income Tax Officer, Ward 62(1), Delhi & Ors
Case Number : W.P.(C) 580/2024
CITATION : 2026 LLBiz HC(DEL) 1060
The Delhi High Court has quashed a notice issued under Section 153C of the Income Tax Act for Assessment Year (AY) 2016-17, holding that the notice was issued beyond the prescribed limitation period. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary allowed the writ petition filed by Preeti Chadha, challenging the notice dated July 25, 2022, issued under Section 153C of the Act pursuant to a satisfaction note recorded by the Assessing Officer on June 16, 2022.
Case Title : Consistent Builders Pvt. Ltd. v. ACIT, Central Circle 05, Delhi & Anr.
Case Number : W.P.(C) 6037/2023
CITATION : 2026 LLBiz HC(DEL) 1062
The Delhi High Court has quashed a tax assessment against a company, holding that proceedings initiated on the basis of material found during search proceedings were barred by limitation. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary observed that the satisfaction note in the case was recorded on June 25, 2021, corresponding to AY 2022-23, whereas the impugned order dated March 30, 2023 concerned AY 2010-11.
No Timeframe For Cancelling Duplicate PAN Can Cause Hardship To Taxpayers: Delhi High Court
Case Title : Abhay Gupta v. Union of India & Ors.
Case Number : W.P.(C) 14527/2026
CITATION : 2026 LLBiz HC(DEL) 1063
The Delhi High Court has observed that the absence of a prescribed timeframe for deciding applications seeking cancellation of duplicate Permanent Account Numbers (PANs) may cause hardship to taxpayers, particularly in relation to filing Income-Tax Returns and availing services linked to PAN. The Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia was dealing with a PIL seeking directions to the authorities to prescribe a timeframe for deciding applications for cancellation of duplicate PANs.
Case Title : Commissioner Of Income Tax, International Taxation-1, New Delhi v. Marguerite Lasusa Chawla
Case Number : ITA 521/2025
The Delhi High Court has given the Income Tax Department a final opportunity to comply with its earlier order directing adjustment of a ₹3.65 crore advance tax payment towards the capital gains tax liability of a 92-year-old assessee, failing which the Court said it would direct payment of interest on the amount. The Division Bench of Justices Subramonium Prasad and Renu Bhatnagar has directed the Department to ensure that the amount is credited to the assessee's account by October 31, 2026.
No Reassessment If Entire Payment Already Disallowed In Earlier Assessment: Delhi High Court
Case Title : Indofil Industries Limited v. Deputy Commissioner Of Income Tax Central Circle 14 & Anr.
Case Number : W.P.(C) 14875/2026
CITATION : 2026 LLBiz HC (DEL) 1102
The Delhi High Court has prima facie observed that reassessment proceedings under Section 148 of the Income Tax Act, 1961 may not be permissible where the entire amount in question had already been disallowed in an earlier assessment, as there would prima facie be no income escaping assessment. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary made the observation while hearing a writ petition challenging a notice issued to Petitioner under Section 148A(1), an order under Section 148A(3) and the consequential notice under Section 148 for Assessment Year 2021-22.
Reassessment Notice For AY 2015-16 Issued In 2026 Time-Barred: Delhi High Court
Case Title : Rita Kumari v. Assistant Commission Of Income Tax Central Circle 27
Case Number : W.P.(C) 9112/2026
CITATION : 2026 LLBiz HC (DEL) 1104
The Delhi High Court has quashed an Income Tax reassessment notice issued for Assessment Year (AY) 2015-16, holding that the notice issued in 2026 was clearly beyond the permissible limitation period under Section 149 of the Income Tax Act, 1961. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary allowed a writ petition challenging the notice dated March 31, 2026, issued under Section 148 of the Act seeking to reassess Petitioner's income for AY 2015-16.
Case Title : Surender Gupta v. Asstt. Commissioner Of Income Tax, Circle - 59( 1 ), & Anr.
Case Number : W.P.(C) 7958/2019
CITATION : 2026 LLBiz HC (DEL) 1108
The Delhi High Court has refused to direct a refund of ₹1 crore paid by a partnership firm towards the individual income tax dues of its partner, holding that the amount was voluntarily tendered and that the dispute essentially concerned an inter-se dispute between partners. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary dismissed a writ petition filed by Surender Gupta, who sought refund of ₹1 crore along with interest.
Delhi High Court Refuses To Quash ₹8.12 Crore Income Tax Reassessment Notice Against Pernod Ricard
Case Title : Pernod Ricard India Private Limited v. Assistant Commissioner Of Income Tax, Central Circle -31, New Delhi And Anr.
Case Number : W.P.(C) 5162/2022
CITATION : 2026 LLBiz HC (DEL) 1120
The Delhi High Court has refused to quash an income tax reassessment notice issued to Pernod Ricard India Private Limited, the maker of popular liquor brands Royal Stag and Blenders Pride, over an alleged discrepancy of more than ₹8 crore between its turnover declared in Value Added Tax (VAT) returns and its income tax records for the assessment year 2013-14. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary dismissed the company's writ petition challenging the notice issued under Section 148 of the Income Tax Act, 1961, holding that the company's explanations for the discrepancy involved factual issues that could be examined during the assessment proceedings.
PAN Misuse | Delhi High Court Quashes ₹3.91 Crore Income Tax Demand Against Security Guard
Case Title : Lalit v. Union of India & Ors.
Case Number : W.P.(C) 9365/2025
CITATION : 2026 LLBiz HC (DEL) 1121
The Delhi High Court has quashed an income tax assessment order raising a demand of approximately ₹3.91 crore against a contractual security guard, observing that the assessment was based solely on portal data without any independent inquiry to establish his connection with the alleged transactions. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary held that the assessment violated the principles of natural justice, as the Assessing Officer failed to provide the material relied upon to Petitioner despite his request and did not properly consider his response alleging misuse of his Permanent Account Number (PAN).
Delhi High Court Quashes Income Tax Penalty Order Passed During Pendency Of ITAT Appeal
Case Title : BT Global Communications India Private Ltd v. Assessment Unit, National Faceless Assessment Centre & Anr.
Case Number : W.P.(C) 4767/2023
CITATION : 2026 LLBiz HC(DEL) 1127
The Delhi High Court has quashed an income tax penalty order passed against a private company under Section 270A of the Income Tax Act, 1961, during the pendency of the company's appeal before the Income Tax Appellate Tribunal (ITAT). The Division Bench of Justices Dinesh Mehta and Aditi Choudhary held that Section 275(1)(a) of the Income Tax Act mandates that penalty proceedings remain in abeyance when an appeal against the relevant assessment order is pending before the ITAT.
Case Title : Baleshwar Sharma v. Deputy Commissioner of Income Tax
Case Number : W.P.(C) 15244/2026
CITATION : 2026 LLBiz HC(DEL) 1128
The Delhi High Court has observed that an assessee's failure to remain available for cross-examination of a witness despite receiving at least 10 days' prior notice reflects an indolent and negligent approach towards the proceedings. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary made the observation while setting aside an income tax assessment order passed against Petitioner and directing the Assessing Officer to provide a fresh opportunity to cross-examine two witnesses.
Case Title : Sunil Verma v. Assessing Officer, Assessment Unit, National Faceless Assessment Centre & Anr.
Case Number : W.P.(C) 6249/2026
CITATION : 2026 LLBiz HC(DEL) 1156
The Delhi High Court has set aside an income tax assessment order after the Assessing Officer (AO) failed to consider the assessee's reply filed before the assessment was finalised. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary observed that an AO, being a quasi-judicial authority, is expected to act objectively and dispassionately while dealing with the material available on record.
Case Title : Sunil Verma v. Assessing Officer, Assessment Unit, National Faceless Assessment Centre & Anr.
Case Number : W.P.(C) 6249/2026
CITATION : 2026 LLBiz HC(DEL) 1156
The Delhi High Court has set aside an income tax assessment order after the Assessing Officer (AO) failed to consider the assessee's reply filed before the assessment was finalised. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary observed that an AO, being a quasi-judicial authority, is expected to act objectively and dispassionately while dealing with the material available on record.
Charitable Activity Need Not Be Free Of Cost; Subsidised Services Can Qualify: Delhi High Court
Case Title : Principal Commissioner of Income Tax (Exemptions), Delhi v. Orientals Ardaas Foundation Delhi
Case Number : ITA 225/2026
CITATION : 2026 LLBiz HC(DEL) 1174
The Delhi High Court has held that charitable activities need not necessarily be provided free of cost, observing that charging partial, subsidised or concessional amounts for accommodation or services does not by itself make an organisation's activities commercial. The division bench of Justices Dinesh Mehta and Aditi Choudhary made the observation while directing the Income Tax Department to grant registration under Section 12A of the Income Tax Act, 1961, to Orientals Ardaas Foundation Delhi, a company incorporated under Section 8 of the Companies Act, 2013.
Case Title : DLF Home Developers Ltd. v. Deputy Commissioner of Income Tax, Circle 74(1), Delhi & Anr.
Case Number : W.P.(C) 15467/2026
CITATION : 2026 LLBiz HC (DEL) 1176
The Delhi High Court has quashed a tax demand against DLF Home Developers for failure to deduct tax at source (TDS) on external development charges paid to the Haryana Urban Development Authority (HUDA), holding that the demand was contrary to the law laid down in its earlier judgment. The division bench of Justices Dinesh Mehta and Aditi Choudhary quashed the assessment order dated March 22, 2023, and a subsequent order dated August 31, 2026, rejecting the company's rectification application under Section 154 of the Income Tax Act, 1961.
'Assessee In Default Has Not Committed A Sin': Delhi High Court Orders ₹1.93 Crore Tax Refund
Case Title : Mohan Clothing Co. Pvt. Ltd. v. Deputy Commissioner of Income Tax, Circle 16(1), Delhi & Anr.
Case Number : W.P.(C) 16193/2024
CITATION : 2026 LLBiz HC (DEL) 1177
The Delhi High Court has directed the Income Tax Department to refund ₹1.93 crore, with applicable interest, to a taxpayer after holding that the recovery of the amount during the pendency of stay applications was a “colourable exercise of power.” The division bench of Justices Dinesh Mehta and Aditi Choudhary observed that merely because an assessee had been declared to be in default did not mean that they had committed a sin so as to be deprived of the benefit of circulars issued by the Central Board of Direct Taxes (CBDT).
Delhi High Court Restores Income Tax Appeal Decided Ex-Parte Before Scheduled Hearing Date
Case Title : MEHAK ASRI v. UoI
Case Number : W.P.(C) 15512/2026
CITATION : 2026 LLBiz HC (DEL) 1191
The Delhi High Court has set aside an order passed by the Commissioner of Income Tax (Appeals) dismissing a taxpayer's appeal ex-parte, after finding that the authority had decided the matter before the date fixed for hearing and before the deadline for filing written submissions. The Division Bench of Justices Dinesh Mehta and Aditi Choudhary was hearing a petition filed by Mehak Asri challenging the CIT(A)'s order dated June 25, 2026, passed under Section 250 of the Income Tax Act, 1961.
Gujarat HC
Gujarat High Court Upholds ₹23.77 Crore Income Tax Relief For Adani Infrastructure Services
Case Title : Principal Commissioner of Income Tax-1 v. Adani Infrastructure Services Pvt. Ltd.
Case Number : R/Tax Appeal No. 144 of 2016
CITATION : 2026 LLBiz HC (GUJ) 144
The Gujarat High Court has ruled in favour of Adani Infrastructure Services Pvt. Ltd., upholding the deletion of a ₹23.77 crore income tax disallowance. The court found that the company's interest income exceeded its interest expenditure and that the borrowed funds were advanced in a back-to-back transaction. The dispute concerned a disallowance under Section 14A of the Income Tax Act read with Rule 8D(2)(ii). Section 14A deals with expenditure incurred in relation to income that does not form part of an assessee's taxable income.
Case Title : Jyoti CNC Automation Limited v. Assistant Commissioner of Income Tax, Circle 1(1), Rajkot
Case Number : R/Special Civil Application No. 16806 of 2025
CITATION : 2026 LLBiz HC (GUJ) 146
The Gujarat High Court on 7 September held that reassessment proceedings cannot be sustained where the Revenue relies merely on screenshots from the Insight Portal without furnishing the underlying reports and material allegedly linking the taxpayer to accommodation transactions. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati quashed the reassessment proceedings against Jyoti CNC Automation Ltd., finding that the notice issued under Section 148A(1) of the Income Tax Act, 1961 did not provide sufficient particulars to enable the taxpayer to effectively respond to the allegations.
Case Title : Ajay Surendra Patel v. Deputy Commissioner of Income Tax
Case Number : R/Special Civil Application No. 6580 of 2016
CITATION : 2026 LLBiz HC (GUJ) 149
The Gujarat High Court has held that a public limited company cannot be treated as a private company merely because one of its directors holds a substantial number of shares. Thus, a director cannot be held personally liable for the company's unpaid tax merely because the director holds substantial shares in the company. The case concerned Section 179 of the Income Tax Act. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed: “In our considered opinion, the status of public limited company cannot be doubted and held to be a private limited company by mere holding of substantial numbers of equity shares by a director.”
Revenue Cannot Reopen Assessment Over Additions Already Pending In Tax Appeals: Gujarat High Court
Case Title : Venus Township (India) LLP v. Deputy Commissioner of Income Tax, Central Circle 1(1), Ahmedabad
Case Number : R/Special Civil Application Nos. 14467, 14472, 14547, 14568, 14595, 14597, 14608, 14609, 14611, 14613, 14615, 14624, 14629, 14630, 14753, 14784 & 15323 of 2025
CITATION : 2026 LLBiz HC (GUJ) 147
The Gujarat High Court on 16 September held that the Revenue cannot reopen an assessment under Section 147 of the Income Tax Act and pursue parallel proceedings where the same additions have already been examined by the CIT(A) on merits and remain subject matter of tax appeals before the High Court. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati quashed reassessment proceedings initiated against Venus Township (India) LLP, finding that the reassessment sought to replicate the identical additions of Rs. 1.32 crore made in the original assessment under Sections 153A/153C.
Case Title : Commissioner of Income Tax v. Shantaben K. Patel
Case Number : R/Tax Appeal No. 1439 of 2006 and R/Tax Appeal No. 1054 of 2007
CITATION : 2026 LLBiz HC (GUJ) 150
The Gujarat High Court on 9 October held that the Rs. 50 crore received by Shantaben K. Patel from the sale of the 'Nirma' and 'Nima' trademarks was not taxable as long-term capital gains because their cost of acquisition was unascertainable. A Division Bench comprising Justices Bhargav D. Karia and Pranav Trivedi dismissed the Revenue's appeals against the Income Tax Appellate Tribunal's orders and upheld the Tribunal's findings on the taxability of the receipt, the binding nature of the arbitration award and the deletion of the penalty.
Case Title : Sanjaykumar Amrutlal Patel v. Income Tax Officer, Ward 1, Patan
Case Number : R/Special Civil Application No. 13210 of 2026
CITATION : 2026 LLBiz HC (GUJ) 155
The Gujarat High Court on 8 October quashed a reassessment notice issued under Section 148 of the Income Tax Act, 1961, against Sanjaykumar Amrutlal Patel for Assessment Year 2022-23, holding that a seized broker's register entry, without a live nexus to the taxpayer, could not justify reopening the assessment. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati held that the entry dated 16 January 2020, at best, reflected the asking rate for land in the Bhadaj area and did not establish a concluded transaction involving Patel.
Case Title : Jayaben Ratilal Sorathia v. Assistant Commissioner of Income Tax
Case Number : R/Tax Appeal No. 632 of 2017
CITATION : 2026 LLBiz HC (GUJ) 156
The Gujarat High Court on 14 October held that penalty for concealment of income under Section 271(1)(c) of the Income Tax Act cannot be levied where the Assessing Officer accepts additional income disclosed in a return filed in response to a search-related notice without making any further addition, leaving no tax sought to be evaded under Explanation 4(c). A Bench comprising Justices Bhargav D. Karia and Nirzar S. Desai set aside the Income Tax Appellate Tribunal's order restoring a penalty of Rs. 21.16 lakh on additional income of Rs. 64.54 lakh disclosed by the taxpayer.
Timely Reassessment Notice Cannot Cure Invalid Income Tax Sanction: Gujarat High Court
Case Title : Ritaben Arvindbhai Patel v. Assistant Commissioner of Income Tax, Central Circle 3, Surat
Case Number : R/Special Civil Application No. 8482 of 2022
CITATION : 2026 LLBiz HC (GUJ) 157
The Gujarat High Court has quashed a tax reassessment, ruling that a timely notice to a taxpayer cannot cure an approval obtained from the wrong authority. The court held that the tax department could not rely on the time given to the taxpayer to respond to a reassessment notice to justify the sanction granted by the Principal Commissioner of Income Tax. The tax department argued that excluding this period meant the approval granted by the Principal Commissioner of Income-tax was valid. The court rejected this interpretation, holding that a 2023 amendment to the Income-tax Act could not retrospectively validate the sanction.
Case Title : Sanjaykumar Amrutlal Patel v. Income Tax Officer, Ward 1, Patan
Case Number : R/Special Civil Application No. 13210 of 2026
CITATION : 2026 LLBiz HC (GUJ) 155
The Gujarat High Court on 8 October quashed a reassessment notice issued under Section 148 of the Income Tax Act, 1961, against Sanjaykumar Amrutlal Patel for Assessment Year 2022-23, holding that a seized broker's register entry, without a live nexus to the taxpayer, could not justify reopening the assessment. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati held that the entry dated 16 January 2020, at best, reflected the asking rate for land in the Bhadaj area and did not establish a concluded transaction involving Patel.
Case Title : Jayaben Ratilal Sorathia v. Assistant Commissioner of Income Tax
Case Number : R/Tax Appeal No. 632 of 2017
CITATION : 2026 LLBiz HC (GUJ) 156
The Gujarat High Court on 14 October held that penalty for concealment of income under Section 271(1)(c) of the Income Tax Act cannot be levied where the Assessing Officer accepts additional income disclosed in a return filed in response to a search-related notice without making any further addition, leaving no tax sought to be evaded under Explanation 4(c). A Bench comprising Justices Bhargav D. Karia and Nirzar S. Desai set aside the Income Tax Appellate Tribunal's order restoring a penalty of Rs. 21.16 lakh on additional income of Rs. 64.54 lakh disclosed by the taxpayer.
Timely Reassessment Notice Cannot Cure Invalid Income Tax Sanction: Gujarat High Court
Case Title : Ritaben Arvindbhai Patel v. Assistant Commissioner of Income Tax, Central Circle 3, Surat
Case Number : R/Special Civil Application No. 8482 of 2022
CITATION : 2026 LLBiz HC (GUJ) 157
The Gujarat High Court has quashed a tax reassessment, ruling that a timely notice to a taxpayer cannot cure an approval obtained from the wrong authority. The court held that the tax department could not rely on the time given to the taxpayer to respond to a reassessment notice to justify the sanction granted by the Principal Commissioner of Income Tax. The tax department argued that excluding this period meant the approval granted by the Principal Commissioner of Income-tax was valid. The court rejected this interpretation, holding that a 2023 amendment to the Income-tax Act could not retrospectively validate the sanction.
Cash Sales During Demonetisation Can't Alone Justify Addition At Higher Tax Rate: Gujarat High Court
Case Title : Principal Commissioner of Income Tax (Central), Ahmedabad v. Zinzuwadia and Sons
Case Number : R/Tax Appeal No. 125 of 2025
CITATION : 2026 LLBiz HC (GUJ) 161
The Gujarat High Court has held that cash sales recorded during demonetisation cannot, by themselves, justify an addition under Section 68 of the Income-tax Act, 1961, by shifting the burden of proof onto a taxpayer when the sales have already been offered to tax as business income. A Bench comprising Justices Bhargav D. Karia and Nirzar S. Desai dismissed the Revenue's appeal against the deletion of a Rs. 7.88 crore addition made against Zinzuwadia and Sons, a jewellery firm, for alleged bogus sales during demonetisation.
Commission To Foreign Agents For Procuring Export Orders Not Taxable In India: Gujarat High Court
Case Title : Principal Commissioner of Income Tax, Rajkot-1 v. DML Exim Pvt. Ltd.
Case Number : R/Tax Appeal Nos. 115 and 116 of 2021
CITATION : 2026 LLBiz HC (GUJ) 162
The Gujarat High Court has held that commission paid to foreign agents for soliciting customers for an Indian company's export business is not taxable in India when the services are rendered abroad and the recipients have no business connection in the country. The court ruled that the commission was business income for the recipients, not fees for technical services. No tax deduction at source was therefore required on the payments in question.
Karnataka HC
Infosys, Infosys BPO Not Comparable To Goldman Sachs: Karnataka HC Upholds ITAT Order
Case Title : The Principal Commissioner of Income Tax (CIT) & Anr. v. M/s Goldman Sachs Services Pvt. Ltd
Case Number : Income Tax Appeal No. 49 of 2021 GOLDMAN SACHS
CITATION : 2026 LLBiz HC(KAR) 186
The Karnataka High Court has upheld the exclusion of Infosys Ltd and Infosys BPO Ltd as comparable companies for Goldman Sachs Services Pvt Ltd in a transfer pricing dispute, finding no reason to interfere with the tribunal's factual assessment of the companies. A Division Bench of Justice S.G. Pandit and Justice Chillakur Sumalatha dismissed the Income Tax Department's appeal against the tribunal's order concerning Goldman Sachs for assessment year 2014-15.
Case Title : Obedulla v. Union of India
Case Number : WRIT PETITION NO. 31229 OF 2026 (T-IT)
CITATION : 2026 LLBiz HC(KAR) 189
On 6 October, the Karnataka High Court held that a company director cannot challenge an income-tax search and seizure conducted against the company in his individual capacity when the search is not directed against him personally. Justice B M Shyam Prasad found force in the Revenue's contention that Obedulla A, a director of Attica Gold Private Limited, could not challenge the search against the company in his individual capacity.
Case Title : Anurag Kalia v. Union of India
Case Number : WP 28761 of 2025
The Centre on Friday told the Karnataka High Court that same-sex partners seeking a tax exemption on gifts exchanged between spouses must challenge the laws governing marital status, rather than the Income Tax Act. The latter, it argued, merely refers to the legal status recognised under other enactments. Additional Solicitor General K. Arvind Kamath, appearing for the Centre before Justice B.M. Shyam Prasad, made the submission while opposing a petition by Anurag Kalia and Akhilesh Godi.
Case Title : Sri. K.R. Pradeep v. The Income Tax Department
Case Number : CRIMINAL PETITION NO.7772 OF 2019
CITATION : 2026 LLBiz HC (KAR) 194
The Karnataka High Court on 9 October dismissed two criminal petitions by Pradeep, a taxpayer, which sought to quash prosecution for allegedly failing to file wealth tax returns and to challenge the rejection of his discharge application in a separate case involving alleged false statements about investments worth approximately Rs. 22 lakh in two foreign companies. Justice H.P. Sandesh held that prosecution for failure to furnish wealth tax returns can proceed without a completed assessment determining tax liability and observed that the question of whether the taxpayer knowingly made false statements about his foreign investments must be decided at trial.
Case Title : ANURAG KALIA vs UNION OF INDIA
Case Number : WP 28761/2025
A same-sex couple has argued before the Karnataka High Court that the Income Tax law effectively makes them pay tax for expressing love for their partners, while married couples can exchange gifts without the same tax burden. Arguing that a nation's tax laws reflect the values it upholds, Advocate Dr. Dhruv Janssen Sanghvi, in a rejoinder, appearing for Anurag Kalia and Akhilesh Godi, a same-sex couple, submitted that excluding same-sex partners from the gift-tax exemption available to spouses raises questions about whose relationships receive equal treatment under the law.
Karnataka High Court Quashes Reassessment Over ₹13.39 Crore Turnover Without Supporting Computation
Case Title : Sri Kunjalu Venkatesh Kini v. Additional Commissioner of Income Tax
Case Number : WRIT PETITION NO. 28400 OF 2026 (T-IT)
CITATION : 2026 LLBiz HC(KAR) 203
The Karnataka High Court on 7 October set aside an income tax reassessment order against Kunjalu Venkatesh Kini over alleged non-disclosure of business turnover of Rs. 13.39 crore, holding that the Income Tax Department must disclose the computation and supporting material before proceeding with reassessment. Justice B.M. Shyam Prasad partly allowed Kini's petition and quashed the order passed under Section 148A(3) of the Income Tax Act, 1961, the related approval and the consequential reassessment notice.
Karnataka High Court Upholds Reitzel India Relief, Says Export Incentives Count As Operating Income
Case Title : Principal Commissioner of Income Tax v. M/s Reitzel India Pvt. Ltd.
Case Number : INCOME TAX APPEAL NO. 143 OF 2021
CITATION : 2026 LLBiz HC(KAR) 205
The Karnataka High Court on 8 October dismissed the Income Tax Department's appeal against an Income Tax Appellate Tribunal (ITAT) order directing it to include export incentives received by Reitzel India Pvt. Ltd. in its operating income while determining the arm's length price (ALP) of international transactions. A Division Bench comprising Justices S.G. Pandit and Chillakur Sumalatha held that export incentives directly linked to a taxpayer's export business must be included in operating income for determining the arm's length price, while comparable companies can be rejected only by applying the functional comparability criteria under Rule 10B of the Income Tax Rules.
Kerala HC
Kerala High Court Upholds Rejection Of South Indian Bank's ₹52 Cr. Additional Bad-Debt Claim To ITAT
Case Title : The South Indian Bank Ltd. v. Dy. Commissioner of Income Tax
Case Number : ITA NO. 21 OF 2026
CITATION : 2026 LLBiz HC(KER) 193
The Kerala High Court on 28 September held that the Income Tax Appellate Tribunal (ITAT) cannot refuse to examine a bad-debt disallowance on merits merely because a separate additional claim was raised before the first appellate authority. A Division Bench comprising Justices Devan Ramachandran and Basant Balaji remanded South Indian Bank's Rs. 14.10 crore bad-debt disallowance to the ITAT for fresh consideration, while upholding the rejection of the Bank's separate Rs. 52 crore additional bad-debt claim.
Discount On Shares Issued Under ESOP Is Deductible Business Expenditure: Kerala High Court
Case Title : The Principal Commissioner of Income Tax v. Geojit Financial Services Ltd.
Case Number : ITA No. 21 of 2025
CITATION : 2026 LLBiz HC(KER) 197
The Kerala High Court has held that the discount arising from the allotment of shares to employees under an Employee Stock Option Plan (ESOP) constitutes revenue expenditure deductible under Section 37(1) of the Income Tax Act, 1961. A Division Bench of Justice Devan Ramachandran and Justice Basant Balaji dismissed the Revenue's appeal against Geojit Financial Services Ltd and affirmed the order of the Income Tax Appellate Tribunal, Cochin Bench.
Madras HC
Madras High Court Acquits Woman, Says Non-Filing Of IT Return Not Wilful Without Tax Liability
Case Title : Manivannan Umarani v. The Income Tax Officer
Case Number : CRL RC No. 614 of 2026
CITATION : 2026 LLBiz HC(MAD) 297
The Madras High Court has acquitted a woman convicted for failing to file her income tax return, holding that the non-filing was not wilful where the Income Tax Department had failed to establish that she was liable to pay any tax. Justice Sunder Mohan observed that Section 276CC of the Income Tax Act makes the tax payable by the assessee relevant for determining whether prosecution for failure to file a return can be sustained. It held that, in the absence of any assessment or determination showing the tax payable by the petitioner, the prosecution was misconceived.
Madras High Court Rejects Review Of ₹10 Crore Cash Credit Addition For Lack Of Due Diligence
Case Title : V. Babu v. Deputy Commissioner if Income Tax
Case Number : REV.APPL.No. 107 of 2021
CITATION : 2026 LLBiz HC(MAD) 298
The Madras High Court on 28 September dismissed a review application seeking to reopen a Rs. 10 crore unexplained cash credit addition against an individual engaged in civil contract business. A Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed the review application, holding that the petitioner failed to show due diligence in producing documents relied upon as new evidence and failed to establish the identity and creditworthiness of the creditor and genuineness of the transaction.
Case Title : The Commissioner of Income Tax, Chennai v. M/s. Mahindra Holidays and Resorts India Ltd
Case Number : TCA.No.433 of 2013
CITATION : 2026 LLBiz HC(MAD) 310
The Madras High Court has ruled in favour of Mahindra Holidays and Resorts India Ltd. on its accounting treatment of membership fees worth ₹158.43 crore. It also held that expenditure on domestic software licence renewals could not be disallowed merely because the company had deducted tax on software purchases from foreign suppliers. A Division Bench of Justice Anita Sumanth and Justice S. Raveekumar observed that the company could apportion membership fees over the membership period instead of treating the entire amount received during the accounting year as income.
Orissa HC
Employee Cannot Be Made To Pay Tax Already Deducted Due To Employer's TDS Default: Orissa High Court
Case Title : Nirupama Nanda v. State of Odisha & Ors.
Case Number : W.P.(C) No. 12607 of 2026
CITATION : 2026 LLBiz HC(ORI) 27
The Orissa High Court has ruled that an employee cannot be made to pay income tax again to the extent tax has already been deducted from their salary, merely because the employer failed to deposit it or correctly report the deductions. A Division Bench of Justice Sanjeeb K. Panigrahi and Justice Murahari Sri Raman observed that employees should not suffer because of their employers' failure to deposit tax deducted at source (TDS) with the Income Tax Department.
Orissa High Court Issues Notice On Challenge To Section 147A Of Income Tax Act
Case Title : Ashok Kumar Sahu v. Central Board of Direct Taxes (CBDT) and others
Case Number : W.P.(C) No.10246 of 2026
CITATION : 2026 LLBiz HC(ORI) 28
The Orissa High Court has recently issued notice on a plea challenging the constitutional validity of Section 147A of the Income Tax Act, 1961, which was introduced by the Finance Act, 2026, with retrospective effect from April 1, 2021. Section 147A was introduced to clarify that the Assessing Officer issuing notices under Sections 148 and 148A would mean an officer other than the National Faceless Assessment Centre or an assessment unit under Section 144B. The provision was made retrospective from April 1, 2021.
Rajasthan HC
Rajasthan High Court Quashes Jepee Construction's ₹6.93 Crore Tax Addition Over Short Response Time
Case Title : Jepee Construction Pvt. Ltd. v. The Assessment Unit, National Faceless Assessment Centre & Anr.
Case Number : D.B. Civil Writ Petition No. 5694/2024
CITATION : 2026 LLBiz HC(RAJ) 53
On 6 October, the Rajasthan High Court held that less than three days to respond to a substantial tax addition is not a reasonable opportunity of hearing and set aside an assessment order passed by the National Faceless Assessment Centre against Jepee Construction Pvt. Ltd., involving an addition of about Rs. 6.93 crore. A Division Bench comprising Chief Justice Sanjay K. Agrawal and Justice Baljinder Singh Sandhu found that the assessment order wrongly recorded that the company had not filed a response, despite its reply having been sent by email and acknowledged by the Centre.
Case Title : Commissioner of Income Tax, Udaipur v. M/s Hindustan Zinc Ltd., Yashad Bhawan, Udaipur
Case Number : D.B. Income Tax Appeal No. 183/2014
CITATION : 2026 LLBiz HC (RAJ) 57
The Rajasthan High Court has upheld Hindustan Zinc Ltd.'s claim for additional depreciation of ₹18.87 crore on new plant and machinery installed at its captive power plant and wind power plant. The court held that electricity generation falls within the scope of “production”, which has a wider connotation than “manufacture”. It also held that an assessee engaged in manufacturing or producing an article or thing can claim additional depreciation on qualifying power-generation machinery, regardless of whether electricity generation itself amounts to production of an article or thing.
Sikkim HC
Sikkim High Court Quashes Zydus Healthcare Reassessments, Says Audit Objection Isn't New Evidence
Case Title : Zydus Healthcare Limited v. Assistant Commissioner of Income Tax
Case Number : W.P.(C) 39/2022, 13/2024 and 50/2025
CITATION : 2026 LLBiz HC(SIK) 4
The Sikkim High Court on 14 October quashed income tax reassessment proceedings against Zydus Healthcare Limited for three assessment years, holding that an audit objection expressing a contrary opinion on an issue examined during the original assessment cannot, by itself, justify reopening the assessment. Justice Bhaskar Raj Pradhan observed that the language used in Section 149(1)(b) of the Income Tax Act “clearly contemplates new evidence and not new opinion.”
Telangana HC
Case Title : M/s EKGE Retail LLP v. Assistant Commissioner of Income-Tax
Case Number : WRIT PETITION No.21210 of 2022
CITATION : 2026 LLBiz HC(TEL) 77
The Telangana High Court on 13 October set aside the Income Tax Department's directions invoking the General Anti-Avoidance Rule (GAAR) against EKGE Retail LLP, allowing it to set off a short-term capital loss of Rs. 49.32 crore against long-term capital gains from a business sale. A Division Bench comprising Acting Chief Justice P. Sam Koshy and Justice Narsing Rao Nandikonda allowed EKGE Retail's writ petition challenging the GAAR directions dated 23 February 2022.
Uttarakhand HC
Case Title : Sachin Kumar Gupta v. Principal Commissioner of Income Tax & Anr.
Case Number : Writ Petition (MS) No. 3129 of 2024
CITATION : 2026 LLBiz HC(UTT) 14
The Uttarakhand High Court has recently directed the Income Tax Department to reconsider a taxpayer's claim for relief under the Income Declaration Scheme, 2016, after his final tax installment was credited after the deadline despite the cheque being deposited on time. Justice Manoj Kumar Tiwari was hearing a petition filed by Sachin Kumar Gupta, whose declaration under the scheme was treated as void because his final payment was credited on October 5, 2017, instead of by September 30, 2017.
ITAT
Case Title : Mitsubishi Electric Europe B.V. v. ACIT, Circle–International Tax 2(2)(1), Delhi
Case Number : ITA No. 1948/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 285
The Delhi Income Tax Appellate Tribunal (ITAT) on 30 September held that commission earned for referring potential customers does not qualify as Fees for Technical Services (FTS) under Article 12(5)(b) of the India-Netherlands DTAA where the referral activity does not involve making technical knowledge, skill or know-how available to the Indian entity. A Bench comprising Judicial Member Vikas Awasthy and Accountant Member Naveen Chandra allowed Mitsubishi Electric Europe B.V.'s appeal for Assessment Year 2022-23 against the treatment of Rs. 2.96 crore received from Mitsubishi Electric India Pvt. Ltd. as FTS.
Live Cricket Broadcasting Fees Not Royalty Under India-UK DTAA: Delhi ITAT
Case Title : England and Wales Cricket Board Limited v. Assistant Commissioner of Income Tax
Case Number : ITITA 41/DEL/2026
CITATION : 2026 LLBiz ITAT(DEL) 286
The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that fees received by the England and Wales Cricket Board (ECB) for granting live broadcasting rights of cricket matches cannot be treated as royalty taxable in India under the India-UK Double Taxation Avoidance Agreement (DTAA). The bench comprising Judicial Member Vikas Awasthy and Accountant Member Krinwant Sahay also held that a ₹6.26 crore release fee received by ECB from IPL franchises for allowing English players to participate in the tournament was not taxable in India under Article 18 of the DTAA. The appeal concerned Assessment Year 2023-24.
Case Title : ACIT, Circle 6(1)(1), Mumbai v. Aditya Birla Real Estate Limited
Case Number : ITA Nos. 7766/Mum/2026 & 7767/Mum/2026
CITATION : 2026 LLBiz ITAT(MUM) 287
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that electricity rates actually paid by an assessee's cement manufacturing units to state power distribution companies can be used as internal comparable uncontrolled prices for benchmarking electricity supplied by its captive power plants. The dispute turned on whether the 2013 amendment bringing specified domestic transactions within the arm's-length pricing framework required captive power plants to be benchmarked against rates at which electricity generators supplied power to distribution companies. The tribunal held that it did not.
ITAT Mumbai Upholds Capital Gains Exemption After Two Adjacent Flats Amalgamated Into One
Case Title : Deputy Commissioner of Income Tax-6(1)(2), Mumbai v. Amit Mahendrakumar Mehta
Case Number : ITA No. 599/MUM/2026
CITATION : 2026 LLBiz ITAT(MUM) 288
The Income Tax Appellate Tribunal (ITAT) at Mumbai held that amalgamation of two adjacent flats into a single residential unit can qualify for capital gains exemption where the earlier flat loses its independent existence. A Bench of Judicial Member Pawan Singh and Accountant Member Girish Agrawal dismissed the appeal filed by the Deputy Commissioner of Income Tax-6(1)(2), Mumbai against the order of the Commissioner of Income Tax (Appeals) and upheld the exemptions claimed by Amit Mahendrakumar Mehta under Sections 54 and 54F of the Income Tax Act, 1961.
ITAT Ahmedabad Deletes ₹18.76 Lakh Disallowance On Herbalife Distributor's Commission To Wife's Firm
Case Title : Nirav Dineshbhai Bhavsar v. Income Tax Officer, Ward 5(3)(2), Ahmedabad
Case Number : ITA No. 1971/AHD/2025
CITATION : 2026 LLBiz ITAT(AHM) 289
On 1 October, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) held that commission paid by a Herbalife distributor to his wife's proprietary concern cannot be treated as excessive or unreasonable merely by comparing it with a different line of business. Vice-President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary deleted the Rs. 18.76 lakh disallowance made under Section 40A(2)(b) of the Income Tax Act, 1961, holding that the reasonableness of expenditure must be examined with reference to the taxpayer's own business and the services actually rendered.
Rejection Of Tax Claim Alone Cannot Mean Concealment: ITAT Mumbai Deletes ₹1.23 Crore Penalty
Case Title : Cyqurex Systems Private Limited v. Deputy Commissioner of Income Tax, Central Circle-2(3), Mumbai
Case Number : ITA Nos. 297/Mum/2026, 3499/Mum/2026 & 4637/Mum/2026
CITATION : 2026 LLBiz ITAT(MUM) 290
The Income Tax Appellate Tribunal (ITAT), Mumbai, has held that merely because a taxpayer's claim is rejected, it does not mean the taxpayer concealed facts or gave a false explanation. The tribunal made the observation while deleting a ₹1.23 crore penalty imposed on Cyqurex Systems Pvt. Ltd. under Section 270A of the Income Tax Act. The penalty arose from the company's claim of ₹7.41 crore as revenue expenditure on software development.
Kerala High Court Upholds Rejection Of South Indian Bank's ₹52 Cr. Additional Bad-Debt Claim To ITAT
Case Title : The South Indian Bank Ltd. v. Dy. Commissioner of Income Tax
Case Number : ITA NO. 21 OF 2026
CITATION : 2026 LLBiz HC(KER) 193
The Kerala High Court on 28 September held that the Income Tax Appellate Tribunal (ITAT) cannot refuse to examine a bad-debt disallowance on merits merely because a separate additional claim was raised before the first appellate authority. A Division Bench comprising Justices Devan Ramachandran and Basant Balaji remanded South Indian Bank's Rs. 14.10 crore bad-debt disallowance to the ITAT for fresh consideration, while upholding the rejection of the Bank's separate Rs. 52 crore additional bad-debt claim.
Interest Between Indian Branch And Overseas Head Office Not Taxable: ITAT Mumbai
Case Title : American Express Bank Ltd. v. DDIT (IT)-1(1) / JT DIT (IT)-1(1)
Case Number : ITA Nos. 5667/Mum/2004 and 9414/Mum/2004
CITATION : 2026 LLBiz ITAT(MUM) 291
The Income Tax Appellate Tribunal (ITAT), Mumbai, on 8 October held that interest transactions between an Indian permanent establishment and its overseas Head Office or branches do not constitute taxable income under domestic law, as they represent transactions with oneself. Further that Section 14A of the Income Tax Act, 1961, cannot apply to such receipts. A Bench comprising Judicial Member Beena Pillai and Accountant Member Bijayananda Pruseth partly allowed cross-appeals filed by American Express Bank Ltd. and the Revenue against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2000-01. It also allowed a foreign exchange forward contract revaluation loss and upheld the deduction of expenditure incurred under a voluntary retirement scheme.
Case Title : Deputy Commissioner of Income Tax v. IG3 Infra Limited
Case Number : ITA Nos. 2577 and 2578/Chny/2026
CITATION : 2026 LLBiz ITAT(CHE) 292
On 16 October, the Income Tax Appellate Tribunal (ITAT), Chennai, dismissed the Revenue's appeals against IG3 Infra Limited, holding that cash transactions recorded in a seized Excel sheet could not be attributed entirely to the company without reliable verification and entity-wise segregation. A Bench comprising Judicial Member Manu Kumar Giri and Accountant Member S.R. Raghunatha dismissed the Revenue's appeals for Assessment Years (AYs) 2019-20 and 2020-21.
Case Title : Akara Foundation for Education and Research v. Income Tax Officer, Exemptions Ward-1, Chennai
Case Number : ITA No. 1398/Chny/2026
CITATION : 2026 LLBiz ITAT(CHE) 293
The Income Tax Appellate Tribunal (ITAT), Chennai, has ruled that a charitable trust does not automatically violate tax provisions merely because its founder or trustee receives a salary in excess of ₹50,000. The law restricts payments to certain persons connected with a trust when the remuneration exceeds what may reasonably be paid for the services rendered. The tax authorities must establish whether the payment was actually made and, if so, whether it was excessive.
Case Title : Vikas Ashokkumar Masand v. The Deputy Commissioner of Income Tax
Case Number : ITA No. 3130/AHD/2026
CITATION : 2026 LLBiz ITAT(AHM) 294
On 19 October, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) allowed Vikas Ashokkumar Masand's appeal against an order of the Commissioner of Income Tax (Appeals) [CIT(A)] sustaining the addition for Assessment Year 2017–18. A Bench comprising Vice-President Dr. B.R.R. Kumar and Judicial Member Tapas Ram Misra held that cash receipts from customers during demonetisation cannot be treated as unexplained money merely because customer confirmations have not been furnished, and deleted an addition of Rs. 34.40 lakh made against a petrol pump owner under Section 69A of the Income Tax Act, 1961.
Case Title : Azure Knowledge Corporation Pvt. Ltd. v. The Deputy Commissioner of Income Tax
Case Number : ITA No. 2013/AHD/2024
CITATION : 2026 LLBiz ITAT(AHM) 295
On 19 October, the Income Tax Appellate Tribunal (ITAT), Ahmedabad, remanded Azure Knowledge Corporation Pvt. Ltd.'s dispute over Rs. 2.46 crore in software-related intangible assets to the Assessing Officer for fresh verification, including examination of the company's claim for customisation and development expenses and alleged duplicate disallowances. A Bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Tapas Ram Misra set aside the order of the Commissioner of Income Tax (Appeals) in the company's appeal for Assessment Year 2018–19, directing the Assessing Officer to verify the disputed expenditure and recompute the assessed income after checking whether certain expenses had been disallowed twice.
Sale Of Trademark Need Not Include Entire Corporate Identity, House Marks Or Packaging: ITAT Mumbai
Case Title : Novartis AG v. Assistant Commissioner of Income Tax (International Taxation), Circle 3(3)(1)
Case Number : ITA No. 1027/Mum/2023
CITATION : 2026 LLBiz ITAT(MUM) 296
The Income Tax Appellate Tribunal (ITAT), Mumbai, has held that selling a registered trademark does not require the seller to transfer its entire corporate identity, house marks, or every element of product packaging. Holding so, the tribunal deleted a ₹433.14 crore addition treated as royalty by the income tax department in the case of Swiss pharmaceutical company Novartis AG.
Case Title : Cornell University v. Deputy Commissioner of Income Tax (International Taxation)
Case Number : ITA No. 2195/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 297
The Income Tax Appellate Tribunal (ITAT), Mumbai, has held that receipts earned by New York-based Ivy league college, Cornell University, from professional and executive education courses offered to Indian students and corporate employees cannot be taxed as Fees for Included Services (FIS) under the India-USA Double Taxation Avoidance Agreement (DTAA). This applies even when the courses are customised for corporate participants and impart technical knowledge.
Foreign Company's PE Cannot Be Presumed From Indian Affiliate's Activities: ITAT Mumbai
Case Title : Cornerstone OnDemand International Limited v. Assistant Commissioner of Income Tax (International Taxation)
Case Number : ITA Nos. 3228/Mum/2023, 4558/Mum/2023 and 2128/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 298
The Income Tax Appellate Tribunal (ITAT), Mumbai, on 16 October held that tax authorities cannot presume that a foreign enterprise has a Permanent Establishment (PE) in India merely because its Indian associated enterprise carries out business activities. They must examine the actual contractual arrangements, the parties' conduct and the applicable tax treaty provisions. A Bench comprising Judicial Member Beena Pillai and Accountant Member Arun Khodpia remanded the PE determination and profit attribution issues in the case of Cornerstone OnDemand International Limited to the Assessing Officer for fresh examination, holding that the authorities must support any profit attribution with a reasoned analysis rather than an ad hoc percentage.
ITAT Ahmedabad Deletes ₹4.42 Lakh Penalty For Misreporting Of Income Over PF, ESI Disallowance
Case Title : Nascent Info Technologies Pvt. Ltd. v. Income Tax Officer
Case Number : ITA No. 2906/AHD/2026
CITATION : 2026 LLBiz ITAT(AHM) 299
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, has deleted a ₹4.42 lakh penalty imposed on Nascent Info Technologies Pvt. Ltd. for misreporting of income. It held that mere disallowance of employees' contributions towards Provident Fund (PF) and Employees' State Insurance (ESI) does not automatically constitute misreporting of income. The bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Sanjay Kumar observed that the Revenue must establish that the case falls within the specific categories of misreporting under Section 270A(9) of the Income Tax Act, 1961.
ITAT Ahmedabad Holds BSNL's VRS-2019 Compensation Tax-Exempt
Case Title : Raysinh Atabhai Vala v. Income Tax Officer
Case Number : I.T.A. No.2831/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 300
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, has allowed tax exemption on compensation received by employees under Bharat Sanchar Nigam Limited's Voluntary Retirement Scheme (BSNL VRS-2019). It held that the compensation was exempt from tax and directed the Assessing Officer to recompute the assessees' taxable income and grant refunds, if due. A Bench comprising Judicial Member Rahul Chaudhary and Accountant Member Gangadhar Panda relied on earlier decisions of the Tribunal, which had recognised the eligibility of compensation received under BSNL VRS-2019 for exemption under Section 10(10B) of the Income Tax Act, 1961.
ITAT Sets Aside Revision Order Over ₹5.65 Crore COVID-19 Relief Donation To Medica Hospitals
Case Title : Eastern IndiaHealthcare Foundation v. CIT(Exemption), Kolkata
Case Number : I.T.A.No.2659/KOL/2026
CITATION : 2026 LLBiz ITAT(KOL) 301
On 26 October, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) quashed revision proceedings initiated against Eastern India Healthcare Foundation over its donation of Rs. 5.65 crore to Medica Hospitals Private Limited for COVID-19 relief activities. A Bench comprising Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey held that the Commissioner cannot invoke Section 263 of the Income Tax Act, 1961, merely to disagree with a legally permissible view adopted by the Assessing Officer (AO) after due examination, allowing the foundation's appeal for Assessment Year 2022-23.
Case Title : Deputy Commissioner of Income Tax, CC-1(4), Kolkata v. Paceman Sales Promotion Pvt. Ltd.
Case Number : ITA No. 1642/KOL/2025
CITATION : 2026 LLBiz ITAT(KOL) 302
The Income Tax Appellate Tribunal (ITAT), Kolkata, has held that Assessing Officers can make additions for escaped income discovered during reassessment proceedings even if no addition is made on the issue that originally triggered the reopening. A Bench comprising Judicial Member George Mathan and Accountant Member Rakesh Mishra held that the amended Section 147 of the Income Tax Act, 1961, permits Assessing Officers to assess escaped income relating to other issues discovered during reassessment.
Case Title : M/s. Pebblebrook Ecoenergies Energy Pvt. Ltd. v. The Assistant Commissioner of Income Tax
Case Number : ITA Nos. 3319/Chny/2025
CITATION : 2026 LLBiz ITAT(CHE) 303
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 26 October upheld an addition of Rs. 19.50 lakh as unexplained cash credit against Pebblebrook Ecoenergies Energy Pvt. Ltd. and dismissed three connected appeals involving Hills Garden Pvt. Ltd., Greenwood Farms Pvt. Ltd. and Avinash Plantations Pvt. Ltd. for Assessment Year 2016-17. A Bench comprising Accountant Member Inturi Rama Rao and Judicial Member Manu Kumar Giri held that an addition under Section 68 of the Income Tax Act, 1961, can be sustained in an unabated assessment year when seized material supports the addition and the taxpayer fails to explain the source of the cash credits.