LiveLawBiz Direct Tax Weekly Round-Up: August 17 - August 23, 2026
Kapil Dhyani
25 Aug 2026 11:59 AM IST
HIGH COURTS
Allahabad HC
Case Title : Siddhant Rastogi v. Union Of India Thru. Ministry Of Finance Deptt. Of Revenue And 2 Others
Case Number : WRIT TAX No. - 949 of 2026
CITATION : 2026 LLBiz HC (ALL) 65
The Allahabad High Court at Lucknow has held that objections to a draft assessment order under Section 144C of the Income Tax Act, 1961, must be filed before the Dispute Resolution Panel as well as the Assessing Officer and that filing them before the Assessing Officer alone will not do. It held that where no objections are filed before the Dispute Resolution Panel, the Assessing Officer may finalise the assessment on the basis of the draft order itself.
Andhra Pradesh HC
Income Tax Authorities Can Condon Delay Despite CBDT Time Limit: Andhra Pradesh High Court
Case Title : M/s sri Vani Educational Society v. The Assistant Commissioner and Others
Case Number : WRIT PETITION NO: 3499/2025
CITATION : 2026 LLBiz HC(APH) 48
The Andhra Pradesh High Court has held that tax authorities cannot reject an application for condonation of delay merely because it was filed beyond the time limit prescribed by a CBDT circular. The court held that the authorities have discretion under the Income Tax Act to consider genuine hardship while deciding such applications. A Division Bench comprising Justice Ninala Jayasurya and Justice T.C.D. Sekhar observed that Section 119(2)(b) of the Income Tax Act allows tax authorities to accept certain exemption, deduction, refund, or other claims even after the prescribed deadline where doing so would help avoid genuine hardship.
Delhi HC
Case Title : Aricent Technologies Holding Ltd. (Formerly Known As Flextronics Software System Ltd.) v. DCIT, Circle-11(1), New Delhi
Case Number : ITA 1015/2019
CITATION : 2026 LLBiz HC(DEL) 839
The Delhi High Court has held that the loss incurred by a unit eligible for deduction under Section 10B of the Income Tax Act can be set off against the profits of other units of the assessee. Section 10B provides for deductions in respect of profits derived by eligible 100% export-oriented undertakings from the export of articles, things or computer software. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta held that although profits of each eligible unit are required to be separately calculated for determining the quantum of deduction under Section 10B, such computation does not alter the treatment of the unit's profit or loss for the purpose of computing the assessee's overall income.
Case Title : Principal Commissioner of Income Tax, Delhi-7 v. Vitasta Estates Pvt Ltd
Case Number : ITA 278/2026
CITATION : 2026 LLBiz HC (DEL) 852
The Delhi High Court has held that a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, cannot be sustained if the notice issued to the assessee fails to specify the particular limb under which the penalty proceedings are proposed. The division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta rejected the Revenue's appeal against an ITAT order which had set aside the penalty imposed on Vitasta Estates.
Case Title: Pr. Commissioner of Income Tax-4, New Delhi v. M/s J D Exim Pvt Ltd
Case No.: ITA 669/2026
The Delhi High Court has held that an amount received as an advance towards the sale of property cannot be added as unexplained cash credit under Section 68 of the Income Tax Act in a subsequent assessment year, merely because the assessee allegedly adopted a “device” to set off the capital gain arising from the sale against a capital loss. The division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta was dealing with an appeal filed by the Revenue against an ITAT order concerning Assessment Year 2016-17.
Gujarat HC
Gujarat High Court Quashes Reassessment Against Adani Exports For AY 2010-11
Case Title : Adani Exports v. Income Tax Officer, Ward-5(2)(2)
Case Number : R/Special Civil Application No. 3597 of 2016
CITATION : 2026 LLBiz HC (GUJ) 116
The Gujarat High Court has quashed reassessment proceedings against Adani Exports for AY 2010-11. It found that the Assessing Officer had relied on an unamended partnership deed while reopening the assessment, despite the assessee having specifically informed him that the deed had been amended to remove the obligation to pay interest on partners' capital. A Division Bench comprising Justice A.S. Supehia and Justice Vaibhavi D. Nanavati held that the amended partnership deed expressly provided that no interest would be payable on the partners' capital.
Madras HC
Madras High Court Quashes Geeco Enercon Reassessment, Says New Regime Cannot Revive Limitation
Case Title : Geeco Enercon Private Limited v. The Deputy Commissioner of Income Tax
Case Number : W.P.(MD) No.30962 of 2024
CITATION : 2026 LLBiz HC(MAD) 238
The Madurai Bench of the Madras High Court has held that the Income Tax Department cannot initiate reassessment proceedings under the new reassessment regime after the limitation period under the old regime has expired, and quashed the reassessment proceedings against Geeco Enercon Private Limited for Assessment Year (AY) 2015-16. Justice C. Saravanan held that the proceedings the Income Tax Department initiated in August 2024 were barred by limitation and quashed the order dated 31 August 2024 and the consequential reopening notice.
Punjab & Haryana HC
Case Title : Subh Karan Yadav v. Income Tax Officer, Rewari, Haryana
Case Number : ITA-297-2026 (O&M)
CITATION : 2026 LLBiz HC(PNH) 47
The Punjab and Haryana High Court on 12 August held that capital gains exemption under Section 54 of the Income Tax Act cannot be claimed where a residential property is sold and the proceeds are reinvested in another residential property purchased solely in the name of the taxpayer's wife. A Division Bench of Justices Deepak Sibal and Rupinderjit Chahal dismissed an appeal filed by Subh Karan Yadav, a retired government employee, against the order of the Income Tax Appellate Tribunal (ITAT) denying him the benefit of capital gains exemption.
Telangana HC
Burden Shifts To Revenue Once Taxpayer Proves Creditworthiness And Genuineness: Telangana High Court
Case Title : M/s. Agarwal Industries Pvt. Ltd. v. DCIT, Circle-1(1), Hyderabad
Case Number : INCOME TAX TRIBUNAL APPEAL No.73 of 2023
CITATION : 2026 LLBiz HC(TEL) 60
The Telangana High Court on 22 July held that once a taxpayer establishes the identity, creditworthiness and genuineness of credits through sufficient documentary evidence, the burden shifts to the Assessing Officer to disprove the material with independent and cogent evidence, and deleted income tax additions totalling Rs. 5.58 crore against Agarwal Industries Pvt. Ltd. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda allowed the company's appeal and set aside the order of the Income Tax Appellate Tribunal (ITAT), which had sustained the additions.
Income Tax Department Can't Retain Tax Collected Twice On Same Income: Telangana High Court
Case Title : M/s Premier Solar Power Tech Private Limited v. The Principal Commissioner of Income Tax & Ors.
Case Number : Writ Petition No. 21429 of 2026
CITATION : 2026 LLBiz HC(TEL)63
The Telangana High Court has held that the Income Tax Department cannot retain tax collected twice on the same income and that the Commissioner must exercise powers under Section 264 of the Income Tax Act, 1961. The provision enables revision of an assessment to provide relief against over-assessment, even where the mistake is attributable to the taxpayer. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda made the observation while allowing a writ petition filed by Premier Solar Power Tech Private Limited, which challenged the rejection of its claim that Rs. 6.85 crore had effectively been subjected to tax twice.
Case Title : Escientia Advanced Sciences Private Limited v. Assistant Commissioner of Income Tax
Case Number : WRIT PETITION No.16627 of 2023
CITATION : 2026 LLBiz HC(TEL)64
The Telangana High Court on 11 August held that the share premium received by Escientia Advanced Sciences Pvt. Ltd. from a non-resident shareholder on a fresh issue of equity shares is a capital receipt and cannot be treated as taxable income. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda allowed the company's writ petition and quashed a Rs. 44.07 crore tax demand raised for assessment year 2019-20.
Reassessment Objections Must Be Raised Before Assessing Officer First: Telangana High Court
Case Title : Nitin Enterprises v. Income Tax Officer
Case Number : WRIT PETITION No.24088 of 2026
CITATION : 2026 LLBiz HC(TEL) 65
The Telangana High Court on 11 August declined to interfere with reassessment proceedings against Nitin Enterprises at the preliminary stage, holding that objections concerning the jurisdiction and validity of the reassessment must first be raised before the Assessing Officer and, if necessary, pursued through the statutory appellate remedies. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda held that proceedings initiated through a notice under Section 148A and the consequential notice under Section 148 of the Income Tax Act, 1961 are preliminary in nature and do not by themselves determine any tax liability.
ITAT
Case Title : KRISHNA MOHAN POTLURI VS THE ACIT, CENTRAL CIRCLE
Case Number : ITA 101/Viz/2026
CITATION : 2026 LLBiz ITAT(VIZ) 266
The Income Tax Appellate Tribunal (ITAT), Visakhapatnam has recently quashed reassessment proceedings against an assessee after holding that the Income Tax Department could not use the amended reassessment provisions to reopen a matter after the statutory time limit for assessment had already expired. The bench of Vice President Vijay Pal Rao and Accountant Member Manjunatha G observed, “Since the assessment u/s 153A already attained finality by expiry of limitation u/s 153B of the Act, the said limitation cannot be extended by resorting to subsequent amendment u/s 148 of the Act.”
Photograph Of Handwritten Note Cannot Independently Prove Cash Transaction: ITAT Chennai
Case Title : The Deputy Commissioner of Income Tax, Central Circle 2(1), Chennai v. Ivar Estates Private Limited
Case Number : ITA No. 1857/Chny/2026
CITATION : 2026 LLBiz CESTAT(CHE) 267
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has held that a photograph of a handwritten document cannot independently establish an alleged cash payment when it is merely an electronic reproduction of the same document. The Bench of Judicial Member Manu Kumar Giri and Accountant Member S.R. Raghunatha made the observation while upholding the deletion of a ₹18.87 crore addition against Ivar Estates Private Limited. The Revenue had alleged that the company paid the amount in cash, over and above the recorded consideration, for purchasing land at Vadapalani.
Delhi ITAT Allows Foreign AE As Tested Party Under RPM In ₹13.42 Crore Transfer Pricing Case
Case Title : ACIT v. POSCO International India Pvt. Ltd.
Case Number : ITA No. 2430/Del/2022
CITATION : 2026 LLBiz ITAT(DEL) 268
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 19 August held that a foreign Associated Enterprise (AE) can be selected as the tested party under the Resale Price Method (RPM) for back-to-back merchant trading transactions where it is the least complex entity and reliable comparable data is available. A Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal dismissed the Revenue's appeal against the deletion of a Rs. 13.42 crore transfer pricing adjustment concerning POSCO International India's purchase of steel slabs and HRCF coils from its Korean AE, POSCO Korea, for resale through merchant trading.
OTHER DEVELOPMENTS
CBDT Notifies Rules For Small Taxpayers To Disclose Undisclosed Foreign Assets, Income
The Central Board of Direct Taxes (CBDT) has notified rules allowing taxpayers to disclose certain foreign assets that were not reported in their income-tax returns, including assets acquired while they were non-residents but not disclosed after they became residents in India. The disclosure has to be made by December 31, 2026. The rules deal with two different kinds of cases. One is where the foreign income or asset itself was undisclosed. The other covers certain foreign assets that were not disclosed in the income tax return, even though they were acquired from income earned while the taxpayer was a non-resident or from income proposed to be taxed in India.