LiveLawBiz Direct Tax Weekly Round-Up: August 24 - August 30, 2026
Kapil Dhyani
31 Aug 2026 11:59 AM IST
SUPREME COURT
Case Title : MERCHANT NAVY OFFICERS AND LADIES ASSOCIATION (MNOLA) VERSUS UNION OF INDIA & ORS.
Case Number : Writ Petition(s)(Civil) No(s).1059/2020
CITATION : 2026 LLBiz SC 285
The Supreme Court on 21 August directed the Union of India to sympathetically consider representations filed by Merchant Navy Officers and Ladies Association (MNOLA) seeking a 60-day tax exemption for Indian seafarers who remained in India for more than 182 days during the COVID-19 pandemic. A Bench comprising Chief Justice Surya Kant with Justices Joymalya Bagchi and V. Mohana disposed of the writ petition without expressing any opinion on merits and directed the Union to take an appropriate decision within four weeks.
HIGH COURTS
Bombay HC
Taxpayer Cannot Be Denied TDS Credit For Deductor's Failure To Deposit Tax: Bombay High Court
Case Title : Manohar Ramabtar Jhunjhunwala v. Principal Commissioner of Income Tax-17, Mumbai & Ors. and connected matters
Case Number : Writ Petition No. 2063 of 2025 and connected petitions
CITATION : 2026 LLBiz HC(BOM) 473
The Bombay High Court on 5 August held that TDS credit cannot be denied to a taxpayer merely because the person who deducted the tax failed to deposit it with the Central Government, once actual deduction of tax from the income or payment is established. A Division Bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla observed that the default of the deductor cannot prejudice the deducted and directed the Income Tax Department to verify claims and grant TDS credit where actual deduction is established.
Chhattisgarh HC
Case Title : Smt. Uma Kshatri v. Hari Ram Sahu & Ors.
Case Number : MAC No. 1431 of 2022
CITATION : 2026 LLBiz HC(CHH) 24
The Chhattisgarh High Court on 20 August held that income tax need not be deducted while calculating motor accident compensation if the deceased's income falls within the Rs. 5 lakh limit eligible for rebate under Section 87A of the Income Tax Act. Courts & Judiciary Justice Sanjay Kumar Jaiswal upheld the Motor Accident Claims Tribunal's decision not to deduct tax from the deceased's annual income of Rs. 4,34,970, including 50% towards future prospects, and dismissed his mother's appeal seeking enhancement of compensation.
Delhi HC
Case Title : Vodafone Idea Limited Successor Of Vodafone Mobile Services Limited (Vmsl) Which Merged With Idea Cellular Limited (Icl) And Is Now Known As Vodafone Idea Limited Represented Through Its Authorized Representative Aditya Aggarwal v. Assistant Commissioner Of Income Tax Circle 78(1) New Delhi & Anr.
Case Number : W.P.(C) 2729/2026 and batch
CITATION : 2026 LLBiz HC (DEL) 873
The Delhi High Court on 18 August allowed three petitions filed by Vodafone Idea Limited challenging the Income Tax Department's refusal to release Rs. 53,09,56,470 in tax refunds on the ground of outstanding demands against its PAN and sister TANs, and directed the Department to pay the amount with applicable interest by 30 September 2026. A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta held that an outstanding tax demand does not by itself permit the Department to withhold a refund unless it passes a valid order for adjustment or withholding under Section 245 of the Income Tax Act, 1961.
Case Title : Pr. Commissioner Of Income Tax 4 New Delhi v. M/S Ansal Phalak Infrastructure Pvt Ltd (Now Known As New Look Builders And Developers Pvt Ltd)
Case Number : ITA 770/2025
CITATION : 2026 LLBiz HC (DEL) 878
The Delhi High Court on 21 August dismissed the Income Tax Department's appeal against Ansal Phalak Infrastructure Pvt Ltd and upheld the deletion of the Rs. 55 crore addition by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT). A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta emphasised that an Assessing Officer must objectively consider the reply and documents furnished by a taxpayer and cannot brush them aside while making an addition under Section 68 of the Income Tax Act, 1961 (which deals with unexplained cash credits).
Delhi High Court Upholds ₹3.65 Crore Advance Tax Credit Against Capital Gains Liability
Case Title : Commissioner Of Income Tax, International Taxation-1, New Delhi v. Marguerite Lasusa Chawla
Case Number : ITA 521/2025
CITATION : 2026 LLBiz HC (DEL) 882
The Delhi High Court on 21 August upheld an Income Tax Appellate Tribunal (ITAT) order directing the Income Tax Department to allow Marguerite Lasusa Chawla, a taxpayer, credit of Rs. 3.65 crore advance tax paid in an earlier assessment year against her capital gains tax liability arising in a subsequent assessment year. A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed: "Technically and legally, the advance tax…deposited and the return furnished by the respondent pertains to the very same transaction and very same gain,"
Case Title : M/S Civitech Housing India (P) Ltd. Through Its Director Shri Subodh Goel v. Deputy Commissioner Of Income Tax Circle 4(2) Delhi & Ors
Case Number : W.P.(C) 1077/2026
CITATION : 2026 LLBiz HC (DEL) 883
The Delhi High Court on 21 August questioned the Income Tax Department's decision to withhold the entire refund of Rs.71.71 lakh payable to Civitech Housing India against an outstanding demand of only Rs.1.25 lakh. A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed that it failed to comprehend why such a “meagre” demand warranted withholding the entire refund. It observed: “We fail to comprehend that while would the respondents withheld the entire refund of Rs.71,71,049/- for a meagre demand of Rs.1,25,389/- which has been calculated way back on 21.07.2026.”
Delhi Registered Office Doesn't Confer Jurisdiction Over UP Tax Audit Dispute: Delhi High Court
Case Title : Dhanesh Gupta & Co., Chartered Accountants v. UoI & Ors
Case Number : W.P.(C) 610/201
CITATION : 2026 LLBiz HC (DEL) 889
The Delhi High Court on 21 August held that merely because the registered office of a company whose accounts were audited is situated in Delhi, it does not mean that any part of the cause of action arose within the territorial jurisdiction of the Court. A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta dismissed a petition filed by a Chartered Accountants firm challenging a dispute concerning its fee bill and interest arising from its appointment as a Special Auditor.
Gujarat HC
Case Title : Loonchand Dhanraj HUF v. Assistant Commissioner of Income Tax, Circle 5(3)
Case Number : R/Special Civil Application No. 18101 of 2019
CITATION : 2026 LLBiz HC (GUJ) 118
The Gujarat High Court on 19 August held that an Assessing Officer (AO) cannot reopen an assessment on an issue already specifically examined during the original scrutiny merely on a change of opinion, unless fresh tangible material shows that income had escaped assessment because of suppression of material facts. A Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati allowed a writ petition filed by Loonchand Dhanraj HUF and quashed the reassessment proceedings initiated through a notice dated 29 March 2019 under Section 148 of the Income Tax Act, along with the subsequent order rejecting its objections.
Jammu & Kashmir And Ladakh HC
Section 269SS Income Tax Act Breach Does Not Bar Section 138 NI Act Case: J&K High Court
Case Title : Manzoor Ahmad Khan v. Javaid Ahmad Malik
Case Number : CRM(M) No. 392/2024 c/w CRM(M) No. 219/2024
CITATION : 2026 LLBiz HC(JAM) 27
The High Court of Jammu & Kashmir and Ladakh on 18 August held that violation of Section 269SS of the Income Tax Act does not render a transaction unenforceable under Section 138 of the Negotiable Instruments Act (NI Act), and attracts only the penalty prescribed under the Income Tax Act. Section 269SS of the Income Tax Act restricts the acceptance of certain loans, deposits and specified sums in cash. A Bench of Justice Shahzad Azeem dismissed two petitions filed by Manzoor Ahmad Khan under Section 482 of the Code of Criminal Procedure (CrPC), seeking quashing of complaints under Section 138 of the NI Act arising from dishonour of ten cheques issued in connection with a Rs. 45.50 lakh land transaction.
Kerala HC
Kerala High Court Sets Aside Rejection Of Regional Sports Centre's Building Tax Exemption Claim
Case Title : Regional Sports Centre v. The State of Kerala
Case Number : WP(C) NO. 3192 OF 2023
CITATION : 2026 LLBiz HC(KER) 172
The Kerala High Court on 18 August set aside the Kerala Government's rejection of the Regional Sports Centre, Kochi's claim for exemption from building tax and directed it to reconsider the claim afresh. Justice Harisankar V. Menon passed the order after finding that the Government had failed to properly consider material showing that the Centre provided free sports coaching to several students and trainees. He held: "The Government to reconsider the claim for exemption raised by the petitioner afresh with specific reference to the observations made as above."
Madras HC
Interest On Trust's FDs Taxable Without Specific Donor Direction For Corpus: Madras High Court
Case Title : St. Joseph's Development Trust v. The Income Tax Officer Exemption Ward
Case Number : T.C.A.No.124 of 2026
CITATION : 2026 LLBiz HC(MAD) 245
The Madras High Court on 17 August held that interest earned on fixed deposits maintained by a Trust is taxable revenue receipt where donors have not specifically directed that such interest form part of the Trust's corpus. A Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed an appeal filed by St. Joseph's Development Trust, upholding the addition of Rs. 94.66 lakh as taxable interest income for Assessment Year (AY) 2017-18.
ITAT
Case Title : Hero Fincorp Limited v. DCIT, Circle 10(1), Delhi
Case Number : ITA No. 3094/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 269
The Delhi Income Tax Appellate Tribunal (ITAT) on 25 August deleted a Rs. 168.31 crore share premium addition made against Hero FinCorp for Assessment Year 2018-19 under Section 56(2)(viib) of the Income Tax Act, 1961. Accountant Member S. Rifaur Rahman and Judicial Member Raj Kumar Chauhan held that the company's Discounted Cash Flow (DCF) projections could not be rejected merely by comparing them with subsequent financial results, and allowed the company's appeal.
Case Title : ACIT, Circle-27(2), New Delhi v. WNS Business Consulting Services Pvt. Ltd.
Case Number : ITA No. 663/Del/2018
CITATION : 2026 LLBiz ITAT(DEL) 270
The Delhi Income Tax Appellate Tribunal (ITAT) on 25 August upheld the exclusion of Eclerx Services, TCS E Serve, Infosys BPO and Acropetal Technologies from WNS Business Consulting Services' comparable set, observing that transfer-pricing comparables must be assessed on their actual functional profile rather than merely on their presence in the same broad industry. A Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal dismissed the Revenue's appeal for Assessment Year (AY) 2011-12 and upheld the deletion of the Rs. 87.72 lakh transfer-pricing adjustment.