LiveLawBiz Direct Tax Weekly Round-Up: July 20 - July 26, 2026
Kapil Dhyani
27 July 2026 7:16 PM IST
SUPREME COURT
Case Title : PARVEEN KUMAR BANSAL Versus UNION OF INDIA AND ORS.
Case Number : W.P.(C) No. 843/2026
The Supreme Court on Tuesday declined to entertain a PIL seeking transfer of appellate jurisdiction under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act) from the Appellate Tribunal constituted under the Prevention of Money Laundering Act (PMLA) to the Income Tax Appellate Tribunal (ITAT). It, however, granted liberty to the petitioner to pursue his pending representation before the Union Government. At present, appeals under the PBPT Act are heard by the Appellate Tribunal constituted under the PMLA. The tribunal exercises jurisdiction under multiple statutes, including the PBPT Act, and functions through a single bench in New Delhi.
HIGH COURTS
Allahabad HC
Case Title : Justice Sandeep Jain v. Union of India & Ors.
A sitting judge of the Allahabad High Court, Justice Sandeep Jain, has approached the High Court challenging the denial of exemption of statutory allowances from his total income under the new tax regime. The plea was taken up on Monday before a bench of Justice Saumitra Dayal Singh and Justice Swarupama Chaturvedi, which called for instructions from the state on the petition. At the outset of the hearing, the bench asked the State's counsel whether there was any objection to it hearing the petition. After the state expressed no objection, the court called for instructions. It observed that the matter could not be heard ex-parte without calling for instructions. The court further observed that the interim relief sought was "in the nature of final relief."
Case Title : Principal Commissioner of Income Tax and another v. Ankur Mittal
Case Number : INCOME TAX APPEAL No. - 99 of 2026
CITATION : 2026 LLBiz HC (ALL) 53
The Allahabad High Court has recently held that under the Income Tax Act, 1961, the revenue has no right of appeal against an assessment order, as the assessment order is the stated case of the revenue itself. It held that where the revenue is aggrieved by an assessment order, its remedy is to seek revision where the assessment order is found to be "erroneous in so far as it is prejudicial to the interest of revenue." The court held that in an assessment proceeding the Assessing Authority acts as a quasi-judicial authority, raising his own doubts in the interest of the revenue and deciding them on the replies of the assessee, so that the resulting order cannot be appealed against by the revenue.
Allahabad High Court Flags Loophole In Income Tax Law On Reassessment After Taxpayer's Death
Case Title : Smt. Asha Dubey v. Union of India Thru. Secy. Ministry of Finance Deptt. Revenue Sectt. New Delhi and 2 others
Case Number : WRIT TAX No. - 571 of 2026
CITATION : 2026 LLBiz HC (ALL) 54
While holding that a reassessment notice under Section 148 of the Income Tax Act cannot be issued in the name of a dead assessee, the Allahabad High Court at Lucknow recently observed that the Act contains a legislative lacuna because it leaves the Revenue unable to initiate reassessment proceedings where an assessee dies before a valid reassessment notice is issued. Holding that the gap could result in escaped income going untaxed and prejudice the public exchequer, the court observed that the loophole ought to be plugged by Parliament. The court allowed the writ petition and quashed the notice issued under Section 148 in the name of the deceased assessee, along with all consequential reassessment proceedings.
Case Title : Smt. Asha Dubey v. Union of India Thru. Secy. Ministry of Finance Deptt. Revenue Sectt. New Delhi and 2 others
Case Number : WRIT TAX No. - 571 of 2026
CITATION : 2026 LLBiz HC (ALL) 54
The Allahabad High Court on 23 July held that an order quashing a reassessment notice issued in the name of a deceased person as void ab initio cannot be treated as a “finding” or “direction” under Section 150(1) of the Income Tax Act, 1961. A Bench of Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary quashed the reassessment proceedings initiated against Smt. Asha Dubey, holding that the Income Tax Department cannot rely on an order quashing a notice issued in the name of a deceased person to bypass the limitation period and issue a fresh notice to the legal representative.
Bombay HC
Case Title : Pr. Commissioner of Income Tax-2 v. The Tata Power Company Ltd.
Case Number : Income Tax Appeal no. 21 of 2020
CITATION : 2026 LLBiz HC(BOM) 412
The Bombay High Court has recently dismissed an appeal filed by the Income Tax Department against The Tata Power Company Ltd. It held that income from trial runs of its broadband project and the sale of scrap generated before the project's installation were capital receipts not liable to tax. Observing that income generated before the commencement of business that is "inextricably connected with the setting up of a capital asset" is capital in nature and serves to reduce the cost of construction, the court held that the ITAT's order did not give rise to any substantial question of law.
Delhi HC
Case Title : Delhi Tax Bar Association Through Its Secretary K G Bansal v. Union of India & Anr.
Case Number : W.P.(C) 9365/2026
CITATION : 2026 LLBiz HC (DEL) 721
The Delhi High Court, by way of an interim direction, has allowed Supreme Court and High Court judges to file their income tax returns by showing prescribed judicial allowances as “receipts not in the nature of income”, even while opting for the new tax regime. The order came in a petition filed by the Delhi Tax Bar Association challenging a September 12, 2025, Office Memorandum issued by the CBDT, which, according to the petitioner, denied judges opting for the new tax regime the benefit of specified judicial allowances.
NFAC Must Provide Video Conferencing If Assessee Seeks Personal Hearing: Delhi High Court
Case Title : High Vista Buildcon Pvt. Ltd. (Earlier Known As Vikram Electric Equipment Pvt. Ltd.) v. National Faceless Appeal Centre (NFAC) Delhi & Ors.
Case Number : W.P.(C) 4594/2026
CITATION : 2026 LLBiz HC (DEL) 729
The Delhi High Court has held that a taxpayer who seeks a personal hearing during appellate proceedings before the NFAC is entitled to such a virtual hearing. “There are various issues which can be better explained with the help of personal or virtual assistance by assessee or its authorised representative. Mere written submissions or memo of appeal are not sufficient for proper adjudication,” division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed. The court thus set aside an order of the Commissioner of Income Tax (Appeals) NFAC, passed without hearing the assessee despite requests.
Gujarat HC
Case Title : Vimal Oil and Foods Limited v. Assistant Commissioner of Income Tax, Circle, Gandhinagar
Case Number : R/Special Civil Application No. 13194 of 2023
CITATION : 2026 LLBiz HC(GUJ)93
The Gujarat High Court on 30 June quashed reassessment proceedings against Vimal Oil and Foods Ltd., holding that the Assessing Officer cannot reopen an assessment of a company sold as a going concern under the Insolvency and Bankruptcy Code (IBC) on mere assumptions without verifying whether any income had actually escaped assessment. A Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati allowed the batch of writ petitions filed by the company and quashed the notice issued under Section 148 and the order passed under Section 148A(d) of the Income Tax Act for Assessment Year 2019-20.
Case Title : Virendra Naginbhai Patel (HUF) v. Income Tax Officer, Ward 1(2)(5)
Case Number : R/Special Civil Application No. 20401 of 2019
CITATION : 2026 LLBiz HC(GUJ)94
The Gujarat High Court has recently held that an Assessing Officer is not deemed to have noticed facts disclosed in a wealth tax return while examining an income tax return. It refused to interfere with reassessment proceedings initiated against a Hindu Undivided Family (HUF) over an unexplained cash payment of more than ₹1.02 crore towards the purchase of immovable property. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati dismissed the writ petition filed by Virendra Naginbhai Patel (HUF), which challenged the reassessment notice issued for Assessment Year 2012-13.
Case Title : Datta Projects Private Limited v. Assistant Commissioner of Income Tax, Vapi Circle, Vapi
Case Number : R/Special Civil Application No. 21134 of 2019
CITATION : 2026 LLBiz HC(GUJ)96
The Gujarat High Court has quashed reassessment proceedings initiated under the Income Tax Act, holding that a completed assessment cannot be reopened merely on the presumption that an assessee collected unaccounted cash ("on-money") from buyers over and above the recorded sale price because its sister concern was found to have done so. The court held that the reopening against Datta Projects was based entirely on presumptions and surmises, without any material linking the assessee to undisclosed income. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati allowed the writ petition filed by Datta Projects Pvt. Ltd. and quashed the notice issued under Section 148 of the Income Tax Act for Assessment Year 2012-13.
Case Title : Late Padmaben Zinabhai Trivedi v. Income Tax Officer
Case Number : R/Special Civil Application No. 19363 of 2017
CITATION : 2026 LLBiz HC(GUJ) 88
The Gujarat High Court ruled that the 2012 amendment to Section 55A(a) of the Income Tax Act, which expanded the Assessing Officer's power to refer capital assets for valuation, cannot be applied retrospectively. The court ruled that assessments relating to the period prior to 1 July 2012 would continue to be governed by the unamended provision and, on that basis, quashed a reassessment notice issued to the assessee. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati passed the ruling while allowing a writ petition filed by the legal heir of late Padmaben Zinabhai Trivedi, who had challenged a notice issued under Section 148 for AY 2010-11.
ITAT
Case Title : SFDC Ireland Ltd. v. Deputy Commissioner of Income Tax
Case Number : ITA No. 2137/Del/2023
CITATION : 2026 LLBiz ITAT(DEL) 246
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 17 July held that receipts from automated software services cannot be treated as Fees for Technical Services (FTS) under the India-Ireland Double Taxation Avoidance Agreement (DTAA) without first examining whether the services involve the requisite human intervention and possess the characteristics of specialised technical services. Judicial Member Vikas Awasthy and Accountant Member Brajesh Kumar Singh allowed an appeal filed by SFDC Ireland Ltd., and remanded the matter to the Assessing Officer for fresh adjudication for failing to examine the issue in light of the Supreme Court's decision in Kotak Securities Ltd., which distinguishes technical services from a mere facility.
ITAT Delhi Remands Partnership Firm's Reassessment, Faults Authorities' Cryptic Orders
Case Title : Accurate Pressings v. ITO
Case Number : ITA No. 5875/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 247
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a reassessment involving a partnership firm's write-back of a retired partner's capital balance after finding that the tax authorities passed cryptic orders without specifying the provision under which the amount was chargeable to tax. A coram of Judicial Member Yogesh Kumar US and Accountant Member Ramit Kochar partly allowed the appeal for statistical purposes. While upholding the reopening of the assessment, it restored the matter to the Assessing Officer (AO) for a fresh examination of the addition on merits.
ITAT Delhi Deletes ₹5.19 Crore AMP Adjustment Against Fujifilm India Following Sony Ericsson Ruling
Case Title : Fujifilm India Private Limited v. Assessing Officer
Case Number : ITA No. 3446/Del/2024
CITATION : 2026 LLBiz ITAT(DEL) 248
The Delhi Income Tax Appellate Tribunal (ITAT) on 20 July held that a transfer pricing adjustment for Advertising, Marketing and Promotion (AMP) expenditure cannot be sustained when it is computed by applying the Bright Line Test (BLT), following the Delhi High Court's ruling in Sony Ericsson Mobile Communications India Pvt. Ltd. A Bench of Accountant Member Ramit Kochar and Judicial Member Sudhir Kumar partly allowed the appeal filed by Fujifilm India Pvt. Ltd. and deleted the Rs. 5.19 crore transfer pricing adjustment made by the authorities. It clarified that the parties would remain bound by the outcome of the Revenue's pending Special Leave Petition before the Supreme Court against the Sony Ericsson judgment.
ITAT Mumbai Grants LTCG Relief To Taxpayer, Rejects Revenue's Claim That Scrip Was Penny Stock
Case Title : Shripal Roopchand Jain v. Income Tax Officer, Ward 31(3)(4), Mumbai
Case Number : ITA No. 5560/MUM/2025
CITATION : 2026 LLBiz ITAT(MUM) 249
The Mumbai Income Tax Appellate Tribunal (ITAT) has allowed an individual taxpayer's claim for exemption on long-term capital gains arising from the sale of shares after finding that the transactions were genuine and supported by documentary evidence. It observed that there was nothing on record to establish that the company whose shares were sold was a penny stock. The tribunal also found no material linking the assessee to any alleged accommodation entry operators. Judicial Member Sandeep Gosain observed that the revenue had not produced material to show that Shree Shaleen Textile Limited was a penny stock company.