LiveLawBiz Direct Tax Weekly Round-Up: June 15 - June 21, 2026
Kapil Dhyani
22 Jun 2026 9:33 AM IST
SUPREME COURT
Case Title : Ashwini Kumar Upadhyay v. Union of India
Case Number : W.P.(C) No. 684/2026 Diary No. 32032 / 2026
The Supreme Court on Tuesday declined to entertain a plea seeking the introduction of a "creamy layer" mechanism for the income-tax exemption granted to Scheduled Tribes residing in specified areas and States under the Income Tax Act, 2025. The petitioner sought a direction to restrict the benefit to economically weaker tribals and exclude affluent beneficiaries. A bench of CJI Surya Kant and Justice V. Mohana allowed petitioner Ashwini Upadhyay to withdraw the petition with the liberty to approach the Centre and the relevant Parliamentary Committee.
HIGH COURTS
Bombay HC
Case Title : Commissioner of Income Tax (International Taxation) v. Gemological Institute of America Inc.
Case Number : INCOME TAX APPEAL NO.945 OF 2022
CITATION : 2026 LLBiz HC(BOM) 332
The Bombay High Court has upheld relief granted to Gemological Institute of America Inc. (GIA US) in a dispute over royalty payments received from its Indian subsidiary. The court ruled that royalty amounts bona fide refunded pursuant to a CBDT-approved Advance Pricing Agreement (APA) could not be brought to tax in the hands of the US entity because the amounts did not ultimately belong to it. A Division Bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla dismissed a batch of appeals filed by the Income Tax Department. The appeals arose from assessment years between 2010-11 and 2017-18.
Case Title : Chennai Container Terminal Pvt. Ltd. v. Assistant Commissioner of Income-tax, Circle-2(1)(1), Mumbai & Ors.
Case Number : WRIT PETITION NO.2959 OF 2022
CITATION : 2026 LLBiz HC(BOM) 336
On 16 June, the Bombay High Court held that the Income Tax Department cannot reopen an assessment after four years when the taxpayer has already disclosed all material facts fully and truly and allowed a writ petition filed by Chennai Container Terminal Private Limited A Division Bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla set aside the notice issued under Section 148 of the Income Tax Act, the order rejecting objections, and the consequential show cause notice and draft assessment order. The judges observed: “The Respondents have erred in equating the Petitioner as the 'enterprise' and, consequently, holding that it is owned by P&O Ports (Chennai) Ltd., Mauritius, which is not a company registered in India.”
Delhi HC
Case Title : The Commissioner Of Income Tax (International Taxation)-1, New Delhi v. Ernst And Young U.S. LLP
Case Number : ITA 423/2025 (and batch)
CITATION : 2026 LLBiz HC (DEL) 627
The Delhi High Court on thursday held that payments made by Indian entities to a foreign company for the secondment of employees can be taxed as Fees for Technical Services (FTS) under the India-US Double Taxation Avoidance Agreement (DTAA) if the arrangement satisfies the "make available" test by transferring technical knowledge, skill, or experience to the Indian entity. A Division Bench of Justices V. Kameswar Rao and Vinod Kumar allowed appeals filed by the Revenue against Ernst & Young U.S. LLP, holding that the Income Tax Appellate Tribunal (ITAT) erred in concluding that the secondment arrangement did not satisfy the "make available" requirement under Article 12(4)(b) of the India-US DTAA.
Gujarat HC
Gujarat HC Quashes Reassessment, Holds No Escaped Income Exists Where MAT Liability Is Unchanged
Case Title : Pandesara Infrastructure Limited v. Assistant Commissioner of Income Tax, Central Circle-2(1)(1), Surat
Case Number : R/Special Civil Application No. 11005 of 2025
CITATION : 2026 LLBiz HC(GUJ) 68
The Gujarat High Court has quashed reassessment proceedings initiated against Pandesara Infrastructure Limited for Assessment Year 2020-21. The court found that the proposed recomputation of depreciation would not result in any income chargeable to tax escaping assessment. It also noted that the company's liability under the Minimum Alternate Tax (MAT) regime would remain unchanged. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati allowed the writ petition challenging a notice issued on 28 June 2025. The petition also questioned the consequential order passed on the same date.
High-Value Bank Transactions Alone Cannot Justify Reassessment: Gujarat High Court
Case Title : O3 Developers Pvt. Ltd. v. Income Tax Officer, Ward 3(1)(1), Ahmedabad
Case Number : R/Special Civil Application Nos. 14057 and 14096 of 2025
CITATION : 2026 LLBiz HC(GUJ)70
The Gujarat High Court recently held that high-value transactions reflected in bank accounts, without any material showing that income had escaped assessment, cannot by themselves justify reopening an assessment. The court consequently quashed reassessment proceedings initiated against O3 Developers Pvt. Ltd. A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati set aside reassessment notices and consequential orders issued against the company for AY 2019-20 and AY 2021-22. “Merely, because there are high value transactions in the bank accounts of the petitioner, the same would not ipso facto mean that there is escapement of income chargeable to tax without there being any iota of evidence.”
Case Title : Vasundhara Builders and Developers v. Principal Commissioner of Income Tax & Anr.
Case Number : R/Special Civil Application Nos. 16029 and 16087 of 2025
CITATION : 2026 LLBiz HC(GUJ)71
The Gujarat High Court has recently held that reassessment proceedings based on survey material are not excluded from the Direct Tax Vivad Se Vishwas Scheme, 2024. The court observed that the revenue cannot import a restriction that does not appear in the statute. The Direct Tax Vivad Se Vishwas Scheme, 2024, was introduced by the Centre to reduce pending income-tax litigation by allowing eligible taxpayers to settle disputes and bring appeals to an end.
Gujarat High Court Quashes Reassessment After Escaped Income Falls Below ₹50 Lakh
Case Title : Touch Comm Tech Private Limited v. National E-Assessment Centre, Delhi & Anr.
Case Number : R/Special Civil Application No. 16693 of 2024
CITATION : 2026 LLBiz HC(GUJ)72
The Gujarat High Court has quashed reassessment proceedings against Touch Comm Tech Private Limited after finding that the alleged escaped income fell below ₹50 lakh, making the reopening time-barred. A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati allowed the company's writ petition and set aside the order passed under Section 148A(d) along with the consequential reassessment notice. “Thus, it appears that in order to bring the assessment within the ambit of limitation, the entire amount of 70,00,000/- has been determined by the Assessing officer,” the court observed.
Madras HC
Madras High Court Issues Notice On Plea Challenging Retrospective Amendments To Income Tax Act, 1961
Case Title : The Revenue Bar Association vs Union of India & Ors
Case Number : WP 21494/2026
The Madras High Court on Monday issued notice on a plea challenging several retrospective amendments to the Income-tax Act, 1961 introduced through the Finance Act, 2026, which are alleged to be unconstitutional and to impermissibly overturn judicial interpretations of tax provisions. A Division Bench of Chief Justice S.A. Dharmadhikari and Justice Arul Murugan issued notice on the petition and is likely to hear the matter next on July 21. The plea was filed by the Revenue Bar Association, a Chennai-based body of tax law practitioners.
Cash Loan Given In Breach Of Income Tax Act Can Still Be Recovered: Madras High Court
Case Title : P. Palanikumar v. R. Selvi
Case Number : A.S. (MD) No. 162 of 2018
CITATION : 2026 LLBiz HC (MAD) 148
The Madras High Court at Madurai has held that a cash loan advanced in breach of the Income Tax Act does not become illegal merely for that reason, and the lender can still seek recovery of the money. A bench of Justice G.R. Swaminathan and Justice R. Poornima was dealing with a case in which P. Palanikumar claimed to have lent ₹25 lakh in cash instead of through an instrument as contemplated under Section 269SS of the Income Tax Act. The bench held that while the Income Tax Department was free to take action for any violation of the Act, such a breach would not render the transaction illegal or prevent the lender from seeking recovery of the amount.
ITAT
Case Title : Mumbai Port Authority v. ACIT (Exemption), Mumbai
Case Number : ITA No. 2598/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 177
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that Mumbai Port Authority's ₹80 crore contribution to SBI Life Insurance Co. Ltd. under a leave encashment scheme is deductible, finding that the payment represented an actual outflow of funds rather than a mere provision for a future liability. A Bench of Judicial Member Anikesh Banerjee and Accountant Member Makarand Vasant Mahadeokar observed: “The amount of Rs.80,00,00,000/- stands actually paid to SBI Life Insurance Co. Ltd. (Receipt of which is place at page No. 60 of paper book) under a leave encashment scheme formulated for meeting employee benefit obligations. The payment has resulted in actual outflow of funds and the assessee has ceased to have control or dominion over the amount so contributed.”
Case Title : Nanne Gulzar & Company v. ACIT, Central Circle 4(4), Mumbai
Case Number : ITA Nos. 3956/MUM/2025 & 3957/MUM/2025
CITATION : 2026 LLBiz ITAT(MUM) 178
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held on 15 June that the Revenue must assess additions arising from search material only under Section 153C of the Income Tax Act and cannot invoke the reassessment provisions under Sections 147/148. Geographic Reference Vice President Saktijit Dey and Accountant Member Prabhash Shankar allowed the appeals filed by Nanne Gulzar & Company and set aside the reassessment proceedings initiated by the Department. The Bench held: “As per the scheme and object of section 153C r.w.s 153A, the AO has no discretion or choice to invoke the provisions of section 147/148 instead of section 153C r.w.s. 153A of the Act.”
Revenue Must Disclose Tally Data, Forensic Report Before Making Additions: ITAT Kolkata
Case Title : Kailash Kumar Patwari v. DCIT, Central Circle-4(4), Kolkata
Case Number : ITA Nos. 912 to 921/Kol/2025 and Connected Matters
CITATION : 2026 LLBiz ITAT(KOL) 179
On 16 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that the Revenue cannot rely on tally data and a forensic analysis report without confronting a taxpayer with those materials, as doing so constitutes a “grave violation of natural justice”. Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey partly allowed Kailash Kumar Patwari's appeals for statistical purposes, dismissed the Revenue's appeals, and remanded the matter to the Assessing Officer.
Cash Held By Chartered Accountant For Client Tax Payments Not Unexplained Income: ITAT Chennai
Case Title : Bose Saravanan v. DCIT, Circle-2(1), Tiruchirappalli
Case Number : ITA No. 2217/Chny/2025
CITATION : 2026 LLBiz ITAT(CHE) 180
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 11 June held that a practising Chartered Accountant does not incur liability under Section 69A of the Income Tax Act merely because clients deposit cash into his bank account for payment of statutory dues, where the evidence shows he used the funds to remit taxes on their behalf. Judicial Member Aby T. Varkey and Accountant Member Padmavathy S allowed the appeal filed by Bose Saravanan and directed the Assessing Officer to delete additions exceeding Rs. 29.87 crore. The Bench held: "We see merit in the submission that the assessee has acted as a conduit for payment of taxes on behalf of the clients and that the deposits reflecting in the bank account of the assessee does not belong to the assessee."
Reassessment Without Section 143(2) Notice Lacks Jurisdiction, Cannot Be Sustained: ITAT Kolkata
Case Title : Star Tradecom Private Limited v. I.T.O Ward-9(1) Kolkata
Case Number : ITA No.52/KOL/2023
CITATION : 2026 LLBiz ITAT(KOL) 181
On 16 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that reassessment proceedings initiated without issuance of the mandatory notice under Section 143(2) of the Income Tax Act are void ab initio, as the requirement goes to the root of jurisdiction and cannot be treated as a curable procedural lapse. Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey set aside the reassessment against Star Tradecom Private Limited and quashed the consequential revisionary proceedings initiated by the Commissioner under Section 263. The Bench held: “The issue of invalidity can be raised in the collateral proceedings by the assessee even though the order concerned passed by the authorities have not been challenged before the appellate authority”
Case Title: DDIT (IT) v. American Express Bank Ltd. & Standard Chartered Holdings Inc. (Successor of American Express Bank Ltd.)
Case Number: ITA No. 3487/Mum/2004
CITATION: 2026 LLBiz ITAT(MUM) 182
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that interest received by the Indian branch of American Express Bank from its Head Office and overseas branches is not taxable in India. The Tribunal found that the transactions were between different parts of the same entity and therefore attracted the principle that a person cannot make a profit from oneself. A bench of Vice President Saktijit Dey and Accountant Member Prabhash Shankar was hearing cross-appeals relating to Assessment Year 1999-2000 involving American Express Bank, a non-resident banking company with a Permanent Establishment in India.
Case Title : Deputy Commissioner of Income Tax v. Chilles & Garlic Commission Co.
Case Number : I.T.A. No.6812/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 183
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of an addition made on alleged undisclosed sales in the case of Chilles & Garlic Commission Co. after finding that the Assessing Officer had wrongly treated consignment sales handled by the commission agent as the taxpayer's own turnover. A bench of Judicial Member Amit Shukla and Accountant Member Arun Khodpia observed that the Assessing Officer had proceeded on a misconceived understanding of the taxpayer's business. According to the Tribunal, consignment sales undertaken on behalf of consignors were incorrectly construed as the taxpayer's turnover.
ITAT Delhi Quashes Proceedings Against Indeed Fincap Over Common, Vague Satisfaction Note
Case Title : ACIT v. Indeed Fincap Pvt. Ltd.
Case Number : ITANo.8096/DEL/2025
CITATION : 2026 LLBiz ITAT(DEL) 185
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed assessment proceedings initiated against Indeed Fincap Pvt. Ltd. after finding that the tax department relied on a common satisfaction note covering multiple assessment years without identifying assessment year-specific incriminating material. A coram of Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman dismissed the Revenue's appeal against an order of the Commissioner of Income Tax (Appeals), which had set aside the assessment.
Case Title : Ashvinkumar Joitaram Patel v. The Income Tax Officer
Case Number : ITA No.1358/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 186
The Income Tax Appellate Tribunal (ITAT) at Ahmedabad has held that findings recorded by an Assessing Officer in a remand report cannot be disregarded by the Commissioner (Appeals) without any material to the contrary. The court observed that where the Assessing Officer, after verification, accepted that a taxpayer's land had been used for agricultural purposes and that the conditions for claiming exemption were met, those findings could not be ignored without contrary evidence. A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary passed the ruling while allowing an appeal filed by Ashvinkumar Joitaram Patel for the assessment year 2016-17.
ITAT Delhi Upholds ₹18 Lakh Tax Deduction Claim On Ernst & Young's CSR Donations
Case Title : DCIT v. Ernst & Young Services Private Limited
Case Number : ITA No. 1389/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 184
Ernst & Young Services Private Limited has succeeded before the Delhi bench of the Income Tax Appellate Tribunal in a dispute over a tax deduction claimed on donations made as part of its Corporate Social Responsibility (CSR) spending. The tribunal dismissed the Income Tax Department's appeal and upheld the deduction. A bench of Judicial Member Yogesh Kumar U.S. and Accountant Member Manish Agarwal was considering the Department's challenge to relief granted to the company.
ITAT Ahmedabad Deletes ₹26.08 Lakh Addition Based Solely On Investigation Wing Information
Case Title : Income Tax Officer v. Amrat Mali
Case Number : I.T.A. No. 2003/Ahd/2025
CITATION : 2026 LLBiz ITAT(AHM) 187
The Ahmedabad Bench of the Income Tax Appellate tribunal has upheld the deletion of a ₹26.08 lakh addition made against a taxpayer. The tribunal held that an addition cannot be sustained solely on information received from the Investigation Wing without independent enquiry or corroborative evidence linking the taxpayer to the alleged transactions. A bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Suchitra R. Kamble dismissed the Revenue's appeal. It affirmed the order of the Commissioner of Income Tax (Appeals).
ITAT Ahmedabad Deletes ₹2.25 Crore Addition On Land Deal Registered In 2019, Notes 2009 Agreement
Case Title : Chhaya Divyesh Patel v. The Deputy Director of Income Tax
Case Number : ITA No.290/AHD/2026
CITATION : 2026 LLBiz ITAT(AHM) 188
The Ahmedabad bench of the Income Tax Appellate Tribunal has deleted a tax addition of about ₹2.25 crore made against a Vadodara taxpayer in a land transaction. The tribunal held that the assessing officer and the Dispute Resolution Panel were not justified in confirming the addition after documents showed that payments had been made before the property's registration. The bench of Vice President Dr. B.R.R. Kumar and Judicial Member Suchitra Kamble allowed the taxpayer's appeal.