LiveLawBiz Direct Tax Weekly Round-Up: March 16 - March 22, 2026

Supreme Court Upholds Quashing Of Income Tax Reassessment Against BPCL Over ₹37.10 Crore Dividend Income

Case Title : Assistant Commissioner of Income Tax vs Bharat Petroleum Corporation Ltd

Case Number : Diary No. 8091 OF 2026

CITATION : 2026 LLBiz SC 112

The Supreme Court on Monday refused to interfere with the Bombay High Court's order quashing income tax reassessment proceedings initiated against Bharat Petroleum Corporation Ltd. (BPCL) for AY 2013-14 in relation to Rs 37.10 crore dividend income received through a trust structure. A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe dismissed the Special Leave Petition, after being informed by the counsels that a previous matter on the same subject was dismissed by the supreme court.

HIGH COURTS

Bombay HC

Charitable Trust Cannot Be Denied Income-Tax Registration For Lack of Irrevocability Clause In Trust Deed: Bombay High Court

Case Title : The Chamber of Tax Consultants & Ors. v. The Commissioner of Income Tax (Exemptions) & Ors. [Writ Petition (L) No. 7587 of 2026]

Case Number : WRIT PETITION (L)NO.7587 OF 2026

CITATION : 2026 LLBiz HC(BOM) 154

The Bombay High Court has held that the absence of an explicit irrevocability clause in a trust deed cannot be a ground to reject the application of a charitable trust for registration or renewal under Section 12AB of the Income Tax Act, 1961. “The statute does not enact that the mere absence of an irrevocability clause makes a trust revocable. On the contrary, it implies that a trust is irrevocable (which is the normal principle in all transfers) unless it is expressly made revocable. Silence in the deed implies irrevocability, not revocability," a division bench of Justices B. P. Colabawalla and Firdosh P. Pooniwalla observed.

Delhi HC

Delhi High Court Sets Aside Rejection Of MakeMyTrip's NIL TDS Certificate, Calls Order Non-Speaking

Case Title : MakeMyTrip (India) Pvt Ltd v. Assistant Commissioner Of Income Tax, Circle-75(1), Delhi & Anr.

Case Number : W.P.(C) 11956/2025

CITATION : 2026 LLBiz HC (DEL) 263

The Delhi High Court has recently set aside an order of the Income Tax Department rejecting online travel company MakeMyTrip's application for a NIL or lower withholding tax certificate for FY 2025-26 (AY 2026-27) under Section 197 of the Income Tax Act. A division bench of Justices V. Kameswar Rao and Vinod Kumar observed that the impugned order was a non-speaking one and failed to provide reasons for the rejection. It observed, “...in the past, withholding certificates were issued at rates between 0.10% to 4% and the rejection of application has the effect of deducting normal rate of tax at source, which is clearly untenable, particularly when no reasons have been given in the impugned order for rejecting the application for NIL withholding certificate”.

Income Tax Assessment Order Against Amalgamated Boeing Entity Is Void: Delhi High Court

Case Title : Principal Commissioner Of Income Tax-1 v. Boeing India Pvt. Ltd.

Case Number : ITA 586/2025

CITATION : 2026 LLBiz HC (DEL) 265

The Delhi High Court has reiterated that an income tax assessment order passed in the name of a company that had ceased to exist following amalgamation is void ab initio and cannot be sustained in law. A division bench of Justices V. Kameswar Rao and Vinod Kumar thus dismissed an appeal filed by the Income Tax Department against Boeing India.

Delhi High Court Quashes Order Requiring OYO Parent Oravel Stays To Deposit 20% Tax Demand During Appeal

Case Title : Oravel Stays Ltd v. Commissioner Of Income-Tax (Tds)-2, Delhi & Ors.

Case Number : W.P.(C) 2932/2026

CITATION : 2026 LLBiz HC (DEL) 266

The Delhi High Court has quashed an order directing Oravel Stays Limited, the parent company of OYO, to deposit 20% of the outstanding tax demand as a condition for the grant of a stay during the pendency of its appeal. A division bench of Justices Dinesh Mehta and Vinod Kumar set aside the order passed by the Commissioner of Income Tax which had disposed of the company's stay application by directing payment of 20% of the total demand while keeping the remaining demand stayed.

Gujarat HC

Search Year Must Be Included While Computing 10-Year Block For Reassessment: Gujarat High Court

Case Title : Dilipbhai Prabhudas Patel v. Deputy Commissioner of Income Tax

Case Number : R/SPECIAL CIVIL APPLICATION NO. 2403 of 2026

CITATION : 2026 LLBiz HC(GUJ) 38

The Gujarat High Court on 9 March, held that while computing the extended ten-year block period for reassessment in search cases, the assessment year relevant to the previous year in which the search is conducted (search assessment year) must be included in the computation. The Division Bench comprising Justice A. S. Supehia and Justice Pranav Trivedi quashed the notice issued to Dilipbhai Prabhudas Patel (petitioner) under Section 148 of the Income Tax Act. The Bench held: "The statutory language necessarily results in inclusion of the search assessment year within the ten-year reckoning. Any interpretation that applies the six-year exclusion model, if made applicable to the ten-year block, would defeat the legislative scheme and render material words redundant. Accordingly, while computing the extended ten-year period under Explanation 1 to Section 153A read with Section 153C of the Act, the assessment year relevant to the previous year of search is to be included in the reckoning."

Madras HC

Madras High Court Dismisses Taxpayer Appeal, Says Books Were Rejected Before DVO Reference

Case Title : M. Ravindran v. The Income Tax Officer

Case Number : T.C.A.No.201 of 2013

CITATION : 2026 LLBiz HC (MAD) 78

The Madras High Court has held that the Assessing Officer was justified in referring the matter to the District Valuation Officer after examining the books of accounts and finding inconsistencies in them, and that the taxpayer could not rely on the Supreme Court's ruling in Sargam Cinema to argue that the reference to the Valuation Officer was invalid. The Division Bench of Justice G. Jayachandran and Justice Shamim Ahmed dismissed the tax appeal filed by taxpayer M. Ravindran and affirmed the findings recorded by the tax authorities as well as the tribunal.

Rajasthan HC

ITAT

Escaped Income Must Include Real Taxable Income, Not Aggregate Value: ITAT Ahmedabad

Case Title : Rupinder Singh Duggal v. Income Tax Officer

Case Number : ITA No: 1921/Ahd/2025

CITATION : 2026 LLBiz ITAT(AHM) 65

The Ahmedabad Income Tax Appellate Tribunal (ITAT) on 16 March, held that the expression “income chargeable to tax which has escaped assessment” under Section 149 of the Income Tax Act refers to the actual taxable income sought to be brought to tax, and not the gross value of underlying transactions. A Bench comprising Judicial Member T.R. Senthil Kumar quashed the reassessment proceedings for Assessment Year 2017–18, holding that the assumption of jurisdiction under Section 148 was invalid because the alleged escaped income did not meet the statutory threshold of Rs.50 lakhs.

ITAT Ahmedabad Grants Partial Relief To Arrow Clothing In Demonetisation Cash Deposit Addition Case

Case Title : Arrow Clothing Pvt. Ltd. v. Income Tax Officer

Case Number : ITA No. 2532/Ahd/2025

CITATION : 2026 LLBiz ITAT(AHM) 66

The Income Tax Appellate Tribunal (ITAT) at Ahmedabad partly allowed an appeal of Arrow Clothing Pvt. Ltd, holding that addition for unexplained cash deposits during demonetisation was justified, but the taxpayer was entitled to credit for opening cash balance and prior bank withdrawals. A coram of Judicial Member Sanjay Garg and Accountant Member Annapurna Gupta held that anomalies were found only in the explanation relating to cash sales and not in the opening cash balance or bank withdrawals of Rs 11.38 lakh.

ITAT Upholds Allowance Of Foreign Travel Expenses, Says No Income From Visited Countries Alone Cannot Justify Disallowance

Case Title : Deputy Commissioner of Income Tax Circle v. Blend Financial Services Limited

Case Number : ITA No. 8088/MUM/2025

CITATION : 2026 LLBiz ITAT(MUM) 67

The Mumbai Income Tax Appellate Tribunal (ITAT) has upheld the deletion of disallowance of foreign travel expenses made against a company engaged in global management and financial consultancy services. The court held that in the facts of the case, the expenditure could not be disallowed merely because no income was directly earned from certain countries visited during the relevant year where the taxpayer had produced material showing business purpose and nexus with its activities.

OTHER DEVELOPMENTS

CBDT Notifies 2026 Income Tax Rules Introducing 'Tax Year' System, Streamlines Compliance Framework

Today, the Central Board of Direct Taxes (CBDT) notified the Income Tax Rules, 2026, which will come into force from 1 April 2026. The draft rules were published on 9 February 2026 for public consultation, inviting suggestions and feedback. The rules establish the procedural framework for implementing the Income Tax Act, 2025, which repeals the Income-tax Act, 1961.

Finance Minister Nirmala Sitharaman Launches PRARAMBH 2026, Unveils Income Tax Website 2.0

Union Finance Minister Nirmala Sitharaman on Friday (March 20) launched the Income Tax Department's nationwide outreach campaign 'PRARAMBH 2026' in New Delhi and also inaugurated the revamped Income Tax Website 2.0 as part of efforts to prepare taxpayers for the new Income Tax Act, which will come into force from April 1, 2026. The upgraded e-filing portal has been designed to provide improved usability, simpler navigation, and more efficient service delivery to taxpayers as part of the department's ongoing digital transformation initiatives.