LiveLawBiz Direct Tax Weekly Round-Up: May 25 - May 31, 2026
Kapil Dhyani
3 Jun 2026 9:30 AM IST
SUPREME COURT
Case Title : THE PR. COMMISSIONER OF INCOME TAX & ANR. VERSUS M/S KARNATAKA BANK LTD.
Case Number : Petition(s) for Special Leave to Appeal (C) No(s). 18972/2026
CITATION : 2026 LLBiz SC 198
The Supreme Court on Monday declined to interfere with Karnataka Bank Ltd's tax relief in a dispute over deduction for diminution in the value of its held-to-maturity (HTM) investments, which are securities that banks buy with the intention of holding until maturity rather than trading. A Bench of Justices Manoj Misra and Manmohan dismissed the Revenue's special leave petition against the Karnataka High Court's August 2025 judgment that had upheld relief granted to the bank.
Case Title : PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL 3 vs PERNOD RICARD INDIA PRIVATE LIMITED
Case Number : Diary No. 74598-2025
The Supreme Court on Tuesday dismissed the Income Tax Department's challenge to a Delhi High Court ruling in favour of Pernod Ricard India Pvt Ltd. It declined to interfere with the judgment that had held AMP and brand-building expenses could not be disallowed in the absence of evidence showing an arrangement with the foreign associated enterprise. The top court declined to entertain the Revenue's plea on account of a 384-day delay in filing the appeal.
Supreme Court Refuses To Interfere With Delay Condonation In Income Tax Dept's Appeal Against IFUNA
Case Title : M/S INDIAN FEDERATION OF UNITED NATION ASSOCIATION VERSUS COMMISSIONER OF INCOME TAX (EXEMPTIONS)
Case Number : Petition(s) for Special Leave to Appeal (C) No(s). 16497 16498/2026
CITATION : 2026 LLBiz SC 200
The Supreme Court on Monday refused to interfere with a Delhi High Court order that condoned the Income Tax Department's delay in filing and re-filing its appeal against Indian Federation of United Nations Association (IFUNA). The delay was 154 days in filing the appeal and 112 days in re-filing it. The Delhi High Court had on March 24, 2026 condoned the delay observing that though the delay was substantial and not properly explained, a “lenient view in the interest of justice” was required.
Supreme Court Seeks Attorney General's Intervention Over Long-Vacant Administrative Posts In ITAT
Case Title : PARVEEN KUMAR BANSAL VERSUS UNION OF INDIA & ORS.
Case Number : Writ Petition(s)(Civil) No(s). 617/2026
The Supreme Court on May 26 expressed concern over longstanding vacancies in the administrative establishment of the Income Tax Appellate Tribunal (ITAT) and sought the intervention of the Attorney General for India to ensure that the posts are filled expeditiously. The petition filed by Parveen Kumar Bansal, sought directions for immediate initiation and completion of the recruitment process for vacant posts including Deputy Registrar and Assistant Registrar, besides convening long-pending Departmental Promotion Committees for promotions to posts such as Senior Private Secretary and Private Secretary, which were stated to be pending since 2015 and 2017.
Supreme Court Grants IT Dept. Liberty To File HC Appeal In Google Ireland ₹116 Crore Tax Dispute
Case Title : THE ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) Versus GOOGLE IRELAND LIMITED
Case Number : Diary No. 25127-2026
CITATION : 2026 LLBiz SC 210
The Supreme Court on Thursday declined to entertain the Income Tax Department's challenge to a Karnataka High Court judgment dated June 3, 2025, which had quashed assessment orders passed against Google Ireland for AYs 2009-10 and 2010-11. The Court held that the Revenue must first pursue the available intra-court appeal before the High Court. A Bench of Justices Aravind Kumar and Prasanna B. Varale dismissed the Revenue's Special Leave Petition, holding that an intra-court appeal against the Single Judge's order was available under Section 4 of the Karnataka High Court Act. The Bench granted liberty to the Revenue to pursue that remedy.
ITAT
Case Title : ARVR Education Society v. Income Tax Officer (Exemption)
Case Number : ITA No. 5300/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 143
The Income Tax Appellate Tribunal (ITAT) has deleted a ₹15.96 crore addition made against ARVR Education Societya charitable society after rejecting the tax department's claim that corpus donations received by the charitable society from four parties were unexplained cash credits rather than genuine voluntary contributions. A Delhi bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Naveen Chandra framed the central issue as, “The first and foremost question which arises for the tribunal's apt adjudication herein is as to whether such a disallowance of corpus donation claim raised under section 11(1)(d) of the Act could attract section 68 unexplained cash credit additions or not.”
Case Title : Sham Sunder Dhingra v. ACIT, Central Circle-8, New Delhi
Case Number : ITA NO. 6191/DEL/2025
CITATION : 2026 LLBiz ITAT(DEL) 144
The New Delhi Bench of the Income Tax Appellate Tribunal on 26 May held that authorities cannot sustain additions under Section 69A of the Income Tax Act in the absence of recovery of unexplained money, bullion, jewellery or other valuable articles from the taxpayer, and cannot invoke the provision merely on the basis of digital material indicating alleged transactions. Judicial Member Sudhir Kumar and Accountant Member Manish Agarwal partly allowed the appeal filed by Sham Sunder Dhingra for Assessment Year 2020–21 and directed the Assessing Officer to tax only 20% of the alleged commission receipts instead of treating the entire amount as unexplained income. The Bench stated that "..in the absence of any unexplained money or article, the provisions of section 69A cannot be invoked…”
ITAT Delhi Grants Relief To Welkin Industries, Holds Form 10-IC Delay Cannot Deny 115BAA Benefit
Case Title : Welkin Industries Private Limited v. ITO Ward 27(1)
Case Number : ITA No.8126/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 145
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 26 May held that a procedural delay in filing Form 10-IC cannot deny a taxpayer the benefit of the concessional 22% corporate tax regime under Section 115BAA of the Income Tax Act, 1961. Accountant Member S. Rifaur Rahman and Judicial Member Sudhir Kumar allowed the appeal filed by Welkin Industries Private Limited against the order of the Commissioner of Income Tax (Appeals), Lucknow, for Assessment Year 2022-23, and directed the Assessing Officer to recompute its tax liability under Section 115BAA.
ITAT Mumbai Quashes Bang Overseas Reassessment, Holds PCIT Sanction Invalid Under Section 151(ii)
Case Title : Bang Overseas Limited v. DCIT
Case Number : ITA No. 8930/Mum/2025
CITATION : 2026 LLBiz ITAT(MUM) 146
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 25 May quashed reassessment proceedings initiated against Bang Overseas Limited, holding that the sanction for issuing notice under Section 148 of the Income Tax Act, 1961 violated Section 151(ii) of the Act. Vice President Saktijit Dey and Accountant Member Prabhash Shankar clarified that where authorities issue a notice after the expiry of three years from the end of the relevant assessment year, they must obtain approval from the Principal Chief Commissioner of Income Tax or the Chief Commissioner of Income Tax, and not from the Principal Commissioner of Income Tax (PCIT).
Case Title : ITO v. First Class Infrabuild Pvt. Ltd.
Case Number : ITA No. 7905/Del/2019
CITATION : 2026LLBiz ITAT(DEL) 147
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 26 May dismissed the Revenue's appeal against First Class Infrabuild Pvt. Ltd. and held that the Tax Department cannot force a taxpayer to adopt the Net Asset Value (NAV) method when the law permits valuation under the Discounted Cash Flow (DCF) method for determining fair market value under Section 56(2)(viib) of the Income Tax Act. Judicial Member Satbeer Singh Godara and Accountant Member M. Balaganesh upheld the order of the Commissioner of Income Tax (Appeals) and deleted the addition for Assessment Year 2015–16.
Case Title : Shri 108 Gupti Sagar Dham Jain Trust v. CIT (Exemption)
Case Number : ITA No.- 7551/Del/2025
CITATION : 2026LLBiz ITAT(DEL) 148
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 26 May held that authorities cannot deny approval under Section 80G of the Income Tax Act to a trust or institution merely because it undertakes religious activities, so long as its expenditure on such activities does not exceed five per cent of its total income in the relevant year. Judicial Member Raj Kumar Chauhan and Accountant Member Brajesh Kumar Singh allowed the appeal filed by Shri 108 Gupti Sagar Dham Jain Trust and set aside the order of the Commissioner of Income Tax (Exemptions), Chandigarh, which had rejected the trust's application for approval under Section 80G.
ITAT Delhi Remands Cargill India's Intra-Group Services TP Dispute To TPO
Case Title : Cargill India Private Limited v. DCIT
Case Number : ITA Nos. 3938/Del/2019 & 4033/Del/2019
CITATION : 2026 LLBiz ITAT(DEL) 149
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded transfer pricing adjustments relating to intra-group services received by Cargill India Pvt. Ltd., after observing that the Arm's Length Price (ALP) of various services had been determined at nil without discussing the evidence produced by the taxpayer. A bench comprising Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman and partly allowed cross-appeals filed by Cargill India Pvt. Ltd. and the Revenue for Assessment Year 2009-10.
Case Title : Baker Hughes Energy Technology UK Ltd. v. ACIT
Case Number : ITA No. 2081/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 150
On 27 May, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that Section 44BB of the Income Tax Act could not be invoked to tax offshore supply receipts in the absence of a Permanent Establishment (PE) in India and deleted an addition of Rs.99.50 crore made against Baker Hughes Energy Technology UK Ltd. Judicial Member Vikas Awasthy and Accountant Member Renu Jauhri observed: “The burden of establishing existence of a PE rests upon the Revenue. Not a single piece of evidence has been brought on record by the Assessing Officer to establish that the assessee had any kind of PE in India in the year under consideration.”
ITAT Bangalore Allows 80P Deduction On Interest Income Earned From Co-Operative Bank Deposits
Case Title : Hamdard Co-operative Society Ltd. v. Addl./JCIT (A)-2 & Anr.
Case Number : ITA No. 1873/Bang/2025
CITATION : 2026 LLBiz ITAT(BLR) 151
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) on 20 May held that a co-operative credit society is entitled to deduction under Section 80P of the Income Tax Act on interest income earned from deposits placed with co-operative banks, as the income remains attributable to its business of providing credit facilities to members. A single-member Bench comprising Vice-President Shri Prashant Maharishi also held that transactions with nominal members do not disentitle the society from claiming the deduction and allowed an appeal by Hamdard Co-operative Society Limited.
ITAT Ahmedabad Deletes ₹20 Crore+ 14A Disallowance Against Axis Bank, Bars Mechanical Use of Rule 8D
Case Title : Axis Bank Limited v. Assistant Commissioner of Income Tax & Connected Appeals
Case Number : ITA No. 611 & 612/Ahd/2025 and ITA No. 563 & 564/Ahd/2025
CITATION : 2026 LLBiz ITAT(MUM) 152
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 20 May held that disallowance under Section 14A of the Income Tax Act cannot be made by mechanically invoking Rule 8D unless the Assessing Officer first records dissatisfaction with the taxpayer's own computation of expenditure relatable to exempt income. Judicial Member Sanjay Garg and Accountant Member Annapurna Gupta allowed the appeal filed by Axis Bank Limited and directed deletion of the disallowance made under Section 14A.