LiveLawBiz Direct Tax Weekly Round-Up: September 21 - September 27, 2026
Kapil Dhyani
28 Sept 2026 3:22 PM IST
HIGH COURTS
Bombay HC
Bombay High Court Condones Trust's 30-Day Delay In Filing Tax Audit Form Despite Pending CBDT Plea
Case Title : Vallabh Welfare Foundation v. Commissioner of Income Tax (Exemptions), Mumbai & Ors.
Case Number : Writ Petition (L) No. 24472 of 2026
CITATION : 2026 LLBiz HC(BOM) 533
The Bombay High Court on 21 September condoned Vallabh Welfare Foundation's 30-day delay in filing Form 10B for Assessment Year 2020-21, despite the charitable trust having already approached the CBDT seeking condonation of the delay. A Division Bench of Justices B.P. Colabawalla and Farhan P. Dubash declined to relegate the Foundation to its pending application before the CBDT, finding that the peculiar facts warranted the High Court's intervention.
Case Title : Principal Commissioner of Income Tax-1 v. Mahalaxmi Infra Projects Ltd.
Case Number : Income Tax Appeal No. 2691 of 2018
CITATION : 2026 LLBiz HC(BOM) 534
The Bombay High Court has cautioned the Income Tax Department against routinely challenging Income Tax Appellate Tribunal (ITAT) orders by mechanically framing substantial questions of law. A division bench of Justice Suman Shyam and Justice Gautam A. Ankhad observed, "we are constrained to observe here that this Bench has noticed that Appeals under Section 260A of the Act are filed by the Department in a routine manner whereby the suggested substantial questions of law(s) are drafted mechanically. In most of those appeals, legal objection and/or purported grounds of challenge to the orders of the Tribunal have been projected as substantial questions of law, based on which, a large number of Income Tax Appeals have been filed under Section 260A of the Act which are pending before this Court. Having regard to the legislative scheme of Section 260A, the remedy thereunder, cannot be permitted to become a routine or automatic continuation of the proceeding instituted before the learned Tribunal"
Case Title : RG Studios v. Union of India & Ors.
Case Number : Writ Petition No. 869 of 2024
CITATION : 2026 LLBiz HC(BOM) 535
The Bombay High Court on 22 September held that a taxpayer cannot be denied the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme merely because the department quantified its service tax liability in a communication addressed to the taxpayer's bank rather than directly to the taxpayer. A Division Bench of Justices M.S. Karnik and Sandesh D. Patil allowed RG Studios' petition challenging the rejection of its declaration under the Scheme, under which the firm had declared service tax dues of Rs. 44.28 lakh.
Calcutta HC
ATMs Are 'Computers' Under Income Tax Rules, Calcutta High Court Allows Higher Depreciation
Case Title : The Royal Bank of Scotland, N.V. v. Director of Income Tax (International Taxation), Kolkata
Case Number : ITA 699 of 2007
CITATION : 2026 LLBiz HC(CAL) 230
The Calcutta High Court has held that Automated Teller Machines (ATMs) qualify as “computers” for claiming the higher depreciation rate under the Income Tax Rules, rejecting the Revenue's classification of the machines as general office equipment or machinery. “The revenue's attempt to categorise these units as general office equipment or machinery ignores the technical reality that they are specialised computing devices. Given that the technical specifications of an ATM align with the broad category of computers described in Appendix I, the appellant's claim for the higher depreciation rate is sustainable. This court finds that the functional parity between an ATM and a computer is sufficient to warrant its inclusion under the relevant rule for depreciation. We answer the substantial question (4) in the negative, i.e., against the revenue and in favor of the assessee,” the court ruled.
Different Evidence View By AO, CIT(A) No Ground To Interfere With ITAT Findings: Calcutta High Court
Case Title : Principal Commissioner of Income Tax-13, Kolkata v. Utkarsh Rai
Case Number : ITAT 174 of 2026
CITATION : 2026 LLBiz HC(CAL) 231
On 22 September, the Calcutta High Court held that a different view of the evidence taken by the Assessing Officer and Commissioner of Income-tax (Appeals) cannot, by itself, justify interference with factual findings of the Income Tax Appellate Tribunal (ITAT) under Section 260A of the Income Tax Act. A Division Bench of Justices Rajarshi Bharadwaj and Sudip Deb dismissed the Revenue's appeal against an ITAT Kolkata order granting relief to bullion trader Utkarsh Rai for Assessment Year 2020-21.
Delhi HC
Case Title : Raj Sheela Growth Fund Pvt Ltd v. Income Tax Officer Ward 21 (1) Delhi
Case Number : W.P.(C) 13737/2026
CITATION : 2026 LLBiz HC (DEL) 1001
The Delhi High Court has declined to exercise its writ jurisdiction in a challenge concerning the jurisdiction of an Income Tax Officer to pass an assessment order, noting that the assessee had already availed the statutory remedy of appeal against the assessment order and the appeal had been pending before the Commissioner of Income Tax (Appeals) since January 2020. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta, however, requested CIT(A) to decide the pending appeal within two months.
Case Title : Shantijanak Estates Private Limited v. The Assistant Commissioner Of Income Tax, Circle 22(2), Delhi &Anr
Case Number : W.P.(C) 12741/2026
CITATION : 2026 LLBiz HC (DEL) 1005
The Delhi High Court has held that an Assessing Officer (AO) cannot require an assessee to furnish “negative evidence” to establish that no appeal has been filed against an assessment order while considering an application for immunity from penalty under Section 270AA of the Income Tax Act, 1961. The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta made the observation while setting aside an order passed by the AO rejecting an application filed by Petitioner seeking immunity from penalty proceedings.
Case Title : Mastercard Asia Pacific Pte. Ltd. v. Union of India & Ors.
Case Number : W.P.(C) 10944/2018
The Delhi High Court on Friday orally observed that treating a network or towers as a permanent establishment (PE) of a foreign enterprise could be a “very dangerous proposition," warning that such an approach could be misused across jurisdictions. “AAR's view that towers and network itself constitute a PE is a very dangerous proposition ... it can be misused anywhere,” a Division Bench comprising Justice Dinesh Mehta and Justice Aditi Choudhary observed while hearing afresh Mastercard Asia Pacific Pte. Ltd.'s challenge to a 2018 ruling of the Authority for Advance Rulings (AAR) at Delhi.
Gujarat HC
Case Title : Principal Commissioner of Income-Tax (Central), Ahmedabad v. Expert Particle Board
Case Number : Tax Appeal Nos.436 & 437 of 2026
CITATION : 2026 LLBiz HC (GUJ) 133
The Gujarat High Court on 8 September held that diary entries or other material found during survey proceedings cannot, by themselves, justify additions in the hands of a partnership firm when the material was not recovered from the firm's premises and there is no independent evidence linking the transactions recorded in it to the firm. A Bench of Justices Bhargav D. Karia and Pranav Trivedi dismissed the Revenue's appeals against Expert Particle Board and its partner, upholding the orders of the CIT(Appeals) and the ITAT Rajkot. It also upheld the deletion of a Rs. 54.04 lakh purchase disallowance, finding that the alleged purchases had never been claimed as a deduction in the books or the return.
Gujarat High Court Holds Company Entitled To Interest On ₹2.50 Crore TDS Refund
Case Title : Maharashtra Border Check Post Network Ltd. v. C.B.D.T. & Anr.
Case Number : R/Special Civil Application No. 21110 of 2017
CITATION : 2026 LLBiz HC (GUJ) 134
The Gujarat High Court has ruled that Maharashtra Border Check Post Network Ltd. is entitled to interest on a ₹2.50 crore refund arising from a TDS demand that was later set aside. The court held that the company's claim was covered by Section 244A(1)(b) of the Income Tax Act and could not be denied by relying on Section 244A(1B), which came into effect from April 1, 2017. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed that Section 244A(1)(b) already provided for interest on refunds in cases falling outside the specific categories covered by Section 244A(1)(a).
Case Title : Lodestone Software Services Private Limited v. Union of India & Ors.
Case Number : R/Special Civil Application No. 5025 of 2026
CITATION : 2026 LLBiz HC (GUJ) 135
The Gujarat High Court on 17 September held that an assessment cannot be reopened merely on the basis of an audit objection when the underlying issue was examined during the original scrutiny and no fresh or tangible material indicates escapement of income. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati quashed the Section 148A(3) order and consequential Section 148 notice issued to Lodestone Software Services Pvt. Ltd. for Assessment Year 2022-23, finding that the reopening was based on a misreading of the audit report.
Case Title : Dilavarsinh Harisinh Zala v. Principal Commissioner of Income Tax, Central Circle, Ahmedabad & Ors.
Case Number : R/Special Civil Application No. 8681 of 2026
CITATION : 2026 LLBiz HC (GUJ) 138
The Gujarat High Court has referred to a Larger Bench the question of whether seized assets must be mandatorily released upon completion of 120 days under Section 132B of the Income Tax Act, where an application for release is filed within 30 days. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati referred three questions concerning the interpretation of the First and Second Provisos to Section 132B(1)(i).
Karnataka HC
Karnataka High Court Quashes Revision Proceedings Over ESOP Tax Treatment After ₹27.13 Cr. Refund
Case Title : Shri Mukesh Bansal v. Principal Commissioner of Income Tax, Bengaluru
Case Number : WRIT PETITION NO. 5330 OF 2026 (T-IT)
CITATION : 2026 LLBiz HC(KAR) 167
On 18 September, the Karnataka High Court set aside revision proceedings initiated against taxpayer Mukesh Bansal after his revised income tax return for the assessment year 2019-20 resulted in a refund of Rs. 27.13 crore. Justice S. Sunil Dutt Yadav held that an intimation issued under Section 143(1) of the Income Tax Act, without any adjustment, cannot be treated as an “order” for exercising revisionary powers under Section 263 of the Act.
Case Title : Mukesh Bansal v. Principal Commissioner of Income Tax, Bengaluru
Case Number : WRIT PETITION NO. 5330 OF 2026 (T-IT)
CITATION : 2026 LLBiz HC(KAR) 167
The Karnataka High Court has set aside income tax revision proceedings initiated against entrepreneur and Myntra and Cult. fit co-founder Mukesh Bansal in connection with a refund of over ₹27.13 crore for AY 2019-20. Justice S. Sunil Dutt Yadav held that an intimation issued under Section 143(1) of the Income Tax Act, without any adjustment, could not be treated as an order for exercising revisionary powers under Section 263.
Kerala HC
Kerala High Court Quashes Order Dismissing Actor Jayasurya's Income Tax Appeal Over Non-Appearance
Case Title : Jayan Vatahakkattu Moni v. Commissioner of Income Tax (Appeals)
Case Number : WP(C) NO. 14421 OF 2026
CITATION : 2026 LLBiz HC(KER) 183
The Kerala High Court has quashed an order dismissing Malayalam actor Jayasurya's (Jayan Vathakkattu Moni) income tax appeal solely because he failed to appear for the hearing despite notices being issued on four occasions. Justice Ziyad Rahman A.A. held that an appellant's non-appearance cannot, by itself, be a ground to dismiss an appeal without considering the grounds raised in it.
Madras HC
Case Title : Agni Estates and Foundations Pvt. Ltd. v. The Deputy Commissioner of Income Tax
Case Number : W.A.Nos.3427 of 2024
CITATION : 2026 LLBiz HC(MAD) 275
On 23 September, the Madras High Court held that the period during which assessment proceedings remain stayed by a court must be excluded while computing the limitation period before determining whether an extension under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) is available. A Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan held that the limitation period under Section 153B of the Income Tax Act has to be computed by applying the statutory exclusions first, before examining whether the resulting date falls within the extended period under TOLA.
Patna HC
Patna High Court Grants Interim Protection To Bihar Power Co. Against ₹29.23 Crore Tax Demand
Case Title : Bihar State Power (Holding) Company Limited v. Income Tax Officer, Ward-2(1), Patna & Anr.
Case Number : Civil Writ Jurisdiction Case No. 8252 of 2026
CITATION : 2026 LLBiz HC(PAT) 29
The Patna High Court on 22 September temporarily protected Bihar State Power (Holding) Company Limited from coercive recovery of an income tax demand of Rs. 29.23 crore. A Division Bench comprising Justices Rajeev Ranjan Prasad and Sunil Dutta Mishra directed the Assessing Officer/Income Tax Appellate Tribunal (ITAT), as the case may be, to consider the company's application for interim protection within six weeks. Until then, no coercive recovery action can be taken against the company.
Punjab & Haryana HC
Punjab & Haryana High Court Sets Aside PCIT Order Rejecting Delay Condonation In HMT VRS Tax Claim
Case Title : Rajbir Singh v. Principal Commissioner of Income Tax, Panchkula and others
Case Number : CWP No. 18800 of 2023 (O&M)
CITATION : 2026 LLBiz HC(PNH) 56
The Punjab & Haryana High Court on 23 September set aside the Principal Commissioner of Income Tax's (PCIT) rejection of an HMT Limited's employee's request to condone the delay in filing a revised return to claim an additional exemption on VRS compensation. A Division Bench of Justices Deepak Sibal and Sunish Bindlish held that delay in filing a revised income tax return cannot be treated as a standalone test while considering a request for condonation under CBDT Circular No. 9/2015.
ITAT
ITAT Delhi Quashes Reassessment Against Company Over Defective Notice
Case Title : RNT Metals Pvt. Ltd. v. DCIT, Central Circle-7
Case Number : ITA Nos. 8528, 8529 and 8530/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 282
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has quashed the reassessment proceedings against RNT Metals Pvt. Ltd. for assessment year (AY) 2021-22, holding that the notice issued under Section 148 did not provide the statutory period prescribed for filing the return. It also quashed the company's regular assessment for AY 2022-23, holding that, in the circumstances of the case, the Assessing Officer could not continue the pending Section 143(3) assessment after a Section 132 search and had to follow the special mechanism under Section 148.
Case Title : Oxonian India Foundation v. CIT (Exemptions)
Case Number : ITA No. 5582/Del/2026 and ITA No. 5583/Del/2026
CITATION : 2026 LLBiz ITAT(DEL) 283
The Delhi Income Tax Appellate Tribunal (ITAT) has directed the tax department to grant Oxonian India Foundation registration as a charitable organisation and approval under Section 80G. It held that scholarships paid in India to Indian students studying abroad cannot be treated as money spent outside India merely because the students later pursue their education overseas.