Delhi High Court Sets Aside ₹16.74 Crore Tax Disallowance Enhancement Against Sahara India Over Lack of Notice

The Delhi High Court has held that the Commissioner of Income Tax (Appeals) cannot enhance a tax disallowance without first issuing a statutory notice to the assessee, observing that failure to do so violates both Section 251(2) of the Income Tax Act, 1961 and the principles of natural justice.The division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta thus set aside the enhancement of a disallowance from ₹11.05 crore to ₹16.74 crore made against Sahara India Commercial Corporation...

Delhi High Court Admits Appeal On Taxability Of Demonetisation-Era Cash Deposits

The Delhi High Court has admitted the Income Tax Department's appeal against an ITAT order deleting additions to income based on an assessee's cash deposits made during the demonetisation period.A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta agreed to examine whether the Tribunal rightly deleted the addition under Section 69A of the Income Tax Act, relating to cash deposits made during the demonetisation period, despite the Revenue's contention that the deposits were...

Delhi High Court Stays Draft Assessment Order Against American Express, Admits Transfer Pricing Appeal

The Delhi High Court has stayed the operation of a draft assessment order passed against American Express Banking Corporation (India Branch) while admitting the company's income tax appeal raising multiple questions of law relating to transfer pricing adjustments, including the validity of the Bright Line Test (BLT) and the Transfer Pricing Officer's (TPO) methodology.A division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta noted that by an interim order dated May 29, 2026, it had...

Bombay High Court Quashes Criminal Prosecution For Late ITR Filing As Taxpayer Entitled To Refund

The Bombay High Court on 22 July held that criminal prosecution for failure to file an income tax return cannot continue when a subsequent assessment shows that the taxpayer had no tax liability and was instead entitled to a refund, as continuing such proceedings would serve no purpose where the Revenue suffered no loss. Justice Madhav J. Jamdar quashed the criminal complaint that the Income Tax Department filed against Rajesh Somandas Sachdev under Section 276CC of the Income Tax Act (which...

Madras High Court Quashes ₹13.48 Cr Misreporting Penalty On Ennore Tank Terminals For Vague Notice

The Madras High Court on 20 July set aside a penalty of over Rs. 13.48 crore imposed on Ennore Tank Terminals Private Limited, holding that the Income Tax Department cannot penalise a taxpayer for alleged misreporting of income unless it clearly informs the taxpayer of the basis for such allegation in the show cause notice. Justice Senthilkumar Ramamoorthy held that proceedings for misreporting of income carry serious consequences, including a penalty of 200% of the tax payable on...

Delhi High Court To Examine If Limitation For Income Tax Assessments Applies To Final Orders Passed Under DRP Procedure

The Delhi High Court has admitted the Income Tax Department's appeal to examine whether the statutory deadline for passing income tax assessment orders under Section 153 also governs final assessment orders passed under Section 144C, which lays down a separate assessment procedure for eligible assessees.Section 144C of the Act prescribes a special assessment procedure involving a draft assessment order, review by the Dispute Resolution Panel (DRP), and the passing of a final assessment order for...

Gauhati High Court Quashes Income Tax Reassessment After AO Cites 'Paucity of Time' For Not Verifying Transactions

The Gauhati High Court has quashed reassessment proceedings initiated under Income Tax Act, holding that the Assessing Officer (AO) reopened the assessment without first verifying the petitioner's transactions. Referring to the AO's own recorded reasons that beneficiary-wise transactions could not be identified "due to paucity of time", Justice N. Unni Krishnan Nair held, "The recording of reason by the Assessing Officer in paragraph 5 of being unable to carry out investigation for identifying...

Ex-Gratia Payment Under Pfizer VRS Is Capital Receipt, Not Taxable as Income From Other Sources: ITAT Pune

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that the ex gratia amount received by an employee under Pfizer Healthcare India Pvt. Ltd.'s voluntary retirement scheme is a capital receipt and cannot be taxed as income from other sources. Observing that it had consistently taken the same view in identical cases involving other employees of the company, the bench ruled, "We find that the identical issue had come up before the tribunal in the case of other employees of M/s....

ITAT Delhi Quashes Reassessment Against Chanel India, Deletes ₹3.08 Crore Transfer Pricing Adjustment

The Income Tax Appellate Tribunal (ITAT) Delhi has recently granted relief to luxury fashion brand Chanel's Indian arm, quashing reassessment proceedings initiated against Chanel (India) Private Limited beyond four years. It also deleted a ₹3.08 crore transfer pricing adjustment. It also deleted a ₹3.08 crore transfer pricing adjustment. The tribunal held that the subsidy received from its associated enterprise formed part of the company's operating income because it directly compensated its...

Book Entry Can't Decide Transaction Nature, Reimbursement Of Expenses Not Liable For TDS: ITAT Mumbai

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 1 July held that the nomenclature given to a payment in the books of account cannot determine the true nature of a transaction and that tax deduction at source (TDS) provisions do not apply where a payment is only reimbursement of expenditure without any income element in the hands of the recipient. A Bench comprising Judicial Member Siddhartha Nautiyal and Accountant Member Vikram Singh Yadav allowed an appeal filed by Maersk...

Charitable Trust Registration Can't Be Denied Over Expenditure Concerns Alone: ITAT Delhi

The Income Tax Appellate Tribunal (ITAT), Delhi, has recently directed the Commissioner of Income Tax (Exemptions) to grant charitable trust registration to Visan Foundation. It held that registration cannot be denied merely over concerns regarding expenditure without first examining whether the trust's objects are charitable and its activities are genuine. A coram of Judicial Member Kavitha Rajagopal and Accountant Member M. Balaganesh observed, "We do not find any discussion as to the objects...

Bombay High Court Upholds ITAT Order, Says Tata Power's Broadband Trial Run Income, Scrap Sale Not Taxable

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,...