INCOME TAX
Central Bank Digital Currencies Not 'Relevant Crypto-Assets' For CRS Reporting: CBDT
The Central Board of Direct Taxes (CBDT) has amended the Income Tax Rules, 1962, to clarify that Central Bank Digital Currencies (CBDCs) will not fall within the definition of “relevant crypto-assets” for Common Reporting Standard (CRS) framework.The amendment forms part of the Income-tax (Amendment) Rules, 2026 notified on March 5, 2026 and the changes introduce new definitions and reporting provisions relating to crypto-assets, electronic money products and digital currencies under the Common...
Non-Resident Individual Eligible For Dispute Resolution Panel Route In Tax Reassessment: Madras High Court Clarifies
The Madras High Court has clarified that a non-resident individual falls within the amended definition of an “eligible assessee” under the Income Tax Act, and therefore reassessment proceedings routed through the Dispute Resolution Panel cannot be challenged on that ground.The court dismissed a writ petition filed by individual taxpayers Motilal Jain and Mahaveer Jain and upheld a reassessment order issued under the Income Tax Act following directions of the Dispute Resolution Panel.The order...
Tax Evasion Prosecution Not Liable To Be Terminated If IT Penalty Set Aside On Technical Grounds: Kerala High Court
The Kerala High Court has reiterated that criminal prosecutions for alleged tax evasion under the Income Tax Act do not automatically fail merely because penalty proceedings were set aside on technical grounds, and that such prosecutions can validly continue where allegations disclose wilful and deliberate concealment of income. The ruling was delivered by Justice G. Girish while dismissing a batch of criminal miscellaneous petitions filed by Dr. P.H. Abdul Majeed, who had sought the quashing...
Taxpayer Cannot Escape Prosecution By Filing Revised Returns Post-Search: Kerala High Court
The Kerala High Court on 20 February held that filing revised income tax returns after a search and seizure operation does not absolve a taxpayer from criminal prosecution for wilful tax evasion, and that such revised returns cannot be used as a shield against offences punishable under the Income Tax Act, 1961. Justice G. Girish, dismissed a batch of petitions filed by a medical practitioner challenging prosecutions pending before the Additional Chief Judicial Magistrate (Economic Offences),...
Notice Issued By Officer Without Jurisdiction Cannot Sustain Assessment: ITAT Quashes Assessment
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 26 February quashed an assessment against taxpayer Jagruti Kirti Shah, holding that the notice under Section 143(2) of the Income Tax Act was issued by an officer lacking jurisdiction as per the Central Board of Direct Taxes (CBDT) Instruction No. 1 of 2011. Instruction 1 prescribes the officer-level jurisdiction for issuing scrutiny notices based on the assessee's income and category.The Bench, comprising Judicial Member Rahul...
Air India SATS Entitled To Tax Benefits On Ground & Cargo Handling Income: ITAT Delhi
On 26 February, the New Delhi Income Tax Appellate Tribunal (ITAT) held that Air India SATS Airport Services Pvt. Ltd.'s income from airport ground handling and cargo handling operations qualifies for tax incentives available to eligible infrastructure-related service providers. A Bench of Judicial Member Satbeer Singh Godara and Accountant Member Naveen Chandra heard the Revenue's appeal, which challenged the deduction claimed by Air India SATS under Section 80-IA of the Income Tax Act on...
Income Tax Authority Must Record Prima Facie View On Taxability Before Issuing Withholding Certificate: Delhi High Court
The Delhi High Court has held that while issuing a certificate for lower deduction of tax at source under Section 197 of the Income Tax Act, 1961, the competent authority is required to record a prima facie view on the taxability of the receipts, and that such certificates cannot be issued mechanically or without reasons.A division bench of Justices Dinesh Mehta and Vinod Kumar made the observation while disposing of a writ petition filed by Ireland-based Workday Limited, which had challenged a...
No Disallowance Of Interest In Absence of Nexus Between Borrowed Funds And Advances: ITAT New Delhi
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 27 February, held that interest disallowance under Section 36(1)(iii) of the Income-tax Act, 1961 cannot be sustained in the absence of a nexus between borrowed funds and interest-free advances, particularly where such advances were granted in years preceding the borrowings and were supported by commercial expediency. A Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Amitabh Shukla deleted the addition of...
ITAT Delhi Deletes ₹3.42 Crore Transfer Pricing Addition On Loans and Receivables In Relief To Varun Beverages
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that no transfer pricing adjustment is warranted where the interest charged on loans advanced to associated enterprises exceeds the internal Comparable Uncontrolled Price (CUP). The bench comprising Judicial Member Yogesh Kumar U.S. and Accountant Member Manish Agarwal deleted the entire transfer pricing adjustment of Rs 3,42,31,778 for Assessment Year 2017-18 in the case of Varun Beverages Limited, including Rs 2,84,45,221...
'No Whisper Of Tangible Material': ITAT Delhi Quashes Reassessment Against Vedanta For AY 2010-11
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed reassessment proceedings against Vedanta Limited for Assessment Year 2010-11. It held that the reopening beyond four years was without jurisdiction as it was not based on any fresh tangible material. A coram of Judicial Member Pawan Singh and Accountant Member Brajesh Kumar Singh observed that “there is no whisper of any tangible material which came to the possession of the assessing officer subsequent to the passing of the...
Continuing Look Out Circular After Tax Proceedings Conclude Violates Fundamental Rights: Delhi High Court
The Delhi High Court has held that failure of tax authorities to obtain information about an assessee's assets in foreign jurisdictions cannot be used to keep a Look Out Circular (LOC) alive indefinitely, particularly when income tax proceedings have already concluded and no demand is outstanding against the assessee.A Division Bench of Justices Dinesh Mehta and Vinod Kumar thus allowed writ petitions filed by the assessees and observed,“If for one reason or the other, the respondents are not in...
Delhi High Court Directs 2% Withholding Tax Certificate For US Software Firm DocuSign
The Delhi High Court has directed the Income Tax Department to issue a withholding tax certificate at the rate of 2% in favour of a US-based software company, after finding that the transactions prima-facie look to be not exigible to tax.A division bench of Justices Dinesh Mehta and Vinod Kumar passed the order while hearing DocuSign's writ petition challenging a certificate issued under Section 197 of the Income Tax Act, 1961.DocuSign provides electronic signature and digital transaction...