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...

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,...

Income Tax Amendment Of 2012 Allowing Officers To Dispute Any Property Value Not Retroactive: Gujarat High Court

The Gujarat High Court ruled that the 2012 amendment to Section 55A(a) of the Income Tax Act, which expanded the Assessing Officer's power to refer capital assets for valuation, cannot be applied retrospectively.The court ruled that assessments relating to the period prior to 1 July 2012 would continue to be governed by the unamended provision and, on that basis, quashed a reassessment notice issued to the assessee.A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati passed...

Gujarat High Court Quashes Reassessment Based On Presumption Drawn From Sister Concern's 'On-Money' Collection

The Gujarat High Court has quashed reassessment proceedings initiated under the Income Tax Act, holding that a completed assessment cannot be reopened merely on the presumption that an assessee collected unaccounted cash ("on-money") from buyers over and above the recorded sale price because its sister concern was found to have done so. The court held that the reopening against Datta Projects was based entirely on presumptions and surmises, without any material linking the assessee to...

Order Quashing Notice To Dead Person Is Not A 'Finding' To Issue Fresh Notice To Legal Heirs: Allahabad HC

The Allahabad High Court on 23 July held that an order quashing a reassessment notice issued in the name of a deceased person as void ab initio cannot be treated as a “finding” or “direction” under Section 150(1) of the Income Tax Act, 1961. A Bench of Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary quashed the reassessment proceedings initiated against Smt. Asha Dubey, holding that the Income Tax Department cannot rely on an order quashing a notice issued in the name of a deceased...

Allahabad High Court Flags Loophole In Income Tax Law On Reassessment After Taxpayer's Death

While holding that a reassessment notice under Section 148 of the Income Tax Act cannot be issued in the name of a dead assessee, the Allahabad High Court at Lucknow recently observed that the Act contains a legislative lacuna because it leaves the Revenue unable to initiate reassessment proceedings where an assessee dies before a valid reassessment notice is issued. Holding that the gap could result in escaped income going untaxed and prejudice the public exchequer, the court observed that...

Revenue Cannot Appeal Assessment Order Under Income Tax Act, Can Only Seek Revision: Allahabad High Court

The Allahabad High Court has recently held that under the Income Tax Act, 1961, the revenue has no right of appeal against an assessment order, as the assessment order is the stated case of the revenue itself. It held that where the revenue is aggrieved by an assessment order, its remedy is to seek revision where the assessment order is found to be "erroneous in so far as it is prejudicial to the interest of revenue." The court held that in an assessment proceeding the Assessing Authority...

NFAC Must Provide Video Conferencing If Assessee Seeks Personal Hearing: Delhi High Court

The Delhi High Court has held that a taxpayer who seeks a personal hearing during appellate proceedings before the NFAC is entitled to such a virtual hearing.“There are various issues which can be better explained with the help of personal or virtual assistance by assessee or its authorised representative. Mere written submissions or memo of appeal are not sufficient for proper adjudication,” division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed.The court thus set aside an...