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...

Delhi High Court Quashes Draft IT Assessment Order Passed Before Upload Of Transfer Pricing Relief Order

The Delhi High Court has recently quashed a draft assessment order passed by the Faceless Assessing Officer (FAO) against Lindstrom Services India, after noting that it was issued without knowledge of the Court's order quashing transfer pricing, due to delay in uploading the High Court direction on its website.The division bench of Justices Dinesh Mehta and Vinod Kumar clarified that while the FAO could not be faulted personally, an assessment order passed in ignorance of a subsisting High Court...

Delhi High Court Calls ITAT's Indefinite Adjournment After Reserving Judgment 'Sheer Wastage Of Time'

The Delhi High Court has reprimanded the Income Tax Appellate Tribunal (ITAT) for adjourning an appeal sine die after the matter had already been heard and reserved for judgment. For context, although Petitioner's appeal before the ITAT had been heard at length and reserved for orders on September 3, 2025, the Tribunal subsequently listed the matter again and, on January 19, 2026, adjourned it sine die. This was done on the ground that a similar issue decided by the Tribunal in another case was...

Allahabad High Court Stays Income Tax Revision, Cites No Definite Error In Reassessment Order

The Allahabad High Court has recently stayed proceedings pursuant to a show cause notice dated January 16, 2026 issued under Section 263 of the Income Tax Act, 1961 against an individual taxpayer, observing that the tax authority had not formed a definite opinion that the reassessment order was erroneous and prejudicial to the interest of the revenue. The order was passed by a bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla.The taxpayers's return had first been examined in a...

BSNL VRS Retirees Absorbed From DoT Entitled To Leave Encashment Tax Exemption: Kerala High Court

The Kerala High Court has held that retired BSNL employees who were originally absorbed from the Department of Telecommunications (DoT) are entitled to full income-tax exemption on leave encashment under the Income Tax Act, 1961.The writ petition was filed by the Sanchar Nigam Pensioners' Welfare Association and two retired officers of Bharat Sanchar Nigam Limited, who had opted for the BSNL voluntary Retirement Scheme, 2019.The grievance arose when BSNL deducted tax at source on leave...

Delhi High Court Quashes 2005 Order Denying Additional Tax Refund Interest To Mitsui Engineering, Cites Sandvik Asia

The Delhi High Court has allowed the writ petition filed by a Japan-based maritime engineering and logistics company, seeking additional interest on a long-pending income tax refund, in light of the Supreme Court's ruling in Sandvik Asia Ltd. v. Commissioner of Income Tax.A Division Bench of Justices Dinesh Mehta and Vinod Kumar set aside a 2005 order passed by the Director of Income Tax (International Taxation), which had rejected the petitioner's application under Section 154 of the Income Tax...

Gujarat High Court Quashes Reassessment On Income From Property Sale After Fraudulent Deeds Cancelled

The Gujarat High Court has recently quashed reassessment proceedings initiated under Section 148A of the Income Tax Act agaisnt an individual taxpayer after noting that the Assessing Officer failed to consider that two sale deeds had been cancelled on account of fraud and that the sale consideration had been reversed. Section 148A governs the procedure to be followed before reopening an assessment. A bench of Justice A.S. Supehia and Justice Pranav Trivedi recorded that the sale deeds dated...

Income Tax Act | Ten-Year Block Under Section 153A Includes Search Year: Gujarat High Court

The Gujarat High Court on 23 February held that tax authorities must include the search year when computing the ten-year block for reopening assessments under Section 153A of the Income Tax Act, 1961. A Bench comprising Justice A.S. Supehia and Justice Pranav Trivedi quashed a notice issued in 2025 for Assessment Year 2014-2015, as it fell outside the ten-year period, with the tenth year being Assessment Year 2015-16. The Court observed that to reopen proceedings under Section 153A, “the date...

Extraordinary Writ Jurisdiction Cannot Be Invoked In Factual Disputes: Orissa High Court

The Orissa High Court on 18 February, held that questions involving disputed facts, including the existence and relevance of incriminating material, cannot be examined in writ proceedings under Articles 226 and 227 of the Constitution. A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman, while dismissing a writ petition filed by Saroj Kumar Sahoo, emphasised that extraordinary writ jurisdiction is not available where an effective alternative remedy exists under the...

ITAT Cannot Grant Tax Exemption Or Donor Tax Benefit To Charitable Trust Without Proper Inquiry: Delhi High Court

The Delhi High Court has held that the Income Tax Appellate Tribunal (ITAT) cannot direct the grant of registration under Sections 12AB (which grants income tax exemption to charitable trusts) and 80G (which allows donors to claim tax deductions on donations) of the Income Tax Act, 1961 without a proper inquiry into the genuineness of the charitable activities of the applicant trust.A Division Bench of Justices Dinesh Mehta and Vinod Kumar thus set aside an ITAT order which had directed the...

Delhi High Court Quashes 15% TDS Certificate On SaaS Under India–US DTAA, Orders 2% Certificate

The Delhi High Court has quashed a 15% tax deduction at source (TDS) certificate issued under Section 197 of the Income Tax Act, in respect of payments made for Software-as-a-Service (SaaS) to a US-based company providing a web-based Vendor Management System (VMS) to Indian clients, including Infosys Ltd.A Division Bench of Justices Dinesh Mehta and Vinod Kumar held that the company had made out a prima facie arguable case on non-taxability under the India–US Double Taxation Avoidance Agreement...