Limitation For TDS Default Orders Runs Quarter-Wise, Not Annually: Bombay High Court

The Bombay High Court has recently held that limitation for passing an order treating a person responsible for deducting tax at source as an “assessee in default” under Section 201 of the Income Tax Act must be computed quarter-wise based on the filing of each TDS statement, and not on an annual or cumulative basis. A Division Bench of Justice M.S. Karnik and Justice Gautam A. Ankhad on March 5, 2026 dismissed the Income Tax Department's appeal against Vodafone Cellular Ltd., Pune. In doing...

No Cancellation Of Educational Trust Registration For Generating Surplus: Punjab & Haryana High Court

The Punjab and Haryana High Court on 27 February held that mere generation of surplus by an educational institution cannot be a ground for cancelling registration of a charitable trust, so long as the activities are genuine and carried out in accordance with the objects of the trust. A Division Bench comprising Justice Lisa Gill and Justice Parmod Goyal dismissed an appeal filed by the Income Tax Department and upheld the order of the Income Tax Appellate Tribunal (ITAT) restoring the...

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),...

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...

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...