Accepted Search Return Without Further Addition Can't Attract Concealment Penalty: Gujarat High Court

The Gujarat High Court on 14 October held that penalty for concealment of income under Section 271(1)(c) of the Income Tax Act cannot be levied where the Assessing Officer accepts additional income disclosed in a return filed in response to a search-related notice without making any further addition, leaving no tax sought to be evaded under Explanation 4(c). A Bench comprising Justices Bhargav D. Karia and Nirzar S. Desai set aside the Income Tax Appellate Tribunal's order restoring a penalty...

Omission From Witness List Does Not Bar Summons If Sufficient Reasons Are Shown: Bombay High Court

The Bombay High Court at Goa on 21 October held that a party may summon a witness whose name was omitted from the original witness list if it provides sufficient reasons for doing so, particularly when the evidence is necessary to resolve a dispute over GST invoices. Justice S.G. Chapalgaonkar partly allowed the defendant's petition challenging the trial court's refusal to summon the Assistant Commissioner of Central Goods and Services Tax (CGST) and the Principal of Jain College of...

CESTAT Delhi Remands Schlumberger's ₹5.82 Crore Tax Dispute Over ONGC Training And Offshore Services

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, on 21 October set aside an order dropping service tax demands against Schlumberger Asia Services Ltd. and remanded the matter for fresh adjudication. It held that the taxability of training services provided to the Oil and Natural Gas Corporation (ONGC) and services connected with offshore oil and gas exploration required further examination.A Bench comprising Judicial Member Ajay Sharma and Technical Member Hemambika R....

CESTAT Delhi Upholds ₹2.89 Lakh Tax Demand On Transit Mixer Hiring, Rejects GTA Service Claim

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, on 16 October upheld a service tax demand of Rs. 2.89 lakh against Shri Sai RMC for hiring transit mixer (TM) machines, holding that the transaction was not covered under Goods Transport Agency (GTA) service. A Bench comprising Judicial Member Ajay Sharma and Technical Member Hemambika R. Priya dismissed the appeal, finding that the case was covered by the Supreme Court's ruling in K.P. Mozika v. ONGC on the distinction...

CESTAT Chennai Allows Royal Enfield's CENVAT Credit Appeals, Sets Aside ₹51.47 Lakh Penalty

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, on 15 October allowed appeals filed by Royal Enfield and set aside demands for reversal of CENVAT credit and penalties imposed on the company. A Bench comprising Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao held that the absence of a separate Input Service Distributor (ISD) registration did not, by itself, disentitle the company from claiming credit on eligible input services. It observed: “we find...

CESTAT Chennai Allows ₹3.91 Lakh CENVAT Benefit To HUL, Says Job Workers' Tax Exemption No Bar

On 22 October, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, set aside the denial of Rs. 3,91,207 in CENVAT credit to Hindustan Unilever Limited on service tax paid by job workers, along with the consequential interest and penalty. A Bench comprising Judicial Member Ajayan T.V. allowed the company's appeal, holding that Section 5A(1A) of the Central Excise Act, 1944, which bars payment of duty on absolutely exempt goods, does not apply to service tax under the...

Madras High Court Directs Film Producer To Pay ₹1.22 Crore GST Dues To "Saakshyam" Dubbing Rights Buyer

The Madras High Court has directed film production company Shri Abishek Pictures and its partner Abhishek Venkat Nama to jointly and severally pay ₹1.22 crore to SPM Arts LLP towards GST dues arising from the assignment of dubbing rights for the Telugu film Saakshyam.Justice P.B. Balaji held that the production firm, having received the entire consideration of ₹7.5 crore and agreed to bear the GST liability under the assignment deed, was responsible for paying the applicable tax.The Court...

Proportionate Rights Shares Allotment Not Taxable Merely Due to Price Difference: Bombay High Court

On Thursday, 22 October, the Bombay High Court held that the difference between the subscription price and fair market value of proportionately allotted rights shares cannot, by itself, be taxed under Section 56(2)(x) of the Income-tax Act when the shareholder's percentage holding remains unchanged and no disproportionate benefit is identified. A Division Bench comprising Justices B. P. Colabawalla and Farhan P. Dubash allowed Grasim Industries Limited's petition challenging reassessment...

Gujarat High Court Quashes Reassessment Based On Broker's Register Without Live Nexus On-Money Payment

The Gujarat High Court on 8 October quashed a reassessment notice issued under Section 148 of the Income Tax Act, 1961, against Sanjaykumar Amrutlal Patel for Assessment Year 2022-23, holding that a seized broker's register entry, without a live nexus to the taxpayer, could not justify reopening the assessment. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati held that the entry dated 16 January 2020, at best, reflected the asking rate for land in the Bhadaj area and...

Foreign Company's PE Cannot Be Presumed From Indian Affiliate's Activities: ITAT Mumbai

The Income Tax Appellate Tribunal (ITAT), Mumbai, on 16 October held that tax authorities cannot presume that a foreign enterprise has a Permanent Establishment (PE) in India merely because its Indian associated enterprise carries out business activities. They must examine the actual contractual arrangements, the parties' conduct and the applicable tax treaty provisions. A Bench comprising Judicial Member Beena Pillai and Accountant Member Arun Khodpia remanded the PE determination and profit...

Income Tax Cannot Be Reassessed After Insolvency Plan Approval Even If New Information Emerges: Bombay High Court

The Bombay High Court has recently reiterated that the Income Tax Department cannot reassess a company's income for a period before its insolvency resolution plan was approved. This applies even when the Department receives fresh information suggesting fraudulent transactions.A Division Bench of Justice B.P. Colabawalla and Justice Farhan P. Dubash quashed reassessment proceedings initiated against Swan Defence and Heavy Industries Ltd., formerly Reliance Naval and Engineering Ltd. The...

Orissa High Court Issues Notice On Challenge To Section 147A Of Income Tax Act

The Orissa High Court has recently issued notice on a plea challenging the constitutional validity of Section 147A of the Income Tax Act, 1961, which was introduced by the Finance Act, 2026, with retrospective effect from April 1, 2021.Section 147A was introduced to clarify that the Assessing Officer issuing notices under Sections 148 and 148A would mean an officer other than the National Faceless Assessment Centre or an assessment unit under Section 144B. The provision was made retrospective...