HIGH COURTS
Bombay HC
Bombay High Court Quashes Special Audit Order For Want Of Mandatory DIN
Case Name: Sanjay Nathalal Shah v. Assistant Commissioner of Income Tax, Central Circle 5(2) & Ors.
Citation: 2026 LLBiz HC(BOM)16
Case Number: WRIT PETITION (L) NO. 19240 OF 2025
The Bombay High Court has held that an approval for a special audit issued without a Document Identification Number (DIN) is invalid and deemed never to have been issued. A Division Bench of Justice B P Colabawalla and Justice Firdosh P Pooniwalla allowed a writ petition filed by assessee Sanjay Nathalal Shah and quashed a special audit ordered for Assessment Year 2023–24 .
Bombay High Court Quashes Tax Reassessment Against Hospital Over Unsigned Reopening Notice
Case Title: Ambernath City Hospital Pvt.Ltd. vs The Union of India and Ors.
Citation: 2026 LLBiz HC(BOM) 17
Case Number: WRIT PETITION 2713 OF 2024
The Bombay High Court has set aside reassessment and penalty proceedings against Ambernath City Hospital Pvt. Ltd., holding that the Income Tax Department lacked jurisdiction to reopen the assessment, as the mandatory notice issued under Section 148 of the Income Tax Act, 1961, was unsigned.
Relying on its own decision in Prakash Krishnavtar Bhardwaj vs. Income Tax Officer,(2023), the court held, “the Notice issued under Section 148, having no signature affixed to it, either digitally or manually, is invalid and would not vest the Assessing Officer with any further jurisdiction to proceed to re-assess the income of the Petitioner.”
Calcutta HC
CITATION : 2026 LLBiz HC (CAL) 8
Case Number : WPA 28765 of 2025
Case Title : Amalgam Steel Private Limited & Anr. v. The Assistant Commissioner of Income Tax & Ors.
The Calcutta High Court has recently clarified that the income tax department cannot deny immunity from penalty for under-reporting of income once a taxpayer meets the conditions prescribed under the law.
A bench of Justice Om Narayan Rai said Section 270AA of the Income Tax Act leaves no discretion with the Assessing Officer. The provision allows immunity where the taxpayer has paid the tax demand, has not filed an appeal, and has applied for immunity within the prescribed time. It also requires that the case should not involve misreporting of income.
Income Tax Dept Cannot Reopen Assessment on New Grounds Without Due Notice: Calcutta High Court
Citation: 2026 LLBiz HC (CAL) 9
Case Title: Balmer Lawrie And Company Limited v. Union of India & Ors.
Case Number: WPO 656 of 2025
The Calcutta High Court has recently held that the income tax department cannot reopen a completed assessment by raising new issues without first following the mandatory procedure under the Income Tax Act. On this basis, the court set aside the reassessment notice issued against a government-owned company. Under the tax law, Sections 148 and 148A require the department to first issue a detailed notice explaining why it believes income may have escaped tax, give the taxpayer an opportunity to respond, and pass a reasoned order before formally reopening an assessment. Section 147, which allows the department to assess income that was earlier missed, operates only after this initial process is completed.
Delhi HC
Case title: Rakesh Suri v. Assistant Commissioner Of Income Tax & Ors.
Citation: 2026 LLBiz HC(DEL) 48
Case Number: W P (C) 4901/2025
The Delhi High Court recently (January 13) allowed income tax assessment proceedings to continue against a taxpayer despite him holding more than one Permanent Account Number (PAN) and directed that the unused PAN be cancelled. A Division Bench of Justices Dinesh Mehta and Vinod Kumar was dealing with a writ petition wherein the taxpayer challenged the continuation of assessment proceedings on the ground that notices had been issued under a PAN different from the one currently claimed by him.
Reassessment Unsustainable Where Income Was Declared And Tax Paid At Highest Rate: Delhi High Court
Case Title: Pr. Commissioner Of Income Tax-7, Delhi v. Atul Goel
Citation: 2026 LLBiz HC(DEL) 49
Case Number: ITA 10/2026
The Delhi High Court has dismissed an appeal filed by the Income Tax Department, holding that reassessment proceedings cannot be sustained where the assessee has already offered the disputed income to tax at the highest applicable rate. A Division Bench of Justices Dinesh Mehta and Vinod Kumar was hearing the Department's appeal against an ITAT order that had quashed the reassessment initiated against the assessee on allegations relating to Client Code Modification (CCM).
Case title: Nord Anglia Education Limited v. Deputy Commissioner Of Income Tax Circle Int. Tax 2(2) (2), New Delhi
Citation: 2026 LLBiz HC(DEL) 50
Case Number: W.P.(C) 13473/2025
The Delhi High Court has quashed the rejection of a Nil Withholding Certificate sought by a UK-based education company after noting that the Assessing Officer (AO) failed to comply with the mandatory requirements under Rule 28AA of the Income Tax Rules, 1962. A Division Bench comprising Justices V. Kameswar Rao and Vinod Kumar set aside the certificate dated July 30, 2025, by which the Revenue had directed deduction of tax at source (TDS) at 15% under Section 197 of the Income Tax Act, 1961.
Income Tax Recovery Without Supplying Assessment Order Is Illegal: Delhi High Court
Case Title: Philco Exports Private Limited v. Assistant Commissioner Of Income Tax, & Ors.
Citation: 2026 LLBiz HC(DEL) 51
Case Number: W.P.(C) 12318/2021
The Delhi High Court has held that recovery of tax from an assessee without supplying the underlying assessment order is illegal and amounts to recovery without authority of law. A Division Bench of Justices Dinesh Mehta and Vinod Kumar thus directed the Income Tax Department to refund Rs 11.14 lakh to Philco Exports Private Limited along with applicable interest.
Kerala HC
Employees Liable To Pay Tax Even If Employer Deducts TDS but Fails To Deposit It: Kerala High Court
Case Title: Sarath V S v. The Commissioner of Income Tax
Citation: 2026 LLBiz HC (KER) 5
Case Number: WA NO. 2142 OF 2025
Holding that employees cannot avoid their income tax liability merely because their employer deducted tax at source from their salaries but failed to deposit it with the Income Tax Department, the Kerala High Court has ruled that the statutory protection under Section 205 of the Income Tax Act applies only when the deducted tax is actually paid to the Central Government.
A division bench of Justice A K Jayasankaran Nambiar and Justice Jobin Sebastian madethe ruling while dismissing writ appeals filed by former employees of Attinad Software Pvt. Ltd. It clarified that “no credit for tax deducted at source can be granted to an assessee claiming the same unless a deduction of tax at source has been made in accordance with the provisions of the IT Act and paid to the Central Government.”
Madras HC
Auction Under Income Tax Act Cannot Be Confirmed Without Addressing Objections: Madras High Court
Case Title: C. Sowmya Raga v. The Tax Recovery Officer
Citation: 2026 LLBiz HC (MAD) 19
Case Number: W.P. No. 41739 of 2025
The Madras High Court has clarified that an auction under the Income Tax Act to recover tax dues cannot be confirmed in a mechanical manner and that objections to the sale must be examined first. The court said confirmation of an auction depends on whether a challenge to the sale is still open or has already been dealt with.
A single bench of Justice C Saravanan said the rules governing income tax auctions have to be read together. One rule allows a purchaser to challenge an auction if the person whose property was sold had no legal right to sell it (Rule 62).
ITAT
ITAT Delhi Quashes Revision Order, Says Tax Dept. Cannot Expand Limited Scrutiny Assessment
Case Title: Harun Ali vs. R. CIT Dehradun
Citation: 2026 LLBiz ITAT (DEL) 6
Case Number: ITA No.3444/Del/2025 A.Y. 2015-2016
The Income Tax Appellate Tribunal, Delhi Bench, has quashed a revision order passed against an individual taxpayer, holding that the tax department cannot expand a limited scrutiny assessment by invoking its revisionary powers. A coram comprising Judicial Member Yogesh Kumar U.S. Accountant Member S. Rifa'ur Rahman held that the Principal Commissioner of Income Tax had wrongly invoked Section 263 of the Income Tax Act which allows revision of an assessment only if it is both erroneous and prejudicial to the interests of the Revenue.
Case Title: Mithi Software Technologies Private Limited v. The Income Tax Officer
Citation: 2026 LLBiz ITAT(PUN) 8
Case Number: ITA No.2371/PUN/2025
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that the waiver of a company's liability to redeem debentures cannot be taxed as income when no deduction of interest on those debentures was claimed in earlier years. A coram comprising Judicial Member Astha Chandra and Accountant Member Dr. Dipak P. Ripote examined the applicability of Sections 28(iv) and 41(1) of the Income Tax Act on the action.
Carry Forward Of Losses Can't Be Denied On Vague Grounds: ITAT Pune
Case Title: Mithi Software Technologies Private Limited v. The Income Tax Officer
Citation: 2026 LLBiz ITAT (PUN) 8
Case Number: ITA No. 2371/PUN/2025
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that statutory tax benefits cannot be denied on vague grounds. Such rejections such as in the present case, reflect a “sheer lack of application of mind,” the tribunal said. Applying this principle, the tribunal allowed a Maharashtra based tech company to carry forward business losses of Rs 1.09 crore and unabsorbed depreciation totalling Rs 1.03 crore.
India–US DTAA Bars 100% Disallowance On Payments To US Firms Without TDS: ITAT Delhi
Case Title: LinkedIn Technology Information Pvt Ltd vs The P.C.I.T
Citation: 2026 LLBiz ITAT(DEL) 9
Case Number: ITA No. 2492/DEL/2024 [A.Y 2018-19]
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) recently held that restricting disallowance to 30% on payments made by an Indian company to US companies for not deducting tax at source on fees for technical services did not cause any prejudice to the Revenue, as such restriction was required under the non-discrimination clause of the India–US tax Double Taxation Avoidance Agreement. A coram of Judicial Member Vikas Awasthy and Accountant Member Naveen Chandra quashed a revision order passed under Section 263 of the Income-tax Act in an appeal filed by LinkedIn Technology Information Pvt. Ltd. for the 2018–19 assessment year.
Case Title: The Mysore Association Bombay Vs Income Tax Officer Exemption Ward 2(4), Mumbai
Citation: 2026 LLBiz ITAT(MUM) 11
Case Number: ITA No. 5860/Mum/2025
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has recently held that no tax addition can be made where a Mumbai charitable trust has incurred an overall loss, even if the Assessing Officer treats some of its receipts as business income. The tribunal made it clear that tax can be levied only on real and net income, and where expenditure exceeds receipts, nothing survives to be taxed.
ITAT Sets Aside Penalty Against Taxpayer For Receiving Property Sale Price In Cash At Registration
Case Detail: Surjit Kaur vs. ITO, Ward 3
Citation: 2026 LLBiz ITAT(MUM)12
Case Number: ITA No.1136/CHANDI/2025
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) recently quashed a penalty of Rs. 7.41 lakh imposed on a Ludhiana resident for receiving the sale consideration of a plot in cash at the time the sale deed was registered. The order was passed by Accountant Member Manoj Kumar Aggarwal, who held that the penalty had been wrongly imposed, as the cash was received in a single transaction at the time of execution of a registered sale deed and not as an advance.
Suppliers' Failure To File Income Tax Returns Alone Can't Render Purchases Bogus: ITAT Chandigarh
Case Title: ITO Ward-3 v. Raman Kohli
Citation: 2026 LLBiz ITAT (CHA)14
Case Number: ITA No.445/CHANDI/2024
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has recently observed that purchases cannot be treated as bogus only because some suppliers failed to file income tax returns or did not respond to departmental notices when the transactions are otherwise supported by records. Explaining this, a bench of Vice President Rajpal Yadav and Accountant Member Manoj Kumar Aggarwal observed that in the fctas of the case, the tax department had accepted the taxpayer's sales and had not found any supplier to be non-existent.
ITAT Mumbai Quashes Tax Reopening Over Political Donation, Allows Section 80GGC Deduction
Case Title: Abhishek Jayketu Joshi vs AC CIR-42(2)(1)
Case No.: ITA No. 5775/Mum/2025
Citation: 2026 LLBiz ITAT(MUM)10
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has quashed reassessment proceedings initiated against a taxpayer for AY 2019–20, holding that the disallowance of political donation under Section 80GGC was unsustainable.
The appeal was decided by a Bench comprising Judicial Member Amit Shukla and Accountant Member Makarand Vasant Mahadeokar, who held that the mandatory procedure under Section 148A of the Act was violated. The Bench stated, Mere suspicion, conjectures, or application of human probabilities, in the absence of any corroborative material, cannot be a ground to deny a statutory deduction expressly provided under the Act.
ITAT Raipur Sets Aside Deletion Of Bogus Purchase Addition For Want of Remand Report From AO
Case Title: The Deputy Commissioner of Income Tax-1(1), Raipur (C.G.) v. Goenka Rockwool India Private Limited
Citation: 2026 LLBiz ITAT (RAI) 13
Case Number: ITA No.453/RPR/2025
The Raipur bench of the Income Tax Appellate Tribunal (ITAT) has remanded a tax appeal after holding that the Commissioner of Income Tax (Appeals) could not delete an addition based on fresh evidence without first seeking a remand report from the Assessing Officer. A coram of Judicial Member Partha Sarathi Chaudhury and Accountant Member Arun Khodpia held that the Commissioner of Income Tax (Appeals), NFAC, could not have decided the case on merits after admitting additional evidence without first obtaining a remand report from the Assessing Officer.
ITAT Delhi Sets Aside ₹4 Crore Additions Based on WhatsApp Evidence From Third-Party Broker
Case Title: Arti Garg Vs DCIT, Delhi
Citation: 2026 LLBiz ITAT (DEL)15
Case Number: ITA No.3143/Del/2025 (A.Y 2021-22)
The Income Tax Appellate Tribunal (ITAT), Delhi, has set aside Rs 2 crore income-tax additions based on a images allegedly found in the WhatsApp of a third-party property broker. The tribunal held that the electronic evidence relied was not in compliance with the Evidence Rules and therefore not credible. A coram comprising Judicial Member Vimal Kumar and Accountant Member S. Rifa ur Rahman deleted additions of Rs 2 crore each made in the hands of a property buyer and seller, observing that the statutory safeguards governing the collection, certification, and chain of custody of electronic evidence had not been complied with.