INCOME TAX CASE LAW 15.06.2026
INCOME TAX CASE LAW 15.06.2026
| Relevant Act | Section | Case Law Title | Citation | Brief Summary |
| Income-tax Act, 1961 | Section 10(23FBA) | Deputy Commissioner of Income-tax v. Sundaram Alternative Opp Series High Yield Secured Debt fund |
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Processing fees on NCD investments are intrinsically linked to investment risks and overall yield. They cannot be recharacterized as business income, making the AIF eligible for exemption under this section. |
| Income-tax Act, 1961 | Section 12AB | Cheshire Homes India KATP v. Commissioner of Income-tax, Exemptions |
2026
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Serving notices solely via the ITBA portal without fulfilling the valid electronic communication rules of Section 282(1) and Rule 127(1) is invalid. Dismissal for non-compliance on this basis requires a de novo hearing. |
| Income-tax Act, 1961 | Section 35D | Navi General Insurance Ltd. v. Assessment Unit, Income-tax Department |
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Once the first four installments of a preliminary expense deduction (IRDAI license) have been accepted, the AO cannot arbitrarily disallow the fifth and final installment without disturbing the assessment of the previous years. |
| Income-tax Act, 1961 | Section 37(1) | Navi General Insurance Ltd. v. Assessment Unit, Income-tax Department |
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Share issue expenses incurred to meet regulatory solvency and working capital requirements expand the capital base. They retain a capital character and are not deductible as business expenditure. |
| Income-tax Act, 1961 | Section 37(1) | Navi General Insurance Ltd. v. Assessment Unit, Income-tax Department |
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ESOP expenses recharged by a parent holding company for options issued to the assessee’s own employees are allowable deductions, as they are incurred wholly and exclusively for the assessee’s business. |
| Income-tax Act, 1961 | Section 80G | Kellog Brown and Root Engineering and Construction India (P.) Ltd. v. Deputy Commissioner of Income-tax |
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A donation made to an approved State Disaster Management Authority cannot be denied Section 80G deduction merely because the payment formed a part of the company’s mandatory CSR obligations. |
| Income-tax Act, 1961 | Section 80G | Cheshire Homes India KATP v. Commissioner of Income-tax, Exemptions |
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Where Section 80G approval was rejected solely due to the denial of Section 12AB registration, and the Section 12AB issue is remitted for fresh adjudication, the Section 80G rejection must also be set aside for de novo consideration. |
| Income-tax Act, 1961 | Section 80G | Cosmo First Ltd. v. Deputy Commissioner of Income-tax |
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Even if an outlay is disallowed under section 37(1) due to its CSR character, a deduction under section 80G is still allowable if the donation is made to an approved, eligible trust. |
| Income-tax Act, 1961 | Section 80-IA | Cosmo First Ltd. v. Deputy Commissioner of Income-tax |
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Deduction for profits from the sale of power to captive units restored to the AO for fresh consideration following factual verification guidelines set by earlier higher forum decisions. |
| Income-tax Act, 1961 | Section 90 | Kellog Brown and Root Engineering and Construction India (P.) Ltd. v. Deputy Commissioner of Income-tax |
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Where the DRP and AO accept a double taxation relief claim under section 90 but fail to grant the actual mathematical credit while computing final tax liability, the matter must be restored for verification and credit. |
| Income-tax Act, 1961 | Section 92C | Kellog Brown and Root Engineering and Construction India (P.) Ltd. v. Deputy Commissioner of Income-tax |
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Forex gains or losses arising directly from the realization of export proceeds from AEs are operating in nature for computing the Profit Level Indicator (PLI) and determining the Arm’s Length Price (ALP). |
| Income-tax Act, 1961 | Section 92C | Cosmo First Ltd. v. Deputy Commissioner of Income-tax |
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If a working capital adjustment has already been granted while benchmarking the primary transaction, no separate, independent TP adjustment on outstanding AE receivables is warranted. |
| Income-tax Act, 1961 | Section 92CA | Cosmo First Ltd. v. Deputy Commissioner of Income-tax |
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The AO is legally bound to pass a revised giving-effect order and recompute total income if the TPO reduces a TP adjustment in a subsequent order following a DRP directive. |
| Income-tax Act, 1961 | Section 148A | Hina Prakash Shah v. Income-tax Officer |
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Where the original reassessment notice was deemed issued in June 2021 and the limitation expired in June 2022, a subsequent Section 148A(d) order and Section 148 notice issued on 29.07.2022 are completely time-barred and invalid. |
| Income-tax Act, 1961 | Section 246 | Marmo Home (P.) Ltd. v. DCIT |
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There is no doctrine of merger between a Section 143(1) intimation and a Section 143(3) assessment order if the AO merely copies the income without independent variation. Adjustments from the 143(1) stage cannot be challenged via a 143(3) appeal, making such an appeal non-maintainable. |