April 2026

This judgment addresses the applicability of paragraph 27AA of the Employees Provident Fund Scheme, 1952, to establishments exempted under Section 17 of the EPF Act. The court held that exempted establishments are not bound by amendments to the statutory scheme unless the exemption conditions are specifically altered. The decision clarifies that the appropriate government must act through the exemption mechanism, not through scheme amendments, to enforce minimum benefits. The matter was referred to a larger bench due to conflicting precedent.

The Gauhati High Court allowed the writ petition, quashing the show cause notice and the order-in-original. The court held that the petitioner’s services of transportation of goods by road using his own vehicles are exempt from service tax under the negative list of Section 66D of the Finance Act, 1994. The invocation of the extended period of limitation was invalid as there was no evidence of willful suppression or intent to evade tax. The court emphasized that the show cause notice is the foundation of proceedings and must be specific; vague allegations cannot sustain a demand. The judgment reinforces the principle that exemptions under the negative list must be given effect, and the extended period of limitation cannot be invoked mechanically without establishing the requisite mens rea.

The Income Tax Appellate Tribunal, Bangalore Bench, dismissed the Revenue’s appeal against the deletion of disallowance of ESOP expenditure. The Tribunal held that the issue is squarely covered in favour of the assessee by the Karnataka High Court’s decision in CIT vs. Biocon Limited and the Tribunal’s earlier order in the assessee’s own case, which was upheld by the High Court. The Revenue’s grounds that ESOP expenditure is notional, capital in nature, and not allowable under section 37(1) were rejected. The appeal was dismissed.

In this landmark reassessment case, the Income Tax Appellate Tribunal, Ahmedabad, allowed the appeal of Ratanvav Juth Vividh Karyakari Sahakari Mandali Limited, a cooperative society, against the disallowance of deductions under Section 80P of the Income Tax Act. The Tribunal held that when a reassessment is initiated based on specific reasons (here, cash deposits), and the Assessing Officer accepts the assessee’s explanation on that issue without making any addition, the AO cannot independently disallow deductions on unrelated grounds. This decision reinforces the legal principle that the scope of reassessment is limited to the reasons recorded, preventing arbitrary expansions of tax scrutiny. The ruling provides crucial protection for taxpayers, especially cooperative societies, against overreach in reassessment proceedings, ensuring procedural fairness and adherence to statutory boundaries under Sections 147 and 148 of the Income Tax Act.

In this landmark reassessment limitation case, the Income Tax Appellate Tribunal allowed the assessee’s appeal by quashing the Section 148 notice issued on 25/07/2022 for AY 2015-16. The Tribunal held the notice was barred by limitation as the six-year period under old Section 149 expired on 31/03/2022, and TOLA provided no extension. Decisively, the Tribunal enforced the Revenue’s admission before the Supreme Court in Rajiv Bansal case that all notices for AY 2015-16 issued on or after 1st April 2021 would be dropped. This creates a significant precedent protecting taxpayers from time-barred reassessments following the Supreme Court’s Ashish Agarwal directions.

In this landmark ruling, the Income Tax Appellate Tribunal, Pune Bench, adjudicated on the taxability of temporary overdrafts in shareholder current accounts as deemed dividend. The Tribunal upheld the applicability of section 2(22)(e) of the Income Tax Act 1961, reinforcing that any advance or loan to a substantial shareholder from a company’s accumulated profits is taxable upon withdrawal, irrespective of repayment. However, in a significant procedural relief, the Tribunal directed the Assessing Officer to recompute the addition by factoring in accrued interest on credit balances on a daily basis, ensuring precise quantification. This decision balances strict statutory interpretation with equitable computation, impacting corporate-shareholder financial dealings.

In this search-based assessment, the ITAT partly allowed Revenue’s appeal on bogus purchases by sustaining a 5% GP addition, while dismissing it on protective r