Author: inavatiq

Case Details: Sahara India Ltd vs. Income-tax Appellate Tribunal [2026] 183 taxmann.com 179 (Delhi)

Judiciary and Counsel Details

• Dinesh Mehta & Vinod Kumar, JJ.
• Percy J. Pardiwala, Sr. Adv., Satyen Sethi, Arta Trana Panda, Sanjeeva Ku. Gupta & Naresh Kapila, Advs. for the Petitioner.
• Ruchir Bhatia, SSC, Anant Mann, Pratksh Gupta, JSCs & Ms Lopamudra Mahapatra, Adv. for the Respondent.

Facts of the Case

The assessee had filed an appeal before the Tribunal, Lucknow Bench, against an order passed by the Commissioner (Appeals). Pursuant to a notice issued under section 127(2), the cases of the Sahara Group pending before various authorities were transferred to Delhi for administrative convenience. Consequently, the President of the Tribunal, in exercise of powers under rule 4 of the Income-tax (Appellate Tribunal) Rules, transferred the assessee’s appeal from the Lucknow Bench to the Delhi Bench.

Thereafter, the Delhi Bench dismissed the appeal as well as the corresponding cross-objection on the ground that it lacked territorial jurisdiction to hear and decide the matter, while granting liberty to the parties to file fresh appeals before the Lucknow Bench. Aggrieved, the assessee filed writ petitions before the Delhi High Court challenging the dismissal of the appeals.

High Court Held

The High Court held that the Delhi Bench was fully aware that the appeals had been transferred pursuant to the President of the Tribunal’s administrative order. It held that once a matter is transferred from one Bench to another, no statutory authority, including the Tribunal, can overturn such an administrative order except a competent court examining its legality.

The Court further held that even if the Delhi Bench was of the view that it lacked territorial jurisdiction, it ought to have placed the matter before the President for appropriate directions, rather than dismissing the appeals and directing the parties to institute fresh proceedings. Such action amounted to setting the President’s administrative order at nought and was unsustainable in law.

Accordingly, the High Court set aside the orders passed by the Tribunal and restored the matters to the file of the Delhi Bench to be decided on merits. The writ petitions were allowed in favour of the assessee.

List of Cases Reviewed

• Pr. CIT v. ABC Papers Ltd. [2022] 141 taxmann.com 332/289 Taxman 150/447 ITR 1 (SC) (para 19) Distinguished.

List of Cases Referred to

• Pr. CIT v. ABC Papers Ltd. [2022] 141 taxmann.com 332/289 Taxman 150/447 ITR 1 (SC) (para 7).

The post Delhi ITAT Had No Power to Dismiss Transferred Appeal | HC appeared first on Taxmann Blog.

source

The Auditing and Assurance Standards Board (AASB) of the Institute of Chartered Accountants of India (ICAI) has issued a Practitioner’s Guide on Drafting of Modified Opinions in Independent Auditor’s Reports.

The Guide is intended to assist auditors in effectively drafting modified opinions in accordance with applicable auditing standards.

1. Coverage Under SA 705 (Revised)

The Guide focuses on reporting requirements under SA 705 (Revised) – Modifications to the Opinion in the Independent Auditor’s Report.

It provides practical guidance on drafting:

• Qualified Opinions
• Adverse Opinions
• Disclaimer of Opinions

The objective is to ensure that modifications are expressed clearly, appropriately, and in full compliance with the Standards on Auditing.

2. Key Features of the Guide

2.1 Practical Guidance

• Step-by-step considerations for determining the nature of modification
• Guidance on evaluating materiality and pervasiveness
• Clarification on structure and placement of modified opinion paragraphs

2.2 Illustrative Formats and Suggested Wording

• Model formats for different types of modified opinions
• Suggested wording aligned with SA 705 (Revised)
• Illustrations covering common practical scenarios

These examples aim to enhance consistency in reporting across audit engagements.

3. Continuity with Earlier Implementation Resources

The Practitioner’s Guide builds upon earlier implementation resources issued by ICAI and integrates practical experience gained in applying SA 705 (Revised).

It serves as a complementary reference to the Standards rather than a substitute.

4. Nature of Illustrations and Professional Judgment

The AASB has clarified that:

• The examples provided in the Guide are illustrative in nature
• They do not replace professional judgment
• They do not override the mandatory requirements of the Standards on Auditing

Auditors remain responsible for applying professional judgment based on the facts and circumstances of each engagement.

5. Relevance for Practitioners

The Guide is particularly useful for:

• Statutory Auditors of companies
• Audit practitioners dealing with reporting complexities
• Engagement partners and quality reviewers
• Audit trainees and professionals seeking clarity on modified reporting

6. Key Takeaway

The Practitioner’s Guide strengthens audit quality by providing structured and practical support for drafting modified opinions under SA 705 (Revised), promoting clarity, consistency, and compliance in auditor reporting.

Click Here To Read The Full Story

The post ICAI Issues Guide on Drafting Modified Audit Opinions appeared first on Taxmann Blog.

source

Editorial Team – [2026] 183 taxmann.com 345 (Article)

Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:

1. PCAOB Issues Inspection Reports for 10 Global Audit Firms Across Multiple Jurisdictions

The Public Company Accounting Oversight Board (PCAOB) has released 10 new inspection reports covering audit firms in the Netherlands, Greece, China, Thailand, Colombia, Italy, and the United States, including firms affiliated with EY, PwC, Forvis Mazars, and other mid-sized networks. The inspections relate to selected issuer audits and assess compliance with PCAOB auditing and quality control standards.

Across the reports, the PCAOB identified instances where firms failed to obtain sufficient appropriate audit evidence in key risk areas such as revenue recognition, accounting estimates, internal control over financial reporting (ICFR), and other significant judgmental areas. In certain cases, the Board also reported quality control deficiencies, indicating areas requiring strengthening in engagement supervision, monitoring, and firm-level quality management systems.

These inspection findings reinforce the PCAOB’s continued focus on audit quality and global oversight of registered firms auditing issuers accessing U.S. capital markets. The reports provide important insights for audit committees, investors, and practitioners regarding recurring themes in audit deficiencies and areas warranting heightened professional skepticism and documentation rigor.

Source – Public Company Accounting Oversight Board

Click Here To Read The Full Article

The post [Global Financial Insights] PCAOB Issues Inspection Reports for 10 Global Audit Firms and More appeared first on Taxmann Blog.

source

Case Details: Al Kabeer Exporters vs. Deputy Commissioner of Customs (Imports) [2026] 183 taxmann.com 244 (Kerala)

Judiciary and Counsel Details

• Ziyad Rahman A.A., J.
• Tomson T. Emmanuel, Adv. for the Appellant.
• P.R.Sreejith, R. Harishankar, Advs. & C. Dinesh, CGC for the Respondent.

Facts of the Case

The petitioners were GST-registered importers of semi-dried dates, claiming an IGST exemption intended for fresh dates. A post-clearance audit detected the misdeclaration and issued show-cause notices under Section 28 of the Customs Act, 1962, orders demanding IGST at 12% with interest; only partial payments were made, and demand notices followed. It did not dispute the IGST liability but challenged the demand notices and sought amendment of Bills of Entry to claim input tax credit (ITC). The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the challenge to Section 28 proceedings was not maintainable and that IGST on imports was leviable under Section 3(7) read with Section 3(12) of the Customs Tariff Act, 1975 and Section 5 of the IGST Act, making Section 28 applicable for recovery of short levy. It further held that Section 149 of the Customs Act permits amendment of Bills of Entry only with contemporaneous documentary evidence, which was absent due to misdeclaration and delay, so correction for ITC was not permissible; hence the writ petitions were dismissed.

The post Section 28 Customs Act Applicable for IGST Short Levy on Imports | HC appeared first on Taxmann Blog.

source

Notification G.S.R. 109(E); Dated: 04.02.2026

Section 136 of the Occupational Safety, Health and Working Conditions Code, 2020, (OSH&WC Code) empowers the Central Government to make regulations in relation to mines and dock work. Accordingly, the Central Government has notified the draft Occupational Safety, Health and Working Conditions (Metalliferous Mines) Regulations, 2026, prescribed under the OSH&WC Code. The draft regulations apply to all mines except coal or oil mines.

Objections and Suggestions can be submitted within 45 days from the date of publication in the Official Gazette. The key highlights of the draft Regulations are as follows:

• Constitution of the Board of Mining Examination – The draft regulations provide for the constitution of a Board of Mining Examination, consisting of the Chief Inspector-cum-Facilitator as the Chairperson (ex-officio) and five members possessing a degree in mining engineering. Each member of the Board other than its Chairperson must hold office for 3 years from the date of appointment or until their successor is appointed, whichever is later.
• Qualifications of Chief Inspector-cum-Facilitator or Inspectors-cum-Facilitators – As per the draft regulations, no person must be appointed as the Chief Inspector cum facilitator or Inspector-cum-Facilitator unless such person holds a degree in mining engineering from an educational institution approved by the Central Government.
• Safety Management Plan – Under the draft regulations, the owner, agent and manager of every mine must:

1. 1. identify hazards to the health and safety of the persons employed at the mine to which they may be exposed while at work,
   2. assess the risks to health and safety to which employees may be exposed while they are at work,
   3. follow an appropriate process for identification of the hazards and assessment of risks
   4. record the list of hazards identified and risks assessed, and
   5. make those records available for inspection by the employees.

• List of Plans, Sections and Instruments and Their Storage – All plans and sections, and tracings or copies thereof, kept at the mine must be serially numbered. Suitable arrangements must be made at every mine for the proper storage and maintenance of every plan and section and of all instruments and materials to provide for flat storage of every plan and section maintained in physical form or secured in digital form.
• Maintenance of Reports, Records and Registers – As per the draft regulations, all reports, records and registers required to be maintained must be kept in interleaved bound paged registers and signed by the concerned competent persons or officials and countersigned by the manager.
• Payment of Fees – The draft regulations provide that any fees payable must be paid through an electronic mode or any other means as specified from time to time by the Chief Inspector-cum-Facilitator.
• Standing Orders – As per the draft regulations, the manager of every mine in which a mechanical ventilator other than an auxiliary fan is installed must submit standing orders specifying the action that must be taken with respect to the withdrawal of persons from the mine or part thereof in the event of a stoppage of the ventilator. The standing orders must be submitted within a period of 30 days of the installation to the Regional Inspector-cum-Facilitator.
• Appeal to the Chief Inspector-cum-Facilitator – As per the draft regulations, an appeal against an order made by the Regional Inspector-cum-Facilitator may be preferred before the Chief Inspector-cum-Facilitator, who may confirm, modify or cancel the order. The appeal must be made within 15 days of receipt of the order by the aggrieved person.

Click Here To Read The Full Notification

The post Draft Metalliferous Mines Safety Regulations 2026 Issued for Public Feedback appeared first on Taxmann Blog.

source

Case Details: GOCL Corporation Ltd. vs. Regional Labour Commissioner (Central) [2026] 182 taxmann.com 132 (HC-Jharkhand)

Judiciary and Counsel Details

• Sujit Narayan Prasad & Rajesh Kumar, JJ.
• Indrajit Sinha & Ankit Vishal, Advs. for the Appellant.
• Prashant Vidyarthi, Sr. Panel Counsel & Rohit Kumar, Adv. for the Respondent.

Facts of the Case

In the instant case, the appellant company was awarded a contract by UCIL to excavate uranium ore. The appellant engaged contractual workers for said work. The Labour Enforcement Officer, Central, inspected the appellant company’s establishment and directed the appellant to report compliance regarding certain irregularities in the payment of minimum wages to contractual workers, alleging that the appellant had been paying less than the minimum wages as per the Government Notification.

Based on the inspection report, the Labour Enforcement Officer filed an application under section 20(2) of the Minimum Wages Act, 1948, before the appropriate authority. The Appropriate authority passed an order directing the appellant to deposit an amount which included a different amount of wages and compensation to be paid in favour of labourers who had been engaged in the execution of work by the appellant company.

Being aggrieved, the appellant filed a writ petition before the High Court. The High Court declined to interfere with the impugned order. Against the said order, the appellant filed an instant appeal.

High Court Held

The High Court held that the appellant company could not dispute the work inspection report. Thus, it was not a fit case to interfere with the impugned order passed by the appropriate authority, as also the order passed by the High Court.

The post HC Upholds Order Directing Payment of Minimum Wage Differential to Contract Workers appeared first on Taxmann Blog.

source

Case Details: Tvl. Shot X Retail (P) Ltd vs. State Tax Officer (ST) [2026] 182 taxmann.com 771 (Madras)

Judiciary and Counsel Details

• Krishnan Ramasamy, J.
• Sudalai Muthu N. for the Petitioner.
• R.Suresh Kumar, AGP for the Respondent.

Facts of the Case

The petitioner challenged the assessment order passed by the State Tax Officer pursuant to a single composite show cause notice (SCN) covering multiple financial years. The impugned order adjudicated demands in one consolidated proceeding. The petitioner relied on an earlier common order on an identical issue and contended that clubbing of adjudications for multiple financial years into one show cause notice and one assessment order was impermissible in law and rendered the assessment without jurisdiction. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the impugned order covered more than one financial year. Such clubbing was without jurisdiction and impermissible in law under Section 73 of the CGST Act. The Court held that the composite assessment could not be sustained and that the impugned assessment and consequential orders were to be quashed. The Court set aside the composite SCN with liberty to initiate separate proceedings for each financial year.

List of Cases Reviewed

• Smt. R. Ashaarajaa v. Senior Intelligence Officer, Directorate General Of GST Intelligences [2025] 176 taxmann.com 689/111 GST 91/101 GSTL 10 (Mad) (Para 9) followed

List of Cases Referred to

• Smt. R. Ashaarajaa v. Senior Intelligence Officer, Directorate General Of GST Intelligences [2025] 176 taxmann.com 689/111 GST 91/101 GSTL 10 (Mad) (para 5).

The post Composite SCN for Multiple Years Under Section 73 Invalid | HC appeared first on Taxmann Blog.

source

CMA Arjya Priya Sinha [2026] 183 taxmann.com 310 (Article)

Designing incentives and disincentives is one of the most powerful ways in which the State shapes the cost structure, risk profile and strategic choices of businesses. Well-crafted incentives can accelerate investment, innovation and employment, while poorly designed ones can distort behaviour, fragment firms, and burden public finances. For cost and management accountants, understanding these sector‑specific levers is essential for realistic costing, pricing, and long‑term planning.

This article analyses key categories of incentives and disincentives across selected sectors—manufacturing, services (including IT/ITeS), infrastructure and green/ESG-linked activities—and examines their impact on business operations and cost management. The focus is not on listing schemes exhaustively, but on drawing out patterns that matter for managerial decision‑making.

1. Conceptual Frame – Incentives, Disincentives and Cost Behaviour

Government interventions influence business economics through two broad channels:

• Incentives – tax holidays, accelerated depreciation, investment‑linked deductions, capital or interest subsidies, reduced customs duties, rebates in indirect taxes (e.g. SGST reimbursement), lower utility tariffs, concessional land, and soft regulations.
• Disincentives – higher tax rates, minimum alternate tax (MAT) expansion, environmental or sin levies, compliance thresholds, removal of exemptions, and tightening of definitions (for example, narrowing the scope of “charitable purpose” or widening tax bases).

From a cost‑management lens, these instruments alter:

• Fixed cost commitments (e.g. capex net of subsidy, long‑term power tariffs).
• Variable cost per unit (e.g. energy duty exemptions, customs duty on raw materials).
• Risk‑adjusted cost of capital (e.g. viability gap funding, tax stability).
• Effective tax rate over the project life, via tax holidays, deductions and MAT interactions.

A key insight from empirical work on size‑dependent incentives is that thresholds (based on turnover, headcount or investment) can create “cliffs” in the cost structure, motivating firms to remain small or to fragment operations to stay below the limit, rather than grow organically. This has deep implications for productivity and competitiveness.

2. Manufacturing – Incentives, Structural Choices and Cost Competitiveness

2.1 Nature of Incentives in Manufacturing

The manufacturing sector typically receives a dense mix of central and state‑level incentives, especially under the broad “Make in India” and industrial promotion agenda. Common mechanisms include:[4][6][3]

• Activity‑based tax incentives:

1. 1. Enhanced deductions for in‑house R&D expenditure (e.g. weighted deduction in certain periods),
   2. Exemptions or reductions in customs duty for importing capital goods and inputs used for export‑oriented or high‑tech production purposes.

• Investment‑based incentives:

1. 1. Capital subsidies of 20–25 percent of project cost for eligible projects,
   2. Higher subsidy percentages in backward regions or for specific thrust sectors such as electronics, chemicals, textiles or renewable components.

• State‑level incentives:

1. 1. Refund or reimbursement of net SGST output for a defined period,
   2. Stamp duty and registration fee concessions on land and loan documents,
   3. Electricity duty exemptions or per‑unit rebates for small and medium plants,
   4. Tailor‑made packages for mega projects.

These incentives directly affect the cost of setting up and scaling manufacturing facilities, often front‑loading benefits in the early years of a project’s life.

2.2 Operational and Cost Management Impact

For manufacturing businesses, incentives translate into specific cost and strategic consequences:

• Lower Effective Project Cost and Payback Period – Capital subsidies and tax holidays reduce the initial cash outlay and increase early post‑tax cash flows, which can materially improve project IRR and shorten payback.
• Location Decisions and Cluster Formation – Differential state incentives, especially SGST refunds, power tariff subsidies and land‑related concessions, lead firms to compare states not only on infrastructure and logistics, but also on multi‑year incentive value. This directly influences landed cost of production and distribution strategies.
• Cost Accounting Complexity – When multiple incentive streams exist—capital subsidy, interest subsidy, tax refunds—there is a need for robust treatment in cost accounts (e.g. allocation of subsidies to cost centres, impact on depreciation base, disclosure of government assistance). This complicates benchmarking across plants with and without incentives.

Click Here To Read The Full Article

The post [Opinion] Sector-Specific Incentives and Disincentives | Cost & Operations Impact appeared first on Taxmann Blog.

source

Case Details: Dheeraj Gupta vs. State of Madhya Pradesh [2026] 182 taxmann.com 595 (Madhya Pradesh)

Judiciary and Counsel Details

• Sandeep N. Bhatt, J.
• Sankalp Kochar, Adv. for the Appellant.
• A. Rajeshwar Rao, Adv. for the Respondent.

Facts of the Case

The applicant filed an anticipatory bail application apprehending arrest for alleged wrongful utilisation of input tax credit (ITC). He submitted that he had already been arrested in a connected proceeding initiated by the office of the Director General of GST Intelligence (DGGI), and therefore, prosecution on the same count of allegation could not be permitted to continue. It was contended that the alleged amount, if exceeding Rs. 5 crores, attracts a maximum sentence of five years, and that the offence could be compounded under Section 138 of the CGST Act either before or after prosecution. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the applicant had already faced one proceeding pursuant to action initiated by the office of the DGGI, and therefore, again prosecuting him on the same count of allegation would amount to double jeopardy. The court observed that the maximum sentence for the alleged amount, if exceeding Rs. 5 crores, is five years, and that the possibility of compounding under Section 138 of the CGST Act could not be ruled out. It further held that custodial interrogation was not warranted and that detaining the applicant would adversely affect his business.

List of Cases Referred to

• Arnab Ranjan Goswami v. Union ofIndia (2021) 1 SCC 1 (para 4)
• Amitbhai Anilchandra Shah v. CBI (2013) 6 SCC 348 (para 4)
• T.T. Antony v. State of Kerala (2001) 6 SCC 181 (para 4)
• Sri Akram Pasha v. Senior Intelligence Officer DGGI [2026] 182 taxmann.com 48 (Karnataka) (para 6)
• Sharat Babu Digumarti v. Government of NCT of Delh (2017) 2 SCC 18 (para 7)
• Deepak Singhal v. Union of India [2024] 167 taxmann.com 222 (Madhya Pradesh) (para 7)
• Sushil Kumar Singla v. State of UT Chandigarh [CRM – M 28701/2023 (O & M)] (para 7)
• Shalini Singhal v. State of MP [M.Cr.C. No. 5759 of 2024, dated 9-2-2024] (para 7)
• Sushila Aggarwal v. State (NCT of Delhi) (2020) 5 SCC 1 (para 16).

The post HC Grants Anticipatory Bail in Wrongful ITC Case Citing Double Jeopardy appeared first on Taxmann Blog.

source

Circular no. SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026; Dated: 10.02.2026

The Securities and Exchange Board of India (SEBI) has strengthened the compliance framework applicable to Credit Rating Agencies (CRAs) when they undertake rating activities relating to financial instruments that fall under the jurisdiction of other financial sector regulators (FSRs).

The revised framework seeks to enhance regulatory segregation, transparency, and investor protection.

1. Segregation of SEBI-Regulated and Other-Regulator Activities

Under the new framework, CRAs are required to:

• Maintain separate email IDs for:

1. 1. SEBI-regulated activities, and
   2. Activities regulated by other financial sector regulators

• Maintain separate web disclosures for such activities to ensure clear distinction.

This segregation is intended to prevent regulatory overlap and reduce the risk of investor confusion.

2. Protection of Minimum Net Worth Requirements

CRAs must ensure that:

• Their minimum net worth requirements, as prescribed under SEBI regulations,
• Are not adversely impacted by undertaking ratings of instruments overseen by other regulators.

This ensures that SEBI-regulated activities remain financially insulated and compliant with regulatory thresholds.

3. Enhanced Website Disclosures

CRAs are required to prominently disclose on their websites:

• The list of all activities being carried out
• The name of the regulator governing each activity

This measure promotes transparency and allows stakeholders to clearly understand the regulatory framework applicable to each service offered by the CRA.

4. Separation of Advertising and Marketing Materials

SEBI has mandated that:

• Advertising or marketing material relating to activities under other Financial Sector Regulators (FSRs)
• Must be separate and distinct from marketing materials related to SEBI-regulated activities.

This prevents any implied regulatory endorsement or confusion regarding investor protections.

5. Mandatory Client Confirmation

CRAs must obtain written confirmation from clients stating that:

• The client understands the nature of the activity being undertaken
• The risks involved in such activity
• The non-availability of SEBI investor protection mechanisms, including grievance or dispute redressal systems, for such non-SEBI-regulated activities

This requirement strengthens informed consent and mitigates potential misinterpretation by clients.

6. Regulatory Objective

The tightened framework aims to:

• Maintain regulatory clarity and jurisdictional boundaries
• Safeguard the integrity of SEBI-regulated activities
• Enhance investor awareness and informed decision-making
• Prevent mis-selling or regulatory arbitrage

7. Key Takeaway

CRAs undertaking activities regulated by other financial sector authorities must ensure operational segregation, enhanced disclosures, financial insulation, and explicit client consent, reinforcing transparency and regulatory discipline across multi-regulator engagements.

Click Here To Read The Full Circular

The post SEBI Tightens Compliance Norms for CRAs Rating Instruments Regulated by Other Authorities appeared first on Taxmann Blog.

source