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Case Details: State of Kerala vs. M. Vijayakumar [2026] 185 taxmann.com 444 (SC)

Judiciary and Counsel Details

• Manoj Misra & Prasanna B. Varale, JJ.
• Jaideep Gupta, Sr. Adv., C. K. Sasi, Deepak Prakash, Aors, Ms Meena K Poulose, Riddhi Bose, Ms Racheeta Chawla, Ms Sampriti Bakshi, Siddharth Banerjee, Sriram P., Ms Jyoti Pandey, Ms Divyangna Malik, Rahul Suresh, Ms Shivangi Rajawat, Rahul Rajeev, Ms Manshi Sinha, Ms Ridhika Singh, Sankalp Tewari, Daksh Rathi, Ms Snehil Singh, Advs. V. Chitambaresh, Sr. Adv., Vipin Nair, Aor, Aditya Narendranath, P B Sashaankh, Haresh Nair, Ms M.B. Ramya, Ms Deeksha Gupta & Ms Puspita Basak, Advs. for the Appearing Parties.

Facts of the Case

In the instant case, the Respondents were retired employees of the Kerala State Road Transport Corporation (KSRTC) who filed writ petitions challenging a Government Order. Under the said Order, to address inflationary pressures, Dearness Allowance (DA) payable to serving KSRTC employees was enhanced to 112% (an increase of 14%), while Dearness Relief (DR) payable to pensioners was enhanced to 109% (an increase of 11%) with effect from March 2021.

The grievance of the Respondents was that DR, like DA, is linked to inflation and serves the same purpose; therefore, it ought not to be enhanced at a lower rate. They contended that such differential treatment violated Article 14 of the Constitution.

The Single Judge dismissed the writ petitions, holding that serving employees and pensioners do not constitute a single class and that prescribing different rates of enhancement was permissible.

However, the Division Bench set aside this decision, holding that granting a lower rate of enhancement of DR (109%) as compared to DA (112%) was discriminatory and violative of Article 14.

Supreme Court Held

The Supreme Court observed that since both DA and DR are linked to inflation and share a common objective, prescribing a lower rate of enhancement for DR payable to pensioners than DA payable to serving employees is arbitrary and discriminatory.

Accordingly, the Court upheld the judgment of the Division Bench and held that such differential treatment violates Article 14.

List of Cases Reviewed

• Order of High Court of Kerala at Ernakulam in Writ Appeal Nos. 131 and 202 of 2022, Dated 22-11-2022 (para 26) affirmed

List of Cases Referred to

• M. Vijayakumar v. State of Kerala [W.P. (C) Nos. 6411 & 12062 of 2021, dated 14-12-2021] (para 1)
• Himachal Road Transport Corporation v. Himachal Road Transport Corporation Retired Employees Union [2021] 2 taxmann.com 2141 (SC) (para 13)
• T.N. Electricity Board v. R. Veerasamy (1999) 3 SCC 414 (para 13)
• State of Punjab v. Amar Nath Goyal 2005 taxmann.com 2143 (SC) (para 13)
• State of Rajasthan v. Amrit Lal Gandhi (1997) 2 SCC 342 (para 13)
• Chairman & MD, Kerala SRTC v. K. O. Varghese (2007) 8 SCC 231 (para 13)
• Kallakkurichi Taluk Retired Officials Association, Tamil Nadu v. State of Tamil Nadu [2013] 1 taxmann.com 8455 (SC) (para 16)
• M. Venugopalan Nair v. Chairman and Managing Director, KSRTC [Writ Petition (C) No. 13798 of 2012, dated 3-7-2013] (para 16)
• Managing Director of KSRTC v. M. Venugopalan Nair [W.A. No. 176 of 2014, dated 9-2-2017] (para 16)
• State of West Bengal v. Anwar Ali Sarkar (1952) 1 SCC 1 (para 22)
• Bhudhan Choudhary v. State of Bihar (1954) 2 SCC 791 (para 22)
• D. S. Nakara v. Union of India (1983) 1 SCC 305 (para 22)
• E.P. Royappa v. State of Tamil Nadu (1974) 4 SCC 3 (para 22)
• Ajay Hasia v. Khalid Mujib Sehravardi (1981) 1 SCC 722 (para 23)
• State of Punjab v. Davinder Singh (2025) 1 SCC 1 (para 24).

The post Lower DR Than DA Is Arbitrary – Violates Article 14 | SC appeared first on Taxmann Blog.

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Case Details: Agricultural Produce Marketing Committee vs. Income-tax Officer [2026] 185 taxmann.com 406 (Bangalore-Trib.)

Judiciary and Counsel Details

• Prashant Maharishi, Vice President & Sounadararajan K., Judicial Member
• Ravishankar, Adv. for the Appellant.
• Balusamy N., JCIT & Raghu, ITO for the Respondent.

Facts of the Case

The assessee was an Agricultural Produce Marketing Committee constituted under the relevant State legislation and regulated by the Department of Agriculture, Government of Karnataka. The income of the assessee comprised market fees and cess collected from agricultural produce transactions, which were claimed to be exempt under section 10(26AAB).

During the obtaining of the Permanent Account Number, the status of the assessee was erroneously recorded as a trust. Due to this incorrect classification, the assessee was unable to file a return in the appropriate form, as ITR-7 applicable to trusts did not provide for claiming exemption under section 10(26AAB).

Assessing Officer (AO) initiated reassessment proceedings under section 147 based on information regarding substantial cash deposits in bank accounts. Since no return was filed, the assessment was completed under section 147, read with section 144, treating the assessee as a trust and determining taxable income.

Aggrieved-assessee filed an appeal to the CIT(A), wherein the CIT(A) dismissed the appeal, and the matter reached the Bangalore Tribunal.

ITAT Held

The Tribunal held that the mere possession of a different PAN, reflecting the assessee’s status as a “trust,” did not warrant the denial of benefits or the taxation of its income. Subsequently, the assessee was granted a PAN, indicating its classification as a local authority from 2022.

Therefore, an error in obtaining or allotting the PAN should not result in taxation, particularly when the Income Tax Act provides for complete exemption of the assessee’s income under Section 10(26AAB). Based on the foregoing facts, the Tribunal concluded that the assessee was eligible for a deduction under Section 10(26AAB), rendering the assessee’s income exempt.

Consequently, the Assessment Orders on merits were set aside, and the AO was instructed to grant exemption on the entirety of the assessee’s income and to determine the total income for all relevant Assessment Years as Nil.

List of Cases Referred to

• Vijay Kumar v. ITO [Writ Petition No. 18395 of 2025, dated 24-11-2025] (para 17)
• Tarish Investment and Trading Company (P.) Ltd v. Union of India [2025] 179 taxmann.com 198 (Karnataka) (para 17)
• Mohammed Yaseen v. ITO [2025] 175 taxmann.com 280 (Karnataka) (para 17)
• Vikas Gupta v. Union of India [2022] 142 taxmann.com 253/289 Taxman 443/448 ITR 1 (Allahabad) (para 18)
• ITO v. Mangla Gupta [2026] 183 taxmann.com 121/309 Taxman 171 (SC) (para 19)
• Kusum Healthcare (P.) Ltd. v. Dy. CIT [2025] 173 taxmann.com 58/304 Taxman 471 (Delhi) (para 20).

The post APMC Exemption Allowed Despite Wrong PAN Status | ITAT appeared first on Taxmann Blog.

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Case Details: Narasus Saarathy Enterprises (P.) Ltd. vs. Additional Commissioner of GST & Central Excise [2026] 185 taxmann.com 321 (Madras)

Judiciary and Counsel Details

• C. Saravanan, J.
• Ms Aparna Nandakumar for the Petitioner.
• Sai Srujan Tayi, Sr. Standing Counsel for the Respondent.

Facts of the Case

The petitioner was engaged in the supply of maida, sooji, etc., was registered under GST. It supplied certain goods in unit containers without registered brand names, claiming exemption under Serial Nos. 73 and 74 of Notification No. 2/2017-Central Tax (Rate), dated 28-06-2017, while branded goods were taxed at applicable rates. It was contended that though packaging carried a generic farmer image and corporate name, an affidavit was filed disclaiming any actionable claim or enforceable right over the brand, which the Department acknowledged. It was further submitted that regular returns were filed and there was no suppression of facts, as the exemption claim was duly disclosed. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the invocation of the extended period under Section 74 of the CGST Act, read with the Tamil Nadu GST Act, was not sustainable as the essential ingredients of fraud, wilful misstatement, or suppression of facts were not established. It was observed that the petitioner had already filed an affidavit disclaiming any actionable claim or enforceable right over the alleged brand name, thereby placing the jurisdictional officer under CGST on notice regarding the exemption claimed under Serial Nos. 73 and 74 of Notification No. 2/2017-Central Tax (Rate), dated 28-06-2017. The Court further noted that regular returns were filed and there was no concealment of material facts from the Department. Accordingly, it was held that only the normal limitation period under Section 73 was applicable, rendering the demand under Section 74 unsustainable.

List of Cases Reviewed

• Nizam Sugar Factory v. CCE, AP., 2006 (197) ELT 465 (SC) (para 87), followed

List of Cases Referred to

• Titan Company Ltd. v. Joint Commissioner of GST & Central Excise [2024] 159 taxmann.com 162 (Madras) (para 33)
• Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories [2025] 171 taxmann.com 214/108 GST 750/95 GSTL 356 (Kerala) (para 34)
• Veremax Technologie Services Ltd. v. Asstt. Commissioner of Central Tax [2024] 167 taxmann.com 332 (Karnataka) (para 38)
• Bangalore Golf Club v. Commercial Tax Officer (Enforcement) [2024] 164 taxmann.com 51/105 GST 275 (Karnataka) (para 38)
• Dilip Kumar Swain v. Dy Director, DGGI [W. P. (C) No. 27979 of 2024, dated 26-11-2024] (para 38)
• X L Interiors v. Deputy Commissioner (Intelligence), SGST Department [2024] 169 taxmann.com 707 (Kerala) (para 38)
• Pushpam Pharmaceuticals Co. v. Collector of Control Excise 1995 Supp. (3) SCC 462 (para 39)
• Continental Foundation Joint Venture v. CCE 2007 taxmann.com 532/2007 (216) E.L.T. 177 (SC) (para 39)
• Nizam Sugar Factory v. CCE 2006 taxmann.com 2313/2006 (197) E.L.T. 465 (SC) (para 39)
• Jaiprakash Industries Ltd. v. CCE 2002 taxmann.com 171/2002 (146) E.L.T. 481 (SC) (para 39)
• Padmini Products v. CCE 1989 taxmann.com 629/1989 (43) E.L.T. 195 (SC) (para 39)
• K.T. Murukan v. Commissioner (Appeals-I) 2017 (5) G.S.T.L. 248 (Ker.) (para 39)
• Additional/Joint Commissioner of GST and Central Excise v. Eskay Trans [W. A. No. 3448 of 2025, dated 12-11-2025] (para 41)
• Mathur Polymers v. Union of India [2025] 177 taxmann.com 860/103 GSTL 72 (Delhi) (para 42)
• ITC Ltd. v. Nestle India Ltd. 2020 SCC Online Mad 1158 (para 60)
• Astra Pharmaceuticals (P.) Ltd. v. CCE 1995 taxmann.com 825/1995 (75) E.L.T. 214 (SC) (para 61).

The post GST Exemption Allowed Despite Brand Image After Disclaimer | HC appeared first on Taxmann Blog.

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1. Question

A public sector undertaking (PSU), incorporated under the Companies Act, 1956, jointly owned by the Ministry of Railways (MoR) and the Government of Maharashtra, has been set up as a project implementing agency for execution of suburban railway infrastructure projects under the Mumbai Urban Transport Project (MUTP). The Company operates without profit motive and is registered under section 12A of the Income-tax Act, 1961.

In the course of its operations, the Company has constructed residential quarters on land owned by Indian Railways in accordance with Railway Board guidelines, which permit PSUs to construct houses on railway land at their own cost. The total construction cost incurred by the Company for 78 residential units (72 in Mumbai and 6 in Pune) amounts to Rs. 5,547 lakhs.

As per the arrangement with Railways, 50% of the constructed quarters (i.e., 39 units) are licensed to the Company for a period of 30 years at a nominal lease rent of Rs. 1,000 per annum per unit, while the remaining 50% are retained by Railways. The ownership of both land and structures continues to vest with Indian Railways at all times, and upon expiry of the lease term, the Company is required to hand over the quarters without any compensation.

The Company has the right to use the licensed quarters for residential and official purposes, primarily for its employees and railway officers on deputation. The allotment and usage of these quarters are governed by Railway rules, and the Company is responsible for maintenance during the lease period. Further, although Railways retain a right to substitute or interchange quarters, such substitution is limited and does not affect the Company’s entitlement to use 39 units at any given time.

The construction of these quarters has been executed partly through direct funding to Railways (in certain cases) and partly by the Company through contractors, thereby involving both funding arrangements and provision of construction services.

The Company has capitalised the entire construction cost as “Tangible Assets under leasehold premises” under Property, Plant and Equipment (PPE) and is amortising it over the 30-year lease period, as the expenditure results in future economic benefits in the form of leasehold rights.

However, during audit, it has been contended that since ownership of the assets rests with Railways and the Company merely has a limited right to use the premises, such assets should not be recognised as PPE, and the expenditure should be treated differently in accordance with applicable accounting standards.

In this context, an issue has arisen regarding the appropriate accounting treatment of the construction costs incurred on such residential quarters under Indian Accounting Standards (Ind AS), specifically whether such costs should be capitalised as PPE and amortised over the lease term, or accounted for as right-of-use assets under lease accounting principles or in any other manner. Additionally, it is necessary to determine the correct presentation of such transactions in the financial statements.

2. Relevant Provisions

Ind AS 116, Leases

Para 9 – At inception of a contract, an entity shall assess whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Paragraphs B9–B31 set out guidance on the assessment of whether a contract is, or contains, a lease.

Para 22 – At the commencement date, a lessee shall recognise a right-of- use asset and a lease liability.

Para 23 – At the commencement date, a lessee shall measure the right-of-use asset at cost.

Para 26 – At the commencement date, a lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date. The lease payments shall be discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee shall use the lessee’s incremental borrowing rate.

Ind AS 115, Revenue from Contracts with Customers

Para 31 – An entity shall recognise revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (i.e., an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset.

Para 46 – When (or as) a performance obligation is satisfied, an entity shall recognise as revenue the amount of the transaction price (which excludes estimates of variable consideration that are constrained in accordance with paragraphs 56–58) that is allocated to that performance obligation. Determining the transaction price.

Para 47 – An entity shall consider the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some 14 sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

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Editorial Team – [2026] 185 taxmann.com 656 (Article)

Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.

1. European Union (EU) Agreed on the Reform of Customs Union Framework

The European Commission announced on 26-03-2026 that the European Parliament and the Council have reached an agreement on a reform of the EU Customs Union. The reform introduces a modern, data-driven customs architecture, simplifies procedures, and enhances efficiency in customs operations across Member States.

The reform updates and integrates customs operations through a single data environment and a more uniform approach at the external border. It provides for the establishment of an EU Customs Authority, the development of the EU Customs Data Hub, specific measures for e-commerce, and a strengthened framework for businesses, with phased implementation of these measures.

Key aspects of this reform include:

(a) Introduction of EU Customs Data Hub as a single entry point for customs data – The reform introduces an EU Customs Data Hub as a single digital interface for the submission of customs data. Businesses will be required to submit data through this central system instead of multiple national systems. The implementation is phased, with the Data Hub opening for e-commerce consignments in 2028, extending to other businesses in 2031, and becoming the single mandatory EU Customs entry point for all traders in 2034.

(b) Establishment of the EU Customs Authority at the EU level – The reform provides for the establishment of an EU Customs Authority (EUCA) to coordinate customs operations across Member States. The authority will develop, operate and maintain the EU Customs Data Hub and support cooperation between national customs administrations. It will also facilitate information-sharing and risk coordination at the EU level. The seat of the authority has been designated in Lille, France, and it will commence some activities progressively from 2027.

(c) Shift from a declaration-based system to a data-driven customs approach – The reform replaces the existing declaration-based customs processes with a data-driven approach. Customs operations will be based on data submitted through the EU Customs Data Hub instead of transaction-based declarations across different systems.

(d) New framework for e-commerce operators as ‘importer for distance sales’ – The reform introduces a new framework under which online platforms and sellers are treated as ‘importers for distance sales’. These operators will be required to report sales data through the EU Customs Data Hub immediately after transactions. They will be responsible for ensuring payment of customs duties and VAT and compliance with applicable EU legislation. They will also be liable for financial obligations (customs duties and other fees) and may face penalties in case of non-compliance.

(e) Removal of duty exemption for low-value consignments below €150 – The reform removes the existing customs duty exemption for goods valued below €150. This exemption will no longer apply to low-value consignments entering the EU, particularly in the context of e-commerce imports.

(f) Temporary customs duty on low-value consignments – From 01-07-2026, a temporary customs duty of €3 will apply to items contained in low-value consignments entering the EU. This measure applies as an interim solution pending full implementation of the new customs data system.

(g) Introduction of handling fee on imported goods – A handling fee will be introduced on imported goods to cover customs processing costs, including IT systems, data verification, risk analysis, and controls. The fee will be determined through a delegated act and will apply at the latest by 01-11-2026.

Sources:

Press Release

Questions and Answers

2. Vietnam Reduced Import Tariffs on Fuel Products

The Government of Vietnam has issued Decree No. 72/2026/ND-CP, reducing import tariffs on certain fuel and petrochemical products. The decree provides for the reduction of most-favoured-nation (MFN) import tariffs on gasoline, diesel, fuel oil, jet fuel, kerosene, and specified petrochemical feedstocks to 0 percent. The measures apply for a limited period from 09-03-2026 to 30-04-2026.

Key changes under this decree include:

(a) Reduction of the most-favoured-nation (MFN) import tariff on gasoline and blending components to zero percent – The decree reduces the MFN import tariff on unleaded motor gasoline from 10 percent to 0 percent. It also reduces tariffs on gasoline blending components such as naphtha and reformate from 10 percent to 0 percent.

(b) Reduction of import tariffs on diesel, fuel oil, jet fuel and kerosene to zero percent – The decree reduces import tariffs on diesel fuel, fuel oil, jet fuel and kerosene from 7 percent to 0 percent.

(c) Reduction of import tariffs on petrochemical feedstocks and cyclic hydrocarbons – The decree reduces import tariffs on xylene, condensate and p-xylene from 3 percent to 0 percent. It also reduces tariffs on other cyclic hydrocarbons from 2 percent to 0 percent.

Sources:

Official Source

Decree 72/2026/ND-CP

Click Here To Read The Full Article

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Case Details: Union of India vs. Sunil Kumar Rai [2026] 185 taxmann.com 173 (SC)

Judiciary and Counsel Details

• S.V.N. Bhatti & Panjaj Mithal, JJ.
• Ms Archana Pathak Dave, ASG, Ms Sweksha, Ms Harshita Choubey, Ms Ankita Choudhary Rathi, Jagdish Chandra, Advs. & Mukesh Kumar Maroria, AOR for the Petitioner.
• Ms Meenakshi Arora, Sr. Adv., Anas Tanwir, AOR, Ganesh A. Khemka, Shreenath A. Khemka, Sarthak Sharma, Ms Vidhi Gupta, Chandratanay Chaube, Ebad Ur Rahman, Ms Masoom Raj Singh, Ms Zainab Shaikh, Fakhre Alam & Kashif Jamal, Advs. for the Respondent.

Facts of the Case

In the instant case, the writ petitioners were Junior Engineers in the Border Roads Organisation, originally inducted in subordinate engineering cadres and redesignated after the Fifth Central Pay Commission. Under the Sixth Central Pay Commission, they were placed in Grade Pay Rs. 4,200 and subsequently progressed to Rs. 4,800 (Level 8) under MACP.

Relying on Para 7.4.13(iv)(b) of the Seventh Central Pay Commission, they claimed Non-Functional Upgradation (NFU) to Level 9 (Grade Pay Rs. 5,400) upon completion of four years in Level 8. Their claim was, however, rejected by BRO vide letter dated 19-02-2021.

The respondents contended that CPC recommendations were merely advisory, that NFU was applicable only to those having an entry-level Grade Pay of Rs. 4,800, and that Junior Engineers who reached that level through MACP were not eligible.

High Court Held

The High Court rejected these contentions and held that completion of four years in Level 8, on a seniority-cum-suitability basis, irrespective of the mode of reaching that level, entitled the petitioners to NFU, and accordingly directed the grant of Grade Pay Rs. 5,400.

On appeal, the Supreme Court of India held that the denial of NFU based on entry-level Grade Pay amounted to adding a condition not contemplated under Para 7.4.13(iv)(b).

Further, it observed that completion of four years in Level 8 on a seniority-cum-suitability basis, irrespective of how such level was attained, entitled the petitioners to NFU. Accordingly, no interference with the order of the High Court was warranted.

List of Cases Reviewed

• Sunil Kumar Rai v. Union of India [W.P. (C) No. 5518 of 2021, dated 14-3-2023] (para 13) affirmed

List of Cases Referred to

• Sunil Kumar Rai v. Union of India [W.P. (C) No. 5518 of 2021, dated 14-3-2023] (para 3)
• M. Subramaniam v. Union of India [W.P No. 13225 of 2010, dated 6-9-2010] (para 7)
• Sushil Kumar v. Union of India [2024 SCC OnLine Del 6482] (para 7)
• Gajendra Singh v. Union of India [2025 SCC OnLine Del 1651] (para 7)
• Union of India v. Gajendra Singh [SLP (Civil) D. No(s). 1406 of 2026, dated 9-2-2026] (para 7)
• Union of India v. Sushil Kumar [SLP (Civil) D. No(s). 13406 of 2025, dated 17-4-2025] (para 7)
• Union of India v. M. Subramaniam [Civil Appeal No(s). 8883 of 2011, dated 10-10-2017] (para 7).

The post SC Grants NFU to BRO JEs After 4 Years in Level 8 appeared first on Taxmann Blog.

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Case Details: Star Grain and Shipping (P.) Ltd. vs. Chetan Dalal [2026] 185 taxmann.com 530 (Bombay)

Judiciary and Counsel Details

• Manish Pitale, J.
• Kevic Setalvad, Sr. Adv., Ms Malcolm Siganporia, Mrs Manisha Mane Bhangale, Ms Bijal Vora & Ashutosh Agarwal for the Appellant.
• Haresh Jagtiani, Sr. Adv., Yashpal Jain, Ms Jahnavi Vora, Pranay Kamdar & Siddhesh Jadhav for the Respondent.

Facts of the Case

In the instant case, the petitioner before the Company Law Board (CLB), being the uncle of the original appellant-individual, along with his brother, had carried on business through a flagship partnership and allied entities. The appellant-company was incorporated in 1976. The petitioner claimed a 30% shareholding therein and was appointed as a director with effect from 01.10.1997.

Relations deteriorated during the period 2005–2007. In 2007, the petitioner sought details of dues and records but was allegedly ousted from office as well as residence. In 2011, when he sought information from DSIPL, the company recognised only the original appellant-individual. He also came to know of an arbitral award dated 2010 between the original appellant-individual and his father. After the father’s death in 2013, the original appellant-individual, as alleged executor, pressed claims under the said award.

The petitioner thereafter searched RoC records and alleged abuse of position and share transactions which reduced his shareholding. He issued a notice in 2013 alleging oppression and mismanagement and filed Company Petition No. 120 of 2013 before the CLB seeking, inter alia, declarations that the share allotments/transfers reducing his shareholding were illegal, rectification of the register, recognition of his continued 30% holding, reinstatement as director, access to company information, and restraint against acts of mismanagement.

High Court Held

The CLB, by the impugned order, granted reliefs to the petitioner. The High Court observed that since the acts of oppression and mismanagement were of a continuous nature, the petition filed before the CLB could not be said to be barred by delay and laches. The CLB was well within its jurisdiction to examine the documents on record and verify the petitioner’s claims; hence, it could not be said that it exceeded its jurisdiction or ought to have relegated the parties to a civil court.

Since the findings rendered by the CLB were based on appreciation of documents and material on record, the contents of which were not even denied by the original appellant-individual, such findings could not be termed perverse or beyond jurisdiction. The High Court further held that, in view of specific findings recorded by the CLB regarding the mala fide manner in which the petitioner was ousted from the company, the direction for appointment of a special auditor could not be a ground to set aside the impugned order. Accordingly, no case was made out for interference with the impugned order of the CLB.

List of Cases Referred to

• Surinder Singh Bindra v. Hindustan Fasteners (P.) Ltd. [1990] 69 Comp Case 718 (Delhi) (para 12)
• Hungerford Investment Trust Ltd. v. Turner Morrison & Co. Ltd [1972] ILR 1 Cal 286 (para 12)
• Balkrishna Savalram Pujari v. Shree Dnyaneshwar Maharajsansthan [1959 SCC OnLine SC 68] (para 13)
• Samruddhi Co-operative Housing Society Ltd v. Mumbai Mahalaxmi Construction (P) Ltd (2022) 4 SCC 103 (para 13)
• Ms. Sulochana Neelkanth Kalyani v. Takle Investments Co. [2016] 70 taxmann.com 351/136 SCL 174 (Bom) (para 13)
• Ansar Khan v. Finecore Cables P. Ltd [2006 SCC OnLine CLB 26] (para 14)
• Jiwan Mehta v. Emmbros Forging (P.) Ltd. [2010] 1 taxmann.com 109 (CLB) (para 14)
• Indian Bank v. Satyam Fibres (India) (P) Ltd (1996) 5 SCC 550 (para 14)
• Jaydayal Poddar v. Mst. Bibi Hazra (1974) 1 SCC 3 (para 15)
• Nagindas Ramdas v. Dalpatram Ichharam (1974) 1 SCC 242 (para 15)
• Sabita Rajesh Narang v. Sandeep Gopal Raheja [AIR Online 2023 BOM 699] (para 15)
• Ajodhya Pd. Bhargava v. Bhawani Shankar Bhargava [1956 SCC OnLine All 131] (para 15)
• Commissioner of Customs v. Ballarpur Industries Ltd (2021) 10 SCC 736 (para 16)
• Kantha Vibhag Yuva Koli Samaj Parivartan Trust v. State of Gujarat (2023) 13 SCC 525 (para 17)
• Abdul Wahid Abdul Gaffor Khatri v. Safe Heights Developers (P) Ltd. [2018 SCC OnLine Bom 693] (para 20)
• Chalasani Udaya Shankar v. Lexus Technologies (P.) Ltd. [2024] 166 taxmann.com 267/186 SCL 309 (SC) (para 23)
• Adesh Kaur v. Eicher Motors Ltd. [2018] 96 taxmann.com 99/148 SCL 765 (SC) (para 23)
• V.S. Krishnan v. Westfort Hi-Tech Hospital Ltd. [2008] 83 SCL 44 (SC) (para 28)
• Purnima Manthena v. Dr. Renuka Datla [2015] 62 taxmann.com 89/132 SCL 602 (SC) (para 28)
• Kishore Samrite v. State of Uttar Pradesh (2013) 2 SCC 398 (para 51)
• North Eastern Railway Admin., Gorakhpur v. Bhagwan Das [2013] 31 taxmann.com 114 (SC) (para 53)
• Satish Chand Surana v. Raj Kumar Meshram [2021 SCC OnLine SC 3446] (para 53)
• A. Andisamy Chettiar v. A. Subburaj Chettiar (2015) 17 SCC 713 (para 53)
• Gajanan Jaikishan Joshi v. Prabhakar Mohanlal Kalwar (1990) 1 SCC 166 (para 53).

The post HC Upholds CLB Findings on Oppression & Mismanagement appeared first on Taxmann Blog.

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CA Bhavya Goyal – [2026] 185 taxmann.com 658 (Article)

In today’s volatile geopolitical and economic environment, the latest Advance Pricing Agreement (APA) report released by the CBDT for FY 2025-26 (dated 31st March 2026) brings a much-needed sense of certainty to one of the most contentious areas of taxation—Transfer Pricing.

Transfer pricing has long been one of the most litigation prone topics in international tax. For multinational enterprises operating in India, the question of how to price transactions between related parties has historically meant years of litigation, enormous compliance burdens, and outcomes that the taxpayers could never predict with confidence. India is now making a deliberate and systematic effort to change that by way of various proactive measures such as the APA programme and the Safe Harbour Rules.

1. Advance Pricing Agreement

The APA programme is among the most effective transfer pricing certainty initiatives in India for creating a taxpayer-friendly tax environment. It delivers essential tax certainty to businesses, which benefits both taxpayers and tax authorities alike. Greater predictability in taxation plays a vital role in encouraging investment, ease of doing business and overall economic growth. India introduced the APA programme through the Finance Act, 2012, primarily to promote tax certainty and prevent double taxation on cross-border transactions. Since its inception, the programme has emphasised a thorough, constructive, fact-based, and cooperative approach to transfer pricing issues. This collaborative spirit remains the foundation of the APA framework.

According to the OECD Transfer Pricing Guidelines, an APA is an arrangement between a taxpayer (and, where applicable, its associated enterprises) and one or more tax administrations. It establishes, in advance, an appropriate set of criteria (such as the transfer pricing method, adjustments and margins based on certain critical assumptions) to determine the arm’s length price for the covered international transactions during the term of the agreement. The APA provides certainty to the taxpayer for a period of 5 years forward and 4 years roll back which works out to 9 years if the taxpayers opts for the roll back provisions. APAs in India can be of two main types:

• Unilateral APA (UAPA) – An agreement solely between the taxpayer and the Indian tax authorities.
• Bilateral APA (BAPA) – An agreement involving the taxpayer, its associated enterprises, and the tax authorities of India and one or more foreign countries.

2. CBDT Press Release dated 31st March 2026 – The APA Annual Report

In the FY 2025-26, the Central Board of Direct Taxes (CBDT) has entered into a record 219 APAs with Indian taxpayers. This year the total number of APAs since the inception of the APA programme has crossed the 1000th mark, aggregating to 1034 APAs, comprising 750 UAPAs and 284 BAPAs. The following table lists the numbers of APAs signed in India since the inception of the APA programme.

The above numbers are very encouraging and show the success and progress of the India’s APA programme over the past many years since its implementation.

3. Safe Harbour

Safe Harbour Rules complement the APA framework by offering a faster, lower-cost alternative for achieving transfer pricing certainty. Introduced in 2013, the Safe Harbour framework prescribes fixed margins for specified categories of international transactions. The regime currently spans twelve transaction categories, including IT and software services, IT-enabled services, KPO, contract R&D, intra-group financing, guarantees, auto components, low value-adding services, and certain transactions in the diamond industry.

Safe Harbour is a simple, rule-based option where the CBDT prescribes fixed profit margins (e.g., the recent uniform 15.5% for IT services) for specified routine international transactions. If a taxpayer meets the eligibility criteria and declares profits at or above the prescribed margin, the tax authorities automatically accept the pricing as arm’s length without scrutiny, offering quick, low-cost compliance with minimal documentation and an automated approval process. In contrast, an APA is a negotiated, taxpayer-specific agreement between the taxpayer (and possibly foreign tax authorities in bilateral cases) and the Indian tax administration. It allows customisation of the transfer pricing method, comparables, and adjustments tailored to the company’s facts and circumstances, providing higher flexibility and stronger protection, especially for complex or high-value transactions. However, it involves a longer process, higher costs, and more detailed documentation.

In short, Safe Harbour prioritises speed and simplicity for standardised cases, while APA offers deeper, bespoke certainty at the expense of time and effort.

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Circular No. A.P. (DIR Series) Circular No. 07, Dated 20.04.2026

The Reserve Bank of India (RBI) has withdrawn the relaxation granted vide circular dated April 1, 2026 and has clarified restrictions on INR-based foreign exchange (FX) derivative transactions with related parties.

1. Prohibition on Related Party Transactions

• Authorised Dealers (ADs) are now prohibited from undertaking INR-based FX derivative contracts with related parties

2. Limited Exceptions Permitted

The RBI has allowed restricted exceptions for:

• Cancellation or rollover of existing contracts
• Back-to-back transactions with:

1. 1. Non-related, non-resident users
   2. In accordance with the relevant Master Direction

3. Definition of ‘Related Party’

• The term ‘related party’ shall be interpreted in line with Ind AS / IAS 24

This ensures consistency with accounting and disclosure standards.

4. Regulatory Impact

The revised position aims to:

• Prevent conflicts of interest and misuse of derivatives
• Strengthen prudential controls in FX markets
• Ensure transactions are undertaken at arm’s length

5. Effective Date

• The directions are effective immediately

6. Conclusion

The withdrawal of the earlier relaxation reinforces RBI’s focus on risk containment and market integrity, ensuring that FX derivative transactions remain transparent, compliant, and free from related-party risks.

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Amod Khare & Husein Zaki – [2026] 185 taxmann.com 579 (Article)

India’s transfer pricing framework is entering a new, data-driven era. With the introduction of Form 48, reporting shifts decisively from broad standardised disclosures to a structured, analytics-ready format.

Introduced by the Central Board of Direct Taxes (CBDT) under the Income-tax Act, 2025, Form 48 replaces the long-standing Form 3CEB with effect from Tax Year 2026-27. The new framework significantly enhances the granularity and traceability of disclosures and is expected to impact not just reporting, but also taxpayer systems, processes, and governance.

This transition aligns with the tax administration’s increasing reliance on data analytics and automated risk assessment, signalling a clear move towards a more technology-driven compliance and audit environment.

1. From Summary‑Level to Transaction‑Level Reporting

The Income-tax Rules, 2026, and the related prescribed forms will come into force from April 1, 2026, and apply from Tax Year 2026-27 onwards. Against this backdrop, Form 48 reflects a clear move towards data‑rich, analytics‑ready reporting that can be more effectively examined by tax authorities for risk assessment and compliance review.

2. Comparative Analysis

To understand the extent of this shift, it is useful to compare the existing Form 3CEB with the Form 48 across key dimensions:

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