This weekly newsletter analytically summarises the key stories reported at taxmann.com during the previous week from Mar 30^th  to April 4^th 2026, namely:

1. Analysis of 20+ Changes in the New ITR Forms Applicable for Assessment Year 2026-27
2. CBDT Amends GAAR Rules to Allow Grandfathering of Investments Made Before 01-04-2017
3. Lok Sabha Approves IBC Amendment Bill, 2026 Enabling Creditor-Led Insolvency and Faster Resolutions
4. Section 60(4) of Social Security Code Held Discriminatory for Restricting Maternity Benefits to Adoption of Infants Under 3 Months as It Violates Article 14: SC
5. Attachment of Overdraft Account for GST Recovery Impermissible as No Actual Funds Available: HC
6. Assignment of Industrial Plot Leasehold Rights Not Liable to GST as Transfer Lacked Business Nexus: HC
7. ICAI Allows One-Time Relaxation to Generate Pending UDINs During the Portal Transition Period
8. NFRA Issues Auditor–Audit Committee Series 5 Discussing Auditing Provisions and Contingencies Under Ind AS and SA
9. Accounting Treatment of Foreign Exchange Fluctuations in Inventory Purchases Under the Ind AS Framework

1. Analysis of 20+ Changes in the New ITR Forms Applicable for Assessment Year 2026-27

The Central Board of Direct Taxes (CBDT) has notified Income-tax Return (ITR) Forms 1 to 7, along with ITR-V and ITR-U, for the Assessment Year 2026–27, relating to income earned during the Previous Year 2025–26 (April 1, 2025, to March 31, 2026).

The ITR forms have been notified on time this year, unlike last year, when their release in the last week of April 2025 delayed the ITR utility and resulted in an extension of the ITR filing deadlines. This article presents an analysis of the key changes incorporated in the revised ITR forms for AY 2026–27, which includes as follows:

• Requires the reporting of turnover & income from futures & option trading.
• Reporting is required for the disallowance of MSME interest.
• Requires disclosure of the interest and remuneration due or received from the partnership firm.
• Reporting of the fee for furnishing the revised return of income.
• Name and PAN of the political party to be furnished under Schedule 80GGC.
• Schedule 80G seeks the IFSC and Transaction Reference Number.
• Changes made to incorporate the due date, extended to 31^st August by the Finance Act 2026, for filing the return of income.
• Assessees opting for the presumptive tax scheme are required to disclose the investment made by them.
• ‘Total value’ of investment made by the charitable trust, instead of its ‘Nominal value’, will be reported.
• Reporting is required for the validity period of registration obtained under other laws.
• Reporting of income from the presumptive scheme applicable to non-residents.
• Reporting of interest income from Companies, NBFCs and HFCs in Schedule OS.
• Removal of the fields seeking reporting of foreign retirement accounts from ITR 1 and ITR 4
• Rationalisation of auditor details sought in ITR Forms

Read the Analysis

2. CBDT Amends GAAR Rules to Allow Grandfathering of Investments Made Before 01-04-2017

Rule 10U of the Income-tax Rules, 1962, lays down the situations where GAAR (General Anti-Avoidance Rules) will not apply, i.e., it provides “grandfathering” and exceptions.

Rule 10U(1)(d) provides that GAAR shall not apply to any income accruing, arising, or received by or deemed to accrue, arise, or be received by any person as a result of a transfer of investments made before April 1, 2017. This is called the “grandfathering” provision. Further, Rule 10U(2) provides an exception to Rule 10U(1)(d) that GAAR can apply to any arrangement irrespective of the year in which it was entered into, provided the tax benefit is obtained on or after April 1, 2017.

The CBDT has amended Rule 10U and the corresponding Rule 128 of the Income-tax Rules, 2026, to clarify the scope of grandfathering. The amended rules clarify that the grandfathering provisions apply to investments made before 01-04-2017.

The pre-amendment Rule 10U(2) was framed as a ‘without prejudice’ proviso, meaning it operated over and above and effectively overrode the grandfathering under Rule 10U(1)(d). The ‘without prejudice’ language is removed entirely from Rule 10U(2).  Instead, Rule 10U(2) now contains an explicit exception. GAAR applies to arrangements generating benefits on or after April 1, 2017, except where such income arises from the transfer of investments made before that date.

The amendment comes into force on March 31, 2026. The Explanatory Memorandum explicitly states that Chapter X-A shall not be invoked ‘on or after the date of publication’ in cases of pre-April 2017 investment transfers.

Read the Notification

3. Lok Sabha Approves IBC Amendment Bill, 2026 Enabling Creditor-Led Insolvency and Faster Resolutions

On March 30, 2026, the Lok Sabha passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2026, introducing a creditor-initiated framework, tighter timelines, enhanced CoC oversight, and clearer treatment of claims, guarantor assets and avoidance transactions, aimed at improving efficiency and value realisation under the Code.

3.1 Key Highlights

The key highlights of the Bill are as follows:

• Time-bound Admission or Rejection of CIRP Applications [Section 7] – Earlier, section 7(5) of the IBC allowed the Adjudicating Authority to admit or reject applications upon satisfaction of default, without a strict timeline. The proposed amendment now mandates that such admission or rejection must be done within 14 days of receipt of the application. The requirement to allow rectification of defects continues. This is expected to bring greater certainty and reduce delays at the admission stage.
• Regulated Withdrawal of CIRP Applications with Defined Timelines [Section 12A] – Previously, withdrawal of CIRP applications was permitted with 90% CoC approval, but procedural clarity was limited. The proposed amendment allows withdrawal even when made by the resolution professional and introduces restrictions by prohibiting withdrawal before the CoC constitution and after the invitation for resolution plans. It also mandates disposal within 30 days, with reasons for any delay to be provided. This brings structure and prevents misuse of withdrawal provisions.
• Supervisory Role of CoC in Liquidation Proceedings [Section 21] – Under the earlier framework, the role of the CoC largely ceased upon commencement of liquidation. The proposed amendment now provides that the CoC must supervise the conduct of liquidation by the liquidator. It also enables participation of additional classes of creditors without voting rights. This strengthens creditor oversight even during liquidation.
• Transfer of Guarantor Assets during CIRP with CoC Approval [Section 28A] – The Code did not expressly deal with the transfer of guarantor assets during CIRP. The newly inserted section 28A permits such transfers, subject to CoC approval and specified conditions. It also prescribes different approval thresholds and treatment of proceeds depending on whether the guarantor is under CIRP, liquidation or bankruptcy. This provides clarity and enables better value realisation across interconnected entities.
• Streamlined Approval, Implementation and Finality of Resolution Plans [Section 31] – Earlier, provisions did not clearly provide for phased approvals or strict timelines. The proposed amendment allows approval of implementation first, followed by distribution, and mandates that the Adjudicating Authority render a decision within 30 days. It also allows rectification of defects, requires prior regulatory approvals, and protects licences and permits post-approval. Further, it clarifies the extinguishment of pre-approval claims against the corporate debtor while preserving the liabilities of guarantors. This significantly improves the certainty and enforceability of resolution plans.
• Expanded Scope and Enforcement of Avoidance Transactions [Section 47] – Earlier, section 47 was limited to undervalued transactions and could be invoked only in specific circumstances. The proposed amendment expands its scope to include preferential, extortionate and fraudulent transactions. It also empowers creditors to initiate applications directly and enables the Adjudicating Authority to pass orders akin to those on applications by insolvency professionals. This strengthens the overall avoidance framework and creditor rights.
• Expanded Contribution Obligations of Secured Creditors in Liquidation [Section 52(8)] – Earlier, secured creditors enforcing security outside liquidation were required to contribute only towards CIRP costs. The proposed amendment expands this obligation to include liquidation costs and workmen’s dues, aligned with section 53 of the IBC. It also introduces a regulatory framework for the manner and timelines of such contributions. This ensures equitable distribution and protects the rights of priority stakeholders.
• Time-bound Liquidation with CoC Oversight on Pending Proceedings [Section 54(1)] – The earlier framework lacked clarity on timelines and treatment of pending proceedings at dissolution. The proposed amendment prescribes a 180-day timeline, extendable by 90 days, and empowers the CoC to decide continuation and distribution of recoveries from pending proceedings. This ensures time-bound closure without loss of value.
• Introduction of Creditor-Initiated Insolvency Framework [Section 58A] – The Code earlier did not provide for a distinct creditor-initiated framework outside standard CIRP. The proposed amendment introduces a new mechanism that allows specified creditors to initiate insolvency proceedings for notified categories of corporate debtors, subject to conditions and exclusions. This creates a more targeted and flexible resolution framework.
• Introduction of Group Insolvency Framework for Coordinated Resolution [Section 59A] – The Code earlier lacked a mechanism for group insolvency. The proposed amendment introduces a framework enabling coordinated proceedings for group entities, including common processes, professionals and creditor coordination. This addresses complexities in interconnected structures and improves value maximisation.
• Structured Initiation Mechanism for Creditor-Led Insolvency Process [Section 58B] – The new provision lays down a structured process requiring 51% creditor approval, an opportunity for debtor representation, and appointment of a resolution professional. It also restricts parallel proceedings and provides for commencement through public announcement. This ensures procedural fairness while enabling creditor-led action.
• Defined Timelines and Limited Extension for Creditor-Initiated Process [Section 58D] – A strict 150-day timeline is prescribed for completing the process, with a one-time 45-day extension subject to CoC approval. In case of failure, the Adjudicating Authority proceeds towards closure. This ensures speed and discipline in the newly introduced framework.
• Time-bound Passing of Dissolution Orders with Accountability [Section 54(4)] – No specific timeline previously existed for passing dissolution orders. The proposed amendment now requires the Adjudicating Authority to pass such orders within 30 days, with reasons for any delay to be recorded. This introduces accountability at the final stage of the process.
• Clarification on Government Dues in Winding-Up Distribution [Section 178] – There was ambiguity regarding the treatment of government dues in winding up. The proposed amendment clarifies that dues for two years fall under clause (d), irrespective of security, with remaining dues under clause (e). This aligns treatment with the statutory distribution framework.
• Enabling Electronic Platform for Insolvency Processes [Section 240B] – The proposed amendment introduces a provision enabling the Central Government to notify an electronic platform for conducting insolvency processes. This is expected to improve transparency, efficiency and ease of administration.

Read the Insolvency and Bankruptcy Code (Amendment) Bill, 2026

4. Section 60(4) of Social Security Code Held Discriminatory for Restricting Maternity Benefits to Adoption of Infants Under 3 Months as It Violates Article 14: SC

The Supreme Court, in the matter of Hamsaanandini Nanduri vs. Union of India [2026] 184 taxmann.com 355 (SC), held that the restriction under Section 60(4) of the Code on Social Security, 2020, limiting maternity benefits only to adoptive mothers of children below three months, was unconstitutional, being violative of Article 14 of the Constitution of India. The Court read down the provision to extend maternity benefit of 12 weeks to all adoptive mothers, irrespective of the child’s age at the time of adoption.

4.1 Brief Facts of the Case

In the instant case, the petitioner, an adoptive mother of two children, filed a writ petition challenging the constitutional validity of the restriction imposed on adoptive mothers in claiming maternity benefits.

Initially, the challenge was made to Section 5(4) of the Maternity Benefit Act, 1961 (as amended in 2017). However, upon the enactment of the Code on Social Security, 2020, which consolidated the relevant provisions, the petitioner was permitted to amend the petition to challenge Section 60(4) of the Code.

The impugned provision granted maternity benefits of 12 weeks only to a woman who legally adopted a child below the age of three months (and to a commissioning mother) from the date the child was handed over. The challenge was confined to adoptive mothers.

The petitioner contended that such a restriction created an unreasonable classification among adoptive mothers based solely on the age of the child and was violative of Article 14 of the Constitution.

4.2 Supreme Court Observations

It was noted that the classification created under Section 60(4) of the 2020 Code, between adoptive mothers of children below three months and those adopting older children, lacked any reasonable basis.

Further, it was noted that the provision failed to disclose any intelligible differentia that distinguished between the two classes of adoptive mothers. Additionally, such differentiation had no rational nexus with the object sought to be achieved, namely, providing maternity benefits to support child care and maternal bonding.

The Supreme Court observed that the provision suffered from under-inclusiveness, as it excluded a significant category of adoptive mothers who were similarly situated in terms of the need for maternity benefits.

Accordingly, the provision operated unequally upon adoptive mothers without any reasonable justification, thereby violating the guarantee of equality under Article 14 of the Constitution.

4.3 Supreme Court Ruling

The Supreme Court held that Section 60(4) of the Code on Social Security, 2020, was unconstitutional and violative of Article 14 of the Constitution to the extent it prescribed an age limit of three months for adoptive children.

Therefore, Section 60(4) of the 2020 Code was to be read as:

‘A woman who legally adopts a child or a commissioning mother shall be entitled to maternity benefit for a period of twelve weeks from the date the child is handed over to the adopting mother or commissioning mother, as the case may be.

Read the Ruling

5. Attachment of Overdraft Account for GST Recovery Impermissible as No Actual Funds Available: HC

The High Court held that attachment of an overdraft account for GST recovery under Section 79 is impermissible as it does not represent actual funds of the assessee. It permitted filing of appeal beyond limitation subject to 50% pre-deposit. This was held in Ratna Cafe vs. Assistant Commissioner [2026].

5.1 Facts

The petitioner was issued a show cause notice (SCN) under the CGST Act and the Tamil Nadu GST Act, to which a reply was filed but no personal hearing was attended. Thereafter, an Order-in-Original was passed confirming tax, interest, and penalty. The petitioner did not file a statutory appeal within the prescribed limitation period, and subsequent recovery proceedings were initiated. It was submitted that the bank account attached was merely an overdraft (OD) account and therefore not liable for attachment under recovery provisions. The petitioner further sought liberty to file a statutory appeal despite expiry of limitation. The matter was accordingly placed before the High Court.

5.2 Held

The High Court held that where a statutory appeal was not filed within the limitation period, the assessee could be granted liberty to file such appeal within 30 days, subject to deposit of 50% of the disputed tax in two instalments within two months, upon which the appellate authority under Section 107 of the CGST Act shall adjudicate the appeal on merits without reference to limitation. It was held that attachment of an overdraft account under recovery proceedings initiated under Section 79 of the CGST Act was impermissible, as such account does not represent actual funds of the assessee. It was held that recovery could be pursued against available secured assets, subject to the bank’s rights and the outcome of the appeal. Accordingly, the petitioner was granted relief with permission for a conditional appeal.

Read the Ruling

6. Assignment of Industrial Plot Leasehold Rights Not Liable to GST as Transfer Lacked Business Nexus: HC

The High Court held that assignment of leasehold rights in an industrial plot, resulting in complete extinguishment of rights, is not liable to GST as it does not constitute ‘supply’ in absence of business nexus. It reasoned that transfer of benefits arising from immovable property falls outside Section 7 where not in course or furtherance of business, and cannot be residually classified as ‘other miscellaneous services’. This was held in Vidarbha Beverages vs. Union of India [2026].

6.1 Facts

The petitioner held a transferable lease of an industrial plot along with a factory building allotted by Maharashtra Industrial Development Corporation (MIDC) and, with prior consent of MIDC, assigned its entire leasehold rights in favour of an individual, resulting in complete extinguishment of its rights in the said immovable property. Subsequently, a show cause notice was issued proposing levy of GST by treating the consideration received as taxable supply of services which was confirmed by adjudication. It was contended that the transaction was an assignment of leasehold rights amounting to the transfer of benefits arising from immovable property and did not qualify as ‘supply’, as it was not in the course or furtherance of business. The matter was accordingly placed before the High Court.

6.2 Held

The High Court held that the transaction constituted an assignment of leasehold rights leading to the extinguishment of the petitioner’s rights and amounted to the transfer of benefits arising out of immovable property. It held that the essential requirement of ‘supply’ under Section 7 of the CGST Act, namely that the activity must be in the course or furtherance of business, was not satisfied. The Court further held that classification of such transaction under residual entry at Sr. No. 35 of the rate notification as ‘other miscellaneous services’ was legally unsustainable, as the said entry could not be extended to cover assignment of leasehold rights in immovable property. It was observed that the transaction was an assignment and not a sub-lease, and therefore could not be subjected to GST under the said entry. Accordingly, the notice and adjudication order were quashed and set aside.

Read the Ruling

7. ICAI Allows One-Time Relaxation to Generate Pending UDINs During the Portal Transition Period

The UDIN Directorate of ICAI has introduced a one-time relaxation, allowing members to generate pending UDINs that could not be issued earlier due to the transition to the new UDIN portal.

This relief covers documents and reports signed between 22^nd October 2025 and 22^nd November 2025, with a special window open from 1^stApril to 30^th April 2026 to complete the process. The move is aimed at helping members regularise past documents and ensure compliance without procedural setbacks.

Importantly, this relaxation is limited to the specified period. For all other documents, the existing requirement continues – the UDIN must be generated within 60 days of the date of signing.

Read the Update

8. NFRA Issues Auditor–Audit Committee Series 5 Discussing Auditing Provisions and Contingencies Under Ind AS and SA

NFRA, through its Auditor–Audit Committee Interaction Series – 5, highlights key auditing considerations for provisions, contingent liabilities, and contingent assets—areas that involve significant judgement and estimation uncertainty. Drawing on Ind AS 37, along with SA 540 and SA 501, the series outlines the challenges in assessing obligations, evaluating probabilities, and determining reliable estimates.

It also emphasises the importance of effective auditor–audit committee communication, particularly in judgment-intensive areas, and the need for robust audit procedures, including professional scepticism and evaluation of assumptions. Overall, the series serves as a practical guide to strengthen oversight and enhance the quality of financial reporting.

Read the Update

9. Accounting Treatment of Foreign Exchange Fluctuations in Inventory Purchases Under the Ind AS Framework

In a globalised business environment, foreign currency purchases of inventory are routine, yet the accounting for exchange differences continues to create confusion. The core issue lies not in recording the transaction, but in correctly applying the interplay between Ind AS 2 and Ind AS 21. Misinterpretation can significantly impact inventory valuation, profitability, and financial ratios.

The key question is whether exchange differences arising between the purchase date and settlement date should be included in inventory cost or recognised in profit or loss. Ind AS provides a clear conceptual boundary. Inventory is initially recognised at the exchange rate prevailing on the transaction date, establishing its historical cost. Once recognised, inventory, being a non-monetary item, is not re-measured for exchange fluctuations. Accordingly, Ind AS 2 does not permit the inclusion of exchange differences, as these do not contribute to bringing inventory to its present location and condition.

This can be illustrated by the case of Alpha Private Limited, which imports inventory worth USD 10,000 at a rate of ₹80 per USD. The inventory is recorded at ₹8,00,000. At the reporting date, the exchange rate rises to ₹85, resulting in an exchange loss of ₹50,000 on the outstanding payable, which is recognised in profit or loss. Upon settlement at ₹83, a gain of ₹20,000 is recorded. Importantly, even though 40% of the inventory remains unsold, its closing value continues at ₹3,20,000, unaffected by exchange rate changes.

The critical takeaway is that exchange differences arise from re-measurement of a monetary liability, not from the cost of inventory. Therefore, they must be recognised in profit or loss and should not be capitalised. Any attempt to allocate such differences to closing inventory would effectively revalue a non-monetary asset, leading to distorted financial results and non-compliance with Ind AS 2 and Ind AS 21.

Read the Story

The post Weekly Round-up on Tax and Corporate Laws | 30th March to 4th April 2026 appeared first on Taxmann Blog.

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Case Details: Tamil Nadu Industrial Co-operative Bank Ltd vs. Joint Commissioner of Labour/Appellate Authority - [2026] 184 taxmann.com 655 (HC-Madras)

Judiciary and Counsel Details

• S. M. Subramaniam & K. Surender, JJ.
• Haja Nasirudeen, Addl. Adv. General & P. Hari Babu for the Appellant.
• R. Kumaravel, Addl.Govt.Pleader & P. Chandrasekar for the Respondent.

Facts of the Case

In the instant case, the appellant Co-operative Bank dismissed the respondent-employee for misconduct. The respondent filed an appeal under Section 41 of the Tamil Nadu Shops and Establishments Act, 1947, before the Joint Commissioner of Labour, who set aside the dismissal. The Writ Court upheld that order.

The appellant contended that the appeal under Section 41 of the Tamil Nadu Shops and Establishments Act, 1947, was not maintainable as the bank was governed by the special bye-laws approved by the Registrar under the Tamil Nadu Co-operative Societies Act, 1983, and that proper remedies lay under Sections 153 and 154 of the Tamil Nadu Co-operative Societies Act, 1983.

It was noted that by virtue of Section 4(1)(f) of the Tamil Nadu Shops and Establishments Act, 1947, if a separate law governs any establishment for the time being in force in the State, the Shops Act would not apply.

Further, it was noted that, since the appellant bank was registered under the Tamil Nadu Co-operative Societies Act, 1983, and the competent authority had approved the special bye-laws, the Co-operative Societies Act, as well as the special bye-laws, alone would apply in respect of employees serving in the appellant bank.

The High Court observed that the reference regarding Section 35 of the Tamil Nadu Shops and Establishments Act, 1947, in bye-laws was only for the purpose of imposing a fine by the Registrar, and it did not speak about the applicability of the Shops Act.

High Court Held

The High Court held that, since the appellant bank was governed by the Co-operative Societies Act and its special bye-laws, employees were bound to exhaust their remedies as contemplated under the Co-operative Societies Act, the rules framed thereunder, and the special bye-laws.

Thus, the impugned order, as well as the order passed by the Joint Commissioner of Labour, was to be set aside.

List of Cases Referred to

• C.V. Raman v. Management of Bank of India 1988 taxmann.com 1545 (SC) (para 5)
• Smt. K.A. Annamma v. Secretary, Cochin Cooperative Hospital Society Ltd [2018] 1 taxmann.com 8940 (SC) (para 7)
• P. Eawaramoorthy v. R.J.B. Leoraj (2008) 5 MLJ 238 (para 7).

The post Shops Act Appeal Not Maintainable for Co-operative Bank Employees | HC appeared first on Taxmann Blog.

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1. Introduction

The National Financial Reporting Authority (NFRA), through its enforcement, review, and monitoring activities, has consistently observed the critical importance of effective communication between statutory auditors and those charged with governance (TCWG), particularly Audit Committees. In this context, NFRA has initiated a series of Auditor–Audit Committee interaction papers to reinforce communication practices, drawing upon the requirements of the Companies Act, 2013, relevant Standards on Auditing (notably SA 260 (Revised) and SA 265), and the Standard on Quality Control (SQC 1). This initiative is aligned with NFRA’s broader objective of enhancing audit quality, promoting adherence to accounting and auditing standards, and safeguarding public and investor interests.

In the extant “Interaction Series 5”, NFRA focuses on provisions, contingent liabilities, and contingent assets under Ind AS 37, highlighting areas where significant management judgment is involved and where auditors are expected to engage more deeply with Audit Committees.The key aspects of this edition of the interaction series are discussed below:

2. Significance of Accounting Estimates and Judgements

Financial reporting inherently requires management to make estimates and judgments, particularly in areas such as impairment of assets, expected credit losses, litigation provisions, and deferred tax assets. These estimates often involve uncertainty and complexity, necessitating heightened scrutiny by preparers, auditors, and Audit Committees. NFRA emphasises that provisions and contingencies are especially sensitive areas due to their reliance on assumptions regarding future events and obligations.

3. Core Principles of Ind AS 37

Ind AS 37 establishes a robust framework for recognition, measurement, and disclosure of provisions, contingent liabilities, and contingent assets. Its primary objective is to ensure that financial statements present a true and fair view of obligations and risks by applying appropriate recognition criteria and measurement bases, and by providing adequate disclosures.

Ind AS 37 defines provision asa defined liability of uncertain timing or amount arising from a past event, which is recognised only when a present obligation exists, an outflow of resources is probable, and a reliable estimate can be made. Notably, obligations may be legal, contractual, or constructive in nature, thereby expanding the scope beyond strictly enforceable liabilities.

The standard distinguishes provisions from contingent liabilities, which are not recognised but disclosed unless the possibility of outflow is remote. Similarly, contingent assets are not recognised and are disclosed only when an inflow of economic benefits is probable.

4. Key Points Discussed About the Provision Under Ind AS 37

The standard emphasises the use of judgment, incorporation of uncertainties, and continuous reassessment, thereby enhancing reliability while also introducing areas requiring careful evaluation. It also provides specific guidance for complex scenarios such as large populations and onerous contracts.

4.1 Best Estimate Concept

The measurement of provisions under Ind AS 37 is based on the “best estimate” of the expenditure required to settle a present obligation. This estimate is not a mere approximation but a reasoned assessment considering all available evidence, including past experience, expert opinions, and prevailing circumstances. The inclusion of risks and uncertainties ensures that the provision reflects a prudent and realistic liability rather than an optimistic or understated figure.

4.2 Use of Expected Value Method

Where obligations involve a large number of similar items, such as warranties or customer claims, the standard requires the use of probability-weighted outcomes. The expected value method considers various possible scenarios and assigns probabilities to each, resulting in a more accurate and representative provision. This approach avoids reliance on a single most likely outcome and instead captures the overall risk profile of the obligation.

4.3 Discounting of Provisions

In situations where the time value of money is material, provisions must be discounted to their present value. The discount rate used should be a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the liability. This ensures that long-term obligations are not overstated and are presented in line with their present economic burden.

4.4 Periodic Reassessment and Management Judgement

Ind AS 37 requires provisions to be reviewed at the end of each reporting period and adjusted to reflect the latest estimates. This continuous reassessment introduces a dynamic element, ensuring that provisions remain relevant and accurate over time. However, it also creates scope for management bias, making it essential for auditors to critically evaluate assumptions, methodologies, and changes in estimates.

4.5 Onerous Contracts

For onerous contracts, the provision is measured at the least net cost of exiting the contract, which is the lower of the cost of fulfilling the contract and the compensation or penalties arising from non-fulfilment. Only direct costs that are necessary to fulfil the contract are considered. A contract is classified as onerous when the unavoidable costs of meeting obligations exceed the expected economic benefits, thereby necessitating recognition of a provision.

4.6 Recognition of Changes in Provisions

Any revision in the amount of provision, arising from reassessment or change in estimates, must be recognised in the statement of profit and loss. Such changes are either recorded as an additional expense or as a reduction in the previously recognised provision.

5. Auditor’s Responsibilities under Standards on Auditing

The Standards on Auditing, particularly SA 540, place significant responsibility on auditors in evaluating accounting estimates related to provisions and contingencies. Auditors are required to assess whether such estimates are reasonable, supported by sufficient audit evidence, and appropriately disclosed in accordance with the applicable financial reporting framework.

Further, auditors must evaluate estimation uncertainty, identify potential management bias, and obtain written representations from management regarding key assumptions. Standards such as SA 501 and SA 505 also require auditors to obtain external evidence, including legal confirmations, especially in cases involving litigation or disputes.

Auditors are additionally required to consider subsequent events that may impact the recognition or disclosure of provisions and contingencies, ensuring that financial statements reflect all relevant developments up to the date of issuance.

Click Here To Read The Full Story

The post NFRA Auditor-Audit Committee Series 5 | Key insights appeared first on Taxmann Blog.

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Case Details: Ahamed Usman vs. Deputy Commissioner - [2026] 185 taxmann.com 31 (Kerala)

Judiciary and Counsel Details

• Devan Ramachandran & Basant Balaji, JJ.
• P. Raghunathan, Premjit Nagendran & Rishal K., Advs. for the Petitioner.
• Rajesh K. Raju, Adv. & Smt. Thushara James, Sr. GP for the Respondent.

Facts of the Case

The assessee filed a writ petition challenging the impugned order and sought a direction to consider a rectification application filed for the correction of returns for the prior periods. It was submitted that the rectification application ought to be considered and the impugned order be set aside on merits. The Department of Revenue submitted that the statutory time limit prescribed for rectification including the extension granted thereunder, had expired in March 2019 and that the application filed in January 2024 was hopelessly time-barred. It was further submitted that the writ petition had been rightly dismissed on the ground of limitation. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the statutory time limit prescribed under Section 39 read with Section 168A of the CGST Act and the corresponding provisions of the Kerala GST Act is mandatory and binding, and that, having expired in March 2019, no rectification application filed thereafter could be entertained. The Court held that the rectification application filed in January 2024 was hopelessly time-barred and that no direction could be issued to consider it. It was further held that recourse to rectification after a prolonged delay constitutes admission of error by the assessee, thereby rendering the challenge to the impugned order on merits untenable. Accordingly, it was held that no ground for interference with the prior judgment and the appeal was dismissed.

List of Cases Referred to

• Rejimon Padickapparambil Alex v. Union of India [2024] 169 taxmann.com 152 (Kerala)/[2025] 107 GST 483 (Ker) (para 5).

The post Belated Rectification After Six Years Time-Barred – Merits Challenge Fails | HC appeared first on Taxmann Blog.

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Notification F. No. IFSCA/GN/2026/007; Dated: 30.03.2026

The International Financial Services Centres Authority (IFSCA) has notified the IFSCA (Pension Fund) Regulations, 2026, establishing a comprehensive framework for the registration, regulation, and supervision of Pension Funds in IFSC.

1. Objective of the Regulations

The regulations aim to:

• Promote long-term retirement savings
• Ensure a secure, transparent, and well-regulated environment
• Protect the interests of subscribers
• Maintain the integrity of the pension ecosystem

2. Mandatory Registration Requirement

• No entity can act as a Pension Fund unless it obtains a certificate of registration from IFSCA
• Applications must be submitted through the SWIT portal
• The application must be accompanied by prescribed fees and documentation

3. Governance and Key Managerial Personnel (KMP)

The regulations prescribe robust governance requirements:

• Minimum two KMPs responsible for:

1. 1. Fund management
   2. Risk management

• Appointment of a Compliance Officer (as a KMP):

1. 1. Responsible for overall compliance
   2. Reports directly to the Board

• The Board composition must include:

1. 1. At least four directors
   2. Minimum 50% independent directors

• All directors, KMPs, and controlling shareholders must satisfy the ‘fit and proper’ criteria at all times

4. Subscriber Flexibility and Rights

The framework ensures subscriber-centric features:

• Subscribers can:

1. 1. Decide the frequency and amount of contributions
   2. Switch Pension Funds up to two times per financial year

• Pension Funds may prescribe a minimum contribution amount (with prior approval of the Authority)

5. Innovative Product Features

• Pension Funds may offer a healthcare benefit option, allowing allocation of a portion of contributions to a dedicated healthcare savings account
• Details of such features must be disclosed in the Scheme Information Document

6. Disclosure and Transparency Requirements

Pension Funds must ensure:

• Availability of educational materials
• Clear disclosure of performance and scheme details
• Information is presented in a simple, accessible, and understandable format for subscribers

7. Conclusion

The IFSCA (Pension Fund) Regulations, 2026, establish a robust, investor-centric regulatory framework, balancing governance, flexibility, and transparency, and fostering the development of a trusted pension ecosystem within IFSCs.

Click Here To Read The Full Notification

The post IFSCA Notifies Pension Fund Regulations 2026 for IFSC Framework appeared first on Taxmann Blog.

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Case Details: Deputy Commissioner of Income-tax (Exemptions) vs. ICT Academy of Tamil Nadu - [2026] 184 taxmann.com 634 (Chennai-Trib.)

Judiciary and Counsel Details

• Manu Kumar Giri, Judicial Member & S. R. Raghunatha, Accountant Member
• C. Sivakumar, Addl.CIT for the Appellant.
• G. Ramachandran, CA for the Respondent.

Facts of the Case

The assessee, a society registered under section 12A, was engaged in skill development, training, certification and employability enhancement programmes. The assessee filed a nil return claiming exemption under sections 11 and 12.

The Assessing Officer (AO) held that the assessee was engaged in activities falling under the limb of ‘advancement of any other object of general public utility’ as specified in section 2(15). He invoked the proviso to section 2(15), which provides that such activities were in the nature of trade, commerce, or business. Consequently, the assessee’s activities were treated as non-charitable, leading to the denial of exemption under section 11.

On appeal, CIT(A) held that the activity carried out by the assessee qualified as ‘education’ in terms of section 2(15), and thus entitling the assessee to claim exemption under section 11. The AO filed an appeal to the Chennai Tribunal.

ITAT Held

The Tribunal held that it is an admitted fact that the assessee is a society registered under section 12A and is engaged in activities relating to skill development, training, certification, and the enhancement of employability of students and faculty, in coordination with Government bodies and educational institutions. The nature of activities, as borne out from the record, indicates that the assessee conducts structured training programmes, faculty development initiatives and vocational courses aligned with national skill development policies.

The dominant object of the assessee is to impart skill-based education and training to enhance employability. Such activities, in the present socio-economic context, form an integral part of the educational framework. The programmes conducted by the assessee are structured, curriculum-based and aimed at systematic development of skills and knowledge.

Therefore, the same cannot be equated with mere commercial or business activities. The mere presence of receipts from training or certification programmes cannot, in isolation, lead to the conclusion that the proviso to section 2(15) is attracted. Consequently, the assessee is entitled to an exemption under sections 11 and 12.

List of Cases Reviewed

• ACIT (Exemption) v. Ahmedabad Urban Development Authority [2022] 143 taxmann.com 278 (SC)/[2023] 291 Taxman 11 (SC)/[2022] 449 ITR 1 (SC) (para 21) followed

List of Cases Referred to

• Asstt. CIT (Exemptions) v. Ahmedabad Urban Development Authority [2022] 143 taxmann.com 278 (SC)/[2023] 291 Taxman 11 (SC)/[2022] 449 ITR 1 (SC) (para 9).

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Parveen Kumar Bansal & Ruchesh Sinha – [2026] 185 taxmann.com 40 (Article)

I. Introduction

The evolution of India’s tribunal system reflects a continuous effort by the legislature and the executive to balance specialisation, efficiency, and accessibility in the delivery of justice. Over the years, multiple tribunals have been constituted, merged, and restructured to streamline adjudication in complex domains such as taxation, financial crimes, and property forfeiture. However, with changing legal landscapes and increasing overlap between statutory frameworks, it becomes imperative to periodically reassess whether existing institutional arrangements continue to serve their intended purpose effectively.

One such area requiring urgent reconsideration is the appellate mechanism under the Prohibition of Benami Property Transactions Act, 1988 (“PBPT Act”). The Benami Tribunal constituted under Section 30 of the PBPT Act presently functions within the consolidated “Appellate Tribunal” constituted under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (“SAFEMA”). However, given the nature of its functions, which are adjudicatory, quasi-judicial, and appellate in character, there is a compelling need to reconsider this administrative positioning for enhanced accessibility, expertise, efficiency and improved Ease of Justice.

This issue assumes particular importance in the broader context of ongoing reforms aimed at strengthening India’s tribunal system and ensuring that specialised disputes are adjudicated by forums best equipped in terms of subject-matter expertise and institutional capacity.

This article is firmly rooted in and fully aligned with the thought process that justice must be accessible, affordable, and delivered in a timely manner, regardless of economic or social background, and that Ease of Justice is an essential pillar supporting Ease of Doing Business and Ease of Living. There is a need for decentralisation, simplification of legal processes, reduction of litigation burdens, and enhancement of citizen-centric justice delivery.

In this context, the present article examines the historical evolution, current structure, and practical challenges of the existing appellate framework, and makes a compelling case for transferring jurisdiction over benami matters to the Income Tax Appellate Tribunal (ITAT), a body uniquely equipped in terms of expertise, infrastructure, and nationwide presence to handle such disputes.

II. Background and Evolution of the Appellate Framework

The Appellate Tribunal was originally constituted in the year 1977 as the Appellate Tribunal for Forfeited Property (“ATFP”) under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976(“SAFEMA”). Being constituted in the late 1970s, it is among the earliest tribunals established in India. SAFEMA applies to persons convicted under the Sea Customs Act, 1878 or the Customs Act, 1962, as well as persons covered under the Foreign Exchange Regulation Act, 1947 (FERA) and FERA, 1973. The SAFEMA Act also extends to persons detained under The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (“COFEPOSA”), whose detention orders have not been revoked or set aside, subject to conditions prescribed in Section 2 of the SAFEMA Act. The SAFEMA Act primarily deals with forfeiture of illegally acquired properties of such persons, and includes within its ambit their relatives, associates, and holders of such properties unless they can prove that they are bona fide transferees for adequate consideration.

In 1985, the Narcotic Drugs and Psychotropic Substances Act (“NDPS Act”) was enacted to create a comprehensive legal framework to address narcotic drugs, psychotropic substances, trafficking offences, and to implement international conventions. The Act was amended in 1989, introducing Chapter VA relating to seizure, freezing, and forfeiture of illegally acquired properties derived from narcotics-related offences. The provisions of this Chapter were analogous to those under SAFEMA, and the ATFP was consequently vested with jurisdiction to hear cases arising under the NDPS Act as well.

In 2003, the Prevention of Money Laundering Act (“PMLA”) was enacted, following the introduction of the Prevention of Money-Laundering Bill, 1998 and subsequent parliamentary review. Section 25 of the PMLA mandated the Central Government to establish an Appellate Tribunal for hearing appeals against the Adjudicating Authority and other authorities under the Act.

The Finance Act, 2016 introduced significant reforms relating to the merger of various tribunals. It substituted Section 25 of PMLA with a new provision designating the Appellate Tribunal constituted under SAFEMA as the Appellate Tribunal for hearing appeals under PMLA with effect from 01.06.2016. The same Act also renamed the “Appellate Tribunal for Forfeited Property” as simply the “Appellate Tribunal”.

In the same year, following the enactment of the Benami Transactions (Prohibition) Amendment Act, 2016, a notification dated 25.10.2016 was issued by the Central Board of Direct Taxes (“CBDT”) stating that the Appellate Tribunal established under Section 25 of the PMLA shall also discharge the functions of the Appellate Tribunal under the PBPT Act.

Subsequently, the Finance Act, 2017 merged the Appellate Tribunal for Foreign Exchange (“ATFE”), constituted under Section 18 of the Foreign Exchange Management Act, 1999 (“FEMA”) with the Appellate Tribunal under SAFEMA.

As a result of this series of legislative developments and mergers, the present Appellate Tribunal represents a consolidated adjudicatory body comprising the tribunals originally established under SAFEMA, PMLA, and FEMA. It now hears appeals under five central Acts, namely SAFEMA, NDPS Act, PMLA, PBPT Act (as amended in 2016), and FEMA.

The Appellate Tribunal adjudicates appeals and related petitions arising from attachment and forfeiture orders passed by the Competent Authority under SAFEMA and the NDPS Act, orders of the Adjudicating Authority and other authorities under PMLA, orders issued by the Income Tax Department under the PBPT Act, and orders imposing penalties or fines under FEMA issued by Financial Intelligence Unit, India and other authorities. It is a national-level tribunal headquartered in New Delhi and presently has no permanent benches elsewhere, comprising a Chairman and four Members.

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Case Details: Buckbox Infotech (P.) Ltd. vs. Director General of GST Intelligence - [2026] 185 taxmann.com 62 (Gujarat)

Judiciary and Counsel Details

• A.S. Supehia & Pranav Trivedi, JJ.
• Jay S. Shah & Vijay H. Patel for the Petitioner.
• Neel P. Lakhani & Tirth Nayak for the Respondent.

Facts of the Case

The petitioner, a GST-registered technology service provider (TSP) filed a writ petition challenging the provisional attachment of its bank accounts and seeking de-freezing thereof, contending that it had acted as a TSP for Digihub by facilitating payouts through its current account with virtual accounts, and that such attachment was unjustified. The Department of Revenue submitted that Digihub was under investigation for tax evasion in gaming and betting activities, and that the petitioner’s accounts were used for routing payouts to beneficiaries. The petitioner had admitted that it had not verified the credentials or business activities and had relied solely on an undertaking, without conducting any independent verification. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that provisional attachment of bank accounts under Section 83 of the CGST Act, read with Rule 159 of the CGST Rules, was justified in the facts of the case, as the material on record clearly established that Digihub had utilised the petitioner’s platform and bank accounts for routing gaming or betting-related payouts. The Court held that the petitioner had admittedly failed to verify the credentials and nature of the business, and mere reliance on an undertaking was insufficient due diligence. Considering the magnitude of transactions and the ongoing investigation involving multiple linked accounts, the exercise of powers by the jurisdictional officer under CGST. Accordingly, the request to de-freeze bank accounts was rejected, and the writ petition was dismissed.

The post Bank Account Attachment Upheld for TSP Aiding Gaming Payouts Without Due Diligence | HC appeared first on Taxmann Blog.

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Case Details: Bhawana Steel Traders vs. Joint Director, DGGI - [2026] 185 taxmann.com 22 (Bombay)

Judiciary and Counsel Details

• Anil L. Pansare & Nivedita P. Mehta, JJ.
• A. J. Bhoot, Adv. for the Petitioner.
• Mrs K. Vaidya, Adv. for the Respondent.

Facts of the Case

The petitioner assailed a consolidated SCN issued by the Joint Director, DGGI for the financial years 2018-19 to 2023-24, alleging suppression and short payment of tax. The writ was filed to question the clubbing of multiple financial years.

High Court Held

The Bombay High Court held that Section 74 did not permit the consolidation of financial years or tax periods while issuing SCN or passing the order. The fraudulent availment of ITC allegation did not create any exception to permit clubbing. Only the distinction under Section 74 concerned the five-year limitation from furnishing the annual return for each financial year. Consolidation would aggregate distinct tax periods with separate due dates and limitations and impair the year-wise statutory scheme. Accordingly, the impugned SCN and composite order were quashed with liberty to issue year-wise notices strictly in terms of Section 74.

List of Cases Reviewed

• Milroc Good Earth Developers v. UOI [2025] 179 taxmann.com 465/112 GST 596/[2026] 104 GSTL 45 (Bombay)
• Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST & Central Excise [2026] 183 taxmann.com 627 (Bombay) (para 17)followed

List of Cases Referred to

• Milroc Good Earth Developers v. UOI [2025] 179 taxmann.com 465/112 GST 596/[2026] 104 GSTL 45 (Bombay) (para 3)
• Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST & Central Excise [2026] 183 taxmann.com 627 (Bombay) (para 5)
• Mathur Polymers v. Union of India [2025] 177 taxmann.com 860/103 GSTL 72 (Delhi) (para 9)
• Mathur Polymers v. Union of India [2026] 182 taxmann.com 215 (SC) (para 10)
• CIT v. Smt. Godavaridevi Saraf Tumsar [1978 (2) ELTJ 624 Bombay] (para 13).

The post Section 74 Bars Consolidated GST Notices Across Years | HC appeared first on Taxmann Blog.

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Editorial Team – [2026] 185 taxmann.com 147 (Article)

Taxmann presents Practical Insights on Ind AS and SAs, a weekly series exclusively for Accounts and Audit Module subscribers of Taxmann.com, focusing on the practical application of Ind AS and Standards on Auditing through structured, issue-based analysis.

Each week features a focused topic with real-world relevance. This edition explores the Conceptual Framework for Financial Reporting under Ind AS, covering the objective of financial reporting, qualitative characteristics of useful information, the concept of reporting entities, and the fundamental elements of financial statements.

1. Introduction

The Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS) provides the basic foundation on which accounting standards are developed and financial statements are prepared. It was issued by the Institute of Chartered Accountants of India (ICAI) and became effective for standard-setting in March 2018. For preparers of financial statements, it applies to accounting periods beginning on or after 1 April 2021.

The Framework is broad in scope and lays down the key areas that guide financial reporting. It covers the objective of general purpose financial reporting, the qualitative characteristics that make financial information useful, the concept of a reporting entity, and the elements that make up financial statements. In addition, it also deals with recognition and de-recognition principles, measurement bases, presentation and disclosure principles, and concepts relating to capital and capital maintenance.

The purpose of this Framework is multifold. It assists standard-setters such as the ICAI and other regulators in developing consistent and conceptually sound accounting standards. It also helps preparers of financial statements in situations where no specific Ind AS applies or when they must choose between alternative accounting treatments. Further, it aids users and other stakeholders in understanding and interpreting the requirements of Ind AS.

2. Objectives of General Purpose Financial Reporting

General purpose financial statements present financial information in a structured manner. They provide details about an entity’s assets, liabilities, equity, income, and expenses. This structured presentation helps users understand both the financial position and financial performance of the entity.

Such financial statements are prepared with the objective of meeting the common information needs of primary users. They aim to present a clear and organised view of financial data so that users can analyse and interpret it effectively.

General purpose financial reports are designed to provide financial information about a reporting entity to users who cannot demand tailored reports. These reports focus on delivering information that is useful for making economic decisions.

The information provided in such reports primarily relates to the economic resources of the entity, the claims against those resources, and the changes in both over time. Economic resources refer to what the entity owns or controls, while claims represent obligations or interests of others in those resources.

These reports are particularly useful to primary users such as investors, lenders, and other creditors. Since these users do not have the authority to request specific information directly from the entity, they depend on general purpose financial reports to meet their needs.

3. Features and Benefits of the Conceptual Framework in Financial Reporting

The Conceptual Framework provides a strong foundation for the development of Ind AS. One of its key benefits is that it promotes international comparability of financial statements, making it easier for users to compare financial information across different entities and jurisdictions.

It also strengthens accountability by ensuring that financial reporting reflects the economic reality of transactions. By helping generate comparable and consistent financial information, the Framework contributes to overall economic efficiency.

Another important benefit is that it helps bridge the information gap between providers of capital (such as investors and lenders) and management. By improving the quality of disclosures and supporting risk assessment mechanisms, it enhances users’ ability to make informed decisions.

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