PR No. 2025-2026/1926; Dated: 14.01.2026

1. Introduction

Reserve Bank of India (RBI) has recognised the Foreign Exchange Dealers’ Association of India (FEDAI) as a Self-Regulatory Organisation (SRO) for all authorised dealers under its Omnibus framework for SROs.

2. Recognition Under Omnibus SRO Framework

The recognition brings FEDAI within RBI’s broader Omnibus framework for SROs, aimed at strengthening market discipline, transparency, and self-regulation across regulated entities involved in foreign exchange transactions.

3. Scope Of FEDAI’s Role

As an SRO, FEDAI will play a key role in setting standards, promoting best practices, and ensuring compliance among authorised dealers operating in the foreign exchange market, subject to RBI’s overall regulatory oversight.

4. Alignment And Membership Expansion

RBI has granted FEDAI a period of one year to align its governance and operational framework with the Omnibus SRO requirements. During this period, FEDAI must also take steps to extend its membership to cover all categories of authorised dealers.

5. Conclusion

The recognition of FEDAI as an SRO marks a significant step in strengthening self-regulation in India’s foreign exchange market. By expanding its governance framework and membership base, FEDAI is expected to enhance consistency, accountability, and market integrity among authorised dealers.

Click Here To Read The Full Press Release 

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Case Details: Vinod Narayan Kachave vs. Presiding Officer (ICC) - [2025] 181 taxmann.com 527 (HC - Bombay)

Judiciary and Counsel Details

• Sandeep V. Marne, J.
• Ms. Sana Raees Khan, Juhi Kadu & Ms. Sanskriti Yagnik for the Petitioner.

Facts of the Case

In the instant case, the petitioner, an employee of respondent-employer, was proceeded against on a complaint by a female colleague alleging three incidents:

(i) petitioner commented on complainant’s hair and sang a song relating to her hair;

(ii) petitioner made remarks about a male colleague’s private parts in a common forum where female employees were present;

(iii) a separate allegation against complainant’s reporting manager (a female) that she checked complainant out and discussed her attire with male colleagues.

The Internal Complaints Committee (ICC) issued an adverse finding, recording that serious allegations were confirmed by multiple witnesses and that the petitioner was reluctant to accept his behaviour as unprofessional.
The petitioner filed an appeal under Section 18 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, before the Industrial Court, which was dismissed. Thereafter, an appeal was made before the High Court.

It was noted that even if three incidents recorded by the ICC were held to be proved, conduct attributed to Petitioner (particularly Incidents 1 and 2) could not be said to amount to ‘sexual harassment’ to the complainant, and the third incident did not pertain to the petitioner.

High Court Held

The High Court held that the ICC report was vague as it was drawn without discussing evidence on record, and most importantly, the ICC had not considered the issue of whether the allegations levelled against the petitioner in the first two incidents really constituted sexual harassment to the complainant. Therefore, the impugned judgment and order passed by the Industrial Court were indefensible and liable to be set aside.

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Case Details: Principal Commissioner of Income-tax Central vs. Priya Blue Industries (P.) Ltd. [2025] 181 taxmann.com 745 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & Pranav Trivedi, JJ.
• Varun K.Patel, Sr. Standing Counsel for the Appellant.

Facts of the Case

The assessee was covered in a search operation. During the search, the Assessing Officer (AO) found undated cheques from the assessee. In response, the assessee submitted that no cash loan was given by any of the assessee of the group to the companies whose cheques in question were found during the search.

The assessee, in the normal course of its business and on account of a mutual understanding with the parties involved, had taken cheques that were not required to be deposited. However, AO made additions to the assessee’s income, contending that the undated cheques were issued in lieu of unaccounted cash loans.

The matter reached the Gujarat High Court.

High Court Held

The High Court held that the assessee submitted that it had taken the cheques from the parties in question, which were not required to be deposited. The assessee had discharged its onus of proving the identity and genuineness of the transactions. The assessee also demonstrated that the cheques in question were received in the normal course of business and that no cash loan was involved in the transaction.

During the search operation, no incriminating evidence was found to support the contention that the assessee had given any cash loan. Thus, the AO made the entire addition based on a presumption. Further, no cash trail or loose papers were found to support the presumption drawn by the AO. The cheques found during the search were also undated, and the AO did not make any inquiries of the parties who issued them.

AO made additions solely on the basis of presumptions and surmises, not on any evidence. Thus, the AO’s additions were deleted.

List of Cases Reviewed

• Balasinor Road Transport Co-Op. Society Ltd. v. ITO [IT Appeal No. 39/Ahd/2022, dated 28.06.2024] (para 4.2) affirmed

The post Unexplained Investment Addition Deleted For Lack Of Evidence | HC appeared first on Taxmann Blog.

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Editorial Team 

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

1. ASIC proposes updates to guidance on financial reporting and audit relief by issuing Regulatory Guide 43

The Australian Securities and Investments Commission (ASIC) has proposed updates to its existing guidance on financial reporting and audit relief. The update aims to provide greater clarity and consistency in the application of relief measures by entities and auditors. The proposed update is issued under Regulatory Guide 43, Financial reports and audit relief.

According to ASIC, the proposed updates are intended to ensure the currency and clarity of guidance on ASIC’s approach to granting relief from the financial record-keeping, financial reporting, and audit requirements. Thus, the revised guidance seeks to clarify the circumstances under which financial reporting and audit relief may be available and the expectations placed on preparers, directors, and auditors when such relief is applied.

ASIC emphasised that the proposed changes are designed to support high-quality financial reporting, while ensuring that relief measures do not compromise transparency, investor protection, or audit integrity. The regulator highlighted the continued importance of professional judgment, adequate disclosures, and compliance with core accounting and auditing standards.

It is important to note that ASIC proposes to withdraw Regulatory Guide 29 (RG 29) after the updated Regulatory Guide 43 (RG 43) is published.

Source- Australian Securities and Investments Commission

2. IESBA launches firm culture and governance viewpoints as it begins Asia outreach with a focus on emerging markets

The International Ethics Standards Board for Accountants (IESBA) has launched a new series of “Firm Culture and Governance Viewpoints”, marking a significant step in its efforts to strengthen ethical behaviour, accountability, and governance within audit and professional services firms. The initiative was formally introduced as part of IESBA’s outreach activities in Asia.
The newly released viewpoints are intended to stimulate dialogue among firms, regulators, and stakeholders on how organizational culture and governance structures influence ethical decision-making and audit quality. The publication highlights the growing expectation that firm leadership plays a central role in embedding ethical values, professional scepticism, and public-interest responsibility throughout their organizations.

According to IESBA, the viewpoints focus on practical considerations relating to tone at the top, leadership accountability, incentive structures, and governance mechanisms, emphasizing that a strong ethical culture cannot be achieved through compliance alone but requires sustained commitment from senior management and those charged with governance. The “Firm Culture and Governance Viewpoints” form part of IESBA’s wider strategic focus on enhancing trust in the accountancy profession and reinforcing the profession’s role in serving the public interest.

Source- International Ethics Standards Board for Accountants

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PR No. 2025-2026/1925; Dated: 14.01.2026

1. Introduction

Reserve Bank of India (RBI) has issued draft amendment directions on the computation of Net Open Position (NOP) and the calculation of capital charge for foreign exchange (FX) risk, inviting public comments.

2. Objective Of The Draft Directions

The draft aims to strengthen the prudential framework for managing FX risk by ensuring consistent and comprehensive computation of net open positions. It seeks to align capital adequacy with the actual risk exposure arising from foreign exchange fluctuations.

3. Computation At Group And Consolidated Level

Under the proposed framework, banks are required to compute their net open positions and maintain capital charge for FX risk not only at the standalone level but also at the group or consolidated level, enhancing overall risk oversight.

4. Continuous Capital Requirement

The draft directions mandate that banks must meet capital requirements for foreign exchange risk on a continuous basis. This means compliance must be ensured at the close of each business day, rather than at periodic reporting intervals.

5. Conclusion

The proposed directions reflect RBI’s focus on strengthening risk management practices in the banking sector. Stakeholders may submit comments on the draft by February 3, 2026, after which the final framework is expected to be notified.

Click Here To Read The Full Press Release 

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Case Details: BirlaNu Ltd. vs. Union of India [2026] 182 taxmann.com 297 (Telangana) 

Judiciary and Counsel Details

• ApareshKumar Singh, CJ.
• G.M. Mohiuddin, J.
• Sparsh Bhargava, Learned Counsel and Smt. Shireen Sethna Baria for the Petitioner.
• Bokaro Sapna Reddy, Standing Counsel, B.Mukherjee, learned counsel and N.Bhujanga Rao, Deputy Solicitor General for the Respondent.

Facts of the Case

The petitioner challenged the validity of Rule 39(1)(a) of the CGST Rules and consequential proceedings initiated by the Department of Revenue. It was observed that the petitioner had accumulated Input Tax Credit (ITC) and distributed it in the last month of the year, contrary to the said rule, which mandates that credit available for distribution in a month shall be distributed in the same month. It was submitted that all particulars of ITC distribution were disclosed in periodical returns, rendering the invocation of extended limitation under Section 74 legally untenable. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that Rule 39(1)(a) mandating distribution of ITC within the same month was ultra vires Section 20 of the CGST Act and the Telangana GST Act. It was observed that the inflexible requirement imposed by the rule could deny legitimately accrued ITC. The Court held that the show-cause notice issued was beyond the normal limitation period under Section 73, and the Department could not invoke an extended limitation under Section 74, as there was no suppression, misstatement, or fraud; all relevant ITC distributions were disclosed and available to the Department. Therefore, the final audit report, show-cause notice, and all consequential proceedings were set aside, allowing the petitioner to claim any amounts deposited in connection with the impugned proceedings.

List of Cases Referred to

• Lakshmi Rattan Engineering Works Ltd v. CST AIR 1968 SC 488 (para 13)
• STO v. K. I. Abraham [1967] 20 STC 367 (para 14)
• Global Energy Ltd v. Central Electricity Regulatory Commission (2009) 15 SCC 570 (para 15)
• Kirloskar Brothers Ltd v. State of Jharkhand [W.P. (T) No. 3944 of 2022, dated 26-4-2023] (para 17)
• Bharat Barrel and Drum Manufacturing Company Ltd v. ESI Corporation (1971) 2 SCC 860 (para 17)
• Pushpam Pharmaceuticals Company v. CCE 1995 Supp (3) SCC 462 (para 25).

The post Rule 39 ITC Norms Invalid Under Section 20 | HC appeared first on Taxmann Blog.

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Case Details: Aggarwal Hotels (P.) Ltd. vs. Assistant Labour Commissioner [2025] 181 taxmann.com 247 (HC - Delhi)

Judiciary and Counsel Details

• Ms. Chandrasekharan Sudha, J.
• Anil K. Hajelay, Adv. for the Petitioner.
• Vinay Singh & Ms. Sangita Singh, Advs. for the Respondent.

Facts of the Case

In the instant case, the petitioner was involved in the hospitality business and had two hotels and a restaurant. Respondent No. 2, claiming to be a registered trade union, submitted an application before the petitioner seeking a declaration of seven of its office bearers as ‘protected workmen’.

The petitioner sent a reply to respondent No. 2, inter alia, stating that the total strength of the petitioner was around 80 only and the maximum number of workmen who could be granted protection could not exceed five.

It was also informed that five of the persons mentioned in their application were suspended for acts of misconduct, and that disciplinary proceedings were pending and in progress. However, respondent No. 2 filed an application before the Assistant Labour Commissioner seeking a declaration that the same seven office bearers be declared protected workmen.

High Court Held

The Assistant Labour Commissioner declared all seven workmen mentioned in the application by respondent No. 2 as protected workmen. Thereafter, the petitioner filed a writ petition challenging the said order.
The High Court held that since disciplinary proceedings were pending against five of the seven workmen proposed for recognition as protected workmen, the petitioner was well within its right to decline recognition to such workmen.

Further, the High Court held that the Assistant Labour Commissioner erred in holding that merely because an employer-employee relationship existed, management was bound to grant protected status to workmen named in the application. Therefore, the impugned order was to be set aside

List of Cases Reviewed

• HLL Lifecare Ltd. v. Hindustan Latex Labour Union (AITUC) [2011] 11 taxmann.com 536 (Kerala) (para 11) followed

List of Cases Referred to

• HLL Lifecare Ltd. v. Hindustan Latex Labour Union (AITUC) [2011] 11 taxmann.com 536 (Kerala) (para 10).

The post Suspended Office-Bearers Not Protected Workmen | HC appeared first on Taxmann Blog.

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Circular No. CEPD.PRD.No.S1027/13.01.019/2025-26, Dated: 14.01.2026

1. Introduction

Reserve Bank of India (RBI) has notified the Internal Ombudsman Directions, 2026 to strengthen the internal grievance redressal framework across banks and select regulated entities.

2. Entities Covered Under The Directions

The Directions apply to commercial banks, payments banks, small finance banks, non-banking financial companies (NBFCs), non-bank prepaid payment instrument (PPI) issuers, and credit information companies, ensuring uniform grievance handling standards.

3. Appointment And Tenure Of Internal Ombudsman

The framework lays down provisions relating to the appointment, tenure, and independence of the Internal Ombudsman. This aims to ensure impartial review of customer complaints within regulated entities.

4. Review Of Rejected Or Partially Resolved Complaints

Under the Directions, complaints that are partially resolved or proposed to be rejected must be reviewed by the Internal Ombudsman before final rejection. Timelines have been prescribed to ensure faster and more effective grievance resolution.

5. Conclusion

The Internal Ombudsman Directions, 2026 reinforce RBI’s focus on consumer protection and accountability. By strengthening internal grievance mechanisms, the Directions seek to improve transparency, trust, and timely resolution of customer complaints across the regulated ecosystem.

Click Here To Read The Full Circular 

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World Corporate Law News provides a weekly snapshot of corporate law developments from around the globe. Here’s a glimpse of the key corporate law update this week.

1. Securities Law

1.1 FCA highlights good practice and risks in complex ETFs for retail investors

On January 12, 2025, the Financial Conduct Authority (FCA) highlighted good practices and risks associated with complex exchange-traded products (ETPs) for retail consumers. Complex ETPs are a subset of the wider ETP market and include high-risk investment strategies that can be difficult for retail consumers to understand.

The FCA assessed how firms of different sizes and business models evaluate these products, communicate key risks and monitor outcomes under the Consumer Duty.

Given the complexity and risk profile of ETPs, it is essential that firms make sure investors have the knowledge they need to make informed investment decisions.

The FCA found that some firms demonstrated detailed processes for:

(a) Defining target markets
(b) Assessing customer knowledge
(c) Monitoring outcomes

Other firms had weaker controls or limited assessments of a customer’s investment experience and knowledge. The FCA also observed unclear disclosures, making it harder for consumers to understand the associated risks.

The FCA expects firms to put consumers first by ensuring that products and services meet their needs and that communications are clear and understandable.

ETPs include a wide range of products, from more vanilla investments to high-risk offerings. For example, crypto exchange-traded notes (cETNs), which are high-risk investments linked to cryptoassets, are a type of ETP.
Complex ETPs are high-risk investments that make up a small subset of the wider ETP market. They include products with leveraged and inverse strategies.

Complex ETPs also have features that can be difficult for retail consumers to understand, such as the potential impact of holding them beyond recommended holding periods.

What firms should do?

Firms should review their processes to ensure they meet the Consumer Duty requirements. This includes addressing gaps in appropriateness checks and clearly communicating risks to retail investors.
The review supports the FCA’s broader work to protect consumers and promote a fair and thriving investment culture in the UK.

Source – Official Guidance

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Case Details: Infosys Green Forum vs. Income-tax Officer (Exemptions) - [2026] 182 taxmann.com 242 (Bangalore - Trib.) 

Judiciary and Counsel Details

• Prashant Maharishi, Vice President
• Keshav Dubey, Judicial Member
• Manish Kanth, Adv. & Porus Kaka, Sr. Adv. for the Appellant.
• Shivanand Kalakeri, CIT(DR)(ITAT) for the Respondent.

Facts of the Case

Assessee-Infosys Green Forum was a Section 8 company. It was incorporated to promote commerce, art, science, sports, education, research, social welfare, religion, charity, or the protection of the environment, or any other object. The company was formed to undertake the corporate social responsibility (CSR) activities on behalf of Infosys Limited, pursuant to the amendment to Rule 7(4) of the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The company was set up to generate clean and green solar power. It was a non-profit company and was entitled to supply power to its 100% shareholder (Infosys Ltd.) at an agreed-upon rate. The company applied for registration under section 12AB of the Act.

The CIT(E) rejected the assessee’s application for registration under section 12AB of the Act. Aggrieved by the order, the assessee filed an appeal to the Bangalore Tribunal.

Tribunal Held

The Tribunal held that the assessee was set up to generate power for its 100% shareholder (Infosys Ltd.) only. There was no benefit to the public at large or a section of the public at all. The dominant object of the whole of the exercise is to get the power for Infosys Limited through captive solar power plant shown as CSR activity and then made an attempt to claim the benefit of section 11, 12 of the Income tax Act by obtaining registration under section 12AB of The Act and further to obtain recognition under section 80G(5) of the Act.

Assessee’s case was not different from the case that a donor sets up a school for his own children and claims it as ‘Educational activity’, a company setting up a hospital exclusively for its own promoters/employees and claiming it as medical relief, setting up its own yoga centre for itself and claiming it as ‘Yoga’, etc. In all these cases, there was no public benefit.

Further, the Hon’ble Supreme Court in CIT v. Dawoodi Bohara Jamat [2014] 43 taxmann.com 243 (SC) has held that the word ‘charity’ connotes altruism in thought and action and involves an idea of benefiting others rather than oneself. It cannot be said that a purpose would cease to be charitable even when public welfare is intended to be served.

Therefore, the CIT(E) ‘s order was upheld, and the assessee’s appeal was dismissed.

List of Cases Referred to

• CIT (Exemption) v. Indian Trade Promotion Organisation [2023] 152 taxmann.com 491 (SC)/[2023] 294 Taxman 1 (SC)/[2023] 454 ITR 799 (SC) (para 11)
• Huhtamaki Foundation v. CIT (Exemption) [2024] 163 taxmann.com 174 (Mumbai – Trib.) (para 11)
• CIT v. Naroda Enviro Projects Ltd. [2020] 118 taxmann.com 378 (Gujarat)/[2019] 419 ITR 482 (Gujarat) (para 11)
• CIT (Exemptions) v. Water & Land Management Training & Research Institute [2017] 83 taxmann.com 234 (Andhra Pradesh and Telangana)/[2017] 398 ITR 283 (Andhra Pradesh and Telangana) (para 11)
• CIT (Exemption) v. Water & Land Management Training & Research Institute [2023] 156 taxmann.com 193 (SC)/[2023] 295 Taxman 753 (SC)/[2024] 461 ITR 1 (SC) (para 11)
• Punjab Heritage & Tourism Promotion Board v. CIT (Exemptions) [2025] 179 taxmann.com 259 (Chandigarh – Trib.) (para 11)
• City Hospital Charitable Trust v. CIT (Exemptions) [2025] 175 taxmann.com 716 (Bangalore – Trib.)/[2025] 213 ITD 399 (Bangalore – Trib.) (para 11)
• Punjab Plastic Waste Management Society v. CIT(E) [IT Appeal No. 17 (Chandigarh) of 2020, dated 14-7-2023] (para 11)
• CIT v. Dawoodi Bohara Jamat [2014] 43 taxmann.com 243 (SC)/[2014] 222 Taxman 228 (SC)/[2014] 364 ITR 31 (SC) (para 30).

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