Case Details: Insolvency and Bankruptcy Board of India vs. Truvisory Insolvency Professionals (P.) Ltd. [2026] 184 taxmann.com 11 (NCLAT- New Delhi)

Judiciary and Counsel Details

• Justice Ashok Bhushan, Chairperson & Indevar Pandey, Technical Member
• N. Venkatraman, Sr. Adv., Ms Amrita Singh & Prasang Sharma, Advs. for the Appellant.
• Arun Kathpalia, Milan Singh Negi, Nikhil Kumar Jha, Treenok Guha, Utkarsh Mishra, Pranaya Goyal, Chiranjivi Sharma, Ms Nehal Gupta, Ms Katyayani, Ms Chitra, Ms Neharika Sharma, Ms Khyati Mehrotra, D. Arambhan, Ms Nanki Grewal, Advs., Krishnendu Dutta & Abhijeet Sinha, Sr. Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant-IBBI filed an appeal challenging the NCLT’s order approving a resolution plan. The filing entailed a delay of 103 days. The IBBI filed an application seeking condonation of delay, which the Respondent No. 2 opposed on the ground that the delay exceeded the statutory outer limit of 45 days under Section 61(2) of the IBC.

The appellant contended that, by virtue of section 198’s non obstante clause, delay in filing an appeal could be condoned and that the Appellate Tribunal could exercise the Adjudicating Authority’s power; reliance was placed on section 16(4) of the IBC.

It was noted that Section 198 of the IBC can have no relevance with regard to Section 61 of the IBC, which provides for a limitation for filing an appeal. Further, it was noted that the power of condonation by the Adjudicating Authority is a clear indicator that when a function is entrusted to the Board and the same is not performed within time, it can be condoned. The purpose is that such a delay can have no fatal effect on proceedings.

NCLAT Held

The NCLAT held that the Appellate Tribunal can also exercise the jurisdiction that is vested in the Adjudicating Authority. Still, power has been given for a specific purpose and object to the relevant Adjudicating Authority, which can never be intended to contemplate condonation of delay under Section 61 of the IBC by the Appellate Tribunal.

Thus, a delay in filing an appeal beyond the condonable period could not be condoned; the 103-day delay could not be condoned.

List of Cases Reviewed

• Order of National Company Law Tribunal, Mumbai in IA No.53 of 2025 in C.P. (IB) No.77/MB/2024, Dated 13.08.2025 (para 26) affirmed

List of Cases Referred to

• Union of India v. Prabhakaran Vijay Kumar (2008) 9 SCC 527 (para 13)
• Bank of Baroda v. MBL Infrastructures Ltd. [2022] 134 taxmann.com 190 (SC)/[2022] 170 SCL 640 (SC) (para 15)
• Reserve Bank of India v. Peerless General Finance & Investment Co. Ltd. [1996] 7 SCL 126 (SC) (para 15)
• Kunwer Sachdev v. IDBI Bank [2024] 159 taxmann.com 324 (Delhi)/[2024] 183 SCL 368 (Delhi) (para 17)
• Hari Shankar v. Rao Girdhari Lal Chowdhury AIR 1963 SC 698 (para 21)
• Shiv Shakti Coop. Housing Society, Nagpur v. Swaraj Developers (2003) 6 SCC 659 (para 22)
• Malluru Mallappa v. Kuruvathappa [Civil Appeal No. 1485 of 2020, dated 12-2-2020] (para 23)
• GLAS Trust Company LLC v. BYJU Raveendran [2024] 167 taxmann.com 619 (SC)/[2025] 187 SCL 14 (SC) (para 25)
• Independent Sugar Corporation Ltd. v. Girish Sriram Juneja [2025] 170 taxmann.com 868 (SC) (para 25).

The post 103-Day Delay in IBBI Appeal Dismissed Under IBC Section 61 | NCLAT appeared first on Taxmann Blog.

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Case Details: Geena Garments vs. State Tax Officer - [2026] 184 taxmann.com 225 (Madras)

Judiciary and Counsel Details

• C. Saravanan, J.
• S. Sathyanarayanan for the Petitioner.
• Ms Amirtha Poonkodi Dinakaran, Govt. Adv. for the Respondent.

Facts of the Case

The petitioner was issued a show cause notice (SCN) alleging wrongful availment of input tax credit (ITC) under the CGST Act. The petitioner accepted the demand proposed in the SCN and proceeded to make payment through Form GST DRC-03 by debiting the Electronic Credit Ledger (ECL). Upon verification, it was noticed by the department that the balance in the ECL was insufficient for the period during which such a debit was made, resulting in the delayed payment of tax liability. Consequently, interest under section 50(3) of the CGST Act was confirmed through the impugned assessment order, and a penalty under section 74 was also levied. Aggrieved by such levy of interest and penalty, the petitioner filed a writ petition challenging the consequential liability. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the petitioner had admitted the tax liability and effected payment through Form GST DRC-03, though belatedly and without sufficient balance in the ECL. The Court observed that interest under section 50(3) of the CGST Act was rightly attracted on account of the delayed payment of tax. It further held that the penalty under section 74 was also justified, particularly when the statute provided graded options for a reduced penalty which were not availed by the petitioner. The Court concluded that once the liability stood admitted and payment was effected belatedly, the challenge to consequential interest and penalty was not sustainable. Accordingly, the writ petition was dismissed.

The post Interest u/s 50(3) & Penalty u/s 74 Valid on Belated ITC Payment via DRC-03 | HC appeared first on Taxmann Blog.

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Circular No. HO/47/16/14(1)2026-MRD-POD1/I/7115/2026; Dated: 16.03.2026

1. Background and Context

The Securities and Exchange Board of India (SEBI) has revised the coverage norms applicable to the Core Settlement Guarantee Fund (SGF) under the Commodity Derivatives segment. These revisions are aimed at strengthening the risk management framework governing Clearing Corporations and enhancing the resilience of the settlement ecosystem against member defaults.

2. Revised Coverage Norms for Core SGF

2.1 Revised Default Scenario for Credit Exposure Computation

Clearing Corporations are now required to compute their credit exposure based on the simultaneous default of at least 3 clearing members. This replaces the earlier methodology, which was based on the default of 2 clearing members plus 50% of all clearing members.

2.2 Significance of the Revision

The upward revision in the number of simultaneous defaults to be considered strengthens the stress-testing framework by:

• Accounting for a broader and more severe default scenario.
• Ensuring that the Core SGF corpus is adequately funded to withstand systemic shocks.
• Aligning the commodity derivatives segment’s risk coverage with more robust prudential standards.

3. Exemptions and Relaxations from SGF Provisions

3.1 Power to Grant Exemptions

SEBI may, after due deliberation, grant exemptions or relaxations from the strict enforcement of provisions relating to the Settlement Guarantee Fund (SGF) in the commodity derivatives segment. Such exemptions shall be considered on a case-to-case basis.

3.2 Factors to be Considered

Before granting any exemption or relaxation, SEBI shall take into account the following:

• Prevailing Market Conditions – the broader economic and market environment at the time of the request.
• Adequacy of the Applicable Risk Management Framework – whether the existing safeguards are sufficient to compensate for any deviation from standard SGF norms.
• Overall Objective of Investor Protection – ensuring that any relaxation does not compromise the safety and integrity of the settlement system or the interests of investors.

3.3 Nature of Exemptions

The exemption mechanism is discretionary and deliberative in nature, ensuring that no blanket relaxations are granted. Each case will be assessed independently against the above parameters, preserving regulatory flexibility while maintaining systemic safeguards.

4. Effective Date

The circular shall come into force with immediate effect from the date of its issuance.

Click Here To Read The Full Circular

The post SEBI Revises SGF Norms | 3 Clearing Members Default Test appeared first on Taxmann Blog.

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Case Details: Goal Closures vs. State Tax Officer (Int)-1 - [2026] 184 taxmann.com 226 (Madras)

Judiciary and Counsel Details

• C. Saravanan, J.
• G. Natarajan for the Petitioner.
• C. Harsharaj, Special Government Pleader for the Respondent.

Facts of the Case

The petitioner, a registered person, was subjected to inspection and search by the department, pursuant to which goods were placed under Prohibition Order in Form GST INS-03 and Seizure Order in Form GST INS-02. A show cause notice (SCN) in Form GST DRC-01 was thereafter issued alleging belated availment of input tax credit (ITC) under section 16(4) of the CGST Act, which culminated in an assessment order passed in Form GST DRC-07. The said assessment order was subsequently quashed in separate writ proceedings on the ground of limitation. It was also confirmed that no fresh or de novo proceedings had been initiated thereafter and that none of the notices proposed confiscation of the seized goods under section 67(2) of the CGST Act. The petitioner, therefore, challenged the continued operation of the Prohibition and Seizure Orders. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the continuance of the Prohibition Order in Form GST INS-03 and Seizure Order in Form GST INS-02 could not be sustained once the assessment order had been quashed and no fresh proceedings proposing confiscation had been initiated. The Court observed that in the absence of any proposal for confiscation as contemplated under section 67(2) of the CGST Act, the very basis for continuation of such restrictive measures ceased to exist. It further held that mere pendency of remand proceedings, without any substantive action for confiscation, could not justify continuation of seizure or prohibition. Accordingly, the Court concluded that the impugned Prohibition and Seizure Orders were unwarranted and liable to be set aside.

List of Cases Referred to

• Global Closures v. State Tax Officer [W.P. No. 8284 of 2025, dated 12-3-2025] (para 5).

The post Seizure & Prohibition Orders Fall Once GST Assessment Quashed on Limitation | HC appeared first on Taxmann Blog.

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Press Note No. 2; Dated: 15.03.2026

1. Background and Context

The Government has reviewed Para 3.1.1 of the Consolidated FDI Policy of 2020, dated 15.10.2020. This provision governs foreign direct investments originating from countries that share a land border with India.

2. Key Amendments to the FDI Policy

2.1 Prior Government Approval for Change in Beneficial Ownership

As per the amended policy, any subsequent change in beneficial ownership of an investment made by an entity from a land-bordering country will now require prior Government approval. This marks a significant tightening of oversight, ensuring that indirect shifts in control or ownership do not bypass the approval framework applicable to such investments.

2.2 Alignment of ‘Beneficial Ownership’ with PMLA, 2002

The definition of ‘beneficial ownership’ has been formally aligned with the definition as provided under the Prevention of Money Laundering Act (PMLA), 2002. This alignment brings consistency between foreign investment regulations and anti-money laundering frameworks.

3. Determination of Beneficial Ownership

3.1 Applicable Legal Framework

Beneficial ownership must be determined in accordance with the criteria specified under Rule 9(3) of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules, 2005).

3.2 Significance of Rule 9(3)

Rule 9(3) of the PML (Maintenance of Records) Rules, 2005 lays down the threshold-based criteria for identifying beneficial owners in the context of entities such as companies, partnerships, and trusts. By anchoring the FDI policy definition to this rule, the Government ensures a uniform and legally precise standard for identifying ultimate beneficial ownership across regulatory domains.

4. Implications of the Amendment

The amended policy has the following key implications:

• Investments from land-bordering countries are subject to enhanced scrutiny not just at the entry stage but also upon any downstream change in beneficial ownership.
• Entities holding such investments must monitor and report changes in beneficial ownership and seek prior approval before any such change takes effect.
• The alignment with PMLA definitions reduces regulatory ambiguity and strengthens the anti-circumvention framework applicable to sensitive cross-border investments.

5. Effective Provision

The amendment applies to Para 3.1.1 of the Consolidated FDI Policy, 2020, dated 15.10.2020, and governs all investments from countries sharing a land border with India, including any structural or ownership changes post-investment.

Click Here To Read The Full Press Release

The post Govt. Tightens FDI Rules for Land Border Countries appeared first on Taxmann Blog.

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The National Financial Reporting Authority (NFRA), exercising its mandate under Section 132 of the Companies Act, 2013, has issued four inspection reports on 16th March 2026 in respect of leading audit firms, including entities from the “Big Four” network. These inspections are part of NFRA’s ongoing efforts to monitor compliance with auditing standards and enhance the overall quality of audit services in India.

The inspections involved a comprehensive review of both firm-level controls and engagement-level audit work. As part of the process, NFRA assessed the remedial actions undertaken by the firms in response to deficiencies identified in earlier inspection reports. Further, key elements of the firms’ system of quality control, such as human resources, consultation mechanisms, and monitoring processes, were evaluated to determine their effectiveness.

At the engagement level, NFRA reviewed selected audit assignments, focusing on critical audit areas such as revenue recognition and loans and advances, along with certain entity-specific components. The inspection process also included on-site visits, detailed discussions with audit firm personnel, and the examination of policies, procedures, and supporting documentation.

NFRA followed a structured process wherein initial observations were communicated to the audit firms, their responses were evaluated, and draft reports were shared before finalisation. The issuance of these reports highlights key audit quality concerns and reinforces the need for robust audit methodologies, stronger internal quality controls, and strict adherence to auditing and ethical standards.

Click the link below to access the inspection reports

Inspection Report 1

Inspection Report 2

Inspection Report 3

Inspection Report 4

Click Here To Read The Full Story

The post NFRA Issues Audit Inspection Reports on Big Four Firms | Key Findings appeared first on Taxmann Blog.

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Editorial Team – [2026] 184 taxmann.com 294 (Article)

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

1. Sweden Approves a Temporary Reduced VAT Rate on Food

Sweden has approved a temporary reduction in the value-added tax (VAT) rate on food. The decision follows approval of the government’s proposal to reduce the VAT rate applicable to food supplies from 12 per cent to 6 per cent. The measure is intended to provide financial support to households.

The legal amendments introduce a temporarily reduced VAT rate specifically applicable to food. The measure forms part of a policy initiative aimed at supporting household finances by lowering the VAT burden on food consumption during the specified period.

Key aspects of this measure include:

(a) Temporary Reduction of VAT Rate on Food from 12 Per Cent to 6 Per Cent – The approved amendments reduce the value-added tax (VAT) rate applicable to food from 12 per cent to 6 per cent. This reduction applies only for a limited period and is intended to provide temporary relief by lowering the VAT charged on food supplies.

(b) Parliamentary Approval of the Government’s Proposal for VAT Reduction – The government proposed amendments to temporarily reduce the VAT rate on food as part of measures to support households. The proposal was reviewed by the parliamentary committee, which recommended approval of the bill. Following this recommendation, the House approved the committee’s proposal. The legislative decision formally authorises the temporary reduction in the VAT rate applicable to food.

(c) Effective Period of the Temporary VAT Reduction – The legal amendments specify that the temporary VAT rate reduction will apply from 01-04-2026. The measure will remain in force until 31-12-2027, after which the temporary provisions will cease to apply unless further legislative action is taken. The specified period defines the duration during which the reduced VAT rate of 6 per cent will apply to food supplies.

Source: Official Announcement

Click Here To Read The Full Article

The post [Global IDT Insights] Sweden Cuts Food VAT to 6% | Vietnam Clarifies Animal Feed VAT appeared first on Taxmann Blog.

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Kushal Soni & Priyanshi Soni – [2026] 184 taxmann.com 236 (Article)

1. Introduction

The Income-tax Act, 2025 was introduced with the intention of reorganising and simplifying India’s direct tax framework. However, legislative reform does not end with structural consolidation. The Finance Bill, 2026 demonstrates that tax law continues to evolve, not through sweeping changes, but through carefully considered refinements.

The recent amendments do not weaken enforcement. Instead, they address areas where the earlier framework was seen as disproportionately harsh or procedurally rigid. Broadly, the reforms focus on four areas:

• Expansion of the updated return mechanism
• Rationalisation of tax on unexplained income
• Consolidation of penalty provisions and expansion of immunity
• Rationalisation of block assessment in search cases

Each of these changes reflects a move towards balanced administration, where revenue protection and taxpayer fairness are expected to co-exist.

2. Expansion of Scope of Updated Return

(Section 263 read with Section 267 in IT Act, 2025; Section 139(8A) read with Section 148 in IT Act, 1961)

Position before Amendment

The concept of an updated return was introduced as a voluntary compliance measure. A taxpayer could file such return within forty-eight months from the end of the relevant financial year, subject to payment of additional tax.

However, once a reassessment notice was issued under Section 280 (or Section 148 under the 1961 Act), this window closed. At that stage, the matter moved entirely into reassessment proceedings, and the assessee was left to contest the issue within that framework.

In practice, this often meant that even where a taxpayer was willing to accept the omission, there was no structured mechanism to settle the matter early.

Position after Amendment

The Finance Bill, 2026 now permits filing of an updated return even after receipt of a reassessment notice. The assessee must file it within the time specified in the notice and pay:

• Tax and interest,
• Additional income-tax under Section 267, and
• An additional 10% of the aggregate tax and interest.

Once this route is adopted, no separate return can be filed in response to that notice. Further, the income so disclosed will not form the basis of penalty under misreporting provisions.

Implications

The reassessment stage now becomes an opportunity for resolution rather than an automatic escalation into litigation. While the financial cost is higher than voluntary disclosure, the benefit lies in certainty and closure.

Illustration

If Mr A receives a reassessment notice for non-disclosure of ₹10 lakh, he is no longer compelled to contest the reassessment. Instead, he may regularise the income through an updated return, discharge the enhanced tax liability, and close the issue at that stage itself

3. Rationalisation of Tax on Unexplained Income

(Section 195 read with Sections 102–106 in IT Act, 2025; Earlier Sections 69–69C in IT Act, 1961)

Position before Amendment

Unexplained income such as unexplained credits, investments or assets was taxed at a flat rate of 60%. This was in addition to surcharge (highest rate applicable that is 25%) and 4% health and education cess. Further, a separate penalty under Section 443 applied at 10% of the tax payable.

The combined effect was a significantly high effective tax burden. The approach was clearly prevention driven.

Position after Amendment

The Finance Bill, 2026 reduces the special tax rate from 60% to 30%. Surcharge and cess continue to apply. The separate penalty under Section 443 has been removed, and such cases now fall within the general misreporting framework.

Implications

The amendment does not condone unexplained income. It continues to attract serious tax consequences. However, the burden is no longer disproportionate. The reform reflects a shift from layered penal exposure to a more streamlined structure.

Illustration

On an addition of ₹10 lakh as unexplained income, the earlier regime would have attracted tax at 60% plus surcharge (25%), cess (4%) and separate penalty. Under the amended regime, the base rate stands reduced to 30%, significantly lowering the immediate financial impact.

4. Reform of Misreporting Penalty and Expansion of Immunity

(Sections 439 & 440 in IT Act, 2025; Section 270AA in IT Act, 1961)

Position before Amendment

Immunity from penalty and prosecution was available only in cases of under-reporting, not where income was categorised as misreporting. Once misreporting was alleged, penalty proceedings typically followed, and the matter often moved into appeal.

In addition, unexplained income cases attracted separate penalty under Section 443.

Position after Amendment

The Finance Bill, 2026 introduces a more integrated approach:

• Section 443 is omitted.
• Penalty provisions are consolidated under Section 439(11).
• Immunity under Section 440 is extended even to misreporting cases.

To avail immunity, the assessee must pay additional income-tax equal to:

• 100% of tax payable in general misreporting cases, or
• 120% of tax payable in unexplained income cases.

Similar amendments are made under Section 270AA of the 1961 Act.
Implications

The law now recognises that prolonged penalty litigation may not always serve revenue interests. By allowing immunity upon payment of enhanced tax, it introduces a structured settlement mechanism.

Illustration

If an addition of ₹8 lakh is treated as misreporting, the assessee may choose to pay the prescribed additional tax and seek immunity, thereby avoiding further penalty proceedings and prosecution exposure.

Click Here To Read The Full Article

The post [Opinion] Reform of Reassessment, Penalty and Block Assessment under Finance Bill 2026 appeared first on Taxmann Blog.

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The Auditing and Assurance Standards Board (AASB) of the Institute of Chartered Accountants of India (ICAI), under the authority of its Council, has issued the Guidance Note on Audit of Banks (2026 Edition) on 16th March 2026. This annual publication serves as a comprehensive reference for auditors engaged in the statutory audit of banks and bank branches, offering updated guidance in line with evolving regulatory and reporting requirements.

The 2026 edition is structured to provide both conceptual clarity and practical support. It includes the core text of the Guidance Note along with appendices dedicated to statutory central audits and bank branch audits. In addition, the publication consolidates relevant regulatory materials issued by the Reserve Bank of India (RBI), including Master Circulars, Master Directions, Notifications, FAQs, and General Circulars, along with their respective lists for ease of reference.

By integrating authoritative guidance with key regulatory pronouncements, the updated Guidance Note aims to assist auditors in effectively navigating the complexities of bank audits and ensuring compliance with applicable standards and regulatory expectations.

Click here to access the guidance note

Click Here To Read The Full Story

The post ICAI AASB Releases Guidance Note on Audit of Banks 2026 Edition appeared first on Taxmann Blog.

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Case Details: Creative Enterprises vs. State of Telangana - [2026] 184 taxmann.com 183 (Telangana)

Judiciary and Counsel Details

• Aparesh Kumar Singh, CJ. & G.M. Mohiuddin, J.
• M.Uma Shankar, Learned counsel for the Petitioner.
• Swaroop Oorilla, Learned Special Govt. Pleader for the Respondent.

Facts of the Case

The petitioner challenged the re-blocking of its Electronic Credit Ledger (ECL) under Rule 86A of the CGST Rules on the ground that such action was beyond the permissible period of one year and without jurisdiction. The petitioner confined the writ petition only to the challenge against the blocking of the ECL and contended that the action of the department was not sustainable if the blocking had continued beyond the prescribed time limit. During the course of proceedings, the department submitted that the ECL had been re-blocked and that the period of one year from the date of such re-blocking had not expired. The department also produced an order-in-original passed pursuant to a show cause notice (SCN) issued under Section 74 of the CGST Act, disallowing input tax credit (ITC) and imposing tax, interest, penalty and late fee. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the writ petition did not disclose the proceedings initiated under Section 74 of the CGST Act or the linkage of the blocking of the ECL with such proceedings. The Court observed that non-disclosure of material facts in writ proceedings was fatal to the grant of relief. It further held that the re-blocking of the ECL was founded on the demand created under Section 74 of the CGST Act and that the one-year period from the date of re-blocking had not expired. In view of these circumstances, the Court concluded that interference in writ jurisdiction was unwarranted and dismissed the writ petition.

The post ECL Re-Blocking Within One Year Valid | HC appeared first on Taxmann Blog.

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