Case Details: Citius Holidays (P.) Ltd., In re [2026] 182 taxmann.com 675 (AAR-WEST BENGAL)

Judiciary and Counsel Details

• Shafeeq S. & Jaydip Kumar Chakrabarti, Member
• Vikas B. Waghmare, CA & Keyur Thakkar, AR for the Applicant.

Facts of the Case

The applicant, engaged in event management, tours and travel services, arranged bundled services for clients, including hotel accommodation, conference rooms, and meals, for which a consolidated fee was charged. Hotels issued single or bundled invoices covering accommodation, venue facilities, and food and beverages used for providing such services. An application for advance ruling was filed seeking clarity on the admissibility of Input Tax Credit on food and beverages used in supplying event management services. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the services supplied qualified as a composite supply with event management as the principal supply and hotel accommodation, conference facilities, and food and beverages as ancillary supplies. It recorded that food and beverages were supplied as part of the bundled service provided to clients. It ruled that where such inward supplies form part of a taxable composite supply, restriction on Input Tax Credit would not apply. Accordingly, Input Tax Credit on food and beverages used in providing event management services was held to be admissible, subject to the fulfilment of general conditions under the CGST Act and the West Bengal GST Act.

List of Cases Referred to

• Indian Society of Critical Care Medicine, In re [2022] 140 taxmann.com 526/93 GST 802 (AAR – GUJARAT) (para 2.3)
• All Rajasthan Corrugated Board and Box Manufacturers Association, In re [2019] 107 taxmann.com 264/75 GST 335/27 GSTL 295 (AAR – RAJASTHAN) (para 2.3)
• Mangaldas Mehta & Company Ltd., In re [2024] 159 taxmann.com 654 (AAR – GUJARAT) (para 2.3)
• GRB Dairy Foods (P.) Ltd., In re [2022] 140 taxmann.com 414 (AAAR – TAMILNADU) (para 2.3).

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Case Details: Vashishtha Luxury Fashion Ltd. vs. Deputy Director of Income-tax/Income-tax Officer - [2026] 182 taxmann.com 396 (Mumbai-Trib.)

Judiciary and Counsel Details

• Ms Kavitha Rajagopal, Judicial Member & Om Prakash Kant, Accountant Member
• Manish Agarwal for the Appellant.
• Annavaram Kosuri, Sr. DR for the Respondent.

Facts of the Case

The assessee company was engaged in designing and manufacturing a distinctive collection of hand-embroidered apparel. The assessee filed its return of income, applying the tax rate under Section 115BAA. However, the Centralized Processing Centre (CPC) computed the assessee’s tax liability under the normal provisions without considering the assessee’s option to be taxed under Section 115BAA.

The matter reached the Mumbai Tribunal.

ITAT Held

The Tribunal held that Section 115BAA applies to a domestic company where the assessee opts to be computed at 22%, subject to the satisfaction of the conditions specified in sub-section (2). It prescribes that the assessee exercises the said option only when it is in the prescribed manner on or before the due date specified in section 139 for furnishing the return of income. The third proviso to the said section states that the option exercised by the assessee becomes invalid when there is a violation of the condition prescribed in sub-clause (ii) or (iii) or clause (a) or clause (b) of sub-section (2).

There has been no express bar for the assessee to claim the benefit of the provision if there is a delay in filing the return, i.e. return filed under section 139(4), though it says in sub-section (5) that the assessee has to exercise the option in the prescribed manner on or before the due date specified under section 139(1).

In the instant case, the assessee had filed Form 10IC within the prescribed time limit specified in section 115BAA. The assessee shall exercise the option in the prescribed manner on or before the due date specified under section 139(1) for furnishing the return of income for any previous year relevant to the assessment year on or after the first day of April 2020. The assessee has also filed the tax audit report well within the time, which establishes the fact that the assessee intended to opt for the concessional tax regime under Section 115BAA.

Therefore, the assessee was entitled to a concessional tax regime even if the return was filed belatedly.

List of Cases Reviewed

• Aprameya Engineering Ltd. v. ITO [2024] 164 taxmann.com 740 (Ahmedabad – Trib.) (para 15) followed

List of Cases Referred to

• Aprameya Engineering Ltd. v. ITO [2024] 164 taxmann.com 740 (Ahmedabad – Trib.) (para 15)
• Pr. CIT v. Wipro Ltd. [2022] 140 taxmann.com 223 (SC)/[2022] 288 Taxman 491 (SC)/[2022] 446 ITR 1 (SC) (para 15).

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Notification No. S.O. 461(E); Dated: 30.01.2026

The Central Government has notified an exemption, on the recommendation of the Reserve Bank of India (RBI), under section 53 of the Banking Regulation Act, 1949. The exemption relates to the applicability of section 19(2) of the Act in respect of specified shareholding limits.

1. Exemption from Shareholding Restrictions under Section 19(2)

Section 19(2) of the Banking Regulation Act, 1949, restricts a banking company from holding shares in any company beyond a prescribed percentage of its paid-up share capital. Pursuant to the notified exemption, the provisions of section 19(2) shall not apply to:

• Bank of Baroda, and
• State Bank of India,

in relation to their shareholding exceeding thirty per cent of the paid-up capital of the Indian Digital Payment Intelligence Corporation (IDPIC).

2. Entity Covered – Indian Digital Payment Intelligence Corporation

The exemption is specific to the shareholding of Bank of Baroda and State Bank of India in the Indian Digital Payment Intelligence Corporation (IDPIC) and does not extend to investments in any other entity.

3. Validity Period of the Exemption

The exemption has been granted for a limited period and shall remain valid up to 16 October 2026, unless withdrawn or modified earlier.

4. Regulatory Context and Implications

The exemption enables the concerned banks to continue holding a higher stake in IDPIC beyond the statutory threshold, supporting the operational and strategic objectives of the digital payments and financial intelligence framework, while remaining within the regulatory oversight of the RBI.

5. Key Takeaway

By exercising its powers under section 53 of the Banking Regulation Act, the Government has provided regulatory flexibility to Bank of Baroda and State Bank of India for a defined period, ensuring continuity in their investment in IDPIC without contravention of shareholding restrictions under section 19(2).

ick Here To Read The Full Notification

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Simran Keswani – [2026] 182 taxmann.com 810 (Article)

With the advancement in technology especially after the introduction of AI smartphones are inevitable part of our daily life’s. The Indian telecom sector thus plays an important role in category to the ever-evolving technological needs. Furthermore, the imminent rollout of 5G networks promises even faster connectivity, but it also introduces complex infrastructure demands and hefty capital investments. The telecom industry has been grappling with the cash flow issues due to variety of reasons ranging from high operational cost, high spectrum cost, intense competition due to tariff wars. As of late January 2026, the total Adjusted Gross Revenue (AGR) demands for the Indian telecom sector are estimated at approximately Rs. 1.66 trillion (Rs. 1.66 lakh crore). Adjusted Gross Revenue (AGR) refers to the revenue metric used by the Department of Telecommunications (DoT) to calculate the license fees and spectrum usage charges (SUC) that telecom companies (telcos) must pay to the government. Telecom Companies have to pay Adjusted Gross Revenue (AGR) dues which are fees telecom operators in India pay to the Department of Telecommunications (DoT), consisting of license fees i.e. right to obtain telecommunication license (approx. (7-8%) and spectrum usage charges i.e. right to use spectrum (approx. 3-5%).

A 2019 Supreme Court ruling widened the definition of AGR to include non-telecom revenue (e.g., rent, interest, asset sales), resulting in massive, legally binding liabilities for companies like Vodafone Idea. Major telecommunication providers, particularly Vodafone Idea, faced substantial financial distress due to these recalculated, retrospective payments. In late 2025, the Supreme Court permitted a review and recalculation of certain dues to provide relief to struggling operators. Following severe financial stress, the government has provided a 5-year moratorium of the dues followed by a staggered repayment structure for these dues, with the bulk of payments deferred over a 10-year period. The frozen dues are subject to reassessment which may further reduce this amount. Following Vodafone’s case, Airtel is seeking similar relief

Telecommunications finance ensures that telecom companies have the funds they need to build, maintain, and expand their services while making wise financial decisions to ensure long-term success. This involves everything from budgeting for daily operations to securing investments for future growth. Taxation is one of the critical part impacting the cash flow challenges of the telecom sector.

Click Here To Read The Full Article

The post Budget 2026 | Wishlist of Cash Strapped Telecom Sector appeared first on Taxmann Blog.

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GSTN Advisory, Dated 30-01-2026

The Goods and Services Tax Network (GSTN) has issued an advisory announcing system enhancements in the filing of GSTR-3B, applicable from the January-2026 tax period onwards. The changes primarily relate to interest computation, auto-population of tax liability, and flexibility in ITC utilisation, in line with the CGST Rules.

1. Revised Interest Computation in Table 5.1

GSTN has updated the interest calculation mechanism in Table 5.1 of GSTR-3B to extend the benefit of the minimum cash balance available in the Electronic Cash Ledger. This benefit will be considered from the due date of return filing up to the actual date of tax payment, in accordance with the proviso to Rule 88B(1) of the CGST Rules.

For delayed filing of GSTR-3B for the January-2026 tax period, the applicable interest will be system-computed and auto-populated in the February-2026 GSTR-3B.

2. System-Computed Interest – Minimum Payable Amount

The interest amount computed by the portal will be non-editable downward and will represent the minimum interest payable. However, taxpayers will have the option to revise the interest amount upward, where required, based on self-assessment and factual considerations.

3. Auto-Population of Tax Liability Break-up Table

The GST portal will now auto-populate the Tax Liability Break-up Table in GSTR-3B based on document dates declared in GSTR-1, GSTR-1A, or the Invoice Furnishing Facility (IFF). This enhancement applies to cases where the underlying supply relates to earlier tax periods but the tax liability is discharged in the current period, improving consistency between outward supply reporting and tax payment.

4. Flexibility in Utilisation of ITC for IGST Liability

Once the available IGST Input Tax Credit (ITC) is fully exhausted, the system will permit taxpayers to discharge IGST liability using available CGST and SGST ITC in any order. This provides enhanced flexibility in credit utilisation and aligns the portal functionality with statutory provisions.

5. Interest Recovery for Cancelled Taxpayers

In cases involving cancelled registrations, where the last applicable GSTR-3B is filed after the due date, the applicable interest will be levied and recovered through GSTR-10, ensuring proper recovery of dues post-cancellation.

6. Compliance Implications

These enhancements reinforce GSTN’s focus on automation, rule-based interest computation, and improved return accuracy. Taxpayers should review their return filing timelines, cash ledger balances, and ITC utilisation strategies to ensure alignment with the revised system functionality effective from January 2026.

Click Here To Read The Full Update 

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Circular no. HO/38/13/(3)2026-MIRSD-POD/I/3763/2026; Dated: 30.01.2026

The Securities and Exchange Board of India (SEBI) has simplified the process for issuance and transfer of securities by dispensing with the requirement of issuing a Letter of Confirmation (LoC). Going forward, securities may be credited directly to investors’ demat accounts, reducing procedural steps and timelines.

1. Direct Credit of Securities to Demat Accounts

Under the revised framework, the Registrar and Transfer Agent (RTA) or the Issuer Company is required to verify and process investor service requests and issue securities directly in dematerialised form to the demat account of the securities holder or claimant.
Such direct credit must be completed within 30 days from the date of receipt of a valid service request.

2. Documentation Requirement – Client Master List (CML)

Investor service requests must be accompanied by a copy of the latest Client Master List (CML) of the demat account. The CML:

• must not be older than two months, and
• must be duly attested by the Depository Participant (DP).

This requirement ensures accuracy of demat account details prior to credit of securities.

3. Initiation of Demat Conversion Request

After verifying and processing the service request and supporting documents, the RTA or Issuer Company must initiate the dematerialisation (demat conversion) request in the depository system. This step enables the direct credit of securities into the demat account of the securities holder or claimant.

4. Intimation on Successful Dematerialisation

Upon confirmation of the demat conversion request, the depositories, RTAs, or listed companies, as applicable, are required to send an intimation to the securities holder or claimant confirming the successful dematerialisation and credit of securities to the demat account.

5. Effective Date

The circular will come into force with effect from April 2, 2026. All RTAs, issuer companies, depositories, and investors must align their processes with the revised requirements from this date.

6. Key Takeaway

By eliminating the Letter of Confirmation and enabling direct demat credit, SEBI aims to simplify investor servicing, reduce turnaround time, and enhance operational efficiency, while maintaining necessary checks through attested demat account verification.

Click Here To Read The Full Circular

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Case Details: Jagbeer Singh vs. State of U.P. - [2025] 181 taxmann.com 893 (HC-Allahabad)

Judiciary and Counsel Details

• J.J. Munir, J.
• Ashwini Kumar Srivastava, Adv. for the Petitioner.
• Girijesh Kumar Tripathi, Addl. Chief Standing Counsel for the Respondent.

Facts of the Case

In the instant case, the petitioner was appointed as an unskilled labourer in the Irrigation Workshop Division, Meerut, in April 1983. He was issued a retirement notice stating that he would retire upon reaching 60 years of age.

The petitioner represented that his date of birth was 20.02.1967, relying on a Class VIII school-leaving certificate, a high-school marksheet, and an internal certificate issued by Mukhya Samaypal reflecting a date of birth of 20.02.1967, a date of appointment in April 1983, and a projected retirement in March 2025.

He sought restoration of his service records to reflect 20.02.1967 instead of 01.09.1964. The Works Manager rejected representation, and the petitioner was superannuated accordingly.

It was noted that the date of birth recorded in such a government servant’s service book at the time of entry into service by mandate of Rule 2 of the Uttar Pradesh Recruitment to Services (Determination of Date of Birth) Rules, 1974, has to be deemed as his correct date of birth for all purposes, which include superannuation.

Further, it was noted that, since there was no objection to the petitioner’s date of birth, which was initially recorded as 20.02.1967 and later changed based on a notarial affidavit furnished by the petitioner, the change was clearly in the teeth of Rule 2 of the Rules 1974.

High Court Held

The High Court held that, by virtue of Rule 3, the Rules of 1974 have an overriding effect over all other rules. Further, the petitioner’s date of birth, as originally recorded in his service book, i.e., 20.02.1967, was to be regarded as his correct and immutable date of birth. The conclusion, to the contrary, reached by respondents and orders impugned were, therefore, manifestly illegal.

Thus, impugned orders were to be quashed, and a mandamus was to be issued to respondents to ensure, amongst themselves, immediate reinstatement of the petitioner in service, together with all consequential benefits of salary, increment and seniority.

List of Cases Referred to

• Smt. Kalyani Devi v. State of U.P. [WRIT Appeal No. 7679 of 2024, dated 12-9-2024] (para 17).

The post DOB in a Govt. Servant’s Service Book Final for Retirement | HC appeared first on Taxmann Blog.

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Case Details: NSL Sugars Ltd. vs. Deputy Commissioner of Income-tax [2026] 182 taxmann.com 500 (Bangalore-Trib.)

Judiciary and Counsel Details

• Soundararajan K., Judicial Member & Waseem Ahmed, Accountant Member
• Suresh Muthukrishnan, CA for the Appellant.
• Dr K.J. Dhivya, CIT-DR for the Respondent.

Facts of the Case

The assesse, a public integrated sugar company, wrote off Rs. 3.79 crores representing loans/advances given to its wholly-owned subsidiary in Ghana. The advances were made in earlier years by making payments directly to the subsidiary’s vendors and were recorded as loans in the assessee’s books. The subsidiary was engaged in the same line of business and was incorporated to expand the assessee’s business outside India. Due to ongoing losses, its operations were closed, and the subsidiary entered liquidation.

The assessee claimed the write-off as a business loss/expenditure under section 37(1), contending that advances were made on commercial expediency and that the loss was incidental to the business. The Assessing Officer rejected the claim, holding that the write-off represented capital loss, that the assessee was neither a banking nor a money-lending company, and that the conditions of section 36(2) were not satisfied. He further held that commercial expediency was not established.

ITAT Held

On appeal, the Tribunal held that the assessee had set up a wholly owned subsidiary in Ghana to expand its sugar business and funded its initial operations by directly paying consultants and vendors on its behalf, which were recorded as loans/advances. The funding was for business purposes, and classifying the amounts as loans/advances rather than equity did not change the transaction’s true character.

Applying the principle that commercial expediency must be judged from a business person’s perspective, the loss arising from the subsidiary’s failure was incidental to the assessee’s business. The write-off of Rs. 3.79 crores was allowed as a deductible business loss under section 37(1), and the addition made by the Assessing Officer was deleted.

List of Cases Reviewed

• ACE Designers Ltd. v. Addl. CIT [2020] 120 taxmann.com 321 (Karnataka)/[2020] 275 Taxman 138 (Karnataka)
• CIT v. Colgate Palmolive (India) Ltd. [2015] 59 taxmann.com 139 (Bombay)/[2015] 370 ITR 728 (Bombay)
• Cosmos Industries Ltd. v. DCIT [IT Appeal No. 3730 (Del) of 2015]
• REFEX Industries Ltd. v. Dy. CIT [2022] 139 taxmann.com 213 (Chennai-Trib.) (para 25.4) followed.
• ITA No. 772/Bang/2019 (32.3) followed.

List of Cases Referred to

• ACE Designers Ltd. v. Addl. CIT [2020] 120 taxmann.com 321 (Karnataka)/[2020] 275 Taxman 138 (Karnataka) (para 20.2)
• CIT v. Colgate Palmolive (India) Ltd. [2015] 59 taxmann.com 139 (Bombay)/[2015] 370 ITR 728 (Bombay) (para 20.2)
• REFEX Industries Ltd. v. Dy. CIT [2022] 139 taxmann.com 213 (Chennai – Trib.) (para 20.2)
• Cosmos Industries Ltd. v. DCIT [IT Appeal No. 3730 (Del) of 2015] (para 20.2)
• Ryatar Sahakari Sakkare Karkhane Niyamit v. Asstt. CIT [2016] 67 taxmann.com 283 (Karnataka)/[2016] 383 ITR 561 (Karnataka) (para 27.3)
• Kesha Appliances Pvt. Ltd. v. ITO [IT Appeal No. 2715 (Del) of 2016, dated 09.03.2018] (para 36.2)
• Sonicwall Technology System India Pvt. Ltd. v. ACIT [IT Appeal No. 3860 (Mum) of 2019, dated 02.12.2022] (para 36.2)
• Phool Singh v. ACIT [IT Appeal No. 2901 (Del) of 2014, dated 06.04.2017] (para 36.2).

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The National Financial Reporting Authority (NFRA) has published its first-ever newsletter, marking an important step in enhancing transparency around the audit regulator’s work, priorities, and expectations. The publication serves as a formal communication channel to engage with stakeholders across the financial reporting ecosystem.

1. Overview of Regulatory Priorities

The newsletter provides insights into NFRA’s regulatory focus areas, outlining how the authority intends to strengthen audit quality and uphold the integrity of financial reporting. It highlights NFRA’s approach to supervision, enforcement, and standard-setting, offering clarity on the themes that will guide its oversight activities going forward.

2. Key Oversight Observations from Audit Reviews

A significant part of the newsletter discusses key observations emerging from NFRA’s audit inspections and reviews. These observations reflect recurring deficiencies and areas of concern identified during oversight, and signal the regulator’s expectations regarding professional scepticism, documentation, independence, and compliance with auditing standards.

3. Emphasis on Accountability and Professional Conduct

The publication underscores NFRA’s emphasis on accountability, ethical conduct, and professional discipline. It reiterates the regulator’s commitment to ensuring that auditors discharge their responsibilities with due care, objectivity, and independence, thereby reinforcing confidence in the audit profession.

4. Strengthening Trust in Financial Reporting

By sharing its perspectives and expectations, NFRA aims to build greater trust in financial statements and audit processes. The newsletter highlights the role of high-quality audits in protecting public interest and maintaining the credibility of India’s financial reporting framework.

5. Signals for Auditors, Preparers, and Users of Financial Statements

The newsletter also serves as a forward-looking guide for auditors, preparers, and users of financial statements, offering early signals on areas that may attract closer regulatory scrutiny. Stakeholders are encouraged to align their practices with NFRA’s expectations to mitigate compliance risks and enhance overall reporting quality.

6. Way Forward

NFRA’s inaugural newsletter sets the tone for ongoing engagement with the profession and other stakeholders. Going forward, such communications are expected to play a key role in promoting regulatory clarity, improving audit outcomes, and strengthening confidence in India’s financial reporting and governance landscape.

Click Here To Read The Full Story

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Editorial Team – [2026] 182 taxmann.com 808 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Japan to Implement Pillar Two Side-by-Side Package

Japan’s Ministry of Finance has issued a Cabinet Decision dated 23 January 2026 to align the country’s Pillar Two global minimum tax framework with the OECD’s side-by-side package released on 5 January 2026. Under this decision, Japan will revise its rules as follows:

• Exemption for Certain Parent Jurisdictions – Multinational groups headquartered in specified jurisdictions that maintain internationally recognised minimum tax regimes such as those with a corporate tax rate of at least 20% and a domestic minimum tax will have their GloBE top-up tax reduced to zero.
• Extension of Transitional Safe Harbor: The transitional Country-by-Country Reporting (CbCR) safe harbor will be extended by one additional year, remaining in effect through the end of 2027.
• Treatment of Investment Tax Credits – Certain investment-related tax credits may be included in covered taxes to mitigate unintended top-up tax exposure, subject to defined limitations.
• Revisions to UTPR Residual Tax Allocation – The approach to allocating residual top-up tax under the UTPR-equivalent mechanism will be refined.
• Updates to Local Inhabitant Taxes – Conforming amendments will be introduced to Japan’s local corporate inhabitant tax rules.

These revisions will apply to fiscal years beginning on or after 1 January 2026.

Source – Cabinet Decision

2. South Africa Lowers Interest Rates on Outstanding Taxes and Overpayments

The South African Revenue Service (SARS) has released updated interest rate tables dated 22 January 2026, reflecting the following adjustments:

• Table 1 – Interest on outstanding taxes and refunds – The interest rate applicable to unpaid taxes, duties, and levies, as well as interest payable on tax refunds arising from successful appeals and certain delayed refunds, has been reduced from 10.50% to 10.25%, effective 1 March 2026. This follows an earlier reduction from 10.75% to 10.50% effective 1 November 2025.
• Table 2 – Interest on credit balances – The interest rate payable on credit amounts, including overpayments of provisional tax, has been lowered from 6.50% to 6.25%, effective 1 March 2026. This comes after a prior decrease from 6.75% to 6.50% effective 1 November 2025.

The interest rates under both tables are linked to the rate prescribed under section 80(1)(b) of the Public Finance Management Act, 1999 (PFMA), which sets the standard interest rate for debts owed to the State. The PFMA rate was most recently reduced from 10.50% to 10.25% with effect from 1 January 2026, as announced by the National Treasury. However, for income tax purposes, the revised rate becomes applicable only from the first day of the second month following its implementation under the PFMA namely, 1 March 2026.

Source – South African Revenue Service

Click Here To Read The Full Article

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