The Income Tax Department has appealed to the Delhi High Court against an Income Tax Appellate Tribunal (ITAT) decision that significantly reduced the tax liability of Clifford Chance, a global law firm.

The ITAT had earlier ruled that only a portion of the firm’s India-sourced income was taxable, dismissing the department’s claim of higher dues.

The case revolves around the interpretation of permanent establishment and tax treaties. 

The department argues the ITAT order undermines tax compliance for foreign legal entities. 

[Commissioner of Income Tax (International Taxation) v Clifford Chance Pte Ltd.]

The Allahabad High Court has held that officers appointed under the State Goods and Services Tax (SGST) Act are authorized to discharge duties as "proper officers" for Integrated GST (IGST) and Central GST (CGST) matters.

The court clarifies that dual appointments under state and central laws are valid, ensuring seamless enforcement and reducing jurisdictional conflicts.

Dismissing challenges to such appointments, the bench underscored that GST is designed on the principle of cooperative federalism and requires smooth coordination between state and central authorities to avoid jurisdictional conflicts.

The Rajasthan High Court rejected a plea challenging the 2021 amendment that introduced “sleeper buses” as a separate taxable category.

A division bench of Justice Vinit Kumar Mathur and Justice Anuroop Singhi held that buses fall under definitions in the Motor Vehicles Act, 1988, and the State has the competence to further categorise them by body type under the Rajasthan Motor Vehicles Rules, 1990, for tax purposes.

The Court clarified that the amendment only specified tax rates, not a new vehicle class. Upholding differential tax rates and exemptions, it ruled the policy was based on intelligible differentia and served public interest.

[Khuman Singh v State of Rajasthan & Ors]

The Kerala High Court ruled that denying property tax exemption to unaided schools does not violate Article 14.

Justice Ziyad Rahman explained that government-owned, managed, and aided schools provide education at minimal or no fees, funded by the state, justifying their tax exemption.

In contrast, unaided schools charge fees and thus do not qualify for exemption. The Court held this classification as reasonable and aligned with the objectives of the Kerala Panchayat Raj Act and Kerala Municipality Act amendments.

The petition by unaided educational institutions challenging the removal of tax exemption was accordingly dismissed.

[Rev. Fr. Dr. Abraham Thalothil v State of Kerala]

The Rajasthan High Court condoned a 700-day delay by a public charitable trust in filing its audit report (Form 10B) under the Income Tax Act, 1961.

The trust’s president suffered a severe brain stroke, delaying the accounting process for AY 2018–19. Authorities had rejected condonation under Section 119, stating the Vice-President could have filed the report.

The Court held that the exemption should not be denied merely due to limitation when charitable activities were in good faith and no mala fide intent existed.

Emphasising an equitable approach, it ruled that genuine charitable trusts deserve relief from rigid procedural delays.

The Bombay High Court held that the sale of a 1931 Ford Tourer by Mumbai resident Narendra Bhuva is subject to capital gains tax, as there was no proof of its personal use. 

Bhuva bought the car in 1983 for ₹20,000 and sold it in 1992 for ₹21 lakh, claiming exemption as a personal asset.

The Assessing Officer and the ITAT rejected this claim due to a lack of evidence.

The Court agreed, noting that ownership alone does not qualify as personal use, and Bhuva did not provide proof of expenses or exclusive personal usage. The appeal was dismissed.

[Narendra I. Bhuva v Assistant Commissioner of Income Tax]

The Allahabad High Court held that a notice served on the registered email address of the assessee constitutes valid service under Section 169(1)(d) of the CGST Act, 2017.

The assessee challenged the proceedings, claiming that email communication was not proper service and that the limitation could not begin as the email was not read.

The Court rejected this contention and ruled that once the department sends the notice to the registered email address, it completes service, and the limitation runs from that date.

The Court further emphasised that taxpayers must regularly monitor their registered communication channels. 

[Assessee v Revenue Department]

The Bombay High Court has held that advances granted by a company to its shareholder, if not demonstrated to have been utilised for the company’s business, will be treated as deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961.

A Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne dismissed an appeal filed by the legal heir of late Shri Jaykumar B. Patil, upholding the Income Tax Appellate Tribunal’s ruling.

The Court stressed that it is not the purpose of the advance but its actual utilisation that determines exclusion from the deemed dividend provisions.

Mere maintenance of a running account or ongoing transactions, it held, cannot establish business use.

The Delhi High Court has declined to intervene in a ₹50.33 crore GST demand against a trader accused of fraudulently availing inadmissible Input Tax Credit (ITC).

Despite notices being issued via the GST portal, the sole proprietor entirely failed to attend the personal hearing or submit a reply, claiming infrequent access to the portal.

The bench of Justices Prathiba M. Singh and Renu Bhatnagar emphasised that it’s standard practice for all such communications to be posted online and faulted the trader’s non-participation as inexcusable.

The court dismissed the petition and imposed ₹50,000 costs to be deposited with the Delhi High Court Bar Association within two weeks

The Supreme Court has held that a summons issued under Section 70 of the CGST Act does not amount to "initiation of proceedings” under Section 6(2)(b).

This allows both Central and State GST authorities to conduct simultaneous investigations at the inquiry stage.

A Bench of Justices JB Pardiwala and R Mahadevan clarified that only adjudicatory steps such as assessment or penalty proceedings qualify as “proceedings.”

To avoid duplication, the Court issued a nine-point framework ensuring coordination between authorities while upholding taxpayers’ duties to comply.

[Armour Security v Commissioner of CGST, Delhi]

The Supreme Court reserved judgment in a landmark case on the applicability of GST to online real money games, involving a ₹2.5 lakh crore tax dispute.

A bench of Justices J.B. Pardiwala and R. Mahadevan heard final rejoinders from senior counsels representing gaming companies such as Gameskraft, Delta Corp, and other industry bodies.

The submissions argued that “Betting & Gambling” applies only to games of chance, not skill, challenged the classification of online rummy stakes as “actionable claims,” and criticised recent casino GST valuation rules.

The respondents urged dismissal of the Revenue’s petitions and quashing of tax demands. The government will file supplementary submissions in two weeks.

The Lok Sabha has passed the Income Tax (No. 2) Bill, replacing the 1961 Act from April 1, 2026, to make tax laws simpler, streamlined, Integrated, minimise litigation, Practical, Learnable, and Efficient.

Based on 285 accepted committee suggestions, it reduces the number of sections from 819 to 536 and chapters from 47 to 23.

Key reforms include simplified language, faceless digital assessments, refunds for late ITRs, no penalty for late TDS, NIL-TDS certificates, explicit deductions for commuted pension, and reinstated inter-corporate dividend relief under Section 80M.

The amendments also align tax treatment across pension schemes like UPS and NPS. Tax slabs remain unchanged. The Taxation Laws (Amendment) Bill, 2025, was also passed.

Union Finance Minister Nirmala Sitharaman will present the revised Income Tax Bill in the Lok Sabha on August 11, incorporating 285 suggestions from the Select Committee chaired by Baijayant Panda.

The earlier February 13 version was withdrawn last week to avoid confusion from multiple drafts. The updated bill, replacing the 1961 Act, simplifies language, aligns phrases, and corrects cross-references.

Key changes include allowing tax refunds even if returns are filed late, restoring Section 80M deductions for certain inter-corporate dividends, and enabling NIL TDS certificates.

The government accepted all panel suggestions to ensure smooth implementation.

The Bombay High Court upheld the constitutional validity of the seventh proviso to Section 2(b) of the Maharashtra Entertainments Duty Act, which includes online booking charges within taxable admission costs.

Dismissing petitions challenging the amendment, the Bench held that the State has legislative competence under Entry 62, List II, to tax such charges.

The Bench rejected claims of colourable legislation and ruled that online booking is directly connected to accessing entertainment, making any distinction from offline booking superfluous.

The Court noted the proviso merely sets the measure of tax and disposed of all petitions.

[FICCI & Anr. v State of Maharashtra & Ors.]