Tax Weekly Round-Up: August 18 - August 24, 2025
Kapil Dhyani
25 Aug 2025 6:35 PM IST
SUPREME COURTIs Merchant Navy Officer's Salary Credited In Indian Bank Account Exempt From Income Tax? Supreme Court To DecideCause Title: VANDANA & ORS. VERSUS KESHAV & ORS.The Supreme Court on Monday (Aug. 18) agreed to decide whether the income credited in an Indian bank account while working with a Foreign Entity would be exempted from the payment of Income Tax under the Income...
SUPREME COURT
Cause Title: VANDANA & ORS. VERSUS KESHAV & ORS.
The Supreme Court on Monday (Aug. 18) agreed to decide whether the income credited in an Indian bank account while working with a Foreign Entity would be exempted from the payment of Income Tax under the Income Tax Act, 1961..
The issue arose before the bench of Justices Pankaj Mithal and Prasanna B. Varale while hearing the appeal filed against the Punjab & Haryana High Court's decision upholding the Motor Accident Claims Tribunal (“MACT”) decision to deduct 30% towards tax liability while computing the compensation claim of the Appellant's deceased husband, who was employed with British Marine PLC, London as Merchant Navy Officer earning 3,200 USD monthly income.
HIGH COURTS
Bombay HC
Case Title: Commissioners of Customs (Export) v. Bank of India & Anr.
Case Number: WRIT PETITION NO.620 OF 2021
The Bombay High Court stated that expired bank guarantee can't be enforced post CIRP (corporate insolvency resolution process).
Justices M.S. Sonak and Jitendra Jain stated that, “The argument that a personal guarantee survives the CIRP does not apply in the case because the guarantee had expired even before the CIRP. During the validity period of the guarantee, admittedly, no claim was lodged by the department. This petition was instituted almost 10 years after the guarantee expired, and that too by instituting a writ petition, probably realising that a suit would be barred by limitation.”
Case Title: Narendra I. Bhuva v. Assistant Commissioner of Income Tax
Case Number: INCOME TAX APPEAL NO.681 OF 2003
The Bombay High Court held that sale proceeds of vintage car taxable unless the assessee proves that the car was used as a personal asset.
Chief Justice Alok Aradhe and Justice Sandeep V. Marne stated that the capability of a car for personal use would not ipso facto lead to automatic presumption that every car would be personal effects for being excluded from capital assets of the Assessee.
Case Title: M/s. Eagle Security & Personnel Services v. Union of India
Case Number: WRIT PETITION NO.1687 OF 2024
The Bombay High Court held that RCM notifications denying ITC credit to service providers are constitutionally valid and does not violate Article 14 and 19(1)(g) of the Constitution.
The bench opined that in case of RCM, the person receiving the services, i.e. the recipient pays the tax and can claim credit of the same. The provider of service is exempt from paying tax. Merely because persons covered by RCM cannot claim credit of ITC cannot be seen in a microscopic way to hold the notification and the provision as ultra vires.
Delhi HC
Case title: Suresh Kumar v. Commissioner CGST Delhi North
Case no.: W.P.(C) 12199/2025
The Delhi High Court recently observed that usually there is a gap between the passing of a demand order by the GST Department and uploading of Form DRC-07 (summary of order) on the official portal.
A division bench of Justices Prathiba M. Singh and Shail Jain however refused to infer such a gap as rendering the demand order time-barred, in view of the fact that the demand was served upon the assessee in question via email.
Kerala HC
No Violation Of Article 14 In Denying Property Tax Exemption To Unaided Schools: Kerala High Court
Case Title: Rev. Fr. Dr. Abraham Thalothil v. State of Kerala
Case Number: WP(C) NO. 24012 OF 2023
The Kerala High Court stated that there is no violation of Article 14 in denying property tax exemption to unaided schools.
Justice Ziyad Rahman A.A. stated that the fact that the Government owned, managed and aided schools are established by the Government at their funds in order to provide education to all classes of persons by collecting nil or meagre fees, is a crucial factor which distinguishes such establishments from an unaided school, where fees is collected from the students for rendering the services.
Madras HC
Case Title: Chandrasekaran Proprietor Subha Earth Movers v. Assistant Commissioner
Case Number: W.P.No.30638 of 2025
The Madras High Court has directed the department to issue a circular urging assessees to engage only qualified consultants for GST compliance.
Justice Krishnan Ramasamy stated that, "This Court comes across similar instances in several cases, extending ill advice to the clients by the consultants, who are all not qualified persons. Such kind of ill-advice leads to the fact that the clients are not in a position to appear before the Officers concerned with suitable reply supported by documents, which is purely on the negligence on the part of the consultant."
Case Title: M/s Arul Industries v. The Asst. Commissioner of Income Tax
Case Number: TCA No.340 of 2016
The Madras High Court stated that the Income Tax commissioner cannot revise an assessment merely because detailed reasoning was not given in the order.
Chief Justice Manindra Mohan Shrivastava and Justice Sunder Mohan stated that, "an order cannot be termed as erroneous unless it is not in accordance with law. If the Income Tax Officer, acting in accordance with law, makes certain assessment, the same cannot be branded as erroneous by the Commissioner, simply because, according to the Commissioner, the order should have been written more elaborately."
Rajasthan HC
Case Title: Khuman Singh v State of Rajasthan & Ors., and other connected matters
The Rajasthan High Court rejected the challenge made to an amendment brought in by the Transport Department by which a new category of “sleeper bus” was added for levying motor vehicle tax, taking it out from the previous category without qualifying it for the exemptions available under other categories.
The division bench of Justice Vinit Kumar Mathur and Justice Anuroop Singhi held that the “bus” fell in the definitions under Sections 2(7) and 2(29) of the Rajasthan Motor Vehicles Act, 1988, and once the type or class of vehicle was categorised further based on seating capacity/berth arrangement as per body types defined under the Rajasthan Motor Vehicle Rules, 1990, the State was within its right to categorize such vehicle for tax imposition.
TRIBUNALS
Widow Eligible To Claim TDS Credit On Deceased Husband's Income: ITAT
Case Title: Lovely Das v. Addl/JCIT, Nashik
Case Number: I.T.A. Nos.: 291, 292, 293 & 294/KOL/2025
The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has stated that widow eligible to claim TDS credit on deceased husband's income.
Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member) stated as per sub-rule (2) of Rule 37BA and sub-rule 3(i) of the Income Tax Rules, 1962, if the income is assessable in the hands of any other person, the credit of TDS shall be given to him for the year in which the income is shown.
Case Title: Jayshreeben Jayantibhai Palsana v. ITO, Ward-1 (9) Ahmedabad
Case Number: ITA No.1014/Ahd/2025
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has stated that rebate under section 87A available on short-term capital gains under section 111A under new regime.
Suchitra R. Kamble (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) stated that on a plain reading of the statutory provisions, there exists no express bar either in section 87A or section 111A for denial of rebate in respect of tax payable on short-term capital gains arising from transfer of listed equity shares taxable at special rates under section 111A. The legislative intent is further clarified by the subsequent amendment proposed in the Finance Bill, 2025, which is prospective in nature and thereby reinforces that no such restriction was in force during the relevant assessment year.
Revenue Cannot Enforce Optional Exemption Notification Without Assessee's Consent: CESTAT
Case Title: Commissioner of Central Goods v. M/s Hindustan Unilever Limited
Case Number: EXCISE APPEAL NO. 52196 OF 2024
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that revenue cannot enforce optional exemption notification without assessee's consent.
Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) opined that once an exemption is claimed, the assessee will not get CENVAT credit and may lose some other benefits. Therefore, it cannot be said that the optional exemption notification should be applied even if the assessee does not opt for it or for even for period before it opts for it.
OTHER DEVELOPMENTS
Centre Publishes Income Tax Act 2025 In Official Gazette After Presidential Assent
The Ministry of Law and Justice today published the Income Tax Act, 2025, in the Official Gazette after it received the President's assent on Thursday.
The Act consolidates and amends the existing income tax law, replacing the Income Tax Act, 1961. It will come into effect from April 1, 2026.