Bombay HC allows filing of refund application for a period already covered under an earlier application

This Tax Alert summarizes a recent judgement of the Bombay High Court (HC) ^[1] on the validity of multiple refund applications filed by the taxpayer under section 54(1) of the Central Goods and Services Tax Act, 2017 (CGST Act) for the same tax period.

Assessee filed a refund application for the tax period of August 2022 which was rejected by the Revenue on the ground that assessee had earlier filed and obtained refund through a consolidated application covering the period July 2022 to September 2022. The petitioner contended that the August 2022 invoice had been inadvertently omitted from the earlier application. The rejection was thus challenged before the HC.

The key observations of the HC are:

India-New Zealand FTA signed in April 2026, enabling zero-duty access for Indian exports to New Zealand

India and New Zealand have signed a landmark India–New Zealand Free Trade Agreement (IN–NZ FTA) on 27 April 2026 in New Delhi. The FTA aims to boost exports, MSMEs, investment flows, skills mobility and broader economic cooperation.

Defining features of the FTA are:

SEBI Applies Substance-over-Form Test While Granting Exemption Under Takeover Code for Share Transfers to Private Trusts

 Succession planning for promoter families has emerged as a critical priority for business-owning families. It necessitates a structured evaluation of legal and regulatory considerations, including compliance with the SEBI framework, particularly the takeover regulations when transferring control of a listed company to the next generation.

The SEBI Takeover Regulations trigger an open offer obligation where an acquisition of shares or control entitles an acquirer to exercise 25% or more of the voting rights in a listed company. This applies to both direct and indirect acquisitions, including transfers of shares in holding entities. While certain bona fide transactions such as inter-se promoter transfers, transfers among immediate relatives, and succession-related transfers are exempt, no blanket exemption is available for transfers to family trusts. However, SEBI Master Circular permits case-specific exemptions upon application to SEBI, subject to conditions, including that the settlor must have been disclosed as a promoter for at least three years.

In the exemption application filed by Tega Industries Limited, the promoter family proposed to transfer shares of NFSPL, which held 49.71% in the company. During its review, SEBI observed that one of the settlors had not been formally disclosed as a promoter of Tega Industries Limited. However, she had held shares in NFSPL since 2006, and NFSPL itself had been disclosed as a promoter of Tega Industries Limited since its listing in 2021. Based on these facts, SEBI concluded that the requirement of being “disclosed as a promoter for three years” was substantively met and accordingly granted the exemption.

NCLT clarifies IBC applicability: Commercial profit-sharing not a trigger for CIRP

 In a recent ruling, the NCLT, Mumbai Bench (‘Tribunal’) held that a claim arising from a revenue or profit-sharing arrangement under film rights and co-production agreements does not qualify as 'operational debt' within the meaning of Section 5(12) of the IBC. The Tribunal held that the petitioner, being a commercial partner, sharing profits from the exploitation of cinematographic rights, could not be treated as a supplier of goods or services so as to invoke the corporate insolvency resolution process.

Tax Implications of Offshore Liquidation Structures Involving Indian Subsidiaries: A Practical Analysis

Global corporate structures often evolve over time, and simplification through liquidation of intermediate holding entities is a common strategic move. However, when such structures involve Indian subsidiaries, the Indian Income-tax Act introduces complex tax implications—particularly through the indirect transfer provisions. This article examines the tax consequences of liquidating an intermediate holding entity within a multi-tier structure and outlines the associated risks, responsibilities, and litigation considerations.

The Four-Day CA Firm: Automating the Non-Busy Season

Let’s start with a small story in this regard. CA X was the managing partner of a rapidly growing, mid-sized tax and audit practice in Pune. It was the second week of June historically the one brief window of calm between the grueling March year-end closing and the impending avalanche of July income tax filings. Yet, as CA X walked through the office on a Saturday afternoon, the atmosphere felt as tense as the final week of September. His brightest senior associate, Mr. A, walked into his cabin and handed in his resignation, citing extreme burnout and a desire to move to a corporate job for a better work-life balance.

Major Overhaul of Companies Act & LLP Act: Key Amendments Explained

 Recent legislative amendments have brought sweeping changes to India’s corporate compliance landscape, strengthening regulatory oversight while introducing targeted relaxations for small companies and IFSC entities.

Big Relief: Delay in Form-67 Not Fatal to Foreign Tax Credit (FTC)

In a taxpayer-friendly ruling, the ITAT Hyderabad (ITA No. 1705/Hyd/2025) -  Amit Vishnav H  held that delay in filing Form-67 cannot be the sole ground to deny Foreign Tax Credit under a DTAA.

TDS on Interchange Fees & Payment Gateway Charges: Not Applicable

A key question in digital payments is whether TDS applies to interchange fees, payment gateway charges, or Merchant Discount Rate (MDR). The settled position—backed by CBDT clarifications and judicial rulings—is that TDS is generally not required.

Delhi High Court Rejects ‘Virtual Service PE’ in Clifford Chance Ruling

In a significant ruling today, the Delhi High Court in Clifford Chance PTE Ltd rejected the Revenue’s theory of a “Virtual Service Permanent Establishment” under the India-Singapore DTAA.

The Department argued that physical employee presence is no longer essential for a Service PE, citing Hyatt, Verizon, and ABB FZ LLC. The Court, however, held that Article 5(6)(a) explicitly requires services to be furnished “within a Contracting State… through employees or other personnel.” The words “within” and “through personnel” mandate a physical footprint in India.

Observing that the DTAA must be interpreted strictly, the Court refused to read in a virtual PE concept where the treaty conspicuously omits it. The cited precedents were held factually distinguishable. Consequently, the argument for a virtual service PE was dismissed

Calcutta High Court: Unlisted Share Sale Taxable as Capital Gains Absent Exceptional Circumstances

 In a significant ruling, the Calcutta High Court held in the case of Russel Credit Ltd that gains from the sale of unlisted shares must be taxed as capital gains, consistent with CBDT Instruction dated May 2, 2016. The court emphasized that only exceptional circumstances—such as sham transactions or lack of genuineness—can warrant a different treatment.

Calcutta High Court Reaffirms: Suspicion Cannot Replace Evidence in Share Capital Cases

In PCIT v. Shipra Enclave (P.) Ltd., the Calcutta High Court dismissed the Revenue’s appeal, holding that share capital additions cannot be based on mere suspicion or non-appearance of directors when documentary evidence exists.

The assessee raised ₹6.22 crore from 15 corporate investors. The AO treated the amount as unexplained cash credit, citing non-appearance of directors and branding the investors as “shell entities”. However, the assessee furnished PAN, ITRs, audited financials, and banking confirmations.

The High Court ruled that credible documentation, banking channels, and investor confirmations prevail over subjective assumptions. Non-appearance of directors alone does not vitiate genuine transactions. Suspicion, however strong, cannot replace concrete evidence.

The decision reinforces an evidence-driven approach, offering clarity and reassurance to taxpayers facing similar scrutiny under section 68

Delhi HC: No Deemed Gift Tax on Share Buy-Back at Discount

The Delhi High Court in the case of Globe Capital market has ruled that a company’s buy-back of its own shares cannot be taxed under Section 56(2)(x) of the Income Tax Act merely because the buy-back price is below fair market value. Dismissing the tax department’s appeal, the Court held that buy-back results in reduction of share capital, not acquisition of property.

Since bought-back shares are extinguished, the company does not acquire any capital asset capable of generating income. Thus, the deemed gift provisions do not apply.

While this ruling offers clarity for unlisted companies, the evolving buy-back tax framework and the new Income Tax Act, 2025 now require case-specific evaluation of applicable provisions.

Big Relief for Taxpayers: Delay in Form-67 Not Fatal for Foreign Tax Credit

In a landmark ruling, the ITAT, Hyderabad Bench, in the case of Amith Vishnaw Gudimela, held that a delay in filing Form-67 cannot be the sole ground to deny Foreign Tax Credit (FTC). The tribunal allowed FTC to an assessee employed in the USA with Cognizant US Corp, even though Form-67 was filed after the due date.

The CPC had disallowed the claim under Section 143(1), citing Rule 128(9), which requires filing before the return due date. However, the ITAT observed that FTC prevents double taxation under Section 90 of the Income-tax Act and the India-USA DTAA. Procedural rules like Rule 128(9) are directory, not mandatory. Denying credit for a mere delay would violate treaty obligations.

The tribunal directed the department to grant FTC, reinforcing that substantive relief under DTAA overrides procedural lapses. This ruling is a key precedent for international tax professionals.

Orissa High Court Rules Against Adjustment of Refund During Stay

In a significant ruling, the Orissa High Court has held that adjusting an income tax refund against a disputed demand while a stay order is in force is illegal and arbitrary. The court directed the tax department to release a refund along with interest, declaring the adjustment as perfunctory and in violation of principles of natural justice.