Tax INFORM- July 2026

The sixty-sixth issue of our monthly tax newsletter, Tax Inform, is out. Through these newsletters, we provide a compilation of key tax-related case laws, circulars, notifications, etc. issued by the authorities in the previous month, impacting entities and individuals operating in India.

The highlights of the current issue are:

Direct Tax:

Domestic Tax Rulings:

• Telangana High Court allows exemption under Section 54F where the assessee invested the capital gains but the developer delay completion and delivery of the residential property.
• Madras High Court quashes reassessment proceedings because the Section 148 notice was issued beyond the mandatory limitation period under Section 149(1).
• Karnataka High Court holds that advances retained as liabilities cannot be treated as forfeited merely due to the passage of time and deletes the addition under Section 56(2)(ix).
• Delhi High Court quashes a block assessment because the Assessing Officer failed to issue the mandatory notice under Section 143(2) and relied on material gathered after the search.
• Delhi High Court holds secondment reimbursements taxable as fees for technical services and remands other service receipts for fresh examination.

Notifications/Circulars:

• The Central Board of Direct Taxes clarified the statutory framework governing proceedings, approvals and enforcement actions during the transition from the Income-tax Act, 1961 to the Income-tax Act, 2025.
• The Central Government notified 384 as the Cost Inflation Index for Financial Year 2026–27.

Indirect Tax: 

Goods & Services Tax

Case Laws:

• Gujarat High Court holds that State Goods and Services Tax officers may exercise powers under the Integrated Goods and Services Tax Act without a separate Central Government notification.
• Karnataka High Court quashes Section 74 proceedings because the show cause notice contained no allegation of fraud, wilful misstatement or suppression of facts.
• Supreme Court directs online gaming Goods and Services Tax disputes to proceed through statutory adjudication and appellate remedies following its decision in Gameskraft.
• Calcutta High Court upholds an adjudication order digitally issued within limitation despite its subsequent upload on the Goods and Services Tax portal after the prescribed period.
• Calcutta High Court sets aside an ex parte assessment because the notices and order were displayed under the incorrect tab on the Goods and Services Tax portal.

Notifications/Circulars:

• The Central Board of Indirect Taxes and Customs clarified how pending Goods and Services Tax proceedings must be handled when a taxable person migrates from one jurisdiction to another.
• The Central Board of Indirect Taxes and Customs clarified that customs drawback or refund relating to import duty paid through duty credit scrips must be granted through re-credit and not in cash.
• The Goods and Services Tax Appellate Tribunal introduced a token-generation mechanism allowing appellants to record their intention to file an appeal by July 31, 2026 and complete the filing within 60 days thereafter.