Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Govt Extends Time Limit to File Appeals or Applications Before GST Appellate Tribunal Till July 31, 2026
The Indian government has extended the deadline for filing appeals or applications before the GST Appellate Tribunal (GSTAT) to July 31, 2026. This extension provides taxpayers additional time to approach the newly operational tribunal for resolving GST disputes. The move is significant for businesses with pending GST controversies, as the GSTAT serves as a key forum for adjudicating tax disputes under India's Goods and Services Tax framework, offering relief to taxpayers who may have missed earlier filing windows.
Undergraduate Student Receives Income Tax Summons Over Rs 20.98 Crore Transactions, Alleges PAN-Aadhaar Misuse by Shell Company
An undergraduate student in India received an income tax summons related to Rs 20.98 crore in financial transactions linked to their PAN and Aadhaar credentials. The student alleges identity misuse by a shell company that fraudulently used their details. The case highlights serious concerns around PAN-Aadhaar misuse for tax evasion purposes, with the Income Tax Department investigating the high-value transactions. It underscores risks of identity theft in tax compliance and the challenges individuals face when fraudulently implicated in others' financial activities.
Income Tax Act, 2025 Replaces “May” with “Shall”: Has the Assessing Officer Lost His Discretion?
India's Income Tax Act, 2025 has replaced the word 'may' with 'shall' in provisions governing Assessing Officers, raising significant questions about whether AOs have lost their discretionary powers. Previously, 'may' granted flexibility in assessment decisions, while 'shall' imposes a mandatory obligation. This linguistic shift could have far-reaching implications for tax administration, potentially constraining AOs from exercising judgment in borderline cases. The article examines whether this drafting change represents a deliberate policy intent to standardize assessments or an inadvertent alteration, and what consequences this may have for taxpayers facing scrutiny assessments under the revised statute.
HC Upholds MCX Circular Fixing Negative Due Date Rate for Crude Oil
A High Court has upheld a Multi Commodity Exchange (MCX) circular that fixed a negative due date rate for crude oil contracts. While primarily a commodity market regulatory matter, the case carries tax implications as the settlement price determination for futures contracts affects the calculation of commodity transaction tax and capital gains tax on derivative instruments. The ruling validates MCX's authority to set contract settlement rates under extraordinary market conditions, similar to the negative pricing event seen in April 2020, which has downstream consequences for how gains and losses on such contracts are assessed for tax purposes in India.
Appeal Is Not a Mere Formality: ITAT Mumbai Reminds Authorities to Determine the Correct Tax Liability
The Income Tax Appellate Tribunal (ITAT) Mumbai has issued a significant ruling emphasizing that tax appeals are not mere procedural formalities but substantive proceedings requiring authorities to determine the correct tax liability. The tribunal reminded appellate authorities of their independent duty to assess the actual tax due rather than mechanically upholding or rejecting lower-order decisions. This ruling reinforces taxpayer rights in the appellate process and underscores that appellate bodies must apply judicial mind to the merits of each case, ensuring fair and accurate tax assessments rather than rubber-stamping earlier determinations.
HC Holds Time-Barred Assessment Cannot Sustain Penalty Under Section 271(1)(c)
An Indian High Court has ruled that a time-barred tax assessment cannot serve as the basis for levying a penalty under Section 271(1)(c) of the Income Tax Act, which deals with concealment of income or furnishing inaccurate particulars. The court held that if the underlying assessment itself is invalid due to being time-barred, any consequential penalty proceedings also cannot be sustained. This ruling has significant implications for tax controversy cases, reinforcing procedural safeguards for taxpayers against penalties arising from legally defective assessments.
ITAT Upholds Pass-Through Taxation for Revocable Securitisation Trust Under Income Tax Act
India's Income Tax Appellate Tribunal (ITAT) has upheld pass-through taxation treatment for a revocable securitisation trust under the Income Tax Act. The ruling affirms that income generated by such trusts should be taxed in the hands of the beneficiaries rather than the trust itself, consistent with pass-through principles. This decision has significant implications for the securitisation industry in India, clarifying the tax treatment of revocable trusts and providing certainty for financial institutions and investors structuring securitisation vehicles under Indian tax law.
ITAT Remands Section 50C Addition After Finding Breach of Natural Justice
India's Income Tax Appellate Tribunal (ITAT) has remanded a Section 50C addition back for fresh adjudication after determining that the assessing officer violated principles of natural justice. Section 50C deals with deemed capital gains on property transfers where the sale consideration is below the stamp duty value. The tribunal found the taxpayer was not given an adequate opportunity to present their case before the addition was made, requiring the matter to be reconsidered with proper procedural fairness.
Comments on ECJ C-603/24 (Stellantis Portugal) – Transfer pricing and VAT: Court confirms in Stellantis that not every true-up constitutes a service
The European Court of Justice ruled in case C-603/24 (Stellantis Portugal) that not every transfer pricing true-up payment constitutes a taxable service for VAT purposes. The court confirmed that intercompany price adjustments made to align profits with arm's length principles do not automatically create a VAT-liable supply of services. This decision clarifies the intersection of transfer pricing and VAT, providing important guidance for multinationals managing intragroup transactions in the EU, particularly regarding when true-up payments trigger VAT obligations versus when they remain outside the scope of VAT entirely.
ITAT Directs CPC to Grant Section 87A Rebate on STCG Tax
India's Income Tax Appellate Tribunal (ITAT) has directed the Centralised Processing Centre (CPC) to grant the Section 87A tax rebate on Short-Term Capital Gains (STCG) tax to eligible taxpayers. The CPC had denied the rebate, creating disputes for individuals whose total income fell within eligible thresholds. This ruling clarifies that the Section 87A rebate, available to resident individuals with income up to specified limits, should be applied against STCG tax liabilities, providing relief to affected taxpayers.
ITAT Reduces Bogus Purchase Addition to 10% for Civil Contractor, Recognises Lower Industry Margins
India's Income Tax Appellate Tribunal (ITAT) has reduced a bogus purchase addition to 10% of the disputed amount for a civil contractor, acknowledging the sector's characteristically low profit margins. The tribunal recognised that applying a higher addition rate would be disproportionate given industry norms in civil contracting. This ruling provides guidance on how tax authorities should calibrate additions for unverified purchases, balancing revenue protection with commercial reality, particularly for contractors operating in low-margin construction and infrastructure sectors.
Senate panel seeks 20-year tobacco tax record after FBR fails to provide data
Pakistan's Senate panel has demanded a 20-year record of tobacco tax collections after the Federal Board of Revenue (FBR) failed to provide the requested data. The inquiry highlights concerns over transparency and accountability in tobacco taxation, with legislators seeking historical revenue figures to assess whether tax policy on tobacco has been effectively enforced and collected. The FBR's inability to furnish the records raises questions about data management within Pakistan's tax administration and the adequacy of tobacco excise tax compliance and enforcement over two decades.
Tax Court Reviews ‘Cohan Rule’ in New Business Expense Case
The U.S. Tax Court has revisited the Cohan Rule in a new business expense case, examining its application to taxpayers who lack adequate documentation for claimed deductions. The Cohan Rule allows courts to estimate deductible expenses when exact records are unavailable, provided sufficient evidence exists to support a reasonable approximation. This case highlights ongoing tension between taxpayer recordkeeping obligations under IRC Section 274 and judicial discretion to allow estimated deductions. The ruling has practical implications for tax practitioners advising clients on substantiating business expenses and managing audit risk when documentation is incomplete or lost.
2nd Circ. Revives Penalty Collection Fight In $380M Tax Case
The Second Circuit Court of Appeals has revived a penalty collection dispute in a $380 million federal tax case, reinstating claims that had been dismissed at the lower court level. The ruling allows the government to continue pursuing substantial tax penalties against the defendant, keeping alive a high-stakes controversy over the collection and enforcement of significant tax liabilities. The case highlights ongoing judicial scrutiny of IRS penalty assessment and collection procedures, with the appellate court's decision potentially setting important precedent for how courts evaluate penalty-related disputes in large-scale federal tax enforcement matters.
Authorities Investigating €13M VAT Fraud In Paris Area
French authorities are investigating a €13 million VAT fraud scheme in the Paris area. The case involves suspected fraudulent VAT claims or carousel-type fraud operations, reflecting ongoing enforcement efforts by French tax authorities against VAT evasion. Such investigations typically involve businesses submitting false VAT refund claims or participating in missing trader schemes where tax is charged but never remitted to the government. The Paris region case underscores the scale of VAT fraud across the EU and the continued prioritization of enforcement actions by national revenue authorities targeting large-scale tax evasion networks.
Tax Attys Cite Justices' Venue Ruling In Seeking 4th Circ. Redo
Tax attorneys are citing a recent Supreme Court ruling on venue jurisdiction in seeking a rehearing at the Fourth Circuit Court of Appeals. The case highlights how procedural and jurisdictional decisions can significantly impact federal tax litigation strategy. The Supreme Court's venue ruling is being leveraged to argue that the lower court proceedings should be reconsidered, potentially affecting where tax disputes are heard and adjudicated. This development has broader implications for tax controversy practitioners navigating federal court procedures and determining optimal litigation venues for challenging IRS determinations.
Herzfeld: “SpaceX Speculation: Who Bears the Risk?”
This article by Herzfeld examines transfer pricing and risk allocation issues related to SpaceX, analyzing who bears economic risk in the company's structure. The piece explores how speculative valuations and intercompany arrangements may affect tax outcomes, particularly regarding which entities bear financial risk for tax purposes. Transfer pricing rules require that risk allocation in intercompany agreements reflect actual economic substance, and SpaceX's unique business model raises questions about whether its corporate structure properly allocates risk in a manner consistent with arm's length principles and IRS scrutiny.
UNIRE Prizes Not Always VAT-Taxable: Registration Is the Decisive Factor
An Italian tax ruling or court decision has clarified that prizes awarded by UNIRE (Italy's horse racing regulatory body) are not automatically subject to VAT. The decisive factor is whether the prize recipient is registered as a VAT taxable person engaged in an economic activity. Unregistered individuals receiving prizes do so outside the scope of VAT, while registered operators may be subject to it. This ruling provides important guidance for the horse racing and sports sectors in Italy regarding the VAT treatment of prize money and related income.
FBR suspends nine Faceless Customs officials in major crackdown
Pakistan's Federal Board of Revenue (FBR) has suspended nine officials from its Faceless Customs Assessment system in a significant disciplinary crackdown. The Faceless Customs initiative was introduced to reduce human interaction and curb corruption in import duty assessments. The suspensions suggest irregularities or misconduct within the system, raising questions about the integrity of customs valuations and duty collection. The action signals FBR's intent to enforce accountability within its reformed customs framework.
Georgia Tax Preparer Obtained $30,000 from Fraudulent Claims, Feds Say
A Georgia-based tax return preparer has been charged by federal authorities with fraudulently obtaining approximately $30,000 through false tax claims. The case involves the submission of fabricated or inflated deductions and credits on client returns, allegedly without the knowledge or consent of taxpayers. Federal investigators identified discrepancies that triggered the fraud inquiry. The case underscores ongoing IRS and Department of Justice efforts to prosecute unscrupulous tax preparers who exploit their position of trust to generate fraudulent refunds. Convictions in such cases typically carry penalties including fines, restitution, and imprisonment under federal tax fraud statutes.
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