India: Income Tax

Welcome to the latest issue of "The Crime Times," dedicated to the intricate and ever-evolving landscape of criminal law in India. We are living in challenging times, marked by an aggressive approach from governmental agencies in initiating criminal prosecutions.

In Income Tax Department v. Vikas Chaudhary & Ors., 2026:DHC:6605-DB, a Division Bench of the Delhi High Court set aside the judgment of the learned Single Judge which had quashed a Look Out Circular (“LOC”) issued against Vikas Chaudhary at the instance of the Income Tax Department.

Foreign bank accounts, overseas investments, RSUs, ESOPs and other foreign financial interests are coming under greater visibility as the CBDT authorises the integration of Automatic Exchange of Information (AEOI) data into the Annual Information Statement (AIS). What does this mean for taxpayers, and what should taxpayers with foreign assets do now?

The Bangalore Bench of the ITAT has delivered an important ruling clarifying the tax treatment of consideration received on repurchase of vested but unexercised employee stock options (ESOPs). The Tribunal held that such consideration is taxable as capital gains and not as salary since the options were never exercised and no shares were allotted.

The Central Board of Direct Taxes issued an order dated 9th July, 2026, authorizing the Director General of Income-Tax (Systems) to upload financial data obtained via the Automatic Exchan-ge of Information (AEOI) framework into taxpayers’ Annual Information Statements (AIS) in Form No. 26AS. This directive requires that international financial information currently held for the years 2022, 2023 and 2024 be integrated into taxpayer records within 90 days of the order’s issuance.

The Supreme Court has clarified when the doctrine of 'change of opinion' applies in tax reassessment proceedings, examining whether mere production of documents satisfies the requirement of full and true disclosure.

One of the key issues before the Ld. Madhya Pradesh Electricity Regulatory Commission (“MPERC”) was whether MB Power was entitled to gross-up its Return on Equity (“RoE”) notwithstanding the fact that, at the corporate level, it had not paid income tax during certain years owing to losses and unabsorbed depreciation arising from its other businesses. MPPMCL opposed the claim, inter alia, on the grounds that the claim was barred by limitation and that grossing-up could not be permitted in the absence of actual tax payment by the corporate entity.

The Chennai Bench of Income Tax Appellate Tribunal, in the case of Sundaram Alternative Opp Series High Yield Secured Debt Fund rejected the tax officer’s attempt to re-characterise the Fund's investment income as business income and affirmed the tax exemption for the Fund.

In Ritu Butalia v. State, 2026:DHC:2057, the Delhi High Court held that an accused is entitled to inspect original foreign documents relied upon by the prosecution where such inspection is necessary for effective cross-examination and to challenge the admissibility of those documents.