Adv. Chahat Sharma

Tax Advocate

[Adv. Chahat Sharma @advchahat]

Our firm has started an initiative wherein we will be providing half or full scholarships for CA Students belonging to the poor strata of the society. Interested students can email their details at - [email protected] #CharteredAccountants #TaxTheRich #accountancy

[CSA Legal @CSALegal]

🔴 Case Law Decoded | Madras High Court | June 2026

Southern Steels vs. Assistant Commissioner (ST)
[2026] 187 https://t.co/ix5DmKIqaK 763 (Madras)

A GST ruling every taxpayer facing Section 74 proceedings and ITC dispute must understand.

Facts: The taxpayer had two GST registrations. After inspection, the department alleged circular / reciprocal transactions and fictitious ITC on non-supplies.

DRC-07 orders were passed. In one registration, earlier orders had been remanded by the High Court, but after remand, a fresh DRC-07 was issued without issuing a fresh DRC-01.

Decision: Madras High Court held:

▸ Inspection findings showing circular transactions and fictitious ITC were enough prima facie material to invoke extended limitation under Section 74.

▸ The threshold to invoke extended limitation under GST is lower than under earlier indirect tax laws.

▸ But after remand, DRC-07 cannot be issued without a prior DRC-01.

▸ Failure to issue DRC-01 before demand order violates Rule 142 and principles of natural justice.

✅ Takeaway for taxpayers and practitioners:

One — In bogus ITC / circular trading cases, do not assume Section 74 can be defeated at threshold. First test whether the department has prima facie inspection material.

Two — Even where Section 74 is invoked, procedural discipline remains mandatory. DRC-01 is not a formality. It is the foundation of adjudication.

Three — After remand, the department must restart from the legally required notice stage if the rules demand it.

In GST litigation, merits and procedure must both be attacked. A valid allegation can still fail if the adjudication route is defective.

— @csalegal | Tax Lawyers

#GST #ITC #Section74 #DRC01 #DRC07 #NaturalJustice #GSTLitigation #MadrasHighCourt #Taxmann #CSALegal

[CSA Legal @CSALegal]

🔴 Case Law Decoded | Madras High Court | June 2026

B. Siva vs. Deputy Commissioner of Income-tax
[2026] 187 https://t.co/ix5DmKIqaK 374 (Madras)

A key ruling for taxpayers facing prosecution under the Income-tax Act after the BNSS regime.

Facts: The Income-tax Department alleged that bogus purchase invoices were obtained, and payments made through banking channels were returned in cash after deducting commission.

After search proceedings, sanction under Section 279(1) of the Income-tax Act was obtained and prosecution complaints were filed under Sections 277A and 278.

The Trial Court took cognizance and issued summons. The assessee challenged the cognizance order, not on merits of the allegation, but on the ground that no opportunity of hearing was given before cognizance after BNSS came into force.

Decision: Madras High Court held:

▸ Once the complaint and cognizance happened after BNSS came into force, Section 223(1) BNSS applied.

▸ Opportunity of hearing before cognizance is mandatory.

▸ Non-compliance is not a mere procedural irregularity. It is an illegality which vitiates the proceedings.

▸ Cognizance was set aside and the matter was remitted to the Trial Court for giving hearing opportunity.

✅ Takeaway for taxpayers:

One — In Income-tax prosecution matters, always check the date of complaint and cognizance. If cognizance is post-BNSS, Section 223(1) hearing becomes a crucial procedural safeguard.

Two — Sanction under Section 279 does not cure denial of hearing before cognizance.

Natural justice is not a formality. It is the first defence.

— @csalegal | Tax Lawyers

#IncomeTax #TaxProsecution #BNSS #Section279 #NaturalJustice #MadrasHighCourt #TaxLitigation #Taxmann #CSALegal

[Adv. Chahat Sharma @advchahat]

@aniyadav17 Absolutely agree. Repeated notices for documents already on record only delay justice and increase taxpayer compliance burden. Faceless appeals should mean efficient, accountable, and time-bound disposal with proper consideration of existing submissions. @IncomeTaxIndia

[CA Anil Kr Yadav @aniyadav17]

Many taxpayers are facing the same issue before CIT(A). Every time a new CIT(A) assumes charge, fresh notices are issued asking for the very same documents already submitted multiple times, without even verifying the records.

This has been continuing for 4–5 years, causing unnecessary hardship, delay and increased compliance costs. It feels like -the process never moves forward.

Where is the accountability? Is there any mechanism to monitor the disposal of appeals and ensure that previously filed submissions are actually considered?

Taxpayers deserve efficient, faceless, and time-bound appellate proceedings, not repetitive compliance.
@IncomeTaxIndia

#IncomeTax #FacelessAppeal #Taxpayers #EaseOfDoingBusiness #CBDT

[CSA Legal @CSALegal]

🔴 Case Law Decoded | Supreme Court | June 2026

L.K. Trust vs. Commissioner of Income-tax
[2026] 186 taxmann 594 (SC)

A landmark ruling on interest deduction for group company investments.

Facts: A trust borrowed ₹3.8 crore from a bank to purchase shares of Shaw Wallace and Co. Ltd. The funds were routed through a group company (Gayatri Holdings) before reaching the ultimate share purchase.

The AO disallowed interest under Section 36(1)(iii) — reasoning that the money was used to benefit a subsidiary, not the assessee’s own business.

High Court agreed with the AO — held that a subsidiary’s business cannot, in law, be treated as the assessee’s business.

Supreme Court REVERSED both. Interest deduction ALLOWED.

The Apex Court’s reasoning is a masterclass in commercial expediency:
▸ Section 36(1)(iii) requires only that capital was borrowed for business purposes — not that the immediate use must be the assessee’s standalone business activity
▸ The assessee carried on a COMPOSITE business — moneylending, speculation, film distribution, AND investment in shares — all through one common set of books
▸ Complete intermingling of funds + unified management by trustees = investing through subsidiaries is itself part of the assessee’s composite business

✅ Why this ruling matters for every group structure in India:
If your client operates multiple business verticals through a common set of books with unified management — investment in group companies or subsidiaries is NOT automatically disqualified from interest deduction.

The key test: commercial expediency, not narrow technical ownership.

Don’t let an AO disallow interest merely because funds passed through a related entity.

If the business is genuinely composite — the law is now crystal clear from the Supreme Court itself.

— @CSALegal | Tax Lawyers

#IncomeTax #Section36 #SupremeCourt #CommercialExpediency #CaseLaw #TaxLitigation #CSALegal

[Harshit Singh @i_m_harshitsing]

Here we go again..

Stray Dogs attacked an innocent child In Bijnor, UP & the child's condition is serious.
They mostly go for k!ds.

In this Video, the dog made another attempt to b!te the kid again in the end even though lots of adults were there.
Dogs shouldn't be on streets.

[The opportunistinvestor @sudheep8531]

Dear Modi Sir,
Crude oil prices are almost back to pre war and expected to fall further

So when are we reducing petrol and diseal prices?

[CSA Legal @CSALegal]

Daily backup of books now mandatory under IT Rules 2026. Effective 1 April 2026.
The intent is right. The ground reality is harder.

Problems practitioners are already facing:

▸ “India-based servers” — most SMEs use Google Drive, Dropbox, OneDrive. All foreign servers. Technically non-compliant from day one.
▸ Daily backup vs daily filing — a small trader running Tally on a laptop with no IT support cannot automate daily cloud backups without significant cost.
▸ Penalty of ₹25,000 for non-maintenance — disproportionate for a kirana store owner maintaining basic books on a ₹15,000 laptop.
▸ Auditor reporting burden — tax auditors must now certify server location and backup compliance in Form 26. One more checkbox. One more liability.
▸ No government cloud infrastructure provided — the law mandates India servers but offers no subsidised, compliant cloud solution for SMEs.

@IncomeTaxIndia @FinMinIndia — the compliance intent is valid.

But without:
▸ A government-approved low-cost India cloud solution for SMEs
▸ A grace period for businesses to migrate from foreign servers
▸ Proportionate penalties for small businesses

This becomes another compliance burden that hits honest small businesses hardest while large companies with IT teams comply effortlessly.

Good policy. Needs better implementation support.

— @CSALegal | Tax Lawyers

#IncomeTax #ITRules2026 #DailyBackup #TaxCompliance #SME #Section62 #Section63 #CSALegal

[Windows Latest @WindowsLatest]

Windows 11 June 2026 update, which was supposed to make PCs faster, is crashing some PCs with BSODs, breaking OneDrive integration in File Explorer and custom folder icons, and causing other problems.

We're seeing reports that Windows 11 KB5094126 is causing boot failures on some PCs, mostly HP enterprise hardware.

The worst reports involve BitLocker recovery loops, Black Screen of Death/BSOD failures, Secure Boot signature errors, and error 0xc0430001.

Affected models appear to include HP EliteBook 840 G10, HP ProBook 460 G11, HP Engage One Pro G2 AiO POS, HP ZBook, and some Dell Precision systems.

The likely trigger is Secure Boot certificate handling + EFI partition space. On older images with a 100MB EFI partition, Windows may fail to update Boot Manager because there isn’t enough space, especially on HP systems where firmware recovery files can bloat EFI.

There are also File Explorer cloud integration issues. OneDrive, and in some cases Dropbox or iCloud Drive, may stop opening from the sidebar/tray shortcut after KB5094126.

Microsoft also confirms desktop.ini hardening can break custom folder icons or localized folder names from untrusted sources.

KB5094126 is important, as it fixes 200+ security bugs, but be careful, as it could cause havoc on some PCs.

[CSA Legal @CSALegal]

🔴 Case Law Decoded | ITAT Ahmedabad | June 2026 Dhaval Patel vs. ACIT [2026] 187 taxmann 292 (Ahmedabad Trib.)

A case every taxpayer and CA in India must read.
During a search — the AO found a WhatsApp message on the assessee's phone: "50 lacks given to Manan yesterday."

The AO's conclusion: ₹50 lakh unaccounted cash payment. Addition made. CIT(A) confirmed.

ITAT Ahmedabad: Addition of ₹50 lakh — DELETED entirely. The Tribunal's reasoning was surgical:
▸ The WhatsApp message said "given" — it did NOT say "cash given"
▸ The assessee provided ledger account, PAN, and address of the recipient
▸ The AO neither examined the recipient nor conducted any independent inquiry
▸ No cash withdrawals, no diary entries, no corroborative material was brought on record
▸ An isolated WhatsApp message without corroboration can create suspicion — but suspicion is NOT evidence of undisclosed income.
The addition was built on assumption. It fell on proof.

✅ The critical takeaway for every taxpayer: Your WhatsApp messages CAN be seized during a search. But a message alone — without cash withdrawal evidence, diary entries, or recipient confirmation — cannot sustain a Section 69 addition. Digital evidence must be corroborated with financial evidence. One without the other is suspicion.

Courts require proof. If you have received an addition based solely on WhatsApp messages or digital evidence from a search — the law is on your side.
— @CSALegal | Tax Lawyers
#IncomeTax #SearchAndSeizure #WhatsApp #Section69 #ITAT #CaseLaw #TaxLitigation #CSALegal

[GST Pro Advisory | Compliance & News @mayankagar1]

🚨 Congratulations GST taxpayers. New compliance requirement unlocked. 🚨

Before claiming ITC, now apparently ensure that your supplier:

📌 Files returns
📌 Pays GST
📌 Actually deposits tax with Govt
📌 Remains solvent
📌 Doesn’t disappear
📌 Doesn’t become “bogus” after 5 years
📌 And perhaps also remains morally committed to nation-building.

Because according to Gujarat HC:

💥 Even bona fide purchaser with invoice, payment, goods received & GSTR-2B reflection can lose ITC if supplier defaults.

Court says:

👉 ITC is only a “concession”
👉 Hardship to genuine buyers irrelevant
👉 You can re-avail later… whenever supplier decides to pay.

Fantastic business model:

Pay supplier. Pay GST. Lose ITC. Chase supplier. Fund Govt meanwhile.

Ease of Doing Business, but only for people who can perform forensic audits on every vendor in India.

@CAclubindia @Taxguru_in @Sudhirhalakhndi
@CAChirag @rajendrakumarRK @BimalGST @CA_HarshilSHETH @atulmodani @abhishekrajaram

#GST #GSTIndia #ITC #Section16 #GSTLitigation #GSTCaseLaw #IndirectTax #TaxLaw #GSTJudgment #CharteredAccountants #TaxProfessionals #EaseOfDoingBusiness

Maruti Enterprise vs Union of India — Gujarat HC (R/SCA No. 18080/2023)

[CSA Legal @CSALegal]

🚨 Urgent Alert for all Private Limited Companies | AY 2025-26 @IncomeTaxIndia @FinMinIndia @nsitharamanoffcA wrongful automated trigger is firing under Section 143(1)(a) for virtually every Private Limited Company that filed its ITR with Deferred Tax.

The notice flags Schedule MAT and demands Form 29B — claiming MAT credit is unverified.

The trigger: Deferred Tax entries in the P&L account.

The problem: The CPC system is incorrectly treating Deferred Tax Debit/Credit in the P&L as MAT adjustments — and automatically demanding Form 29B certification by a CA.
This is wrong on two counts:
▸ Deferred Tax as per Ind AS / AS 22 is an accounting entry — it is NOT a MAT add-back or deduction under Section 115JB
▸ Form 29B is required only where actual MAT adjustments under the Companies Act are claimed — not for routine deferred tax accounting entries.
The trigger is so aggressive that ITRs filed on June 12, 2026 received this intimation the same day — within hours of filing.This is not a scrutiny. This is a system error causing mass panic across India's corporate taxpayer base.
Practical impact:▸ Hundreds of companies receiving identical notices simultaneously
▸ CAs being asked to file Form 29B for entries that legally do not require it
▸ Unnecessary compliance burden on companies that have filed correct returns
▸ Risk of wrongful adjustments if companies fail to respond within 30 days @IncomeTaxIndia @cbdt_india — this automated trigger needs to be reviewed and withdrawn immediately.
Issue a clarification: Deferred Tax entries in P&L do not attract Form 29B requirements under Section 115JB. Until then — every affected company must respond within 30 days clarifying that the deferred tax entry is an accounting adjustment and not a MAT-related claim.
Do NOT ignore this notice even if it is wrongful.@ITD_eFiling @askITR_official @Infosys_GSTN — please escalate to the CPC team for immediate correction.
— @CSALegal | Tax Lawyers
#IncomeTax #MAT #Section115JB #DeferredTax #Form29B #143a #ITRFiling #AY202526 #CPC #CSALegal

[CSA Legal @CSALegal]

🔴 Case Law Decoded | ITAT Lucknow | June 2026

Vipin Yadav vs. ITO
[2026] 186 taxmann 972 (Lucknow Trib.)

A case every married investor needs to read.

Facts: A husband gifted ₹1.15 crore to his wife for derivative and equity trading. The trades resulted in substantial losses. The husband claimed the losses should be clubbed under Section 64(1)(iv) and set off against his income.

AO rejected it — said wife made independent trading decisions.

CIT(A) confirmed — said wife was an independent assessee.

ITAT Lucknow: Set-off ALLOWED.

The Tribunal held:
▸ Gift deeds and affidavits proved transfer without consideration
▸ Section 64(1)(iv) covers not just income but also LOSSES arising from gifted assets — directly or indirectly
▸ The AO and CIT(A) both erred — clubbing provisions apply symmetrically to losses, not just profits

Matter restored to AO only to quantify the exact loss attributable to gifted funds.

✅ The takeaway that changes everything:

Section 64 is a two-way street.
The department loves to club a spouse’s income with yours when profits arise from gifted funds.

But when losses arise from the same gifted funds — the same section allows those losses to be set off against your income.
Symmetry in law. Use it.

If you gifted funds to your spouse for trading and those trades resulted in losses — your tax advisor needs to see this ruling today.

— @CSALegal | Tax Lawyers

#IncomeTax #Section64 #ClubbiingProvisions #ITAT #CaseLaw #TaxPlanning #Derivatives #CSALegal

[CSA Legal @CSALegal]

🔴 Case Law Decoded | AAR Rajasthan | June 2026

Allen Career Institute (P.) Ltd., In re
[2026] 186 taxmann 514 (AAR - Rajasthan)

A ruling every coaching institute and edtech company in India must read.

Facts: A leading IIT-JEE/NEET coaching institute provided offline classes, live online sessions, and pre-recorded video lectures — accessed by students across India. Study material couriered from Kota. Invoices raised from Rajasthan.

The institute’s contention: Online live and pre-recorded courses are OIDAR services — taxable under IGST based on the student’s location.

AAR held: NOT OIDAR. Entire supply taxable as CGST + SGST.

The reasoning:
▸ Live classes involve substantial human intervention — interactive doubt-solving, user-specific responses
▸ OIDAR requires a fully automated electronic service with minimal human involvement
▸ Dispatch of printed study material + integrated coaching = not a pure electronic supply
▸ Classification: SAC 999293 — commercial training and coaching
Students sitting in Mumbai, Chennai, or Kolkata does not change the nature of supply.

Intra-state supply. CGST + SGST. Period.

✅ The takeaway for the entire edtech and coaching industry:

If your online course involves live teachers, doubt sessions, or human interaction — you are NOT an OIDAR service provider.
Your place of supply analysis, registration strategy, and tax structure must be built on this distinction.

Human teaching = coaching service.
Fully automated content = OIDAR.

The line is now clearly drawn. Structure accordingly.

@ALLENkota @PhysicswallahAP @aakasheduin @unacademy @vedantu_learn — this ruling directly affects your GST structure on online courses. Worth a review.

— @CSALegal | Tax Lawyers @advchahat

#GST #OIDAR #EdTech #CoachingInstitute #AAR #CaseLaw #IndirectTax #CSALegal

[CSA Legal @CSALegal]

🔴 Case Law Decoded | ITAT Chennai | June 2026

Bose Saravanan vs. DCIT
[2026] 186 https://t.co/ix5DmKIqaK 1084 (Chennai Trib.)

A case every CA in India must read.

Facts: A Chartered Accountant declared income of ₹2.95 lakh. His bank account showed massive deposits — funds collected from clients to pay their income tax, VAT, TDS and service tax on their behalf.

The AO reopened under Section 148 and added ₹23 CRORES under Section 69A — treating client tax money as the CA’s unexplained income.

CIT(A) went further — ENHANCED the addition by ₹6.88 crores more.

Total addition on a CA earning ₹2.95 lakh: nearly ₹30 crores.

ITAT Chennai — entire addition DELETED.

The Tribunal found:
▸ Tax payments of ₹29.83 crores flowed OUT of the same account to government authorities
▸ Tax challans matched the bank debits on sample verification
▸ Bank narrations clearly showed payments to government departments
▸ The AO and CIT(A) completely ignored the debit side of the account

The CA acted as a conduit. The money never belonged to him.

✅ The takeaway for every practitioner:
When fighting a Section 69A addition on bank credits — the debit side of the account is your strongest evidence.

Credits tell half the story. Debits complete it.
The department saw ₹30 crores coming in.
It refused to see ₹29.83 crores going out — to its own treasury.

Justice took years. But the paper trail won.

— @CSALegal | Tax Lawyers @advchahat

#IncomeTax #Section69A #ITAT #CaseLaw #CharteredAccountant #Taxmann #TaxLitigation #CSALegal

[CSA Legal @CSALegal]

The Small LLP Framework by @MCA21India is a game changer for India’s micro entrepreneurs.

But most people don’t know what it actually means in practice.

Here is why it matters:
Before Small LLP — a first-generation entrepreneur starting a small business faced:

▸ Same ROC filing fees as a ₹100 crore LLP
▸ Same penalty structure as large corporates
▸ Same compliance calendar — Form 8, Form 11, audit requirements
▸ Same cost of professional fees — CA + lawyer + filing agent

For someone earning ₹5-10 lakh annually — compliance cost was eating 15-20% of revenue.

Small LLP Framework changes this:
▸ Lower filing fees
▸ Simplified compliance requirements
▸ Reduced penalty exposure
▸ Lighter audit burden

Why does this matter for India?

6.3 crore MSMEs contribute 30% of India’s GDP and employ 11 crore people.
Most of them operate as proprietorships — unregistered, unprotected, unlimited personal liability.

Small LLP gives them limited liability protection at a cost they can actually afford.
A street vendor, a freelancer, a home baker, a tutor — all can now have a formal legal entity with liability protection for the cost of a monthly electricity bill.

Formalisation of India’s informal economy starts here.

@MCA21India @FinMinIndia @nsitharamanoffc @PIB_India @OfficeofPCM — now make the next step equally simple:

▸ Ensure physical PAN is auto-delivered post incorporation
▸ Link GST threshold exemption to Small LLP status automatically
▸ Pre-filled annual returns using MCA portal data — zero manual entry

Make it easy to stay formal.

India’s entrepreneurial revolution depends on it.
🇮🇳
— @CSALegal | Tax Lawyers

#SmallLLP #LLP #MCA #MSME #StartupIndia #EaseOfDoingBusiness #Entrepreneurship #CSALegal

[CSA Legal @CSALegal]

Dear @IncomeTaxIndia @FinMinIndia @nsitharamanoffc @cbdt_india

A simple but urgent fix needed in Form 35 — CIT(A) appeal form.

Currently there is no separate column for the authorized representative’s email and phone number.

The portal sends hearing notices only to the email registered in the assessee’s profile.
If the assessee manages their own profile — the representative never gets notified.

Result: Hearing missed. Ex-parte order passed. Client suffers.

This happened in one of our matters recently. A completely avoidable injustice.

The fix takes 10 minutes of portal development:

Add two fields in Form 35:
▸ Authorized Representative Email ID
▸ Authorized Representative Mobile Number

All hearing notices auto-copied to both the assessee AND the representative.

No missed hearings. No ex-parte orders on technical grounds.

Justice should not fail because of a missing column in a form.

@askITR_official @ITD_eFiling — please escalate this to the portal team immediately.

— @CSALegal | Tax Lawyers

#IncomeTax #Form35 #CITAppeals #eFiling #TaxReform #CSALegal

[CSA Legal @CSALegal]

Polymer notes make sense on paper.

Longer lifespan. Harder to counterfeit. Cleaner to handle.

Australia switched in 1988. UK in 2016. Both reported significant cost savings over time.

But from a tax and black money perspective — the more interesting question is:

Will polymer notes make cash hoarding harder to detect?

Polymer notes last 2.5x longer than paper notes.

That means ₹500 and ₹2000 polymer notes stuffed in walls and mattresses survive longer without deteriorating.

Post-demonetisation, one of the key detection mechanisms was damaged and soiled notes emerging from hoards — polymer eliminates that signal.

@RBI — while evaluating polymer notes, also evaluate:

▸ Lower denomination polymer notes only — keep high denomination paper for faster deterioration of hoarded cash
▸ Enhanced digital transaction incentives alongside — polymer alone does not reduce cash economy
▸ CBDT coordination — any new note series should trigger fresh SFT reporting requirements for large cash holdings

Good idea. But implement it with the full picture in view.🇮🇳

— @CSALegal | Tax Lawyers

#RBI #PolymerNotes #BlackMoney #IncomeTax #Currency #CSALegal

[CSA Legal @CSALegal]

The government just proved it understands capital markets.

Income Tax Amendment Ordinance 2026 — FIIs and BIS exempted from tax on G-Sec interest and capital gains. Effective 1 April 2026.

Translation: Zero tax on government bond returns for foreign investors.

The logic is simple and correct:

Tax exemption → FIIs buy more G-Secs → higher demand for rupee assets → rupee strengthens → import costs fall → inflation cools → RBI cuts rates → businesses borrow cheaper → economy grows.

One ordinance. One chain reaction.

But here is the question that needs an answer:
If zero tax attracts foreign capital into G-Secs —
Why does 12.5% LTCG repel foreign capital from equities?

The economic logic is identical. The government has accepted the principle.
Now apply it consistently.

Zero LTCG on equities = same FII inflow story at 10x the scale.

@nsitharamanoffc @FinMinIndia — the ordinance is a great first step.
Budget 2027 should be the second.
🇮🇳
— @CSALegal | Tax Lawyers
#Ordinance2026 #FII #GSec #LTCG #IncomeTax #CapitalMarkets #Rupee #CSALegal

[Sambhav Daga @sambhavdaga]

LTCG was 0% for years.

Promoters exploited it to their advantage.

These promoters would form a shell company & get it listed. Then, pumps the price from ₹10 to ₹100. Sell the stock and book ₹90 as “long-term capital gains.”

Pay zero tax on LTCG.

Black money becomes white. Clean, legal, untraceable.

That’s why LTCG went to 10%. Then 12.5%.
Not to hurt retail investors. To plug a laundering loophole that was hiding in plain sight.

We love blaming the government for every tax hike.

This is a problem with how our mindset/DNA works and how we want to extract everything out for ourselves without paying anything back to the government.

The government is corrupt but then, as citizens we too are.

#LTCG