Bombay High Court Clarifies Scope of ‘Eligible Assessee’ under Section 144C of the Income Tax Act

The Bombay High Court, in Classic Legends (P.) Ltd. v. ACIT, held that an assessee cannot be treated as an “eligible assessee” under Section 144C(15)(b) of the Income Tax Act, 1961, where no variation in income arises pursuant to a Transfer Pricing Officer’s (TPO) order.

Upholding the Gujarat High Court’s ruling in Pankaj Extrusion Ltd., the Court clarified that the draft assessment procedure under Section 144C applies only when there is an actual variation in income resulting from the TPO’s findings. The High Court held that I n the absence of any such variation, the Assessing Officer was not empowered to issue a draft assessment order under Section 144C(1).

The final assessment order was also quashed holding that as a consequence to the above, there was no occasion to pass the same by invoking the provisions of Section 144C(3).

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Customs and GST Alert – November 2025

We are pleased to share with you our latest Customs and GST Alert, covering recent judgments and regulatory updates.

We trust that you will find the same useful.

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Supreme Court Allows Cognizant to Continue Using Hexagonal Logo

In Cognizant Technology Solutions India Pvt. Ltd. v. Atyati Technologies Pvt. Ltd. (SLP (Civil) No. 25582 of 2025), the Supreme Court set aside the Bombay High Court’s order restraining Cognizant from using its hexagonal logo, allowing continued use pending final adjudication of the interim injunction.

The Court held that the Division Bench erred in interfering with the Single Judge’s findings at the interim stage and directed the High Court to decide the application within six months.

This ruling underscores the importance of due diligence in adopting trademarks and logos to mitigate disputes and business disruption risks.

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ITAT Chennai Clarifies Taxability of Salary for Services Rendered Abroad

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) held that salary received in India by a non-resident for services rendered entirely in Malaysia is not taxable in India. The Tribunal observed that under Section 9(1)(ii) of the Income-tax Act, 1961, salary income accrues where services are performed, not where payment is received.

It further held that, in line with Article 16 of the India–Malaysia DTAA, salaries of a Malaysian tax resident are taxable only in Malaysia unless the employment is exercised in India. The ruling reinforces that mere receipt of income in India does not attract taxation, providing clarity for NRIs working remotely from abroad.

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