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S.R. Patnaik

Head and Partner in the Tax Practice at the Delhi NCR office of Cyril Amarchand Mangaldas. Mr. Patnaik specialises in various aspects of direct tax, such as international tax, transfer pricing, corporate tax etc. He can be reached at sr.patnaik@cyrilshroff.com

Telangana High Court clarifies GAAR in relation to market-based transactions

Summary: In a recent case, the Telangana High Court has frowned upon the Revenue’s attempt to invoke GAAR in respect of a transaction that was carried out by the taxpayer through the stock exchange. By rejecting the stance adopted by the Revenue, the High Court categorically held that not every tax planning is bad, and it cannot be brought within the purview of GAAR. Only if a taxpayer colludes or connives to bypass statutory provisions, by entering into transactions that defy commercial logic, can it be examined.Continue Reading Telangana High Court clarifies GAAR in relation to market-based transactions

The Sacred Fortress of Privilege: Navigating the Scope of Client-Attorney Privilege

Summary: Client-attorney privilege in India is facing a moment of renewed scrutiny. As investigative agencies increasingly enter the professional space of advocates, the boundaries of this privilege are being tested like never before. Courts are now tasked with distinguishing between protected and unlawful conduct, while statutory safeguards under the Bharatiya Sakshya Adhiniyam, 2023 attempt to preserve the integrity of legal representation. This blog examines how recent jurisprudence is shaping the future of client confidentiality, raising urgent questions about privacy, procedural fairness, and the limits of investigative authority.Continue Reading The Sacred Fortress of Privilege: Navigating the Scope of Client-Attorney Privilege

Summary: This blog unpacks the sweeping GST rate rationalisations announced by the 56th GST Council meeting, covering key sectors such as food, healthcare, FMCG, agriculture, consumer goods, automobiles, infrastructure, and more. Beyond listing rate changes, we analyse their policy intent, business impact, and compliance challenges, from ITC reversals and refund reforms to supply chain recalibration and pricing strategies. For businesses, this is not just about new tax slabs but about aligning operations and strategy with a shifting indirect tax landscape.Continue Reading GST 2025: A Brave New Chapter in India’s Tax Reform

The Great Gamble: India’s Online Gaming Ban, the GST Battle, and What Lies Ahead

Summary: India’s online real-money gaming industry, once hailed as India’s next digital sunrise sector, now finds itself at a crossroads, caught between a sweeping ban under the Online Gaming Act, 2025, and a trillion plus rupee tax battle in the Supreme Court. The distinction between “games of chance” or “gambling” and the “games of skill”, established through years of litigation, now faces a knockout blow. A potential judicial somersault could result in retrospective GST demands, while the introduction of future prohibition could shut down future business models. This blog analyses the great gamble row unfolding, and what it means for founders, investors, and the future of India’s digital gaming industry.Continue Reading The Great Gamble: India’s Online Gaming Ban, the GST Battle, and What Lies Ahead

A subsequent SC decision is not ground for rectification u/s 254(2)

Summary: Section 254(2) of the Income Tax Act, 1961, provides power to the Income Tax Appellate Tribunal to amend its order to rectify any mistake apparent on record to ensure fairness without re-visiting the entire case and prolonging litigation. This blog analyses a recent decision of the Hon’ble Bombay High Court where the extent of exercise of rectification powers was discussed. It held that a subsequent Supreme Court decision on the issue cannot be grounds for rectification of orders.Continue Reading A subsequent SC decision is not ground for rectification u/s 254(2)

Foreign taxes cannot be allowed as tax deductible expenditure: Chennai ITAT

The Income Tax Appellate Tribunal’s (“ITAT”) Chennai bench in Zoho Corporation Pvt. Ltd. v. Deputy Commissioner of Income Tax,[1] determined that foreign taxes paid by an assessee, which do not qualify for relief under Sections 90 or 91 of the Income Tax Act, 1961 (“IT Act”), cannot be claimed as business expense deduction under Section 37(1).Continue Reading Foreign taxes cannot be allowed as tax deductible expenditure: Chennai ITAT

Treading a fine line: Extension is ultra-vires but valid?

Summary: This blog examines the ongoing judicial debate surrounding extensions of GST limitation periods in the wake of the pandemic and subsequent systemic challenges. It outlines the decision of the Hon’ble Madras High Court, which set aside Notification No. 56/2023 issued under Section 168A of the CGST Act, extending timelines for recovery orders for FY 2017-18, 2018-19, and 2019-20. The blog notes how this position differs from those adopted by the Hon’ble Guwahati, Telangana, and Bihar High Courts on the same matter, addresses the possible need for intervention by the Hon’ble Supreme Court, and outlines considerations for taxpayers.Continue Reading Treading a fine line: Extension is ultra-vires but valid?

Global Business, Local Tax: The Infosys GST Controversy and its Wider Implications

In an increasingly globalised economy, business activities extend beyond physical borders and traverse geographical boundaries, leading to varied tax implications due to outdated tax legislations that do not fully address these changes. In the service sector, tax obligations can arise even without traveling to different countries. A case in point is the recent incident of the revenue serving Infosys with a INR 32,403 crore (US$ 3.8 Billion) pre-show cause notice, which was later transferred to the Directorate General of GST Intelligence (“DGGI”) for further investigation. Prima facie, the tax assessment seemed not only excessive but also conceptually flawed, as it exceeded the annual profit declared by Infosys. The DGGI later withdrew the said notice. While the dust has settled on this high-stakes incident, the lessons may reverberate across India, particularly for multinational service providers. The questions raised during the investigation will have lasting significance and warrant consideration, extending beyond a single company or tax notice.Continue Reading Global Business, Local Tax: The Infosys GST Controversy and its Wider Implications

Delhi ITAT delivers one of the first decisions dealing with Principal Purpose Test

The principal purpose test (“PPT”) has been introduced into the Indian double taxation avoidance agreement (“DTAA”) lexicon through the base erosion and profit shifting (“BEPS”) project of the Organisation for Economic Cooperation and Development (“OECD”) to dissuade sophisticated taxpayers from entering into transactions aimed at tax avoidance. The requisite amendments to the DTAAs have been made via multilateral instruments (“MLIs”).Continue Reading Delhi ITAT delivers one of the first decisions dealing with Principal Purpose Test

Time bound adjudication by revenue authorities: A distant dream or plausible reality?

In a tax system as vast and complex as India’s, time-bound adjudication is not merely a procedural ideal, it is also an essential pillar that promotes ease of doing business, upholds taxpayer trust, promotes administrative efficiency, and sustains the integrity of revenue collection. On the other hand, persistence of cases where adjudication lingers for a decade or more raises troubling questions.Continue Reading Time bound adjudication by revenue authorities: A distant dream or plausible reality?