Tax INFORM- December 2021

The twelfth issue of our monthly tax newsletter – Tax Inform is out. Through these newsletters, we provide a compilation of key tax-related case laws, circulars, notifications, etc. issued by the authorities in the previous month impacting entities & individuals operating in India.

The highlights of the current issue are:

Direct Tax – 

Domestic Tax Rulings:

  • Section 254(2) of the Income Tax Act, 1961 does not empower the Tribunal to recall its earlier order and re-hear the matter on merits.
  • Education cess cannot be allowed as a deduction while computing taxable business income.
  • Delhi High Court quashes 1346 re-assessment notices issued after 1 April 2021 under old regime of reassessment.
  • Difference between sales consideration and stamp duty value cannot be attributed to gift, on invocation of section 50C of the Act.

International Tax Rulings:

  • Unexplained investment in India made by a non-resident with no economic/income generation activities in India, cannot be taxed u/s section 69 of the Act.
  • Filing of Form 67 for claim of Foreign Tax Credit (FTC) is not mandatory but directory in nature; allows the claim of FTC to the assessee.
  • Fees for professional services is different from fees for technical services; no disallowance could be made under section 40(a)(i) for non-deduction of tax on payment of legal fees to non-resident lawyers.


  • Central Board of Direct Taxes (CBDT) issues additional guidelines on TDS/TCS under Sections 194-O, 194Q & 206C(1H) of the Act.

Other Updates:

  • OECD releases Model GloBE Rules under Pillar Two

Indirect Tax – 

  • Goods & Services Tax


    Case Laws:

    • High Court sets aside Revenue’s Orders deciding allegations pending before it in writ petition.
    • Taxability of assessment programme’ clarified
    • Classification of Fusible Interlining Fabrics of Cotton’ clarified
    • No GST on part recovery of transportation charges from employees
    • No ITC on renting car with driver to corporate customers for staff transport under agreement.
    • Rate of Tax on Diagnostic kits and laboratory reagents clarified.
    • Electricity/Water Charges collected by Landlord held as consideration.




    • The Central Board of Indirect Taxes and Customs, vide Circular No.167/23/2021-GST dated December 17, 2021, issued a clarification with respect to GST on services by restaurants through e-commerce operators.