JOURNAL MARCH 2026

Ahmedabad Chartered Accountant Journal March, 2026 1091TMJudicial Analysis9.2 The provisions of Sections 153A / 153C of the Actfind place in the proviso to Section 149 of the Actand, hence, the limitation as provided in Sections153A / 153C of the Act gets triggered upon theinitiation of assessment proceedings emanatingfrom a search under Sections 132 / 132A of theAct. We may, at this stage, mention that the DelhiHigh Court as well as the Madras High Court hasalready considered the implications of Explanation(1) to Section 153A of the Act to the limitation andthe expression “relevant assessment year” usedtherein in Explanation (1) to Section 153A of theAct. The Delhi High Court, in the case of OjjusMedicare (P.) Ltd. (supra), after considering anarray of judgments of other High Courts as well asof the Supreme Court and upon a threadbareconsideration and analysis of the statutoryprovisions of Sections 153A, 148 and 149 of theAct, has held thus:“88 Section 153A replicates the basis on whichthe six AYs’ are to be identified and computedwith the solitary distinction being that in the caseof the searched person, the six AYs’ are liable tobe computed from the AY pertaining to the FY inwhich the search was conducted. The starting pointfor the purpose of identifying the six AYs’ in thecase of section 153A would thus turn upon theyear of search as opposed to the handover ofmaterial which is spoken of in the First Proviso tosection 153C. If one were to therefore assumethat a search took place on a person between 01April 2021 to 31 March 2022, the pertinent AY wouldbecome AY 2022-23 and the corresponding sixAYs’ would by as follows:Computation of the six-year No ofblock period as provided under yearssection 153C of the ActAY 2021-22 1AY 2020-21 2AY 2019-20 3AY 2018-19 4AY 2017-18 5AY 2016-17 689. That takes us then to the issue of identifying the“relevant assessment year” for the purposes ofcomputing the ten year block. Explanation 1 tosection 153A specifies the manner in which theentire ten AY period is to be computed. While thecomputation of six AYs follows the position asenunciated and identified above, Explanation Iprescribes that the ten AYs’ would have to becomputed from the end of the AY relevant to theFY in which the search was conducted orrequisition made The ten AY period consequentlyis to be reckoned from the end of the AY pertainingto the previous year in which the search wasconducted as distinct from the preceding yearwhich is spoken of in the case of the six relevantAYs.90. Viewed in that light, and while keeping the periodof 01 April 2021 to 31 March 2022 as the constant,the relevant AY would be AY 2022-23. The ten AYswould have to be computed from 31 March 2023with the said date indubitably constituting the endof the AY relevant to the previous year of search.Viewed in light of the above, the block period of10 AYs would be as follows.-Computation of the six-year No ofblock period as provided under yearssection 153C of the ActAY 2022-23 1AY 2021-22 2AY 2020-21 3AY 2019-20 4AY 2018-19 5AY 2017-18 6AY 2016-17 7AY 2015-14 8AY 2014-15 9AY 2013-14 1091 Tested on the aforesaid precepts, it would bemanifest that AY 2022-23 would form the first yearof the block of ten AYs’ terminating in AY 2013-14.We, in this regard also bear in consideration thefollowing instructive passages as appearing in thedecision handed down by a learned Judge of the

1092 Ahmedabad Chartered Accountant Journal March, 2026TMMadras High Court in A.R.Safiullah. We deem itappropriate to extract the following paragraphsfrom that decision:-“9 Explanation-I is clear as to the manner ofcomputation of the ten assessment years. Itclearly and firmly fixes the starting point. It isthe end of the assessment year relevant tothe previous year in which search isconducted or requisition is made. Therecannot be any doubt that since search wasmade in this case on 10.04.2018, theassessment year is 2019-20. The end of theassessment year 2019-20 is 31.03.2020. Thecomputation of ten years has to run backwardsfrom the said date i.e. 31.03.2020. The firstyear will of course be the search assessmentyear itself. In that event, the ten assessmentyears will be as follows:1st Year 2019-202nd Year 2018-193rd Year 2017-184th Year 2016-175th Year 2015-166th Year 2014-157th Year 2013-148th Year 2012-139th Year 2011-201210th Year 2010-2011The case on hand pertains to AY 2009-10. It isobviously beyond the ten year outer ceiling limitprescribed by the statute. The terminal point isthe tenth year calculated from the end of theassessment year relevant to the previous year inwhich search is conducted. The long arm of thelaw can go up to this terminal point and not oneday beyond. When the statute is clear and admitsof no ambiguity, it has to be strictly construed andthere is no scope for looking to the explanatorynotes appended to statute or circular issued bythe department.10. In the case on hand, the statute has prescribedone mode of computing the six years and anothermode for computing the ten years. Section153A(1)(b) states that the assessing officer shallassess or reassess the total income of six yearsimmediately preceding the assessment yearrelevant to the previous year in which search isconducted. Applying this yardstick, the six yearswould go up to 2013-14. The search assessmentyear, namely, 2019-20 has to be excluded. This isbecause, the statute talks of the six yearspreceding the search assessment year. But, whilecomputing the ten assessment years, the startingpoint has to be the end of the search assessmentyear. In other words, search assessment year hasto be including in the latter case. It is not for me tofathom the wisdom of the parliament. I cannotassume that the amendment introduced by theFinance Act, 2017 intended to bring in four moreyears over and above the six years alreadyprovided within the scope of the provision. Whenthe law has prescribed a particular length, it is notfor the court to stretch it. Plasticity is the new mantrain neuroscience, thanks to the teachings of NormanDoidge. It implies that contrary to settled wisdom,even brain structure can be changed. But not sowhen it comes to a provision in a taxing statutethat is free of ambiguity Such a provision cannotbe elastically construed.11. One other contention urged by the standingcounsel has to be dealt with. It is pointed out thatthe petitioner has invoked the writ jurisdiction atthe notice stage Since the petitioner hasdemonstrated that the subject assessment yearlies beyond the ambit of the provision, therespondent has no jurisdiction to issue theimpugned notice Once lack of jurisdiction has beenestablished, the maintainability of the writ petitioncannot be in doubt.”In our considered opinion, the decision in A.RSafiullah correctly expounds the legal position andthe interpretation liable to be accorded to theidentification of the ten AYs which are spoken ofin sections 153A and 153C.”Judicial Analysis

Ahmedabad Chartered Accountant Journal March, 2026 1093TM9.3 Thus, it is precisely held hereinabove that thestatute prescribes different modes of computationfor six years and ten years. We reiterate that theprovisions of Section 153A(1) (b) of the Act stipulatethat the Assessing Officer shall assess or reassessthe total income of six years immediatelypreceding the assessment year relevant to theprevious year in which the search is conducted.However, the ten assessment year period,consequently, is to be reckoned from the end ofthe assessment year pertaining to the previousyear in which the search was conducted, as distinctfrom the preceding year which is spoken of in thecase of the six relevant assessment years. Thus,the contention with regard to the computation ofsix years as well as ten years under the provisionsof Section 153A of the Act has already been goneinto by the Delhi High Court as well as the MadrasHigh Court, and we have no convincing reason totake a divergent view from the view expressedhereinabove. Applying the aforesaid computationto the facts of the present case, taking the date ofthe search as 09.05.2024 during the Financial Year2024-25, the Assessment Year 2025-26 willbecome the first assessment year and, in thesame manner, the Assessment Year 2016-17 willbecome the tenth assessment year. Thus, the yearunder consideration, namely, Assessment Year201516, for which the impugned notice has beenissued under Section 148 of the Act, would fallbeyond the period of ten years prescribed underthe statute as it stood immediately before thecommencement of the Finance Act, 2021, andhence, on this count, the impugned notice can besaid to be barred by limitation.9.4 However, since an additional submission has beenadvanced by learned Senior Standing CounselMr.Yajnik to the extent that the expression used inthe proviso to Section 149(1) of the Act, to theextent that “if a notice under Section 148 or Section153A or Section 153C could not have been issuedat that time on account of being beyond the timelimit specified”, would mean that the AssessingOfficer is competent to issue notice under Section148 of the Act, since he would only gain knowledgeof incriminating material against the third personafter the search, and the limitation prescribedunder the provisions of Sections 153A or 153C ofthe Act cannot restrict his power, and such limitationwill start running from the day of search. We fail tograsp the said submission and the impact of suchsubmission on the limitation prescribed in the firstproviso, which relates to Sections 153A or 153Cof the Act. Hence, it is not dealt.Nilay Desai v. DCIT (SCA No. 1093 of 2026)dated 23/02/20267. We have heard the learned advocates for therespective parties at length. We have alsoperused the case laws cited, considered theprovisions threadbare and have also perused thematerial on record.8 The sole issue that arises for consideration in thepresent petition is that –(i) Whether thenotice issued by the respondentfor the Assessment Year 2014-15 is barredby limitation;(a) Dealing with this issue, uncontroverted factsare that the search took place in the case ofthe petitioner on 08.02.2024 whichindisputably falls in the Financial Year 2023-24. Therefore, the date of search would betaken into consideration for the purpose ofinitiation of proceedings under Section 153Aof the Act. Keeping that legal principle in mind,ten years that could be covered subject tofulfilling other conditions emanating from thestatute, would be as under:Number Assessment Year1st year Assessment Year 2024-252nd year Assessment Year 2023-243rd year Assessment Year 2022-234th year Assessment Year 2021-225th year Assessment Year 2020-216th year Assessment Year 2019-207th year Assessment Year 2018-198th year Assessment Year 2017-189th year Assessment Year 2016-1710th year Assessment Year 2015-1641Judicial Analysis

1094 Ahmedabad Chartered Accountant Journal March, 2026TM(b) The only difference between the calculationas per the revenue and the petitioner is theinclusion or exclusion of the search year.Revenue contends that while calculating theperiod of ten years, search year is to beexcluded and the calculation starts fromassessment year immediately preceding theprevious year relevant to the assessment yearin which search is conducted whereas thepetitioner’s contention is that the calculationof the period of ten years would include thesearch year.(c) The short controversy turns upon whether,while computing the ten-year block, theassessment year relevant to the previousyear in which search is conducted (hereinafter“the search assessment year”) is to beincluded in the reckoning, unlike thecomputation of six assessment years whichexpressly excludes it.(d) With reference to the relevant assessmentyear, it is necessary to refer to the provisionsof Section 153A(1)(b) of the Act which readsas under :“Section 153A(1)(b)(The Assessing Officer shall) assess orreassess the total income of six assessmentyears immediately preceding the assessmentyear relevant to the previous year in which suchsearch is conducted or requisition is made andfor the relevant assessment year or years.”The key expression that flows from readingof the section is “six assessment yearsimmediately preceding the assessment yearrelevant to the previous year in which suchsearch is conducted” and “for the relevantassessment year or years.” is phrasedindependently, disjointed from earlierphrase.(e) In juxtaposition, the Fourth Proviso permitsassessment beyond six years subject tospecified conditions and refers to “relevantassessment year” as stated in Explanation 1that defines “relevant assessment year” as:“For the purpose of this sub-section, theexpression “relevant assessment year” shallmean an assessment year preceding theassessment year relevant to the previous yearin which search is conducted or requisition ismade which falls beyond six assessment yearsbut not later than ten assessment years fromthe end of the assessment year relevant tothe previous year in which search is conductedor requisition is made.”(f) The key expressionthat flows from readingof the section is “not later than ten assessmentyears from the end of the assessment yearrelevant to the previous year in which searchis conducted”.Thus, the computational framework of Section153A of the Act, including Explanation 1,applies pari materia to the proceedings underSection 153C of the Act.A plain reading of Section 153A of the Actreveals that the Parliament has consciouslyadopted two different phraseologies:Six-Year Block Ten-Year Block“six assessment “not later than tenyears immediately assessment yearspreceding” from the end of theassessment year”This linguistic distinction is deliberate andmust be given full effect. Under Section153A(1)(b) of the Act, the anchor point is “theassessment year relevant to the previousyear in which search is conducted”. Therefore,six years must be “immediately preceding”that assessment year. The phrase“immediately preceding” necessarilyexcludes the search assessment year itself.In contrast thereto, Explanation 1 introducesa materially different formulation: “not later thanten assessment years from the end of theassessment year relevant to the previousyear in which search is conducted”. Thiscomputation mechanism does not use thephrase “immediately preceding” but instead,requires reckoning from the end of theJudicial Analysis

Ahmedabad Chartered Accountant Journal March, 2026 1095TMassessment year relevant to the previousyear of search. Thus, the assessment yearrelevant to the previous year of searchbecomes the reference year and the ten-yearperiod is counted from the end of thatassessment year. This necessarily includesthe search assessment year within the tenyear framework and resultantly, the searchyear becomes the first year in the reckoningof the ten-year block.(g) If Parliament intended identical computation forboth six and ten years, it would have usedidentical language. Instead, it has consciouslyused different phraseology, for six years“immediately preceding” and for ten years“from the end of the assessment year”. Legally,it is well settled that while interpreting plainlanguage of a Statute, the Court must givemeaning to every word used by theLegislature. To compute ten years byexcluding the search year (as is done for sixyears) would render the phrase “from the endof the assessment year” otiose and merge twodistinct statutory schemes into one that wouldviolate settled principles of statutoryinterpretation. The scheme of Section 153Areflects calibrated expansion in as much asordinary search assessment would becomputed as six years immediately precedingthe search year whereas exceptional extendedjurisdiction up to ten years is not a merearithmetic extension of the six-year model; itis governed by a separately structuredcomputational rule. The Legislature, in itswisdom, has consciously created:· A backward-looking “preceding” model(six years), and· A reckoning “from the end of theassessment year” model (ten years).Thus, it can be concluded that Section 153A ofthe Act prescribes two distinct and independentcomputational regimes. The six assessmentyears are those “immediately preceding” theassessment year relevant to the previous yearof search, thereby excluding the search yearwhereas the ten assessment years underExplanation 1 are to be computed “from theend of the assessment year” relevant to theprevious year of search. The statutory languagenecessarily results in inclusion of the searchassessment year within the ten-year reckoning.Any interpretation that applies the six-yearexclusion model, if made applicable to the tenyear block, would defeat the legislativescheme and render material words redundant.Accordingly, while computing the extendedten-year period under Explanation 1 to Section153A read with Section 153C of the Act, theassessment year relevant to the previous yearof search is to be included in the reckoning.(h) Even otherwise, this issue is no more resintegra as the same is covered by thejudgement of this Court in the case ofJayantibhai Karamshibhai Maniya versusIncome-tax Officer reported in [2026] 182taxmann.com 493 (Guj.). This Court has takena view, after considering the earlier judgementin the case of Bhavin Zinzuwadia (supra), thatwhile calculating the period of ten years underSection 153C of the Act, keeping in mind thelanguage of Explanation 1 to Section 153A ofthe Act, the search year or the year in whichseized material is received by the JAO of thepetitioner is required to be taken intoconsideration. Relevant extract of the saidjudgement can be usefully referred to as under:xxx…9. In the facts of the present case, admittedlythe search was conducted on 08.02.2024,therefore impugned notice under Section 148of the Act dated 26.03.2025 for A.Y. 2014-15is barred by limitation as the same fallsbeyond the permissible period of ten years.We, therefore, quash and set aside the noticedated 26.03.2025 issued under Section 148of the Act for assessment year 2014-15 onthe ground of limitation. RULE is madeabsolute accordingly, with no order as to cost.Judicial Analysis

1096 Ahmedabad Chartered Accountant Journal March, 2026TMCA. Kaushik D. [email protected] vs MisreportingIssueDoes the failure of the Assessing Officer (AO) to strikeoff irrelevant portions in a penalty notice issued underSection 274 read with Section 270A—thereby failingto specify whether the charge is for underreporting ormisreporting of income—render the entire penaltyproceedings invalid?PropositionFor any penalty proceeding to be legally sustainable,the foundational notice must be specific, unambiguous,and reflective of a clear application of mind. If an AOissues a generic, printed notice without deleting inapplicable segments, it is not merely a “clerical error.”Since Section 270A prescribes vastly different penaltyrates for underreporting versus misreporting, the failureto identify the exact limb of the offense is a fatalprocedural defect that vitiates the penalty order in itsentirety.Views against the PropositionIn the case of Scholars International EducationalFoundation v. DCIT [2023] 157 taxmann.com 765(Delhi - Trib.), the Revenue argued that the levy ofpenalty was justified because the assessee hadalready accepted the disallowance of depreciation inthe quantum proceedings, thereby establishing theunderlying reporting error. It further mentioned that theNational Faceless Appeal Centre (NFAC) was correctin confirming the penalty as the assessee had claimeddepreciation in violation of the amendment broughtunder Section 11(6) with effect from April 1, 2015. TheRevenue’s position asserts that substantive default overrides procedural irregularities.Views in favour of the PropositionIn the above referred case, the assessee’s counselargued that the Assessing Officer issued a genericshow-cause notice without mentioning the specificoffense committed, which prevented the taxpayerfrom understanding the exact nature of the chargeunder Section 270A. Relying on the decision of theHon’ble Bombay High Court in Mohd. Farhan A.Shaikh v. Dy. CIT [2021] 434 ITR 1 (Bombay), theassessee contended that issuing omnibus noticesin printed form without striking off in applicable partsis a ritualistic practice that betrays a non-applicationof mind.Further, the assessee highlighted that a contraventionof a mandatory requirement for a valid communicationis “fatal” per se, citing principles from Dilip N. Shroffv. CIT [2007] 291 ITR 519 (SC), which holds that noticesmust be precise and leave no room for ambiguity. Itwas emphasized that because Section 270A stipulatesdifferent rates for underreporting and misreporting, theAO has an “onerous task” to specify the exact limb toapply the correct statutory penalty amounts.SummationThe judicial position maintained in [2023] 157taxmann.com 765 (Delhi - Trib.) ScholarsInternational Educational Foundation v. DCIT,establishes that the mandatory requirement for anAssessing Officer to specify the exact nature of anoffense—whether under reporting or misreporting—isa jurisdictional prerequisite under Section 270A. Whena penalty notice remains generic and fails to deleteinapplicable portions, the resulting ambiguity is viewedas a failure to apply mind and a breach of proceduralfairness, leading to the quashing of the penalty.Controversies

Ahmedabad Chartered Accountant Journal March, 2026 1097TMThis principle has also been reinforced in the followingcases:1. Schneider Electric South East Asia (HQ) Pte.Ltd. v. ACIT [2022] 145 taxmann.com 665 (DelhiHC)The penalty notice did not clearly state whetherthe penalty was for underreporting or misreporting.The Hon’ble Delhi High Court held that (a) penaltynotices must be specific-failure to clarifyunderreporting or misreporting violates naturaljustice. (b) The AO did not explain why misreportingapplied, making the order arbitrary. (c) Legalprecedents confirm that vague penalty notices areinvalid. Thus, the penalty was set aside, confirmingthat ambiguous notices cannot sustain penaltyproceedings.2. Smt. Saroj Shrivastava v. ITO [2024] 14taxmann.com 1409 (Raipur – Tribunal)A penalty under section 270A cannot be sustainedif the penalty order is vague and does not clearlydistinguish between underreporting andmisreporting. In this case (1) the AO imposedpenalties for (i) deemed disallowance of cost ofimprovement on a sold asset (ii) Disallowance ofHouse Rent Allowance (HRA) (iii) Capital gainadditions (2) The penalty order mentioned both“underreporting” and “misreporting” but did notspecify which one applied. The ITAT Raipur heldthat (a) the penalty order lacked clarity and showedno application of mind by the AO. (b) Judicialprecedents confirm that penalties must be specificif misreporting is alleged, the AO must provide clearreasons. (c) Since the AO failed to establish whetherthe income was underreported or misreported, thepenalty order was defective.3. Dhansukhlal Maganlal Dhangar v. ITO [ITA No.247/Srt/2023, dated 6-7-2023]Since the taxpayer acted under a genuine beliefand there was no deliberate misrepresentation, suppression, or falsification, the penalty can only befor under-reporting, not for misreporting. If thepenalty was initiated for under-reporting but laterlevied for misreporting, it must be set aside.4. M/s. Sree Navaladiyan Finance v. DCIT [2024]161 taxmann.com 641 (Chennai – Tribunal)The Tribunal found that (i) the AO vaguely mentioned“under-reporting” without specifying concealment ormisreporting. (ii) Lack of clarity makes the penaltyorder invalid. (iii) The penalty was cancelled due toimproper application of the law.5. Sunil Chunilal Kumavat v. ITO [2024] 165taxmann.com 287 (Pune – Tribunal)The Tribunal held that (a) the AO must clearly statethe reason for imposing a higher penalty (200%)for misreporting. (b) Failure to mention the correctsection makes the penalty order invalid. (c) Theruling was based on the Bombay High Court’sdecision in Mohd. Farhan A. Shaikh v. ACIT. Sincethe AO did not follow this requirement, the penaltywas deleted.6. GE Capital US Holdings INC v. DCIT [2024] 163taxmann.com 146 (Delhi).The High Court held that (i) The AO cannotmechanically impose a penalty without specifyingthe charge. (ii) If the AO fails to classify the offenseunder section 270A(9), the penalty proceedingsbecome invalid. (iii) The application for immunityunder section 270AA could not have been rejected,as there was no clear finding of misreporting. Thus,the penalty was quashed due to lack of specificreasons for misreporting.Controversies

1098 Ahmedabad Chartered Accountant Journal March, 2026TMBeyond the Boarding Pass: Dissecting the ITAT’sRuling in the Binny Bansal Residency DisputeThe Factual MatrixBinny Bansal, an Indian citizen, served in varioussenior, foundational management capacities includingChairman, Chief Operating Officer, and Group ChiefExecutive Officer at the Flipkart group since itsinception in 2007. Effective 13 November 2018, theassessee officially resigned from board of the Flipkartgroup,Shortly after his exit, on 22 February 2019, the assesseemoved to Singapore to take up employment as theChief Executive Officer of X to 10X Singapore Pte. Ltd.and to work with other ventures he had co-founded,including Three State Capital Advisors Pte. Ltd. Thisphysical and professional relocation formed thefoundational basis of his claim that his situs hadpermanently shifted outside the territorial jurisdictionof India.The crux of the tax assessment pertained exclusivelyto FY 2019-20. During FY 2019-20,the assessee sold642,267 equity shares of Flipkart Pvt. Ltd., Singapore.The assessee filed his Indian Income Tax Returnclaiming the status of a Non-Resident (NR).TheRevenue Department, however, initiated a scrutiny ofthe physical presence and historical stay of theassessee in India. During FY 2019-20, the assesseewas physically in India for 141 days. Furthermore, ananalysis of his passport records indicated that hispresence in India during the four immediately precedingfinancial years exceeded the threshold, totaling anaggregate of 1,237 days against a requirement of 365days. Consequently, the Assessing Officer (AO), whosedraft order was subsequently ratified by the DisputeResolution Panel (DRP), classified the assessee as aresident of India, thereby denying the claimed treatybenefits and bringing his entire global income,encompassing the substantial Flipkart capital gains,decisively into the Indian tax net.Quantitative Breakdown of Physical Presence andEconomic NexusThe structured data presented below highlights themetrics utilized by the Tribunal to continuously evaluateand reject the residency claim:FEMA & InternationalTaxationCA. Dhinal A. [email protected]. Sunil [email protected] Period Indian Jurisdictional Data Singapore Jurisdictional DataDays of Physical Stay FY 2019-20 141 days Balance of the year (approx. 224 days)Days of Stay Preceding 4 1,237 days Negligible prior to February 2019Financial YearsTotal Investment Corpus As of INR 73,792 lakhs INR 87,789 lakhsMarch 31, 2020Investments Deployed Historical INR 60,035 lakhs NegligiblePre-Migration (approx. 81% of Indian total)Investments Deployed FY 2019-20 INR 19,125 lakhs (incl. ` 86,846 lakhs (approx. 99% of SG total)Post-Migration ` 5,000 lakhs pre-committed)Immovable Property / - Owned residential property Rented serviced apartmentAccommodation Status in Koramangala (Valued at` 39 crores) & MantriClassic Apartment

Ahmedabad Chartered Accountant Journal March, 2026 1099TMFEMA & International TaxationInterpreting Section 6(1)(c) and its ExplanationsThe main issue under domestic law in this case wasthe interpretation of section 6(1)(c) of the Income-taxAct, along with its Explanations. As per this provision,an individual is treated as a resident in India if he ispresent in India for at least 60 days during the relevantprevious year and for 365 days or more in theimmediately preceding four years.In the present case, these conditions were clearlysatisfied, as the assessee stayed in India for 141 daysduring FY 2019–20 and for 1,237 days in the precedingfour years. Therefore, under the basic rule, he qualifiedas a resident in India.However, Explanation 1(a) to Section 6(1)(c) grants thegenerous 182day relaxation to an Indian citizen wholeaves India during the previous year for the specificpurposes of employment outside India. The assesseerelied on these provisions and contended that thehigher 182day limit should apply in his case instead ofthe standard 60day requirement.The date of departure: the assessee departed Indiaand assumed his Singaporean residency on February22, 2019 i.e., FY 2018-19, it was concluded that thestatutory benefit of Explanation 1(a) is strictly restrictedexclusively to the actual year of departure.It was ruled that this exception does not create acontinuous benefit that carries forward into subsequentfinancial years. Therefore, FY 2019-20, Explanation 1(a)was declared wholly inapplicable.The interpretation of Explanation 1(b): Defining BeingOutside IndiaSince the assessee could not claim the benefit ofExplanation 1(a), he pivoted to Explanation 1(b). Thisspecific clause extends the 182-day presencethreshold to an Indian citizen or a person of Indianorigin who, being outside India, comes on a visit toIndiain any relevant previous year.The assessee contended that having formallyrelocated to Singapore in the prior financial year, hisresidential status was now legally and physicallyoutside India; therefore, his 141 day presence duringFY 2019-20 constituted a mere temporary visit to hishome country, thereby placing him safely below therelaxed 182-day ceiling.The Revenue Department opposed this and arguedthat the specific phrase being outside India inherentlyimplies a pre-existing status as a non-resident.Since the assessee was an undisputed resident ofIndia continuously up until the very end of FY 2018-19,and re-entered Indian territory as early as April 2, 2019(just weeks into the new financial year), he did not havean established presence outside India at the beginningof the relevant year. Additionally, the Revenue pointedout that a stay of 141 days is a very long and significantperiod. A stay of that length cannot reasonably becalled a mere visit.The ITAT agreed with the Revenue. To support itsdecision, the Tribunal looked back at the history of theprovision tracing how it evolved through amendmentsmade in the Finance Acts of 1978, 1982, 1989, and1994 and also examined the CBDT circulars issued atthose times.The Judicial Conflict: Departure from the KarnatakaHigh Court PrecedentThe reading of Explanation 1(b) depart from an earlierjudgment of the Karnataka High Court in Director ofIncome Tax v. Manoj Kumar Reddy Nare, which hadtaken a very different view.In that case, Manoj Kumar Reddy was a regular Indianresident who went to Chicago on a work deputation onFebruary 1, 2004. When his residential status for thefollowing year was challenged by the Revenue, boththe ITAT and the Karnataka High Court ruled in his favour.The High Court held that his return trip to India betweenAugust 18 and September 6, 2004 was simply a visit,and therefore the 182-day limit under Explanation 1(b)and not the stricter 60-day rule would apply.Importantly, the High Court dismissed the Revenue’sappeal, saying it did not even raise a legal question.This effectively meant that someone who had just leftIndia for the first time could still claim the benefit ofExplanation 1(b) in their very first year away.In the Binny Bansal case, his lawyers relied on thisJudgement. The factual similarities were obvious bothmen were long-time Indian residents, both left for

1100 Ahmedabad Chartered Accountant Journal March, 2026TMemployment abroad, and both sought relief underExplanation 1(b) in the year immediately following theirdeparture.The distinguishment was made between these twocases. In doing so, it concluded the condition that aperson must already be a non-resident before theycan claim the benefit of Explanation 1(b). The coreinterpretation made by reading the phrase beingoutside India as if it meant being a non-residentThe DTAA Tie-Breaker Rule: An Exhaustive Article 4AnalysisSince the assessee was found to be a resident ofIndia under Indian domestic law, and at the same timequalified as a resident of Singapore too given hisemployment contract, physical presence there, andrented home a dual residency situation arose.In international tax law, such conflicts are resolved usingwhat are known as tie-breaker rules, which are set outin Article 4 of the India-Singapore Double TaxAvoidance Agreement (DTAA). These rules closelyfollow the frameworks recommended by the OECDand UN Model Tax Conventions.The tie-breaker testworks as a step-by-step process.Step 1: The Permanent Home criterion and thedefinition of Availabilityo The first, primary limb of the treaty tie-breaker testrequires the authorities to determine the singlejurisdiction in which the individual has a permanenthome available to him.o The assessee relied on his long-term rentedapartment in Singapore, where he lived with hisfamily, as his primary home. The Revenuecountered by pointing to his Indian propertyholdings a residential property in Koramangala,Bangalore valued at approximately INR 39 crores,and a Mantri Classic apartment in Bengaluru.o The assessee argued the Koramangala propertywas entirely uninhabitable due to ongoing structuralrenovation, and that a prior Section 54F deductionclaimed in respect of it reflected a passive statutoryentitlement not actual availability or centre of vitalinterests under treaty lawo Finding permanent homes in both jurisdictions,the first test produced no conclusive result, andthe analysis proceeded to the second tier.Step 2: Centre of Vital Interestsa. Personal RelationsThe assessee argued that his personal ties haddecisively shifted to Singapore his spouse wasemployed there and his children were enrolled inSingaporean schools, representing a completebreak from daily life in India. The Revenuecountered that this relocation was a gradual postfacto process and was not fully crystallised at thecommencement of the financial year, suggestingan ongoing transition rather than a definitiveseverance of Indian tiesb. Economic RelationsThis proved to be the decisive battleground. Theassessee urged the Tribunal to focus on activeinvestments made after his relocation, rather thanpassive wealth accumulated during his earlieryears of Indian residency. To support this, hepresented comparative investment data acrossboth jurisdiction:Category India SingaporeTotal Cumulative Investments INR 73,792 lakhs INR 87,789 lakhs(as of March 31, 2020)Legacy Capital (Pre-Migration) ` 60,035 lakhs Negligible / Not Applicable(~81% of Indian Portfolio)Active Capital (Invested Post-Migration 19,125 lakhs (includes ` 86,846 lakhsin FY 19-20) ` 5,000 lakhs pre-committedcapital)FEMA & International Taxation

Ahmedabad Chartered Accountant Journal March, 2026 1101TMo The assessee argued that the capital deployedin Singapore nearly 87,000 lakhs within a singleyear clearly demonstrated that his active economicinterests had shifted there. On the Indian side, hecontended that the ` 5,000 lakhs invested in Indiaduring the year were not fresh, discretionaryinvestments reflecting ongoing economicengagement.o Assessee’s argument was not accepted. Relyingon the case of Ashok Kumar Pandey v. ACIT, itsaid that a person’s financial position cannot bedivided just based on the date they leave acountry.o Looking at the full picture, the Tribunal noted thatthe assessee still had significant assets in Indiasuch as AIF investments, shares (both listed andunlisted), mutual funds, and real estate. Thisshowed that his main economic base was still inIndia.o Furthermore, it was noted that the very capitalgains in dispute arose directly from the liquidationof shares in Flipkart Singaporean entity whoseentire multi-billion dollar valuation was intrinsicallylinked to its operational subsidiaries dominatingthe Indian domestic retail market. It was ruled thatthe assessee’s centre of Vital Interests remainedsubstantially closer to India.Step 3: Habitual Abode and Nationalityo Regarding the Habitual Abode test, evaluation ofthe frequency, duration and regularity of theassessee’s physical stays was made. Theassessee spent 141 days physically present inIndia during the year under consideration. Theassessee urged this was partly influenced by theextraordinary global mobility restrictions andlockdowns imposed during the COVID-19pandemic. Conversely, he spent the balance ofthe year working, living and residing in Singapore.It was concluded that this pattern of dual physicalpresence, especially in the very first year of hisemployment contract, indicated that the assesseemaintained a habitual, customary abode in bothjurisdictions.ConclusionWith the first (Permanent Home) and third (HabitualAbode) tests resulting in absolute ties, and the secondtest (Vital Interests) leaning heavily toward India, thefinal, determinative criterion Nationality proved decisiveIt remained an undisputed fact that the assessee wasan Indian national, holding an Indian passport. UnderArticle 4(2), nationality operates as the ultimate tiebreaker when all previous criteria fail to produce a clearresult. The Tribunal accordingly designated theassessee as an Indian resident for DTAA purposes,extinguishing his claim to any treaty protection.The confirmation of Indian residency automaticallytriggered taxation of the assessee’s gains from thesale of 642,267 shares in Flipkart Private Limited,Singapore.By using the Article 4 tie-breakerit was ruled that theassessee was an Indian residentFEMA & International Taxation

1102 Ahmedabad Chartered Accountant Journal March, 2026TMExport and Import of Goods and ServicesThe Reserve Bank has comprehensively reviewed theregulations and directions governing export and importof goods and services, under FEMA, 1999, inconsultation with stakeholders, and issued ForeignExchange Management (Export and Import of Goodsand Services) Regulations, 2026. The Regulations areintended to promote ease of doing business,especially for small exporters and importers, and toempower authorised dealers to provide quicker andmore efficient service to their customers. TheRegulations will be effective from October 01, 2026.Accordingly, the instructions contained in the directionswill also be effective from the said date.In exercise of the powers conferred under the ForeignExchange Management Act, 1999 (42 of 1999), theReserve Bank hereby directs that authorised dealersshall ensure adherence to Foreign ExchangeManagement Act, 1999 (FEMA), and rules, regulations& directions issued under FEMA, and extant ForeignTrade Policy issued by the Government of India, whilehandling transactions related to export and import ofGoods and Services, including merchanting tradetransactions.An Authorised Dealer shalli. send all references to the Reserve Bankthrough PRAVAAH portal.ii. inform any doubtful transaction to the Directorateof Enforcement (DoE).With effect from the date these directions come intoforce, the Master Direction – Export of Goods andServices and Master Direction – Import of Goods andServices and circulars listed at Annex to thecircular shall stand superseded.Source:RBI/2025-26/194A.P. (DIR Series) Circular No.20 dated January 16, 2026For full text refer:https://rbidocs.rbi.org.in/rdocs/notification/PDFs/APPDIR191201202690F6A48208144E70817236152282BA14.PDFExcerpts of Foreign Exchange Management(Export and Import of Goods and Services)Regulations, 20263. Declaration of exports.- (1) An exporter of goodsshall furnish to the specified authority, a declarationin the Export Declaration Form (EDF) specifyingthe amount representing the full export value ofgoods, at the time of export…(2) An exporter of services shall furnish to thespecified authority, a declaration in EDFspecifying the amount representing the fullexport value of services, within 30 days fromthe end of month in which invoice for serviceshas been raised, provided that…4. Manner of Receipt and Payment.- (1) The receiptsand payments for export and import of goods andservices shall be in the manner specified inthe Foreign Exchange Management (Manner ofReceipt and Payment) Regulations, 2023, asamended from time to time.5. Time period for realisation of exports.- (1) Theamount representing the full export value (orreduced export value in terms of Regulation 6 ofthese Regulations) of goods and services shallbe realised (including by way of set off in terms ofRegulation 7 of these Regulations) and repatriatedby the exporter within the period specified below:(a) fifteen months from the date of shipment incase of goods (other than goods exportedCA. Dr. Savan R. [email protected] Updates25

Ahmedabad Chartered Accountant Journal March, 2026 1103TMto a warehouse outside India) and from thedate of invoice in case of services;(b) fifteen months from the date of sale of goodsfrom the warehouse in case of goodsexported to a warehouse outside India;(c) as per payment terms of the contract, in caseof project exports…6. Reduction in the export realization.- AnAuthorised Dealer may, on request from theexporter citing reasons for under-realisation or nonrealisation of full export value, allow reduction inrealisation of export value, provided theAuthorised Dealer is satisfied of the reasonscited…7. Set off of export receivables against importpayables.- An Authorised Dealer may allow setoff of export receivables against import payablesfrom/to the same overseas buyer or supplier orwith their overseas group or associate companies,within the stipulated period for realisation of exportproceeds or extended period, if any, allowed bythe Authorised Dealer.8. Third party receipts and payments.- AnAuthorised Dealer may permit third party (otherthan the parties undertaking export and import)receipts and payments for export and importtransactions provided that the Authorised Dealeris satisfied with the bonafides of the transactions.9. Time period for making import payment.- AnAuthorised Dealer shall monitor its IDPMS entriesand follow up with the respective importer formaking payment for its imports within the periodspecified in the underlying contract…10. Advance payment for exports and imports anddelayed payment for imports.- (1) An exportershall, in case of advance receipt for export, routethe advance amount, and realisation of exportproceeds, if any, through the same AuthorisedDealer. However, an exporter may route thetransactions through any other Authorised Dealerprovided the exporter has intimated the changeto both the Authorised Dealers...11. Import of gold and silver.- Save as otherwiseprovided in the Act, Rules, Regulations orDirections made there under, and notwithstandingthe provisions of these Regulations, no advanceremittance shall be permitted by an AuthorisedDealer for the import of gold or silver.12. Import not materialised.- (1) Where an importeris unable to import within the contract period, orthe extended period, the importer shall repatriatethe advance payment made, if any…13. Unrealised exports.- If the export proceeds of anexporter remain unrealised for a period beyondone year from the due date of realisation orextended period, if any, allowed by an AuthorisedDealer, the exporter shall undertake further exportsonly against receipt of full advance or anirrevocable Letter of Credit.14. Export of goods and services against repaymentof State credits.- For the implementation of theprovisions of the Inter banking arrangement, anAuthorised Dealer shall adhere to instructions anddirections issued by the Reserve Bank from timeto time on export of goods and services againstrepayment of State credits granted by the erstwhileSoviet Union.15. Project Export.- (1) An Authorised Dealer maypermit receipts/ payments for project exports asper the underlying contract, after satisfying itselfof the genuineness of the project…16. Merchanting Trade Transaction (MTT).- (1) Aperson undertaking Merchanting Trade, inaccordance with the Foreign Trade Policy, shallensure that:(a) the period between the outward remittanceand inward remittance or vice versa does notexceed six months…(b) outward remittances are sent only to theoverseas seller and inward remittances arereceived only from the overseas buyer…(c) the documents evidencing the MTT areprovided to the Authorised Dealer, toestablish the genuineness of the transactions.17. International Trade Invoicing and Settlement inIndian Rupees (INR).- The Authorised Dealer maybe guided by the extant guidelines on the broadFEMA Updates

1104 Ahmedabad Chartered Accountant Journal March, 2026TMframework as well as instructions issued by theReserve Bank in this regard, from time to time.18. Reporting.- (1) EDPMS (Export Data Processingand Monitoring System) and IDPMS (Import DataProcessing and Monitoring System) -An Authorised Dealer:(a) shall enter details of EDF (of its customers)as received from non-EDI (Electronic DataInterchange) port in EDPMS within fiveworking days of receipt of EDF…19. Internal Policy and Standard OperatingProcedure (SOP) for handling transactions.- (1)An Authorised Dealer shall put in place a separate,comprehensive, well-documented internal policyand SOP, for handling transactions (including thereporting thereof) related to export and import ofgoods and services as well as MTT, in accordancewith the Act, and Rules, Regulations and Directionsissued thereunder.Source: Notification No. FEMA 23(R)/2026-RB datedJanuary 13, 2026For full text refer:https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NRAR23R16012026C1272B8B66944ED5A53741840B973363.PDFFEMA UpdatesThe DRP had rejected 4 comparables for the reasonthat they were functionally non comparable with thetested party i.e Zydus France. While Zydus Francewas a wholesale distributor of the assessee products,the four comparables were found to be operating forthe retail segment. The argument of the assessee wasthat the tested party i.e. Zydus France was operatingboth for the retail and wholesale segment and for thepurposes of TNMM, which method was adopted asmost appropriate method for benchmarking thetransaction, a broad functional comparison needed tobe done. The Tribunal did not agree with the contentionof the assessee. As per the tribunal, the dissimilarityin the function of the comparables rejected by the DRPwith the tested parties has wide ramifications. Even ifagreeing that the tested party was operating both inthe wholesale and retail segments, as per Tribunal,the comparables rejected by the DRP were noted tobe operating only in the retail segment. There was nodoubt that the functions, risks and margins ofthe retailsegment and wholesale segment are markedlydifferent. In the light of the same the functionaldissimilarity noted between the comparables rejectedby the DRP and the tested party as per tribunal couldnot be ignored, even taking a broader view. Therefore,the rejection of four comparables by the DRP wasconfirmed by the tribunal.Continued from page 1086 Tribunal News

Ahmedabad Chartered Accountant Journal March, 2026 1105TMWhat the Current Global Situation Means for the GulfEconomy and Future OpportunitiesIn recent weeks, global media has once again turnedits attention toward the Middle East due to risinggeopolitical tensions and shifting global alliances.Such developments naturally raise questions amonginvestors, businesses, and policymakers: Willgeopolitical uncertainty slow economic momentumin the Gulf, or will the region once againdemonstrate its ability to adapt and grow?If we examine the historical trajectory of the Gulfeconomies, the answer becomes clearer. The regionhas repeatedly shown that while geopolitical eventsmay create short-term volatility, the long-term economicdirection of the Gulf remains remarkably resilient.Countries such as United Arab Emirates, Saudi Arabia,Qatar, and Bahrain have spent the last two decadesbuilding diversified economic models designed towithstand precisely such global disruptions.What we are witnessing today is not merely a reactionto global events, but the outcome of deliberatestrategic planning.The Gulf’s Transformation: From Oil Dependenceto Global Economic PlatformsHistorically, the Gulf region was perceived primarilyas an energy hub. However, over the past twentyyears, governments across the region haveaggressively pursued economic diversification.Cities like Dubai and Abu Dhabi have evolved intoglobal commercial hubs driven by finance, logistics,tourism, technology, and international trade. Massiveinvestments in ports, airports, digital infrastructure, andfree economic zones have created a businessecosystem that attracts multinational companies,entrepreneurs, and investors from around the world.Similarly, under initiatives such as Saudi Vision 2030,Saudi Arabia is undergoing one of the most ambitiouseconomic transformation programs in the world. Largescale projects in tourism, infrastructure, renewableenergy, and technology are redefining the Kingdom’seconomic landscape.These initiatives are gradually repositioning the Gulfnot only as a regional economic center but as a globalgateway connecting Asia, Europe, and Africa.The Strategic Geography AdvantageOne of the Gulf’s most underestimated strengths is itsgeographic positioning.Within an eight-hour flight radius from the Gulf lie someof the world’s largest and fastest-growing markets,including India, Southeast Asia, Europe, and Africa.This connectivity has allowed cities like Dubai toemerge as major global logistics and aviation hubs.Major airlines, ports, and shipping corridors passingthrough the region make the Gulf a critical node in globaltrade networks. As supply chains continue to evolvein response to geopolitical shifts, this geographicadvantage is becoming increasingly valuable.For multinational corporations, operating from the Gulfoften allows access to multiple markets from a singlestrategic location.The Rise of the Gulf as a Global Capital DestinationAnother major shift taking place in the region is thegrowing inflow of global capital.Over the past few years, the Gulf particularly the UAEhas become a preferred destination for family offices,global entrepreneurs, high-net-worth individuals,and investment funds.CA. Sanskar [email protected]

1106 Ahmedabad Chartered Accountant Journal March, 2026TMSeveral factors are contributing to this trend:• Competitive tax regimes• Stable regulatory frameworks• Residency programs such as long-term visas andinvestor visas• World-class infrastructure and lifestyle ecosystemsCities like Dubai are increasingly positioningthemselves alongside global financial centers suchas London, Singapore and Hong Kong.This trend has been further accelerated by globalwealth migration patterns, where investors andentrepreneurs are seeking jurisdictions that offer bothstability and global market access.Real Estate as a Reflection of Global Capital FlowsOne sector that often mirrors global investor sentimenttoward the Gulf is real estate. Over the past few years,property markets particularly in Dubai and Abu Dhabihave experienced significant growth driven byinternational demand.Unlike many global cities where real estate cycles arelargely domestic, the Gulf property market is deeplyinfluenced by cross-border capital flows. Investorsfrom Europe, Asia, Africa and India are activelyparticipating in the region’s real estate market.Several structural factors continue to support this trend.First, the region offers a globally competitive taxenvironment, with no personal income tax in countriessuch as the United Arab Emirates. This makes propertyinvestment particularly attractive for internationalinvestors seeking both asset diversification and rentalincome.Second, rental yields in cities like Dubai often rangebetween 6% and 8%, which compares favorably withmany mature global property markets where yieldsare significantly lower.Third, regulatory frameworks governing propertyownership have evolved substantially over the pastdecade. Investor protections, escrow mechanisms foroffplan projects, and clearer ownership structures haveincreased transparency and confidence amonginternational buyers.Another important driver has been the introduction oflong-term residency programs such as the GoldenVisa, which has strengthened the link between realestate investment and long-term residency planningfor entrepreneurs, professionals and high networthindividuals.However, it is equally important to view the real estatesector with a balanced perspective. Property marketsare naturally cyclical and periods of rapid growth areoften followed by phases of consolidation. Investorstherefore need to adopt a long-term approach ratherthan viewing the market purely through a short-termspeculative lens.The real question may not be whether Dubai realestate will remain attractive but how much globalcapital it will continue to attract in the coming years.From a broader economic standpoint, the strength ofthe real estate market reflects a deeper reality: theGulf is increasingly becoming a destination for globaltalent, businesses, and capital, all of which ultimatelytranslate into sustained demand for housing,commercial space and infrastructure.India and the Gulf: A Strengthening EconomicCorridorOne of the most significant developments in recentyears has been the strengthening economicpartnership between India and the Gulf region.The signing of the Comprehensive EconomicPartnership Agreement (CEPA) India-UAE hassignificantly enhanced bilateral trade, investment flows,and economic cooperation between the two countries.For Indian businesses, the Gulf increasingly servesas a gateway to international markets. Indiancompanies are expanding operations in sectors suchas logistics, fintech, healthcare, construction andtechnology within the Gulf region.At the same time, sovereign funds and investors fromthe Gulf are actively exploring opportunities in India’sinfrastructure, renewable energy, Gift City, technology,and startup ecosystems.This mutually beneficial relationship is likely to deepenfurther over the coming decade.GULF InsightsContinued to page 1115

Ahmedabad Chartered Accountant Journal March, 2026 1107TM[I] IMPORTANT CASE LAWS:[1] Issue:Perishable are canuts detained in transit to bereleased on bank guarantee pendingadjudication: HCCase Law:Venkateshwara Traders v. Union of India [2026]182 taxmann.com 889 (Raj.)Facts:The petitioner traded arecanuts against a purchaseorder from a registered dealer and issued a taxinvoice with IGST charged. During transit, theconsignment was intercepted and confiscationproceedings were initiated under Section 129 ofthe CGST Act, confirming confiscation andimposing penalty and fine. The petitioner filedwritten replies but no personal appearance wasrecorded. The confiscation order was challengedthrough writ petitions, contending that the goodswere perishable and their continued detentionwould cause irreversible loss. The matter wasaccordingly placed before the High Court.Held:The High Court held that the are canuts fell withinthe definition of perishable goods and, therefore,their detention required special consideration. TheCourt directed release of the goods on furnishinga bank guarantee or solvency security equal tothe invoice value, observing that the disputeinvolved factual examination and interim releasewould not prejudice the adjudication of theconfiscation proceedings. The Court clarified thatthe release was without prejudice to the merits ofthe demand, which would be independentlyexamined by the authorities during adjudicationCA. Vishrut R. [email protected]. Bihari B. [email protected] and VAT Judgmentsand Updatesunder Section 129 read with Section 130 of theCGST Act. The writ petitions were disposedaccordingly.[2] Issue:Composite SCN for multiple years under sec. 73held without jurisdiction; assessment quashed: HCCase Law:Tvl. Shot X Retail (P.) Ltd v. STO (ST) [2026] 182taxmann.com 771 (Mad.)Facts:The petitioner challenged the assessment orderpassed by the State Tax Officer pursuant to a singlecomposite show cause notice (SCN) coveringmultiple financial years. The impugned orderadjudicated demands in one consolidatedproceeding. The petitioner relied on an earliercommon order on an identical issue andcontended that clubbing of adjudications formultiple financial years into one show cause noticeand one assessment order was impermissible inlaw and rendered the assessment withoutjurisdiction. The matter was accordingly placedbefore the High Court.Held:The High Court held that the impugned ordercovered more than one financial year. Suchclubbing was without jurisdiction andimpermissible in law under Section 73 of the CGSTAct. The Court held that the composite assessmentcould not be sustained and that the impugnedassessment and consequential orders were to bequashed. The Court set aside the composite SCNwith liberty to initiate separate proceedings foreach financial year.

1108 Ahmedabad Chartered Accountant Journal March, 2026TMGST and VAT - Judgements and Updates[3] Issue:Assessee directed to pursue appellate remedyagainst direct confiscation without penaltydetermination: HCCase Law:Vivek Verma v. State of Gujarat [2026] 182taxmann.com 884 (Guj.)Facts:The petitioner, a cotton yarn trader, arrangedtransportation of goods but the vehicle wasdiverted due to traffic and intercepted byauthorities, the driver produced the invoice, einvoice, transport receipt, and e-way bills, anddetention proceedings were initiated by issuingMOV-1 and MOV-2, with verification confirming thatthe documents tallied with the invoices, yet theproper officer issued MOV-4 and MOV-6 and,without determining penalty during detention,proceeded directly to confiscation by issuingMOV-10 and MOV-11, prompting the petitioner tochallenge the action by writ. The matter wasaccordingly placed before the High Court.Held:The High Court held that when a statutory appellateremedy is available under Section 107 of the CGSTAct, the writ petition ought not to be entertained inthe absence of exceptional circumstances. TheCourt observed that the grievance raised pertainedto the propriety of invoking confiscationproceedings under Section 130 and the allegednon-compliance with procedural requirements. Itwas held that the determination of whether issuanceof MOV-10 and MOV-11 without prior penaltydetermination was justified. Accordingly, withoutexpressing any view on the merits of thecontroversy, the petition was disposed, with allcontentions kept open for consideration anddecision on merits by the appellate authority.[4] Issue:Portal-only SCN service and no hearing violatednatural justice; orders set aside and matterremanded: HCCase Law:Cmkr Ganesan and Bros v. Dy. Commissioner(CT)GST, Madurai [2026] 183 taxmann.com 275(Mad.)Facts:The petitioner received a show cause notice(SCN) and all subsequent communications onlyby uploading the same on the GST portal. Thepetitioner submitted that they were unaware ofthe portal uploads and therefore did not file anyreply. In the absence of a response to theuploaded notices, the Assessing Officer passedex parte assessment orders confirming theproposals and subsequently rejected thestatutory appeal on the ground of limitation. Itwas contended that the service exclusivelythrough the portal, without personal delivery oralternative statutory modes, violated theprinciples of natural justice. The matter wasaccordingly placed before the High Court.Held:The High Court held that although portal uploadconstitutes sufficient service in law, in the absenceof any response, the Assessing Officer ought tohave attempted other statutory modes of serviceunder Section 169 of the CGST Act, preferably byRegistered Post with Acknowledgement Due(RPAD), to ensure effective notice. The Courtobserved that confining compliance to portaluploads amounted to empty formalities and pavedthe way for multiplicity of litigations. Accordingly,the assessment order and the order rejecting theappeal were set aside, and the matter wasremanded for fresh adjudication subject topayment of 25% of the disputed tax amount.[5] Issue:Rejection of delayed appeal without hearingunsustainable; matter remitted forreconsideration: HCCase Law:Watech RO Systems Pvt. Ltd. v. State of Gujarat[2026] 182 taxmann.com 885 (Guj.)

Ahmedabad Chartered Accountant Journal March, 2026 1109TMFacts:The petitioner, a GST-registered manufacturer andtrader of RO systems and parts, was issued ashow cause notice (SCN) alleging excess ITCavailed in delayed GSTR-3B returns. It furnishedexplanations pursuant to the SCN; however, thejurisdictional officer under CGST disallowed majorITC on timing and matching grounds and issued ademand order in Form DRC-07 for tax, interest,and penalty. It preferred to appeal under Section107 of the CGST Act, with an 18-day delay. Theappeal was rejected as time-barred withoutconsidering the plea for condonation of delay oraffording an opportunity to be heard. The matterwas accordingly placed before the High Court.Held:The High Court held that the impugned orderrejecting the appeal without considering the pleaof delay and without affording an opportunity ofhearing was unsustainable in view of theprinciples of natural justice. The Court recordedthe statement made on behalf of the revenuethat the impugned order would be withdrawn anda fresh order would be passed after granting thepetitioner an opportunity to be heard. It wasobserved that the Appellate Authority underSection 107 of the CGST Act and the Gujarat GSTAct is required to deal with all contentions raisedand pass a reasoned order. The directions wereissued to pass a fresh order after due opportunityof hearing and after addressing all contentionsraised by the petitioner, and to complete theexercise within twelve weeks.[6] Issue:Cancellation of registration does not absolvetaxpayer of any existing liability: HCCase Law:Manikanta Electronics Services Center v. State ofTelangana [2026] 183 taxmann.com 314(Telangana)Facts:The petitioner filed a writ challenging the actionsof the Department of Commercial Tax. It hadvoluntarily applied for cancellation of its GSTregistration, indicating zero tax liability. Thejurisdictional officer under CGST issued a showcause notice (SCN) alleging that it had failed todeclare the correct input and output taxes in itsreturns and had not filed any reply to the SCN.The Assessing Authority proceeded to imposetax and penalty. It also filed an application forrectification under Section 161 of the CGST Act,which was rejected on the ground that it wasseeking re-examination of the entire subjectmatter. The matter was accordingly placed beforethe High Court.Held:The High Court held that cancellation of GSTregistration does not absolve a taxpayer of anyexisting liability. The Court observed that theAssessing Authority was correct in proceeding toimpose tax and penalty where it had failed torespond to the SCN. It was further held that therejection of the rectification application underSection 161 was valid, as it sought re-examinationbeyond the statutory scope. The Court relied onthe provisions of Section 29, read with Section161 of the CGST Act, and Rule 142(2)/142(3) ofthe CGST Act, concluding that the impugned orderdid not suffer from any infirmity warrantinginterference.(SOURCES: CORPORATE PROFESSIONAL TODAY)GST and VAT - Judgements and Updates

1110 Ahmedabad Chartered Accountant Journal March, 2026TMGST Implications on Maintenance Charges, WaterSupply and Corpus Fund Collections by ResidentWelfare Association: Karnataka AAR – The Case ofM/s. Godrej United Owner’s AssociationAdvance Ruling No. KAR/ADRG 13/2026 dated11.02.2026Brief Facts:The Applicant, M/s. Godrej United Owner’sAssociation, is a registered apartment owners’association responsible for managing andmaintaining the common areas and facilities of aresidential complex. The association undertakesvarious activities including housekeeping,security, repair and maintenance of infrastructure,and provision of utilities such as water to itsmembers. For this purpose, it collects periodiccontributions from members, generally calculatedon a per square foot basis and invoiced on aquarterly or monthly cycle.In addition to regular maintenance charges, theApplicant also collects amounts towards corpusfund or sinking fund to meet future contingenciessuch as major repairs, replacement of capitalassets, and long-term upkeep of the property.Further, the association proposed to restructureits billing mechanism by separately invoicing watercharges recovered at actuals and sought to treatsuch supply as exempt. The Applicant alsoreceives voluntary contributions from membersfor cultural and social events organized within thesociety.In light of the above operational and accountingpractices, the Applicant approached the Authorityfor Advance Ruling seeking clarity on various GSTimplications, particularly concerning theapplicability of exemption thresholds, classificationof water supply, taxability and timing of corpusfund collections, and treatment of voluntarycontributions.Question:The primary issue before the Authority was todetermine the correct interpretation andapplicability of GST provisions in relation to varioustypes of receipts collected by the Applicant fromits members. Specifically, the questions revolvedaround whether the exemption of ` 7,500 permember is to be computed on a monthly or annualbasis, whether supply of water qualifies as anindependent exempt supply, and whether corpusor sinking fund collections are taxable at the timeof receipt or at the time of actual utilization.Additionally, the Applicant sought clarification onwhether GST liability can be aligned withaccounting principles such as depreciation oncapital assets, and whether corpus fundcontributions can be considered for exemptionunder the same threshold applicable tomaintenance charges. Another important issueraised was whether voluntary contributionscollected for cultural events would fall within theambit of “supply” and attract GST.Findings and Arguments:The Authority, upon examination of Entry No. 77 ofNotification No. 12/2017Central Tax (Rate), heldthat the exemption of ` 7,500 per member is clearlyintended to apply on a monthly basis. Itemphasized that the wording of the notification isunambiguous and does not permit aggregationof the exemption limit on an annual basis.Accordingly, even if invoices are raised quarterlyor annually, the exemption must still be computedwith reference to each month independently.CA. Monish S. [email protected]

Ahmedabad Chartered Accountant Journal March, 2026 1111TMWith regard to water charges, the Authority rejectedthe Applicant’s contention that supply of waterconstitutes an independent exempt supply ofgoods. It observed that the association is notengaged in trading of water as a standaloneactivity. Instead, water is supplied as part of theoverall maintenance and upkeep servicesprovided to members. Applying the principle ofcomposite supply under Section 2(30) of the CGSTAct, the Authority held that maintenance servicesconstitute the principal supply and water supplyis merely incidental. Therefore, the entiretransaction is taxable as a supply of services.On the issue of corpus/sinking fund, the Authorityundertook a detailed analysis of the definition of“consideration” under Section 2(31) and concludedthat such collections are not in the nature ofdeposits but represent advance consideration forfuture supply of services. The Authoritydistinguished between a refundable deposit andan advance, noting that corpus funds are collectedwith the intention of being utilized for future servicessuch as repairs and capital expenditure.Accordingly, such amounts attract GST at the timeof receipt in terms of the time of supply provisionsunder Section 13.The Applicant’s argument that GST liability shouldbe linked to depreciation charged in the booksof accounts was categorically rejected. TheAuthority clarified that GST is a statutory levygoverned entirely by the provisions of the CGSTAct, and accounting practices cannot determinetaxability or timing of supply. Depreciation ismerely an accounting concept and does notrepresent actual supply of services under GSTlaw.In relation to exemption applicability, the Authoritydrew a clear distinction between recurringmaintenance charges and corpus/sinking fundcollections. It observed that maintenancecharges relate to regular, ongoing services,whereas corpus funds are collected for nonrecurring, long-term capital purposes. Relyingon CBIC Circular No. 109/28/2019GST, theAuthority held that the exemption under Entry No.77 is restricted only to monthly maintenancecontributions and does not extend to corpus orsinking fund collections. It further clarified thatsuch corpus contributions need not be clubbedwith maintenance charges for determiningeligibility for exemption.Regarding voluntary contributions collected forcultural events, the Authority held that such receiptsdo not qualify as consideration since they aremade without any obligation or quid pro quo. Itwas observed that there is no enforceable supplyof goods or services in return for suchcontributions. Therefore, such voluntary donationsfall outside the scope of “supply” under Section 7and are not liable to GST.Ruling:The Authority conclusively ruled that the exemptionof ` 7,500 per member is applicable strictly on amonthly basis and cannot be aggregated annually,irrespective of the invoicing pattern adopted bythe association.It was held that supply of water by the associationis not an independent exempt supply but formspart of a composite supply of maintenanceservices, and therefore the entire considerationis liable to GST.The Authority ruled that corpus or sinking fundcollections are taxable as advance considerationfor future supply of services and GST is payableat the time of receipt of such amounts.It was further held that accounting treatment,including depreciation on capital assets, has nobearing on GST liability, and taxability must bedetermined strictly in accordance with statutoryprovisions.The Authority clarified that corpus/sinking fundcontributions are distinct from maintenancecharges, are not eligible for exemption under EntryNo. 77 and are not required to be clubbed withmaintenance charges for the purpose ofdetermining the exemption threshold.Advance Ruling under GST

1112 Ahmedabad Chartered Accountant Journal March, 2026TMFinally, it was held that voluntary contributionsreceived from members for cultural or socialevents, being without consideration, do notconstitute supply and are therefore not liable toGST.Comments:This ruling provides important clarity on the GSTtreatment of various types of receipts collectedby residential welfare associations and reinforcesthe need for strict compliance with statutoryprovisions. The interpretation of the monthlyexemption limit removes ambiguity and ensuresuniform application across different invoicingpractices.The decision highlights the importance of theconcept of composite supply in GST, preventingartificial segregation of bundled services to claimexemptions. Associations must therefore carefullyevaluate the nature of their supplies beforeclassifying them as exempt.The ruling also has significant financial implications,particularly with respect to corpus fund collections,as it mandates upfront GST liability on amountscollected for future use. This may impact cash flowsand necessitate careful financial planning byassociations.Further, the clear distinction drawn betweenmaintenance charges and corpus funds providesvaluable guidance for structuring membercontributions and ensures that exemption benefitsare not misapplied.Advance Ruling under GSTThe recognition of voluntary contributions as nontaxable reinforces the principle that GST appliesonly where there is a clear element ofconsideration linked to a supply, therebysafeguarding genuine donations from taximplications.Conclusion:The Karnataka AAR, through this ruling, hascomprehensively addressed multiple GST issuesfaced by apartment owners’ associations andestablished clear principles regarding exemption limits,composite supply and taxability of advance receipts.The ruling underscores that GST liability is determinedbased on the true nature of transactions and statutoryprovisions, rather than accounting treatment or internalstructuring. It serves as a crucial reference point forRWAs and similar entities in ensuring accurate taxcompliance and structuring their financial andoperational practices in line with GST law.

Ahmedabad Chartered Accountant Journal March, 2026 1113TMIND AS InsightsCase Scenario :-Chennai Super Giants Ltd. acquires and sells players’registrations on a regular basis. For a player to playfor its team, Chennai Super Giants Ltd. must purchaseregistrations for that player. These player registrationsare contractual obligations between the player and thecompany. The costs of acquiring player registrationsinclude transfer fees, league levy fees, and playeragents’ fees incurred by the club.At the end of each season, which happens to also bethe reporting period end for Chennai Super Giants Ltd.,the club reviews its contracts with the players andmakes decisions as to whether they wish to sell/transferany players’ registrations. The company activelymarkets these registrations by circulating with otherclubs a list of players’ registrations and their estimatedselling price. Players’ registrations are also sold duringthe season, often with performance conditionsattached. In some cases, it becomes clear that a playerwill not play for the club again because of, for example,a player sustaining a career threatening injury or beingpermanently removed from the playing squad for anyother reason.During the year, Chennai Super Giants Ltd. andRajasthan Kings Ltd., have agreed to exchange theplayers of each company. In this agreement, certainplaying registrations of Rajasthan Kings Ltd. wereacquired by Chennai Super Giants Ltd. at the cost of` 280 crores and the playing registrations of someplayers were sold to Rajasthan Kings Ltd. after theyear end, for total proceeds, net of associated costs,of ` 150 crores. These registrations had a net bookvalue of ` 90 crores.Considering the above exchange transaction as twoseparate independent purchase and sale of playingregistrations, Chennai Super Giants Ltd. seeks youradvice on the treatment of the acquisition, extension,review and sale of players’ registrations in thecircumstances outlined above.Solution :-AcquisitionAs per para 18 of Ind AS 38 Intangible Assets, therecognition of an item as an intangible asset requiresan entity to demonstrate that the item meets:(a) the definition of an intangible asset; and(b) the recognition criteriaThis requirement applies to costs incurred initially toacquire or internally generate an intangible asset andthose incurred subsequently to add to, replace partof, or service it.As per para 21, an intangible asset shall be recognisedif, and only if:(a) it is probable that the expected future economicbenefits that are attributable to the asset will flowto the entity; and(b) the cost of the asset can be measured reliably.As per para 22, an entity shall assess the probabilityof expected future economic benefits usingreasonable and supportable assumptions thatrepresent management’s best estimate of the set ofeconomic conditions that will exist over the useful lifeof the asset.As per para 23, an entity uses judgement to assessthe degree of certainty attached to the flow of futureeconomic benefits that are attributable to the use ofthe asset on the basis of the evidence available at thetime of initial recognition, giving greater weight toexternal evidence.CA. Niket Rasania [email protected]

1114 Ahmedabad Chartered Accountant Journal March, 2026TMAs per para 25, normally, the price an entity pays toacquire separately an intangible asset will reflectexpectations about the probability that the expectedfuture economic benefits embodied in the asset willflow to the entity. In other words, the entity expectsthere to be an inflow of economic benefits, even ifthere is uncertainty about the timing or the amount ofthe inflow. Therefore, the probability recognition criterionin paragraph 21(a) is always considered to be satisfiedfor separately acquired intangible assets.As per para 26, in addition, the cost of a separatelyacquired intangible asset can usually be measuredreliably. This is particularly so when the purchaseconsideration is in the form of cash or other monetaryassets.As per para 27, the cost of a separately acquiredintangible asset comprises:(a) its purchase price, including import duties and nonrefundable purchase taxes, after deducting tradediscounts and rebates; and(b) any directly attributable cost of preparing the assetfor its intended use.Accordingly, the costs associated with the acquisitionof players’ registrations would need to be capitalizedwhich would be the amount of cash or cash equivalentpaid or the fair value of other consideration given toacquire such registrations i.e. ` 280 crores. In line withInd AS 38 Intangible Assets, costs would include transferfees, league levy fees and player agents’ fees incurredby the club, along with other directly attributable costs,if any. Amounts capitalized would be fully amortizedover the period covered by the player’s contract.Sale of registrationsAs per para 6 of Ind AS 105 Non-Current Assets Heldfor Sale and Discontinued Operations,an entity shallclassify a non-current asset (or disposal group) as heldfor sale if its carrying amount will be recoveredprincipally through a sale transaction rather than throughcontinuing use.As per para 7, for this to be the case, the asset (ordisposal group) must be available for immediate salein its present condition subject only to terms that areusual and customary for sales of such assets (orInd AS Insightsdisposal groups) and its sale must be highly probable.Thus, an asset (or disposal group) cannot be classifiedas a non-current asset (or disposal group) held forsale, if the entity intends to sell it in a distant future.As per para 8, for the sale to be highly probable, theappropriate level of management must be committedto a plan to sell the asset (or disposal group), and anactive programme to locate a buyer and complete theplan must have been initiated. Further, the asset (ordisposal group) must be actively marketed for sale ata price that is reasonable in relation to its current fairvalue. In addition, the sale should be expected toqualify for recognition as a completed sale within oneyear from the date of classification, except as permittedbypara 9, and actions required to complete the planshould indicate that it is unlikely that significant changesto the plan will be made or that the plan will bewithdrawn. The probability of shareholders’ approval(if required in the jurisdiction) should be consideredas part of the assessment of whether the sale is highlyprobable.In the given case, it would appear that the managementis committed to a plan to sell the registration, that theasset is available for immediate sale and that an activeplan to locate a buyer is already in place by circulatingclubs. Ind AS 105 stipulates that it should be unlikelythat the plan to sell the registrations would besignificantly changed or withdrawn. To fulfil thisrequirement, it would be prudent if onlythoseregistrations are classified as held for sale whereunconditional offers have been received prior to thereporting date.Once the conditions for classifying assets as held forsale in accordance with Ind AS 105 have been fulfilled,the player registrations would be stated at lower ofcarrying amount and fair value less costs to sell, withthe carrying amount stated in accordance with Ind AS38 prior to application of Ind AS 105, subject toimpairment, if any.Profits and losses on sale of players’ registrationswould be computed by deducting the carrying amountof the players’ registrations from the fair value of theconsideration receivable, net of transaction costs. Incase a portion of the consideration is receivable onthe occurrence of a future performance condition (i.e.

Ahmedabad Chartered Accountant Journal March, 2026 1115TMcontingent consideration), this amount would berecognized in the Statement of Profit and Loss onlywhen the conditions are met.The players registrations disposed of, subsequent tothe year end, for ` 150 crores, having a correspondingbook value of ` 90 crores would be disclosed as anon-adjusting event in accordance with Ind AS 10Events after the Reporting Period.Impairment reviewInd AS 36 Impairment of Assets requires companiesto annually test their assets for impairment. An asset issaid to be impaired if the carrying amount of the assetexceeds its recoverable amount. The recoverableamount is higher of the asset’s fair value less costs tosell and its value in use (which is the present value offuture cash flows expected to arise from the use of theasset). In the given scenario, it is not easy to determinethe value in use of any player in isolation as that playercannot generate cash flows on his/her own unless viaa sale transaction or an insurance recovery. Whilst anyindividual player cannot really be separated from thesingle cash-generating unit (CGU), being a cricket teamor a hockey team in the instant case, there may becertain instances where a player is taken out of theCGU when it becomes clear that he/she will not playfor the club again. If such circumstances arise, thecarrying amount of the player should be assessedagainst the best estimate of the player’s fair value lessany costs to sell and an impairment charge should berecognized in the profit or loss, which reflects any lossarising.Ind AS InsightsMy Practical Gulf Insights for Businesses andProfessionalsBeyond macroeconomic trends, the evolving Gulflandscape presents several practical opportunities forbusinesses and professionals:1. Expansion of Global Business HubsThe Gulf continues to attract multinationalcorporations establishing regional headquartersand shared service centers.2. Growth of Financial and Advisory ServicesAs cross-border investments increase, demandfor legal, tax, and financial advisory services isexpanding significantly.3. Startup and Innovation EcosystemsSeveral Gulf countries are investing heavily instartup ecosystems, fintech innovation, and digitalinfrastructure.4. Infrastructure and Sustainability ProjectsLarge-scale projects in renewable energy, smartcities, and logistics are creating new opportunitiesfor international collaboration.For people working in international taxation, corporatestructuring, investment advisory, or crossborder trade,the Gulf is becoming an increasingly importantjurisdiction to understand.Looking AheadThe current geopolitical environment will undoubtedlycontinue to influence global markets. However, thebroader trajectory of the Gulf economies suggests along-term strategy focused on resilience, diversificationand global integration.Rather than being defined by short-term disruptions,the Gulf is steadily evolving into a critical globaleconomic corridor means one that connects capital,commerce, and talent across continents.For investors, businesses, and professionalsobserving global economic shifts, the key questionmay not simply be whether the Gulf will remain relevant.The more important question is how influential theregion may become in shaping the futurearchitecture of global trade and investment.Continued from page 1106 GULF Insights

1116 Ahmedabad Chartered Accountant Journal March, 2026TMMCA Updates:1. Companies Compliance Facilitation Scheme,2026:Through this CCFS, 2026, in order to give a onetime opportunity to allow companies to file theirdocuments related to Annual Return and FinancialStatements in the MCA-21 registry, or to file fordormancy/closure, the MCA has decided tocondone the delay in filing the above-mentioneddocuments with the Registrar, wherever applicable.CA. Naveen [email protected] are the saliant features of this scheme:Sr. Salient Features DetailsNo.1 Validity Period of the CCFS, 2026 15.04.2026 to 15.07.20262 Eligibility All companies except for the following:a) companies against which action of final notice for strikingoff the name u/s 248 of the Act (previously section 560of Companies Act, 1956) has already been initiated bythe Registrar;b) companies which have filed application for striking offtheir name from the register of companies;c) companies which have filed for obtaining Dormant Statusunder section 455 of the Act before the inception of thisScheme;d) companies which have been dissolved pursuant to ascheme of amalgamation under the Act;e) vanishing companies;3 Manner of payment of normal fees 1) For all Companies: On filing of the each of the relevantand additional fees, as the case may e-forms:be, under the Scheme a) Normal fees:As prescribed under the rules.b) Additional fees:10% of the additional fees asprescribed under the rules.2) Fees for e-form MSC-1 (For obtaining the DormantStatus):50% of the normal filing fees applicable.3) Fees for e-form STK-2 (For Striking off the name ofthe Company):25% of the normal filing fees applicable.

Ahmedabad Chartered Accountant Journal March, 2026 1117TMSr. Salient Features DetailsNo.4 Relevant e-forms for CCFS, 2026 1) Any one or more of the e-forms MGT-7, MGT-7A, ÀÎÑ4, ÀÎC-4 CFS, AOC-4 NBFC (Ind AS), AOC-4 CFS NBFC(Ind AS), AOC4 (XBRL), ADT-1, FC-3, FC-4 (the Formsnotified under the Companies Act, 2013 and the Rulesthereunder), and2) Any one or more of the e-forms Form 20B, Form 21A,Form 23AC, Form 23ACA, Form 23AC-XBRL, Form23ACA-XBRL, Form 66 and Form 23B (the Formsnotified under the Companies Act, 1956 and the Rulesthereunder);5 Immunity pursuant to the filing of relevant 1) The relevant proceedings under section 92 or sectione-forms 137 shall be concluded and no penalty shall beleviable, if the filings are made under the scheme:i. prior to issuance of the notice by the adjudicatingofficer; orii. within thirty days of the issuance of the notice bythe adjudicating officer.2) In respect of e-forms ADT-1, FC-3, FC-4, Form 20B,Form 21A, Form 23AC, Form 23ACA, Form 23ACXBRL, Form 23ACA-XBRL, Form 66 and Form 23B, theimmunity would be granted against any prospectivepenal action in respect of delayed filings of such forms,if: i. the said forms are filed under the Scheme; and ii.no prosecution has been filed, or adjudicationproceedings have been initiated by issuance of a showcause notice, for such default, before the filing of suchforms under the Scheme.Corporate Law UpdateFor detailed text of the circular, please refer to:https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=NjM4NTY0NzE1&docCategory=Circulars&type=open[F.No. Policy-02/2/2020-CL-V dated 24.02.2026]IFSC Updates:2. Requirement for a Finance Company/ FinanceUnit (FC/FU) to have a website/webpage:With a view to ensure transparency forstakeholders and enhance consumer awareness,IFSCA hereby mandates that all FCs / FUsproviding services to clients other than their groupentities, shall maintain a dedicated website/ webpage.Such a website/ webpage should, inter-alia,display the following information about the FC/FU:a) Brief overview of GIFT IFSC ecosystem;b) Certificate of Registration clearly reflecting theRegistration number and permitted activities;c) A list of products and services offered, withdetailed description of each such offering;d) Grievance redressal procedure and contactdetails of the Grievance redressal officer;

1118 Ahmedabad Chartered Accountant Journal March, 2026TMe) Name, designation and contact details of keymanagerial personnel in IFSC (such as Headof FC/FU, CEO, CFO, Compliance officer,Principal officer, as applicable).[File No. IFSCA-FCR/4/2026-Bankingdated03.02.2026]3. Directions for obtaining International SecuritiesIdentification Numbers (ISINs) from arecognised depository in IFSC:In order to develop a holistic regulatory andsupervisory ecosystem, the IFSCA has directedthat:a. All Units in the IFSC intending to dematerialisesecurities or other permitted financial productsshall obtain ISINs from a depositoryrecognised by the IFSCA.b. The Units in IFSC which have already obtainedISINs from the domestic depositories in Indiafor the securities or other permitted financialproducts, shall obtain new ISINs from adepository recognised by the IFSCA, byAugust 31, 2026.For removal of doubt, it is hereby clarified that anissuer may continue to availthe services ofInternational Central Securities Depositories forissuance andlisting of debt securities and otherfinancial products, as permitted undertheInternational Financial Services CentresAuthority (Listing) Regulations, 2024.[F. No. IFSCA-PLNP/85/2025-Capital Marketsdated 06.02.2026]4. Unified Registration for multiple Capital MarketActivities under the IFSCA (Capital MarketIntermediaries) Regulations, 2025 (Master Key):The following type of capital market intermediaries,permitted under the CMI Regulations, may applyfor a Master Key for undertaking multiple capitalmarket activities viz.:1) Broker Dealer;2) Clearing Member;3) Credit Rating Agency;4) Custodian;5) Debenture Trustee;6) Depository Participant;7) Distributor;8) ESG Ratings and Data Products Provider;9) Investment Adviser;10) Investment Banker;11) Research Entity.W.e.f. 16.02.2026, an application shall be filedthrough the Single Window IT System (SWIT) portalof IFSCA for undertaking one or multiple activitiespermitted under the CMI Regulations and theapplicant shall pay the requisite fee for each ofthe activities it has applied for.[F. No. IFSCA-PLNP/80/2024-Capital Marketsdated13.02.2026]IBBI Updates:5. Insolvency and Bankruptcy Board of India(Voluntary Liquidation Process) (Amendment)Regulations, 2026:Vide these amendment regulations, in theInsolvency and Bankruptcy Board of India(Voluntary Liquidation Process) Regulations, 2017,in regulation 3, in sub-regulation (1), in clause (b),after sub-clause (ii), the following explanation shallbe inserted, namely:-“Explanation –For the purposes of this regulation,a registered valuer shall prepare the valuationreport and maintain such documentation as perthe format notified by the Board through circular.”[F. No. IBBI/2025-26/GN/REG137 dated25.02.2026]Corporate Law Update

Ahmedabad Chartered Accountant Journal March, 2026 1119TMRERA and Lease Transactions : Navigating theRegulatory Grey ZoneI. The Macro Economic Context : Setting the StageWithin this ecosystem, the Real Estate (Regulationand Development) Act, 2016 (“RERA Act” or “theAct”) serves as the principal statute governing theconduct of promoters, protecting the rights ofallottees, and prescribing the adjudicatoryframework for dispute resolution. Enacted afternearly a decade of legislative deliberation, theAct has progressively transformed the regulatorylandscape — though not without generatinginterpretive controversies that continue to test theingenuity of legal, financial, and complianceprofessionals alike.One such controversy — arguably the mostconsequential yet least definitively resolved — isthe applicability of the RERA Act to leasetransactions. The answer to this question hassignificant ramifications: it determines whether apromoter must register a project, whether anallottee has access to RERA’s dispute resolutionmechanism, whether interest on delayedpossession is claimable, and — critically for taxpractitioners — how the transaction is characterisedfor stamp duty, income tax, and GST purposes.Yet, neither the Act itself, nor the Rules framedthereunder, nor a centralised regulatory directive,has furnished a conclusive and nationally uniformanswer.II. Lease as a mode of Transfer : The TPAFrameworkAny analysis of RERA’s applicability to leasetransactions must commence with anunderstanding of what a “lease” constitutes underthe principal statute governing property transfers— The Transfer of Property Act, 1882 (“TPA”).Section 105 of the TPA defines a lease ofimmovable property as:“A transfer of a right to enjoy such property,made for a certain time, express or implied,or in perpetuity, in consideration of a pricepaid or promised, or of money, a share ofcrops, service or any other thing of value, tobe rendered periodically or on specifiedoccasions to the transferor by the transferee,who accepts the transfer on such terms.”Three structural elements are essential toconstituting a valid lease: (i) transfer of the right ofenjoyment — not ownership — of the property;(ii) a defined or indefinite term; and (iii)consideration rendered periodically or onspecified occasions. It is this third element — theperiodicity of consideration — that provides theclassical point of distinction between a lease andan outright sale. A sale contemplates a lump-sumtransfer of ownership; a lease contemplatesrecurring consideration for a reversionary right ofenjoyment.However, commercial practice has progressivelyblurred this distinction, particularly throughstructures such as long-term leases with upfrontpremiums, 99-year or 999-year lease deeds, andlease-cum-sale constructs. It is precisely thisblurring that has drawn the RERA Act into theequation.III. RERA Act : Decoding the Definitional ProvisionsThe RERA Act does not define “lease.” It doesnot explicitly state that lease transactions arecovered — nor does it state the contrary. Theambiguity is embedded within the definitionssection of the Act itself.CA. Manan Doshi [email protected] Corner

1120 Ahmedabad Chartered Accountant Journal March, 2026TM3.1 The Definition of ‘Allottee’ — Section 2(d)Section 2(d) defines an ‘allottee’ as:“…the person to whom a plot, apartment orbuilding, as the case may be, has beenallotted, sold (whether as freehold orleasehold) or otherwise transferred by thepromoter…but does not include a person towhom such plot, apartment or building, as thecase may be, is given on rent.”The phrase “freehold or leasehold” is the statutoryhook upon which the entire RERA-leaseapplicability debate turns. Its presence indicatesParliament did not intend to wholly excludeleasehold transfers from the Act’s regulatory ambit.Simultaneously, the express exclusion of personswho receive property “on rent” creates adistinguishing boundary — though the Act offersno guidance on where exactly the line between a“leasehold allotment” and a “rental arrangement”is drawn.3.2 The Definition of ‘Real Estate Project’ — Section2(zn)Section 2(zn) defines a real estate project asdevelopment of land or buildings:“…for the purpose of selling all or some ofthe said apartments or plots or building, asthe case may be…”The phrase “for the purpose of selling” is equallycritical. A literal reading would confine the Act’sapplicability to projects where the developer’sintent is to sell — potentially reading out projectswhere the developer intends to retain ownershipand lease units to occupants. This is the preciseargument advanced by several promoters beforeRERA Authorities to resist project registration.3.3 The Interpretive TensionA conjoint reading of Sections 2(d) and 2(zn)generates the following circularity:If the project’s purpose is “selling” under Section2(zn), and the developer’s intent is exclusively tolease, is the project a “real estate project” withinthe Act at all?If it is not a real estate project, can the lesseequalify as an “allottee” under Section 2(d)?Conversely, if the lessee is recognised as an“allottee” (by virtue of the “freehold or leasehold”language in Section 2(d)), does that automaticallybring the project within the scope of Section 2(zn)?This statutory circularity reflects the inherentcomplexity of attempting to regulate a spectrumof transactions — from short-term rentals to nearpermanent leasehold grants — within a statuteprimarily designed with outright sale transactionsin mind. It is this very circularity that has generateddivergence across State RERA Authorities andjudicial forums.IV. Judicial Discourse : The Evolving Jurisprudence4.1 Lavasa Corporation Ltd. V. Jitendra JagdishTulsiani & Ors.Bombay High Court | (2018) SCC Online Bom 2074| (2018) 5 AIR Bom R 553This is the foundational precedent on RERA’sapplicability to long-term lease transactions.Facts: Three residential apartments were bookedunder agreements styled as “Agreement to Lease”for 999 years, with an upfront lump-sum premiumequivalent to approximately 80% of the prevailingmarket value and a nominal annual rent of Re. 1/-. Possession was delayed by five years. TheAdjudicating Authority declined jurisdiction,holding the transaction to be outside RERA’sscope. MREAT reversed the order; LavasaCorporation appealed to the Bombay High Court.Findings: The High Court applied a purposive andholistic interpretive approach, holding that thenomenclature of a document is not determinativeof its legal character. The document must be readin its entirety to ascertain the true intent of theparties and the nature of the rights beingtransferred. The court found that the substance ofthe 999-year lease was indistinguishable from anoutright sale: the tenure approximated perpetuity,the consideration was structured as a lump sum,and the nominal Re. 1/- annual rent was a legalformality with no genuine commercial content.GujRERA Corner

Ahmedabad Chartered Accountant Journal March, 2026 1121TMApplying Heydon’s Rule (the mischief rule), thecourt held that permitting developers to circumventRERA’s consumer protection provisions bylabelling their transactions as “leases” wouldfundamentally defeat the Act’s purpose.What this ruling does not settle: The court’sreasoning was calibrated specifically to the factsbefore it — a 999-year term and a lump-sumpremium approximating full sale value. The rulingdoes not articulate a universal principle coveringall lease transactions. Its application to shortertenure leases or those with genuine periodic rentalstructures is therefore not automatic and remainsopen to contestation.4.2 Nagpur Integrated Township Pvt. Ltd. V. SujitChandankhede & Ors.Maharashtra Real Estate Appellate Tribunal(MREAT) | Complaint No. CC004000000020110MREAT’s ruling in this case extended the Lavasaprinciples to address a further dimension: theposition of a developer who holds leasehold landand launches a project thereon. The Tribunal heldthat the nature of the underlying land title — whetherfreehold or leasehold — has no bearing on RERAobligations. A lessee of land, if authorised undera development agreement, qualifies as a“promoter” under Section 2(zk) of the Act.The Tribunal also held that a lease for a longerperiod is legally and economically comparableto a lease in perpetuity, amounting to alienation.Transactions involving short-term rental paymentswere, however, explicitly carved out as fallingoutside the Act.What remains unresolved: MREAT did not definewith precision what constitutes a “longer period.”The absence of any quantitative tenure thresholdmeans that leases in the middle range —commercially common tenures of 30 to 60 years— remain in a zone of genuine legal uncertainty.4.3 Marg Properties Limited v. T.M. ArunachalamTamil Nadu Real Estate Appellate Tribunal(TNREAT) | Appeal No. 2 of 2018The TNREAT ruling involved a project situatedwithin a Special Economic Zone, where thepromoter contended RERA was inapplicablebecause the transaction was structured as a leasedeed. The Tribunal undertook a clause-by-clauseexamination and found that the document providedfor no periodic rental payment and the entireconsideration was paid as a one-time lump sumequivalent to the prevailing sale price. On thesefindings, the Tribunal held the document — thoughstyled a “Lease Deed” — to be, in substance, aSale Deed, and directed the promoter to registerthe project under RERA.TNREAT further observed that the definition of“allottee” under Section 2(d) extends to leaseholdrights on a long-term basis such as a 99-year termwith a renewal for another 99 years.Interpretive concern: The ruling raises a questionthat neither the statute nor the judgment explicitlyaddresses — at what point does a long-term leasetransform into an allotment for RERA purposes?The 999-year and 99+99-year cases appear settledby the weight of authority. Commercial leases ofshorter tenures remain in genuinely contestedterritory.4.4 M/s. Newtech Promoters and Developers Pvt.Ltd. V. State of U.P. &Ors.Supreme Court of India | Civil Appeal Nos. 6745–6749 of 2021 | Decided: November 11, 2021While this Supreme Court ruling does not directlyaddress lease transactions, it establishes theinterpretive compass by which the RERA Act mustbe read. The court confirmed that the Act appliesretroactively to all ongoing projects, that the RERAAuthority possesses full remedial jurisdictionincluding the power to direct refunds with interest,and — most importantly — that every interpretiveambiguity must be resolved in favour of theallottee, given the Act’s consumer-protectiveorientation.This purposive interpretive instruction has directimplications for the RERA-lease debate: wherethe substance of a leasehold arrangement iseconomically equivalent to that of an allotment,GujRERA Corner

1122 Ahmedabad Chartered Accountant Journal March, 2026TMthe purposive reading mandated by NewtechPromoters reinforces the extension of RERAcoverage to such transactions.4.5 Imperia Structures Ltd. V. Anil Patni&Anr.Supreme Court of India | (2020) 10 SCC 783 |Decided: November 2, 2020The Supreme Court held in this ruling that anallottee’s right to seek refund with interest underSection 18 of the RERA Act is unqualified: once apromoter fails to hand over possession by theagreed date, the allottee’s entitlement crystallisesautomatically. The court also confirmed that RERAremedies and Consumer Protection Act remediesare concurrent.For practitioners, the downstream implication issignificant: if a lessee under a long-termarrangement is judicially held to be an “allottee,”that lessee will be entitled to invoke Section 18on delayed possession — a right with materialfinancial consequences for the lessor-promoter.The exposure arising from this, in projects wherelease terms have not been carefully calibrated,can be substantial.V. Regulatory Positions : The State-LevelDivergence5.1 Maharashtra RERA (MahaRERA)MahaRERA has issued a clarification through itsAdditional FAQs (IT Application) — the most explicitofficial position presently available:Long-term leases fall within Section 2(d) and areregulated under the Act.Leave and licence arrangements and short-termleases not exceeding five years are explicitlyexcluded.The five-year threshold provides a workingbenchmark for Maharashtra-based transactions.However, it has no statutory basis in the centralAct and is not binding on other State RERAAuthorities. More importantly, it does not addressleases between five years and, say, 30 years —a gap that remains substantively unresolved evenwithin Maharashtra’s own regulatory framework.5.2 Delhi RERADelhi RERA has, through statements reported bynews agencies, clarified that commercial projects— office and retail alike — fall within RERA’spurview, and that mandatory registration is requiredeven where the developer’s stated intention isexclusively to lease the area.However, Delhi RERA has not formalised thisposition through any official circular, notification,or FAQ on its portal. For practitioners, this createsa significant evidential gap: there is no officialdocument that can be cited in legal proceedings,and the position remains vulnerable to challenge.5.3 Other StatesThe RERA Authorities in most other States havenot publicly articulated any formal position. Theapplicable framework therefore differs State byState — and within a single State, may vary fromone RERA Authority’s case-by-case assessmentto another. This regulatory fragmentationintroduces transaction risk into institutionallysignificant deals, particularly in the commercialoffice, warehousing, and retail sectors where longterm leasing is the predominant mode ofoccupancy.VI. The Enduring Grey ZonesNotwithstanding the judicial and regulatoryguidance reviewed above, the following questionsremain substantively unresolved:The tenure threshold question: No statute, rule, orauthoritative judgment has drawn a categorical linespecifying the minimum lease tenure at whichRERA applicability is triggered. 999 years and99+99 years are covered; five years and below(in Maharashtra) are excluded. Leases betweenthese poles — 15, 30, 49-year tenures — remainfact-specific and forum-dependent.Commercial lease transactions: Judicialpronouncements to date have largely arisen inthe context of residential or residential-equivalenttransactions. Whether the same principles applywith equal force to bona fide commercial leases— where parties are sophisticated, negotiate atGujRERA Corner

Ahmedabad Chartered Accountant Journal March, 2026 1123TMarm’s length, and operate under institutionalframeworks — is a question the courts have notdirectly confronted.The SEZ dimension: Projects within SpecialEconomic Zones operate under a distinct legalregime. The interplay between the SEZ Act, theRERA Act, and lease obligations within an SEZremains underexplored in the judicial record.Pre-lease agreements: The rulings in Lavasa andNagpur Integrated Township extended RERA to“agreements to lease.” The extent to which suchpre-execution agreements attract the full RERAcompliance framework — mandatory registration,Section 18 obligations — is a question deservingmore detailed judicial examination.Renewals and aggregate tenure: If a short-termlease is renewed multiple times, does theaggregate tenure eventually trigger RERAapplicability? If a lease deed contains built-inrenewal options that extend the effective termbeyond the de facto safe harbour, does therenewal period count? These questions have notbeen addressed by any regulatory authority.VII. Compliance Dimensions : The Fiscal StatuteInterfaceThe RERA characterisation of a lease transactiondoes not operate in isolation. It has directimplications across multiple fiscal statutes, andpractitioners must examine all dimensionsconcurrently.Income Tax: Under Section 2(47) of the IncomeTax Act, 1961, a long-term lease economicallyequivalent to a sale may attract capital gains tax inthe hands of the lessor. The Supreme Court’sobservation in R.K. Palshikar (HUF) v. CIT, M.P.[(1988) 172 ITR 311] that a 99-year lease constitutesa transfer of capital assets remains instructive.Simultaneously, the periodic rent received on anylease is assessable under the head “income fromhouse property.”GST: The upfront premium received on a longterm lease may constitute a taxable supply ofservice under the CGST Act, 2017. However, theGST treatment of leases involving developmentrights, SEZ premises, or affordable housinginvolves additional exemptions and conditions thatmust be independently verified on the facts of eachtransaction.Stamp Duty: In several States, stamp duty on longterm lease deeds is computed at ratesapproaching those applicable to sale deeds —reflecting the legislative recognition that long-termleases constitute substantive transfers. The stampduty implication is, therefore, a significant costelement that must be factored into the commercialstructuring of any long-term lease transaction.The simultaneous operation of RERA, GST,income tax, and stamp duty on the sametransaction — without consolidated or harmonisedguidance across these regimes — represents asignificant compliance burden and a genuinesource of professional risk.VIII.The Way ForwardThe following regulatory and legislativeinterventions are, in the author’s view, necessary:1. Statutory amendment to incorporate a cleardefinitional distinction between “leaseholdallotment” (covered) and “rental arrangement”(excluded), with objective criteria — includingtenure thresholds and consideration structure— to assist classification.2. MoHUA model circular to be adopted by allState RERA Authorities, establishing minimumuniform standards and eliminating the currentState-level fragmentation.3. Explicit carve-out for institutional commercialleasing transactions — at arm’s length,between sophisticated parties, with genuineperiodic market-rate rental structures — toprevent the over-regulation of a commerciallyvital segment.4. Joint guidance by MoHUA and the GSTCouncil on the RERA-GST interface for longterm lease transactions, to ensure coherentand non-contradictory complianceobligations.GujRERA CornerContinued to page 1131

1124 Ahmedabad Chartered Accountant Journal March, 2026TMSummary:India’s economic momentum remains robust with realGDP growth estimated at 7.4% for FY26 and investmentlevels steady at 30% of GDP. While the January IndiaUS Strategic Trade Reset significantly reduced tariffsfrom 50% to 18%, a new conflict between Iran and aUS-Israel coalition has introduced fresh globalchallenges, including the closure of the Strait ofHormuz and crude oil prices exceeding $110 perbarrel.In the secondary markets, benchmark indicesmoved into a consolidation phase following the recordhighs of 2025. The BSE Sensex closed Februaryat 81,287.19 (-1.19%), while the Nifty 50 endedat 25,178.65 (-0.56%), as investors adopted a cautiousstance amid global uncertainties and sectoral rotation.Despite near-term volatility driven by geopolitical risksand oil price fluctuations, the medium-term outlookremains constructive, supported by stable domesticmacro fundamentals, easing inflation trends and anexpected 12–13% earnings growth trajectory.Key M&A and PE activity highlights include AlkemLaboratories acquiring a 55% stake in Swissbased Occlutech for ` 1,074 crore to enter theadvanced MedTech segment, and a ChrysCapital-ledconsortium acquiring a 70.68% stake in Novartis Indiafor ` 1,446 crore, marking the Swiss major’s exit fromits listed Indian arm.Economic Update:CA. Karan [email protected] war between Iran and the US-Israel coalition thatbegan in late February 2026 has quickly changed theglobal economic landscape. While the trade dealbetween India and the US in January provided somerelief, this new conflict has created a massive wave offresh challenges for world markets.The conflict has led to the effective closure of the Straitof Hormuz. This is a vital waterway that handles 20percent of the world’s oil and 25 percent of its liquefiednatural gas. Because of the fighting, shippingcompanies are avoiding the Middle East and takingthe long route around Africa. This adds about two weeksto travel times and has caused freight costs to jumpby more than 300 percent in some areas. Insurancepremiums for ships have also risen by 40 percent,making global trade more expensive for everyone.Global energy prices are also rising, with crude oilstaying well above 110 dollars per barrel.Impact for IndiaThe Indian government has used emergencypowers to redirect oil. They are prioritizing gasfor homes and hospitals while cutting supply tosome factories to manage the shortage.In a surprising move, the US granted India a 30 daywaiver in March to buy Russian oil that was stuck atsea. This was done to help India keep its energyprices stable while the Middle East is in chaos.Exports could see a loss of 5,000 crore rupees.Raw material costs for medicines have surged by30 to 100 percent because shipping from China isdelayed.Nearly 12 percent of all Indian clothing exports goto the Middle East. With shops closing in thosecountries, Indian textile hubs are seeing a sharpdrop in new orders.Prices for cars and home appliances like ACs arerising by 5 to 6 percent because the plastic and

Ahmedabad Chartered Accountant Journal March, 2026 1125TMCapital Marketchemicals used to make them are derived fromexpensive crude oil.India imports 60 percent of its Urea from the Gulf.This supply is now at risk right before the criticalKharif sowing season.India has an 87 percent dependency on the MiddleEast for Methanol and Polymers. Plastic and paintraw material costs have risen by 25 percent.Secondary Market:The BSE Sensex closed February at 81,287.19,while the Nifty 50 ended the month at 25,178.65,reflecting marginal declines of 1.19% and 0.56%,respectively, compared to January. Following thesharp correction seen earlier in the year, marketstraded in a relatively range-bound manner asinvestors assessed the Union Budgetannouncements and evolving globalmacroeconomic cues.· Foreign Portfolio Investors (FPIs) turned net buyerswith Rs. 22,615 crore inflows in February, reversingRs. 35,962 crore outflows in January, although flowsremained volatile with intermittent heavy selling suchas Rs. 3,466 crore on February 26.Domestic Institutional Investors (DIIs) remainedstrong supporters of the market, recording Rs.26,130 crore net inflows during the month, helpingoffset FPI volatility and limiting downside pressure.Brent Crude stayed elevated above $71 per barrel,raising concerns around inflation, fiscal stress, andpressure on India’s external balance.The Indian Rupee hovered near Rs. 91/USD, whilerelatively elevated equity valuations kept foreigninvestors cautious despite the return of inflows.Market performance remained highly divergent,with the Nifty IT index declining sharply by 20% inthe last month following the Anthropic shock, whileover a one-year period the Nifty 50 delivered 13%returns, with six stocks gaining over 50% (led byShriram Finance at 92%), even as five stocksdeclined more than 20%, highlighting a strongstock-picker’s market.Market sentiment remained cautious, reflected innegative breadth (2,683 stocks declined vs 1,875advanced) and a rise in India VIX by 3.42% to13.51, indicating heightened volatility and investornervousness.Equity Markets Jan-26 Feb-26 % Change BSE Sensex 82,269.78 81,287.19 -1.19% Nifty 50 25,320.65 25,178.65 -0.56% BSE 500 36,185.03 36,332.56 0.41% BSE Healthcare 41,347.72 43,917.47 6.21% BSE IT 36,615.48 29,754.94 -18.74% BSE FMCG 18,735.15 18,739.32 0.02% BSE Metal 38,845.17 40,424.48 4.07%

1126 Ahmedabad Chartered Accountant Journal March, 2026TMCapital MarketPrimary Market Update:There were 07 main board IPOs in February 2026including Fractal Analytics Limited, Aye FinanceLimited, Gaudium IVF & Women Health Limited, ShreeRam Twistex Limited, Cleanmax Enviro EnergySolutions Limited, PNGS Rewa Diamonds JewelleryLimited and Omnitech Engineering Limited, against 03main board IPOs in January 2026. There were 05 SMEIPOs in February 2026 as compared to 10 SME IPOsin January 2026.Fractal Analytics Limited:About the Founded in 2000, Fractal AnalyticsCompany Limited is an India-based artificialintelligence and advanced analyticscompany that provides enterprise AIsolutions, data engineering and decisionintelligence services to globalcorporations. The company operatesacross industries including consumergoods, healthcare, retail, financialservices and technology. Fractal servesseveral global Fortune 500 clientsincluding Microsoft, Apple, Nvidia,Alphabet and Amazon. The companyfocuses on building AI platforms andproducts such as Fractal Alpha, alongwith generative AI and machine learningsolutions that help enterprises improvedecision-making and operationalefficiency. In FY25, Fractal Analyticsreported operating revenue ofapproximately Rs. 2,816 crore and PATof Rs. 220 crore.Funds The IPO proceeds from the fresh issueUtilization will primarily be utilized towardsrepayment of debt at its US subsidiary,investment in research and developmentfor AI and generative AI initiatives,expansion of office infrastructure in India,strengthening sales and marketing effortsunder its Fractal Alpha platform, andpotential acquisitions along with generalcorporate purposesAnchor The company raised approximately Rs.Investors 1,248 crore from anchor investors prior& Selling to the IPO. The anchor book sawShare- participation from several institutionalholders investors including SBI Small Cap Fund,Life Insurance Corporation of India (LIC),ICICI Prudential, Motilal Oswal, HDFCLife, Goldman Sachs and MorganStanley. The Offer for Sale included earlyinvestors such as TPG Fett Holdings andQuinag Bidco (Apax Partners)IPO Per- The Rs. 2,834 crore IPO comprised aformance fresh issue of approximately Rs. 1,023crore and an offer for sale of around Rs.1,810 crore. The issue was priced in theband of Rs. 857 – Rs. 900 per share.The IPO was subscribed approximately2.7 times, driven largely by strongdemand from Qualified InstitutionalBuyers (QIBs). Shares of FractalAnalytics Limited listed on theexchanges at around Rs. 872 on NSEand Rs. 868 on BSE, reflecting a modestdiscount to the upper issue price.Funds Mobilization by Corporates (Rs. In Crore)Particulars Dec-25 Jan-26I. Equity Issues 71,001 40,833 a. IPOs (i+ii) 23,553 5,533i. Main Board 21,858 4,765ii. SME Platform 1,695 768 b. FPOs – – c. Equity Rights Issues 26,963 561 d. QIPs/IPPs 11,085 4,150 e. Preferential Allotments 9,400 30,589II. Debt Issues 74,164 55,304 a. Debt Public Issues 580 1,601 b. Private Placement of Debt 73,584 53,703III. REITs/ InvITs 4,750 1,900 a. REITs 3,500 0 b. InvITs 1,250 1,900Total Funds Mobilized (I+II+III) 1,49,916 98,037Mergers and Acquisitions (M&A) Key Deal:M&A: Alkem Laboratories Unit to buy up to 55% Stakein Switzerland’s Occlutech for $118 million (INR 1,074Crores) in an all cash deal marking it’s entry intoAdvanced Cardiovascular devices.

Ahmedabad Chartered Accountant Journal March, 2026 1127TMTransaction:• Alkem Laboratories, through its wholly-ownedsubsidiary Alkem MedTech, has entered into adefinitive agreement to acquire an approximate 55%stake in Occlutech Holding AG, a global leader instructural heart disease devices.• Funded by an all-cash transaction entirelythrough internal accruals, the total consideration forthe acquisition is EUR 99.4 million (Approx. INR1,074 crore), valuing the entire company at an equityvalue of approximately $207.4 million USD.About Occlutech:• Founded in 2003 and headquartered in Switzerland,Occlutech is the second-largest company inEurope in the minimally invasive cardiac implantssegment and the third-largest globally deriving 85%of revenue from Europe and the US.• A global biotech company focused on minimallyinvasive cardiac implant solutions, it operatesmanufacturing and R&D facilities in Germany andTurkey, a global distribution hub in Sweden, andclinical operations in the US.About Alkem Laboratories:• Established in 1973, Alkem Laboratories is one ofIndia’s largest pharmaceutical companies,consistently ranking among the top five in thedomestic market.• The company has a strong presence across keytherapeutic segments while aggressivelyexpanding its portfolio in chronic areas and operates19+ manufacturing facilities, exporting formulationsand APIs to over 40 countries, including the USand Europe.Rationale:• Occlutech has established capabilities in structuralheart devices, a highly-experienced managementteam, world class R&D and manufacturing facilities,and strong quality and regulatory framework, whichprovides a strong foundation for Alkem MedTechto begin its journey in the cardiology segment andsupport sustainable growth.Capital Market• It gives Alkem entry into high-barrier, high-valuemarkets such as the US, Japan, Germany and otherwestern European markets.• In calendar year 2025, Occlutech recorded arevenue of EUR 49.4 million (unaudited),representing a 15.7% CAGR over the past threeyears.• Occlutech deal implies enterprise value of $215Million at 3.7x EV/Sales and 86.1x EV/EBITDA(CY25), indicating a premium for global MedTechexposure and dollar-denominated revenues.• The Indian MedTech industry is a rapidly growingvalued at approximately $12–$15 billion in 2023–24 and projected to reach $50 billion by 2030,growing at a 16%–20% CAGR.• With over 4,000 health-tech startups, the focus ison AI, IoT and affordable, portable diagnostics.Further, driven by “Make in India,” the sector isshifting from import dependence (currently 80%–85% imports) toward manufacturing, supported by3D printing, AI and specialized medical deviceparksPrivate Equity (PE) Key Deal:PE:Novartis Exits India Arm; ChrysCapital-LedConsortium Acquires 70.68% Stake for Rs. 1,446CroreTransaction:• Swiss pharmaceutical company Novartis AG willdivest its 70.68% stake in Novartis India Limited toa consortium led by ChrysCapital, along withWaveRise Investments and Two Infinity Partners,marking a change-in-control and its exit from theIndia-listed business.• The acquisition has triggered a mandatory openoffer for an additional 26% stake at Rs. 860.64 pershare, potentially taking the total deal value closeto Rs. 2,000 crore, subject to regulatory approvalsand closing conditions.• Under the agreed structure:One acquirer will buy 56.45% of the company atRs 860.64 per share.

1128 Ahmedabad Chartered Accountant Journal March, 2026TMThe remaining 14.23% will be acquired at Rs701.25 per share by the other two entities.About Novartis India Limited:• Novartis India Limited, headquartered in Mumbai,is the listed Indian subsidiary of Swisspharmaceutical major Novartis AG.• The company markets established legacy brandsacross therapeutic areas such as painmanagement, calcium supplementation, andgynecology, including well-known products likeVoveran, Calcium Sandoz, and Methergine.About Chrys Capital:• ChrysCapital is one of India’s leading private equityfirms, managing around $5 billion in assets acrossmultiple sectors.• The firm has a strong healthcare investment trackrecord, with notable investments including MankindPharma, Eris Lifesciences, and IntasPharmaceuticals.Rationale:• The divestment forms part of Novartis AG’s strategyto focus exclusively on innovative medicines andsimplify its global structure.• The move represents ChrysCapital’s first majorityacquisition in the Indian pharmaceutical space.• For ChrysCapital and MEMG, the deal providesownership of iconic brands like Voveran andCalcium Sandoz, which continue to generate strong,steady cash flows and possess a massivedistribution reach across India.• While Novartis AG exits the listed entity (NIL), itmaintains a significant presence in India through itsseparate, unlisted arm (Novartis Healthcare PrivateLimited), which includes its massive corporatecenter in Hyderabad and its innovative medicinesbusiness.• For FY2024–25, NIL demonstrated a high-marginprofile with a Profit After Tax (PAT) of Rs. 100.90crore on a total income of Rs. 356.27 crore;however, recent Q3 FY26 results showed a 36.8%decline in net profit (Rs. 6.09 crore) and a 7.6%revenue drop (Rs. 85.90 crore), reflecting shortterm transitional volatility during the parentcompany’s divestment process.• Novartis India is valued at an enterprise value of ¹1,445–1,500 crore (about 12.0x–12.5x FY2024–25EBITDA).• The transaction signals a broader trend of globalpharmaceutical majors reassessing their Indiastrategies, even as private equity firms deepen theirexposure to the domestic healthcare sector.• The Indian pharmaceutical industry, valued atapproximately US$55-60 billion in 2025, is theworld’s third-largest by volume, projecting growthto US$130 billion by 2030• The industry is moving from “Make in India” to“Develop in India,” focusing on complex generics,specialty medicines, and patent-protected productsrather than just low-cost generic drugs.Acknowledgements: RBI Bulletin(www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE(www.nseindia.com), BSE (www.bseindia.com), IBEF(https://www.ibef.org)Capital Market

Ahmedabad Chartered Accountant Journal March, 2026 1129TMFINANCIAL INSTRUMENTS [ IND-AS 109] -Annual Report 2024-25Reliance Industries LimitedPurchase and sale of Financial Assets are recognisedusing trade date accounting. Trade receivables thatdo not contain a significant financing component aremeasured at transaction price,The Company has elected to account for its investmentsin subsidiaries, associates and joint venture at costless impairment loss (if any),All other equity investments are measured at fair value,with value changes recognised in Statement of Profitand Loss, except for those equity investments for whichthe Company has elected to present the value changesin ‘Other Comprehensive Income’. However, dividendon such equity investments are recognised inStatement of Profit and loss when the Company’s rightto receive payment is established. The investmentsin preference shares with the right to surplus assetswhich are in nature of equity in accordance with Ind AS32 are treated as separate category of investment andmeasured at Fair Value Through Other ComprehensiveIncome (FVTOCI). Other Financial Assets are generallymeasured at Fair Value Through Profit or Loss (FVTPL)except where the Company, based on the businessmodel objectives, measures these at Amortised Costor Fair Value Through Other Comprehensive Income(FVTOCI).The Company uses ‘Expected Credit Loss’ (ECL)model, for evaluating impairment of Financial Assetsother than those measured at FVTPL. Expected CreditLosses are measured through a loss allowance at anamount equal to:• The 12-months expected credit losses (expectedcredit losses that result from those default eventson the financial instrument that are possible within12 months after the reporting date); or• Full lifetime expected credit losses (expected creditlosses that result from all possible default eventsover the life of the financial instrument).For Trade Receivables, the Company applies‘simplified approach’ which requires expected lifetimelosses to be recognised from initial recognition of thereceivables.The Company uses historical default rates to determineimpairment loss on the portfolio of trade receivables.At every reporting date these historical default ratesare reviewed and changes in the forward-lookingestimates are analysed. For other assets, the Companyuses 12 month ECL to provide for impairment losswhere there is no significant increase in credit risk. Ifthere is significant increase in credit risk full lifetimeECL is used.TATA Motors LimitedA financial instrument is any contract that gives rise toa financial asset of one entity and a financial liability orequity instrument of another entity. Trade receivablesand debt securities issued are initially recognised whenthey are originated. All other financial instruments areinitially recognised when the Company becomes aparty to the contractual provisions of the instrument.Initial measurementFinancial instruments are initially recognised at its fairvalue. Transaction costs directly attributable to theacquisition or issue of financial instruments arerecognised in determining the carrying amount, if it isnot classified as at fair value through profit or loss.However, trade receivables that do not contain asignificant financing component are measured attransaction price. Transaction costs of financialCA. Pamil H. [email protected] PublishedAccounts

1130 Ahmedabad Chartered Accountant Journal March, 2026TMinstruments carried at fair value through profit or lossare expensed in profit or loss Subsequently, financialinstruments are measured according to the categoryin which they are classified.Classification and measurement – financial assetsClassification of financial assets is based on thebusiness model in which the instruments are held aswell as the characteristics of their contractual cash flows.The business model is based on management’sintentions and past pattern of transactions. Financialassets with embedded derivatives are considered intheir entirety when determining whether their cash flowsare solely payment of principal and interest. TheCompany reclassifies financial assets when and onlywhen its business model for managing those assetschanges.Financial assets are classified into three categoriesFinancial assets at amortised cost:Financial assets having contractual terms that give riseon specified dates to cash flows that are solelypayments of principal and interest on the principaloutstanding and that are held within a business modelwhose objective is to hold such assets in order tocollect such contractual cash flows are classified inthis category. Subsequently, these are measured atamortised cost using the effective interest method lessany impairment losses.Equity investments at fair value through othercomprehensive income (Equity instruments)These include financial assets that are equityinstruments and are designated as such upon initialrecognition irrevocably. Subsequently, these aremeasured at fair value and changes therein arerecognised directly in other comprehensive income,net of applicable income taxes. Dividends from theseequity investments are recognised in the consolidatedstatement of Profit and Loss when the right to receivepayment has been established. When the equityinvestment is derecognised, the cumulative gain orloss in equity is transferred to retained earnings.Financial assets at fair value through othercomprehensive income (Debt instruments):Financial assets having contractual terms that give riseon specified dates, to cash flows that are solelypayments of principal and interest on the principaloutstanding and that are held within a business modelwhose objective is to hold such assets in order tocollect such contractual cash flows as well as to sellthe financial asset, are classified in this category.Subsequently, these are measured at fair value, withunrealised gains or losses being recognised in othercomprehensive income apart from any expected creditlosses or foreign exchange gains or losses, whichare recognised in profit or loss.Financial assets at fair value through profit and loss:Financial assets are measured at fair value throughprofit and loss unless it is measured at amortised costor at fair value through other comprehensive incomeon initial recognition.The transaction costs directly attributable to theacquisition of financial assets and liabilities at fair valuethrough profit and loss are immediately recognised inprofit and lossIndian Oil Corporation LimitedInitial recognition and measurementAll Financial Assets are recognized initially at fair valueplus,in the case of financial assets not recorded at fairvalue through profit or loss, transaction cost that areattributable to the acquisition of the Financial Asset.However, trade receivables that do not contain asignificant financing component are measured attransaction price. Transaction costs directly attributableto the acquisition of financial assets measured at fairvalue through profit or loss are recognized immediatelyin the Statement of Profit and Loss.Subsequent measurementFor the purpose of subsequent measurement,Financial Assets are classified in four categories:1) Financial Assets at amortised cost2) Debt Instruments at fair value through OtherComprehensive Income (FVTOCI)3) Equity Instruments at fair value through OtherComprehensive Income (FVTOCI)From Published Accounts

Ahmedabad Chartered Accountant Journal March, 2026 1131TM4) Financial Assets and derivatives at fair valuethrough profit or loss (FVTPL)Financial Assets at Amortised CostA Financial Asset is measured at the amortised cost ifboth the following conditions are met:a) The asset is held within a business model whoseobjective is to hold assets for collectingcontractual cash flows, andb) Contractual terms of the asset give rise onspecified dates to cash flows that are solelypayments of principal and interest (SPPI) on theprincipal amount outstanding. Financial Assets aresubsequently measured at amortised cost usingthe effective interest rate (EIR) method. Amortisedcost is calculated by taking into accountFrom Published Accountsanydiscount or premium on acquisition and feesor cost thatare an integral part of the EIR. The EIRamortisation isincluded in finance income in theprofit or loss. The losses arising from impairmentare recognized in the profit or loss. Apart from thesame, any income or expense arising fromremeasurement of financial assets measured atamortised cost, in accordance with Ind AS 109, isrecognized in the Statement of Profit and Loss.This category generally applies to trade and otherreceivables.Continued from page 1123IX. ConclusionThe RERA Act’s applicability to lease transactionsoccupies the uncomfortable middle ground of anincompletely resolved legal debate. The availablejudicial and regulatory guidance supports thebroad proposition that transactions styled asleases but substantively equivalent to allotments— particularly those involving long tenures andlump-sum upfront consideration — will attractRERA’s coverage. Beyond that broad proposition,significant grey zones persist, and the law offerslimited guidance.For the practising Chartered Accountant, thistranslates into a professional obligation to lookbeyond the label attached to a transaction andexamine its economic substance, considerationstructure, tenure, and the nature of rights beingtransferred — before advising on RERAcompliance or non-compliance. An error in thisassessment — in either direction — carriesmaterial regulatory, financial, and reputationalconsequences for the client.The sector cannot sustain its growth trajectory in astate of regulatory opacity on a question asfoundational as this. Clarity — through legislativeamendment or centralised regulatory guidance —is not merely desirable; it is overdue.GujRERA Corner

1132 Ahmedabad Chartered Accountant Journal March, 2026TMCA. Kunal A. [email protected] the Government CA. Ashwin H. [email protected](Feedback has been received that thisconfirmation should be mandatory only incases where supplies pertaining to previous taxperiods have been reported in the current taxperiod. However, the confirmation is presentlybeing required in all cases, including where theliability relates only to the current tax period.The feedback is acknowledged by GSTN andthe same is under resolution. Meanwhile,taxpayers are requested to kindly open the “TaxLiability Breakup, As Applicable” tab on thepayment page and click “SAVE” within the tabfor filing during the current reform cycle.Thereafter, filing of Form GSTR-3B can becompleted normally.)2) Advisory on the Payment of pre-deposit whilefiling of appeal before First Appellate authority(GST updates Mar 14th, 2026)Sometimes taxpayers voluntarily pay someamount during the investigation stage using FormGST DRC-03. Later, when the taxpayer wants tofile an appeal application against the demandorder issued after the investigation, they arerequired to pay a pre-deposit to file the appeal.However, many taxpayers complain that the GSTportal still asks them to pay the pre-deposit evenwhen they have already paid more than therequired amount through Form GST DRC-03.When a demand order (for example, Form GSTDRC-07) is issued to a taxpayer, a Demand ID iscreated in Part II of the Electronic Liability Registeron the GST portal. If the taxpayer makes a paymentusing the “Payment towards Demand” functionalityon the portal, the amount is automatically adjustedagainst that Demand ID in the register. However,payments made through Form GST DRC-03 areGOODS AND SERVICE TAX1) Advisory regarding confirmation of “Tax LiabilityBreakup, As Applicable” in GSTR-3B-reg(GST updates Mar 16th, 2026)1. In terms of the provisions of Section 50 of theCentral Goods and Services Tax (CGST) Act,2017, interest is payable where the tax liabilitypertaining to a previous tax period isdischarged in a subsequent tax period.Accordingly, the tab “Tax Liability Breakup,As Applicable” in Form GSTR-3B is meant tocapture the tax liability relating to supplies ofprevious tax periods which are beingreported and discharged in the current taxperiod.2. From the February 2026 tax period onwards,the GST Portal auto-populates the “Tax LiabilityBreakup, As Applicable” in GSTR-3B on thebasis of the document dates of suppliesreported in GSTR-1 / GSTR-1A / IFF, wheresuch supplies pertain to any previous taxperiod but the corresponding tax liability isbeing discharged in the current period’sGSTR-3B.3. Accordingly, from the February 2026 taxperiod, after offsetting the liability in GSTR3B, taxpayers are required to click on the “TaxLiability Breakup, As Applicable” tab availableon the payment page and confirm the breakupof tax liability by clicking the “SAVE” buttonor edit the same, if required.4. Once the breakup of tax liability is confirmedand saved, the taxpayer will be able toproceed with filing Form GSTR-3B using EVCor DSC.

Ahmedabad Chartered Accountant Journal March, 2026 1133TMnot linked to the Demand ID and therefore do notappear as adjusted against the demand in theliability register.While filing an appeal by Taxpayer, GST Systemauto calculates the required amount to be paid(i.e. Admitted amount + Pre-Deposit) and checkswhether any amount is already paid by thetaxpayer against the demand ID in the said liabilityregister.a. If such amount is equal to or greater than therequired amount, then the portal will allow thetaxpayer to file appeal without prompting forfurther payment. Portal will show the belowmessage, if required amount is already paidthe taxpayer.If such amount is lesser than the required amount,then Portal mandates the taxpayer for the paymentof Balance payable.Pre-deposit Payment made through DRC 03: 4.As explained earlier, any payment made throughForm GST DRC-03 is not automatically recognizedby the GST system against any specific DemandID. Therefore, such payments are not consideredby the system while calculating the pre-depositamount required for filing an appeal. To ensurethat the payment made through Form GST DRC03 is counted against a particular demand order,the payment must be linked with the respectiveDemand ID by filing Form GST DRC-03A on theGST portal. Filing Form GST DRC-03A enablesthe payment made through DRC-03 to be mappedto the corresponding demand order, and the entryfor the same becomes available in the ElectronicLiability Register.Consequently, at the time of filing an appeal, thesystem will recognize the payment (made throughDRC 03 and adjusted using DRC 03A) and will notrequire the taxpayer to pay any additional amountagain while calculating the mandatory pre-deposit.Accordingly, taxpayers are advised to file FormGST DRC-03A to link payments made through FormGST DRC-03 with the relevant demand order beforefiling an appeal, wherever applicable. To knowhow to link any demand ID with a particular FormGST DRC 03, through the Form GST DRC 03A,Please refer the manual available on GST portal…From the Government

1134 Ahmedabad Chartered Accountant Journal March, 2026TMHow AI is Changing Audit Planning and RiskAssessmentArtificial Intelligence is transforming audit planning andrisk assessment, with profound implications forcoverage, reliability, and professional judgment. Auditplanning and risk assessment have always dependedon professional judgment supplemented by samplingtechniques, analytical procedures, and internal controlevaluation. In the traditional model, risk is identifiedthrough selective testing and experience-drivenintuition. However, that assumption is no longer sufficientin today’s environment.The scale, complexity, and velocity of data in modernbusinesses have outgrown manual audit approaches.Enterprise systems generate millions of transactionsacross multiple platforms, and risk does not alwaysreside in obvious locations. Instead, risk often hidesin patterns, correlations, and exceptions that are difficultto detect using conventional methods. ArtificialIntelligence is changing this foundation by augmenting,rather than replacing, audit judgment.AI alters the way auditors gather evidence, identify risk,and decide where to focus their efforts. It shifts auditplanning from sample-based reasoning towarddynamic, data-driven risk mapping. The key questionis no longer whether AI will be used in audits, but ratherwhere it genuinely improves audit quality and wherereliance on it creates blind spots.Implications for Coverage, Reliability andProfessional JudgmentAI in audit planning introduces a dynamic layer to whatwas traditionally a structured but static process.Traditional audit planning usually follows these steps:understanding the business and its environment,identifying significant accounts and disclosures,assessing inherent and control risk, and designingaudit procedures. By contrast, AI allows auditors toanalyse entire datasets upfront and identify risk signalsbefore finalising their audit procedures.Data profiling at scale enables AI tools to ingest entiregeneral ledgers, sub-ledgers, and transactionaldatasets. These tools can identify high-frequencyaccounts, unusual transaction patterns, seasonalinconsistencies, and outliers in volume or value. Thisshift allows auditors to move from assumption-basedplanning to planning grounded in empirical evidence.Automated risk scoring uses AI models to assign riskscores to transactions, accounts, or business unitsbased on historical audit findings, deviations fromexpected patterns, control overrides, and userbehaviour anomalies. This capability enables auditorsto prioritise their efforts, focusing on high risk clustersinstead of treating all areas equally.Continuous risk assessment transforms audit planningfrom a one-time exercise into an ongoing process. AIsupports continuous monitoring throughout the auditperiod, flagging new risks in real time, triggering alertswhen transaction behaviour changes, and allowing riskassessments to evolve dynamically. This is especiallycritical in volatile environments where risk profileschange rapidly.AI in Audit Planning: From Static Plans to DynamicRisk MappingTraditional audit planning follows a structured but staticapproach, beginning with understanding the businessand its environment, identifying significant accounts anddisclosures, assessing inherent and control risk, andthen designing audit procedures. AI introduces adynamic layer to this process by allowing auditors toanalyse full datasets upfront and identify risk signalsbefore planning substantive procedures.CA. Hency [email protected]

Ahmedabad Chartered Accountant Journal March, 2026 1135TMKey applications of AI in audit planning include dataprofiling at scale, automated risk scoring, and continuousrisk assessment. AI tools can ingest entire generalledgers, sub-ledgers, and transactional datasets toidentify high-frequency accounts, unusual transactionpatterns, seasonal inconsistencies, and outliers involume or value, enabling evidence-based planning.AI models can also assign risk scores to transactions,accounts, or business units based on historical auditfindings, deviations from expected patterns, controloverrides, and user behaviour anomalies, allowingauditors to focus on high risk areas.In addition, AI enables continuous monitoringthroughout the audit period, flagging new risks in realtime, triggering alerts when transaction behaviourchanges, and allowing the risk assessment to evolvedynamically. This continuous approach is particularlyimportant in volatile environments where risk profilescan change quickly.AI in Risk Assessment: Enhancing Depth andCoverageThe most significant impact of AI in auditing is its abilityto expand audit coverage. Traditional audits rely onsampling due to time and resource constraints, but AIremoves this limitation by enabling full populationtesting. AI tools can analyse 100% of transactionsinstead of relying on samples, leading to higherassurance that material misstatements are not missedand reducing sampling risk. For example, instead ofmanually testing 1000 journal entries, an AI system canevaluate all entries and identify those with unusualcharacteristics.AI also enhances risk assessment by detectingpatterns beyond human capability. These includerepeated small value frauds designed to avoidthresholds, complex transaction chains across entities,and timing patterns indicating earnings management.Such capabilities are particularly relevant in industrieswith high transaction volumes, such as banking, ecommerce, and manufacturing.Furthermore, AI models can analyse user level activity,including who is posting entries, the timing of entries,the frequency of overrides, and deviations in accesspatterns. This adds a behavioural dimension to riskassessment that traditional audits often overlook.IT CornerPractical Application: Anomaly DetectionAnomaly detection is one of the most widely adoptedAI applications in auditing. AI models identifytransactions that deviate from normal patterns, whichmay be based on amount, timing, accountcombinations, user activity, or frequency. For example,consider a manufacturing company where most journalentries are posted during business hours, entriesabove a certain threshold require approval, andspecific accounts are rarely adjusted. An AI systemmay flag entries posted late at night, manual adjustmentsjust below approval thresholds, or unusualcombinations such as revenue and expense accounts.These anomalies do not prove fraud, but they highlightareas requiring audit attention. AI improves coverageby identifying hidden patterns across large datasets,detecting subtle deviations missed in sampling, andreducing reliance on arbitrary thresholds. However, AIcan also fail if it is not properly calibrated, generatingtoo many false positives, lacking context aboutbusiness rationale, or treating legitimate one offtransactions as high risk. Ultimately, auditors mustinterpret anomalies rather than blindly relying on them.Practical Application: Journal Entry TestingJournal entry testing is a critical audit procedure,particularly in fraud risk assessment. The traditionalapproach is sample based, focusing on large orunusual entries and conducting only a limited reviewof user activity. In contrast, an AI driven approach allowsauditors to evaluate all journal entries and score thembased on risk factors such as entries posted outsidenormal hours, entries posted by senior management,round number transactions, entries with unusualaccount combinations, and reversals shortly afterposting.For example, in a services company, AI may identifya pattern where entries are posted at quarter end toinflate revenue and then reversed in the next period,with the pattern repeating across multiple periods. Asample based audit may miss this systematicmanipulation, whereas AI can highlight it immediately.AI improves coverage by analysing the entirepopulation of journal entries, detecting systematicmanipulation patterns, and identifying high risk usersand behaviours. However, AI cannot understand

1136 Ahmedabad Chartered Accountant Journal March, 2026TMmanagement intent, may misclassify legitimate accrualsas suspicious, and requires clean, structured data toproduce reliable outputs.Limitations of AI in Audit Risk AssessmentDespite its power, AI is not reliable in isolation, andignoring its limitations poses a professional risk. AImodels are only as good as the data they process;incomplete data can lead to incorrect conclusions,poor classification can affect pattern recognition, andsystem errors can propagate into AI outputs. Auditorsmust therefore validate data integrity before relying onAI results.AI also lacks contextual understanding unless explicitlyprogrammed. It cannot distinguish between strategictransactions and manipulative ones, may not be awareof industry practices, and cannot interpret managementintent. This is where professional judgment remainsessential. AI models may also exhibit bias or overfittingif trained on biased historical data, leading them tomiss new types of fraud and creating a false sense ofassurance.Explainability is another critical limitation. Some AImodels operate as black boxes, making it difficult toexplain why a transaction is flagged or to documentaudit evidence. This can pose challenges duringregulatory inspections. Auditors should therefore prefermodels that provide transparent reasoning and clearaudit trails.Regulatory and Professional ConsiderationsThe use of AI in auditing raises important regulatoryand professional concerns. Audit standards requiresufficient and appropriate audit evidence, and AIoutputs by themselves do not constitute evidence.Instead, they guide auditors to areas of risk, after whichsubstantive procedures must still be performed.Auditors must also document how AI tools were used,the parameters and assumptions applied, and theirinterpretation of the results. Inadequate documentationcan weaken the defensibility of the audit.Professional skepticism is another criticalconsideration. AI does not replace skepticism; in fact,over reliance on AI may reduce it. Auditors mustcontinue to challenge why certain transactions areflagged, why certain areas show no anomalies, andwhether AI might be missing something. They mustremain actively engaged in interpreting results ratherthan treating AI outputs as definitive conclusions.Strategic Impact on the Role of CharteredAccountantsAI is not reducing the importance of auditors; rather, itis changing their role. Auditors must now develop abroader skillset that includes understanding datastructures and systems, interpreting AI model outputs,and performing risk analysis in a data drivenenvironment. Technical ignorance is no longeracceptable in modern practice.The audit focus is shifting away from manual testingtoward more time spent on risk analysis, interpretation,and judgment based decision making. Firms that failto adopt AI may face lower audit efficiency, reducedcoverage, and a higher risk of audit failure, making AIadoption a strategic necessity rather than an option.Chartered Accountants must therefore adapt their skillsto remain relevant and effective in an AI assisted auditenvironment.Practical Checklist for ImplementationChartered Accountants should approach AI adoptionwith discipline and a clear implementation plan. First,they must ensure data readiness by verifying thecompleteness and accuracy of data, standardising thechart of accounts, and validating system controls.Second, they should select AI tools carefully, preferringexplainable models, avoiding black box solutionswithout audit trails, and ensuring compatibility withexisting systems.Third, auditors must calibrate risk parameters bydefining what constitutes an anomaly, adjustingthresholds based on industry and client profile, andregularly reviewing model performance. Fourth, AIshould be integrated into audit procedures, being usedfor risk identification rather than drawing finalconclusions. Flagged items should be linked tosubstantive testing, and the rationale for conclusionsshould be clearly documented.Finally, firms should invest in training and governance.Audit teams must be trained to interpret AI outputscorrectly, internal review mechanisms should beestablished to monitor analysis, and misuse or overreliance on AI should be actively monitored.IT CornerContinued to page 1138

Ahmedabad Chartered Accountant Journal March, 2026 1137TMEmpowering Women Entrepreneurs: The herSTARTInitiative and Its CSR Driven ImpactIn an era where gender equality is pivotal tosustainable development, initiatives like herSTARTstand out as beacons of progress. Launched by theGujarat University Startup and Entrepreneurship Council(GUSEC), herSTART has evolved into a nationalplatform dedicated to empowering women led startups.Its formal inauguration by the Hon’ble President ofIndia, Smt. Droupadi Murmu, marked a significantmilestone, emphasizing the need for inclusiveecosystems that connect women entrepreneurs withgovernment and private resources. As professionalsin business, finance and innovation, understandingherSTART’s model not only highlights effective CSRstrategies but also inspires corporate leaders to amplifysimilar efforts for broader societal impact.HerSTART’s core mission is to bridge the gendergap in entrepreneurship, shifting the narrative from“women development” to “women leddevelopment,” as echoed by Prime Minister ShriNarendra Modi in his endorsement. The programaddresses systemic barriers such as limited accessto funding, mentorship and networks, which oftenhinder women innovators. Through structuredbootcamps, accelerators and incubation support,herSTART provides participants with essential tools:personalized mentorship from industry experts,networking opportunities, incubation at GUSEC’sfacilities, access to government grants, dedicatedco working spaces,etc. The latest edition, herSTART5.0 opened by Chief Minister of Gujarat.CA. Siddharth Bhatt CSR Stories [email protected] initiative’s achievements are compelling,demonstrating tangible outcomes that resonate withCSR objectives focused on economic empowermentand job creation. To date, herSTART has engagedover 15,000 women entrepreneurs through online andoffline modes, supported more than 2,000 women ledstartups and accelerated hundreds of ventures. Theseefforts have generated over 1,000 jobs. Events like

1138 Ahmedabad Chartered Accountant Journal March, 2026TMthe herSTART Summit and accelerator programs fostercollaboration, with sessions featuring insights fromdignitaries and stakeholders.A key driver of herSTART’s success is its robust CSRpartnerships, which serve as a model for corporateinvolvement in social equity. UNICEF has been acornerstone collaborator since the program’s earlyeditions, providing expertise in gender focuseddevelopment and helping scale the initiative to supportover 250 women led startups. SBI Mutual Fund,contributes to building financial independence amongwomen, resonating with their values of inclusive growth.These CSR contributions including governmentassistance through funding, mentorship, andecosystem building, illustrate how corporations canachieve measurable impact while advancing their ownsustainability agendas.For professionals and organizations, herSTART offersa blueprint for meaningful CSR engagement. Byinvesting in women entrepreneurs, companies not onlyfulfill ethical imperatives but also tap into untappedtalent pools, fostering innovation and economicresilience. As global reports indicate, women ledbusinesses often yield higher social returns,contributing to poverty reduction and inclusive growth.Initiatives like herSTART remind us that progress isamplified when barriers are dismantled collectively.In conclusion, herSTART is more than an incubator, it’sa catalyst for systemic change, empowering womento lead India’s entrepreneurial landscape. Asprofessionals, let’s draw inspiration from its model andcommit to supporting similar programs through CSRfunding, mentorship, or partnerships. By doing so, wecan accelerate a future where women innovators drivenational prosperity, creating a ripple effect ofempowerment and opportunity for generations tocome. Your contribution could spark the nextsuccess story.CSR StoriesContinued from page 1136Key TakeawaysAI transforms audit planning from static, judgment basedapproaches to dynamic, data driven risk mapping. Itsignificantly improves coverage by enabling fullpopulation testing and expanding the depth of riskassessment. Practical applications such as anomalydetection and journal entry testing enhance the abilityto identify risks that might otherwise be missed.However, AI does not understand business contextand cannot replace professional judgment.Data quality and model transparency are critical forreliable outcomes. Over reliance on AI can reduceaudit skepticism and increase risk, so the real valuelies in controlled integration. Chartered Accountantsmust adapt their skills and mindset to leverage AIeffectively while continuing to exercise professionaljudgment and skepticism.Final PerspectiveAI is not merely an upgrade to existing audit tools; itrepresents a structural change in how audits areperformed. It exposes weak audit approaches that relyon limited sampling and unchecked assumptions, whilealso introducing new risks. Blind reliance on AI cancreate a false sense of assurance, undermining ratherthan enhancing audit quality.The real value lies in controlled, thoughtful integration.Auditors should use AI to expand coverage andenhance risk identification, rely on professionaljudgment to interpret results, and maintain skepticismat all stages of the audit. This balance will define auditquality in the coming decade and determine howeffectively Chartered Accountants can serve their clientsand the public in an increasingly data driven world.IT Corner

Ahmedabad Chartered Accountant Journal March, 2026 1139TMCA. Sulabh PadshahHon. SecretaryAssociation NewsCA. Ashish SharmaHon. Secretary1. Glimpses of Past Events.Day & Date Program Speaker Venue2nd March, 7th March, Income Tax Reading Series CA Dhaval Patanvadia, Ahmedabad10th March, 12th March, CA Palak Pavaghadi, Management14th March 2026 CA Mehul Thakkar, Association, AMACA Divyang Shah,CA Jayraj DhakanThe Chartered Accountants Association, Ahmedabad (CAAA) successfully conducted a 5-part Reading Series on theNew Income Tax Act, aimed at fostering in-depth understanding of its evolving provisions. The series witnessed activeparticipation from over 60 Chartered Accountants, reflecting the keen interest of members in staying updated withlegislative developments.Distinguished faculties led each session, offering valuable insights, practical perspectives,and detailed analysis of the new provisions. The interactive format enabled meaningful discussions and knowledgeexchange, making the series both engaging and enriching7th March, 14th March, Transfer Pricing Series CA Vishwa Jhala, Association Office21st March, CA Jatin Gajjar,28th March 2026 CA Sonal Pandey,CA Gunjan ShahThe Chartered Accountants Association, Ahmedabad (CAAA) organised a focused series on Transfer Pricing, featuringexpert faculties from the Big4 firms. Designed for a deeper and more practical understanding, the sessions coveredcritical concepts, recent developments, and nuanced interpretations in the evolving transfer pricing landscape. DirectTax Committee Chairman CA Parin Shah played a pivotal role in designing the series.12th March, 2026 Wadhwani Group Initiative- First Cohort - i-HUB,University RoadThe curated cohort of the collaboration of Wadhwani Foundation and CAAA was a great success. The event was heldat i-HUB and proved to be a very informative and successful event for the Foundation and the Association. It wasattended by more than 20 Chartered Accountants with two fold advantages- Enabling our clients to expand and scaletheir businesses through structured framework and an opportunity to expand our own service offerings.17th March, 2026 Articleship Mela- Edition #3 - Gujarat Sports ClubTuesdayCAAA based on its earlier success of Articleship Mela organised its 3rd Edition of the Articleship Mela. a landmarkinitiative that brought together over 80 aspiring students and 32 reputed CA firms under one roof. The event was a grandsuccess, providing a valuable platform for students to secure articleship placements in firms aligned with their careergoals.

1140 Ahmedabad Chartered Accountant Journal March, 2026TMDay & Date Program Speaker Venue18th March, 2026 Special Technical Session & Sr. Adv. H.T. ParekhWednesday 75th Year Logo Inaugural Saurabh Soparkar & Auditorium, AMAMr. Mrugank ParikhThe Chartered Accountants Association, Ahmedabad (CAAA) organised a special technical evening on 18th March2026 at HT Parekh Auditorium, AMA, Ahmedabad, bringing together members of the profession for an enrichingexchange of knowledge and ideas. The programme featured Senior Advocate Shri Saurabh Soparkar, who deliberatedon landmark Supreme Court judgments that have significantly influenced India’s taxation landscape, and Mr. MrugankParikh, who shared valuable insights on the growing relevance of technology in professional practice. A key highlight ofthe evening was the unveiling of CAAA’s 75th Year Logo, marking a proud milestone in the Association’s journey. Theoccasion was further graced by the presence of many Past Presidents of the Chartered Accountant Association. Theprogramme concluded with dinner and networking, fostering professional camaraderie among members.24th March, 2026 Wadhwani Group Initiative- - i-HUB,Tuesday Second Cohort University RoadThe curated second cohort of the collaboration of Wadhwani Foundation and CAAA was with the same motive ofgrowth of the client and opportunity to expand our opportunity. This cohort was even a grander success with participationof more than 25 CAs. The event was held at i-HUB and proved to be a very informative and successful event for theFoundation and the Association.27th March, 2026 4th Brain Trust- Auditing & CA Kaushikbhai Patel ATMA Hall,Assurance, AS and SA Ashram roadThe 4th Brain Trust session of the Chartered Accountants Association, Ahmedabad (CAAA) was a resounding success,focusing on the critical domain of Standards on Auditing. The session was ably led by CA Kaushik C Patel, a respectedsenior member and an authority in the field of auditing. His insightful deliberations, practical perspectives, and in-depthanalysis of auditing standards made the session highly engaging and enriching for participants. The interactive formatfurther encouraged meaningful discussions, reaffirming Brain Trust as a valuable platform for knowledge sharingamong professionals.2. Forthcoming Events.Day & Date Program Speaker Venue7th April, 2026 SME 2026- Conclave Joint program by Mr. Arjun Handa IIMA_ Ventures,Tuesday CAAA and Wadhvani Foundation Key note speaker New IIM Campus25th April to 7th Direct Taxes Home Refresher Course Various speakers Virtual Mode- Zoom9th May, 2026 (DTHRC)Association News