ITAT Ahmedabad Judgments — October 2025

The Tribunal held that the issue relating to the ITES segment adjustment requires fresh examination by the TPO/AO, involving a detailed FAR analysis. For management charges, relief was granted based on a Mutual Agreement Procedure (MAP) resolution, and the ground was dismissed as withdrawn. The manufacturing segment adjustment was also restored to the TPO/AO for fresh determination.

The Tribunal held that the reassessment proceedings were valid. It also found that the assessee failed to provide evidence for the cost of acquisition of the property, thus rejecting the claim for deduction. The appeal was dismissed.

The Tribunal held that the assessee's case did not fall under the specific instances of mis-reporting of income as defined in Section 270A(9). The fault was related to the calculation of the deduction, not misrepresentation or suppression of facts.

The Tribunal upheld the CIT(A)'s deletion of the addition, emphasizing that the Assessing Officer failed to provide specific evidence linking the assessee to bogus transactions or cash payments, relying solely on a third-party investigation report. It reiterated that suspicion cannot substitute proof and that a separate addition under Section 68 for income already recorded in books and offered to tax would constitute double taxation, which is unjustified.

The Tribunal held that the assessee failed to establish the genuineness of the share transactions. The manner of purchase of shares was not explained, and the gain was not disclosed in the original return. The surrounding circumstances and evidence indicated that the transactions were not genuine.

The Tribunal largely agreed with the AO's application of extrapolation, given the established systematic and continuous pattern of suppression. For unaccounted donations, the Tribunal upheld extrapolation but restricted it to 75% of management quota students. For salary received back, the Tribunal fully upheld the AO's extrapolation. Regarding undisclosed bank deposits, the Tribunal confirmed the CIT(A)'s deletion of additions related to accounts of separately assessed entities and certain contra entries, thereby dismissing the Revenue's appeal on this ground.

The Tribunal held that the exchange difference arising on settlement or conversion of foreign currency loans should be recognised as income or expense in the relevant previous year, as per Accounting Standards and ICDS. The PCIT's finding that the current year's fluctuation was only Rs.2,34,703/- was not disputed.

The Tribunal held that the filing of Form 10CCF is a directory requirement, not mandatory. Therefore, the denial of deduction solely on the grounds of delayed filing, especially when the form was filed before the intimation, was incorrect. The Assessing Officer was directed to grant the deduction.

The Tribunal held that the pro-rata loss on discontinued operations required further verification by the AO. The disallowance for delayed PF deposit was deleted, considering the due date fell on a Sunday and payment was made on the next working day. Software expenses and consultancy fees for US-FDA approval were treated as revenue expenditure, allowing the assessee's claim.

The Tribunal held that the Revenue authorities erred in confirming the addition as the sale deed indicated the property was purchased jointly by the assessee and her husband, with payments made in earlier years, not the impugned year. The bank statements of the husband, evidencing the payments, were also available.

The Tribunal condoned the delay of 69 days, finding sufficient cause due to the partner's medical condition and bereavement. The Tribunal then adjudicated the grounds of appeal, dealing with additions made by the Assessing Officer regarding unexplained capital, unsecured loans, and interest income.

The Tribunal held that the CIT(A) committed a procedural infirmity by allowing relief based on additional evidence without providing the Assessing Officer an opportunity to examine and rebut it, as required by Rule 46A(3). The matter was remanded to the CIT(A) for de novo consideration.

The Tribunal found no basis in the PCIT's order to conclude that the AO had failed to make necessary inquiries. The PCIT's order lacked discussion on the AO's inquiries and the assessee's replies, making it unsustainable in law.

The Tribunal, relying on judicial precedents and CBDT circulars, held that the return filed within the extended period permissible under Section 139(4) of the Act is a valid return. It concluded that the belated filing of Form 10B constitutes substantial compliance, and thus, the benefit of exemption under Section 11 cannot be denied on technical grounds. The Tribunal found the CPC was not justified in denying the exemption.

The Tribunal held that the disallowance of pro-rata loss on discontinued operations needs to be verified by the AO. The disallowance of employees' contribution to PF was deleted, as the delay was due to a Sunday and the payment was made on the next working day, which is considered timely as per the General Clauses Act. The disallowance of software expenses and consultancy fees was deleted, holding them as revenue expenditure, consistent with earlier decisions.

The Tribunal dismissed the ground regarding the absence of DIN in the CIT(A)'s order as it was inadvertently raised. The ground concerning the delayed payment of PF & ESIC and interest on TDS were dismissed as covered by judicial precedents. The issue of interest on income tax refund was restored to the AO for determining the exact date of refund grant. The issue of difference in Form 26AS was also restored to the AO for fresh adjudication based on a previous ITAT order.

The Tribunal held that the adjustment made by the CPC under Section 143(1) without issuing prior intimation to the assessee, as mandated by the first proviso to Section 143(1)(a), is invalid and quashed the intimation. Consequently, other grounds raised on merits were not adjudicated.

The Tribunal held that the mere presence of religious objects in the trust deed does not disentitle an institution from approval under section 80G, especially when the predominant purpose and actual activities are charitable. The crucial factor is whether expenditure on religious purposes exceeds the prescribed limit.

The Tribunal held that the AO had conducted due enquiry and applied his mind to all three issues. The AO had accepted the assessee's claims based on plausible legal interpretations and judicial precedents. Therefore, the Pr. CIT's assumption of jurisdiction under Section 263 was unjustified.

The Tribunal held that the delay in filing the audit report is a procedural issue and not a ground to deny exemption. The return filed under Section 139(4) is considered valid, and since the audit report was also filed, it constitutes substantial compliance. Therefore, the denial of exemption on technical grounds is unjustified.

The Tribunal held that since the substantive addition related to the same issue was deleted by the ITAT in the subsequent year, the protective addition in the impugned year was not sustainable. Furthermore, regarding the transfer pricing issue, the Tribunal found that the TPO had erred in benchmarking the transaction as Nil without establishing a defect in the calculation or allocation, and the expenses were capitalized, not debited to P&L.

The Tribunal held that the Assessing Officer made a disallowance based on the erroneous assumption that the assessee was a working partner in only one firm. The assessee demonstrated involvement in two firms and as a sole proprietor, and the expenses were incurred for these businesses.

The Tribunal held that the assessee had a reasonable and bona fide belief that no taxable income accrued in India, excusing the failure to file a return. Therefore, the penalty under Section 271F was unsustainable.

The Tribunal condoned the delay in filing the appeal, accepting it was not deliberate. It remanded the matter back to the CIT(E) for fresh adjudication, directing that the appellant be given a proper opportunity of hearing. A cost of Rs. 5000 was imposed on the appellant to be paid to the Prime Minister's Welfare Fund within two weeks for not explaining the previous non-reply to notices.

The Tribunal held that the delay in filing Form 10-IC was condoned by the Principal Commissioner under Section 119(2)(b), validating the assessee's option for Section 115BAA. The denial of the concessional rate was therefore no longer valid.

The Tribunal found that while some objects were specific, the CIT(E) had not gone through the financials to ascertain the trust's activities. Therefore, the matter was remanded back to the CIT(E) for verification of financials and proper adjudication.

The Tribunal held that the assessee had a reasonable cause for not filing the return of income due to the foreign nature of the transaction and her bona fide belief. The penalty under Section 271F was deemed unsustainable.

The Tribunal held that given the smallness of the amount and the explanation of the assessee regarding foreign trips and gifts from children residing overseas, the addition was not sustainable.

The Tribunal held that the CIT(Exemption) erred by not considering the assessee's details and not providing an opportunity of hearing. The case is remanded back to the CIT(Exemption) for fresh adjudication on merits after verifying details and granting an opportunity of hearing.

The Tribunal held that the rejection of the application solely for non-submission of documents without properly verifying the nature of objects and activities, and without providing a reasonable opportunity of being heard, is contrary to natural justice. The delay in filing the appeal was condoned.

The Tribunal held that the appeal was filed with a delay of 304 days, and no sufficient cause was provided for condonation. Furthermore, the assessee exhibited consistent non-compliance before all authorities, indicating a lack of seriousness in pursuing the appeal. Therefore, the delay was not condoned and the appeal was dismissed.

The Tribunal condoned the delay in filing the appeal, acknowledging the complexity of the provisions. The Tribunal directed that the assessee's application be treated as moved under the correct clause (iii) of the first proviso to Section 80G(5) and restored the matter to the Ld.CIT(E) for a fresh decision after providing the assessee an adequate opportunity to present its case.

The Tribunal held that while the assessee was at fault for not participating in hearings, the CIT(A) had not correctly appreciated the facts and had confirmed additions without confronting adverse materials. Therefore, the issue was restored to the CIT(A) for fresh adjudication.

The Tribunal noted that the assessee had not filed necessary details before the CIT(Exemption) and had not responded to notices. The AR requested to file details and be heard, praying for a remand. The Tribunal decided to remand the matter back to the CIT(E) for fresh adjudication.

The Tribunal held that the appeal was filed with a significant delay of 304 days without any application for condonation or explanation for the delay. The Tribunal also noted consistent non-compliance by the assessee before all authorities. Consequently, the appeal was dismissed as time-barred and in limine.

The Tribunal held that the Assessing Officer's assumption of jurisdiction u/s 147 was invalid for all assessment years. The AO's belief of income escapement was merely a 'borrowed belief' from the ACB report, without proper application of mind or identification of specific assets, rendering the reassessment orders invalid. Consequently, the revision orders passed by the PCIT u/s 263 for the earlier years on such invalid orders were also not sustainable.

The Tribunal held that the issue of classifying the income as business income versus unexplained money under Section 69A is a debatable issue. Therefore, it cannot be rectified under Section 154, which is meant for mistakes apparent from the record. The AO's action was considered a review/reappraisal of facts, which is impermissible under Section 154.

The Tribunal held that the Assessing Officer (AO) had not formed a valid belief to assume jurisdiction for reassessment under Section 147, as the reasons recorded were vague and constituted a borrowed belief. Consequently, the reassessment orders for all years were quashed as invalid.

The Tribunal held that the assumption of jurisdiction by the Assessing Officer (AO) under Section 147 was invalid in all four years. The reasons provided were vague, indicating a borrowed belief and lack of independent application of mind by the AO. Consequently, the assessment orders for AY 2014-15 and 2015-16 were quashed as invalid, and the subsequent revision orders by the PCIT were also set aside. The reassessment orders for AY 2017-18 and 2018-19 were also found to be without valid jurisdiction and were set aside.

The Tribunal held that the CIT(E) did not verify the financials of the trust and did not properly adjudicate the aspect of its objects relating to charity to the general public. The Tribunal also noted that the applicant was not given an opportunity of hearing.

The Tribunal noted that the CIT(E) had not considered the details submitted by the assessee. Consequently, the Tribunal remanded the case back to the CIT(E) for fresh adjudication on merits, directing the CIT(E) to verify the details and provide the assessee a fresh opportunity of hearing in accordance with natural justice principles.

The Tribunal noted that the addition was made without confronting all adverse materials to the assessee. Therefore, the appeals were restored to the CIT(A) for adjudication after providing a fresh opportunity of hearing.

The Tribunal noted that the issue of addition to income was earlier restored to the CIT(A) by the ITAT for fresh consideration of evidence. Since the addition itself was subject to re-adjudication, the penalty order related to it was also restored to the CIT(A) for adjudication along with the quantum proceedings.

The Tribunal held that the assessee had a reasonable and bona fide belief that no taxable income accrued or arose in India, and thus was not required to file a return under Section 139(1). The loan transaction was foreign in nature and already considered in another person's assessment.

The Tribunal condoned the delay and allowed the appeal for statistical purposes. Recognizing the interest of natural justice, the Tribunal set aside the ex-parte order of the Ld. CIT(A) and restored the matter for fresh adjudication, granting the assessee an opportunity to be heard.