ITAT Chandigarh Judgments — August 2025

The Tribunal accepted the assessee's appeal, setting aside the impugned order and restoring the assessment to the file of the Assessing Officer for a de novo assessment. This allows the assessee a fresh opportunity to present evidence and arguments to substantiate the claim for exemption.

The Tribunal upheld the denial of the STCL claim, observing that the losses stemmed from a penny stock entity, a fact corroborated by an investigation report and SEBI's trading suspension. The assessee failed to provide evidence demonstrating the genuineness of the claim.

The Tribunal found that the assessee had established reasonable cause for the delay in filing the first appeal. Consequently, the CIT(A)'s order was set aside, and the appeal was restored back to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the addition under Section 68 was unsustainable because the assessee, being a public listed entity, is not required to prove the 'source of source' of share capital. The immediate source of investment was not doubted, and the share premium from the same investor was accepted by the AO. Furthermore, no independent inquiry was conducted by the AO. Therefore, the addition of Rs.218.20 Lacs was deleted, and the AO was directed to recompute the income.

The Tribunal found that the assessee had discharged the onus by providing evidence of the gifts, including a gift deed for a moveable asset (not requiring registration) and banking channel transfers. It noted that lower authorities failed to conduct independent inquiries from the donors. The Tribunal accepted the assessee's explanation and deleted the addition of Rs. 6.75 Lacs.

The Tribunal admitted the additional legal ground and, following decisions of the Hon'ble Punjab & Haryana High Court and Coordinate Benches, held that the Section 148 notice issued by the Jurisdictional AO on 30/03/2023 was bad in law and without jurisdiction. This was because such notices, post the CBDT notification dated 29/03/2022, ought to have been issued by the Faceless Assessment Unit as per Section 144B and Section 151A of the Income Tax Act. The re-assessment order was accordingly quashed.

Recognizing the assessee's negligence but acknowledging the materiality of additional evidence, the Tribunal invoked principles of natural justice. The assessment is therefore restored to the Assessing Officer for a de novo assessment, with the directive for the assessee to promptly plead and prove their case.

The Tribunal noted that the CIT(E) did not issue a show-cause notice and the order was not passed on merit. Emphasizing natural justice, the Tribunal remanded the case back to the CIT(E) for fresh adjudication on merits, ensuring the assessee is given due opportunity of hearing.

The Tribunal observed that the quantum assessment, which formed the basis for these penalties, had already been restored to the Assessing Officer for fresh assessment. Therefore, the Tribunal set aside the penalty orders and remanded the issue of penalties to the Assessing Officer for fresh consideration based on the outcome of the re-assessment.

The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s decision, ruling that the power of remand was validly exercised. The ITAT noted that the original assessment was framed on a best judgment basis and new submissions/evidences by the assessee during the first appeal necessitated a fresh assessment by the AO.

The Tribunal held that the CIT(A) validly exercised its remand powers under Section 251(1)(a). It noted that the assessment was made on a best judgment basis, and the fresh submissions by the assessee during the first appeal had a material bearing on the case. Therefore, the direction for a fresh assessment by the AO was deemed appropriate and without infirmity.

The Tribunal observed that the core issue of capital subsidy's taxability and its impact on depreciation originated in AY 2012-13, and the appeal for that year is still pending adjudication before the CIT(A). Since the resolution of the AY 2012-13 appeal would directly impact subsequent years, the Tribunal decided to restore all appeals back to the CIT(A) for de novo adjudication, with a direction to first decide the lead AY 2012-13.

The Tribunal observed that the core issue of capital subsidy's taxability and its impact on depreciation originated in AY 2012-13, and the appeal for that year is still pending adjudication before the CIT(A). Since the resolution of the AY 2012-13 appeal would directly impact subsequent years, the Tribunal decided to restore all appeals back to the CIT(A) for de novo adjudication, with a direction to first decide the lead AY 2012-13.

The Tribunal observed that the core issue of capital subsidy's taxability and its impact on depreciation originated in AY 2012-13, and the appeal for that year is still pending adjudication before the CIT(A). Since the resolution of the AY 2012-13 appeal would directly impact subsequent years, the Tribunal decided to restore all appeals back to the CIT(A) for de novo adjudication, with a direction to first decide the lead AY 2012-13.

The Tribunal observed that the core issue of capital subsidy's taxability and its impact on depreciation originated in AY 2012-13, and the appeal for that year is still pending adjudication before the CIT(A). Since the resolution of the AY 2012-13 appeal would directly impact subsequent years, the Tribunal decided to restore all appeals back to the CIT(A) for de novo adjudication, with a direction to first decide the lead AY 2012-13.

The Tribunal ruled that the suo-moto cancellation based on a mere technical error, without providing an opportunity for rectification, violated principles of natural justice and was unjustified. The impugned orders of rejection were set aside, and the applications were restored to the CIT(E) for fresh consideration after affording the assessee a proper hearing.

The Tribunal, relying on the Apex Court's decision in Pr. CIT vs. Abhisar Buildwell (P.) Ltd. and other High Court judgments, held that no additions could be made for completed or unabated assessment years under Section 153A in the absence of incriminating material found during the search. The seized document relied upon by the AO was merely a net worth certification and not incriminating material. Therefore, the additions made based on post-search inquiries and financial statements were deleted.

The Tribunal, relying on the Apex Court's decision in Pr. CIT vs. Abhisar Buildwell (P.) Ltd. and other High Court judgments, held that no additions could be made for completed or unabated assessment years under Section 153A in the absence of incriminating material found during the search. The seized document relied upon by the AO was merely a net worth certification and not incriminating material. Therefore, the additions made based on post-search inquiries and financial statements were deleted.

The Tribunal, relying on the Apex Court's decision in Pr. CIT vs. Abhisar Buildwell (P.) Ltd. and other High Court judgments, held that no additions could be made for completed or unabated assessment years under Section 153A in the absence of incriminating material found during the search. The seized document relied upon by the AO was merely a net worth certification and not incriminating material. Therefore, the additions made based on post-search inquiries and financial statements were deleted.

The Tribunal observed that the AO had not originally disputed the lack of evidence for advance receivables and that the CIT(A)'s reasoning was flawed. It held that the application of income must be considered according to its earlier directions, and thus, the assessee's claim is accepted. Consequently, the impugned assessment of Rs.56,947/- is deleted, and the AO is directed to accept the assessee's claim.

The Tribunal acknowledged the assessee's history as a regular taxpayer with significant past income, making accumulation of savings plausible despite a time gap between withdrawals and deposits. To conclude the litigation, the Tribunal partially allowed the appeal, restricting the unexplained cash deposit addition to Rs. 1 Lacs and directing the AO to re-compute the income.

The Tribunal upheld the CIT(A)'s decision, ruling that interest under Section 234D is not leviable if the regular assessment was completed before 01-06-2003, even if subsequent orders giving effect to higher authorities' directions are passed later. It emphasized that Explanation 2 to Section 234D requires the 'proceedings' for the assessment year to be completed after 01-06-2003 for its applicability, and the 'regular assessment' definition u/s 2(40) refers to initial assessments. The Tribunal relied on precedents from the Supreme Court and Madras High Court.

The Tribunal noted that the issue regarding the non-deductibility of late employees' contributions is settled by the Supreme Court in *Checkmate Services*. However, it directed the AO to verify the assessee's claim of incorrect reporting by the Tax Auditor and restrict the disallowance only to the extent of actual late payments after examining the challans.

The Tribunal, acknowledging principles of natural justice and potential communication gaps in the faceless regime, set aside the CIT(A)'s order. The case was remanded back to the CIT(A) for de novo adjudication, with directions for the assessee to present its case effectively.

The Tribunal observed that the core issue of capital subsidy's taxability and its impact on depreciation originated in AY 2012-13, and the appeal for that year is still pending adjudication before the CIT(A). Since the resolution of the AY 2012-13 appeal would directly impact subsequent years, the Tribunal decided to restore all appeals back to the CIT(A) for de novo adjudication, with a direction to first decide the lead AY 2012-13.

The Tribunal, recognizing principles of natural justice and potential communication issues in the faceless assessment regime, granted the assessee's request for another hearing. It set aside the CIT(A)'s order and remanded the case back to the CIT(A) for fresh adjudication. The assessee was directed to present and prove their case, with all issues remaining open.

The Tribunal ruled that the penalty notice issued under Section 274 read with Section 271AAB(3) was vague as it failed to specify the exact charge or the particular clause of Section 271AAB applicable to the assessee. Citing judicial precedents, the Tribunal deemed the penalty proceedings invalid due to the defective notice, thus deleting the penalty.

The Tribunal, relying on the Apex Court's decision in Pr. CIT vs. Abhisar Buildwell (P.) Ltd. and other High Court judgments, held that no additions could be made for completed or unabated assessment years under Section 153A in the absence of incriminating material found during the search. The seized document relied upon by the AO was merely a net worth certification and not incriminating material. Therefore, the additions made based on post-search inquiries and financial statements were deleted.

The Tribunal found that the CIT(A) validly exercised its power of remand, given that the original assessment was on a best judgment basis and the assessee had presented fresh submissions during the first appeal. The Tribunal saw no infirmity in the direction for a fresh assessment.

The tribunal, acknowledging principles of natural justice and potential communication gaps in the faceless regime, accepted the assessee's prayer. The impugned order of the CIT(A) was set aside, and the appeal was restored to the CIT(A) for de novo adjudication, with a direction for the assessee to present its case forthwith.

The Tribunal upheld the CIT(A)'s decision, finding that the remand power was validly exercised. This was due to the original assessment being a best judgment assessment and the assessee submitting fresh evidence during the first appeal, which had a material bearing on the assessment.

The Tribunal observed that the original assessment was on a best judgment basis and the assessee submitted fresh evidence during the first appeal, which had a material bearing on the assessment. The Tribunal upheld the CIT(A)'s decision, finding that the remand power was validly exercised under Section 251(1)(a) and found no infirmity in the direction for a fresh assessment.

The Income Tax Appellate Tribunal (ITAT) upheld the CIT(E)'s decision to reject the Section 80G(5)(iii) approval. The ITAT observed consistent large surpluses in the assessee's financial statements and found insufficient evidence to substantiate claims of charitable medical activities.

The Tribunal upheld the denial of deduction under Section 80P(2)(d) for interest income, citing the assessee's failure to file a return of income under Section 139(1) as mandated by Section 80AC. It also confirmed that additions for other escaped income could be made during reassessment proceedings, even if the initial ground for reopening was subsequently deleted.

The Tribunal found that the CIT (Exemptions) had passed the order ex-parte without considering the merits and without affording the assessee due opportunity. Therefore, the matter was remanded back to the CIT (Exemptions) for fresh adjudication on merits after providing a proper hearing to the assessee.

The Tribunal observed that the assessee had provided sufficient evidence, including cash flow statements and cash books, to demonstrate the sources of the cash deposits, primarily from property sales, withdrawals, and business receipts. Consequently, the impugned addition of Rs.21.09 Lacs made by the AO was deleted, and the AO was directed to accept the assessee's computation of income after due verification and re-compute the income.

The Tribunal observed that the quantum assessment, which formed the basis for these penalties, had already been restored to the Assessing Officer for fresh assessment. Therefore, the Tribunal set aside the penalty orders and remanded the issue of penalties to the Assessing Officer for fresh consideration based on the outcome of the re-assessment.

The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s decision, ruling that the power of remand was validly exercised. The ITAT noted that the original assessment was framed on a best judgment basis and new submissions/evidences by the assessee during the first appeal necessitated a fresh assessment by the AO.

The Tribunal held that since the assessee had already been granted permanent registration under Section 12A(1)(ac)(i) and Section 80G(5)(i) on 01-12-2022, which was still valid, the earlier application for conversion of provisional registration (Form 10AB) became infructuous. Consequently, the impugned order rejecting this infructuous application was quashed.

The Tribunal ruled that the suo-moto cancellation based on a mere technical error, without providing an opportunity for rectification, violated principles of natural justice and was unjustified. The impugned orders of rejection were set aside, and the applications were restored to the CIT(E) for fresh consideration after affording the assessee a proper hearing.

The Income Tax Appellate Tribunal condoned the 64-day delay in filing the first appeal. Consequently, the Tribunal restored the appeal to the file of the CIT(A) for a fresh adjudication on merits, directing the assessee to present and prove their case forthwith.

The Tribunal dismissed the Revenue's appeal for non-maintainability due to low tax effect, citing CBDT Circular No.09/2024, which specifies a monetary limit of Rs. 60 lacs for such appeals. The dismissal does not affirm the CIT(A)'s order on merits, and the legal issue is left open for future adjudication if applicable exceptions are met.

The Tribunal held that the source of the fresh deposit was clearly the maturity proceeds of an earlier fixed deposit, supported by bank statements and bank confirmation. It also found the addition of Rs. 25,000/- from the opening balance unsustainable. Consequently, the Tribunal concluded there was no legal basis for treating the deposits as unexplained and directed the deletion of the entire addition made by the Assessing Officer.

The ITAT noted the Ld. CIT(A) had indeed condoned delays in other penalty appeals for the same assessee based on the same reasons. Finding divergent views and no justifiable basis for the differing treatment, the ITAT condoned the delay in filing the current appeal and remanded the matter back to the Ld. CIT(A) for fresh adjudication on merits.

The Tribunal condoned the delay. It deleted the Rs. 10 lacs addition, finding the source (opening bank balance from agricultural land sale) adequately explained. The Rs. 20,525 bank interest addition was also deleted to prevent double taxation, as it had already been disclosed under Section 148.

The Tribunal held that the AO exceeded jurisdiction by expanding the scope of assessment from limited scrutiny (for cash deposits) to examine cash payments under Section 40A(3) without obtaining proper approval as per CBDT instructions. Since no approval was on record to expand the scope, the additions made by the AO were without requisite jurisdiction and were directed to be deleted.

The Tribunal ruled that the assessee met the criteria for condonation as per CBDT Circular No. 10/2019, having obtained the audit report before filing the return and filed it within the extended time limits under Section 139(5). The Tribunal emphasized that CBDT circulars are binding on the lower authorities and a mere procedural delay in e-filing Form 10B, especially when the report was available to the AO, cannot deny the substantive claim for exemption under Section 11.

The Tribunal found that the AO had conducted necessary inquiries, examined books of accounts, and considered the assessee's detailed submissions, thus taking a plausible view. The Pr. CIT was not justified in invoking revisionary jurisdiction under Section 263 to substitute his own view, as the AO's order was neither erroneous nor prejudicial to the revenue.