ITAT Chandigarh Judgments — August 2025

The Tribunal held that Section 80P(2)(d) allows deduction for interest income earned by a cooperative society from its investments with any other cooperative society. Section 80P(4) is only relevant if the assessee itself is a cooperative bank seeking deduction.

The Tribunal affirmed the CIT(A)'s decision to set aside the assessment order, which was originally passed under Section 144, back to the AO. The Tribunal noted that the CIT(A)'s action was justified under the newly inserted sub-section to Section 251, effective from October 1, 2024, which specifically permits such a remand for orders made under Section 144.

The Tribunal held that the evidence from a third party's laptop, without sufficient corroboration and without allowing cross-examination, is insufficient to make additions. The Tribunal also noted that the office space booking was cancelled and the amount was returned by cheque.

The Tribunal upheld the CIT(A)'s decision, confirming the deletion of the addition. It was observed that the Revenue had accepted the assessee's purchases, stock, books of account, and sales. Therefore, when the sales generating cash were accepted, depositing these proceeds into the bank account cannot be treated as unexplained, especially when the books were not rejected.

The Tribunal held that the evidence from a third party's laptop, without sufficient corroboration and without allowing cross-examination, is insufficient to make additions. The Tribunal also noted that the office space booking was cancelled and the amount was returned by cheque.

The Tribunal upheld the CIT(A)'s action, finding it justified as the original assessment was passed under Section 144. The appellate order was covered by the newly inserted proviso to Section 251(1)(a) of the Income Tax Act, which became effective from 01.10.2024. Consequently, the Revenue's appeal was dismissed.

The Tribunal ruled that a legal heir, filing in a representative capacity, is entitled to all tax liabilities and TDS credits of the deceased. It found the CIT (Appeals) erred in law and directed the AO, including CPC Bangalore, to grant the denied TDS credit to the appellant within one month.

The Tribunal allowed the Revenue's appeal regarding the validity of the reopening under Section 147/148, finding it to be in accordance with law as tangible material and approval were in place. However, on the merits of the case, the Tribunal upheld the CIT(A)'s deletion of the addition for bogus LTCG, as the Revenue failed to rebut the CIT(A)'s detailed findings that the AO did not provide sufficient evidence to prove the transactions were sham.

The Tribunal observed that no incriminating material regarding the alleged under-declaration of rental income was found during the search operation, and the original assessments had already attained finality or were beyond the notice period before the search. The agreements referred by the AO for letting out the property were not signed by the assessee, and the Department failed to prove that the property was let out based on these agreements or that information was withheld. Consequently, applying the principles laid down by the Supreme Court in Abhisar Buildwell Pvt. Ltd., the Tribunal allowed both appeals and deleted the additions.

The Tribunal ruled that a legal heir, filing in a representative capacity, is entitled to all tax liabilities and TDS credits of the deceased. It found the CIT (Appeals) erred in law and directed the AO, including CPC Bangalore, to grant the denied TDS credit to the appellant within one month.

The Tribunal observed that no incriminating material regarding the alleged under-declaration of rental income was found during the search operation, and the original assessments had already attained finality or were beyond the notice period before the search. The agreements referred by the AO for letting out the property were not signed by the assessee, and the Department failed to prove that the property was let out based on these agreements or that information was withheld. Consequently, applying the principles laid down by the Supreme Court in Abhisar Buildwell Pvt. Ltd., the Tribunal allowed both appeals and deleted the additions.

The Tribunal upheld the CIT(A)'s decision, concluding that the cash payments were made due to genuine business difficulties and did not indicate tax evasion, as evidenced by Form 26AS. Relying on judicial precedents, including a High Court ruling affirming exigencies requiring cash payments for business operations, the Tribunal found the CIT(A)'s order to be well-reasoned and dismissed the Revenue's appeal.

The Tribunal held that the assessee had successfully discharged the initial onus under Section 68 by proving the identity of the lenders and the genuineness of the transactions, which occurred through banking channels and were supported by documentary evidence. It emphasized that once the assessee establishes these points, the onus shifts to the Revenue to investigate the source of funds in the hands of the creditors, and as such, the addition made was unjustified.

The Tribunal found a prima facie plausible case for the assessee given the sale of land. As the relevant documents were not filed before the AO or considered by the ld. CIT(A), the Tribunal set aside both lower orders and restored the issue to the file of the AO for fresh adjudication. The assessee is at liberty to submit details, and the ld. AO is directed to verify the veracity of the Sale Deeds.

The Tribunal affirmed the CIT's decision, holding that the AO had not conducted adequate inquiries into the source of the cash deposit. The AO's quick acceptance of the assessee's explanation and declared income without proper verification, especially regarding a large friendly loan and illegible bank statements, rendered the assessment order erroneous and prejudicial to the revenue. Thus, the CIT was justified in invoking Section 263 to set aside the assessment and direct a fresh one.

The Tribunal held that the period of limitation for passing a penalty order under Section 275(1)(c) commences from the date the Assessing Officer makes a reference to the competent authority (26.06.2023), not from the date the JCIT issues a show cause notice. As the penalty order was passed on 28.02.2024, beyond the six-month statutory period ending on 31.12.2023, it was time-barred. The other grounds raised by the assessee were not adjudicated.

The Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeal, affirming the CIT(A)'s decision. The Tribunal held that the assessee was entitled to the deduction under Section 54F(4) as the sale proceeds were duly deposited in the capital gains account. It clarified that while non-utilization for purchase/construction within the specified period could lead to tax imposition in a subsequent year, the initial deposit fulfilled the conditions for the period under consideration.

The ITAT held that the Supreme Court judgment in Checkmate Services P. Ltd. & Ors. Vs. CIT & Ors. (2022) 448 ITR 518 (SC), which affirmed disallowance for delayed payments of employee contributions, is applicable retrospectively. Relying on the Full Bench decision of the jurisdictional Punjab & Haryana High Court, the tribunal rejected the assessee's contention based on the Chhattisgarh High Court judgment.

The Tribunal held that the period of limitation for passing a penalty order under Section 275(1)(c) commences from the date the Assessing Officer makes a reference to the competent authority (26.06.2023), not from the date the JCIT issues a show cause notice. As the penalty order was passed on 28.02.2024, beyond the six-month statutory period ending on 31.12.2023, it was time-barred. The other grounds raised by the assessee were not adjudicated.

The Tribunal held that the period of limitation for passing a penalty order under Section 275(1)(c) commences from the date the Assessing Officer makes a reference to the competent authority (26.06.2023), not from the date the JCIT issues a show cause notice. As the penalty order was passed on 28.02.2024, beyond the six-month statutory period ending on 31.12.2023, it was time-barred. The other grounds raised by the assessee were not adjudicated.

The Tribunal dismissed the appeal regarding HRA, upholding that the assessee failed to substantiate the rent payments and that the CIT(A)'s findings were correct. However, it allowed the appeal concerning Section 54F, holding that the one-time maintenance charge was a compulsory, non-refundable payment and thus an integral part of the cost of acquisition of the property.

The ITAT held that the Supreme Court judgment in Checkmate Services P. Ltd. & Ors. Vs. CIT & Ors. (2022) 448 ITR 518 (SC), which affirmed disallowance for delayed payments of employee contributions, is applicable retrospectively. Relying on the Full Bench decision of the jurisdictional Punjab & Haryana High Court, the tribunal rejected the assessee's contention based on the Chhattisgarh High Court judgment.

The Income Tax Appellate Tribunal held that given the jurisdictional High Court's finding that the Trust was illegally formed and declared null and void, a decision upheld by the Supreme Court, the Assessing Officer and CIT(A) were correct in taxing the assessee as an 'AOP'. The tribunal, therefore, dismissed all grounds of the assessee's appeal.

The Tribunal held that the assessee, opting for presumptive taxation under Section 44AD with turnover below Rs. 2 Crores, had correctly offered 8% of the gross turnover. The addition of Rs. 34,05,424/- under Section 68 by the authorities, based on cash deposits that were part of the turnover, was found to be erroneous and deleted.

The Tribunal found that the mandatory procedural requirements of Section 250(1) of the Income Tax Act were violated by the CIT(A). To prevent multiple proceedings, the Tribunal set aside both the assessment order and the CIT(A)'s order, remanding all issues to the Assessing Officer for fresh adjudication after due notice to the assessee.

The Tribunal condoned the delay, citing a liberal interpretation of 'sufficient cause' to advance substantial justice. The reassessment order was quashed due to improper service of notice under Section 148.

The Tribunal held that the assessee had satisfactorily explained the source of the cash deposit as being from earlier withdrawals, supported by bank statements and a cash flow statement. It emphasized that once the source is established and no evidence suggests utilization elsewhere, the addition under Section 69/69A is unsustainable, particularly for a nominal amount.

The Tribunal found a direct nexus between the land sale and the cash deposit, noting that the authenticity of the agreement had been accepted in a related case involving the assessee's brother. It concluded that the source of the Rs. 50 lacs deposit and the Rs. 14,28,250/- investment was sufficiently proven from the land sale. Consequently, the Tribunal deleted the additions on merits, deeming the ground regarding the non-service of the Section 148 notice academic.

The Tribunal found that the assessee had a sufficient and explained source for the deposits, rejecting the CIT(A)'s reasoning that it was not humanly possible to keep money for such a long period. The Tribunal concluded that there was a substantial amount available within the family from agricultural land sales and withdrawals. Consequently, the addition made by the AO and confirmed by the CIT(A) was deleted.

The Tribunal held that service via SMS or CPC portal is not a valid mode of service as per Section 282 of the Income Tax Act and Rule 127 of the Income Tax Rules. Finding sufficient cause and adopting a liberal approach for condonation, the Tribunal condoned the delay, set aside the CIT(A)'s order, and remanded the matter for fresh adjudication on merits, imposing a cost of ₹2,000 on the assessee.

The Tribunal set aside the CIT(E)'s order, finding that the assessee might be able to substantiate the delay. Applying principles of natural justice, the application was restored to the CIT(E) for de novo consideration, granting the assessee another opportunity of hearing.

The Tribunal held that the AO's allegations of out-of-book sales and bogus purchases were unsubstantiated due to lack of evidence and timing discrepancies. The consequential addition on account of GP rate was also deleted. However, the disallowance of interest on account of cash discrepancy was upheld.

The Tribunal upheld the reopening of the assessment and the addition of unexplained income, finding that the assessee had failed to provide any explanation for the deposits. Consequently, the penalty imposed under Section 271(1)(c) was also confirmed.

The Tribunal upheld the reopening of the assessment and the addition of unexplained income, finding that the assessee had failed to provide any explanation for the deposits. Consequently, the penalty imposed under Section 271(1)(c) was also confirmed.

The Tribunal held that the assessment order was barred by limitation based on the India Post evidence showing dispatch on April 4, 2013, and inconsistencies in departmental records. Therefore, the assessment was quashed.

The Tribunal found that certain unexplained investments aggregating to Rs.15.75 Lacs were either inter-bank transfers or transfers from friends and family, whose sources were not doubtful. To resolve the dispute, the Tribunal held that an estimated addition of 4% on the turnover of Rs.197.43 Lacs would meet the ends of justice. The assessee would be granted credit for the returned income of Rs.3.86 Lacs, and the AO was directed to re-compute the income accordingly.

The Tribunal observed that the rejection was based on technical grounds, as the assessee already had 12A registration under the old regime. It held that due to the nuances of the new registration regime, the application should be considered under the appropriate clause, not merely rejected on technicalities. The Tribunal set aside the CIT(E)'s order and directed a fresh order after considering the application under the correct/relevant clause.

The Tribunal confirmed the addition of Rs.21 Lacs related to sundry debtors discrepancies as it was backed by evidence from regular books and handwritten ledger. However, the addition of Rs.9.09 Lacs for "unknown discrepancies" was deleted due to lack of concrete evidence and reconcilability of other discrepancies. The AO was directed to accept the assessee's revised income of Rs.21,88,707/-.

The Tribunal dismissed all appeals. For the Revenue's appeals, it upheld the CIT(A)'s finding that interest disallowance u/s 36(1)(iii) was not justified as the assessee had sufficient interest-free funds. It also confirmed that disallowance u/s 14A must be restricted to the exempt income and royalty payments were revenue expenditure. The assessee's appeals were dismissed due to an inordinate delay of 1862 days in filing, for which no reasonable cause was found.

The Tribunal found reasonable cause for the delay, noting the COVID-19 lockdown period, and condoned it. It set aside the CIT(A)'s order and restored the assessment file to the AO for fresh assessment, allowing the assessee to present her case and supporting documents.

The Tribunal found that the AO had made due inquiries and accepted the assessee's explanations, taking a plausible view. Citing Supreme Court judgments, it held that the Pr. CIT could not substitute his view for the AO's where two plausible views exist, unless the AO's order was erroneous and prejudicial to revenue. The revisionary order was thus unsustainable.

The Tribunal dismissed all appeals. For the Revenue's appeals, it upheld the CIT(A)'s finding that interest disallowance u/s 36(1)(iii) was not justified as the assessee had sufficient interest-free funds. It also confirmed that disallowance u/s 14A must be restricted to the exempt income and royalty payments were revenue expenditure. The assessee's appeals were dismissed due to an inordinate delay of 1862 days in filing, for which no reasonable cause was found.

The Tribunal dismissed all appeals. For the Revenue's appeals, it upheld the CIT(A)'s finding that interest disallowance u/s 36(1)(iii) was not justified as the assessee had sufficient interest-free funds. It also confirmed that disallowance u/s 14A must be restricted to the exempt income and royalty payments were revenue expenditure. The assessee's appeals were dismissed due to an inordinate delay of 1862 days in filing, for which no reasonable cause was found.

The Tribunal dismissed all appeals. For the Revenue's appeals, it upheld the CIT(A)'s finding that interest disallowance u/s 36(1)(iii) was not justified as the assessee had sufficient interest-free funds. It also confirmed that disallowance u/s 14A must be restricted to the exempt income and royalty payments were revenue expenditure. The assessee's appeals were dismissed due to an inordinate delay of 1862 days in filing, for which no reasonable cause was found.

The Tribunal held that the AO's allegations of out-of-book sales and bogus purchases were unsubstantiated due to lack of evidence and timing discrepancies. The consequential addition on account of GP rate was also deleted. However, the disallowance of interest on account of cash discrepancy was upheld.

The Tribunal, upholding principles of natural justice, accepted the appellant's prayer for another opportunity of hearing. Consequently, the matter of registration was restored to the file of the Commissioner of Income Tax (Exemption) for fresh adjudication, with directions for the assessee to plead and prove its case.

The Tribunal found that the Assessing Officer had applied his mind and conducted due inquiries before accepting the assessee's explanation, thereby taking a plausible view. Citing Supreme Court precedents, the Tribunal held that the Pr. CIT could not substitute his view for a plausible view taken by the AO, especially when the order was not shown to be erroneous or prejudicial to the revenue merely because further verification was deemed necessary. Consequently, the revisionary order was not sustainable, and the assessment framed by the AO was restored.

The ITAT found the 8% estimation excessive for the nature of the business (low margin) and reduced the lump sum addition to Rs.2 Lacs. The addition of Rs.8 Lacs for initial investment was deleted as it was based merely on presumption. The AO was directed to re-compute the income accordingly.

The tribunal set aside the impugned order of the CIT(E) and restored the application for de novo adjudication. The CIT(E) was directed to verify the assessee's claim that its religious expenditure did not exceed the 5% threshold permitted by Explanation 5B to Section 80G.