ITAT Chandigarh Judgments — September 2025

The Tribunal held that the rejection of prior applications for technical non-compliance should not bar fresh applications. The CIT ought to have examined the present applications on merits.

The Tribunal upheld the CIT(A)'s order regarding Section 35AD and prior period expenses, relying on previous decisions. However, the issue of interest on WIP was remanded back to the Assessing Officer for fresh adjudication after admitting additional evidence.

The Tribunal held that a fresh application for registration/approval is maintainable even if earlier applications were rejected for technical non-compliance, not on merits. The CIT(Exemptions) was directed to adjudicate the applications afresh on merits, providing the assessee an adequate opportunity of being heard.

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete disallowances for Section 35AD and prior period expenses, citing judicial precedents. For the Assessee's appeal concerning interest on WIP, the Tribunal admitted new evidence and remanded the matter back to the Assessing Officer for a fresh adjudication.

The Tribunal condoned the delay, holding that it was due to a bonafide error in interpreting the order and not a deliberate attempt to delay. The Tribunal found that the CIT had misconstrued the partnership deed and committed an error in branding the assessment order as erroneous on a minor issue.

The Tribunal held that an order passed in the name of a deceased person is non-est in law. Therefore, the impugned order of the CIT(A) was set aside, and the case was restored to the CIT(A) for fresh adjudication after impleading the legal representatives of the deceased assessee.

The Tribunal found that the PCIT's order under section 263 was well-reasoned and that the assessee had not presented any rebuttal or contrary case law. Consequently, the Tribunal confirmed the PCIT's order.

The Tribunal held that the CIT(A) correctly deleted the addition on Short Term Capital Gain as the land sold was agricultural land and located beyond 5 km from the municipality limits at the time of sale, thus not a capital asset as per Section 2(14)(iii) of the Income Tax Act. The Tribunal also upheld the deletion of the Rs. 5 lacs addition, noting that the land was in the name of HUF and the Revenue provided no evidence to the contrary.

The Tribunal noted that the sales were not doubted, implying purchases must have been made. Considering the hypothetical nature of the AO's estimation and the desire to avoid multiplicity of litigation, the Tribunal, with the consent of the assessee's counsel, reduced the addition from Rs.8,84,160/- to Rs.4,00,000/-.

The Tribunal condoned the delay in filing the appeal, citing the assessee's medical condition and the principle of substantial justice over technicalities. The addition of Rs. 20,45,000/- was deleted, but the issue of salary assessment amounting to Rs. 10,72,056/- was remitted to the AO for fresh examination.

Following the Supreme Court's ruling in CIT Faridabad Vs Ghanshyam, HUF, the tribunal held that interest received under Section 28 of the Land Acquisition Act is part of the enhanced compensation and not "simpliciter interest" for Income Tax purposes. As the compensation was received after April 1, 2004, and relates to compulsory acquisition of agricultural land, it is exempt under Section 10(37) of the Income Tax Act. Furthermore, the prospective application of Sections 56(2)(viii) and 145B means they are not applicable for AY 2007-08.

The Tribunal found the CIT(E)'s order to withdraw registration unsustainable, reasoning that the factual basis for the withdrawal (past assessment issues) had already been adjudicated by the ITAT in earlier appeals, with the ITAT largely upholding the assessee's entitlement to Section 11/12 benefits. The ITAT emphasized that applying Section 12AB(4) retrospectively for matters already settled by a higher appellate authority amounted to judicial indiscipline. The Tribunal quashed the CIT(E)'s order and directed the restoration of the assessee's registration granted under Section 12A(1)(ac)(iii) and Section 12AA, noting the new scheme of registration was introduced from 01.04.2021.

The Tribunal observed a factual dispute regarding the actual quantum of delayed employees' contributions, noting the CPC's mechanical lifting of figures without proper segregation. It ruled that adjustments under Section 143(1)(a) are for prima facie errors, not debatable issues, and remanded the case to the CIT(A). The CIT(A) is directed to verify the factual position, segregate employer and employee contributions, confine disallowance to actual delayed employee contributions, and reconsider the applicability of relevant High Court precedents on the scope of Section 143(1)(a) adjustments.

The Tribunal held that the purchase of land is merely a preparatory step and not the commencement of charitable activities. Therefore, the rejection of the assessee's application by the CIT(E) on technical grounds was not justified.

The Tribunal held that the adjustment made by the CPC was legally invalid and factually incorrect as it mechanically clubbed employee and employer contributions without proper verification. The matter was restored to the CIT(A) for de novo adjudication.

The Tribunal held that the matter requires restoration to the CIT(A) for de novo adjudication. The CIT(A) needs to verify the actual quantum of delayed employees' contribution and segregate employer's and employees' contributions. The disallowance should strictly be confined to the employees' contribution deposited beyond statutory due dates.

The Tribunal found that the assessee had provided complete details of the sale proceeds received by the father and deposited in a joint bank account. The assessee also submitted copies of sale deeds for land sold and purchased. The Tribunal held that the AO failed to verify the details properly and unnecessarily made the addition.

The Assessee sought withdrawal of the appeal as the issue involved in the original assessment proceedings had been settled under the Direct Tax Vivad Se Vishwas Scheme, 2020. The Ld. DR did not object to the withdrawal.

The Tribunal held that the reopening of the assessment was based on a 'reason to suspect' rather than 'reasons to believe' as the AO acted mechanically on third-party information without independent inquiry. The grounds for reopening were not substantiated, making the reassessment proceedings invalid.

The Tribunal condoned the delay, stating that dismissal for non-prosecution without adjudicating on merits is not sustainable. The order of the CIT(A) was set aside, and the matter was restored for fresh adjudication on merits, subject to the assessee paying costs.

The Tribunal held that the first appellate authority must adjudicate appeals on their merits and cannot dismiss them solely for want of prosecution. Accordingly, the Tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication of all grounds, directing the assessee to cooperate and the CIT(A) to provide adequate opportunity.

The Tribunal held that while the assessee defaulted in complying with notices, the penalty was levied for three identical, recurring defaults. The AO could have completed the assessment after the initial notice.

The Tribunal upheld the CIT(A)'s decision, agreeing that the original assessment was on a best judgment basis and the assessee's submissions warranted a fresh assessment. It ruled that the CIT(A) had validly exercised its remand power under Section 251(1)(a) and found no infirmity in the order.

The Tribunal, considering principles of natural justice and the assessee's past litigations, granted another opportunity for hearing before the CIT(A) at a cost of Rs.10,000/-. The CIT(A) was directed to conduct a de novo adjudication.

The Tribunal accepted the assessee's request for another opportunity to be heard, citing principles of natural justice. The impugned order was set aside, and the appeal was restored to the CIT(A) for de novo adjudication.

The Tribunal held that while the CIT(A)'s order in the name of the deceased might be technically flawed, it did not vitiate the entire proceedings, as the Assessing Officer's order predated the death. However, the Tribunal found merit in the assessee's contention regarding the admission of additional evidence and the non-adjudication of legal grounds.

The Tribunal held that while the assessee provided substantial explanation for the deposits, the lack of complete corroboration and prior non-filer status warranted retaining a partial addition. Thus, the addition was restricted.

The Tribunal noted the assessee's negligence in attending the first appellate proceedings due to ongoing litigations. Considering principles of natural justice, the Tribunal granted another opportunity for hearing before the CIT(A) at a cost of Rs. 10,000/-.

The Tribunal held that the CIT(A) failed to adhere to the mandatory procedure under Section 250(6) of the Income Tax Act, which requires formulating points of dispute and recording reasons for the conclusion. Therefore, the ex-parte order was set aside.

The Tribunal held that the cash deposits were collected by the assessee as an agent on behalf of the principal (DTM Pvt. Ltd.) and were promptly deposited into the company's account with proper reconciliation. Therefore, the addition was unsustainable.

The Tribunal held that the higher tax rate under Section 115BBE could not be justified as the notification prescribing it came into force after the survey and the surrender. Additionally, the AO had not disturbed the head of income. The AO was directed to accept the surrender as normal business income.

The Tribunal, keeping in mind the principles of natural justice, set aside the impugned order and restored the appeal to the CIT(A) for de novo adjudication.

The Tribunal held that the CIT(A)'s disposal of the appeal ex parte, without a specific notice for enhancement, violated the principles of natural justice. The order was set aside and the matter was remanded back for fresh adjudication.

The Tribunal held that filing Form 67 is a procedural requirement and that the benefit of Foreign Tax Credit should be allowed even if the form is filed subsequently, citing various High Court and Supreme Court judgments.

The Tribunal condoned the delay in the first appeal, citing principles of natural justice and potential communication gaps in the faceless regime. The impugned order was set aside and restored to the CIT(A) for de novo adjudication.

The Tribunal accepted the assessee's prayer for a fresh hearing, setting aside the impugned order. The appeal was restored to the CIT(A) for de novo adjudication with a direction for the assessee to present its case.

The Tribunal admitted the appeals, condoned the delay, and restored the quantum appeal for de novo assessment. The penalty was deleted.

The Tribunal admitted the appeals, noting that the assessee had reasonable cause for non-representation. The quantum appeal was restored for de novo assessment, and the penalty was deleted.

The Tribunal held that the notice u/s 148, issued by the JAO instead of the FAO as per the scheme of faceless assessment, was liable to be quashed. The Tribunal quashed the notice, rendering other grounds academic.

The Tribunal held that the cash payment was made out of business expediency, considering the dispute between the parties and the circumstances of the transaction. Therefore, the disallowance made by the AO under Section 40A(3) was not justified.

The Tribunal held that the reopening of the assessment was valid, as the AO had a reason to believe that income had escaped assessment based on the information received. The Tribunal also found that the assessee had provided sufficient documentary evidence for the purchase and sale of shares, and the claim for exemption under Section 10(38) was genuine.

The Tribunal held that the assessee had substantiated the source of investment for the property purchase, relying on evidence presented, including sale agreements and bank transactions. Consequently, the addition made by the AO was deleted.

The Tribunal held that the reopening of the assessment was valid, as the assessee failed to disclose the bank account and explain the source of cash deposits. However, on merits, it restored the issue to the AO for fresh adjudication, directing the assessee to prove the source of deposits.

The Tribunal held that the higher tax rate of 60% under Section 115BBE is not applicable to transactions prior to April 1, 2017, as the survey occurred before this date and before the relevant amendment came into force. It directed the AO to apply normal tax rates to the surrendered income. The Tribunal also reduced the lump-sum disallowance from Rs. 5 Lacs to Rs. 2 Lacs, deleting the remaining Rs. 3 Lacs.

The Tribunal held that the assessee's accounting method did not prevent disallowance under Section 43B. However, the argument regarding the timing of GST payment (after Tax Audit but before the due date of return filing) was found to carry weight and was restored to the CIT(A) for verification.

The Tribunal noted that the CIT(E) had granted registration under Section 12A to the assessee trust. Consequently, the appeals against the earlier rejection order became infructuous. The assessee sought permission to withdraw these appeals.