ITAT Chandigarh Judgments — October 2025

The Tribunal found that the Ld. Addl. CIT(A) had misinterpreted the return of income, as the assessee had indeed debited various expenses such as freight, power, fuel, salary, wages, and depreciation, and also reported closing stock of finished goods. These facts proved that manufacturing activity had commenced during the year. Consequently, the impugned order of the Addl. CIT(A) was set aside, and the Assessing Officer was directed to allow the claim.

The Tribunal held that the impugned order of the CIT(A) was ex-parte and set it aside, restoring the matter to the CIT(A) for fresh adjudication. The assessee was granted an opportunity to present their case.

The Tribunal set aside the ex-parte order of the CIT (Appeals) and restored the matter for fresh adjudication. This remand was conditional on the assessee depositing Rs. 10,000/- in the Prime Minister Relief Fund as costs, with failure to do so justifying dismissal of the appeal by the CIT (Appeals).

The Tribunal held that the assessee provided affidavits from relatives and bank statements to support the loan claim. The issue of the PAN number was also addressed, directing the new PAN to be used for all purposes. The additions made by the lower authorities were found to be unjustified.

The Tribunal noted that the revenue could not point out the specific reason for denial of the TDS claim. In similar cases, the matter has been restored to the Assessing Officer. Hence, the impugned order was set aside.

The Tribunal held that the compensation received by the assessee on voluntary retirement, in the context of the closure of the HMT Tractor Division, qualifies for exemption under Section 10(10B) of the Income Tax Act. The Tribunal noted that the scheme was initiated by the Government of India to provide relief and rehabilitation to employees due to the company's closure.

The Income Tax Appellate Tribunal (ITAT) set aside the impugned order of the CIT (Appeals) and restored the matter for fresh adjudication. The CIT (Appeals) was directed to provide a proper and adequate opportunity of hearing to the assessee, who in turn was advised to remain vigilant and check emails.

The Tribunal held that the assessee has a right to be heard before an order is passed by the CIT(E) as per the Income Tax Act. Since this opportunity was not provided, the case was remanded back to the CIT(E).

The Tribunal held that the assessee has a right to be heard before an order is passed by the CIT(E). Since this was not done in the present case, the Tribunal remanded the case back to the CIT(E) to grant an opportunity of hearing to the assessee and then pass a fresh order.

The Tribunal found that the assessee failed to provide a plausible explanation for the delay, especially after May 2022. It characterized the assessee as negligent and callous in pursuing legal remedies. The Tribunal dismissed the appeals, distinguishing the cited Apex Court and Coordinate Bench decisions on condonation of delay, stating that the assessee did not demonstrate 'sufficient cause' and a prior Coordinate Bench decision was distinguishable due to incomplete facts presented.

The Tribunal observed a delay of over five years and five months and found that the assessee failed to provide a plausible explanation for the delay, especially after May 2022. It concluded that the assessee was negligent and callous in pursuing legal remedies, thereby dismissing all appeals. The Tribunal distinguished the previous condonation of delay cases cited by the assessee on the grounds of inadequate disclosure of facts.

The Tribunal found no justification for the Assessing Officer's estimation of agricultural income. It noted that the assessee had provided copies of agreements for the sale of 'kinnow' fruits and bank statements demonstrating the receipt of sale proceeds through banking channels. Since the AO had not disputed the land ownership or previous assessments under Section 143(3), the additions made by the AO and confirmed by the CIT(A) were deemed unsustainable.

The Tribunal held that rejection of an application solely for quoting an incorrect sub-clause in Form 10AB is unjustified, as Section 12AB provisions are benevolent and remedial, and minor procedural mistakes should not deprive a genuine charitable institution of registration.

The Income Tax Appellate Tribunal (ITAT) found that the Assessing Officer had conducted sufficient inquiries and taken a plausible view on the flagged issues. The Tribunal noted that the PCIT failed to demonstrate how the assessment order was erroneous and prejudicial to the revenue due to inadequate inquiry by the AO, and also observed that the PCIT's show-cause notice was a verbatim copy of an audit objection, suggesting a lack of independent application of mind. The Tribunal concluded that the PCIT's assumption of jurisdiction under Section 263 was invalid.

The Tribunal held that the assessee's approach in pursuing the legal remedy was negligent and callous, and no sufficient cause for the inordinate delay was demonstrated. The Tribunal distinguished the reliance placed on a coordinate bench decision.

The Tribunal found the assessee negligent and callous for not providing any plausible explanation for the delay in filing appeals after May 2022, despite the death of counsel and the pandemic. It noted that the specific facts regarding the death of the Ld. AR were not brought to the notice of the earlier Coordinate Bench whose decision was cited by the assessee. Consequently, the Tribunal dismissed all appeals.

The Tribunal held that the CIT(A) erred in dismissing the appeal for non-prosecution without adjudicating on merits, violating the principles of natural justice. The order was therefore set aside.

The Tribunal held that the AO ought to have initiated proceedings under Section 153C, not Section 148, as the information was derived from a search on a third party. Consequently, the assessment framed under Section 148 was quashed. The Tribunal also found the reopening under Section 148 to be bad in law due to wrong reasons to believe.

The Tribunal ruled that protective assessments in an individual's hands are not permissible when substantive additions for the same income have already been made in the company's hands, as a company and an individual are distinct legal entities. Since no evidence demonstrated the assessee's personal involvement or benefit from the alleged bogus transactions, the protective assessment against her in her individual capacity could not be sustained. The Tribunal, citing relevant case law emphasizing taxing the 'right person', allowed the assessee's appeal.

The Tribunal observed that the assessment was completed without affording the assessee an adequate opportunity to present submissions. Consequently, the case was remanded back to the Assessing Officer for a fresh assessment (de novo), requiring the AO to provide due and adequate opportunity of hearing to the assessee.

The Tribunal found that the order passed by the Addl. CIT(A) was ex-parte. Considering the principles of natural justice, the assessee should be given an opportunity to be heard.

The Tribunal held that protective additions made in the hands of an individual, when substantive additions have already been made in the hands of the company (a separate legal entity), are not sustainable in law. The AO failed to appreciate that a body corporate and an individual are distinct entities.

The Tribunal held that the assessee had provided sufficient documentary evidence to establish the identity, genuineness, and creditworthiness of the lenders for unsecured loans and the sources of partner's funds. The AO's rejection of these was deemed ill-founded.

The Tribunal noted that the assessee could not file relevant documents before either the Assessing Officer or the CIT(A). Therefore, the matter was remanded back to the Assessing Officer for a fresh adjudication.

The Income Tax Appellate Tribunal held that the approval granted by the Addl. CIT under Section 153D was mechanical and ritualistic, without the required application of mind, as it covered multiple assessees and assessment years through a common order. Citing numerous precedents from the Supreme Court and High Courts, the Tribunal concluded that such a mechanical approval vitiated the assessment orders, as Section 153D mandates an independent application of mind for each assessee and each assessment year.

The Tribunal held that the CIT(A) rightly set aside the assessment order and directed the AO to make a fresh assessment after providing a proper opportunity of hearing. The Tribunal found no reason to interfere with the CIT(A)'s order.

The Tribunal held that the notice under Section 148 was issued by the JAO instead of the Faceless Assessing Officer (FAO), which is contrary to the scheme of faceless assessment mandated by Section 151A and the relevant notification. Therefore, the notice and subsequent assessment proceedings are vitiated.

During the tribunal proceedings, the assessee demonstrated compliance with Rule 37BA(2) by filing declarations and getting the TDS reflected in the HUF's Form 26AS. Since this new evidence was not available to lower authorities, the Tribunal remanded the matter to the Assessing Officer for verification of these documents and to grant the TDS credit if compliance is confirmed.

The Tribunal held that the prior approval under Section 153D was a mandatory statutory requirement and if granted mechanically without application of mind, it would vitiate the assessment orders. Several grounds related to additions based on alleged bogus purchases and estimated profits were also decided.

The Tribunal held that the approval granted by the Addl. CIT under Section 153D was mechanical and not done with due application of mind. This statutory requirement is mandatory and not a mere procedural formality. Consequently, the assessment orders passed without valid approval are unsustainable.

The Tribunal held that the approval granted under Section 153D of the Income Tax Act requires a mechanical exercise without application of mind, which violates the statutory requirement. It further held that the assessment orders were vitiated due to the lack of valid approval, quashing the same.

The Tribunal held that the approval granted under Section 153D of the Income Tax Act was a mandatory statutory requirement and was not meant to be a mechanical exercise. It found that in the present cases, the approval was granted without proper application of mind, thus vitiating the assessment orders. Consequently, the assessment orders were quashed.

The Tribunal condoned the 352-day delay in filing the appeal. Noting that both the assessment and first appeal were decided ex parte and the addition was presumptive, the Tribunal held that in the interest of substantial justice, the matter should be remanded to the Assessing Officer for a fresh assessment. The assessee is to be given adequate opportunity to present evidence and cooperate with the AO.

The Tribunal found that the assessee had provided credible evidence for the source of cash from genuine housing loan withdrawals and that the Department failed to show the funds were used elsewhere. Citing the Punjab & Haryana High Court judgment in Shivcharan Dass v. CIT, the Tribunal ruled that mere time lapse between withdrawal and deposit does not justify addition. Therefore, the addition was deleted to the extent of Rs. 27,45,000/-, restricting the unexplained cash to Rs. 3,00,000/-.

The Tribunal held that the approval granted by the Addl. CIT u/s 153D was mechanical and without application of mind. This rendered the assessment orders unsustainable. Consequently, the appeals of the assessee were allowed, and the appeals of the Revenue were dismissed.

The tribunal allowed the assessee's primary jurisdictional ground, holding that the approval granted by the Additional CIT under Section 153D was mechanical and without due application of mind, thereby vitiating the assessment orders for all years. For AY 2015-16, the assessment under Section 153A was quashed due to the absence of incriminating material. The tribunal also ruled against blanket rejection of books for minor discrepancies, deleted additions for alleged bogus purchases due to lack of corroborative evidence, and directed that excess cash and stock found during search be taxed as business income at normal rates, not under Section 115BBE. Additions for unexplained investment in property were confirmed only for the advance paid, deleting the rest.

The Tribunal primarily held that the mandatory approval granted by the Additional CIT under Section 153D of the Income Tax Act, 1961, was mechanical, lacking proper application of mind, and thus vitiated the assessment orders for all years. It further ruled that the rejection of the assessee's books of accounts was not justified for minor discrepancies, and additions for alleged bogus purchases were deleted where sales were not disputed and payments were made by cheque. Additionally, unexplained cash and stock offered by the assessee's partner as business income should be taxed at normal rates, not under Section 115BBE, as per settled legal principles.

The Tribunal, relying on various Supreme Court and High Court precedents, held that the approval granted by the Additional CIT under Section 153D was mechanical and without proper application of mind. Such a mechanical approval, being contrary to statutory requirements and judicial pronouncements, vitiates the assessment orders passed after a search operation, rendering them unsustainable in law.

The Tribunal found that the Additional CIT's approval under Section 153D was indeed mechanical, without considering the relevant material or applying independent judgment, as evidenced by the common proforma approval for multiple assessees and assessment years. Relying on various High Court and Supreme Court precedents emphasizing the non-mechanical nature of such approvals, the Tribunal concluded that this procedural flaw vitiated the assessment orders. Consequently, the assessments were quashed.

The Tribunal, relying on Supreme Court and various High Court judgments, held that approval under Section 153D is a mandatory statutory requirement necessitating independent application of mind, not a mechanical exercise. It found that the approval in this case was mechanical, granted via a common proforma for multiple assessees and assessment years, without due consideration of specific facts or seized material. Consequently, the assessment orders were deemed unsustainable and were quashed.

The Tribunal held that the approval granted by the Additional CIT under Section 153D for the search assessments was mechanical and without proper application of mind, thus vitiating the assessment orders. Consequently, assessment orders for A.Y. 2015-16 were quashed due to lack of incriminating material and mechanical approval. For other years, additions related to rejection of books and bogus purchases were deleted, while additions for unaccounted sales, capital introduction, and excess cash/stock were confirmed but directed to be taxed at normal business rates instead of Section 115BBE.

The Tribunal held that the commission paid to foreign agents was income earned on foreign land for services rendered outside India. Since the foreign agents did not have any permanent establishment in India, their income was not taxable in India, and consequently, no TDS was required to be deducted on these payments. The findings of the CIT(A) were therefore not justified.

The Tribunal observed that the CIT(A) had himself found the services to be commission-based, not FTS, and the department had not appealed this finding. It held that commission paid to foreign agents for services rendered outside India, without any Permanent Establishment in India, is not taxable in India. Consequently, no TDS was applicable on such payments.

The Tribunal held that the transaction was an asset purchase agreement and not a slump sale. Since no undertaking was acquired as a going concern, no goodwill was generated. The Tribunal also noted that the predecessor had not claimed depreciation on the assets, and the assets were put to use for more than 180 days, allowing for 100% depreciation.

The Tribunal held that the notice under Section 148, having been issued by the Jurisdictional Assessing Officer (JAO) on 06-04-2022 instead of a Faceless Assessing Officer (FAO), violated Section 151A and CBDT Notification No.18/2022. Citing the Punjab & Haryana High Court decisions in *Jatinder Singh Bhangu* and *Om Satya Overseas*, the Tribunal quashed the impugned notice and the subsequent assessment order, rendering the assessee's appeal allowed and the revenue's appeal infructuous.

The Tribunal held that the approval granted by the Additional CIT under Section 153D for the block assessments was mechanical and ritualistic, lacking proper application of mind, and thus vitiated the assessment orders for all years. It affirmed that no incriminating material was found for AY 2015-16. For other years, the Tribunal ruled against the rejection of books of accounts for minor defects, deleted additions for bogus purchases made without corroborative evidence, upheld the CIT(A)'s reduced GP rate for unaccounted sales based on loose papers, confirmed additions for unexplained capital, and directed that excess cash/stock declared by the partner as business income during search be taxed at normal rates, not under Section 115BBE.

The Tribunal held that the issue is covered by the decision of the Himachal Pradesh High Court in Pr.CIT v. Kangra Central Co-operative Bank Ltd., which ruled that Section 43D is retrospective and applies to co-operative banks for prior assessment years. Therefore, notional interest on NPAs not credited to the profit and loss account cannot be taxed until realized.

The Tribunal held that the Assessing Officer's initiation of reassessment proceedings was mechanical and based on borrowed satisfaction without independent application of mind or verification of basic particulars. The Department failed to produce any evidence to substantiate the alleged investment.

The Tribunal upheld the CIT(A)'s decision, ruling that when sales are duly recorded in audited books and VAT returns, cash deposits cannot be treated as unexplained without rejecting the books. It emphasized that the 'human probability' test cannot override verifiable documentary evidence, and the assessee's explanation, supported by audited books and VAT data, proved the source of the deposits, rendering Section 68 inapplicable.