ITAT Chennai Judgments — March 2025

The Tribunal held that the appeals should be remanded to the CIT(A) for a fresh decision after considering the written submissions and documentary evidence from the assessee, as the assessee was not afforded sufficient opportunity previously.

The Tribunal held that the CIT(A) was not justified in dismissing the appeal without awaiting the CCIT's decision on the pending condonation petition for delayed filing of the return. The matter was remitted back to the CIT(A) for de novo adjudication after the CCIT's decision.

The Tribunal accepted the assessee's request to withdraw the appeal, as the assessee had opted for the Vivad-Se-Vishwas Scheme, 2024, to settle the dispute. Consequently, the appeal was dismissed as withdrawn under the VSVS-2024 scheme, with no objection from the Revenue.

The Tribunal condoned the delay in filing the appeals, noting the assessee's claim of non-receipt of notices and the ex-parte nature of the earlier orders. The Tribunal restored the appeals to the CIT(A) for de novo hearing, subject to a cost of Rs. 2,000/- per appeal.

The Tribunal noted the assessee's failure to respond to notices and provide evidence before the CIT(A). However, in the interest of justice, the matter was remanded back to the CIT(A) for fresh adjudication after considering the assessee's submissions and evidence.

The Tribunal noted that the AO and CIT(A) arbitrarily rejected the books of accounts. While acknowledging the assessee's failure to provide complete evidence, the Tribunal considered it appropriate to estimate profit at 3% of turnover, setting aside the lower authorities' order. The AO was also directed to verify the eligibility of carry-forward losses.

The Tribunal held that the statute does not prescribe a time limit for filing Form 10. Relying on High Court decisions, the Tribunal set aside the CIT(A)'s order and remitted the case to the AO to consider the merits of Form 10.

The Tribunal held that the assessee's decision to hire gold stock was a better business option than taking a loan to purchase it, considering the interest cost involved. The hire charges were incurred solely for the purpose of business.

The Tribunal, while acknowledging the submissions of the revenue, decided to grant the assessee another opportunity for hearing based on the principle of natural justice. The impugned orders were set aside and restored to the CIT(A) for de novo appeal hearings.

The Tribunal condoned the delay in filing the appeal. It noted that the quantum appeal, based on which the penalty was levied, had been restored to the CIT(A) by the ITAT. Therefore, the Tribunal deemed it appropriate to remit the penalty matter back to the CIT(A) for a fresh adjudication.

The Tribunal, in the interest of natural justice, decided to set aside the ex-parte orders and remit the matter back to the AO for de novo adjudication, subject to the assessee paying costs and appearing before the AO with complete details.

The Tribunal held that while the reassessment proceedings were validly initiated, the assessee could not furnish complete evidence before the lower authorities. Therefore, the matter was remanded to the Assessing Officer for a fresh examination.

The Tribunal found that the assessee failed to establish the nexus between the cash deposits and turnover and could not explain the source of these deposits with documentary evidence. To meet the ends of natural justice, the matter was remanded to the CIT(A) for a fresh decision.

The Tribunal condoned the delay and allowed the appeal partly. It directed the AO to adopt the cost of acquisition as recorded in the assessee's books (Rs. 6.07 Crores) for capital gains computation and to delete the addition of loan waiver under Section 41(1), citing Supreme Court precedent.

The Tribunal held that the primary legal ground regarding the limitation of the assessment order was dismissed. However, on the merits of the addition of professional fees, the Tribunal found the AO's order to be cryptic and the CIT(A)'s decision to be ad-hoc. Therefore, in the interest of natural justice, the matter was set aside and remitted back to the AO for fresh adjudication.

The Tribunal held that the filing of the audit report in Form 10CCB is directory and not mandatory. Since the report was filed before the assessment was completed, the assessee is eligible for the deduction under Section 80IAC.

The tribunal condoned the delay in filing the appeals. It held that the legal ground of limitation raised by the assessee was dismissed as the assessment order was passed within the extended due date. However, on merits, the tribunal found the assessment order to be cryptic and set aside the CIT(A)'s order, remitting the issue back to the AO for fresh adjudication to provide a fair opportunity to the assessee.

The Tribunal ruled that interest on enhanced compensation for compulsory acquisition of agricultural land is part of the compensation and is exempt from income tax under Section 96 of the RFCTLARR Act, 2013, and Section 10(37) of the Income Tax Act. Citing Supreme Court and High Court judgments, the Tribunal set aside the CIT(A)'s order and deleted the addition made by the Assessing Officer.

The Tribunal, relying on various High Court judgments, held that the requirement to file the audit report (Form 10CCB) along with the return is directory and not mandatory. It was affirmed that if the audit report is filed before the completion of the assessment (i.e., before the Section 143(1) order), the deduction should be allowed. Therefore, the denial of deduction under Section 80IAC by the AO and CIT(A) was set aside, and the AO was directed to allow the deduction considering the audit report filed.

The Tribunal condoned the delay, noting that the CIT(A) had not addressed the merits of the case. It set aside the CIT(A)'s order and remanded the case for fresh adjudication (de novo) with directions for the assessee to ensure full compliance with all statutory notices. A cost of Rs. 5,000 was imposed on the assessee for wasting judicial time, payable to the Tamil Nadu Legal Services Authority.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause. It was noted that the Hon'ble Supreme Court had extended the limitation period due to Covid-19. The Tribunal set aside the order of the CIT(A) and remitted the matter back for adjudication on merit.

The Tribunal condoned the delay in filing the appeals. It was held that penalty for concealment under Section 271(1)(c) cannot be levied when additions are based on estimates. The additions made were below Rs. 50 lakhs, and several judicial precedents supported this view.

The Tribunal noted that the Hon'ble Supreme Court had extended the limitation period due to Covid-19, and therefore, there was no delay in filing the appeal. The CIT(A) should have condoned the delay and adjudicated the appeal on merits.

The Tribunal noted that no affidavit justifying the delay was filed by the assessee. Therefore, the Tribunal concluded that the assessee did not have justified grounds for the delay in filing the appeal.

The Tribunal condoned the delay, finding sufficient cause. Considering the principles of natural justice, the Tribunal set aside the CIT(A)'s ex-parte order and remitted the matter back for adjudication after providing the assessee another opportunity of hearing.

The Tribunal condoned the delay, finding the assessee's explanation adequate. The Tribunal found that Section 40(a)(ia) mandates only a 30% disallowance and therefore, the CIT(A)'s direction to add back the differential amount of Rs. 7,79,000/- was not sustainable.

The Tribunal held that penalty under Section 271(1)(c) cannot be imposed when additions are made on an estimate basis, as concealment requires willful mens rea, which is absent in estimated assessments. The Tribunal found that the additions made by the AO were purely on an estimate basis.

The Tribunal condoned the delay, set aside the CIT(A)'s order, and remanded the case for adjudication on merits, emphasizing that the assessee be given an opportunity to be heard. A cost of Rs. 5,000 was imposed.

The Tribunal noted that the assessee's counsel informed them about the decision to opt for the VSVS scheme and the desire to withdraw the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that both the AO and CIT(A) passed orders ex-parte, violating principles of natural justice. The Tribunal set aside the orders and remanded the matter back to the AO for fresh adjudication, subject to the assessee paying costs of Rs. 5,000/-.

The Tribunal held that no appeal lies against the order of the CIT(E) passed on a petition for condonation of delay under Section 119(b)(2) of the Act.

The Tribunal held that the assessee adequately explained the source for the immovable property purchase from his NRE account for AY 2011-12, directing deletion of the addition related to Rs.40.00 Lakhs. However, the difference between the sale consideration and stamp duty value was sustained. The addition for term deposits was deleted. For AY 2012-13, the claim for cost of improvement was not accepted due to lack of evidence. However, the claim for deduction under Section 54 for purchasing a new house property was allowed.

For A.Y. 2011-12, the Tribunal deleted the Rs.40 Lakhs addition for property purchase after finding the source explained from the assessee's NRE HDFC account, but sustained the addition for the Rs.25.36 Lakhs difference between claimed purchase price and stamp duty value. The Rs.20 Lakhs addition for the bank deposit was deleted based on a bank certificate. For A.Y. 2012-13, the Tribunal sustained the disallowance of Rs.23.50 Lakhs as cost of improvement due to lack of evidence for cash payment, but allowed the Section 54 deduction for the new house property purchase of Rs.40 Lakhs as it was registered within the stipulated timeframe.

The Tribunal condoned a 14-day delay in filing the appeals, accepting the assessee's justification. It ruled that a penalty under Section 271(1)(c) cannot be imposed when additions to income are based on estimates, as concealment requires a willful mens rea. Consequently, the Tribunal set aside the orders of the lower authorities and directed the deletion of the penalty for all assessment years.

The Tribunal noted that the assessee had provided details of customers from whom cash advances were received and their accounting in the books of account. The Tribunal found it appropriate to remit the matter back to the Assessing Officer for denovo adjudication.

The Tribunal condoned the delay in filing the appeals. It held that no penalty under Section 271(1)(c) can be imposed for concealment when the additions to income are made on an estimated basis by the AO, as concealment requires willful mens rea which is absent in estimated additions. Therefore, the penalty orders were set aside.

The Tribunal held that the services provided did not 'make available' technical knowledge or expertise to the recipient, as required by the India-US DTAA. Relying on its own prior decisions for the same assessee and other precedents, the Tribunal found that the services were not taxable as 'fees for included services' or royalty. One ground of appeal was allowed for statistical purposes, and another was dismissed.

The Tribunal found no evidence from the AO that the deposits were unrelated to the assessee's admitted business or that demonetization was initiated for these activities. Relying on a coordinate bench decision (TASMAC), it held that legitimate SBN receipts are not illegal and their source is similar to other currency. Therefore, the addition made by the lower authorities was set aside, and the AO was directed to delete the impugned amount.

The Tribunal held that there was sufficient cause for the delay in filing the appeal. The CIT(A) should have admitted the appeal and decided the case on merits.

The Tribunal held that the notices for reopening issued on 30.06.2021 were barred by limitation under Section 149(1)(b) of the substituted Act of 2021 (Finance Act, 2021). Consequently, the reassessment proceedings were set aside.

The Tribunal noted the assessee's decision to resolve the dispute under the DTVSV scheme and treated the appeal as dismissed as withdrawn. Liberty was granted for restoration if the scheme resolution fails.

The Tribunal, while noting the assessee's failure to appear before the CIT(A) and the ex-parte nature of the AO's order, restored the appeal to the AO for de novo assessment. This was done to ensure principles of natural justice, subject to a cost of Rs. 5,000 to be paid by the assessee.

The Tribunal held that the disallowance of PF and ESIC contributions was justified, as per the Supreme Court's ruling, and the "Checkmate Services" judgment applies retrospectively. However, the issue regarding the Section 80JJAA deduction was remitted to the Assessing Officer for fresh adjudication.

The Tribunal held that the Pr. CIT could not substitute his own view for that of the AO if the AO had taken a plausible view and conducted necessary inquiries, even if partial. The Tribunal noted that similar issues for other years had been decided in favor of the assessee and confirmed by the Tribunal. It also referred to Supreme Court judgments on what constitutes an erroneous and prejudicial order.

The Tribunal allowed the assessee to withdraw the appeals as they had opted for the Vivad-Se-Vishwas Scheme. The appeals were dismissed as withdrawn.

The Tribunal, while acknowledging the assessee's failure to appear and the ex-parte nature of the order, restored the appeal to the AO for denovo assessment, emphasizing the principle of natural justice. The assessee was directed to furnish evidence and pay a cost of Rs. 5,000/-.

The Tribunal held that the cost of land acquired for constructing a residential house is includible in the cost of the new asset for the purpose of Section 54F deduction, following the jurisdictional High Court's decision. The Tribunal also allowed the cost of improvement claimed by the assessee for the land sold.

The Tribunal noted that the appeals were not prosecuted before the CIT(A) because the assessee missed receiving notices. While acknowledging the assessee's default, the Tribunal, in the interest of natural justice, set aside the impugned orders and restored the appeals to the AO for denovo assessment.

The Tribunal restored both appeals to the file of the Assessing Officer for denovo assessment. This was done to provide the assessee with an opportunity to present their case and evidence, keeping in mind the principles of natural justice, despite the assessee's past defaults.

The Tribunal held that the CIT(A) ought to have condoned the delay, especially considering the assessee's status as a co-operative society and the reasons provided. The Tribunal also found that the CIT(A) should have awaited the outcome of a condonation petition filed before the Chief Commissioner of Income Tax.