ITAT Chennai Judgments — April 2025

The Tribunal held that rejecting evidence solely for non-reference to Rule 46A is not a strong ground, as substance should prevail over form. The assessee deserves another opportunity to present its case.

The Tribunal found that the assessee had made cash deposits and incurred expenses without deducting TDS. The Assessing Officer made additions under Sections 69 and 40(a)(ia) of the Act. The CIT(A) dismissed the appeal for want of prosecution. The Tribunal, considering the facts and in the interest of justice, remanded the matter to the Assessing Officer for fresh adjudication.

The Tribunal held that interest income earned from cooperative banks not holding a license under Section 22 of the Banking Regulation Act, 1949, would be eligible for deduction under Section 80P(2)(d). The directions of the CIT(A) were contradictory and partly reversed.

The Tribunal accepted the reasons for the delay as bona fide and condoned the delay in filing the appeal. Given that the assessee was unable to represent its case before the CIT(A), the Tribunal remanded the matter back to the CIT(A) for fresh consideration, granting the assessee an opportunity to present its evidence.

The Tribunal held that the reopening of the assessment was bad in law as it was based on a mere change of opinion and the AO did not have tangible evidence. The Tribunal quashed the reassessment order on legal grounds.

The Tribunal noted that the assessee had filed a petition for condonation of delay before the CCIT, which was pending when the CIT(A) decided the appeal. Therefore, the Tribunal remitted the matter back to the CIT(A) to decide after the CCIT's decision.

The Tribunal noted that the CIT(A) had inadvertently omitted to adjudicate ground no.2, which related to the assessment of gross receipts. Consequently, the Tribunal set aside the CIT(A)'s order.

The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's explanation and the lack of serious objections from the Revenue. The Tribunal noted that the assessee had not adequately complied with statutory notices and the AO had not provided sufficient opportunity of being heard.

For unaccounted partner's remuneration, the Tribunal upheld the CIT(A)'s deletion, reasoning that remuneration not deductible for the firm under Section 40(b) cannot be taxed in the partner's hands due to the proviso to Section 28(v), preventing double taxation. For unaccounted investment in immovable property, the Tribunal also upheld the CIT(A)'s deletion, finding that the AO erroneously relied on a retracted third-party statement without producing independent corroborative evidence to prove the cash payments originated from the appellant. The Tribunal emphasized that the onus was on the revenue to adduce proper evidence.

The Tribunal condoned the delay in filing the appeal, finding the assessee's reasons adequate. It set aside the orders of the lower authorities and remitted the case back to the Assessing Officer for fresh adjudication (de novo), instructing the AO to provide proper opportunity of hearing and the assessee to comply with notices and furnish all relevant evidence.

The Tribunal held that the restructuring of partners was an administrative matter and not a valid reason for delay. The medical reasons provided were not supported by documentary evidence. Therefore, the delay could not be condoned.

The Tribunal condoned the delay and admitted the appeal for adjudication. The Tribunal noted the assessee's illiteracy and lack of awareness of tax proceedings as reasons for non-compliance. In the interest of justice, the matter was remanded to the Assessing Officer with a cost.

The tribunal noted that the assessee wished to withdraw its appeal due to opting for the VSVS scheme. Consequently, the appeal was dismissed as withdrawn.

The Tribunal condoned the delay, finding the reasons for the delay to be bona fide. It remanded the matter back to the Assessing Officer for fresh adjudication, conditional on the assessee paying ₹5,000/- to the State Legal Aid Authority within 30 days, to provide an opportunity for the assessee to present all relevant details and evidence.

The Tribunal acknowledged the assessee's history of non-compliance but, considering an undertaking affidavit from the assessee's Secretary and in the interest of justice, decided to remand the matter back to the Assessing Officer. The remand is conditional on the assessee paying ₹5,000/- to the State Legal Aid Authority within 30 days, after which the AO is directed to decide the issue afresh based on submissions and evidence from the assessee.

The Tribunal condoned the delay in filing the appeal. It held that the assessee should be granted another opportunity to present their case before the CIT(E) subject to payment of costs, and accordingly, set aside the CIT(E)'s order.

The Tribunal held that the source of the deposits, which was from ordinary business sales, was not disputed. It was noted that the demonetization scheme did not prohibit the acceptance or deposit of SBNs prior to December 31, 2016. Therefore, a mere violation of certain notifications would not justify rejecting the explained source of funds.

Considering the principles of natural justice, the Tribunal set aside the CIT(E)'s order. The matter was remitted back to the CIT(E) with a direction to provide the assessee with another opportunity to be heard and to examine the application afresh in accordance with law.

The Tribunal condoned the delay in filing the appeal. While the Assessing Officer's objection was the unexplained source of ₹.50,50,000/-, the assessment order lacked details of the transaction. Therefore, the matter was remitted back to the Assessing Officer for fresh consideration.

The Tribunal noted that the CIT(E) rejected the application due to the assessee's failure to provide satisfactory explanations. However, the assessee's AR contended that adequate opportunity was not granted. The Tribunal, considering principles of natural justice, decided to provide another opportunity to the assessee.

The Tribunal held that the assessee failed to provide necessary evidence to justify the claims for technical services fees and cash payments. The grounds raised by the assessee were found to be general or lacked substantiation.

The Tribunal condoned the delay and set aside the order of the CIT(A), directing him to adjudicate the matter de novo after providing the assessee with an adequate opportunity of being heard. The grounds of appeal were allowed for statistical purposes.

The Tribunal ruled that the assessment under Section 153C was invalid as the assessee should have been treated as a 'searched person' under Section 153A, given that incriminating documents were found and seized from his premises and his statement recorded under Section 132(4). It also held that the additions under Section 69, based on a partially accepted and partially rejected statement of the assessee, were impermissible, especially when the ownership of properties was under dispute. Thus, the impugned additions were deleted.

The Tribunal noted that the issues were similar for both appeals and, with consent, heard them together. In the interest of justice, the Tribunal decided to remand both matters back to the Commissioner of Income Tax (Exemption) for fresh consideration.

The Tribunal held that the assessment proceedings initiated under section 153C were bad-in-law as the search was conducted at the assessee's premises, making section 153A applicable. Furthermore, the Tribunal found that the additions were based on an uncorroborated part of the assessee's statement, which was impermissible.

The Tribunal found that the assessee could not furnish necessary details to the CIT(A) despite opportunities. In the interest of justice, the matter was remanded to the CIT(A) for a fresh decision after considering evidence to be submitted by the assessee.

The Tribunal upheld the CIT(A)'s decision, confirming that unaccounted partner's remuneration not allowed as a deduction to the firm under Section 40(b) cannot be taxed in the hands of the partners due to the proviso to Section 28(v), thus preventing double taxation. For the undisclosed investment, the Tribunal ruled that the Assessing Officer failed to provide independent corroborative evidence beyond a retracted third-party statement and a flawed seized material, which was not sufficient to prove the cash payments originated from the appellant. Consequently, all nine appeals filed by the revenue were dismissed.

The Tribunal held that the source of deposits, which was from the sale of petroleum products, was not disputed and was created out of ordinary business sales. The acceptance of Specified Bank Notes (SBNs) during the demonetization period, even if in violation of certain notifications, did not automatically make the cash deposits unexplained, as the Assessing Officer did not dispute that the cash deposited was unaccounted.

The Tribunal held that interest income earned from cooperative banks, not holding a banking license under Section 22 of the Banking Regulation Act, 1949, is eligible for deduction under Section 80P(2)(d). Directions issued by the CIT(A) regarding Section 80P(2)(a)(i) were reversed as they were contradictory and not subject to appeal.

The Tribunal held that principles of natural justice were violated as the assessee was not afforded adequate opportunity to be heard. The order of the lower authorities was set aside, and the matter was remanded to the AO for fresh adjudication.

The Tribunal noted that the assessee did not appear before the CIT(A) and had contended that adequate opportunity was not granted. In the interest of justice and considering principles of natural justice, the Tribunal provided one more opportunity to the assessee.

The Tribunal noted the assessee's failure to appear before the lower authorities. However, considering the assessee's undertaking to cooperate and appear for fresh assessment proceedings, the Tribunal decided to remand the matter back to the Assessing Officer.

The Tribunal upheld the Ld. CIT(A)'s decision to delete the additions. For unaccounted partner's remuneration, it held that if remuneration is not deductible in the firm's hands under Section 40(b), it is not liable to be included in the partner's income as per the proviso to Section 28(v). Regarding unaccounted investment in immovable property, the Tribunal found that additions based solely on a retracted statement of a third party and uncorroborated loose sheets are not legally sustainable.

The Tribunal held that in the interest of justice, it is proper to remand the matter back to the CIT(E) for fresh consideration. This will enable the assessee to file the correct application as per the law.

The Tribunal found that both the AO and CIT(A) had passed ex-parte orders. In the interest of justice, the Tribunal decided to give the assessee another opportunity to substantiate their claim before the AO.

The Tribunal held that the AO had conducted proper inquiries and applied his mind before allowing the deduction for IBNR & IBNER provisions. The AO's decision was in line with several judicial precedents, including decisions of the Mumbai and Kolkata Tribunals, and observations of the Bombay High Court. Therefore, the PCIT's action under Section 263 was not justified as the AO's order was neither erroneous nor prejudicial to the interest of the revenue.

The Tribunal noted that the assessee did not provide timely details, and the AO did not have sufficient opportunity to examine all facts. Following a similar decision for AY 2013-14, the Tribunal restored the case to the AO for fresh assessment, providing an opportunity to the assessee to present all relevant documents.

The Tribunal held that the acceptance of SBNs was not prohibited under the Specified Bank Notes (Cessation of Liabilities) Act, 2017, and the assessee had explained the source of deposits. For property additions, it was found that the properties were purchased in earlier years from borrowed funds and disclosed income, making the additions a double taxation. Therefore, both additions were deleted.

The Tribunal held that the reassessment proceedings, initiated for verifying the source of investment in an immovable property, could not be continued to make additions on other issues when the original reason for reopening did not hold good. The additions made on other grounds were therefore set aside.