ITAT Chennai Judgments — July 2025

The Tribunal admitted the additional ground and found that the notice under Section 148 was issued by a non-jurisdictional officer, violating the e-assessment scheme. Following jurisdictional High Court decisions, the Tribunal set aside the notice and consequential orders.

The Tribunal found that the assessee's transactions were back-to-back invoices where the AE acted as a pass-through entity. The pricing was negotiated directly with the end customer, making CUP the most appropriate method.

The Tribunal held that the assessee is eligible for exemption of salary earned for services provided to TCS Malaysia, even though it was received in India. The reasoning was based on the assessee qualifying as a Tax Resident of Malaysia and offering the income to tax in Malaysia. The Tribunal found that Article 16(1) of the India-Malaysia DTAA mandates that remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is exercised in the other State, such remuneration may be taxed in that other State. However, the Tribunal's analysis, supported by various case laws including those from the Madras High Court and Karnataka High Court, emphasized that for salary to be taxable in India under Section 5(2)(b), the income must be earned in India for services rendered in India. The Tribunal noted that the assessee's employment services were rendered for TCS Malaysia. The Tribunal also highlighted that in case of conflict between the Act and the DTAA, the DTAA provisions prevail as per Section 90(2). The Tribunal allowed the appeal of the assessee, granting exemption for the salary earned abroad but received in India, as it was taxed in Malaysia.

The ITAT held that the assessee had shown sufficient cause for the delay in filing the appeal, which was due to the pendency and subsequent withdrawal of a writ petition to pursue the statutory appellate remedy. Consequently, the ITAT remitted the matter back to the CIT(A) with a direction to admit the appeal and decide it afresh on merits after providing a proper opportunity of being heard to the assessee.

The Tribunal found that the CIT(A) dismissed the appeal without considering the assessee's submissions, violating principles of natural justice. The matter was remitted back to the CIT(A) for a fresh decision.

The Tribunal held that the order passed by the CIT(E) rejecting the condonation application is not an appealable order before the Tribunal under Section 253 of the Act. Therefore, the grounds raised by the assessee were rejected.

The Tribunal held that the penalty order was passed without considering the assessee's application for immunity under Section 270AA. Since the assessee was eligible for immunity and had a valid application pending, the penalty order was unjustified.

The Tribunal noted that the assessee was not given a proper opportunity to be heard and was willing to furnish evidence. Therefore, the Tribunal allowed the appeal for statistical purposes, remitting the matter back to the CIT(A) for a fresh hearing.

The Tribunal condoned the delay of 398 days in filing the appeal. Finding that the assessee claimed non-receipt of notices, the Tribunal, in the interest of justice, set aside the CIT(A)'s order and remanded the case for de novo adjudication, providing the assessee another opportunity to be heard.

The Tribunal held that statements recorded under Section 133A, without corroborative evidence, do not have sufficient evidentiary value to form the sole basis for assessment. Admissions made during such surveys can be retracted if supported by evidence.

The Tribunal found that the difference arose due to accounting treatment and that the total income returned was offered to tax. However, to verify the facts, the Tribunal decided to remit the issue back to the Assessing Officer.

The Tribunal held that the demand raised against the assessee for short deduction of TDS warrants deletion. The intention behind the circulars is to ensure compliance by the payee, not to punish the payer who unintentionally missed checking the payee's PAN status.

The Tribunal held that the assessee should be granted one more opportunity to substantiate their case before the AO in the interest of justice and in accordance with the principles of natural justice. The AO had made an addition of Rs. 1,33,80,000/- on account of cash deposits, as the assessee had not explained their source. The assessee had submitted additional evidence before the CIT(A) to explain that the deposits were business receipts from the sale of prepaid vouchers and SIM cards. However, the CIT(A) did not admit this additional evidence and dismissed the appeal. The ITAT found merit in the assessee's plea for a further opportunity. Accordingly, the Tribunal set aside the order of the CIT(A) and remitted the matter back to the AO for verification of the source of cash deposits in accordance with law. The assessee was directed to appear before the AO on the hearing date and furnish all relevant details for fresh consideration. The appeal was allowed for statistical purposes.

The Tribunal held that the notice under Section 148 and the consequential order under Section 148A were not issued in accordance with the mandatory faceless procedure prescribed by the CBDT's e-assessment scheme. Therefore, these were set aside.

The Tribunal held that the notice issued by the Jurisdictional Assessing Officer (JAO) was not in accordance with the e-assessment scheme, 2022, which mandates faceless issuance. Following jurisdictional High Court decisions, the Tribunal set aside the impugned notice and consequential orders.

The Tribunal held that the CIT(A) was correct in deleting the addition of agricultural income as the AO had accepted similar claims in prior years. Regarding sundry creditors, the Tribunal found that opening balances from previous years cannot be assessed under Section 68 in the current year, and the assessee had provided evidence of these being carried forward.

The Tribunal held that the filing of Form 10B is a procedural and directory requirement, not mandatory. Therefore, denial of exemption solely on the ground of delayed filing of the audit report, when substantive conditions were fulfilled, is not justified.

The Tribunal held that the filing of the audit report within the stipulated time is directory, not mandatory, and the exemption under Section 10(23C)(v) should be granted by dispensing with the technical breach. The nature of receipts as offerings to a religious institution cannot be considered taxable.

The Tribunal held that the assessee should be granted one more opportunity to present their case and submit necessary documents to the CIT(E). The matter was remitted back to the CIT(E) for fresh consideration of both the Section 12A and Section 80G applications.

The Tribunal noted that the assessee's Authorized Representative claimed technical glitches prevented timely submission of an agreement and ledger account explaining the cash deposits as commission receipts. In the interest of justice, the Tribunal granted one more opportunity.

The Tribunal upheld the CIT(A)'s decision to delete the additions. It found that the assessee had provided sufficient evidence for agricultural income and that the sundry creditors represented opening balances from previous years, not new credits assessable under Section 68.

The Tribunal set aside the order of the Ld. CIT(A) and restored the assessment to the file of the AO for a de novo assessment. The AO was directed to share any bank statement from 'Andhra Bank' with the assessee, and the assessee was directed to diligently file documents to prove the agricultural income source of the deposits.

The Tribunal held that the filing of Form 10B is a procedural and directory requirement, not mandatory. Therefore, denial of exemption solely on the ground of delayed filing of the audit report, when substantive conditions were fulfilled, is not justified.

The Tribunal held that the assessee should be granted one more opportunity to present their case and submit necessary documents to the CIT(E). The matter was remitted back to the CIT(E) for fresh consideration of both the Section 12A and Section 80G applications.

The Tribunal held that the land sold was rural agricultural land and not a capital asset. The AO's addition of long-term capital gains was set aside.

The Tribunal held that the assessee failed to substantiate the cash deposits with credible documentary evidence, as confirmations were on plain paper without supporting documents. Given the unverifiable source of funds and the nature of the business, the Tribunal estimated 20% of the total cash deposits as additional income.

The Tribunal condoned the delay of 146 days in filing the appeal before the CIT(A) due to medical reasons. On merits, the Tribunal found that the Assessing Officer was not justified in computing income under Section 44AD and directed recomputation under Section 44AE.

The Tribunal held that the filing of the audit report within the stipulated time is directory, not mandatory, and the exemption under Section 10(23C)(v) should be granted by dispensing with the technical breach. The nature of receipts as offerings to a religious institution cannot be considered taxable.

The Tribunal held that the assessee complied with the requirement for Section 80JJAA deduction as Form 10DA was filed within the extended due date. Regarding TDS credit, the Tribunal found merit in the assessee's submission concerning demerged entities and directed the AO to verify and allow the credit.

The Tribunal, citing principles of natural justice, condoned the delay in filing the appeal. It held that the assessee should be provided another opportunity to present their case before the CIT(A) for denovo adjudication.

The Tribunal held that the CIT(E) did not properly consider the documents submitted by the assessee, including the trust deed and supplementary deed. The Tribunal set aside the order of the CIT(E) and remanded the matter back for fresh consideration.

The Tribunal held that the provisions of Chapter X (Transfer Pricing) are not applicable to a company opting for the Tonnage Tax Scheme (TTS). The TTS, governed by Chapter XII-G, provides a distinct and self-contained mechanism for computing income based on the tonnage of ships, as stipulated in Section 115VG. The Tribunal reasoned that any variation in the determination of Arm's Length Price (ALP) for charter hire rates or sale value of a ship would not impact the computation and declaration of income under the TTS, as it is computed on a separate and independent basis. The core activities of a tonnage tax company, as defined in Section 115VI(2), include operating qualifying ships and ship-related activities, which encompass charter hire and the purchase/sale of ships. Therefore, the adjustments made by the TPO and AO concerning charter hire charges and the sale of the vessel were considered untenable in law, especially in light of Section 115VA, which prohibits the operation of Sections 28 to 43C. Consequently, the upward adjustments of Rs.1,54,07,156/- and Rs.7,49,00,991/- were directed to be deleted. The Tribunal noted that the DRP had also acceded to this legal claim. As the basis of assessment was nullified by the non-applicability of transfer pricing provisions, the jurisdiction of the TPO was ousted, and other grounds became academic.

The Tribunal held that the assessee was called exparte as they did not appear for the hearing. The CIT(A)'s decision to uphold the additions made by the AO was found to be justified due to the assessee's non-compliance and failure to provide proper documentation.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable. It reasoned that the PE's existence was assumed for settlement purposes under MAP, and there was no conclusive proof or corroborative evidence to suggest concealment of income or furnishing of inaccurate particulars by the assessee.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable. It reasoned that the PE's existence was assumed for settlement purposes under MAP, and there was no conclusive proof or corroborative evidence to suggest concealment of income or furnishing of inaccurate particulars by the assessee.

The Tribunal held that the penalty levied under Section 270A is unsustainable if the basis for the addition, which led to the penalty, has been removed. Since the additions were deleted by the CIT(A) and not appealed by the revenue, the penalty could not sustain.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable. It reasoned that the PE's existence was assumed for settlement purposes under MAP, and there was no conclusive proof or corroborative evidence to suggest concealment of income or furnishing of inaccurate particulars by the assessee.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable. It reasoned that the PE's existence was assumed for settlement purposes under MAP, and there was no conclusive proof or corroborative evidence to suggest concealment of income or furnishing of inaccurate particulars by the assessee.

The Tribunal allowed the assessee's request to withdraw the appeal, as the Ld.DR did not object. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable. It reasoned that the PE's existence was assumed for settlement purposes under MAP, and there was no conclusive proof or corroborative evidence to suggest concealment of income or furnishing of inaccurate particulars by the assessee.

The Tribunal found a violation of natural justice and, considering the assessee's existing provisional registrations, granted one more opportunity. The impugned order was set aside, and the application was restored to the Ld.CIT(E) for fresh consideration.

The Tribunal held that the assessee's Audit Report was filed within the extended due date granted by the CBDT. Therefore, the penalty levied for belated filing was not warranted and should be deleted.

The Tribunal upheld the CIT(A)'s decision that the assessee's valuation reports correctly determined the FMV of the shares as per Rule 11UA. Since the purchase price was higher than the determined FMV, no addition was warranted under Section 56(2)(x).

The Tribunal held that the reopening of assessment beyond four years was invalid as the AO failed to demonstrate the assessee's failure to disclose material facts. Consequently, the reassessment order was quashed.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable. It reasoned that the PE's existence was assumed for settlement purposes under MAP, and there was no conclusive proof or corroborative evidence to suggest concealment of income or furnishing of inaccurate particulars by the assessee.

The tribunal noted that the Revenue did not object to the assessee's request. Consequently, the tribunal allowed the assessee to withdraw the appeal.

The tribunal noted that the Department's Representative (DR) did not object to the assessee's request to withdraw the appeal. Consequently, the tribunal allowed the Trust to withdraw the appeal.

The Tribunal held that notices issued for reopening assessment and the reassessment order passed in the name of a non-existent entity, despite the AO being aware of the amalgamation, are void ab initio and null in the eyes of law.

The Income Tax Appellate Tribunal noted that the Revenue had no objection to the assessee's request to withdraw the appeal. Consequently, the Tribunal allowed the request and dismissed the appeal as withdrawn, in light of the assessee opting for the Vivad Se Vishwas Scheme, 2024.

The Tribunal held that the notice under Section 148 was not issued in accordance with the mandatory faceless procedure prescribed by the CBDT's e-assessment scheme. Therefore, the notice and consequential proceedings were vitiated.