ITAT Chennai Judgments — August 2025

The Tribunal held that reopening of assessment based solely on a survey statement without corroborative material is not valid. While the disallowance of honorarium is justified due to lack of evidence, the extent of disallowance should be reasonable, and 50% is considered appropriate based on past acceptance.

The Tribunal held that the appeal filed before it against the assessment order passed under Section 147 r.w.s 144C(3) of the Act was not maintainable. The correct appellate authority was the Ld. CIT(A).

The Tribunal held that once the assessee furnished primary evidence like supplier details, PAN, ledger accounts, and bank statements, the onus was discharged. Non-response from suppliers or their non-filing status cannot be a ground to disallow genuine purchases.

The Tribunal held that the delay in filing the appeal was due to reasons attributable to the Covid-19 pandemic and the assessee had demonstrated sufficient cause. Therefore, the Addl. CIT(A) ought to have condoned the delay and decided the appeal on merits.

The Tribunal held that the additions made by the AO were not sustainable. In cases where the assessee provided sufficient evidence of identity, creditworthiness, and genuineness of transactions, the onus shifted to the Department, which failed to discharge it. Furthermore, estimations based on extrapolation without rejecting books of accounts were found to be arbitrary.

The Tribunal held that the addition made on account of share capital received from M/s. DFPL and M/s. BMPL are unsustainable due to lack of incriminating evidence and the assessee having discharged the initial burden of proof. Similarly, additions based on extrapolation of sales without rejecting books of accounts and without cogent corroborative evidence were also deleted. Additions related to unaccounted cash were also deleted on the principle of telescoping and lack of direct nexus.

The Tribunal held that the additions made by the AO were not sustainable. Key reasons included the lack of incriminating evidence during the search for certain additions and the failure to properly investigate the genuineness of transactions and creditworthiness of parties involved. Procedural infirmities and reliance on estimations without rejecting books of accounts were also noted.

The Tribunal held that considering the submissions and in the interest of natural justice, the assessee should be given another opportunity to present its case before the CIT(A). The order of the CIT(A) was set aside and the matter was remitted back for fresh adjudication.

The Tribunal held that the filing of Form 10B within the due date is a procedural and directory requirement, not mandatory. Since the report was available before the intimation order was passed, and given the reliance on Supreme Court and High Court judgments, the disallowance was deemed erroneous.

The Tribunal found that the CIT(A) dismissed the appeal ex-parte without deciding on merits. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication, granting the assessee another opportunity.

The Tribunal agreed with the CIT(A)'s finding that the revised return was fraudulent. The CIT(A) had rightly set aside the intimation order based on the fake return, as the AO is duty-bound to assess the correct income.

The Tribunal held that in the absence of incriminating evidence from the search, additions based on estimations or suspicions are not sustainable. It also noted that reassessment proceedings initiated without proper basis or after a stipulated period are invalid. The CIT(A)'s orders deleting the additions were upheld.

The Tribunal held that the additions made by the AO were not sustainable. For the share capital additions, the Tribunal found that the assessee had established the identity, creditworthiness, and genuineness of the transactions. The revenue failed to discharge its burden to prove otherwise. Regarding the suppression of sales, the Tribunal noted the absence of incriminating evidence and the principle that confessions require corroboration, and a mere estimate based on subsequent years' data is not sufficient. The Tribunal upheld the orders of the CIT(A) in deleting the additions.

The Tribunal held that reopening based solely on a survey statement without corroborative material is bad in law. Previous disallowances of 50% were deemed reasonable, and the further disallowance of 25% confirmed by the CIT(A) was directed to be deleted.

The Tribunal held that the notice under Section 148 was issued by the Income Tax Officer (JAO) instead of the Faceless Assessment Officer (FAO), violating the e-assessment scheme. Following jurisdictional High Court decisions, the Tribunal found the notice and subsequent proceedings to be void ab initio.

The Tribunal held that reopening based solely on a survey statement without corroborative material is not sustainable. Previous disallowances of 50% were considered reasonable given the director's admission of genuine expenses but inability to provide documentation. The Tribunal directed the AO to delete the further disallowance of 25% confirmed by the CIT(A), thereby restricting the disallowance to 50%.

The Tribunal held that the CIT(A) was correct in deleting the additions. The additions made by the AO were not based on any incriminating material found during the search. The genuineness of the share capital transactions was established by the assessee, and the revenue failed to discharge its burden to investigate further. Similarly, the estimations on account of suppressed sales were found to be arbitrary and lacking corroborative evidence.

The Tribunal held that the Explanation inserted to Section 14A by the Finance Act, 2022, which became effective from April 1, 2022, is not applicable to the assessment year 2011-12. Furthermore, it was held that where there is no exempt income, no disallowance under Section 14A can be made.

The Tribunal upheld the CIT(A)'s order, finding no infirmity. It noted that the assessee had properly accounted for the amounts received, with certain amounts treated as advance for incomplete projects and later adjusted after resolution of corporate insolvency.

The Tribunal held that the delay of 623 days was abnormal and the explanation provided in the affidavit, that the appeal was filed on the advice of the authorized representative, did not constitute a sufficient cause for the delay.

The Tribunal held that since the tax effect was less than Rs. 60 lakhs, the appeal was not maintainable as per the CBDT circular. However, the issues raised were left open for future examination if they arise and the Revenue could apply for recalling the order if it falls under exceptions mentioned in the circular.

The Tribunal held that the addition made by the Assessing Officer and confirmed by the CIT(A) was unwarranted and unjustified. The grounds raised by the assessee were allowed.

The Tribunal held that both the AO and CIT(A) passed ex-parte orders without granting sufficient opportunity to the assessee. Therefore, to uphold principles of natural justice, the matter was remitted back to the AO for de novo assessment.

The Tribunal held that Section 200A(1)(c), which enables the levy of late fees under Section 234E during the processing of TDS statements, was introduced w.e.f. 01.06.2015. Therefore, for assessment years prior to this date, the AO was not empowered to levy such fees.

The Tribunal held that the disallowance of CSR salary expenses was justified as the assessee failed to prove that such expenses were incurred wholly and exclusively for business purposes. However, the disallowance of donation expenses was allowed as the assessee had already disallowed it in its return and claimed deduction under Section 80G.

The Tribunal held that the CIT(A) erred in dismissing the appeal without considering the submissions of the legal heir. The Tribunal set aside the order and directed the CIT(A) to adjudicate the issues on merits.

The Tribunal held that the additions were made under Section 56(2)(x)(c) for AY 2014-15, a provision introduced by the Finance Act, 2017, with effect from 01.04.2017, making it inapplicable to AY 2014-15. Additionally, the AO assumed jurisdiction beyond the 6th assessment year without recording the required satisfaction.

The Tribunal observed that the amendment to Section 80G(5) inserting clause (iv) came into force on 01.10.2024, which was prior to the CIT(E)'s rejection order dated 10.06.2025. Therefore, the assessee's application should have been considered under the new provision. The Tribunal set aside the CIT(E)'s order and directed a fresh decision under clause (iv)(B) of Section 80G(5) after providing a hearing opportunity.

The Tribunal permitted the assessee to withdraw the duplicate appeal as another appeal against the same order was already filed and pending. Consequently, the appeal was dismissed as withdrawn.

The Tribunal condoned the delay in filing the appeal. Considering the principles of natural justice, the Tribunal set aside the impugned order and remitted the matter back to the CIT(E) for fresh adjudication.

The Tribunal condoned the delay of 179 days in filing the appeal before the CIT(A), finding sufficient cause due to the assessee pursuing alternate remedies. The impugned order was set aside, and the appeal was restored to the CIT(A) for decision on merits.

The ITAT, considering principles of natural justice, set aside the CIT(A)'s ex-parte order and remitted the matter back to the CIT(A) for fresh adjudication. This is subject to the assessee paying costs of Rs. 10,000/- to the Tamil Nadu State Legal Services Authority.

The Tribunal held that the AO's assessment order for the relevant year did not contain any direction or satisfaction for initiating penalty proceedings under Section 270A. Furthermore, the show-cause notice issued by the AO was vague and did not specify the exact limb of Section 270A(9) that was attracted, violating the principles of natural justice. Therefore, the penalty was considered illegal and liable to be quashed.

The Tribunal condoned the 2-day delay in filing the appeal after finding the reasons to be bonafide. The Tribunal set aside the ex-parte order of the CIT(A) and directed it to consider the condonation petition and decide the appeal on merits.

The Tribunal held that an order passed by the CIT(E) under Section 119(2)(b) of the Income Tax Act is not appealable before the Income Tax Appellate Tribunal as it is an administrative order and not listed in Section 253(1) of the Act.

The Tribunal held that Section 200A(1)(c) of the Act, which enables the levy of late fees, was inserted only with effect from 01.06.2015. Therefore, for assessment years prior to this date, the AO could not levy late fees under Section 234E while processing TDS statements under Section 200A.

The Tribunal held that the land was situated in a Town Panchayat which was not a municipality during the relevant Assessment Year. Therefore, it was not a capital asset as per Section 2(14)(iii) of the Income Tax Act, and the capital gains were not taxable.

The Income Tax Appellate Tribunal (ITAT) followed its own previous decisions in the assessee's own case for earlier assessment years, holding that annual maintenance service fees are an integral part of software license sales and not taxable as FTS. The Tribunal concluded that the amount received is not taxable in India as it cannot be treated as 'Fees for Included Services' under Article 12(4) of the DTAA, and directed the AO to delete the addition. The related stay petition was dismissed as infructuous.

The Tribunal held that the addition made by the Assessing Officer in reassessment proceedings was not maintainable as the issue had attained finality in the first round of appellate proceedings, following the decisions of the Hon'ble High Courts.

The Tribunal condoned the delay, finding sufficient cause and no latches on the part of the assessee's legal heir. The matter was remitted to the Assessing Officer for fresh adjudication after noting that the appellate order was ex-parte and the original assessment was completed under best judgment.

The Tribunal condoned the delay in filing the appeal. The petition to admit additional evidence (list of members) was allowed in the interest of justice, and the Assessing Officer was directed to consider this list while passing the order.

The Tribunal held that for unabated assessments, additions under Section 153A are permissible only if based on incriminating material found during search. Since no such material was found for the initial AYs (2012-13 to 2015-16), the additions were deleted. For AY 2016-17, the addition for wages payable was deleted due to lack of rejection of books and consistent net profit. The addition for agricultural income was confirmed as unsubstantiated. For AY 2017-18, the wages payable addition was deleted. For AY 2018-19, a partial addition for jewellery was sustained based on CBDT guidelines, and the addition for immovable property was to be taxed at normal rates.

For AYs 2012-13 to 2015-16, additions for trade creditors and gifts were deleted as these were unabated assessments and no incriminating material was found during the search, relying on the Supreme Court's Abhisar Buildwell decision. For AY 2016-17 and 2017-18, the addition for wages payable was deleted, as the AO had not rejected the books of accounts under Section 145(3) and the net profit ratios were consistent; however, the agricultural income addition for AY 2016-17 was confirmed due to lack of evidence. For AY 2018-19, the unexplained jewellery addition was partly sustained (only 89 grams considered unexplained as per CBDT instructions), and the unexplained investment in immovable property was directed to be taxed at normal business rates instead of under Section 115BBE, due to absence of incriminating material.

The Tribunal held that for unabated assessments, additions under Section 153A are permissible only if based on incriminating material found during search. In this case, the additions for A.Ys. 2012-13 to 2015-16 regarding trade creditors and gifts were deleted as no incriminating material was found. Additions related to salary/wages payable and agricultural income for subsequent years were also decided based on the evidence and merits. The addition for unexplained jewellery was partly upheld after considering CBDT guidelines, and the addition for immovable property was to be taxed at normal rates.

The Tribunal held that the late fee under Section 234E of the Act cannot be imposed while processing TDS statements under Section 200A of the Act for assessment years prior to the introduction of Section 200A(1)(c) with effect from 01.06.2015.

The Tribunal held that for unabated assessments, additions under Section 153A are only permissible if based on incriminating material found during search. Since no such material was found for trade creditors and gifts, these additions were deleted for AYs 2012-13 to 2015-16. For AY 2016-17, the addition for salary/wages was deleted as it was not verifiable and the agricultural income addition was confirmed. For AY 2017-18, wages payable addition was deleted. For AY 2018-19, a portion of the jewellery addition was deleted based on CBDT guidelines and the immovable property addition was taxed at normal rates.

The Tribunal held that the late fee under Section 234E could not be imposed while processing TDS statements under Section 200A for assessment years prior to 01.06.2015, as Section 200A(1)(c) was introduced later. Therefore, the levy was without authority.