ITAT Chennai Judgments — August 2025

The Tribunal noted that the Ld.CIT(A) dismissed the appeal without going into the merits, despite the mandate under Section 250(6) of the Act to pass a reasoned order. The Tribunal set aside the impugned order and restored the appeal to the file of the Ld.CIT(A) for a decision on merits.

The Tribunal held that notices issued by the JAO were invalid and bad in law as they contravened the provisions of Section 151A of the Act and the mandatory faceless assessment scheme. Consequently, the reassessment orders were deemed null and void.

The Tribunal held that the delay caused due to administrative problems and the Covid-19 pandemic, as claimed by the assessee, was not a sufficient cause for condoning the inordinate delay. The CIT(A) rightly rejected the condonation petition.

The Tribunal held that the delay caused due to administrative problems and the Covid-19 pandemic, as claimed by the assessee, was not a sufficient cause for condoning the inordinate delay. The CIT(A) rightly rejected the condonation petition.

The Tribunal condoned the delay in filing the appeal, noting the death of the assessee and difficulties in serving notices. The Tribunal found that the assessee deserved another opportunity to present their case.

The Tribunal held that the reasons for the delay, including the sickness of the accountant and the delay in statutory audit, were bonafide. The Tribunal directed the CIT(A) to condone the delay and adjudicate the issues on merits.

The Tribunal noted that the CIT(A) had not considered a jurisdictional High Court judgment regarding a similar issue. Therefore, the Tribunal decided to remit the matter back to the CIT(A) to adjudicate the issue afresh, considering the High Court's decision and affording the assessee a reasonable opportunity of being heard.

The Tribunal condoned the delay of 180 days, granting the assessee one more opportunity to present their case. The appeal was restored to the file of the Ld.CIT(A) for adjudication on merits, subject to the assessee paying Rs. 5,000/- to the State Legal Aid Authority.

The Tribunal condoned the delay in filing the appeal, acknowledging the technical issues faced by the assessee. It was held that the ex parte order by the Ld.CIT(A) violated principles of natural justice as the assessee was not properly heard.

The Tribunal held that the Ld.CIT(A) passed the order without hearing the assessee and without issuing notice to the assessee's registered email ID, which violated natural justice. Therefore, the order of the Ld.CIT(A) was set aside.

The Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeal as not maintainable/withdrawn. This decision was based on CBDT Circular No.09 of 2024, which increased the monetary limit for Revenue appeals to ₹60 lakhs, and the tax effect in the instant case being less than this revised limit.

The Tribunal held that the appeals filed by the Revenue and the Cross-Objections filed by the assessee are dismissed. Regarding the additions made under Section 68, the Tribunal noted that the CIT(A) had allowed the assessee's appeal on merits and directed deletion of the additions. The Tribunal also observed that the assessee had undergone a search on 16.10.2014, and during the subsequent scrutiny assessment under Section 153A/143(3), the AO had made various additions. The CIT(A) had deleted the additions concerning the receipts from M/s. Renuka Mata Credit Society. The Tribunal confirmed the order of the CIT(A) in deleting the addition, finding no infirmity. Consequently, the Revenue's appeal on this point was dismissed. Regarding the cross-objections filed by the assessee against the rejection of the legal issue concerning the reopening of assessment, the Tribunal held that this issue had become academic in view of the decision to uphold the deletion of additions on merits. Therefore, the legal issue was not examined and was left open. The operative direction is the dismissal of both the Revenue's appeals and the assessee's cross-objections.

The Tribunal condoned the delay in filing the appeal, finding reasonable cause for the delay due to the assessee's medical condition and the pandemic. The Tribunal set aside the Ld.CIT(A)'s order and restored the appeal for fresh adjudication.

The Tribunal held that the Ld.CIT(A) erred by not adjudicating the legal issue concerning the validity of the reopening of assessment. It was duty-bound to decide this issue first before restoring the case for de novo assessment.

The Tribunal condoned the delay after finding reasonable cause. The Tribunal set aside the ex-parte order of the Ld.CIT(A) as it violated Section 250(6) of the Act. The appeal was restored to the Ld.CIT(A) for adjudication on merits, subject to the assessee paying a cost of Rs. 5,000 to the State Legal Aid Authority.

The Tribunal held that Section 80P(4) of the Act is not applicable to cooperative societies earning interest income from other cooperative societies. Therefore, the disallowance of interest income was deleted.

The Tribunal confirmed the deletion of additions made by the AO, finding that the necessary documents were available to the AO and there was no violation of rules regarding additional evidence. The assessee's cross-objections became academic.

The Tribunal found that the assessee did not get a proper opportunity before the AO and set aside the ex parte order. The assessment was restored to the file of the AO for de novo assessment.

The Tribunal held that the notice issued by the JAO under Section 148 was invalid and bad in law as it contravened the mandatory provisions of the Faceless Scheme, which required such notices to be issued through an automated, faceless mechanism. Consequently, the reassessment order was deemed null and void.

The Tribunal held that notices issued by the JAO were invalid and bad in law as they contravened the provisions of Section 151A of the Act and the mandatory faceless assessment scheme. Consequently, the reassessment orders were deemed null and void.

The Tribunal noted that the AO reopened the assessment under Section 148 based on a cash deposit of ₹1,00,67,250/- and made an addition under Section 69A after the assessee failed to file a Return of Income or respond to notices. The Ld.CIT(A) confirmed the AO's action due to the assessee's non-response to notices. The assessee brought to the Tribunal's notice that due to medical problems and hospitalization, he could not access his computer and therefore could not respond to notices. Considering the medical reports and the fact that the entire cash deposit was added, the Tribunal, relying on the decision of the Hon'ble Supreme Court in TIN Box Co. Ltd. (supra), decided to give the assessee one more opportunity. The impugned order of the Ld.CIT(A) was set aside, and the assessment was restored to the file of the AO for de novo assessment, subject to the assessee remitting a cost of ₹10,000/- to the State Legal Aid Authority, Hon'ble Madras High Court within three months. The AO was directed to assess the income afresh after hearing the assessee in accordance with law. The assessee undertook to file written submissions and relevant documents concerning the nature and source of cash deposits.

The Tribunal condoned the delay in filing the appeals, setting aside the ex-parte orders of the Ld.CIT(A) due to a violation of natural justice. The appeals were restored to the file of the Ld.CIT(A) for a fresh decision after hearing the assessee.

The Tribunal allowed the assessee's appeal on the first ground, holding that the AO had not mandatorily followed the CBDT Circular No. F.No.225/81/2022/ITA-II dated 11.05.2022, as modified on 03.06.2022. The Tribunal reiterated the legal position that CBDT circulars and instructions are binding on Assessing Authorities and that deviations from specific guidelines for case selection render assessment proceedings null and void. The Tribunal found the AO's action in selecting the assessee's case for scrutiny to be a "fragrant violation" of the binding circular, making the resulting assessment invalid and unsustainable in law. Consequently, Ground No. 2 of the assessee was allowed. The Tribunal deemed the other grounds on merits as academic and infructuous in light of the decision on the procedural issue. The operative direction was to allow the appeal.

The Tribunal held that the filing in Form-36, registered as an appeal, was not a valid appeal under Section 253 of the Act but an application for deferment under Section 158AB(2). Therefore, it was dismissed as not maintainable.

The Tribunal condoned the delay in filing the appeals, setting aside the ex-parte orders of the Ld.CIT(A) due to a violation of natural justice. The appeals were restored to the file of the Ld.CIT(A) for a fresh decision after hearing the assessee.

The Tribunal held that the CIT(A) did not err in deleting the addition by following the Tribunal's own previous decisions and Supreme Court/High Court precedents. The principles of mutuality were applied, and the Revenue failed to distinguish the facts.

The Tribunal acknowledged the error in jurisdiction and recalled its ex-parte order. The Miscellaneous Application was allowed, and the appeal filed before the Chennai ITAT was treated as infructuous and dismissed.

The Tribunal held that the assessee failed to provide concrete evidence, PAN details of debtors, or any reliable supporting documents to substantiate the cash recovery from debtors and the income from scrap sales. Therefore, the addition made by the Assessing Officer and confirmed by the CIT(A) was sustained.

The Tribunal held that the assessee had obtained the audit report within the due date and had a reasonable cause for not filing it as the income was below the taxable limit. Therefore, the penalty levied by the Assessing Officer was not justified.

The Tribunal condoned the delay in filing the appeal, acknowledging a reasonable cause for the assessee's non-response to notices. The Tribunal set aside the order of the CIT(A) and remitted the matter back to the AO for de-novo assessment.

The Tribunal held that the National Faceless Appeal Centre (NFAC) had not appreciated that the loans advanced were to the business concerns of the assessee, in which the assessee had a key management, partner, or beneficiary interest. The Tribunal found the case law of the Hon'ble Supreme Court in S.A. Builders Ltd. v. CIT squarely applicable. The Supreme Court held that if a holding company advances borrowed money to a subsidiary company and the subsidiary uses it for business purposes, the holding company is ordinarily entitled to a deduction for interest on its borrowed loans. The Tribunal reversed the order of the Ld. CIT(A) and deleted the disallowance of interest made by the AO. The appeals for both AY 2018-19 and AY 2020-21 were allowed.

The Tribunal held that the addition made by the AO was untenable and amounted to double taxation. They noted that the assessee had offered income for taxation under the new PAN, and purchases were reflected in audited accounts. The lower authorities failed to provide sufficient reasons for treating the import expenditure as unexplained.

The Tribunal condoned the delay in filing the appeals and directed the CIT(E) to consider the application filed on 07.03.2022 as one filed under clause (i) for registration under Section 80G for 5 years. Consequently, the order rejecting the application for renewal/extension was set aside.

The Tribunal held that the Assessing Officer's failure to comply with the Supreme Court's decision in M/s.GKN Driveshafts (India) Ltd. vitiated the reassessment order. The AO's rejection of objections without proper reasoning was insufficient.

The Tribunal held that the allowability of interest under Section 36(1)(iii) depends on the purpose of the loan and not the comparative interest rates, provided the loan is for business purposes and genuine. Relying on the Supreme Court's decision in SA Builders Ltd. v. CIT, the Tribunal reversed the CIT(A)'s order.

The Tribunal condoned the delay in filing the appeals and directed the CIT(E) to consider the application filed on 07.03.2022 as one filed under clause (i) for registration under Section 80G for 5 years. Consequently, the order rejecting the application for renewal/extension was set aside.

The Tribunal held that the CIT(A) was not right in dismissing the claim for exemption u/s.11 without considering the pending condonation petition with the CBDT. The Tribunal remanded the case to the AO to examine the exemption claim u/s.11 after the CBDT's decision and also to examine alternative claims u/s.10(23C) if necessary.

The tribunal dismissed the appeals for all three assessment years (2007-08, 2009-10, 2010-11). It upheld the disallowance, reaffirming that the interest payment was taxable in India at a rate not exceeding 10% under Article 11(1) and 11(2) of the DTAA between India and Switzerland. The tribunal concluded that the assessee was liable to deduct tax at source under Section 195, and its failure to do so attracted disallowance under Section 40(a)(i) of the Act, relying on its own previous order in the assessee's case for AY 2008-09.

The tribunal dismissed the appeals for all three assessment years (2007-08, 2009-10, 2010-11). It upheld the disallowance, reaffirming that the interest payment was taxable in India at a rate not exceeding 10% under Article 11(1) and 11(2) of the DTAA between India and Switzerland. The tribunal concluded that the assessee was liable to deduct tax at source under Section 195, and its failure to do so attracted disallowance under Section 40(a)(i) of the Act, relying on its own previous order in the assessee's case for AY 2008-09.

The Tribunal held that the addition made by the AO was untenable and amounted to double taxation. They noted that the assessee had offered income for taxation under the new PAN, and purchases were reflected in audited accounts. The lower authorities failed to provide sufficient reasons for treating the import expenditure as unexplained.

The Tribunal held that the addition made by the AO was untenable and amounted to double taxation. They noted that the assessee had offered income for taxation under the new PAN, and purchases were reflected in audited accounts. The lower authorities failed to provide sufficient reasons for treating the import expenditure as unexplained.

The tribunal dismissed the appeals for all three assessment years (2007-08, 2009-10, 2010-11). It upheld the disallowance, reaffirming that the interest payment was taxable in India at a rate not exceeding 10% under Article 11(1) and 11(2) of the DTAA between India and Switzerland. The tribunal concluded that the assessee was liable to deduct tax at source under Section 195, and its failure to do so attracted disallowance under Section 40(a)(i) of the Act, relying on its own previous order in the assessee's case for AY 2008-09.

The Tribunal held that the penalty notice was defective because it failed to clearly specify whether the penalty was being initiated for concealment of income or for furnishing inaccurate particulars. This lack of specificity vitiates the penalty proceedings.

The Tribunal noted that neither the AO nor the CIT(A) had conclusively established whether the advance fees were offered in the subsequent year. Relying on previous decisions, the Tribunal directed the AO to verify this fact and decide accordingly.

On the issue of corporate guarantee fees, the Tribunal held that provision of guarantee is an international transaction requiring transfer pricing adjustment, following the Madras High Court in Redington India Ltd. However, it directed the Assessing Officer to restrict the adjustment to 0.5% of the guarantee value, respectfully following the decision of the Coordinate Bench in Sundaram Fastener Ltd. Regarding disallowance under Section 14A read with Rule 8D, the Tribunal directed the Assessing Officer to disallow under Rule 8D(2)(iii) at 0.5% of investments yielding exempt income, and to exclude the suo motu disallowance of Rs. 73,710/- if the calculated disallowance was less. The ground was allowed for statistical purposes. Concerning weighted deduction under Section 35(2AB), the Tribunal directed the Assessing Officer to grant the weighted deduction as per the certificate in Form 3CL issued by DSIR, following the CIT(A)'s direction. On the deductibility of CSR expenditure under Section 80G, the Tribunal held that the impugned deduction would be available to the assessee, respectfully following the decision of the Coordinate Bench in Source Hov India Private Limited v. DCIT, and dismissed the Revenue's appeal on this issue. The Departmental Appeal in ITA No 48/CHNY/2025 was dismissed.

The Tribunal condoned the delay in filing the appeals, finding the assessee's justification adequate. The Tribunal set aside the order of the Ld. CIT(A) and directed it to re-adjudicate the matters after providing an opportunity of hearing to the assessee.

The Tribunal condoned the delay in filing the appeals, finding the assessee's justification adequate. The Tribunal set aside the order of the Ld. CIT(A) and directed it to re-adjudicate the matters after providing an opportunity of hearing to the assessee.

The Tribunal held that the assessee had explained the source of investment through bank loans availed by the partners of the firm and paid through banking channels, as evidenced by bank statements. The addition made by the Assessing Officer under Section 69 was correctly deleted by the CIT(A).

The Tribunal condoned the delay in filing the appeals, finding the assessee's justification adequate. The Tribunal set aside the order of the Ld. CIT(A) and directed it to re-adjudicate the matters after providing an opportunity of hearing to the assessee.

On the issue of corporate guarantee fees, the Tribunal held that provision of guarantee is an international transaction requiring transfer pricing adjustment, following the Madras High Court in Redington India Ltd. However, it directed the Assessing Officer to restrict the adjustment to 0.5% of the guarantee value, respectfully following the decision of the Coordinate Bench in Sundaram Fastener Ltd. Regarding disallowance under Section 14A read with Rule 8D, the Tribunal directed the Assessing Officer to disallow under Rule 8D(2)(iii) at 0.5% of investments yielding exempt income, and to exclude the suo motu disallowance of Rs. 73,710/- if the calculated disallowance was less. The ground was allowed for statistical purposes. Concerning weighted deduction under Section 35(2AB), the Tribunal directed the Assessing Officer to grant the weighted deduction as per the certificate in Form 3CL issued by DSIR, following the CIT(A)'s direction. On the deductibility of CSR expenditure under Section 80G, the Tribunal held that the impugned deduction would be available to the assessee, respectfully following the decision of the Coordinate Bench in Source Hov India Private Limited v. DCIT, and dismissed the Revenue's appeal on this issue. The Departmental Appeal in ITA No 48/CHNY/2025 was dismissed.