ITAT Chennai Judgments — September 2025

The Tribunal held that the addition of Rs.4,97,175/- was unsustainable as it was based on a defective comparison by the AO. Regarding the addition of Rs.13,86,890/- for sale of turmeric stock, the Tribunal noted that though omitted from the ITR, the sale proceeds were recorded in the assessee's books and supported by sales bills, thus rejecting the 'afterthought' argument.

The Tribunal held that filing of Form-67 is directory and not mandatory, as Rule 128(9) does not prescribe disallowance of FTC for delayed filing. The assessee is eligible for FTC as Form-67 was filed before the completion of assessment.

The Tribunal held that the assessee had a reasonable cause for the delay in filing the tax audit report, as the process was dependent on the Cooperative Department. Therefore, the penalty levied under Section 271B was cancelled.

The Tribunal held that the assessee's application should be considered under the newly inserted clause (iv) of the first proviso to Section 80G(5), which allows applications to be filed at any time after the commencement of activities. The Tribunal directed the CIT(E) to consider the application under this clause.

The Tribunal found that the assessee's father, an agriculturist, gifted ₹.10,00,000/- in cash from the sale of his agricultural land and accumulated income. The Tribunal held that the grounds raised by the assessee were acceptable, and there was no contrary evidence.

The Tribunal held that the reasons provided by the assessee for the delay did not constitute a 'sufficient cause'. Following the Supreme Court's judgment in UOI Vs Jahangir Byramji Jeejeebhoy, the Tribunal found the assessee's approach to be non-serious and lackadaisical.

The Tribunal held that the reasons provided by the assessee for the delay were not sufficient cause. Following the Supreme Court's judgment in UOI Vs Jahangir Byramji Jeejeebhoy, the Tribunal found the assessee's approach to be non-serious and lackadaisical.

The Tribunal condoned the delay, finding a reasonable cause. The Tribunal set aside the order of the CIT(A) and remitted the matter back to the CIT(A) for de novo adjudication on merits, granting a reasonable opportunity to the assessee.

The Tribunal held that the assessee's minor daughter's share of the sale consideration, deposited in a bank as per a court order, could not be clubbed with the assessee's income. The court order restricted the utilization of the funds until the daughter attained majority, making it impossible to club the income with the assessee's.

The Tribunal condoned a 6-day delay in filing the appeal due to the assessee traveling for a family event. It also noted that the CIT(A) dismissed the appeal ex-parte due to the assessee's non-appearance.

The Tribunal found the reasons for the delay to be bonafide and condoned it. The CIT(A) was directed to condone the delay and adjudicate the issues on merits, affording the assessee a reasonable opportunity to present their case with supporting evidence.

The Tribunal condoned the delay in filing the appeal, noting the assessee's submission about business disruptions due to COVID-19. The Tribunal set aside the CIT(A)'s order and remitted the matter back for denovo adjudication.

The Tribunal noted the assessee's negligence but, to ensure justice, set aside the Ld.CIT(A)'s order. The case was remitted back to the Assessing Officer for a de novo assessment, with instructions to provide the assessee a fresh, reasonable opportunity to present its case and file relevant documents.

The Tribunal condoned the delay in filing the appeal, noting a reasonable cause for the assessee's failure to appear. The Tribunal set aside the orders of the lower authorities and remitted the matter back to the AO for de novo assessment.

The Tribunal noted that the assessee failed to participate in proceedings before the AO and the Ld. CIT(A), leading to ex-parte orders. While setting aside the order and remitting the matter to the AO for de novo assessment, the Tribunal levied a cost of Rs. 10,000 on the assessee for non-participation.

The Tribunal held that the bonus amount of ₹.2,26,000/- was paid to employees and not as profit or dividend. This was supported by a certificate from the Chartered Accountant. Therefore, the addition made by the Assessing Officer was deleted.

The Tribunal held that the reasons for the delay in filing the appeal were bonafide, considering the circumstances of the nationwide lockdown and the assessee's attempts to rectify the issue through petitions. The delay was condoned.

The Tribunal noted that the assessee did not cooperate with the Department. However, to meet the ends of natural justice, the Tribunal afforded one more opportunity to the assessee, subject to payment of costs.

The Tribunal condoned the 103-day delay in filing the appeal, finding a reasonable cause. It then set aside the CIT(A)'s order and remitted the matter back to the AO, directing a de novo assessment after providing the assessee a reasonable opportunity to present his case.

The Tribunal held that the addition made by the AO was not sustainable as the cash deposits were accounted for in the HUF's books and the return filed in the HUF status correctly reflected the bank accounts. The use of the individual PAN was due to KYC norms.

The Tribunal held that the ex-gratia compensation received by the assessee was capital in nature and not taxable. It was based on various ITAT and High Court judgments concerning similar payments from the same employer.

The Tribunal ruled that the amendment to Section 144C, being procedural law, applies retrospectively, thereby dismissing the assessee's legal argument regarding its applicability. However, on merits, the case was remanded to the Assessing Officer with a direction to refer the matter to the DVO for a fresh determination of the fair market value of the property.

The Tribunal condoned the delay of 67 days in filing the appeal, finding a reasonable cause due to the Managing Trustee's illness. Regarding the addition, the Tribunal accepted the assessee's contention that the disallowed sum of Rs. 10,28,208/- represented interest and late fees paid to the Managing Trustee, not loan repayment. The Tribunal reasoned that Explanation 4 to Section 11 of the Income Tax Act, 1961, specifically restricts the claim of loan repayment as application of income, but it does not bar the claim of interest payments. The Tribunal noted that the assessee had clearly stated in its submissions that interest and late fees totaling Rs. 10,28,621/- were paid. The Tribunal found that the AO had specifically disallowed this amount from application of income. Therefore, the Tribunal held that the addition was made by incorrectly disallowing the payment of interest, which is a revenue expenditure and allowable as application of income. The Tribunal also noted that the assessee had shown loan repayment of Rs. 75,14,899/- as application of income, which is allowable. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition. No issue was expressly left undecided.

The Tribunal held that the addition made by the AO was not sustainable as the cash deposits were accounted for in the HUF's books and the return filed in the HUF status correctly reflected the bank accounts. The use of the individual PAN was due to KYC norms.

The Tribunal held that the option exercised under Section 115BAA, even if initially filed belatedly, is valid for subsequent assessment years. The benefit of concessional tax rate cannot be denied due to procedural technicalities, especially when the option is not withdrawn.

The Tribunal addressed several issues. For the downward adjustment concerning non-US entities (Ground No. 3B), the Tribunal, following its own precedent in the assessee's own case (IT(TP)A.No.70/Chny/2022), directed the TPO to examine if the international transactions with non-US entities were similar to those covered by MAP. If found correct, the TPO was to grant similar treatment as resolved under MAP for US companies. The TPO was instructed to pass a speaking order after affording an opportunity of hearing. This ground was partly allowed. Regarding downward adjustments for Inter-Company support services/Outsourcing (Ground No. 5.2), the Tribunal, noting that the main issue of BPO services to non-US entities was remanded, felt this issue could also be re-examined in light of MAP resolutions. The TPO was directed to call for necessary evidence and decide the issue in accordance with law after affording sufficient opportunity. This ground was also partly allowed. For the disallowance under Section 40(a)(i) concerning connectivity charges (Ground No. 8), the Tribunal, referencing its own prior decision in the assessee's case, set aside the lower authorities' orders and remitted the issue to the AO for re-adjudication. The AO was directed to pass a speaking order after giving the assessee an opportunity to be heard and to file necessary details. This issue was allowed for statistical purposes. Concerning the additional ground on ESOP expenses (Additional Ground No. 3), the Tribunal, again following its own precedent, remitted the matter to the AO for adjudication after giving the assessee an opportunity to be heard and to produce relevant evidence. This was allowed for statistical purposes. Finally, for the additional ground regarding double disallowance of BPO services (Additional Ground No. 4), the Tribunal directed the TPO/AO to verify the orders and delete any duplicate disallowance. This additional ground was allowed for statistical purposes. The Tribunal expressly left undecided grounds that were not pressed by the assessee.

The Tribunal held that an assessment order passed in the name of a non-existent entity after its liquidation is void ab initio. Following various Supreme Court and High Court decisions, the assessment order was deemed unsustainable.

The Tribunal noted the ex-parte nature of both the assessment and first appellate orders. Considering the assessee's plea that deposits were from normal business and in the interest of justice, the matter was remitted to the AO for fresh adjudication with a direction to provide a reasonable opportunity of hearing.

The Tribunal held that the sale consideration should be Rs. 1,00,44,000/- and allowed the exemption under Section 54F for Rs. 82,15,610/- after verifying bank statements for construction expenses.