ITAT Chennai Judgments — October 2025

The Tribunal held that additions under Section 153A can only be made if incriminating material is found during the search. Since the assessment years were not pending at the time of search, and no incriminating material was found relating to the additions, the additions made by the AO were beyond the scope of Section 153A and unsustainable.

The Tribunal held that the assessment was completed after due inquiry on the issues selected for scrutiny. The PCIT failed to provide independent material to establish that the assessment order was erroneous and prejudicial to the revenue. The revisionary proceedings were initiated mechanically based solely on audit objections, without independent satisfaction.

The Tribunal held that the appeal against the assessment order under Section 143(3) was still pending before the CIT(A) and that the assessee was not given adequate opportunity of hearing. Therefore, the matter was restored to the CIT(A) for fresh consideration.

The Tribunal held that the assessee was not engaged in the business of money lending, and the advances were to his own business concerns. It was found that there was a reasonable cause for not getting accounts audited, and the penalty levied under Section 271B was not sustainable.

The Tribunal held that the assessee was a Non-Resident in India for the relevant assessment years. The CIT(A)'s finding that the assessee was employed with JCI (USA) and stayed in India for less than 182 days in each relevant year was upheld.

The Tribunal held that the assessee was correctly treated as a Non-Resident based on documentary evidence of employment abroad and not meeting the criteria for residency in India. The additions on account of foreign bank deposits and credit card expenses were deleted. The additions for personal gifts in AY 2016-17 and 2018-19 were upheld.

The Tribunal held that in the absence of incriminating material found during the search, no additions could be made under Section 153A for completed or unabated assessments, even if the return was filed after the search date. The additions made by the AO were therefore quashed.

The Tribunal held that the assessee was a Non-Resident based on evidence of employment outside India and staying less than 182 days in India during the relevant years. The additions for foreign income were correctly deleted by the CIT(A). However, additions for personal gifts in AY 2016-17 and 2018-19 were upheld as there was incriminating material.

The Tribunal held that the correct stamp duty value was Rs. 30,31,900/-, and the difference between this value and the purchase price was within the 5% tolerance limit. Therefore, no addition was warranted under section 56(2)(x) of the Act.

The Tribunal held that the assessee was correctly treated as a Non-Resident based on his employment abroad and duration of stay in India. The additions on foreign bank deposits and credit card expenses were rightly deleted by the CIT(A).

The Tribunal condoned the delay in filing the appeal and, considering the principles of natural justice, set aside the ex-parte orders of the AO and CIT(A). The matter was remitted back to the AO for a de novo assessment after providing the assessee with a reasonable opportunity to be heard.

The Tribunal held that a recent amendment to Section 80G(5) by the Finance Act, 2024, allows applications to be filed at any time after commencement of activities. Therefore, the CIT(E) was directed to treat the assessee's application as filed under the amended provision.

The Tribunal noted that Section 80G was amended by the Finance Act, 2024, inserting clause (iv) which allows applications anytime after commencement of activities, effective from 01.10.2024. Since the CIT(E)'s order was passed after the amendment came into force, the Tribunal directed the CIT(E) to decide the application on merit.

The Tribunal held that the rejection of the application due to a clerical mistake in selecting the wrong clause was not justified. The CIT(E) was directed to consider the application under the correct clause and provide an opportunity to the assessee to present its case and submit supporting documents.

The Tribunal upheld the CIT(A)'s decision to delete the transfer pricing adjustment for Section 80IA, confirming that captive power valuation should be at the State Electricity Board rate as per Supreme Court precedent. It also confirmed the deletion of disallowance under Section 40(a)(ia) for non-resident agent commission, as Section 195 is not attracted for services rendered outside India with no income accruing in India, and the assessee complied with Section 195(6).

The Tribunal condoned the delay in filing the appeals. Observing that the assessment was ex-parte and the CIT(A) dismissed the appeal without considering merits, the Tribunal set aside the impugned order and remitted the matter back to the A.O. for denovo assessment.

The Tribunal held that the rejection of the application due to a clerical mistake in selecting the wrong clause should not deprive the assessee of its substantive right to registration. The Tribunal also noted that the CIT(E) did not consider the complete list of trust objects and relied only on three. Consequently, the Tribunal set aside the order and remitted the matter back to the CIT(E) for fresh consideration, allowing one more opportunity to the assessee.

The Tribunal condoned the delay in filing the appeals after considering the assessee's condonation petitions. The Tribunal set aside the impugned orders and remitted the matters back to the AO for denovo assessment, emphasizing the principles of natural justice and affording the assessee an opportunity to present her case. The penalty orders for the related appeals were also rendered non-surviving.

The Tribunal held that the First Appellate Authority (FAA) failed to discharge the burden of proof in establishing that the donations were not voluntary. The FAA's findings were based on presumptions and lacked concrete evidence. The Tribunal found the donations to be voluntary and thus not chargeable to tax, directing the deletion of the addition.

The Tribunal found that the CIT(A) dismissed the appeal ex-parte without providing sufficient opportunity to the assessee. Therefore, the Tribunal set aside the order and remitted the matter back to the CIT(A) for fresh adjudication, granting one more opportunity to the assessee.

The Tribunal held that since the assessment order, which formed the basis of the penalty, was set aside by a coordinate bench for fresh assessment, the penalty levied thereon cannot survive.

The Tribunal held that interest income received by a co-operative society from investments in another co-operative bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, 1961, following the High Court's ruling.

The Tribunal held that the CIT(E) should decide the application on its merits, considering the amended provisions of Section 80G(5). The rejection solely on the ground of maintainability was set aside.

The Tribunal held that the CIT(A) ought to have condoned the delay and decided the appeal on merits. The impugned order was set aside, and the matter was remitted back to the CIT(A) to condone the delay and decide the appeal afresh.

The Tribunal condoned the delay in filing the appeals and set aside the impugned orders. The matter was remitted back to the AO for denovo assessment, granting the assessee an opportunity to present her case.

The Tribunal noted that the assessment was completed ex-parte without proper participation of the assessee and without examining the merits. The assessee also raised a legal ground challenging the validity of the order u/s. 148A(d) as it pertained to another assessee.

The Tribunal held that the assessee was not provided with sufficient opportunity to substantiate its case before the addition was confirmed. Therefore, the matter was remitted back to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee's activities constitute 'education' under Section 2(15) of the Income Tax Act. The generation of surplus from educational activities, when ploughed back for charitable purposes, does not imply profit motive. The proviso to Section 2(15) is not applicable.

The Tribunal upheld the CIT(A)'s deletion of the transfer pricing adjustment, following Supreme Court and jurisdictional ITAT precedents regarding the valuation of captively consumed power. The Tribunal also upheld the deletion of disallowance for commission paid to non-resident agents, as services were rendered outside India and the assessee had complied with procedural requirements.

The Tribunal, following its own earlier order in a similar case (Kalasadhanalaya vs. CIT(E)), held that teaching dance is a charitable activity falling under Section 2(15). The CIT(E) erred in rejecting the application.

The Tribunal held that the CIT(A) was justified in deleting the addition. The assessee's treatment of indirect costs as period costs, consistent with the ICAI guidance note, was found to be in order, especially as the project had not yet commenced and revenue recognition criteria were not met.

The Tribunal held that the reasons provided by the assessee for the delay in filing the appeal were reasonable. The delay was condoned, and the CIT(A) was directed to adjudicate the issues on merits after considering the assessee's submissions and evidence.

The Tribunal held that although the application was filed late under the original clause (iii), an amendment to the Act made the assessee eligible under the new clause (iv). The CIT(E) was directed to treat the application as filed under the amended provision and decide on merits.

The Tribunal held that the AO's failure to give complete effect to the Ld. CIT(A)'s order amounted to a patent error rectifiable under Section 154. The Tribunal set aside the orders of the lower authorities and directed the AO to pass a speaking order giving effect to the Ld. CIT(A)'s directions.