ITAT Chennai Judgments — November 2025

The Tribunal held that the assessment order passed by NFAC was bad in law as it did not issue notice under Section 148A before concluding the assessment under Section 147. Relying on the decision of the Hon'ble High Court of Madras in Mark Studio India (P.) Ltd. V. ITO, the Tribunal quashed the assessment order.

The Tribunal held that the first proviso to Section 153C of the Act, as amended by the Finance Act, 2017, shifts the relevant date from the date of initiation of the search to the date of receipt of the seized books of account, documents, or assets by the Assessing Officer (AO) having jurisdiction over the non-searched person. This date becomes the commencement point for reckoning the six assessment years. The Tribunal, following the decision of the Hon'ble Delhi High Court in Pr. CIT Vs Ojjus Medicare (P) Ltd and its own coordinate bench in Shri Bondalapati Shivaji Rao Vs DCIT, found that the Ld. CIT(A) correctly applied this proviso. The Ld. CIT(A) determined that the date of search should be considered 18.06.2021 (the date of handover of seized materials to the assessee's AO). Based on this, AYs 2014-15 and 2015-16 were found to be beyond the six assessment years preceding the date of search. Consequently, the notices issued under Section 153C for these AYs were held to be bad in law. The Tribunal did not explicitly decide on the validity of the satisfaction note itself in relation to all AYs, but the quashing of notices for AYs 2014-15 to 2017-18 by the Ld. CIT(A) was upheld based on the procedural invalidity of the notice issuance.

The Tribunal held that the notices issued under Section 148 for AYs 2013-14 to 2016-17 were beyond the time limit prescribed by the first proviso to Section 149 of the Act. Consequently, all consequential proceedings were annulled.

The Tribunal held that the satisfaction note recorded by the AO lacked a nexus between the seized material and the assessment years in question. Consequently, the notices issued under Section 153C were deemed invalid, and the assessment orders were quashed.

The Tribunal held that the notices issued under Section 148 for reassessment were beyond the time limit prescribed by the first proviso to Section 149 of the Act. Consequently, all reassessment proceedings were quashed.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that while the assessee's accounting practices had deficiencies, the AO's conclusion of outright falsification of entries was not conclusively established by the seized records alone. Following precedent, the Tribunal upheld the rejection of books and estimation of profits but not the entire addition.

The Tribunal held that the notices issued under Section 148 by the JAO were bad in law and invalid, following the decisions of the jurisdictional High Courts. Consequently, all consequential proceedings stemming from the issuance of these notices were annulled.

The Tribunal held that the notices issued under Section 148 by the JAO were bad in law and invalid, following the decisions of the jurisdictional High Courts. Consequently, all consequential proceedings stemming from the issuance of these notices were annulled.

The Tribunal held that the notices issued under Section 148 by the JAO were bad in law and invalid, following the decisions of the jurisdictional High Courts. Consequently, all consequential proceedings stemming from the issuance of these notices were annulled.

The Tribunal held that the notices issued under Section 148 by the JAO were bad in law and invalid, following the decisions of the jurisdictional High Courts. Consequently, all consequential proceedings stemming from the issuance of these notices were annulled.

The Tribunal held that the notice issued under Section 148 for AYs 2014-15 to 2016-17 was beyond the time limit prescribed by the proviso to Section 149 of the Act. Consequently, the reassessment proceedings were quashed.

The Tribunal held that the notice issued under Section 148 for AYs 2014-15 to 2016-17 was beyond the time limit prescribed by the proviso to Section 149 of the Act. Consequently, the reassessment proceedings were quashed.

The Tribunal held that the AO's satisfaction note lacked specific mention of incriminating material relating to the impugned assessment years. Therefore, the initiation of proceedings under Section 153C was considered invalid and ab initio void.

The Tribunal held that the seized material did not contain any incriminating evidence pertaining to the assessee for the impugned assessment years. Therefore, the AO had invalidly invoked Section 153C, making the action void ab initio.

The Tribunal held that the AO's power to examine the 'source of source' for credits was limited before the Finance Act 2022 amendment. It also found that the interest-free security caution deposits were a routine transaction and directed deletion of the addition. The Tribunal allowed the Revenue's appeal regarding Section 11 exemption, following a High Court decision.

The Tribunal upheld the rejection of the assessee's books of accounts under Section 145(3) due to improper maintenance and lack of supporting vouchers. The addition made on an estimation basis was also considered justified.

The Tribunal held that the CIT(A)'s decision was based on a correct understanding of facts and judicial pronouncements, particularly the Supreme Court's decision in Jindal Steel and Power Limited. The Tribunal found no error in the CIT(A)'s deletion of additions made by the AO.

The Tribunal held that the reassessment notices issued under Section 148 were beyond the time limit stipulated in the first proviso to Section 149(1) of the Act. Consequently, all consequential proceedings were annulled.

The Tribunal held that the CIT(A)'s decision was based on a correct understanding of facts and judicial pronouncements, particularly the Supreme Court's decision in Jindal Steel and Power Limited. The Tribunal found no error in the CIT(A)'s deletion of additions made by the AO.

The Tribunal held that the assessment order dated 28.02.2025 was time-barred and therefore a nullity in law. The Tribunal noted that Section 144C(4) clearly mandates the AO to pass the assessment order within one month from the end of the month in which the DRP directions are received. It was an undisputed fact that the DRP directions dated 10.09.2024 were received electronically by the AO on the same date. Electronic communications like emails are recognized as evidence. Therefore, the timeline for the AO commenced from 10.09.2024, and the order should have been passed on or before 31.10.2024. The Tribunal rejected the Revenue's argument that the Hon'ble Madras High Court's order in the assessee's writ petition extended the statutory timelines, stating that the High Court had directed the AO to pass the order after obtaining DRP directions, not to extend the statutory timelines. Consequently, the Tribunal quashed the assessment order and allowed the legal grounds of appeal. All other grounds concerning the merits of the additions were left undecided as they became academic.

The Tribunal held that the CIT(A) did not appear to be aware of pending remand proceedings, leading to a violation of natural justice. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back for de novo adjudication.

The Tribunal held that the satisfaction note recorded by the AO did not establish a nexus between the seized material and the assessment years 2014-15 to 2017-18. Therefore, the notices issued under Section 153C for these years were invalid.

The Tribunal upheld the CIT(A)'s decision, agreeing that the notice for reassessment was issued beyond the time limit prescribed under Section 149 of the Act, especially considering the provisions related to search proceedings and the definition of 'asset'. The reassessment proceedings were thus deemed invalid.

The Tribunal held that the reassessment notices were issued beyond the time limit prescribed under Section 149 of the Act, as the alleged suppressed income was not in the form of undisclosed 'assets' as defined in the Act. Therefore, the reassessment proceedings were invalid.

The Tribunal held that the AO's power to examine the 'source of source' for credits was limited before the Finance Act 2022 amendment. It also found that the interest-free security caution deposits were a routine transaction and directed deletion of the addition. The Tribunal allowed the Revenue's appeal regarding Section 11 exemption, following a High Court decision.

The Tribunal held that the satisfaction note did not demonstrate the existence of incriminating material relating to the assessee for the impugned assessment years. Therefore, the initiation of proceedings under Section 153C was invalid and ab initio void.

The Tribunal held that the notices issued under Section 148 by the JAO were bad in law and invalid, following the decisions of the jurisdictional High Courts. Consequently, all consequential proceedings stemming from the issuance of these notices were annulled.

The Tribunal held that the notice issued under Section 148 of the Act for reassessment was beyond the time limit prescribed by the proviso to Section 149 of the Act. Consequently, all reassessment proceedings were quashed.

The tribunal held that the notice under section 148 was issued by the Jurisdictional Assessing Officer (JAO) and not by the Faceless Assessment Officer (FAO) as required by the e-assessment scheme. Following the jurisdictional High Court's decision, the tribunal set aside the notice and consequential orders.

The Tribunal condoned the delay in filing the appeal. The Tribunal found that the PCIT's order under Section 263 suffered from a non-application of mind and contained unclear and self-contradictory findings. Therefore, the PCIT's order was set aside.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the assessee had provided sufficient evidence to show that the funds in the joint accounts belonged to her husband, who is a regular income tax assessee disclosing agricultural income. The Tribunal found that the Revenue failed to conclusively prove otherwise.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the upward transfer pricing adjustment made by the TPO by recharacterizing the assessee's business as a Contract R&D service provider is not warranted. The Tribunal found that the characterization and FAR profile of the assessee were clear from the BAPA signed, clarification letter from the group's Chief Tax Officer, and previous and subsequent TP orders. Therefore, the Tribunal directed the AO/TPO to delete the upward transfer pricing adjustment. Consequently, the grounds related to the rejection of the assessee's FAR analysis and comparable search became academic and were not adjudicated. Regarding the finance lease payment, the Tribunal found strength in the assessee's arguments. Citing the Delhi Tribunal's decision in Minda Corporation Ltd. and the Supreme Court's decision in ICDS Ltd. v. CIT, the Tribunal held that the entire lease payments should be treated as a deductible expense. The Tribunal deleted the disallowance made by the AO and allowed the deduction of the principal portion of lease rentals of Rs.62,55,408/- under Section 37 of the Act, directing the AO to reverse any depreciation allowed pursuant to the DRP directions. The Tribunal expressly left undecided the grounds numbered 2.13 to 2.34 concerning employee profiles, TP documentation, IP ownership, comparable search, and economic adjustments, as the TP adjustment was deleted.

The Tribunal held that the seized material did not contain any incriminating evidence pertaining to the assessee for the impugned assessment years. Therefore, the AO had invalidly invoked Section 153C, making the action void ab initio.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that while statements alone are not conclusive proof of falsification, accounting deficiencies existed. Citing a High Court precedent, it upheld the rejection of books and estimation of profits, but reduced the addition.

The Tribunal held that once the business income is estimated by rejecting the books of accounts under section 145(3) of the Act, other disallowances/additions relating to income from business or profession will not hold good. This principle was supported by various judicial precedents cited by the assessee. Therefore, the grounds raised by the Revenue concerning old bottle purchases, data center expenses, and unaccounted scrap sale (Issues 2 & 3) were allowed, and the AO was directed to delete these additions and disallowances. Regarding the disallowance of CSR contributions of Rs. 4,00,00,000/- for AY 2021-22, the Tribunal concurred with the Ld. CIT(A). It was found that the assessee had neither debited this amount in the Profit & Loss account nor claimed it as a deduction in the return of income. Consequently, the disallowance made by the AO was factually unsustainable, and this ground of the Revenue was dismissed. The ratio decidendi is that additions based on rejected books of account are invalid if income is estimated, and disallowances of expenses not claimed by the assessee are also unwarranted.

The Tribunal held that while the assessee's books of accounts had deficiencies, the AO's conclusion of falsification of entries was not conclusively established. Following a High Court precedent, the Tribunal sustained the rejection of books of accounts and estimated profits due to accounting anomalies.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that M/s. Nihilent Ltd. was not a comparable company due to functional dissimilarity and diversified business activities. It also held that hardware and software expenses incurred for customer contracts were revenue expenditure, not capital expenditure.

The Tribunal held that the late fee charged under Section 234E of the Act for processing TDS returns under Section 200A of the Act is invalid prior to the amendment of Section 200A by the Finance Act, 2015 (w.e.f. 01.06.2015). However, for the financial year 2015-16, the levy is justified.

The Tribunal held that the notices issued under Section 153C of the Act for AYs 2014-15 to 2017-18 were bad in law. The Tribunal noted that the Ld. CIT(A) had correctly observed that the satisfaction note recorded by the AO only referenced incriminating material related to AYs 2018-19 and 2019-20, with no mention of material pertaining to AYs 2014-15 to 2017-18. Relying on the decision in Sinhgad Technical Education Society, the Tribunal found no nexus between the seized material and the impugned AYs prior to the issuance of notices under Section 153C. Furthermore, the Tribunal agreed with the Ld. CIT(A)'s finding that the date of receipt of seized materials by the jurisdictional AO (18.06.2021) should be considered the date of search. Based on this, AYs 2014-15 and 2015-16 were found to be beyond the six-year period permissible under the proviso to Section 153C(1). The Tribunal upheld the quashing of the orders passed under Section 143(3)/153C for AYs 2014-15 to 2017-18, deeming them ab initio void. The appeals of both the Revenue and the assessee were decided on this legal issue.

The Tribunal addressed the issue of M/s. Nihilent Ltd. being included as a comparable company. The Revenue argued for its inclusion, citing the annual report's classification of 'IT Consultancy, Software Development and related services'. The assessee contended it was functionally dissimilar due to diversified activities. The Tribunal, referring to co-ordinate bench decisions in Carl Zeiss India (P) Limited and Subex Limited, held that M/s. Nihilent Ltd. was engaged in diverse business functions and not comparable to a company solely engaged in software development. Therefore, it upheld the exclusion of M/s. Nihilent Ltd. The judgment also discusses issues related to corporate guarantee fees and hardware/software expenses, but the specific findings and reasoning for these issues are omitted in the provided text. The Tribunal directed the AO to grant foreign tax credit on taxes payable in Oman but not paid due to specific exemption in Omani tax law, allowing the assessee's ground related to this. The appeals filed by the Revenue and the assessee were partly allowed, and the cross-objection filed by the assessee was dismissed.