ITAT Chennai Judgments — December 2025

The Tribunal allowed the assessee's appeal against disallowance of interest under Section 14A read with Rule 8D(2)(ii), finding sufficient own funds existed. It upheld the CIT(A)'s direction for recomputing other expenses under Rule 8D(2)(iii). The Revenue's appeal regarding inclusion of leave encashment provision in book profit under Section 115JB was allowed as the assessee withdrew its contest. For subsidies, the assessee's ground against inclusion in book profit under Section 115JB was dismissed, while the Revenue's ground against treating subsidies as capital receipts for normal assessment was also dismissed, upholding the CIT(A)'s findings. The Tribunal further confirmed the CIT(A)'s decision to allow additional depreciation under Section 32(1)(iia), deduction for bad and doubtful debts, and the carry forward of long-term capital loss of the amalgamating company. The assessee's cross-objections were dismissed as infructuous.

The Tribunal held that no disallowance under Section 14A for interest was warranted due to the availability of the assessee's own funds, while directing recomputation for expenses under Rule 8D(2)(iii) excluding strategic investments. The Revenue's appeal for including leave encashment provision under Section 115JB was allowed. Subsidies were confirmed as capital receipts under normal provisions, dismissing the Revenue's appeal, but their inclusion in book profit for MAT under Section 115JB was upheld, dismissing the assessee's appeal. The CIT(A)'s decisions to allow additional depreciation in subsequent years and deduction for provision for bad and doubtful debts (treated as actual write-off) were confirmed, dismissing the Revenue's appeals. Lastly, the carry forward of long-term capital loss of the amalgamating company was allowed, upholding the CIT(A)'s view based on the High Court-approved amalgamation scheme. The assessee's cross-objections were dismissed as infructuous.

The Tribunal held that the reassessment notice was invalid due to improper sanction and that the declaration under IDS, 2016, could not be invoked for addition as Form 2 was not served to the assessee. Consequently, the addition made under Section 69A was deleted. The penalty under Section 271AAC was also quashed as it was consequential to the bad reassessment.

The tribunal granted the appellant's request to withdraw the appeal as the issues involved had been resolved under a MAP resolution mechanism. The appeal was dismissed as withdrawn.

The Tribunal granted permission to the assessee to withdraw the present appeal. Consequently, the Second Appeal was dismissed as infructuous.

The Tribunal noted that the expenditure on salaries and wages was shown as Nil, while a significant amount was shown as 'bonus'. It held that it's not possible to incur bonus expenditure without incurring salaries and wages, and remanded the matter back to the AO to examine the claim.

The Tribunal held that the seized documents have evidentiary value and that the transactions, even if outside regular books, were for business purposes. It also found that the retraction of a statement was valid and the AO's approach of taxing gross receipts was unsustainable. The assessee's appeals were allowed, and the Revenue's appeals were dismissed.

The Tribunal held that the notice issued under section 148 was invalid due to improper sanction. Additionally, the court found that the non-payment of taxes under IDS did not automatically trigger section 197(b) of the Finance Act 2016 due to non-service of Form 2. Consequently, the addition made under section 69A was quashed. The penalty under section 271AAC was also deleted as it was consequential to the bad reassessment.

The Tribunal held that the seized documents had evidentiary value and that a retracted statement, if supported by credible evidence, could be accepted. The Tribunal also examined the legality of the notice issued under Section 148 and found it to be void due to improper approval. The appeals filed by the Revenue were dismissed, and the appeals filed by the assessee were allowed.

The tribunal held that the CIT(A) erred in dismissing the appeal solely on the grounds of delay. The limitation period commences from the communication of the assessment order, not the date of the order itself, and the appellant claimed to have received the order later. Therefore, the matter was remitted back for de novo disposal.

The Tribunal held that while the assessee failed to fully explain the source of all cash deposits, taxing the entire amount would be excessive. The addition should be restricted to the peak unexplained credit. The Tribunal also noted that provisions of Section 68 might be debatable in the absence of proper books of account, but the unexplained peak balance is taxable.

The Tribunal held that the notices issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessment Officer (FAO) were invalid as per the e-assessment scheme. Consequently, the assessment proceedings were vitiated.

The Tribunal condoned the delay in filing the appeals before the CIT(A) and set aside the orders of the CIT(A) and the AO. The matter was remitted back to the AO for a denovo assessment, providing the assessee with a reasonable opportunity to be heard.

The Tribunal held that the notice u/s 148 and subsequent assessment order were invalid because they were issued by the Jurisdictional Assessing Officer (JAO) and not by the Faceless Assessment Mechanism, contrary to the CBDT Notification dated 29.03.2022. Relying on various High Court decisions, the Tribunal found the proceedings to be bad in law.

The Tribunal held that the assessee was justified in valuing the excess stock using the simple average cost method (Rs.1,593/- per gram), as it was consistent with the principles laid down in Section 145 of the Act and AS-2. The AO's re-valuation and the CIT(A)'s modification were set aside.

The Tribunal held that the notices issued by the Jurisdictional Assessing Officer (JAO) were invalid as they were not issued through the Faceless Mechanism as mandated by the CBDT Notification dated 29.03.2022 and Section 151A of the Act. Consequently, the assessment orders were vitiated.

The Tribunal condoned the delay in filing the appeal due to medical reasons. While acknowledging the assessee's failure to participate in assessment and appeal proceedings, the Tribunal set aside the CIT(A) order and remitted the matter back to the AO for de novo assessment.

The Tribunal held that the notices issued under Section 148 were invalid as they were not issued in a faceless manner as mandated by the CBDT Scheme dated 29.03.2022. This deviation from the procedure rendered the assessment proceedings vitiated.

The Tribunal condoned the delay in filing the appeal before the CIT(A) and set aside the CIT(A)'s order. The matter was remitted back to the AO for a de novo assessment, providing the assessee with a reasonable opportunity. The penalty order was also set aside and remitted.

The Tribunal condoned the delay in filing the appeal and provided the assessee with another opportunity to present their case before the CIT(A), setting aside the previous order.

The Tribunal set aside the orders of the ld.CIT(A) and remitted the matter back to the Assessing Officer (AO) to frame de novo assessment orders in accordance with law, after providing reasonable opportunity to the assessee. The Tribunal also levied a cost of Rs. 50,000 (Rs. 25,000 per appeal) on the assessee due to its failure to participate diligently in the earlier proceedings, to be paid to the State Legal Aid Authority.

The Tribunal, considering the High Court's directive for de novo consideration, set aside the CIT(A)'s order and restored the matter to the Assessing Officer. The AO is to conduct a detailed factual inquiry into the transactions between the assessee trust and M/s. Tamil Nadu Real Estates Ltd. regarding potential violations of Section 13(1)(c).

The Tribunal held that the assessee's simple average cost method of Rs. 1,593/- per gram was appropriate for valuing the excess stock, as it was the first year of business and the stock was indistinguishable from regular inventory. The addition made by the AO and sustained by the CIT(A) was deleted.

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 mandated by the e-assessment scheme, 2022. Therefore, the notice and subsequent proceedings were invalid.

The Tribunal held that the notices issued under Section 148 and 148A were invalid as they were not issued by the Faceless Assessment Officer as mandated by the e-assessment scheme notified on 29.03.2022. This procedural defect vitiated the assessment proceedings.

The Tribunal held that amounts credited to the assessee's account arising from the sale of pledged shares, where the loans secured by these shares became irrecoverable due to the financial sickness of the companies, should be treated as a capital loss and not as capital gains. Furthermore, the tribunal deleted additions related to salary and dividend income when they were not supported by incriminating material unearthed during search or when information was already available with the department.

The Tribunal held that dividend income and salary/commission income that were already within the knowledge of the Income Tax Department due to TDS or prior disclosures do not constitute 'undisclosed income' for block assessment purposes. Furthermore, the Tribunal ruled that losses incurred due to the financial sickness of companies, where shares were pledged as security, should be treated as capital losses and not subject to capital gains tax.

The Tribunal held that the notice issued by the JAO was invalid and bad in law because it contravened the provisions of Section 151A of the Act and the mandatory Faceless Scheme notified on 29.03.2022. Consequently, the reopening of assessment and the assessment order were vitiated.

The Tribunal held that the notice issued by the JAO was invalid and bad in law, as it was issued contrary to the faceless scheme notified under Section 151A of the Act. Consequently, the reopening of assessment and the assessment order were deemed null and void.

The Tribunal held that the notices issued under Section 148A and 148 by the Jurisdictional Assessing Officer (JAO) were invalid because they were not issued in a faceless manner as mandated by the e-assessment scheme notified on 29.03.2022.

The Tribunal held that the notice issued by the JAO under Section 148, after the notification of the faceless scheme which mandated issuance by the Faceless Mechanism, was invalid and bad in law. This contravention of the Rule of Law vitiated the reopening of the assessment.

The Tribunal held that notices issued u/s 148 of the Act were invalid because they were not issued through the faceless mechanism as mandated by the CBDT Notification dated 29.03.2022. The issuance by the jurisdictional Assessing Officer (JAO) contrary to the scheme made the proceedings vitiated.

The Tribunal held that the notice issued by the JAO was invalid and bad in law, contrary to the 'Rule of Law' and the mandatory provisions of the faceless scheme. Consequently, the reopening of assessment and the subsequent assessment order were also held to be null and void.

The Tribunal held that the notices issued by the Jurisdictional Assessing Officer (JAO) were invalid as they were not issued through the faceless mechanism as mandated by the CBDT notification. The assessment order was vitiated due to the invalid notices.

The Tribunal held that the assessee was legally entitled to five years of registration and condoned the delay in filing the appeals. The Tribunal decided to set aside the impugned order and directed the processing of the application as if it were filed under the correct clause, granting registration for five years.

The Tribunal held that the notice issued by the JAO was invalid and bad in law as it contravened the provisions of the Act and the faceless scheme. Consequently, the reopening of assessment and the assessment order were also held to be illegal.

The Tribunal held that the notice issued by the JAO under Section 148, dated 31.03.2022, was invalid and bad in law. This was because the e-Assessment Scheme, notified on 29.03.2022, made it mandatory to issue such notices through the Faceless Mechanism. Consequently, the reopening of assessment and the subsequent assessment order were vitiated.

The Tribunal condoned the substantial delays in filing both appeals, acknowledging the genuine reasons including technical glitches and internal litigation. It held that the assessee was legally entitled to five years of registration from AY 2022-23 onwards under Section 12AB(1)(a). The Tribunal set aside the impugned orders and directed the PCIT(E)/CIT(E)/CPC to treat the assessee's application as filed under the correct sub-clause (i) of Section 12A(1)(ac) and to grant registration for five years from AY 2022-23 onwards, after providing an opportunity of hearing.

The Tribunal held that the estimation of profit at 10% of contract receipts was arbitrary and on the higher side. It deemed it appropriate to estimate net profit at 4% of contract receipts and directed that credit for TDS reflected in Form 26AS should be allowed after verification.

The Tribunal noted that the issue of FTC is covered by the Madras High Court's decision in Duraiswamy Kumaraswamy, which held that filing Form 67 under Rule 128 is directory, not mandatory. Therefore, the AO was directed to grant the FTC.

The Tribunal held that Rule 46A does not permit the CIT(A) to scrutinize the credibility of additional evidence before admitting it. The CIT(A) should have admitted the evidence and forwarded it for a remand report.

The Tribunal observed that the AO's order was based on the CIT's order which was annulled by the ITAT. Therefore, the additions/disallowances made by the AO in the set-aside assessment were treated as allowed.