ITAT Chennai Judgments — December 2025

The Tribunal upheld the CIT(A)'s decision to tax 50% of the agricultural income due to lack of substantiating documents. The Tribunal agreed with the CIT(A) that there was incriminating material found during the search, giving the AO jurisdiction for assessment.

The Tribunal upheld the CIT(A)'s decision to tax 50% of the agricultural income due to lack of substantiating documents. The Tribunal agreed with the CIT(A) that there was incriminating material found during the search, giving the AO jurisdiction for assessment.

The Tribunal held that notices issued by the JAO under Section 148 after the faceless scheme notification were invalid and bad in law, vitiating the reassessment. The penalty under Section 271B was deleted due to reasonable cause for delayed filing of the audit report.

The Tribunal found that the assessee was not given a proper opportunity to produce relevant material due to a short timeframe for the assessment order. Therefore, the Tribunal set aside the impugned order.

The Tribunal held that the assessee, being a credit cooperative society engaged in providing financial assistance to its members, is entitled to claim deduction under Section 80P for interest income earned on surplus funds invested in other cooperative banks. The decision in Totgars Cooperative Sales Society Limited was distinguished.

The Tribunal held that the assessee, being a credit cooperative society engaged in providing financial assistance to its members, is entitled to claim deduction under Section 80P for interest income earned on surplus funds invested in other cooperative banks. The decision of a coordinate bench on similar facts was followed.

The Tribunal held that notices issued by the JAO under Section 148 after the faceless scheme notification were invalid and bad in law, vitiating the reassessment. The penalty under Section 271B was deleted due to reasonable cause for delayed filing of the audit report.

The Tribunal upheld the CIT(A)'s decision to delete the additions, finding that the seized documents were vague and not conclusively linked to the assessee. The Tribunal also allowed higher depreciation on assets forming part of the cogeneration power system, following a precedent.

The Tribunal upheld the CIT(A)'s decision to delete the additions, finding that the seized documents were vague and not conclusively linked to the assessee. The Tribunal also allowed higher depreciation on assets forming part of the cogeneration power system, following a precedent.

The Tribunal held that notices issued by the JAO under Section 148 were invalid and bad in law, as the e-Assessment Scheme, 2022, mandated issuance of such notices through the Faceless Mechanism. Consequently, the reopening of assessments and the assessment orders were quashed.

The Tribunal condoned the delay in filing appeals, accepting the legal heir's claim. It found a violation of natural justice as the Ld.CIT(A) orders were passed after the assessee's death without hearing the legal heir. Consequently, the Tribunal set aside the impugned orders and remanded the appeals back to the Ld.CIT(A) to hear the legal heir and pass fresh speaking orders according to law.

The Tribunal ruled that the Ld.CIT(A)'s rejection of the Section 54F claim on technicalities, without providing adequate opportunity to the assessee, violated principles of natural justice. It set aside the Ld.CIT(A)'s order and remanded the quantum assessment back to the AO for a de novo assessment, directing the assessee to submit all relevant documents. Consequently, the related penalty imposed under Section 271AAC(1) was also cancelled.

The Tribunal, relying on various High Court judgments, held that the Section 148 notice issued by the JAO on 09.03.2023 was invalid and bad in law, as it contravened the Faceless Scheme notified by the CBDT on 29.03.2022, which mandates automated allocation for such notices under Section 151A. Consequently, the reassessment order and the penalty levied under Section 272A(1)(d) were also quashed as null in the eyes of law.

The Tribunal held that the notice issued u/s.148 by the JAO was invalid and bad in law, as it contravened the provisions of Section 151A of the Act and the e-Assessment Scheme. Consequently, the reopening of assessment and the assessment order were quashed.

The Tribunal held that in the interest of natural justice, the assessee should be granted one more opportunity to substantiate his case before the Assessing Officer. The Tribunal observed that the assessment order was passed ex-parte under Section 144 and the CIT(A) had not examined the cash book or bank statement. Consequently, the impugned order for ITA No. 2470/Chny/2025 was set aside, and the matter was remitted back to the A.O. for denovo assessment. The assessee was directed to comply with all notices and furnish relevant details. Regarding ITA No. 2471/Chny/2025, the Tribunal held that the penalty under Section 271(1)(c) was based on the assessment order, which had been set aside. Therefore, the penalty order had no legal basis and was cancelled. The Tribunal clarified that the A.O. was free to initiate fresh penalty proceedings during the denovo assessment. The ratio is that procedural fairness and natural justice require an opportunity to be heard, and a penalty based on a set-aside assessment order cannot survive.

The Tribunal held that in the interest of natural justice, the assessee should be granted one more opportunity to substantiate his case before the Assessing Officer. The Tribunal observed that the assessment order was passed ex-parte under Section 144 and the CIT(A) had not examined the cash book or bank statement. Consequently, the impugned order for ITA No. 2470/Chny/2025 was set aside, and the matter was remitted back to the A.O. for denovo assessment. The assessee was directed to comply with all notices and furnish relevant details. Regarding ITA No. 2471/Chny/2025, the Tribunal held that the penalty under Section 271(1)(c) was based on the assessment order, which had been set aside. Therefore, the penalty order had no legal basis and was cancelled. The Tribunal clarified that the A.O. was free to initiate fresh penalty proceedings during the denovo assessment. The ratio is that procedural fairness and natural justice require an opportunity to be heard, and a penalty based on a set-aside assessment order cannot survive.

The Tribunal admitted the additional evidence filed by the assessee, including details of Form 15G/15H and proof of subsequent online filing. The matter was restored to the file of the Assessing Officer (AO) for verification of substantial compliance with Section 197A(2) of the Act by uploading the Form 15G/15H online. The assessee was directed to submit all supporting evidence to the AO. The AO was instructed not to treat the assessee in default if it was found that the assessee had e-filed Form 15G/15H and made substantial compliance with Section 197A. The ratio decidendi is that substantial compliance with procedural requirements, especially when supported by evidence of subsequent rectification and admission of additional evidence, can warrant a review by the AO to avoid penalizing the assessee for technical lapses.

The Tribunal held that the additions of Rs. 1,28,000/- and Rs. 6,49,000/- made by the AO and confirmed by the CIT(A) were unjustified. The Tribunal found no inconsistency or contradiction in the assessee's explanation that the cash deposits were out of earlier withdrawals of retirement benefits, which were retained in hand for the purpose of property purchase that did not materialize. The Tribunal noted that the redeposit during the demonetization period was consistent with this explanation. Crucially, the Tribunal observed that the source of the withdrawn funds was undisputed and traceable to the pensionary benefits. Therefore, the Tribunal deleted the additions made by the AO and confirmed by the CIT(A). No issue was expressly left undecided.

The Tribunal held that the Assessing Officer (AO) passed the final assessment order dated July 8, 2024, in defiance of the binding directions of the Dispute Resolution Panel (DRP). This action was found to be in gross violation of Section 144C(13) of the Income Tax Act, 1961, making the order arbitrary and passed wholly without jurisdiction, hence null and void in the eyes of law. The Tribunal noted that the AO was duty-bound to complete the assessment in conformity with the DRP's directions, but instead passed the final assessment order ignoring them, which was evident from the subsequent rectification order. The Tribunal relied on the decisions of the Hon'ble Delhi High Court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. UoI and the Hon'ble Madras High Court in CIT v. Sanmina SCI India (P.) Ltd., as well as the decision in Comparex India (P.) Ltd. v. ITO (Delhi-Trib.). Since the legal issue was answered in favor of the assessee, other grounds raised were considered academic and not adjudicated. The appeal filed by the assessee was allowed.

The Tribunal ruled that the Ld.CIT(A)'s rejection of the Section 54F claim on technicalities, without providing adequate opportunity to the assessee, violated principles of natural justice. It set aside the Ld.CIT(A)'s order and remanded the quantum assessment back to the AO for a de novo assessment, directing the assessee to submit all relevant documents. Consequently, the related penalty imposed under Section 271AAC(1) was also cancelled.

The Tribunal found that the AO and CIT(A) passed ex-parte orders because the assessee failed to respond to notices and furnish details. However, considering the principles of natural justice, the Tribunal granted one more opportunity to the assessee.

The Tribunal condoned the delay in filing appeals, accepting the legal heir's claim. It found a violation of natural justice as the Ld.CIT(A) orders were passed after the assessee's death without hearing the legal heir. Consequently, the Tribunal set aside the impugned orders and remanded the appeals back to the Ld.CIT(A) to hear the legal heir and pass fresh speaking orders according to law.

The Tribunal held that the notice issued by the JAO under Section 148, after the mandatory faceless scheme notification, was invalid and bad in law. Consequently, the reopening of assessment and the subsequent assessment order were vitiated.

The Tribunal held that the notice issued by the JAO u/s 148 after the notification of the faceless scheme, which mandated issuance by the Faceless Mechanism, was invalid and bad in law. This contravention of law vitiated the reopening of assessment and made the assessment order illegal.

The Tribunal, relying on various High Court judgments, held that the Section 148 notice issued by the JAO on 09.03.2023 was invalid and bad in law, as it contravened the Faceless Scheme notified by the CBDT on 29.03.2022, which mandates automated allocation for such notices under Section 151A. Consequently, the reassessment order and the penalty levied under Section 272A(1)(d) were also quashed as null in the eyes of law.

The Tribunal held that the assessee had provided sufficient evidence, including stock registers and bank statements, to substantiate that the cash deposits were collections made on behalf of the government and not the assessee's personal income. The CIT(A)'s deletion of the addition was found to be justified.

The Tribunal held that Form 10-IE is directory and not mandatory, and since it was available on record at the time of processing, the benefit of the concessional tax regime should not have been denied.

The Tribunal held that the AO did not record proper satisfaction before initiating penalty proceedings and did not specify the limb under which the penalty was levied. The Tribunal also noted that the issue was debatable, with a substantial question of law admitted by the High Court, and relied on Supreme Court and High Court decisions that a debatable claim does not automatically attract penalty.

The Tribunal held that the notice issued u/s.148 by the JAO was invalid and bad in law, as it contravened the provisions of Section 151A of the Act and the e-Assessment Scheme. Consequently, the reopening of assessment and the assessment order were quashed.

The Tribunal held that the notice issued by the JAO u/s.148 dated 31.03.2024 was invalid and bad in law as it was issued contrary to the mandatory provisions of the faceless scheme notified under Section 151A of the Act. Consequently, the reopening of assessment and the assessment order were vitiated.

The Tribunal held that the notice issued u/s.148 by the JAO was invalid and bad in law because it was issued contrary to the faceless scheme notified by the CBDT on 29.03.2022, which mandates such notices to be issued by the Faceless Mechanism. Consequently, the reassessment order was also held to be null in the eyes of law.

The Tribunal, relying on multiple High Court judgments including the jurisdictional Madras High Court, held that the notice issued by the JAO u/s.148 dated 25.04.2022 was invalid and bad in law. This was because the notice should have been issued by a Faceless Mechanism as per Section 151A read with the Faceless Scheme. Consequently, the reassessment order dated 19.12.2023 was declared null and void.

The Tribunal held that notices issued by the JAO under Section 148 were invalid and bad in law, as the e-Assessment Scheme, 2022, mandated issuance of such notices through the Faceless Mechanism. Consequently, the reopening of assessments and the assessment orders were quashed.

The Tribunal, relying on various High Court judgments, held that the Section 148 notice issued by the JAO after 29.03.2022 was invalid and bad in law due to non-adherence to the Faceless Scheme under Section 151A of the Act. Consequently, the reassessment order passed on 20.03.2023 was declared null and void.

Following the jurisdictional High Court's decisions (TVS Credit Service Ltd. and Hexaware Technologies Ltd.), the Tribunal held that reassessment notices under Section 148 must be issued by the Faceless Assessing Officer (FAO). Since the notice was issued by the Jurisdictional Assessing Officer (JAO) after March 29, 2022, it was deemed invalid. The Tribunal set aside the impugned notice and consequential assessment orders, allowing for the Revenue to seek revival if the Supreme Court's decision changes.

The Tribunal condoned the delay in filing the appeal due to medical emergencies. Considering the assessment was ex-parte and evidence was not fully presented, the Tribunal restored the issues to the AO for fresh consideration, directing the assessee to produce evidence and the AO to provide a hearing opportunity.

The ITAT held that the CIT(A) was justified in deleting the additions made by the AO under Sections 68 and 69 of the Act. The Tribunal emphasized the principle of judicial discipline, stating that subordinate authorities must adhere to the law laid down by higher forums on identical issues. In this case, the CIT(A) had rightly followed the binding precedents of the ITAT in earlier group cases involving the same facts, parties, and evidentiary material. The Tribunal had consistently held in those prior decisions that the impounded materials were incomplete, contained duplication, and were unreliable 'dumb documents' incapable of supporting adverse inferences without corroborative evidence. The Revenue failed to demonstrate any distinguishing facts or produce new material to justify a different conclusion. Therefore, the ITAT found no perversity or error of law in the CIT(A)'s order and confirmed the deletion of additions. The appeals filed by the Revenue were dismissed.

The ITAT held that the CIT(A) was justified in deleting the additions made by the AO under Sections 68 and 69 of the Act. The Tribunal emphasized the principle of judicial discipline, stating that subordinate authorities must adhere to the law laid down by higher forums on identical issues. In this case, the CIT(A) had rightly followed the binding precedents of the ITAT in earlier group cases involving the same facts, parties, and evidentiary material. The Tribunal had consistently held in those prior decisions that the impounded materials were incomplete, contained duplication, and were unreliable 'dumb documents' incapable of supporting adverse inferences without corroborative evidence. The Revenue failed to demonstrate any distinguishing facts or produce new material to justify a different conclusion. Therefore, the ITAT found no perversity or error of law in the CIT(A)'s order and confirmed the deletion of additions. The appeals filed by the Revenue were dismissed.

The Tribunal held that the CIT(A) was justified in deleting the additions made by the AO under Sections 68 and 69 of the Act. The Tribunal emphasized the principle of judicial discipline, stating that subordinate authorities must adhere to the law laid down by higher forums on identical issues. It noted that previous ITAT decisions concerning the same group of assessees and the same impounded materials had consistently held that such materials were incomplete, contained duplications, and could not be treated as reliable evidence for additions. The Tribunal reiterated that in the absence of corroborative evidence, these documents were 'dumb documents'. The CIT(A) had rightly followed these binding precedents. The Revenue failed to demonstrate any distinguishing facts or new material. Therefore, the CIT(A)'s order was well-reasoned and in conformity with judicial discipline. The additions were deleted, and the CIT(A)'s orders were confirmed.

The Tribunal held that for claiming deduction under Section 54, it is the investment of capital gains within the stipulated period that matters, not necessarily the completion of registration. The Tribunal noted that the delay in registration was due to the builder and the assessee had utilized the sale amount for the new property within the stipulated time.

The Tribunal held that the reopening of assessment under Section 147 was bad in law. The reasons for reopening were based on material already available on record during the original assessment, constituting a review rather than a valid reassessment. Therefore, the reassessment proceedings were quashed.

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 to frame a fresh assessment order after providing a reasonable opportunity to the assessee.

The Tribunal found that the CIT(A) had not satisfactorily dealt with certain legal issues and had not applied its mind properly. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back for readjudication de novo.

The Tribunal held that the Assessing Officer reopened the assessment based on Section 50C but made additions under Section 43CA. Since the addition was not made based on the original reasons for reopening, the reassessment is considered invalid and quashed.

The Tribunal held that the PCIT failed to establish a lack of inquiry by the AO and that the AO's order was not erroneous or prejudicial to the revenue. The PCIT's revisionary order was quashed as it lacked proper reasoning and relied on a differing view without sufficient material.

The Tribunal held that additions made in the hands of the assessee for sale of flats should be deleted as the income was already offered to tax by the company. Regarding seized jewellery, the Tribunal found the estimation by the CIT(A) to be arbitrary and accepted the assessee's explanation.

The Tribunal found that the CIT(A) had not satisfactorily dealt with certain legal issues and had not applied its mind properly. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back for readjudication de novo.

The Tribunal found that the CIT(A) had not satisfactorily dealt with certain legal issues and had not applied its mind properly. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back for readjudication de novo.

The ITAT condoned a 131-day delay in filing the appeal, accepting the assessee's claim of unawareness due to the non-availability of a Chartered Accountant and becoming aware only upon recovery proceedings. The Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication, granting the assessee another reasonable opportunity to present documentary evidence, thus allowing the appeal for statistical purposes.

The Tribunal held that additions made in the hands of the assessee for sale of flats should be deleted as the income was already offered to tax by the company. Regarding seized jewellery, the Tribunal found the estimation by the CIT(A) to be arbitrary and accepted the assessee's explanation.