ITAT Chennai Judgments — February 2026

The Tribunal noted that the assessee had claimed deduction u/s. 54 in the return and that the AO admitted certain construction expenditure. The denial of deduction u/s. 54F on the ground of it being a fresh claim was considered incorrect. The issue requires fresh examination.

The Tribunal held that the assessee's explanation for the delay in filing the appeal was bonafide and constituted a sufficient cause. The delay was condoned, and the appeal was admitted for adjudication.

The Tribunal held that the notice under section 148 of the Act was issued beyond three years from the end of the assessment year and required approval from the Principal Chief Commissioner (PCCIT) as per Section 151(ii) of the Act. However, the approval was obtained from the Principal Commissioner (PCIT), which is not the competent authority for reassessment proceedings initiated after three years. The amendment by the Finance Act, 2023, introducing a proviso to Section 151, was not applicable as it had a prospective effect from April 1, 2023, whereas the notice was issued on April 4, 2022.

The Tribunal held that the notice under section 148 was issued beyond the permissible period of 3 years, as the escaped income was less than Rs. 50 lakhs. This contravened the provisions of section 149 of the Income Tax Act, as interpreted by the Supreme Court in Ashish Agarwal's case. Consequently, the notice and subsequent proceedings were deemed invalid.

The Tribunal found that the AO ought to have considered the details filed by the assessee and that the estimation of profit at 8% was not correct. Considering the assessee's profit margin in the business range of 2% to 5%, the AO was directed to restrict the estimation of profit to 3%.

The Tribunal noted that the reasons provided for the delay were not supported by documentary evidence. The Tribunal emphasized that a liberal approach cannot be used to overcome the law of limitation and that the assessee failed to provide a sufficient cause for the inordinate delay.

The Tribunal noted that the revenue's appeals were not maintainable due to low tax effect, citing a CBDT circular setting a monetary limit of Rs. 60 lakhs for filing appeals. Since the tax effect in both AYs was below this limit, the appeals were dismissed.

The Tribunal held that the penalty notice issued by the AO was void-ab-initio because it failed to specify the specific limb under which the penalty proceedings were initiated, i.e., whether it was for 'underreporting of income' or 'misreporting of income'. The Tribunal relied on a coordinate bench decision that held similar notices to be bad in law.

The Tribunal admitted the assessee's additional ground that the notice under section 148 was barred by limitation, as it was a pure legal issue. Relying on Supreme Court judgments and concessions made by the Revenue, the Tribunal held that the notice issued for AY 2015-16 on 25.04.2022 under the new regime was beyond the permissible time limit.

The Tribunal held that when the reasons for reopening of assessment do not form part of the additions made in the reassessment order, the Assessing Officer is precluded from making other additions. This is in line with judicial pronouncements from the Hon'ble Jurisdictional High Court and the Supreme Court.

The tribunal found merit in the assessee's contention that the AO should have considered the details furnished, which pertained to the year under consideration. The tribunal noted that the assessee's profit margin is typically between 2% to 5%. Therefore, the estimation of 8% profit by the AO was deemed incorrect.

The Tribunal condoned the delay of 69 days in filing the appeal, acknowledging a reasonable and sufficient cause due to the legal heir's unfamiliarity with the ITBA portal procedures and the transmission of notices. The appeal was remitted back to the CIT(A) to decide on merits, with a direction to condone the delay.

The Tribunal condoned the delay of 34 days in filing the appeal before it, considering the assessee's submission that she is a homemaker with limited technical knowledge and was dependent on counsel. Since the lower authorities had not examined the issue on merits, the appeal was remitted back to the AO for fresh consideration.

The Tribunal noted that the revenue's appeal was not maintainable due to low tax effect, as per CBDT circular 09/2024 which sets a monetary limit of Rs. 60 lakhs. The tax effect in this case was below this limit for all assessment years. Therefore, the appeals were dismissed on the ground of monetary limits.

The Tribunal noted that the assessee had filed Form 67 prior to the intimation and had pursued alternative remedies. The Tribunal found sufficient cause for the delay in filing the appeal before the FAA and condoned the delay of 615 days. The matter was restored to the FAA for adjudication on merits.

The Tribunal noted that the Revenue's appeals were not maintainable due to low tax effect. The CBDT Circular No.09/2024 sets a monetary limit of Rs.60 lakhs for filing appeals. The tax effect in these cases was below this limit.

The Tribunal noted that the revenue's appeals were not maintainable due to low tax effect, citing a CBDT circular that set a monetary limit of Rs. 60 lakhs for filing appeals.

The Tribunal, while deprecating the assessee's non-response to notices, decided to restore the matter to the AO for fresh adjudication in the interest of justice and fair play.

The Tribunal noted that the appeals were not maintainable due to low tax effect, which was below the monetary limit set by CBDT circular. Therefore, the appeals were dismissed on this ground.

The Tribunal noted that the assessee had filed a petition seeking withdrawal of the appeal and, in light of this, dismissed the appeal as withdrawn.

The Tribunal noted that the revenue's appeals were not maintainable due to low tax effect, as per a CBDT circular setting a monetary limit of Rs. 60 lakhs for filing appeals. The tax effect in this case was below the stipulated limit for all assessment years.

The Tribunal held that when a partner introduces capital and provides satisfactory explanation, the burden on the firm is discharged. The credit entry cannot be treated as income of the firm. The addition made under section 68 was not justified as the assessee provided substantive evidence and the partner's contribution was confirmed.

The Tribunal held that the notice issued under Section 148 on 13.04.2022 for AY 2015-16 is barred by limitation as it was issued beyond the six-year period prescribed under the un-amended provisions of Section 149(1) of the Income Tax Act, 1961, as confirmed by Supreme Court decisions.

The Tribunal noted that the date of search, as determined by the satisfaction recorded by the Assessing Officer on the assessee, was 10.08.2023, which was after 01.04.2021. This made the provisions of Section 153C inapplicable. Following the decision of the Hon'ble High Court of Madras in Harigovind v. ACIT, the notice and subsequent assessment orders were deemed invalid.

The Tribunal held that the reassessment proceedings were initiated merely on a change of opinion, as there was no new tangible material or fresh information available to the AO. The AO had already examined the issues and applied his mind during the original assessment. Reopening based on the same facts constitutes a review of the earlier assessment, which is impermissible in law.

The Tribunal noted that the date of search in the assessee's case was the date of satisfaction recorded by the Assessing Officer, which was 10.08.2023. Since this date is after 01.04.2021, the provisions of Section 153C of the Act were not applicable. Therefore, the notice issued under Section 153C and the consequent assessment orders were held to be invalid.

The Tribunal noted that the search in the assessee's case was conducted after the specified date, making Section 153C of the Act not applicable. Consequently, the notice issued under Section 153C and the subsequent assessment order were deemed invalid.

The Tribunal held that the assessment proceedings initiated under Section 153C were invalid because the date of satisfaction recorded by the Assessing Officer (10.08.2023) was after 01.04.2021. This date was considered the deemed date of search for the assessee. The Tribunal relied on the decision of the Hon'ble High Court of Madras in Harigovind v. ACIT.

The Tribunal held that the Assessing Officer erred in the penalty proceedings. The notice for penalty was issued for 'concealment of particulars of income,' but the penalty order was for 'inaccurate particulars.' Furthermore, the Assessing Officer did not record proper satisfaction for initiating penalty proceedings, and the reassessment order was made against a non-existent entity after the firm's conversion.

The Tribunal noted that the proceedings before the First Appellate Authority (FAA) were ex-parte due to the assessee's non-compliance with notices. While deprecating the assessee's attitude, the Tribunal considered the interest of justice and fair play, particularly the legal ground raised regarding the notice under Section 143(2).

The Tribunal noted that the date of search, as per the Assessing Officer's satisfaction, was 10.08.2023, which was after 01.04.2021. Consequently, the provisions of section 153C were not applicable. The notice dated 10.08.2023 issued under section 153C was deemed invalid, and the subsequent assessment orders were liable to be quashed.

The Tribunal held that an order passed under Section 119(2)(b) of the Income Tax Act is not appealable before the Tribunal. Therefore, the appeal filed by the assessee is not maintainable.

The Tribunal noted that there was a significant delay of 440 days in filing the appeal before the CIT(A). However, considering the ill-health of the managing partner and other circumstances, the Tribunal condoned the delay. The Tribunal also observed that the lower authorities had not examined the issue on merits.

The Tribunal noted that Section 153(2) of the Income Tax Act mandates that reassessment orders must be passed within nine months from the end of the financial year in which the notice under Section 148 was served. In this case, the notice was served on 20.03.2018, meaning the financial year ended on 31.03.2018. Nine months from that date would be 31.12.2018. However, the reassessment order was passed on 16.12.2019, which is beyond the prescribed time limit.

The Tribunal held that the notice u/s. 148 was issued beyond three years from the end of the assessment year and required approval from the Principal Chief Commissioner (PCCIT) as per Section 151(ii) of the Act. However, the approval was obtained from the Principal Commissioner (PCIT) only, which is not the competent authority in this case. Therefore, the notice issued u/s. 148 is invalid.

The Tribunal condoned the 92-day delay in filing the appeal due to the assessee's reliance on counsel. The Tribunal decided to remit the penalty appeal back to the CIT(A) to be decided along with the pending quantum appeal, ensuring the assessee gets a reasonable opportunity of being heard.

The Tribunal, considering the assessee's lack of education and technical knowledge, and their dependence on counsel, decided to provide one more opportunity. The appeal was remitted back to the AO for a fresh consideration on merits, with directions to call for necessary details and for the assessee to cooperate.

The Tribunal condoned the 95-day delay in filing the appeal, acknowledging a reasonable cause. Considering the assessee's dependency on counsel and lack of technical knowledge, the Tribunal decided to give the assessee one more opportunity by remitting the appeal back to the AO for fresh consideration.

The Tribunal condoned the delay. It held that the notice issued under Section 153C of the Act was bad in law and unsustainable as it was issued after the cut-off date of April 1, 2021, as per Section 153C(3), following precedents from the Madras High Court and ITAT.

The Tribunal, following judicial precedents including the Madras High Court in Harigovind vs. ACIT, held that Section 153C(3) of the Act bars the applicability of Section 153C to searches initiated on or after April 1, 2021. As the date of receiving the materials by the assessee's Assessing Officer was after April 1, 2021, the notices issued under Section 153C were deemed bad in law.

The Tribunal condoned the delay of 31 days in filing the appeal before it, finding a reasonable cause due to the assessee's rural background and dependence on counsel. The Tribunal remitted the appeal back to the CIT(A) for adjudication on merits.

The Tribunal, following judicial precedents including the Hon'ble Madras High Court and Supreme Court, held that notices issued under Section 153C after 01.04.2021 are invalid due to the prohibition in Section 153C(3). The search in question was initiated prior to 01.04.2021, but the notice under Section 153C was issued later.

The CIT(A) upheld the additions, finding the assessee's submissions unsubstantiated. The Tribunal, noting the unique facts, decided to grant the assessee one more opportunity to present their case properly before the lower authorities.

The Tribunal acknowledged that the assessee is from a rural area, lacks technical knowledge, and was dependent on counsel who did not handle the case properly. Considering these circumstances, the Tribunal decided to give the assessee one more opportunity.

The Tribunal noted that the assessee raised legal contentions that were not properly adjudicated by the CIT(A). The CIT(A) had dismissed these grounds stating the assessee failed to support its claim. The Tribunal decided to give the assessee another opportunity to present its case.

The Tribunal found that there was a reasonable cause for the delay in filing the appeal before the CIT(A). The Tribunal decided to remit the appeal back to the CIT(A) with a direction to condone the delay and decide the appeal on its merits.

The Tribunal followed the decision of the Hon'ble High Court of Madras in the case of True Blue Voice India (P.) Ltd. v. CCIT(TDS), holding that there was no mechanism for determining late fees under Section 234E of the Act at the time of processing TDS statements, and the subsequent amendment was not retrospective. Therefore, the late fee levied was deleted.

The Tribunal followed the decision of the Madras High Court in the case of True Blue Voice India (P.) Ltd. v. CCIT(TDS), which held that there was no mechanism for determining late fees under section 234E before the amendment to section 200A of the Act, and that the amendment was not retrospective. Therefore, the late fees levied were deleted.

The Tribunal found reasonable cause for the delay, considering the assessee's circumstances. It was deemed proper to afford another opportunity to the assessee.

The Tribunal, following the decisions of the Madras High Court and the Supreme Court, held that Section 153C(3) prohibits the issuance of notices under Section 153C for searches initiated on or after April 1, 2021. In this case, the notice under Section 153C was issued after April 1, 2021, making it invalid.