ITAT Chennai Judgments — February 2026

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 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 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 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 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 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 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that the assessee had filed a petition seeking withdrawal of the appeal and, in light of this, dismissed the appeal as withdrawn.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 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 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 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 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 considered the letter filed by the assessee dated 19.02.2026, requesting the withdrawal of the appeal. The assessee stated that they have opted for the Direct Tax Vivad Se Vishwas Scheme, 2024, and provided a copy of Form 2 issued by the PCIT under the scheme. In light of this submission, the Tribunal decided to dismiss the appeal as withdrawn. However, the Tribunal granted the assessee liberty to reinstate the appeal if their application under the Direct Tax Vivad Se Vishwas Scheme, 2024, is not accepted. The primary finding is that the appeal is withdrawn by the assessee due to their participation in the Vivad Se Vishwas scheme.

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, 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 held that the notice issued under Section 148 of the Income Tax Act was invalid because it was issued beyond three years from the end of the relevant assessment year without obtaining proper sanction from the Principal Chief Commissioner of Income Tax (PCCIT) as required by Section 151(ii). Consequently, the reassessment proceedings were vitiated.

The Tribunal held that the credit entry cannot be treated as the income of the assessee firm as the partner had affirmed the infusion and the penalty proceedings for violating Section 269SS were dropped. The addition made under Section 68 was deleted.

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 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 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 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 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 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 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 held that the reassessment proceedings were initiated merely on a change of opinion by the Assessing Officer, without any new or tangible material. Therefore, the reassessment order was unsustainable in law.

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 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 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 held that the notice issued under Section 148 of the Act was invalid because it was issued beyond three years from the end of the relevant assessment year without obtaining approval from the Principal Chief Commissioner of Income Tax (PCCIT) as required by Section 151(ii). Consequently, the assessment order based on this invalid notice was quashed.

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 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 found that the assessee had provided sufficient details of the credit entries, and the Assessing Officer did not conduct a proper examination. The Tribunal decided that the balance amount should be treated as business income and adopted an 8% rate on it.

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 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 condoned the delay in filing the appeal for ITA No. 4038/CHNY/2025 due to the death of the assessee's consultant and health issues of the assessee. The penalty orders were set aside to the files of the CIT(A) for fresh adjudication along with the quantum appeal.

The Tribunal condoned the delay in filing the appeal for ITA No. 4038/CHNY/2025 due to the death of the assessee's consultant and health issues of the assessee. The penalty orders were set aside to the files of the CIT(A) for fresh adjudication along with the quantum appeal.

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 delay in filing the appeal for ITA No. 4038/CHNY/2025 due to the death of the assessee's consultant and health issues of the assessee. The penalty orders were set aside to the files of the CIT(A) for fresh adjudication along with the quantum appeal.

The Tribunal condoned the delay in filing the appeal for ITA No. 4038/CHNY/2025 due to the death of the assessee's consultant and health issues of the assessee. The penalty orders were set aside to the files of the CIT(A) for fresh adjudication along with the quantum appeal.

The Tribunal condoned the delay in filing the appeal for ITA No. 4038/CHNY/2025 due to the death of the assessee's consultant and health issues of the assessee. The penalty orders were set aside to the files of the CIT(A) for fresh adjudication along with the quantum appeal.

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 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 held that notices issued under Section 153C after April 1, 2021, are invalid, even if the search was initiated prior to that date. This is based on the insertion of sub-section (3) to Section 153C. The appeals were allowed on this legal ground.

The Tribunal, after hearing both parties and considering an undertaking, decided to remand the matter to the Assessing Officer. This is subject to the condition of the assessee paying ₹50,000 to the State Legal Aid Authority. The AO is to decide the issue afresh after considering submissions and evidence.

The Tribunal held that the assessee is a zero debt/debt-free company, as evidenced by its balance sheet and financial notes. Since the assessee has no borrowings, it has not incurred any additional burden for managing its working capital cycle due to overdue receivables from its AE. Therefore, imputing notional interest cost on outstanding receivables is not warranted. The Tribunal relied on judicial pronouncements, including the Supreme Court's order in a similar matter, which held that no substantial question of law arises concerning adjustments for interest on receivables when the Tribunal has returned a finding of fact. Consequently, the Tribunal directed the deletion of the transfer pricing adjustment on account of interest on receivables. The specific adjustment of Rs. 3,76,02,920/- was deleted. Ground No. 4 of the assessee's appeal was decided in its favour. Other grounds were not adjudicated and were left open. The Stay Application was dismissed as infructuous.

The Tribunal noted that the assessee, a wholesale fruit vendor, lacked technical knowledge and was dependent on counsel who allegedly mishandled the case. The assessee also claimed cash was received for credit sales in earlier years. Considering the circumstances, the Tribunal decided to grant the assessee one more opportunity.

The Tribunal condoned the delay in filing the appeal for ITA No. 4038/CHNY/2025 due to the death of the assessee's consultant and health issues of the assessee. The penalty orders were set aside to the files of the CIT(A) for fresh adjudication along with the quantum appeal.

The Tribunal held that notices issued under Section 153C after April 1, 2021, are invalid, even if the search was initiated prior to that date. This is based on the amendment to Section 153C(3) of the Act.