ITAT Chennai Judgments — April 2026

The Tribunal upheld the CIT(A)'s decision, stating that the exclusion of the comparable company was justified due to fraud impacting its margins. It also held that the APA, while for subsequent years, had persuasive value in determining the arm's length price for the year in question.

The Tribunal held that the assessee failed to provide sufficient cause for the delay in filing the appeal. The reasons provided, including issues with cooperative auditors and the pandemic, were not accepted as valid grounds for condonation.

For AY 2021-22, the Tribunal directed the CIT(A) to condone the delay and consider taxing net income instead of gross receipts. For AY 2022-23, the Tribunal remanded the matter to the CIT(A) to consider the delay condonation petition upon payment of costs, and then adjudicate on merits.

The Tribunal held that interest income earned by a cooperative society from its investments in another cooperative bank qualifies for deduction under Section 80P(2)(d) of the Act. Section 80P(4) does not apply as the assessee is not a cooperative bank.

The Tribunal condoned the delay in filing the appeal before the CIT(A) and remitted the matter back to the AO. The AO was directed to call for necessary details from the assessee and decide the issue afresh in accordance with the law.

The Tribunal condoned the delay and, considering the lack of compliance by the assessee and in the interest of justice, remanded the matter to the Assessing Officer for fresh consideration. The assessee was directed to pay a cost of Rs. 10,000/-.

The Tribunal upheld the deletion of additions related to unexplained investment in property (Rs. 4,23,12,933). It found that Rs. 2.82 crore was directly advanced by Shri Murugan Enterprises to the vendor, substantiated by bank records and third-party confirmation. The remaining Rs. 1.40 crore was held to be sourced from the assessee's estimated current year income, applying the telescoping principle. The Tribunal dismissed the Revenue's ground of appeal on this issue. Regarding unsecured loans (Rs. 2,58,56,000) and cash credits (Rs. 58,81,300), the judgment indicates these were part of the assessee's appeal, which was allowed for statistical purposes, implying these additions were not fully upheld or were to be re-examined. The specific findings on these two issues are not fully detailed in the provided excerpt, but the overall result suggests partial relief for the assessee.

The Tribunal found merit in the assessee's argument regarding her limited knowledge and directed the CIT(A) to reconsider the delay, condone it, and decide the appeal on merits.

The Tribunal dismissed the Revenue's appeals. Regarding the exclusion of M/s. Acropetal Technologies Ltd., the Tribunal noted the CIT(A)'s reliance on the Chennai Tribunal's decision in Doosan Power Systems India Pvt Ltd. This decision excluded Acropetal due to clear findings of fraud in its financials by SEBI, which significantly impacted its operating margins. The Tribunal agreed that such fraud provides a valid reason for exclusion. Regarding the deletion of TP adjustments based on the Advance Pricing Agreement (APA), the Tribunal observed that the CIT(A) considered the APA for subsequent years (AY 2014-15 to AY 2018-19) and found its mark-up of cost plus 5% to be persuasive. The Tribunal acknowledged that judicial precedents consistently hold that if the nature of transactions and the Functional, Asset, and Risk (FAR) analysis remain identical, the margin accepted by an APA can be applied to years not covered by the APA. The CIT(A) also considered supporting evidence submitted by the assessee. Therefore, the Tribunal found no infirmity in the CIT(A)'s order deleting the TP adjustment based on the APA and supporting evidence. The operative direction was to dismiss the appeals.

The Tribunal held that the CIT(A) exceeded its jurisdiction by directing the reopening of assessments for earlier years, as the appeal was only for the current assessment year. Such directions must be limited to the assessment year under appeal.

The Tribunal upheld the deletion of additions related to unexplained investment in property (Rs. 4,23,12,933). It found that Rs. 2.82 crore was directly advanced by Shri Murugan Enterprises to the vendor, substantiated by bank records and third-party confirmation. The remaining Rs. 1.40 crore was held to be sourced from the assessee's estimated current year income, applying the telescoping principle. The Tribunal dismissed the Revenue's ground of appeal on this issue. Regarding unsecured loans (Rs. 2,58,56,000) and cash credits (Rs. 58,81,300), the judgment indicates these were part of the assessee's appeal, which was allowed for statistical purposes, implying these additions were not fully upheld or were to be re-examined. The specific findings on these two issues are not fully detailed in the provided excerpt, but the overall result suggests partial relief for the assessee.

The Tribunal allowed the assessee's request to withdraw the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal upheld the rejection of the assessee's books of account under Section 145(3) due to insufficient verifiable evidence. However, it found the 8% profit estimation to be on the higher side and reduced it to 5%.

The Tribunal held that appellate authorities are not fettered by the Goetze India Ltd. decision and can entertain new claims. However, the nature of the Rs. 2 crores claim and the depreciation allowance require fresh examination.

For AY 2021-22, the Tribunal directed the CIT(A) to condone the delay and consider taxing net income instead of gross receipts. For AY 2022-23, the Tribunal remanded the matter to the CIT(A) to consider the delay condonation petition upon payment of costs, and then adjudicate on merits.

The Tribunal noted that the assessee adopted TNMM as the most appropriate method and computed its margin at (-) 1.08%, while comparables had a margin of (-) 2.39%, indicating transactions were at Arm's Length. The TPO denied economic adjustments for working capital and capacity utilization, primarily citing unverifiable data and lack of documentary evidence. The Tribunal referred to a coordinate bench decision in the assessee's own case for AY 2021-22, which held that economic adjustments ought to be made under TNMM and that the TPO could have called for information or used available data/RBI reports if data was incomplete. Applying this ratio, the Tribunal found merit in the assessee's contention that the TPO should not have denied working capital adjustment solely on the basis of unverifiable data and that capacity utilization adjustments should not have been denied for want of evidence, especially when financials evidenced underutilization. Non-granting of economic adjustments, when demonstrable effect on margins exists, is contrary to Rule 10B(e). Therefore, the issues were restored to the TPO for fresh determination with directions to call for necessary details and decide in accordance with law after providing an opportunity of being heard.

The Tribunal held that Ground No. 1.2, concerning the issue of limitation, was not pressed by the assessee and was accordingly dismissed as not pressed. Regarding Ground No. 2.2 and 2.3 concerning working capital adjustment, the Tribunal found merit in the assessee's submission. It noted that Rule 10B(1)(e)(iii) mandates adjustments for differences that materially affect profitability, including working capital differences, as recognized by OECD Guidelines. The Tribunal observed that the assessee had clearly demonstrated the impact of working capital adjustments on its margins and those of the comparables. Following judicial precedents and the OECD Guidelines, the Tribunal directed the TPO to allow the working capital adjustment for benchmarking purposes and re-compute the ALP accordingly. Since the working capital adjustment was allowed, the remaining grounds were rendered academic and left open. The Tribunal's reasoning was that working capital differences have a direct bearing on the time value of money and associated financing costs, and adjustments are necessary to enhance comparability. The Tribunal found that the assessee had provided sufficient working capital adjustment data. The appeal was partly allowed.

The Tribunal held that the denial of exemption solely for the belated filing of Form 10B was not justified, especially since the report was available before processing and no prejudice was caused. The Tribunal directed the AO/CPC to amend the intimation considering the filed Form 10B.

The Tribunal held that an assessment under Section 153A is only permissible if a search under Section 132 or requisition under Section 132A has been conducted. Since no such search occurred, the initial Section 153A assessment was invalid, rendering the subsequent Section 263 revision and consequential orders flawed.

The Tribunal held that an assessment under Section 153A is only permissible if a search under Section 132 or requisition under Section 132A has been conducted. Since no such search occurred, the initial Section 153A assessment was invalid, rendering the subsequent Section 263 revision and consequential orders flawed.

The Tribunal, considering the assessee's readiness to file evidence and the respondent's no objection, decided to remand the matter back to the Assessing Officer for fresh consideration. The assessee is granted liberty to file supporting evidence.

The Tribunal condoned the delay in filing the appeal against the assessment order, remanding it for adjudication on merits. However, the delay in filing the appeal against the penalty order was not accepted as quantum and penalty proceedings are independent.

The Tribunal held that the consideration for software licenses is not royalty and annual maintenance charges are not FIS, following previous decisions in the assessee's own cases and Supreme Court rulings. The additions made by the Assessing Officer were directed to be deleted.

The Tribunal held that an assessment under Section 153A is only permissible if a search under Section 132 or requisition under Section 132A has been conducted. Since no such search occurred, the initial Section 153A assessment was invalid, rendering the subsequent Section 263 revision and consequential orders flawed.

The Tribunal held that an assessment under Section 153A is only permissible if a search under Section 132 or requisition under Section 132A has been conducted. Since no such search occurred, the initial Section 153A assessment was invalid, rendering the subsequent Section 263 revision and consequential orders flawed.

The Tribunal held that the assessee failed to provide a sufficient cause for the inordinate delay. The reasons provided were not substantiated and did not satisfy the requirement of a 'sufficient cause' as per legal precedents.

The Tribunal noted that the assessee had a fair case and no representation was made before the CIT(A) due to the rejection of the delay condonation petition. The Tribunal directed the CIT(A) to consider and condone the delay and adjudicate the issues on merits.

The Tribunal condoned the delay in filing the appeal against the assessment order, remanding it for adjudication on merits. However, the delay in filing the appeal against the penalty order was not accepted as quantum and penalty proceedings are independent.

The Tribunal condoned the delay in filing the appeals, citing bonafide reasons. The matter was remanded to the CIT(A) for fresh consideration of the delay condonation petition, subject to the assessee paying a cost.

The Tribunal found it proper to remand the matter to the CIT(A) for a fresh consideration, considering the submissions of both parties and the facts of the case. The grounds raised by the assessee were allowed for statistical purposes.

The Tribunal, considering the assessee's readiness to prosecute the case and the claim of non-receipt of orders due to non-residence, directed the CIT(A) to consider the delay condonation petition and decide the issues on merits.

The Tribunal condoned the delay in filing the appeal before the CIT(A) and remanded the matter back to the CIT(A) to consider the delay petition afresh and adjudicate the issues on merits. The assessee was given liberty to file supporting evidence.

The Tribunal found that the CIT(A) had not considered the evidence filed by the assessee. Therefore, the matter was remanded to the Assessing Officer for a fresh assessment after verifying the evidence and providing an opportunity of being heard.

The Tribunal held that the AO failed to record his satisfaction or direction for initiating penalty proceedings under Section 270A during the assessment proceedings. Additionally, the penalty notice was issued after the assessment order was finalized, violating the procedural requirements.

The Tribunal held that the issue of violation of principles of natural justice (Ground 1) was not elaborated upon by the assessee. Regarding the commercial expediency (Ground 2), the Tribunal noted that the assessee's argument that the transaction was not a subject of assessment was rejected by the AO because the assessee chose to proceed with the sale of shares. The Tribunal found that the AO and DRP had questioned the commercial expediency and proposed an alternate method of implementation. On the characterization of shares and intent test (Ground 3), the Tribunal observed that the assessee's submission that the transaction was not a subject of assessment was rejected. The Tribunal noted that the AO and DRP had wrongly applied the intent test and characterized the shares as stock-in-trade. The Tribunal found that the AO and DRP had failed to appreciate the facts and explanations provided by the assessee regarding the rationale for the acquisition of shares and the characterization of the investment. The Tribunal also noted that the AO and DRP had failed to appreciate the CBDT circulars. Regarding Section 47(iv) (Ground 4), the Tribunal noted that the AO and DRP had denied the benefit of this section. On the tax treaty and Section 9(1)(i) (Ground 5), the Tribunal noted that the AO and DRP had concluded that income accrued in India without appreciating the facts and without applying the tax treaty. The Tribunal also noted the assessee's argument that the deeming fiction of Section 9(1)(i) cannot be imported to the DTAA. Regarding the deduction of the cost of acquisition (Ground 6), the Tribunal noted the assessee's claim for deduction under Section 57. The Tribunal found that the AO and DRP had not considered the assessee's submissions on these grounds. The Tribunal decided to set aside the order of the AO and remand the matter back to the AO for fresh adjudication on all the grounds raised by the assessee, after providing the assessee with an adequate opportunity of being heard and considering all the submissions and evidence.

The Tribunal held that the reassessment notice issued to the assessee was barred by limitation. Relying on Supreme Court judgments and concessions made by the revenue, the Tribunal quashed the reassessment order.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to reasonable cause. The assessment order was set aside and restored to the AO for de novo assessment.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to reasonable cause. The assessment order was set aside and restored to the AO for de novo assessment.

The Tribunal held that the denial of exemption solely for the belated filing of Form 10B was not justified, especially since the report was available before processing and no prejudice was caused. The Tribunal directed the AO/CPC to amend the intimation considering the filed Form 10B.

The tribunal found it appropriate to remand the matter back to the CIT(A) for fresh consideration. The assessee was granted liberty to file supporting evidence for their claims.

The Tribunal held that an assessment under Section 153A is only permissible if a search under Section 132 or requisition under Section 132A has been conducted. Since no such search occurred, the initial Section 153A assessment was invalid, rendering the subsequent Section 263 revision and consequential orders flawed.

The Tribunal condoned the delay in filing the appeals, citing bonafide reasons. The matter was remanded to the CIT(A) for fresh consideration of the delay condonation petition, subject to the assessee paying a cost.

The Tribunal found no illegality or perversity in the CIT(A)'s order, as it was in consonance with the plain provisions of the Act. The denial of deduction was based on the non-filing of the return within the prescribed due date.

The Tribunal found the assessee's reasons for the delay, primarily the death of their accountant, to be bonafide. Therefore, the matter was remanded to the CIT(A) to condone the delay and decide the appeal on merits.

The Tribunal found that the additions made by the AO required assistance from the assessee. Since no assistance was provided before the CIT(A), the matter was remanded.

The Tribunal held that the assessee failed to provide a sufficient cause for the inordinate delay. The reasons provided were not substantiated, and the delay condonation petition was rejected.

The tribunal condoned the delay and, considering the assessee's submission of having a fair chance of success, remanded the matter to the CIT(A) for fresh consideration. The assessee was directed to appear before the CIT(A) and submit evidence.

The Tribunal held that an assessment under Section 153A is only permissible if a search under Section 132 or requisition under Section 132A has been conducted. Since no such search occurred, the initial Section 153A assessment was invalid, rendering the subsequent Section 263 revision and consequential orders flawed.

The Tribunal, considering the assessee's readiness to file evidence and the respondent's no objection, decided to remand the matter back to the Assessing Officer for fresh consideration. The assessee is granted liberty to file supporting evidence.

The Tribunal, considering the assessee's readiness to prosecute the case and the claim of non-receipt of orders due to non-residence, directed the CIT(A) to consider the delay condonation petition and decide the issues on merits.