ITAT Chennai Judgments — May 2026

The Tribunal held that the trust's activities, even if not strictly education, fall under general public utility. The receipt of nominal fees to recover expenses does not constitute commercial activity. Therefore, the CIT(Exemption) was not justified in denying registration and approval.

The Tribunal held that the trust's activities, even if not strictly education, fall under general public utility services. The receipt of nominal fees to recover expenses does not constitute commercial activity. Therefore, the CIT(Exemption) was not justified in denying registration and approval.

The Tribunal held that the CIT(A) wrongly invoked Section 249(4)(b) as there was no admitted tax liability or obligation to pay advance tax. The matter was remitted back to the CIT(A) for a decision on merits.

The Tribunal held that the satisfaction note for initiating proceedings under Section 153C was recorded with an inordinate delay of 73 days without justification, violating the mandate of law. This delay renders the assumption of jurisdiction under Section 153C invalid.

The Tribunal held that the CIT(A) ought to have condoned the delay in filing the appeal before it, as the affidavit explaining the delay was uncontroverted. Therefore, the CIT(A) should admit the appeal for adjudication on merits.

The Tribunal held that the initial confirmation of the gift had an inadvertent error regarding the amount. Based on a revised confirmation, the Tribunal accepted the full gift amount.

The Tribunal found that the CIT(A) made a blatant mistake regarding the society's registration date and that the denial of deduction under Section 80P was based on an incorrect premise. The Tribunal also noted issues with the notice format.

The Tribunal held that the AO erred in not considering the full sale consideration of Rs. 8,50,00,000. Circumstantial evidence supported the assessee's claim of receiving the balance amount in cash as part of the sale transaction.

The Tribunal held that the addition of Rs. 63,64,438/- concerning creditor Raj Enterprises was unsustainable due to plausible explanations and supporting evidence. The reassessment notice dated 28.07.2022 was held to be barred by limitation, rendering the subsequent proceedings void.

The Tribunal held that the addition of Rs. 63,64,438/- concerning creditor Raj Enterprises was unsustainable due to plausible explanations and supporting evidence. The reassessment notice dated 28.07.2022 was held to be barred by limitation, rendering the subsequent proceedings void.

The Tribunal found that the closing balance for creditor IVRL was cleared in the subsequent year and was verifiable. Similarly, the closing balance for creditor CCL was reconciled and cleared in the subsequent year.

The Tribunal upheld the CIT(A)'s decision to exclude 'Orchasp Ltd.' and 'Data Collection Infotech (India) Pvt. Ltd.' due to functional dissimilarity and lack of segmental information. The exclusion of 'Great Software Laboratory Pvt. Ltd.' was also confirmed based on similar grounds and higher turnover.

The Tribunal held that the DRP's directions regarding the inclusion/exclusion of comparables were based on an incorrect understanding of the assessee's objections. Specifically, the DRP directed the exclusion of comparables that the assessee had not objected to, and failed to consider the assessee's specific objections to three comparables. The Tribunal noted that the TPO initially selected 18 comparables, reduced to 13, and the assessee's objections before the DRP were not clearly articulated or considered. Consequently, the Tribunal found that the issue of inclusion/exclusion of comparables needed to be examined afresh. Citing a coordinate bench decision in Xchanging Solutions Ltd. vs. DCIT, the Tribunal held that such matters, when remitted, can only be sent back to the AO. Therefore, the issue of inclusion/exclusion of comparables was remitted back to the AO with a direction to make a reference as appropriate for a fresh examination on merits. The legal grounds (2-6) were rendered academic. Ground 1 was general and Ground 16 was consequential. The Tribunal did not decide on the PLI computation methodology or the upward adjustment of revenue on merits, as these were intertwined with the comparables issue that was remitted.

The Tribunal held that filing Form 67 within the prescribed time is directory, not mandatory, and relied on various judicial pronouncements. The matter was restored to the AO for examination of Form 67.

The Tribunal held that the FAA erred in not admitting the additional evidence on a technical ground and should have directed the assessee to file the application. Following a coordinate bench decision, the Tribunal set aside the FAA's order and restored the matter to the AO for fresh adjudication.

The Tribunal held that the extraction and processing of garnet from beach sand constitutes 'manufacture' as defined under the Act. Consequently, the assessee is eligible for the deduction under Section 10B.

The Tribunal held that the extraction and processing of garnet from beach sand constitutes 'manufacture' as defined under the Act. Consequently, the assessee is eligible for the deduction under Section 10B.

The Tribunal held that the cash deposits were adequately explained as business sales, supported by audited books of accounts and VAT returns. The Assessing Officer had not rejected the assessee's books, and the onus was on the AO to prove the deposits were from an undisclosed source, which was not done.

The Tribunal noted the assessee's non-participation in both assessment and appellate stages. However, to meet the ends of justice, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for de novo assessment, directing the AO to provide a reasonable opportunity to the assessee.

The Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for de novo assessment. The assessee was directed to be diligent and provide necessary documents and submissions.

The Tribunal condoned the delay in filing the appeal and set aside the CIT(A)'s order. The matter was remitted back to the AO for a fresh assessment after providing the assessee with a reasonable opportunity to be heard.

The Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for adjudication on merits. This was done to provide the assessee with one more opportunity to present their case, considering the ends of justice.

The Tribunal held that the assessee consistently maintained separate portfolios for stock-in-trade and investments, with distinct accounting treatments. Relying on its own previous decisions and CBDT circulars, the Tribunal ruled that the gains from sale of investments should be assessed as short-term capital gains, not business income.

The Tribunal held that the reopening of assessment was barred by limitation as no new information had come to the AO's possession and the assessee had fully and truly disclosed all material facts. The Tribunal also found that the AO exceeded his jurisdiction in the rectification proceedings by introducing new issues without proper opportunity to the assessee.

The Tribunal found that both the Assessing Officer and the CIT(A) passed ex-parte orders. Considering the medical certificate submitted by the assessee explaining the absence of its Chartered Accountant, the Tribunal restored the matter to the Assessing Officer for a fresh assessment.

The Tribunal held that the FAA erred in dismissing the claim solely on the basis of not filing a revised return, as appellate authorities have broader powers. The Tribunal also found that the FAA's direction for verification under Section 80IB(10) was appropriate.

The Tribunal held that the penalty was unsustainable because the show-cause notice and penalty order failed to specify the exact clause of Section 270A(9) under which misreporting was alleged. This omission deprived the assessee of a fair opportunity to respond.

The Tribunal held that rejecting a voluntarily maintained cash book solely because income was declared under Section 44AD is unsustainable. The assessee's explanation for cash deposits, supported by documents and a sufficient cash balance, was deemed reasonable.

The Tribunal held that the assessee provided a plausible explanation for the cash deposits supported by bank statements and cash flow statements. The Tribunal also found that the disallowances for deductions were not properly verified and allowed the claims.

The Tribunal held that the Assessing Officer erred in not considering the assessee's claim on merits, despite the original return being filed late. The matter was restored to the AO for a fresh assessment on the taxability of the trust income.

The Tribunal held that the AO mechanically applied Rule 8D without recording satisfaction that the assessee's claim of no expenditure for earning exempt income was incorrect. The penalty was vitiated by non-application of mind and lack of speaking order.

The Tribunal held that the differential amount of Rs. 64,46,611 represented undisclosed business receipts and the application of Section 44AD to these receipts was legally sustainable. The estimation of income at 8% on these undisclosed receipts was upheld.

The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's lack of technical knowledge. The Tribunal set aside the order of the Commissioner (Appeals) and remitted the matter back to the AO for a de novo assessment.

The Tribunal held that the penalty levied under Section 270A was unsustainable. It found that the evidence relied upon, primarily entries in third-party software, was unreliable and lacked corroboration, making it unsafe to impose a penalty.

The Tribunal held that the AO, TPO, and DRP were not correct in computing the ALP of the management fees at NIL without properly examining the voluminous evidence submitted by the assessee. The Tribunal noted that the assessee had provided a detailed breakdown of services and supporting documents, and had benchmarked the transaction under TNMM. The Tribunal observed that the TPO had rejected the TNMM and adopted another method, concluding that no documentary evidence was submitted. The DRP, based on a remand report from the TPO, upheld the adjustment. Citing the case of Xchanging Solutions Ltd. vs. DCIT, the Tribunal held that the issue of determining the ALP of management fees needs to be re-examined. Therefore, the Tribunal remitted the issue back to the AO with a direction to make a reference to the TPO for a fresh examination based on the submitted documents, ensuring the assessee is given a reasonable opportunity of being heard. The Tribunal expressly left undecided the issues of interest under sections 234A and 234B and penalty under section 270A, as these were contingent on the primary adjustment.

The Tribunal held that since the demand was paid within 30 days and the delay in filing the immunity application was a procedural lapse, the penalty levied under Section 270A should be deleted, following a precedent.

The Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) to adjudicate the appeal afresh on merits. This was done to provide the assessee with one more opportunity to present their case.

The Tribunal held that the penalty levied under Section 270A was unsustainable. It found that the evidence relied upon, primarily entries in third-party software, was unreliable and lacked corroboration, making it unsafe to impose a penalty.

The Tribunal held that the penalty levied under Section 270A was unsustainable. It found that the evidence relied upon, primarily entries in third-party software, was unreliable and lacked corroboration, making it unsafe to impose a penalty.

The Tribunal held that the penalty levied under Section 270A was unsustainable. It found that the evidence relied upon, primarily entries in third-party software, was unreliable and lacked corroboration, making it unsafe to impose a penalty.

The Tribunal held that the penalty levied under Section 270A was unsustainable. It found that the evidence relied upon, primarily entries in third-party software, was unreliable and lacked corroboration, making it unsafe to impose a penalty.

The Tribunal held that the extraction and processing of garnet from beach sand constitutes 'manufacture' as defined under the Act. Consequently, the assessee is eligible for the deduction under Section 10B.

The Tribunal held that the penalty levied under Section 270A was unsustainable. It found that the evidence relied upon, primarily entries in third-party software, was unreliable and lacked corroboration, making it unsafe to impose a penalty.

The Tribunal held that the reopening of assessment was barred by limitation as no new information had come to the AO's possession and the assessee had fully and truly disclosed all material facts. The Tribunal also found that the AO exceeded his jurisdiction in the rectification proceedings by introducing new issues without proper opportunity to the assessee.

The Tribunal held that the reopening of assessment was barred by limitation as no new information had come to the AO's possession and the assessee had fully and truly disclosed all material facts. The Tribunal also found that the AO exceeded his jurisdiction in the rectification proceedings by introducing new issues without proper opportunity to the assessee.

The Tribunal held that the Tally data seized during the search, which was already part of the company's reported financials, did not constitute incriminating material. A Special Audit Report analyzing this data, prepared after the search, also cannot be treated as incriminating material for sustaining search assessments in unabated cases.

The Tribunal allowed the assessee's appeal regarding the understatement of profit from a real estate project, holding that the entire payment made was the cost of the land actually received due to legal disputes. The Tribunal also allowed the deduction under Section 80IB(10) for statistical purposes, remanding the matter for re-examination of the procedural lapse in filing Form 10CCB.

The Tribunal allowed the assessee's appeal regarding the understatement of profit from a real estate project, holding that the entire payment made was the cost of the land actually received due to legal disputes. The Tribunal also allowed the deduction under Section 80IB(10) for statistical purposes, remanding the matter for re-examination of the procedural lapse in filing Form 10CCB.

The Tribunal noted that the CIT(Exemptions) rejected the applications primarily on the ground that the assessee's activities were commercial, without adequately examining the trust's objects and the nature of its activities. It was also an admitted position, as fairly submitted by the assessee's counsel, that complete supporting documents were not furnished, and certain expenditures were reflected under general heads. However, the assessee has now placed additional materials on record in the form of a paper-book containing activity reports and photographs. The Tribunal opined that these aspects require proper verification and examination at the CIT(Exemptions) level. Considering the totality of facts, the Tribunal found that the matter required fresh adjudication by the CIT(Exemptions) with reference to the trust's objects, the nature of activities, and the supporting evidence now on record. Accordingly, the Tribunal set aside the impugned orders and remitted the matter to the CIT(Exemptions) for de novo consideration, after affording an adequate opportunity of being heard to the assessee, and to pass an order in accordance with law. The appeals were allowed for statistical purposes.

The Tribunal condoned the delay in filing the appeal, citing a liberal interpretation of 'sufficient cause' and the subsequent CBDT notification. The Tribunal held that the assessee is entitled to the enhanced exemption limit of Rs. 25 lakhs for leave encashment.