ITAT Chennai Judgments — May 2026

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

The Tribunal condoned the delay in filing the appeal and noted that both the AO and CIT(A) passed orders ex-parte due to the assessee's non-participation. To meet the ends of justice, the Tribunal set aside the CIT(A)'s order.

The Tribunal held that the addition was based on conjectures and surmises without supporting evidence. Therefore, the addition sustained by the FAA was deleted.

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 held that the notice issued under Section 148 of the Act on April 1, 2022, was barred by limitation as it was issued beyond six years from the end of the relevant assessment year (March 31, 2022). Consequently, the reassessment proceedings and the additions made were quashed.

The Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO. The AO is directed to re-frame the assessment after providing the assessee a reasonable opportunity to present its case.

The Tribunal held that the Commissioner (Appeals) adopted an overly technical approach by dismissing the appeal without examining the merits and evidence. The Tribunal set aside the order and remitted the issue back for fresh adjudication.

The Tribunal condoned the delay in filing the appeal and, despite the assessee's non-appearance before lower authorities, decided to provide one more opportunity. The matter was remitted back to the CIT(A) for adjudication on merits after providing a reasonable opportunity to the assessee.

The Tribunal condoned the delay in filing the appeal, set aside the CIT(A)'s order, and remitted the matter back to the AO for de novo assessment. The assessee was directed to pay a cost of Rs. 5,000/-.

The Tribunal upheld the additions made by the Assessing Officer and confirmed by the CIT(A). It found that the assessee failed to provide sufficient evidence to rebut the findings regarding bogus purchases and unexplained cash deposits, including the retraction of statements without cogent evidence.

The Tribunal found that the trust deed clearly established the trust as a public charitable trust, not a religious cum charitable trust. The previous registrations also confirmed this status. Therefore, the CIT(E) erred in granting the impugned registration.

The Tribunal held that expenditure on interior decoration and fittings incurred within three years of the original asset's transfer might be eligible for proportionate deduction under Section 54F. The matter was restored to the AO for verification of the expenditure incurred within the stipulated period.

The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's nature and the arguable issue. The case was restored to the AO to await the decision on the assessee's pending condonation petition for the delayed return.

The Tribunal held that the CIT(A) failed to consider the assessee's argument that cash withdrawals made prior to the demonetization period could be the source of subsequent cash deposits. The Tribunal found a nexus between withdrawals and deposits and deleted the addition.

The Tribunal held that separate addition of Rs.98,03,750/- under Section 69A was unsustainable as the Revenue had already treated the entire bank credits as business receipts for estimation. The addition of Rs.1,32,750/- was not challenged.

The Tribunal held that the addition on account of Tiruvottiyur project closing stock was not justified as the compensation paid was part of the cost of land. The disallowance under Section 40(a)(ia) was remitted to the AO for verification of tax payment by a third party. The disallowance of advances written off was also remitted for re-examination. The addition on sales was deleted as it pertained to stock reversal entries.

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 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 held that the reassessment notice was barred by limitation as the escapement of income recorded in the original reasons was below the statutory threshold. Consequently, the reassessment order was quashed for want of jurisdiction.

The Tribunal held that the notice under Section 148 was not validly issued within the statutory limitation period due to lack of conclusive dispatch evidence. Therefore, the reassessment proceedings were deemed invalid and void ab initio.

The Tribunal held that the transfer pricing adjustment for interest on trade receivables was not sustainable, following previous judicial pronouncements. However, issues related to freight forwarding segment analysis and corporate overhead charges were either dismissed or restored to the TPO.

The Tribunal held that the assessment order was void ab initio due to the mandatory procedural requirement of issuing a draft assessment order under Section 144C not being followed. The Tribunal agreed with the CIT(A) that this jurisdictional infirmity vitiated the entire assessment.

The Tribunal held that once penalty is imposed under Section 271A for non-maintenance of books of accounts, a penalty under Section 271B for non-furnishing of the audit report cannot be imposed. The penalty under Section 271B was deleted.

The Tribunal decided the issues as follows: Regarding Issue 1 (Validity of reassessment proceedings) and Issue 2 (Time-barring of reassessment order), the assessee chose not to pursue these grounds, hence they were dismissed as not pressed or withdrawn. Regarding Issue 5 (Disallowance under Section 35(2AB)), the Tribunal held that the AO/DRP cannot sit in judgment over the DSIR's quantification of eligible deduction. Disallowances based solely on survey statements are unsustainable, and survey findings from 2019 cannot invalidate earlier certified deductions. Following binding precedents in the assessee's own case, the disallowance was deleted. Regarding Issue 4 (Disallowance under Section 40A(2)(b) read with Section 37 - MRF SG Transactions), the Tribunal noted that the TPO had already benchmarked the transaction. The AO cannot re-examine the reasonableness of the expenditure, and allegations of a sham transaction lacked cogent evidence. Double disallowance under TP and corporate tax provisions is impermissible, hence the disallowance was deleted. Regarding Issue 6 (TP Adjustment – Raw Material Purchases), the adjustment was to be restricted to 0.5% considering the APA and subsequent developments, if not already offered. Regarding Issue 7 (Corporate Guarantee TP Adjustment), following co-ordinate bench decisions, a corporate guarantee without cost may not warrant adjustment. However, considering the APA adjustment was deleted, it could be restricted to 0.5%. Regarding Provision for Litigation (Issue 3), as the assessee partially submitted evidence, the matter was restored to the AO for fresh examination. Regarding Chapter VI-A Disallowance (Issue 8), it was restored to the AO for verification and deletion if erroneous. Regarding TDS Credit (Issue 9), the AO was directed to grant the correct credit after verification. Regarding Interest u/s 234B (Issue 10), it was held to be consequential. For AY 2016-17, interest u/s 234B & 234C were also held as consequential. Regarding Penalty Proceedings (Issue 11), they were held as premature. For AY 2016-17, TP Issues related to MRF SG Transactions, APA, and Corporate Guarantee were rendered academic/infructuous as the assessee entered into a Bilateral APA and filed a modified return u/s 92CD. MAT adjustment was rectified and hence infructuous. The operative directions included deletion of disallowances, restoration of certain issues to the AO for fresh examination, and direction to grant TDS credit. The Tribunal expressly left undecided the specific quantum of adjustment for raw material purchases and corporate guarantee if not already offered, and the final outcome of the restored issues.

The Tribunal decided the issues as follows: Regarding Issue 1 (Validity of reassessment proceedings) and Issue 2 (Time-barring of reassessment order), the assessee chose not to pursue these grounds, hence they were dismissed as not pressed or withdrawn. Regarding Issue 5 (Disallowance under Section 35(2AB)), the Tribunal held that the AO/DRP cannot sit in judgment over the DSIR's quantification of eligible deduction. Disallowances based solely on survey statements are unsustainable, and survey findings from 2019 cannot invalidate earlier certified deductions. Following binding precedents in the assessee's own case, the disallowance was deleted. Regarding Issue 4 (Disallowance under Section 40A(2)(b) read with Section 37 - MRF SG Transactions), the Tribunal noted that the TPO had already benchmarked the transaction. The AO cannot re-examine the reasonableness of the expenditure, and allegations of a sham transaction lacked cogent evidence. Double disallowance under TP and corporate tax provisions is impermissible, hence the disallowance was deleted. Regarding Issue 6 (TP Adjustment – Raw Material Purchases), the adjustment was to be restricted to 0.5% considering the APA and subsequent developments, if not already offered. Regarding Issue 7 (Corporate Guarantee TP Adjustment), following co-ordinate bench decisions, a corporate guarantee without cost may not warrant adjustment. However, considering the APA adjustment was deleted, it could be restricted to 0.5%. Regarding Provision for Litigation (Issue 3), as the assessee partially submitted evidence, the matter was restored to the AO for fresh examination. Regarding Chapter VI-A Disallowance (Issue 8), it was restored to the AO for verification and deletion if erroneous. Regarding TDS Credit (Issue 9), the AO was directed to grant the correct credit after verification. Regarding Interest u/s 234B (Issue 10), it was held to be consequential. For AY 2016-17, interest u/s 234B & 234C were also held as consequential. Regarding Penalty Proceedings (Issue 11), they were held as premature. For AY 2016-17, TP Issues related to MRF SG Transactions, APA, and Corporate Guarantee were rendered academic/infructuous as the assessee entered into a Bilateral APA and filed a modified return u/s 92CD. MAT adjustment was rectified and hence infructuous. The operative directions included deletion of disallowances, restoration of certain issues to the AO for fresh examination, and direction to grant TDS credit. The Tribunal expressly left undecided the specific quantum of adjustment for raw material purchases and corporate guarantee if not already offered, and the final outcome of the restored issues.

The Tribunal addressed several issues. For issues concerning the Freight Forwarding Segment margins and Corporate Overhead Charges, the Tribunal noted that the assessee did not raise contentions for certain grounds, leading to their dismissal. Regarding the imputation of notional interest on trade receivables, the Tribunal, respectfully following the decision in 'Bechtel India Pvt. Ltd.', held that no transfer pricing adjustment is required for imputing interest on outstanding trade receivables from AEs when the assessee is a debt-free company and the working capital adjustments subsume delayed credit periods. The Tribunal directed the deletion of the transfer pricing adjustment made on account of interest on trade receivables. For AY 2021-22, the issues regarding corporate overhead charges and imputation of notional interest on trade receivables were found to be identical to AY 2020-21 and were decided on the same basis. The issues related to disallowance of contribution to employee's provident fund and ESI fund, and incorrect computation of tax liability and interest, were dismissed as the assessee did not raise contentions on these points before the Tribunal. The appeal was partly allowed for statistical purposes.

The Tribunal addressed several issues. For issues concerning the Freight Forwarding Segment margins and Corporate Overhead Charges, the Tribunal noted that the assessee did not raise contentions for certain grounds, leading to their dismissal. Regarding the imputation of notional interest on trade receivables, the Tribunal, respectfully following the decision in 'Bechtel India Pvt. Ltd.', held that no transfer pricing adjustment is required for imputing interest on outstanding trade receivables from AEs when the assessee is a debt-free company and the working capital adjustments subsume delayed credit periods. The Tribunal directed the deletion of the transfer pricing adjustment made on account of interest on trade receivables. For AY 2021-22, the issues regarding corporate overhead charges and imputation of notional interest on trade receivables were found to be identical to AY 2020-21 and were decided on the same basis. The issues related to disallowance of contribution to employee's provident fund and ESI fund, and incorrect computation of tax liability and interest, were dismissed as the assessee did not raise contentions on these points before the Tribunal. The appeal was partly allowed for statistical purposes.

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 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 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 held that the addition on account of Tiruvottiyur project closing stock was not justified as the compensation paid was part of the cost of land. The disallowance under Section 40(a)(ia) was remitted to the AO for verification of tax payment by a third party. The disallowance of advances written off was also remitted for re-examination. The addition on sales was deleted as it pertained to stock reversal entries.