ITAT Chennai Judgments — October 2026

The Tribunal held that the reopening of the assessment was invalid. The notice issued under Section 148A(b) of the Income Tax Act, 1961, on 15.03.2022, provided only five clear days for the assessee to respond, which contravened the statutory mandate of Section 148A(b) requiring a minimum of seven clear days. The Tribunal relied on the Supreme Court's decision in Pioneer Motors (Private) Ltd. Vs. Municipal Council, Nagercoil, which clarified that 'not less than' a certain number of days implies clear days, excluding both the first and last day. Consequently, the notice under Section 148 dated 31.03.2022, and the assessment order dated 23.03.2023, were held to be non-est in the eyes of law and a nullity. Applying the principle 'Sublato Fundmento Credit opus', the Tribunal further held that since the assessment order was void, the subsequent penalty levied under Section 271AAC(1) was also null and void. The penalty order was quashed. The appeals filed by the assessee were allowed.

The provided text is an excerpt and does not contain the Tribunal's decision or reasoning. It only sets out the parties, assessment years, the authorities involved, and the dates of hearing and pronouncement. Therefore, what the Tribunal decided, the reasoning, the ratio, and the operative directions are not recorded in this portion of the judgment. No issue was expressly left undecided as the substantive part of the judgment is missing.

The Tribunal held that the CIT(A) was justified in restricting the additions to 25% of the amounts originally assessed by the AO. The Tribunal reasoned that while seized electronic records, loose sheets, and sworn statements are relevant and can constitute evidence, the AO had not satisfactorily established the nexus between the entire cash receipts and the expenditure claimed in the regular books. Furthermore, the AO had not undertaken proper entity-wise segregation, adequately examined the possibility of cash withdrawals from disclosed sources, or considered the circulation of funds. The seized Excel sheet itself suffered from material inconsistencies and discontinuities, impairing its reliability. The Tribunal noted that the CIT(A) had taken cognizance of the seized material, statements, physical cash, and the assessee's failure to furnish a complete reconciliation, and had sustained a portion of the additions. The Revenue failed to demonstrate that the factual findings of the CIT(A) were perverse or that the entire gross receipts represented independently taxable transactions. Therefore, the Tribunal upheld the CIT(A)'s estimate and dismissed all grounds raised by the Revenue. The additions were restricted to Rs. 92,44,394/- and Rs. 2,28,72,571/- for AYs 2019-20 and 2020-21 respectively, with the balance additions directed to be deleted.

The provided text is an excerpt and does not contain the Tribunal's decision or reasoning. It only sets out the parties, assessment years, the authorities involved, and the dates of hearing and pronouncement. Therefore, what the Tribunal decided, the reasoning, the ratio, and the operative directions are not recorded in this portion of the judgment. No issue was expressly left undecided as the substantive part of the judgment is missing.

The Tribunal held that the provisions of Section 10(34) and Section 115BBDA of the Income Tax Act, 1961, concerning the taxability of dividend income, were relevant. The Tribunal noted that the provision for taxability of dividend received by the assessee came into effect from Assessment Year 2021-22, whereas the current issue pertains to Assessment Year 2020-21. It was also observed that Section 10(34) applies where tax under Section 115-O and Section 115BBDA has been paid. Section 115BBDA applies to specified assessees whose total income includes dividends exceeding ten lakh rupees, declared, distributed, or paid on or before March 31, 2020. The assessee provided information demonstrating that the dividend income received was Rs. 2,41,22,450/-, and the distributing companies had paid the requisite Dividend Distribution Tax (DDT) under Sections 115BBDA/115O. The Tribunal found this information to be correct and compliant with the provisions. Therefore, the Tribunal found no infirmity in the order of the Ld. Addl. / JCIT (A) and confirmed it. The grounds raised by the Revenue were dismissed.

The Tribunal held that the CIT(A) was justified in restricting the additions to 25% of the amounts originally assessed by the AO. The Tribunal reasoned that while seized electronic records, loose sheets, and sworn statements are relevant and can constitute evidence, the AO had not satisfactorily established the nexus between the entire cash receipts and the expenditure claimed in the regular books. Furthermore, the AO had not undertaken proper entity-wise segregation, adequately examined the possibility of cash withdrawals from disclosed sources, or considered the circulation of funds. The seized Excel sheet itself suffered from material inconsistencies and discontinuities, impairing its reliability. The Tribunal noted that the CIT(A) had taken cognizance of the seized material, statements, physical cash, and the assessee's failure to furnish a complete reconciliation, and had sustained a portion of the additions. The Revenue failed to demonstrate that the factual findings of the CIT(A) were perverse or that the entire gross receipts represented independently taxable transactions. Therefore, the Tribunal upheld the CIT(A)'s estimate and dismissed all grounds raised by the Revenue. The additions were restricted to Rs. 92,44,394/- and Rs. 2,28,72,571/- for AYs 2019-20 and 2020-21 respectively, with the balance additions directed to be deleted.

The Tribunal held that the CIT(A) was justified in restricting the additions to 25% of the amounts originally assessed by the AO. The Tribunal reasoned that while seized electronic records, loose sheets, and sworn statements are relevant and can constitute evidence, the AO had not satisfactorily established the nexus between the entire cash receipts and the expenditure claimed in the regular books. Furthermore, the AO had not undertaken proper entity-wise segregation, adequately examined the possibility of cash withdrawals from disclosed sources, or considered the circulation of funds. The seized Excel sheet itself suffered from material inconsistencies and discontinuities, impairing its reliability. The Tribunal noted that the CIT(A) had taken cognizance of the seized material, statements, physical cash, and the assessee's failure to furnish a complete reconciliation, and had sustained a portion of the additions. The Revenue failed to demonstrate that the factual findings of the CIT(A) were perverse or that the entire gross receipts represented independently taxable transactions. Therefore, the Tribunal upheld the CIT(A)'s estimate and dismissed all grounds raised by the Revenue. The additions were restricted to Rs. 92,44,394/- and Rs. 2,28,72,571/- for AYs 2019-20 and 2020-21 respectively, with the balance additions directed to be deleted.

The Tribunal condoned the delay of 759 days in filing the appeal before the FAA, considering the circumstances of the managing partner's death and the ensuing family disputes. The Tribunal reasoned that these events prevented the surviving partner from attending to statutory obligations, leading to the ex parte assessment. In the interest of justice and fair play, the assessee was granted one more opportunity to substantiate its case. Consequently, the Tribunal set aside the impugned order and restored the matter to the file of the AO for fresh adjudication. The assessee was directed to cooperate fully and avoid unnecessary adjournments. The appeal was allowed for statistical purposes.

The Tribunal held that the reasons advanced for the delay, supported by the material placed on record (message conversations), and the prima facie case made out on merits warranted condonation of the 690-day delay in filing the appeal before the FAA in ITA No. 4344/CHNY/2026. The Tribunal found that the assessee was under the bona fide belief that the proceedings were being attended to by the consultant, and the negligence of the consultant led to the assessee's unawareness of the assessment order and the substantial demand. On merits, the Tribunal noted that the AO treated entire cash deposits of Rs. 17,15,50,700/- as business receipts and estimated profit at 10%, while the assessee claimed a turnover of Rs. 8,97,461/- in the Domestic Money Transfer business. The contention regarding identical credit and debit entries raised a prima facie issue warranting examination. Consequently, the delay was condoned, and the matter was restored to the AO for fresh adjudication, subject to the assessee paying a cost of Rs. 25,000/- to the Cancer Institute (W.I.A), Adyar, Chennai. Following the same reasoning, the delays in filing the penalty appeals were also condoned, and the penalty orders were set aside to the AO for denovo adjudication along with the quantum appeal. The ratio is that gross negligence of a consultant, if substantiated and coupled with a prima facie case on merits, can be a sufficient cause for condoning significant delays in filing appeals.

The Tribunal held that the reasons advanced for the delay, supported by the material placed on record (message conversations), and the prima facie case made out on merits warranted condonation of the 690-day delay in filing the appeal before the FAA in ITA No. 4344/CHNY/2026. The Tribunal found that the assessee was under the bona fide belief that the proceedings were being attended to by the consultant, and the negligence of the consultant led to the assessee's unawareness of the assessment order and the substantial demand. On merits, the Tribunal noted that the AO treated entire cash deposits of Rs. 17,15,50,700/- as business receipts and estimated profit at 10%, while the assessee claimed a turnover of Rs. 8,97,461/- in the Domestic Money Transfer business. The contention regarding identical credit and debit entries raised a prima facie issue warranting examination. Consequently, the delay was condoned, and the matter was restored to the AO for fresh adjudication, subject to the assessee paying a cost of Rs. 25,000/- to the Cancer Institute (W.I.A), Adyar, Chennai. Following the same reasoning, the delays in filing the penalty appeals were also condoned, and the penalty orders were set aside to the AO for denovo adjudication along with the quantum appeal. The ratio is that gross negligence of a consultant, if substantiated and coupled with a prima facie case on merits, can be a sufficient cause for condoning significant delays in filing appeals.

The Tribunal condoned the delay of 1302 days (effective delay of 1157 days) in filing the appeal, subject to the payment of Rs. 10,000/- costs to the Tamil Nadu State Legal Services Authority, which the assessee had complied with. The Tribunal found that the delay was due to sufficient cause, considering the ill health of the managing director, the prevailing COVID-19 pandemic, the evolving legal position on the disallowance issue, and the subsequent clarification from the Chhattisgarh High Court regarding the scope of Section 143(1). The Tribunal held that the assessee's plea regarding the jurisdictional scope of Section 143(1) was a pure question of law that could be raised at any stage, as per the Supreme Court's decision in National Thermal Power Co. Ltd. v. CIT. The Tribunal noted that the CIT(A) had sustained the disallowance based on retrospective amendments without examining if the issue was debatable at the time of the Section 143(1) intimation or considering the effect of the Supreme Court's decision in Checkmate Services. The Tribunal also observed that the CIT(A) passed the order on the very next day after the hearing without further opportunity. Therefore, the Tribunal set aside the CIT(A)'s order concerning the disallowance of Rs. 43,47,891/- and remitted the issue back to the CIT(A) for fresh adjudication on merits, including the legal ground on the scope of Section 143(1), after providing a reasonable opportunity of hearing. The relief granted by the CIT(A) regarding Rs. 7,80,838/- was not disturbed.

The Tribunal held that the reopening of the assessment was invalid. The notice issued under Section 148A(b) of the Income Tax Act, 1961, on 15.03.2022, provided only five clear days for the assessee to respond, which contravened the statutory mandate of Section 148A(b) requiring a minimum of seven clear days. The Tribunal relied on the Supreme Court's decision in Pioneer Motors (Private) Ltd. Vs. Municipal Council, Nagercoil, which clarified that 'not less than' a certain number of days implies clear days, excluding both the first and last day. Consequently, the notice under Section 148 dated 31.03.2022, and the assessment order dated 23.03.2023, were held to be non-est in the eyes of law and a nullity. Applying the principle 'Sublato Fundmento Credit opus', the Tribunal further held that since the assessment order was void, the subsequent penalty levied under Section 271AAC(1) was also null and void. The penalty order was quashed. The appeals filed by the assessee were allowed.

The Tribunal held that the reasons advanced for the delay, supported by the material placed on record (message conversations), and the prima facie case made out on merits warranted condonation of the 690-day delay in filing the appeal before the FAA in ITA No. 4344/CHNY/2026. The Tribunal found that the assessee was under the bona fide belief that the proceedings were being attended to by the consultant, and the negligence of the consultant led to the assessee's unawareness of the assessment order and the substantial demand. On merits, the Tribunal noted that the AO treated entire cash deposits of Rs. 17,15,50,700/- as business receipts and estimated profit at 10%, while the assessee claimed a turnover of Rs. 8,97,461/- in the Domestic Money Transfer business. The contention regarding identical credit and debit entries raised a prima facie issue warranting examination. Consequently, the delay was condoned, and the matter was restored to the AO for fresh adjudication, subject to the assessee paying a cost of Rs. 25,000/- to the Cancer Institute (W.I.A), Adyar, Chennai. Following the same reasoning, the delays in filing the penalty appeals were also condoned, and the penalty orders were set aside to the AO for denovo adjudication along with the quantum appeal. The ratio is that gross negligence of a consultant, if substantiated and coupled with a prima facie case on merits, can be a sufficient cause for condoning significant delays in filing appeals.

The Tribunal held that the reasons advanced for the delay, supported by the material placed on record (message conversations), and the prima facie case made out on merits warranted condonation of the 690-day delay in filing the appeal before the FAA in ITA No. 4344/CHNY/2026. The Tribunal found that the assessee was under the bona fide belief that the proceedings were being attended to by the consultant, and the negligence of the consultant led to the assessee's unawareness of the assessment order and the substantial demand. On merits, the Tribunal noted that the AO treated entire cash deposits of Rs. 17,15,50,700/- as business receipts and estimated profit at 10%, while the assessee claimed a turnover of Rs. 8,97,461/- in the Domestic Money Transfer business. The contention regarding identical credit and debit entries raised a prima facie issue warranting examination. Consequently, the delay was condoned, and the matter was restored to the AO for fresh adjudication, subject to the assessee paying a cost of Rs. 25,000/- to the Cancer Institute (W.I.A), Adyar, Chennai. Following the same reasoning, the delays in filing the penalty appeals were also condoned, and the penalty orders were set aside to the AO for denovo adjudication along with the quantum appeal. The ratio is that gross negligence of a consultant, if substantiated and coupled with a prima facie case on merits, can be a sufficient cause for condoning significant delays in filing appeals.

The Tribunal held that the CIT(A) was justified in restricting the additions to 25% of the amounts originally assessed by the AO. The Tribunal reasoned that while seized electronic records, loose sheets, and sworn statements are relevant and can constitute evidence, the AO had not satisfactorily established the nexus between the entire cash receipts and the expenditure claimed in the regular books. Furthermore, the AO had not undertaken proper entity-wise segregation, adequately examined the possibility of cash withdrawals from disclosed sources, or considered the circulation of funds. The seized Excel sheet itself suffered from material inconsistencies and discontinuities, impairing its reliability. The Tribunal noted that the CIT(A) had taken cognizance of the seized material, statements, physical cash, and the assessee's failure to furnish a complete reconciliation, and had sustained a portion of the additions. The Revenue failed to demonstrate that the factual findings of the CIT(A) were perverse or that the entire gross receipts represented independently taxable transactions. Therefore, the Tribunal upheld the CIT(A)'s estimate and dismissed all grounds raised by the Revenue. The additions were restricted to Rs. 92,44,394/- and Rs. 2,28,72,571/- for AYs 2019-20 and 2020-21 respectively, with the balance additions directed to be deleted.

The Tribunal admitted the additional grounds of appeal concerning the procedural validity of the reopening notice. The Tribunal noted that Section 148A(b) of the Act mandates providing an opportunity of being heard to the assessee by serving a notice to show cause within a specified time, which must be not less than seven days. In the present case, the notice under Section 148A(b) dated 10.03.2023 provided only five clear days for the assessee to respond, which is in contravention of the statutory provision. The Tribunal relied on the principle that a notice issued in contravention of mandatory procedural requirements renders the subsequent proceedings invalid. Therefore, the notice under Section 148A(b) was held to be bad in law. Consequently, the notice issued under Section 148 and the assessment order passed on 19.03.2024 were held to be non-est in the eyes of law and a nullity. The additions made were directed to be deleted. All other legal issues and issues on merits were rendered academic and not adjudicated.

The Tribunal found that the Assessing Officer made additions without discussing the nature of the interest paid on TDS and the nature of the penalty paid to the Dubai Government. Regarding the addition for cash deposits in Specified Bank Notes during demonetization, the assessee claimed that Rs.28,12,064/- was from the cash balance as of 08.11.2016. The Tribunal noted that these submissions require verification of the books of accounts and evidence. Consequently, the Tribunal was of the considered opinion that the matter required a remand to the file of the Assessing Officer for de novo assessment in accordance with law, after affording an opportunity of being heard to the appellant. No specific issue was left undecided, but the entire matter was sent back for fresh consideration.

The Tribunal condoned the delay of 658 days in filing the appeals before it, acknowledging the assessee's financial hardship and business closure as sufficient cause. Similarly, it condoned the delay of 223 days in filing the appeal before the FAA, accepting the assessee's explanation of financial hardship and subsequent medical difficulties. On merits, considering the assessee's contentions regarding the discrepancy in turnover, the excessive estimation of income at 8% compared to prior years' profit margins, and the ex-parte nature of the FAA proceedings, the Tribunal set aside the orders of the FAA and the AO. The matter was restored to the file of the AO for fresh adjudication, with a direction for the assessee to cooperate and furnish all necessary details. The penalty order under section 270A was also set aside and restored to the AO for decision along with the quantum appeal. The appeals were allowed for statistical purposes.

The Tribunal held that the additional evidence sought to be admitted by the assessee, comprising GST return details, confirmations, and bank statements, was relevant for determining the nature and source of bank deposits and had a direct bearing on the issues. Since these documents were not available before the AO and required factual verification, the Tribunal, in the interest of substantial justice, admitted the additional evidence. Consequently, the impugned order for the quantum addition was set aside, and the matter was restored to the file of the AO for fresh examination and adjudication after affording adequate opportunity to the assessee. The assessee was directed to cooperate and not seek unnecessary adjournments. Regarding the penalty appeals (ITA Nos. 1588 & 1589/CHNY/2026), since the quantum appeal was set aside to the AO for denovo adjudication, the Tribunal deemed it appropriate to set aside the penalty orders also to the file of the AO to be decided along with the corresponding quantum appeal. The appeals were allowed for statistical purposes.

The Tribunal held that the additional evidence sought to be admitted by the assessee, comprising GST return details, confirmations, and bank statements, was relevant for determining the nature and source of bank deposits and had a direct bearing on the issues. Since these documents were not available before the AO and required factual verification, the Tribunal, in the interest of substantial justice, admitted the additional evidence. Consequently, the impugned order for the quantum addition was set aside, and the matter was restored to the file of the AO for fresh examination and adjudication after affording adequate opportunity to the assessee. The assessee was directed to cooperate and not seek unnecessary adjournments. Regarding the penalty appeals (ITA Nos. 1588 & 1589/CHNY/2026), since the quantum appeal was set aside to the AO for denovo adjudication, the Tribunal deemed it appropriate to set aside the penalty orders also to the file of the AO to be decided along with the corresponding quantum appeal. The appeals were allowed for statistical purposes.

The Tribunal held that the additional evidence sought to be admitted by the assessee, comprising GST return details, confirmations, and bank statements, was relevant for determining the nature and source of bank deposits and had a direct bearing on the issues. Since these documents were not available before the AO and required factual verification, the Tribunal, in the interest of substantial justice, admitted the additional evidence. Consequently, the impugned order for the quantum addition was set aside, and the matter was restored to the file of the AO for fresh examination and adjudication after affording adequate opportunity to the assessee. The assessee was directed to cooperate and not seek unnecessary adjournments. Regarding the penalty appeals (ITA Nos. 1588 & 1589/CHNY/2026), since the quantum appeal was set aside to the AO for denovo adjudication, the Tribunal deemed it appropriate to set aside the penalty orders also to the file of the AO to be decided along with the corresponding quantum appeal. The appeals were allowed for statistical purposes.

The Tribunal condoned the delay of 658 days in filing the appeals before it, acknowledging the assessee's financial hardship and business closure as sufficient cause. Similarly, it condoned the delay of 223 days in filing the appeal before the FAA, accepting the assessee's explanation of financial hardship and subsequent medical difficulties. On merits, considering the assessee's contentions regarding the discrepancy in turnover, the excessive estimation of income at 8% compared to prior years' profit margins, and the ex-parte nature of the FAA proceedings, the Tribunal set aside the orders of the FAA and the AO. The matter was restored to the file of the AO for fresh adjudication, with a direction for the assessee to cooperate and furnish all necessary details. The penalty order under section 270A was also set aside and restored to the AO for decision along with the quantum appeal. The appeals were allowed for statistical purposes.

The Tribunal condoned the delay of 82 days in filing the appeal, finding sufficient cause for the belated filing and no laches attributable to the assessee. Regarding the substantive issue, the Tribunal noted that the impugned order passed by the CIT(E) was ex-parte and the application was rejected for non-furnishing of the registration certificate under Section 12A/12AA granted under the erstwhile regime. The Tribunal acknowledged the assessee's request for one more opportunity to furnish the relevant certificate. In the interest of substantial justice, the Tribunal held that the assessee deserved another opportunity. Accordingly, the Tribunal set aside the impugned order of the CIT(E) and restored the matter to his file for fresh adjudication. The CIT(E) was directed to afford the assessee a reasonable opportunity of being heard and to furnish necessary documents and evidences. The assessee was directed to cooperate and avoid unnecessary adjournments. The appeal was allowed for statistical purposes.

The Tribunal held that the assessee had substantiated the claim of Rs. 44 lakhs as withdrawals from the bank. Relying on the Supreme Court decisions in Roshan Di Hatti vs. CIT and CIT vs. K. Chinnathamban, the Tribunal noted that once the assessee provides a plausible explanation, the burden shifts to the Revenue. The AO had not brought any material to show the seized cash emanated from any other source and had failed to provide an opportunity for cross-examination. Therefore, the Rs. 44 lakhs were held to be explained. Regarding the remaining Rs. 6 lakhs, the Tribunal found that the AO had not brought on record any other source of income for the assessee. It directed the AO to assess this amount as the assessee's business income and deleted the addition under Section 69A. For the addition under Section 2(22)(e), the Tribunal upheld the CIT(A)'s finding that when a shareholder maintains a running account with a sufficient credit balance, withdrawals are not treated as deemed dividends if the account is operating normally and reflects business transactions. Relying on Delhi, Kolkata, and Mumbai High Court/ITAT decisions, the Tribunal found no case to invoke Section 2(22)(e) and directed the deletion of the addition. Regarding the Rs. 32,75,000/- addition under Section 69A, the Tribunal found no contrary evidence from the Revenue to rebut the CIT(A)'s finding that the deposits were made out of cash balances available in hand and received in the normal course of business during the demonetization period. Thus, the CIT(A)'s order was justified.

The Tribunal held that the basis on which the FAA allowed the assessee's legal ground no longer survived due to subsequent developments. The Supreme Court, acknowledging the retrospective amendment by the Finance Act, 2026, had set aside the High Court judgments relied upon by the FAA. Consequently, the FAA's finding that the notice issued by the JAO was invalid could not be sustained. The Tribunal set aside the impugned order of the FAA. Since the FAA had not adjudicated the grounds on merits, and considering the assessee's plea to restore the matter to the AO for both legal and merit issues due to an ex-parte assessment, the Tribunal restored the matter to the file of the AO. The AO was directed to await the outcome of appeals before the Jurisdictional High Court concerning the validity of the retrospective amendment and then adjudicate afresh. If the assessee did not press the legal issue, the AO could adjudicate remaining grounds on merits after affording a hearing. The appeal was allowed for statistical purposes.

The Tribunal upheld the order of the CIT(A) and dismissed the grounds raised by the Revenue. The Tribunal noted that the CIT(A) had considered the reasons cited by the AO for making the addition, including the closing cash in hand, average monthly sales, and the percentage of cash deposits. The CIT(A) found that the cash in hand increased due to cash sales made in preceding months, which were duly offered as sales in the return of income and accepted by the AO. The Tribunal agreed with the CIT(A)'s reasoning that simply because cash in hand increased compared to the previous year, it does not automatically mean the increased cash is not genuine. Furthermore, the Tribunal relied on the CIT(A)'s finding that the AO had not doubted the genuineness of purchases or opening stock, nor rejected the books of accounts under Section 145(3). In such circumstances, the CIT(A) correctly held that the AO could not deny the source of cash deposits out of cash sales and that making a separate addition under Section 69A when the turnover was accepted would amount to double taxation. The Tribunal found no infirmity in the CIT(A)'s order.

The Tribunal found merit in the assessee's arguments. It noted that the CIT(E) rejected the renewal application based on the incorrect assertion that the earlier approval expired in AY 2024-25. The Tribunal observed that the regular approval granted on 21.03.2023 was, in fact, valid up to AY 2026-27, a fact not referred to in the impugned order. The Tribunal agreed with the assessee that the question of delay did not arise as the regular approval was still valid. Considering the submissions of both parties, the Tribunal deemed it proper to remand the matter to the CIT(E) for a fresh examination of whether the approval granted on 21.03.2023 was indeed valid from AY 2022-23 to AY 2026-27. The assessee was granted liberty to file supporting evidence. The order of the CIT(E) was set aside, and the grounds raised by the assessee were allowed for statistical purposes.

The Tribunal held that the Commissioner of Income Tax (Exemptions) was not justified in denying registration under Section 12AB and approval under Section 80G. The Tribunal reasoned that the scope of enquiry at the registration stage is confined to the objects of the trust, the genuineness of its activities, and compliance with other laws. The CIT(E) cannot enlarge this enquiry to examine whether exemption conditions under Sections 11 to 13 are satisfied in a particular year. The Tribunal distinguished between registration (the gateway) and exemption (decided in assessment). Citing the Supreme Court in ACIT (Exemptions) vs. Ahmedabad Urban Development Authority, it was held that whether receipts from commercial activities exceed the statutory limit is a matter to be examined year-to-year, with the consequence affecting exemption for that year, not registration. The CIT(E) had not recorded any finding that the objects were not charitable or activities were not genuine, but rejected applications solely based on the proviso to Section 2(15). The Tribunal also noted that the financial statements showed the incentive income and other receipts were applied entirely towards charitable objects, indicating no profit motive. Therefore, the activities were held to fall within the ambit of 'relief of the poor' under Section 2(15), and the CIT(E) was directed to grant registration and approval.

The Tribunal held that the order of the CIT(A) was not justified. The Tribunal noted that the assessee had placed on record a valuation report from an approved valuer of the Indian Overseas Bank, which determined the open market value of the property at Rs. 40,00,000/-. This same value was adopted by the AO in the assessee's wife's case and confirmed by the CIT(A). Therefore, the Tribunal found merit in the assessee's argument that when a registered valuer opined the same value in the wife's case, it could be applied in the present case without deviation. The Tribunal directed the AO to delete the addition. The grounds raised by the assessee were allowed. No issue was expressly left undecided.

The Tribunal held that the Commissioner of Income Tax (Exemptions) was not justified in rejecting the registration under Section 12AB and approval under Section 80G of the Act. The Tribunal reasoned that the scope of enquiry at the stage of registration under Section 12AB is confined to the objects of the trust, the genuineness of its activities, and compliance with other laws. The CIT(E) cannot enlarge this enquiry by importing considerations for exemption under Sections 11 to 13, which are to be examined year-to-year during the assessment. The Tribunal noted that the CIT(E) had not recorded any finding that the objects of the assessee were not charitable or that its activities were not genuine. Furthermore, the Tribunal observed from the financial statements that the incentive income and other receipts were applied entirely towards the assessee's charitable objects, indicating that the incentive was not driven by profit motive but was a source of funds for charitable activities. The Tribunal concluded that the activities fall within the ambit of 'relief of the poor' under Section 2(15) and directed the CIT(E) to grant the registration and approval sought by the assessees.

The Tribunal held that the Commissioner of Income Tax (Exemptions) was not justified in denying registration under Section 12AB and approval under Section 80G. The Tribunal reasoned that the scope of enquiry at the registration stage is confined to the objects of the trust, the genuineness of its activities, and compliance with other laws. The CIT(E) cannot enlarge this enquiry to examine whether exemption conditions under Sections 11 to 13 are satisfied in a particular year. The Tribunal distinguished between registration (the gateway) and exemption (decided in assessment). Citing the Supreme Court in ACIT (Exemptions) vs. Ahmedabad Urban Development Authority, it was held that whether receipts from commercial activities exceed the statutory limit is a matter to be examined year-to-year, with the consequence affecting exemption for that year, not registration. The CIT(E) had not recorded any finding that the objects were not charitable or activities were not genuine, but rejected applications solely based on the proviso to Section 2(15). The Tribunal also noted that the financial statements showed the incentive income and other receipts were applied entirely towards charitable objects, indicating no profit motive. Therefore, the activities were held to fall within the ambit of 'relief of the poor' under Section 2(15), and the CIT(E) was directed to grant registration and approval.

The Tribunal held that the impugned ex-gratia payment of Rs. 76,60,495/- received by the assessee is a capital receipt and, on the facts and in the circumstances of the present case, is not liable to be included in the taxable income under section 56(2)(xi) of the Act. The Tribunal found that the issue was squarely covered by the decision of a Co-ordinate Bench in Subramanian Kathirsen v. ITO (ITA No.765/Chny/2025), which dealt with similar circumstances involving compensation from the same employer due to the closure of its manufacturing operations. The Co-ordinate Bench, in that case, had followed judicial precedents, including the decision in Atul Shashikant Garbhe v. ITO (ITA No.863/PUN/2024), and held that such ex-gratia compensation on cessation of employment was capital in nature and not taxable. Respectfully following this precedent, the Tribunal set aside the order of the Ld. CIT(A) and directed the Assessing Officer to delete the addition of Rs. 76,60,495/-. The grounds raised by the assessee were allowed.

The Tribunal noted that the appeal was filed against the order of the Ld. CIT(A) who confirmed the assessment order passed by the Assessing Officer u/s. 144 read with Section 147 of the Act. The assessee had raised grounds challenging the ex parte nature of the order, the legality of the reopening, and specific additions made to income. The grounds raised by the assessee included the confirmation of an addition of Rs. 1,31,235/- by estimating income under Section 44AD, sustaining the inclusion of Rs. 1,11,408/- leading to duplication, not appreciating that cash deposits were explained, and confirming an addition of Rs. 10,00,000/- under Section 69 as unexplained investment. The judgment does not record the specific findings or reasoning of the Tribunal on each of these grounds, nor does it mention any operative directions or issues left undecided. The provided text is an excerpt and does not contain the full decision of the Tribunal.

The Tribunal held that the Revenue had not demonstrated any infirmity in the factual findings of the CIT(A). The Tribunal agreed with the CIT(A) that the conditions for invoking Section 69 of the Income Tax Act, 1961, were not satisfied. The seized notebooks related to money-lending and finance business transactions, and the assessee had admitted these transactions and disclosed the additional income as business income. The Tribunal found that the Assessing Officer had not brought any independent evidence to establish that the impugned amount originated from a source other than the assessee's money-lending business. The reliance on interest-related details furnished by Shri Amit Kothari was insufficient to recharacterize the balance amount as unexplained investment. The Tribunal noted that a discrepancy in interest computation does not, without further evidence, conclusively establish an unexplained investment. Citing the Chennai Tribunal's decision in DCIT v. Shri Amit Kumar Kothari, ITA No. 1218/Chny/2023, the Tribunal reiterated that undisclosed income from finance business transactions should be assessed as business income when the source is identified as finance business and no material establishes another source. The CIT(A)'s approach of linking the undisclosed receipt to an identifiable business activity was upheld. The Tribunal concluded that the Assessing Officer was not justified in segregating the amount from the disclosed business income and subjecting it to Section 69 and Section 115BBE. The CIT(A)'s order was upheld.

The Tribunal noted that the assessment was completed under Section 144 due to the assessee's alleged non-compliance and absence of explanation for cash deposits. The CIT(A)'s order was passed ex parte. Considering the nature of the dispute, the quantum of addition, and the contentions raised, the Tribunal was of the view that the matter required fresh consideration by the first appellate authority. The issues regarding the nature and source of cash deposits, the applicability of Section 69A, and the contention concerning Section 115BBE needed to be examined. In the interest of substantial justice, the Tribunal set aside the CIT(A)'s order and restored the appeal to the file of the CIT(A) for fresh adjudication after providing the assessee an effective opportunity to present its case. The Tribunal explicitly stated that it had not expressed any opinion on the merits of the addition or the applicability of Section 115BBE, leaving all issues open for fresh adjudication. The assessee was directed to cooperate and furnish necessary details.

The Tribunal noted that the assessee had raised a jurisdictional objection before the CIT(A) regarding the JAO's lack of jurisdiction to issue the Section 148 notice, citing Section 151A and CBDT Notification No. 18 of 2022, which vested jurisdiction with the FAO. The CIT(A) had allowed the assessee's appeal based on the decision in Dadha Pharma LLP v. Union of India. However, the Tribunal found that subsequent legal developments, including amendments by the Finance Act, 2026, and the Hon'ble Supreme Court's order dated 03.02.2026 in SLP Civil Diary No. 57403/2025, necessitated reconsideration. Therefore, the Tribunal remanded the matter to the CIT(A) [NFAC] for fresh consideration and adjudication in accordance with law, after affording the assessee a reasonable opportunity of being heard. All contentions raised by the assessee were left open for the CIT(A) to adjudicate independently on merits.

The Tribunal held that the disallowance of CSR expenditure under Section 37(1) does not automatically preclude a deduction under Section 80G. The eligibility for Section 80G deduction must be examined independently under its own provisions. The Tribunal noted that the assessee had suo motu disallowed the CSR expenditure of Rs.21,30,985/- under Section 37(1). Contributions of Rs.18,72,595/- were made to institutions claimed to be eligible under Section 80G, with a deduction of Rs.9,36,298/- (50%) claimed. The lower authorities had not disputed the genuineness of payments or the eligibility of recipient institutions, disallowing the claim primarily due to the mandatory CSR obligation. Following its own coordinate bench decisions in M/s. Source Hov India Private Limited, TVS Motor Company Ltd., and Acqueon Technologies Pvt. Ltd., the Tribunal ruled that the prohibition in Explanation 2 to Section 37(1) pertains to business income computation and does not conclusively determine admissibility under Section 80G. The Tribunal directed the AO to allow the deduction of Rs.9,36,298/- under Section 80G.

The Tribunal held that the original Form No. 10B is a relevant piece of evidence and cannot be disregarded solely because a revised report was filed. Conversely, the revised report cannot be rejected merely because it was filed after scrutiny proceedings commenced. The evidentiary value of both reports must be examined in conjunction with the underlying books of account and other relevant material. The decisive question is whether the sum of Rs. 33,00,000 was actually paid or credited as remuneration to the founder trustee, or if the original disclosure resulted from an identifiable reporting error. This requires verification of the trust’s salary ledger, general ledger, financial statements, bank statements, payment vouchers, payroll records, and TDS records. Even if payment is established, its reasonableness must be examined. The Tribunal restored the matter to the AO for fresh examination, directing verification of all relevant documents, determination of whether the payment was actually made, and if so, its reasonableness. The Tribunal expressed no final opinion on the genuineness of the error or satisfaction of exemption conditions, leaving all contentions open for the AO's consideration. The appeal was allowed for statistical purposes.

The Tribunal noted that the assessee did not press the ground regarding the validity of reassessment proceedings, thus dismissing that ground as not pressed. Regarding the estimation of business income, the Tribunal held that while deficiencies in evidence justify scrutiny and potential rejection of books, the estimation must be fair, rational, and consistent with the business nature and available material. The Tribunal found that the AO's adoption of an 8% profit rate lacked specific comparable case details or a demonstrated working for its applicability. It also noted an arithmetic error in the impugned order regarding the assessee's declared profit margin. Considering the turnover, business nature, evidence deficiencies, and lack of a demonstrated comparable basis for 8%, the Tribunal deemed it reasonable to estimate the net business income at 6% of the gross turnover. The Tribunal directed the AO to recompute the income at 6% of the verified gross turnover of Rs. 2,33,11,387, clarifying that this estimated income is inclusive of business expenditures and avoids double taxation. The consequential tax and interest computation was allowed for statistical purposes to the extent of the revised income determination.

The Tribunal held that the assessee failed to substantiate the nature and source of the disputed cash deposits. While the assessee claimed the deposits were business receipts from wholesale trading, the mere assertion was insufficient. The Tribunal noted that the CIT(A) specifically recorded that the assessee failed to produce supporting bills, invoices, vouchers, and other underlying records to establish the nexus between the cash deposits and alleged sale proceeds, despite references to VAT returns, audit reports, Tally abstracts, and bank statements. The Tribunal found no cogent basis to displace the factual finding that the assessee did not demonstrate that the deposits could be reconciled with identifiable sales transactions or that the corresponding cash was available in business records. The burden of substantiating the explanation lies with the assessee, and the absence of verifiable material cannot be cured by merely repeating the explanation. Therefore, the addition under Section 69A was sustained. Regarding Ground No. 4 concerning the applicability of Section 115BBE, the Tribunal noted the jurisdictional High Court's ruling that Section 115BBE applies prospectively from AY 2018-19. While upholding the addition under Section 69A, the AO was directed to give effect to the binding jurisdictional precedent while computing the tax liability under Section 115BBE. The appeal was accordingly dismissed on the substantive challenge to the addition under Section 69A, but partly allowed concerning the computation of tax under Section 115BBE.

The Tribunal held that the Assessing Officer failed to provide the mandatory minimum period of seven days to the assessee to respond to the notice issued under Section 148A(b) of the Act. The notice was issued on 21.03.2022, requiring a reply by 28.03.2022, which is less than seven days. The Tribunal relied on the decision of the Hon'ble High Court in the case of Bevinakuppe Ningegowda vs ITO and ITO v. Venkatal Ayyappa Ranjanna, which held that if the AO does not provide the minimum period of seven days to respond to a notice under Section 148A(b), the notice is contrary to law, and the consequential proceedings are liable to be quashed. Therefore, the notice issued by the AO under Section 148A(b) was held to be contrary to law, and the consequential reassessment proceedings were liable to be quashed. As the legal contention was considered and the appeal was allowed on this ground, other grounds were rendered academic and left undecided. The appeal of the assessee was allowed.

The Tribunal noted that the assessee had filed written submissions before the CIT(A) explaining its claims and seeking admission of additional evidence under Rule 46A, citing a change in management and difficulties in accessing records. The CIT(A) had rejected these contentions for lack of documentary evidence. The Tribunal, considering that the assessee deserved another opportunity to substantiate its claims in the interest of substantial justice, decided to set aside the CIT(A)'s order and restore the matter to the CIT(A) for fresh adjudication. The CIT(A) was directed to afford the assessee a reasonable opportunity to furnish documentary evidence, consider the request for additional evidence under Rule 46A in accordance with law, and examine the contentions on merits after providing an opportunity to the Assessing Officer. The assessee was directed to cooperate and furnish evidence promptly. All issues were left open for adjudication on merits. The appeal was allowed for statistical purposes.

The Tribunal condoned the delay of 446 days in filing the appeal, finding sufficient cause for the belated filing as the assessee was unaware of the proceedings due to non-receipt of notices. Regarding the merits, the Tribunal held that the FAA had no jurisdiction to dismiss an appeal for non-compliance without going into the merits of the case. The FAA is bound to decide the appeal on merits even in the absence of the assessee. This view was supported by the decision of the Hon'ble High Court of Madras in Southern Steel Industries vs. AAC (CT). Consequently, the order of the FAA was set aside, and the matter was remanded back to the FAA for fresh adjudication on merits after providing a reasonable opportunity of being heard to the assessee. The assessee was directed to cooperate and not seek unnecessary adjournments. The appeal was allowed for statistical purposes.

The Tribunal held that the Principal Commissioner of Income Tax (PCIT) was not justified in invoking jurisdiction under Section 263 of the Income Tax Act, 1961. The Tribunal noted that the assessee had filed a settlement application for Assessment Years 2011-12 to 2017-18, which was admitted by the Income Tax Settlement Commission (ITSC) on 05.03.2019. A consolidated final settlement order was passed by the ITSC on 14.12.2020. Subsequently, the Assessing Officer (AO) passed a giving effect order for AY 2016-17 determining total income at Nil on 09.07.2021. The reassessment proceedings were initiated thereafter. The Tribunal found that once the ITSC decides to proceed with a case under Section 245D(1), it assumes exclusive jurisdiction. The Act does not contemplate parallel proceedings before the ITSC and the AO. Following the ITAT's decision in Shri Bhanwarlal Jain, which held that giving effect proceedings under Section 263 are parallel and the AO must refer them to the settlement commission, the Tribunal concluded that the PCIT's exercise of jurisdiction under Section 263 was not justified. The reassessment order dated 29.03.2024 was deemed not erroneous and prejudicial to the revenue. The grounds raised by the assessee were allowed, and the PCIT's order was set aside.

The Tribunal held that the Commissioner of Income Tax (Exemptions) was not justified in denying registration under Section 12AB and approval under Section 80G. The Tribunal reasoned that the scope of enquiry at the registration stage is confined to the objects of the trust, the genuineness of its activities, and compliance with other laws. The CIT(E) cannot enlarge this enquiry to examine whether exemption conditions under Sections 11 to 13 are satisfied in a particular year. The Tribunal distinguished between registration (the gateway) and exemption (decided in assessment). Citing the Supreme Court in ACIT (Exemptions) vs. Ahmedabad Urban Development Authority, it was held that whether receipts from commercial activities exceed the statutory limit is a matter to be examined year-to-year, with the consequence affecting exemption for that year, not registration. The CIT(E) had not recorded any finding that the objects were not charitable or activities were not genuine, but rejected applications solely based on the proviso to Section 2(15). The Tribunal also noted that the financial statements showed the incentive income and other receipts were applied entirely towards charitable objects, indicating no profit motive. Therefore, the activities were held to fall within the ambit of 'relief of the poor' under Section 2(15), and the CIT(E) was directed to grant registration and approval.

The Tribunal held that the Commissioner of Income Tax (Exemptions) was not justified in denying registration under Section 12AB and approval under Section 80G. The Tribunal reasoned that the scope of enquiry at the registration stage is confined to the objects of the trust, the genuineness of its activities, and compliance with other laws. The CIT(E) cannot enlarge this enquiry to examine whether exemption conditions under Sections 11 to 13 are satisfied in a particular year. The Tribunal distinguished between registration (the gateway) and exemption (decided in assessment). Citing the Supreme Court in ACIT (Exemptions) vs. Ahmedabad Urban Development Authority, it was held that whether receipts from commercial activities exceed the statutory limit is a matter to be examined year-to-year, with the consequence affecting exemption for that year, not registration. The CIT(E) had not recorded any finding that the objects were not charitable or activities were not genuine, but rejected applications solely based on the proviso to Section 2(15). The Tribunal also noted that the financial statements showed the incentive income and other receipts were applied entirely towards charitable objects, indicating no profit motive. Therefore, the activities were held to fall within the ambit of 'relief of the poor' under Section 2(15), and the CIT(E) was directed to grant registration and approval.

The Tribunal consolidated both appeals for a common order. For AY 2018-19, the Tribunal held that the disallowance made by the CPC under Section 143(1) was not justified. The Tribunal, respectfully following the decision of the Hon'ble High Court of Chhattisgarh in Sanjay Kumar Sharma, held that when a notice under Section 143(2) was issued prior to the intimation under Section 143(1), the CPC could not make such an adjustment. The Tribunal rejected the revenue's reliance on Circular No. 3/2017 in light of the Supreme Court's decision in Gujarat Electricity Board, which held that once regular assessment proceedings commence under Section 143(2), there is no need for summary proceedings under Section 143(1)(a). The disallowance was directed to be deleted, and the CIT(A)'s order was set aside. For AY 2020-21, the Tribunal noted that the issue was similar. It held that no disallowance could be made under Section 154 without seeking an explanation from the assessee, as it was a debatable issue. Following the decision in Sanjay Kumar Sharma, the disallowance confirmed by the CIT(A) was deleted due to legal infirmity, and the CIT(A)'s order was set aside. In both cases, the grounds raised by the assessee were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the assessee's grounds, stating that the assessee had not furnished evidence of non-compliance and that the assessment order recorded that formalities were followed. However, the Tribunal observed that the Ld. CIT(A) had failed to examine and adjudicate the specific contention regarding the limitation period for passing the order under Section 148A(d) and issuing the consequential notice under Section 148, especially in light of the dates and applicable provisions. Therefore, the Tribunal held that the issue requires a fresh examination with reference to the complete assessment records, relevant dates, applicable limitation provisions, and the Supreme Court judgments relied upon by the assessee. The matter was set aside to the file of the Ld. CIT(A) for fresh adjudication after duly considering the assessee's contention regarding limitation and affording a reasonable opportunity of being heard. No opinion was expressed on the merits of the issue. The ratio decidendi is that the appellate authority must adjudicate specific contentions regarding procedural validity and limitation periods in reassessment proceedings, especially when statutory timelines are in question.

The Tribunal noted the subsequent legislative amendment by the Finance Act, 2026, which inserted Section 147A retrospectively from April 1, 2021. This new provision clarifies that for the purposes of Sections 148 and 148A, the AO shall mean an AO other than the National Faceless Assessment Centre (NFAC) or any assessment unit referred to in Section 144B(3). The Tribunal also took note of the Supreme Court's order in Income Tax Officer v. Tej Partap Singh, which set aside High Court judgments favouring assessees on the JAO's competence to issue Section 148 notices, due to the insertion of Section 147A, and remitted matters for fresh consideration. The Tribunal further acknowledged the Punjab and Haryana High Court's decision declaring Section 147A unconstitutional, which is stayed by the Supreme Court. Given the pending authoritative judicial determination on the constitutional validity and effect of Section 147A and the competent authority for issuing notices, the Tribunal deemed it inappropriate to express a concluded opinion. Consequently, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A) for fresh consideration, directing the CIT(A) to keep the appeal in abeyance and await the final decision of the jurisdictional High Court or the Supreme Court on the JAO-FAO issue in light of Section 147A. The CIT(A) is to reconsider the validity of the notice under Section 148 after such determination.

The Tribunal held that the Commissioner of Income Tax (Exemptions) was not justified in denying registration under Section 12AB and approval under Section 80G. The Tribunal reasoned that the scope of enquiry at the registration stage is confined to the objects of the trust, the genuineness of its activities, and compliance with other laws. The CIT(E) cannot enlarge this enquiry to examine whether exemption conditions under Sections 11 to 13 are satisfied in a particular year. The Tribunal distinguished between registration (the gateway) and exemption (decided in assessment). Citing the Supreme Court in ACIT (Exemptions) vs. Ahmedabad Urban Development Authority, it was held that whether receipts from commercial activities exceed the statutory limit is a matter to be examined year-to-year, with the consequence affecting exemption for that year, not registration. The CIT(E) had not recorded any finding that the objects were not charitable or activities were not genuine, but rejected applications solely based on the proviso to Section 2(15). The Tribunal also noted that the financial statements showed the incentive income and other receipts were applied entirely towards charitable objects, indicating no profit motive. Therefore, the activities were held to fall within the ambit of 'relief of the poor' under Section 2(15), and the CIT(E) was directed to grant registration and approval.