ITAT Chennai Judgments — October 2026

The Tribunal condoned the delay of 1171 days in filing the appeal, finding that the assessee was prevented by sufficient and reasonable cause and that the delay was not deliberate or mala fide. The Tribunal adopted a liberal and justice-oriented approach. Regarding the applicability of Section 50C, the Tribunal noted the assessee's argument that the proviso to Section 50C(1) should be applied retrospectively. The assessee contended that the sale agreement was dated 23.11.2009 for Rs. 22,22,000/-, and an advance of Rs. 2,00,000/- was received by cheque on the same date. After deducting court expenses of Rs. 2,08,764/- deposited by the buyer on 08.12.2011, the balance Rs. 18,13,236/- was received by the co-owners. The assessee argued that as per the proviso to Section 50C(1), the section should not be applicable. The Tribunal, however, did not explicitly rule on the retrospective application of the proviso or the applicability of Section 50C in its entirety in the provided text. The judgment indicates that the CIT(A) confirmed the AO's addition, holding that Section 50C would apply and the transfer was completed in FY 2011-12. The assessee's appeal is against this order.

The Tribunal held that the deduction under Section 80IAB of the Income Tax Act, 1961, is to be allowed against the gross total income of the assessee and is not restricted to the income under the head 'profits and gains from business or profession'. The Tribunal relied on the ratio laid down by the Hon'ble Supreme Court in CIT vs. Reliance Energy Ltd., which held that Section 80AB and Section 80IA(5) govern the computation of the quantum of deduction, while the allowance of deduction is governed by Section 80IA(1) and Section 80A, subject to the ceiling that total deductions under Chapter VI-A cannot exceed the gross total income. The Tribunal also noted the Hon'ble Madras High Court's decision in Sundaram Fasteners Ltd. that the provision treating the eligible undertaking as the only source of income applies only for computing the quantum of deduction. The Tribunal distinguished the assessee's own case for earlier assessment years, noting that in those years, the assessee had a net loss from business, which is not the case for AY 2019-20. The Tribunal directed the AO to allow the deduction under Section 80IAB considering the gross total income of the assessee. The issue regarding jurisdiction under Section 143(1) was left open.

The Tribunal held that the CIT(A) deleted the addition based on documents that were not fully examined by the AO, and the CIT(A) himself did not correlate cash sales with bank deposits or record any factual finding. The Tribunal found no clear evidence substantiating that cash sales were the source of cash deposits, concluding the source was not conclusively explained. In the interest of natural justice and considering the assessee's business, the Tribunal restored the issue to the AO for verification of documentary evidence supporting the claim of cash sales as the source, with a direction to provide the assessee a reasonable opportunity of being heard. The Revenue's appeal was allowed for statistical purposes. Regarding the cross-objection, the Tribunal found that while the notice under Section 148A(b) initially gave less than seven days, the AO passed the order under Section 148A(d) twelve days later, providing the assessee a real opportunity to respond. Since the assessee did not demonstrate any impediment or attempt to respond, the notice was not vitiated, and the cross-objection was dismissed.

The Tribunal acknowledged that addition cannot be made solely on bank credits without considering debits, which might represent contra-transactions. It also noted the assessee's sole income source is the onion business and the gross profit declared is between 2% to 3%. To resolve the dispute and account for potential income beyond the declared margin, the Tribunal decided to estimate the profit at 8% of the impugned addition (Rs. 1,43,02,512). This estimated profit of 8% is to be treated as the business income of the assessee, in lieu of further verification by the AO. The assessee's legal grounds were expressly left open as the appeal was decided on merits by estimating income. The operative direction is for the AO to treat 8% of the impugned addition as business income.

The Tribunal held that penalties levied under Section 270A and Section 271AAC(1) cannot survive when the very additions that formed the basis for these penalties have been completely deleted in the quantum proceedings. The Tribunal noted that the AO, in an order giving effect to appellate directions, deleted the entire additions of Rs. 14,01,878/-, resulting in a revised total income of Rs. 26,550/- with Nil tax liability. This deletion removed the foundation for the penalties under Sections 270A (under-reporting of income) and 271AAC(1) (tax on unexplained income). The Tribunal found substantial force in the assessee's contention that penalty proceedings are consequential and cannot be sustained if their substratum is removed. Regarding the penalty under Section 272A(1)(d) for failure to comply with notices, the Tribunal, considering the assessee's subsequent participation, furnishing of details, and the ultimate deletion of additions, decided to delete this penalty as well in the peculiar facts and circumstances. The Tribunal set aside the CIT(A)'s orders and deleted all the impugned penalties.

The Tribunal held that penalties levied under Section 270A and Section 271AAC(1) cannot survive when the very additions that formed the basis for these penalties have been completely deleted in the quantum proceedings. The Tribunal noted that the AO, in an order giving effect to appellate directions, deleted the entire additions of Rs. 14,01,878/-, resulting in a revised total income of Rs. 26,550/- with Nil tax liability. This deletion removed the foundation for the penalties under Sections 270A (under-reporting of income) and 271AAC(1) (tax on unexplained income). The Tribunal found substantial force in the assessee's contention that penalty proceedings are consequential and cannot be sustained if their substratum is removed. Regarding the penalty under Section 272A(1)(d) for failure to comply with notices, the Tribunal, considering the assessee's subsequent participation, furnishing of details, and the ultimate deletion of additions, decided to delete this penalty as well in the peculiar facts and circumstances. The Tribunal set aside the CIT(A)'s orders and deleted all the impugned penalties.

The Tribunal held that penalties levied under Section 270A and Section 271AAC(1) cannot survive when the very additions that formed the basis for these penalties have been completely deleted in the quantum proceedings. The Tribunal noted that the AO, in an order giving effect to appellate directions, deleted the entire additions of Rs. 14,01,878/-, resulting in a revised total income of Rs. 26,550/- with Nil tax liability. This deletion removed the foundation for the penalties under Sections 270A (under-reporting of income) and 271AAC(1) (tax on unexplained income). The Tribunal found substantial force in the assessee's contention that penalty proceedings are consequential and cannot be sustained if their substratum is removed. Regarding the penalty under Section 272A(1)(d) for failure to comply with notices, the Tribunal, considering the assessee's subsequent participation, furnishing of details, and the ultimate deletion of additions, decided to delete this penalty as well in the peculiar facts and circumstances. The Tribunal set aside the CIT(A)'s orders and deleted all the impugned penalties.

The Tribunal acknowledged the assessee's failure to avail opportunities provided by both the AO and the CIT(A), deeming the explanation of not monitoring the portal and email as not fully absolving the assessee of his statutory obligations. However, considering that the additions involved factual verification of the source and nature of cash deposits, which requires examination of bank statements, books of account, and other supporting documents, the Tribunal decided to grant the assessee one final opportunity to substantiate his case. The Tribunal found that the interest of substantial justice would be met by remitting the entire matter to the file of the AO for fresh adjudication. The Tribunal set aside the orders of the CIT(A) and the AO. The assessee was directed to furnish all relevant documentary evidence and cooperate with the AO. A cost of Rs. 5,000/- was imposed on the assessee for negligent conduct. The AO was directed to examine the evidence and pass a fresh speaking assessment order.

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, on April 1, 2022, for Assessment Year 2015-16, is barred by limitation. The Court reasoned that under the erstwhile provisions of Section 149(1), the outer limit for issuing a notice under Section 148 for AY 2015-16 was six years from the end of the relevant assessment year, which expired on March 31, 2022. The notice was issued on April 1, 2022, after this period had expired. The Tribunal relied on the Supreme Court's decision in Union of India v. Rajeev Bansal, which clarified that the new extended limitation period cannot revive a reassessment that was already time-barred under the old regime. Furthermore, the Tribunal followed its Co-ordinate Bench's decision in Subramanian Prabhakaran v. Income Tax Officer, which held that for the notice to be valid, it must first pass the limitation test under the applicable provisions. Since the notice was already barred by virtue of the first proviso to Section 149(1), the question of excluding time spent on Section 148A proceedings did not arise. Consequently, the reassessment proceedings initiated pursuant to the invalid notice were quashed. The grounds relating to the merits of the addition were left undecided.

The Tribunal held that the assessee is entitled to the benefit of the enhanced monetary ceiling of Rs. 25,00,000/- under Section 10(10AA)(ii) for the leave encashment received on retirement, even though the retirement occurred prior to 01.04.2023. The reasoning followed the decision of a coordinate bench in Balasubramanian Venkatachalaperumal v. DCIT, which held that the enhancement was beneficial and remedial in nature. The Tribunal noted that while High Court decisions were cited by the Revenue, the precise controversy had been considered by the coordinate bench, and no jurisdictional High Court decision contrary to this view was brought to its notice. Judicial discipline warranted following the coordinate bench decision. Since the actual leave encashment received by the assessee (Rs. 12,98,565/-) was below the enhanced ceiling of Rs. 25,00,000/-, the entire amount is eligible for exemption. The restriction of exemption to Rs. 3,00,000/- was deemed unsustainable. The operative direction is to allow exemption for the entire amount of Rs. 12,98,565/-.

The Tribunal held that the assessment order was erroneous and prejudicial to the interests of the revenue due to the Assessing Officer's failure to examine specific issues. The Tribunal cited various High Court and Supreme Court decisions, including K.A. Ramaswamy Chettiar v. CIT (Madras High Court) and PCIT v. Zuari Maroc Phosphates Ltd. (Bombay High Court), emphasizing that the AO has a responsibility to investigate facts when circumstances warrant it. The failure to make an inquiry renders the order erroneous. The Tribunal found that the PCIT had exercised revisional jurisdiction properly as the proceedings were initiated on the PCIT's own motion after examining the assessment records, and there was no material to show that the same issues were pending before the CIT(A). Therefore, the Tribunal found no illegality in the assumption of jurisdiction under Section 263 by the PCIT and no merit in the grounds of appeal raised by the assessee. The appeal filed by the assessee was dismissed.

The Tribunal held that the assessee is entitled to the deduction under Section 54 of the Income Tax Act, 1961. The Tribunal reasoned that when the assessee has satisfied the mandatory requirement of Section 54(1) by acquiring the new residential property within the stipulated time, the mere non-compliance of the procedural requirement under Section 54(2) cannot stand in the way of the assessee getting the benefit. The Tribunal respectfully followed the decision of the Hon'ble Madras High Court in *Venkata Dilip Kumar vs. CIT* [2019] and the decision of the coordinate bench in *Rathinavel Sukumar vs. ITO* [2026]. The Tribunal found that it is an admitted fact that the assessee fulfilled the mandatory requirements of Section 54(1). Therefore, the Tribunal directed the AO to delete the addition made towards capital gains. No issue was expressly left undecided.

The Tribunal, in the interest of natural justice and fair play, decided to grant one more opportunity to the assessee. The appeal was remitted back to the CIT(A) with a direction to call for necessary details and decide the issue in accordance with law. The assessee was directed to submit the required details and cooperate with the proceedings without seeking unnecessary adjournments. The Tribunal also levied a cost of Rs. 25,000/- on the assessee, payable to the Tamil Nadu State Legal Services Authority within one month, due to the time and efforts spent by the Exchequer and the assessee's delinquency before the lower authorities. The appeal was allowed for statistical purposes.

The Tribunal held that the ex-gratia compensation of Rs. 22,70,407/- received by the assessee under the BSNL VRS-2019 scheme is eligible for exemption under Section 10(10B) of the Act. The Tribunal found that the issue was squarely covered by the decision of a Co-ordinate Bench in Shri Sekar Gnanaprakasam, which held that compensation under the BSNL VRS-2019 scheme was eligible for exemption. The Tribunal noted that the BSNL VRS-2019 scheme was government-approved and, in substance, a retrenchment scheme. The Tribunal further held that the mere fact that the assessee did not claim the exemption in the original return of income cannot disentitle the assessee from claiming a statutory exemption. Relying on Supreme Court and Bombay High Court judgments (Jute Corporation of India Ltd. v. CIT and CIT v. Pruthvi Brokers & Shareholders Pvt. Ltd.), the Tribunal stated that appellate authorities can consider legitimate claims, even if not made in the original return. The Tribunal set aside the order of the JCIT(A) and directed the Assessing Officer/CPC to allow the exemption under Section 10(10B) after verifying the receipt and relevant documents, and to recompute the income and tax liability accordingly.

The Tribunal condoned the delay of 32 days in filing the appeal, citing the Hon'ble Supreme Court's decision in Collector, Land Acquisition Vs. MST.Katiji & Ors. (167 ITR 471) (SC), finding reasonable and sufficient cause. Regarding the main issue, the Tribunal held that the rejection of approval under Section 80G on the ground of the assessee being engaged in religious cum charitable purposes was incorrect. The Tribunal observed from the financial statements that the assessee's main activity was providing Annadanam (free meals) to poor people, which is purely a charitable activity. Furthermore, the revenue had previously granted Section 80G approval up to AY 2026-27 after considering the trust's activities, and there had been no change in these activities or objects. Therefore, the Tribunal directed the CIT(E) to grant the approval under Section 80G in accordance with the law. The appeal was allowed.

The Tribunal held that there was a reasonable and sufficient cause for the delay in filing the appeal. Citing the Supreme Court decision in Collector, Land Acquisition Vs. MST.Katiji & Ors., the Tribunal condoned the delay and admitted the appeal. Regarding the merits, the Tribunal observed that the CIT(E) cancelled the Section 12AB registration solely because the assessee did not respond to notices. However, the Tribunal noted that Section 12AB(1)(b)(ii) and Section 12AB(4) require the CIT(E) to be satisfied about the genuineness of the trust's activities and compliance with laws. Mere non-response to notices, without any adverse finding on the genuineness of activities or specified violations, is insufficient for cancellation. The Tribunal found that the CIT(E) had not recorded any such adverse findings, unlike in the case of the Section 80G application which was rejected for statistical purposes without adverse inference. Therefore, the Tribunal directed the CIT(E) to restore the existing registration under Section 12AB, valid up to AY 2026-27. The appeal was allowed for statistical purposes.

The Tribunal held that the levy of late filing fee under section 234E of the Act, while processing the TDS statement under section 200A in respect of the period prior to 01.06.2015, is not sustainable in law. The reasoning was based on the established judicial precedents, including the decision of the Hon'ble Madras High Court in True Blue Voice India Pvt. Ltd. v. CCIT and the Co-ordinate Bench decisions in Derby Clothing Pvt. Ltd. and Avinash Kishore Hemdev. The Tribunal observed that although section 234E provided for the levy of fee, the mechanism for computation of such fee under section 200A was not available prior to 01.06.2015, as the enabling provision in section 200A(1)(c) was inserted only with effect from that date. Consequently, the Tribunal directed the deletion of the late filing fee of Rs. 41,800/- levied under section 234E. The order of the CIT(A) confirming the levy was set aside to this extent. Other contentions raised by the assessee were not adjudicated separately as the issue on merits was decided.

The Tribunal held that the levy of fee under Section 234E was not sustainable for TDS statements pertaining to periods prior to June 1, 2015. The Tribunal noted that while Section 234E provides for the levy of fee, the controversy lies in the existence of a statutory machinery under Section 200A to compute and levy such fee. Section 200A(1) was amended by the Finance Act, 2015, with effect from June 1, 2015, to specifically empower the computation of fee under Section 234E. The Tribunal followed the jurisdictional High Court of Madras decision in True Blue Voice India Pvt. Ltd. v. Chief Commissioner of Income-tax (TDS), which held that the machinery provision under Section 200A for computing Section 234E fees became effective only from June 1, 2015. Consequently, the levy of fee for periods prior to this date through processing under Section 200A was deemed unsustainable. The Tribunal also deleted the consequential interest charged under Section 220(2) as it arose from the unsustainable levy of Section 234E fee. Grounds 2 to 6 were allowed.

The Tribunal held that the levy of fee under Section 234E was not sustainable for TDS statements pertaining to periods prior to June 1, 2015. The Tribunal noted that while Section 234E provides for the levy of fee, the controversy lies in the existence of a statutory machinery under Section 200A to compute and levy such fee. Section 200A(1) was amended by the Finance Act, 2015, with effect from June 1, 2015, to specifically empower the computation of fee under Section 234E. The Tribunal followed the jurisdictional High Court of Madras decision in True Blue Voice India Pvt. Ltd. v. Chief Commissioner of Income-tax (TDS), which held that the machinery provision under Section 200A for computing Section 234E fees became effective only from June 1, 2015. Consequently, the levy of fee for periods prior to this date through processing under Section 200A was deemed unsustainable. The Tribunal also deleted the consequential interest charged under Section 220(2) as it arose from the unsustainable levy of Section 234E fee. Grounds 2 to 6 were allowed.

The Tribunal held that the levy of fee under Section 234E was not sustainable for TDS statements pertaining to periods prior to June 1, 2015. The Tribunal noted that while Section 234E provides for the levy of fee, the controversy lies in the existence of a statutory machinery under Section 200A to compute and levy such fee. Section 200A(1) was amended by the Finance Act, 2015, with effect from June 1, 2015, to specifically empower the computation of fee under Section 234E. The Tribunal followed the jurisdictional High Court of Madras decision in True Blue Voice India Pvt. Ltd. v. Chief Commissioner of Income-tax (TDS), which held that the machinery provision under Section 200A for computing Section 234E fees became effective only from June 1, 2015. Consequently, the levy of fee for periods prior to this date through processing under Section 200A was deemed unsustainable. The Tribunal also deleted the consequential interest charged under Section 220(2) as it arose from the unsustainable levy of Section 234E fee. Grounds 2 to 6 were allowed.

The Tribunal held that the matter requires fresh consideration by the CIT(A) in the interest of substantial justice, given the substantial addition and the assessee's non-compliance. The Tribunal emphasized that it was not expressing any opinion on the merits of the addition. The assessee is directed to explain the nature and source of the cash deposits and furnish documentary evidence. The CIT(A) is to consider the explanation for non-compliance and pass a fresh speaking order after examining the evidence. The assessee must cooperate and furnish documents. The CIT(A) should decide afresh without being influenced by any observations made in this order. The impugned order of the CIT(A) is set aside, and the matter is restored to the file of the CIT(A) for fresh adjudication.

The Tribunal held that the learned CIT(Exemptions) was not justified in invoking jurisdiction under section 263. The assessment order dated 20.03.2023 could not be held to be erroneous merely because the assessee furnished Form 10B belatedly or because the subsequent application under section 119(2)(b) was rejected by the CBDT. The AO had conducted an enquiry during the reassessment proceedings and adopted a view that was legally plausible and supported by judicial precedents, including the principle laid down in Malabar Industrial Co. Ltd. v. CIT, which states that where two views are possible and the AO adopts one permissible view, the order cannot be revised under section 263 simply because the Commissioner prefers another view. The Tribunal noted that the AO had conducted scrutiny proceedings, issued notices, examined transactions, and considered material furnished by the assessee, thus distinguishing it from a case of complete lack of enquiry. The Tribunal also referred to judicial pronouncements from the Bombay High Court in International Resources for Fairer Environment v. Union of India and the Gujarat High Court in Association of Indian Panel Board Manufacturers v. DCIT, which treated delayed filing of Form 10B as a procedural requirement that should not, by itself, result in denial of exemption. The subsequent rejection of the condonation petition did not retrospectively establish that the AO's view was unsustainable in law. Therefore, the twin conditions prescribed under section 263 were not satisfied, and the impugned order passed by the CIT(Exemptions) was quashed, restoring the original assessment order.

The Tribunal held that the cash deposits of Rs. 70,82,000/- made by the assessee, recovered from sundry debtors, were explained. The Tribunal found that the loans were sourced from identifiable sources, namely additional income offered during a survey and a loan from Bajaj Finance, and were duly recorded in the audited financials and the ROI for AY 2016-17. The Tribunal noted that the AO had not disturbed the interest income offered on these advances in AY 2016-17. It was also acknowledged that obtaining confirmation letters for cash repayments from debtors is not feasible. Therefore, the Tribunal concluded that the addition made by the AO and sustained by the CIT(A) was unwarranted. The Tribunal directed the AO to delete the addition of Rs. 70,82,000/- made under Section 69A read with Section 115BBE of the Act, allowing the grounds of appeal raised by the assessee. No issue was expressly left undecided.

The Tribunal held that the primary issue was whether the assessee was afforded an effective opportunity to explain its case. The assessee's specific contention that the show-cause notice was sent to an incorrect email ID, leading to non-receipt and inability to furnish documents and explanations, was noted. The objections raised by the CIT(E) concerning delay in filing, supporting documents, and the nature of trust objects were material to the application's determination. The Tribunal emphasized that a meaningful opportunity of hearing requires the assessee to be put on notice of proposed adverse decisions and given a reasonable chance to present material. Since the assessee disputed effective service of the notice and expressed willingness to provide documents, and given that these matters require examination, the Tribunal found it appropriate to reconsider the matter at the CIT(E)'s level. The Tribunal explicitly stated it was not expressing any opinion on the merits of the registration claim. The impugned order was set aside, and the matter was restored to the CIT(E) for fresh adjudication after issuing a notice to the correct email ID, providing an effective opportunity to the assessee, and adjudicating afresh on merits.

The Tribunal held that in the interest of justice, the assessee should be given another opportunity. The delay in filing the appeal before the CIT(Appeals) was condoned, as the assessee had filed a condonation of delay in Form 35, which constituted sufficient cause. Consequently, the impugned order of the CIT(Appeals), which dismissed the appeal in limine due to the delay, was set aside. The matter was restored to the file of the CIT(Appeals) with a direction to adjudicate the appeal de novo on merits after providing a reasonable opportunity to the assessee. The assessee was also directed to be diligent and file written submissions and relevant documents. The appeal was allowed for statistical purposes.

The Tribunal held that the learned CIT(E) erred in modifying the category/status of the assessee from 'Charitable' to 'Religious and Charitable' without confronting the assessee with the proposed change and without providing an opportunity to explain its position. This alteration had consequences for the assessee, including an adverse effect on its section 80G recognition. The Tribunal emphasized that principles of natural justice require an assessee to be informed of the precise issue proposed to be decided against it and to have an effective opportunity to respond. Since the record did not demonstrate that such an opportunity was granted before the reclassification, the Tribunal set aside the impugned order to the extent challenged. The matter was restored to the file of the CIT(E) for fresh adjudication, with directions to issue an appropriate notice, afford a reasonable and effective opportunity of hearing, and consider all relevant material before passing a speaking order. The Tribunal explicitly stated it was not expressing any final opinion on whether the objects and activities were purely charitable or religious and charitable.

The Tribunal held that the addition of Rs. 3,63,477/- was not sustainable. The Tribunal found that while the assessee's non-response during assessment justified ex parte proceedings, it did not preclude the consideration of evidence furnished at the appellate stage. The Tribunal noted that the assessee had provided sales ledger, monthly GST returns, and the annual GSTR-9, which reconciled with the books of account and profit and loss account. The GSTR-9 showed an annual turnover of Rs. 2,66,00,104/-, corresponding to the books. The Tribunal concluded that the differential turnover of Rs. 37,39,484/- represented a duplication in reporting for March 2020 GSTR-1, not actual undisclosed income. The Revenue had not produced contrary material to prove additional sales outside the books. Therefore, the basis for estimating profit did not survive. The addition was directed to be deleted, and the grounds raised by the assessee were allowed. The order of the CIT(A) was set aside.

The Tribunal held that the AO failed to establish the factual foundation for the alleged purchases and the statutory foundation for treating the entire purchase value as unexplained money under Section 69A. The Tribunal noted that the assessee denied the purchases, provided its purchase register, financial statements, and bank statements, and stated it had no dealings with LRIPL or its associates. The name in the IVMS database was materially different. The AO's reliance on the IVMS data, without independent corroboration, consignment notes, transport records, or delivery documents, was insufficient. The Tribunal found that the AO did not demonstrate that the investigation into LRIPL resulted in independent evidence proving the alleged purchases by the assessee. Similarly, low returned income in other years does not establish a specific purchase transaction. The Tribunal clarified that Section 69A applies to money, bullion, jewellery, or other valuable articles found with the assessee and not recorded in books, where the nature and source are unexplained. The addition made represented alleged purchase value, not unexplained money or assets owned by the assessee outside its books. The conditions for invoking Section 69A were not demonstrated. Therefore, the addition of Rs. 34,13,862/- made under Section 69A was deleted. The Tribunal refrained from deciding the legal issues regarding reassessment proceedings as the addition failed on merits.

The Tribunal held that the AO failed to establish the factual foundation for the alleged purchases and the statutory foundation for treating the entire purchase value as unexplained money under Section 69A. The Tribunal noted that the assessee denied the purchases, provided its purchase register, financial statements, and bank statements, and stated it had no dealings with LRIPL or its associates. The name in the IVMS database was materially different. The AO's reliance on the IVMS data, without independent corroboration, consignment notes, transport records, or delivery documents, was insufficient. The Tribunal found that the AO did not demonstrate that the investigation into LRIPL resulted in independent evidence proving the alleged purchases by the assessee. Similarly, low returned income in other years does not establish a specific purchase transaction. The Tribunal clarified that Section 69A applies to money, bullion, jewellery, or other valuable articles found with the assessee and not recorded in books, where the nature and source are unexplained. The addition made represented alleged purchase value, not unexplained money or assets owned by the assessee outside its books. The conditions for invoking Section 69A were not demonstrated. Therefore, the addition of Rs. 34,13,862/- made under Section 69A was deleted. The Tribunal refrained from deciding the legal issues regarding reassessment proceedings as the addition failed on merits.

The Tribunal, in the interest of justice, decided to remand the matter to the Assessing Officer (AO) for fresh consideration. The Tribunal noted that the assessee had not submitted necessary documents to the AO and CIT(A), leading to additions. The assessee was granted liberty to file evidence in support of their claim before the AO. The AO was directed to consider the evidence filed by the assessee and pass an order in accordance with the law. Consequently, the order of the CIT(A) was set aside, and the grounds raised by the assessee were allowed for statistical purposes. The principle derived is that in the interest of justice and to ensure fair adjudication, especially when additional evidence is presented and both parties consent, a remand for fresh consideration by the AO is appropriate.

The Tribunal held that a valid revised return filed under Section 139(5) substitutes the original return for assessment purposes. The revised return, filed before the Section 143(1) processing, meant the computation of allowable remuneration should be based on the enhanced book profit. The Tribunal noted that the CIT(A) himself accepted that on the revised book profit, the remuneration of Rs.15,80,000/- was within the permissible limit of Rs.29,56,010/-. Therefore, the disallowance of Rs.5,83,984/- had no surviving basis. The Tribunal further held that the issue of authorization under the partnership deed, requiring examination of the instrument, could not be a basis for sustaining the CPC's adjustment, which was based on an arithmetical error from the original return. The non-production of the deed at a particular stage, especially when the assessee subsequently furnished it and there were no adverse findings on the deed's terms, could not automatically invalidate the claim. The Tribunal found the CIT(A)'s conclusion internally inconsistent and deleted the disallowance.

The Tribunal held that the rejection of the registration application under Section 12AB, which has significant civil consequences, must be preceded by an effective and meaningful opportunity for the assessee to furnish requisite documents and explain its case, in line with the principles of natural justice. The Tribunal observed that the impugned order rejected the application primarily on the ground of non-compliance and non-furnishing of documents, without recording any finding on the merits of the objects of the trust or the genuineness of its activities. Therefore, the Tribunal set aside the impugned order dated 25.06.2026 and restored the matter to the file of the CIT(E) for fresh adjudication. The CIT(E) was directed to re-examine the application after providing an adequate and effective opportunity of hearing to the assessee, who was also directed to cooperate fully. The Tribunal explicitly clarified that no opinion was expressed on the merits of the assessee's entitlement to registration, leaving all issues open for the CIT(E)'s consideration.

The Tribunal held that the assessee failed to establish a sufficient and reasonable cause for the substantial delay of 285 days in filing the appeal. While the assessee cited involvement in various proceedings and the time required for collecting evidence, these reasons were neither substantiated with cogent material nor demonstrated any circumstance preventing timely filing. Furthermore, the assessee's conduct before the Tribunal, including repeated non-appearance on scheduled hearing dates (18.08.2026, 21.08.2026, and 27.08.2026) without any explanation or request for adjournment, did not support a plea of bona fide and diligent prosecution. Consequently, the delay was not condoned, and the appeal was dismissed as barred by limitation. The Tribunal found no infirmity in the orders of the lower authorities, as the grounds raised remained unsupported by evidence or submissions, and the factual findings of the AO and CIT(A) were uncontroverted.

The Tribunal held that the notice issued under section 148 of the Income Tax Act, 1961, for Assessment Year 2015-16 on 04.04.2022 is indeed barred by limitation. The Tribunal noted that the law is well-settled that any notice under section 148 for AY 2015-16 issued on or after 01.04.2022 is time-barred. The Tribunal referred to the amended provisions of section 149(1) of the Act, effective from 01.04.2021, and the prior provisions. It was observed that the notice in this case was issued after the expiry of the permissible period under the law. Consequently, the reassessment proceedings and the reassessment order dated 27.02.2024 were held to be bad in law and liable to be quashed. The Tribunal respectfully followed judicial precedents, including its own coordinate bench decision in Sivaram Lakshmi v. ITO, which relied on the Hon'ble Supreme Court's decision in Rajiv Bansal. The legal ground raised by the assessee was allowed, and the consequent assessment order was quashed.

The Tribunal, in order to advance the cause of substantial justice, decided to grant one more opportunity to the assessee. The delay of 70 days in filing the appeal before the CIT(A) was condoned, as the assessee had set out the reasons for the delay in Form No. 35, which the Tribunal considered sufficient cause. Consequently, the impugned order of the CIT(A) was set aside. The matter was restored to the file of the CIT(A) with a direction to adjudicate the appeal afresh on its merits, in accordance with law, after affording a reasonable opportunity of being heard to the assessee. The assessee was also directed to cooperate fully and furnish necessary written submissions and relevant evidence in a timely manner. The appeal was allowed for statistical purposes.

The Tribunal held that the assessee failed to demonstrate any sufficient or reasonable cause for the delay in filing the appeal before the CIT(Appeals) or for the repeated non-appearance before the ITAT. The assessee was afforded sufficient and repeated opportunities to prosecute the appeal before the ITAT, but no one appeared on behalf of the assessee, nor was any application filed explaining the absence or seeking adjournment. Furthermore, even at the stage of filing the appeal before the ITAT, no affidavit or other material was furnished explaining the delay of one day. The Tribunal concluded that the continued absence of the assessee despite repeated opportunities reflected a lack of due diligence. Therefore, the delay in filing the appeals before both the CIT(Appeals) and the ITAT was not condoned, and consequently, the assessee's appeal was dismissed in limine. The Tribunal did not decide on the merits of the assessment order.

The Tribunal held that to meet the ends of justice, the assessee should be given another opportunity. It was noted that the assessee had filed a condonation of delay in Form 35 itself, which the Tribunal considered sufficient cause. Consequently, the impugned order of the CIT(Appeals) was set aside. The matter was restored to the file of the CIT(Appeals) with a direction to adjudicate the appeal de novo on merits, after providing a reasonable opportunity to the assessee. The assessee was also directed to be diligent and file written submissions and relevant documents. The appeal was allowed for statistical purposes.

The Tribunal held that the Ld. CIT(A) erred by adjudicating an issue relating to penalty under section 271A of the Act, which pertains to failure to keep and maintain books of account, when the appeal before him concerned a penalty under section 270A, dealing with under-reporting and misreporting of income. These provisions operate in different fields with distinct requirements. Consequently, the CIT(A)'s order did not effectively adjudicate the appeal against the section 270A penalty. Furthermore, the Tribunal noted that the quantum addition of Rs.70,24,014/-, which formed the basis for the section 270A penalty, had been set aside by the CIT(A) in quantum proceedings and restored to the AO for fresh adjudication. Since the ultimate quantum of income was yet to be determined, sustaining the impugned penalty on the original determination was inappropriate. Therefore, in the interest of justice, the Tribunal set aside the impugned order of the Ld. CIT(A) and restored the issue relating to penalty under section 270A to the file of the AO for fresh adjudication after the consequential quantum proceedings are completed. The AO was directed to examine the applicability of section 270A afresh based on the ultimately determined income, providing the assessee with an opportunity of being heard. The Tribunal explicitly stated that it had not expressed any opinion on the merits of the penalty and left all contentions open for the AO to consider.

The Tribunal held that the assessee's contention regarding the communications being sent to an incorrect email ID, leading to a lack of effective opportunity, had force. The Tribunal emphasized that the requirement of granting a reasonable and effective opportunity of hearing cannot be treated as a mere procedural formality and that the assessee must have a real and meaningful opportunity to present its case. Since the rejection of the applications was substantially influenced by the assessee's failure to furnish documents, and the assessee claimed this non-compliance was not deliberate but due to incorrect email communication, the Tribunal found merit in reconsidering the matter. The Tribunal set aside the impugned order and restored the applications to the file of the CIT(E) for fresh adjudication, directing the CIT(E) to issue proper notice at the correct email address, afford an effective opportunity, and decide afresh. The assessee was directed to update its email ID and cooperate. The Tribunal explicitly stated it was not expressing any opinion on the merits of the applications.

The Tribunal held that the rejection of the applications for registration under Section 12AB and approval under Section 80G, based on unreadable or corrupted documents and alleged non-compliance with notices, was not sustainable. The Tribunal found that there was no adjudication on the substantive aspects of the applications, such as the objects of the assessee, genuineness of its activities, and other relevant requirements. The Tribunal emphasized that where documents are unreadable or corrupted, the applicant should be given a reasonable and effective opportunity to furnish them afresh in a proper and verifiable form before an adverse order is passed. Citing the principles of natural justice, the Tribunal stated that the assessee must be afforded an adequate and meaningful opportunity to furnish requisite documents and present its case. Consequently, the impugned orders were set aside, and the applications were restored to the file of the CIT(E) for fresh consideration. The CIT(E) was directed to provide the assessee an adequate opportunity to be heard and to resubmit documents, and thereafter pass speaking orders. The Tribunal explicitly stated that it had not expressed any opinion on the merits of the assessee's claims for registration or approval.

The Tribunal held that the rejection of the applications for registration under Section 12AB and approval under Section 80G, based on unreadable or corrupted documents and alleged non-compliance with notices, was not sustainable. The Tribunal found that there was no adjudication on the substantive aspects of the applications, such as the objects of the assessee, genuineness of its activities, and other relevant requirements. The Tribunal emphasized that where documents are unreadable or corrupted, the applicant should be given a reasonable and effective opportunity to furnish them afresh in a proper and verifiable form before an adverse order is passed. Citing the principles of natural justice, the Tribunal stated that the assessee must be afforded an adequate and meaningful opportunity to furnish requisite documents and present its case. Consequently, the impugned orders were set aside, and the applications were restored to the file of the CIT(E) for fresh consideration. The CIT(E) was directed to provide the assessee an adequate opportunity to be heard and to resubmit documents, and thereafter pass speaking orders. The Tribunal explicitly stated that it had not expressed any opinion on the merits of the assessee's claims for registration or approval.

The Tribunal noted that the assessee had been granted 80G approval in 2015 and renewed in 2022. The assessee's contention that religious clauses were deleted from the Trust Deed on 04.08.2015, and that the current objects are charitable, required proper examination. The Tribunal found merit in the assessee's submission that the impugned order did not clearly identify the specific clause of the Trust Deed or the particular activity considered religious. The Tribunal also noted the assessee's claim of filing an online response on 16.03.2026, which was allegedly not considered by the CIT(E). Considering these points, the Tribunal set aside the impugned order and restored the matter to the CIT(E) for fresh adjudication. The CIT(E) was directed to provide an effective opportunity of hearing, specifically identify any religious clauses or activities, verify the online response, and pass a fresh speaking order. The earlier approval did not preclude fresh examination, but the assessee's contention of no change in objects/activities was a material fact. No opinion was expressed on the merits of the eligibility.

The Tribunal condoned the delay of 89 days in filing the appeal, finding sufficient cause and no deliberate or mala fide intent. Regarding the primary claim for exemption under Section 11, the Tribunal noted it was not pressed by the assessee. However, concerning the alternate ground (H), the Tribunal held that even if the assessee is not eligible for exemption under Section 11 and is assessed as an AOP, the gross receipts cannot be treated as taxable income. The real or net income, after allowing expenditure incurred wholly and exclusively for carrying on its activities, should be computed. The Tribunal followed its co-ordinate bench's decision in the assessee's own case for AY 2018-19, restoring the issue to the Jurisdictional Assessing Officer (JAO). The JAO is directed to verify the expenditure incurred by the assessee in connection with its educational activities and allow legally admissible expenditure. The taxable income is to be determined thereafter, giving the assessee an opportunity of being heard. The Tribunal clarified that this adjudication is confined to the alternate ground and does not decide the primary claim for exemption under Section 11.

The Tribunal dismissed the Revenue's appeal. On the first issue, regarding the estimation of business income, the Tribunal found the CIT(A)'s approach of restricting the net profit rate to 3% to be balanced and reasonable. The Tribunal noted that the CIT(A) considered the nature of the business, scale of operations, historical profit margins, and verification deficiencies. The Revenue failed to provide material to justify the AO's 10% estimation. Therefore, the Tribunal upheld the CIT(A)'s direction to recompute business income at 3% of gross sales. On the second issue, concerning the deletion of the addition under Section 69A, the Tribunal agreed with the CIT(A). It acknowledged that while reconciliations had inconsistencies, the deposits broadly stood linked with business receipts and cash rotation. The Tribunal reasoned that since business income was already estimated, a separate addition for cash deposits arising from the same business stream, without establishing an independent unexplained source, would lead to double taxation. The Revenue did not provide independent material to prove the deposits arose from a source other than the disclosed business. Thus, the deletion of the addition under Section 69A read with Section 115BBE was upheld.

The Tribunal allowed the appeals on legal grounds. The primary issue was the validity of the notice issued under section 148A(b) of the Income Tax Act, 1961. The Tribunal noted that the notice dated March 1, 2023, required the assessee to respond by March 8, 2023. Even after excluding the date of issuance and the last date for response, the assessee was provided with only five clear days, which is less than the mandatory minimum of seven clear days stipulated in section 148A(b). The Tribunal relied on judicial precedents, including the Supreme Court's decision in Pioneer Motors (Private) Ltd. and decisions of co-ordinate benches, which held that 'not less than seven days' implies a minimum of seven clear days, excluding both the date of issuance and the date of compliance. Therefore, the notice issued under section 148A(b) was found to be contrary to the mandatory requirements of the Act. Consequently, the reassessment proceedings initiated pursuant to this defective notice were quashed as they could not survive. The penalty proceedings and the impugned orders arising therefrom were also quashed as a consequential step. The additional grounds raised by the assessee were allowed.

The Tribunal allowed the appeals on legal grounds. The primary issue was the validity of the notice issued under section 148A(b) of the Income Tax Act, 1961. The Tribunal noted that the notice dated March 1, 2023, required the assessee to respond by March 8, 2023. Even after excluding the date of issuance and the last date for response, the assessee was provided with only five clear days, which is less than the mandatory minimum of seven clear days stipulated in section 148A(b). The Tribunal relied on judicial precedents, including the Supreme Court's decision in Pioneer Motors (Private) Ltd. and decisions of co-ordinate benches, which held that 'not less than seven days' implies a minimum of seven clear days, excluding both the date of issuance and the date of compliance. Therefore, the notice issued under section 148A(b) was found to be contrary to the mandatory requirements of the Act. Consequently, the reassessment proceedings initiated pursuant to this defective notice were quashed as they could not survive. The penalty proceedings and the impugned orders arising therefrom were also quashed as a consequential step. The additional grounds raised by the assessee were allowed.

The Tribunal condoned the delay of 110 days in filing the appeal, finding that the assessee had provided a reasonable and sufficient cause, and a liberal interpretation of 'sufficient cause' was warranted to advance substantial justice. On the merits, the Tribunal held that the addition of Rs.1,03,22,956/- was not sustainable. The Tribunal reasoned that the AO had accepted the books of account for determining the opening cash balance and was therefore required to examine subsequent cash inflows and corresponding business transactions. Since the AO had not rejected the books of account or brought on record material to establish that the sales transactions were fictitious or that the deposits represented amounts from undisclosed sources, the explanation furnished by the assessee could not be rejected solely because the deposits were made in SBNs during demonetization. The Tribunal relied on the principles laid down in the case of TASMAC, emphasizing that the nature and source of deposits should be explained with reference to regular business transactions. The Tribunal found that the assessee had satisfactorily explained the source of deposits as arising from cash sales and realization of trade receivables, duly recorded in the books. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition of Rs.1,03,22,956/-. The alternative contention regarding the enhanced rate of tax became academic and was left undecided.

The Tribunal held that Ground No. 2, concerning the validity of the reassessment proceedings, was decisive. The Tribunal found that the notice under Section 148 dated 31.03.2021 was issued after obtaining approval from the Principal Commissioner of Income Tax. However, in light of the period covered by TOLA and the Supreme Court's decision in Union of India v. Rajeev Bansal, the competent authority for granting sanction for a notice issued on 31.03.2021 for AY 2015-16 (where the four-year period ended on 31.03.2020) should have been the Joint Commissioner as per Section 151(2) of the old regime. The Tribunal relied on the judgments of the Bombay High Court in Prabhakar Nerulkar and Ghanshyam K. Khabrani, and the Delhi High Court in CIT v. SPL's Siddhartha Ltd., which emphasized that statutory powers must be exercised by the specified authority. Since the approval was granted by the Principal Commissioner, a superior authority, and not the Joint Commissioner, the statutory requirement of Section 151(2) was not complied with. Consequently, the notice under Section 148 was held to be invalid, and the reassessment proceedings initiated pursuant thereto were quashed. As a result, the reassessment order passed under Section 147 was also set aside. The Tribunal left the other grounds relating to the merits of the addition under Section 50C and the procedural objection under Section 144B undecided as they became academic.

The Tribunal held that the AO failed to establish the factual foundation for the alleged purchases and the statutory foundation for treating the entire purchase value as unexplained money under Section 69A. The Tribunal noted that the assessee denied the purchases, provided its purchase register, financial statements, and bank statements, and stated it had no dealings with LRIPL or its associates. The name in the IVMS database was materially different. The AO's reliance on the IVMS data, without independent corroboration, consignment notes, transport records, or delivery documents, was insufficient. The Tribunal found that the AO did not demonstrate that the investigation into LRIPL resulted in independent evidence proving the alleged purchases by the assessee. Similarly, low returned income in other years does not establish a specific purchase transaction. The Tribunal clarified that Section 69A applies to money, bullion, jewellery, or other valuable articles found with the assessee and not recorded in books, where the nature and source are unexplained. The addition made represented alleged purchase value, not unexplained money or assets owned by the assessee outside its books. The conditions for invoking Section 69A were not demonstrated. Therefore, the addition of Rs. 34,13,862/- made under Section 69A was deleted. The Tribunal refrained from deciding the legal issues regarding reassessment proceedings as the addition failed on merits.

The Tribunal held that the AO failed to establish the factual foundation for the alleged purchases and the statutory foundation for treating the entire purchase value as unexplained money under Section 69A. The Tribunal noted that the assessee denied the purchases, provided its purchase register, financial statements, and bank statements, and stated it had no dealings with LRIPL or its associates. The name in the IVMS database was materially different. The AO's reliance on the IVMS data, without independent corroboration, consignment notes, transport records, or delivery documents, was insufficient. The Tribunal found that the AO did not demonstrate that the investigation into LRIPL resulted in independent evidence proving the alleged purchases by the assessee. Similarly, low returned income in other years does not establish a specific purchase transaction. The Tribunal clarified that Section 69A applies to money, bullion, jewellery, or other valuable articles found with the assessee and not recorded in books, where the nature and source are unexplained. The addition made represented alleged purchase value, not unexplained money or assets owned by the assessee outside its books. The conditions for invoking Section 69A were not demonstrated. Therefore, the addition of Rs. 34,13,862/- made under Section 69A was deleted. The Tribunal refrained from deciding the legal issues regarding reassessment proceedings as the addition failed on merits.