ITAT Delhi Judgments — July 2025

The Tribunal accepted the Ld. AR's contention that the actual tax effect of the CIT(A)'s order was Rs. 50,52,498/-, which is below the prescribed monetary limit of Rs. 60 lakhs for filing appeals before the Hon'ble ITAT, as per CBDT Circulars. Therefore, the Revenue's appeal was dismissed as not maintainable.

The Tribunal held that the approval under Section 153D of the Act was not granted for each assessment year, violating the provisions of the Act. This rendered the approval mechanical and without due application of mind, making the assumption of jurisdiction vitiated.

The Tribunal held that the assessee consistently followed its accounting method and incurred the expenditure wholly and exclusively for business purposes. The Assessing Officer's ad-hoc disallowance of 90% of the expenditure was considered arbitrary, especially since he himself allowed 10%.

The Tribunal held that CSR expenses incurred prior to April 1, 2015, are allowable if they result in overall welfare of society, referencing prior judicial precedents. Prior period expenses were restored to the AO for verification of their crystallization and non-deduction in earlier years. Other grounds were decided based on previous tribunal orders and judicial pronouncements, leading to mixed outcomes for the assessee and the Revenue.

The Tribunal largely decided in favor of the assessee on the issue of CSR expenses, allowing deductions based on prior rulings and the fact that the expenditure was incurred before the relevant amendment to Section 37(1). Prior period expenses were restored to the AO for verification. The Tribunal also allowed deductions for grants-in-aid and certain revenue recognition issues. However, grounds related to revenue recognition on accrual basis and additions on account of premium received on bonds were dismissed. Disallowances under Section 14A were restricted to the exempt income earned.

The Tribunal, proceeding ex-parte due to the assessee's repeated adjournments and non-appearance, found the explanation for the 157-day delay in filing the appeals to be unacceptable. Consequently, all appeals preferred by the assessee were dismissed as being barred by limitation.

The Tribunal held that the addition of Rs.101 crores over and above the special auditor's quantification was erroneous and led to double addition. The Tribunal also found that the estimation of profit at 37.72% by the lower authorities was not properly substantiated. For some additions, a profit rate of 20% was deemed appropriate. Several grounds raised by the assessee were allowed, and some grounds raised by the Revenue were dismissed.

The Tribunal held that the Assessing Officer erred by making adjustments under Section 143(1)(a) for a highly debatable issue, especially when the Supreme Court decision in Checkmate Services Pvt. Ltd. was not yet available. Such issues should have been dealt with under Section 143(3).

The Tribunal held that the final assessment order was passed beyond the prescribed time limit under section 144C(13) of the Act. Relying on various judicial pronouncements, the Tribunal concluded that the delay in passing the order made it invalid and liable to be quashed.

The Income Tax Appellate Tribunal (ITAT) condoned the delay in filing the appeals before the CIT(A), holding that non-receipt of an ex-parte penalty order constitutes sufficient cause. Citing the Supreme Court's view on liberal interpretation for condoning delays, the ITAT remanded the matters to the Ld. CIT(A) for fresh adjudication on merits.

The Tribunal held that since the appeals against the substantive additions were dismissed, there was no concealed income on which penalty could be levied. The appeals were dismissed as the penalty deletion by the Ld. CIT(A) was upheld.

The tribunal held that the CIT(A) decided the appeal on an issue that was not raised by the assessee in their grounds of appeal. Therefore, the appeal is restored back to the CIT(A) to adjudicate the grounds raised by the assessee.

The Tribunal noted that the issue was settled by the Revenue via a rectification order under Section 154 of the Act. The assessee's request to withdraw the ground of appeal was allowed, and accordingly, the grounds were dismissed. Other grounds were also dismissed.

The Tribunal acknowledged the possibility of communication gaps and, in the larger interest of justice, restored the appeal to the Assessing Officer for fresh adjudication. The assessee was granted three effective opportunities for hearing at their own risk.

The Tribunal remanded the issues of notional interest on receivables from AEs and provision for warranty to the TPO/AO for fresh examination. It held that disallowance under Section 14A cannot exceed the actual exempt income and directed the AO to restrict it to Rs.29,447/- for AY 2017-18 and Rs.40,243/- for AY 2018-19. The listing fees for Non-Convertible Debentures were found to be allowable, reversing the disallowance. The disallowance under Section 36(1)(iii) for diversion of funds was also remanded to the AO for fresh consideration, while the disallowance under Section 40(a)(ia) for AY 2018-19 was sustained.

The Tribunal held that the tax authorities did not properly analyze the assessee's evidence, such as stock-in-trade and VAT returns. Since the assessee offered 15% of cash sales as unexplained, and the tax authorities did not dispute the books of account or stock, they should have accepted this offer rather than making an ad-hoc disallowance of 30%.

The Tribunal found that no search was initiated on the assessee, and no panchnama was drawn in its name, nor was any incriminating material found related to it. Following previous judgments, the Tribunal held that the notice issued under Section 153A was without jurisdiction and bad in law, rendering the assessment order and the impugned appellate order void ab initio.

The Tribunal held that the CIT(A) had not dealt with the matter on merits as required by Section 250(6) of the Act. Therefore, the matter was remitted back to the CIT(A) for a fresh decision on merits after providing the assessee with an opportunity of being heard.

The Tribunal held that the appeals against the quantum additions in the assessee's own case for the relevant assessment years were dismissed by a Co-ordinate Bench. As there were no concealed income additions, the penalty under Section 271(1)(c) was not sustainable. Therefore, the deletion of penalty by the Ld. CIT(A) was upheld.

The Tribunal held that since the basis of the penalty levy under Section 271(1)(c) is under settlement, it is expedient to delete the penalty. The appeal is allowed subject to conditions related to the settlement of the main dispute.

The Tribunal held that the initiation of proceedings under Section 153A is permissible only if a search under Section 132 or requisition under Section 132A has been initiated. In this case, the Revenue failed to conclusively prove that a search was initiated on the assessee, and in light of a previous decision in the assessee's own case, the assessments under Section 153A were quashed.

The Tribunal held that the Assessing Officer erred in disallowing the ESI/PF contribution under Section 143(1) as the issue was debatable at the time of intimation and was later settled by the Supreme Court. The disallowance was therefore set aside.

The Tribunal held that the proceedings under Section 153A of the Act were not justified as no search was initiated on the assessee, nor was any panchnama drawn in its name. Relying on a previous decision in the assessee's own case, the Tribunal quashed the assessments.

The tribunal observed that the Assessing Officer (AO), in the original ex-parte assessment order, explicitly noted that the indexed cost of acquisition was 'rectifiable on actual basis.' The tribunal held that this admission within the assessment order itself provided scope for revision/rectification under Section 154 of the Income Tax Act. Consequently, the tribunal set aside the impugned order and remitted the matter back to the AO for a fresh assessment (de novo) to determine the actual income, ensuring the assessee is given a proper opportunity of being heard.

The tribunal held that the CIT(A) had passed the order ex-parte without providing the assessee an opportunity of being heard, thus violating principles of natural justice. Therefore, the matter was remanded back to the CIT(A) for a fresh decision.

The Tribunal directed the deletion of the Rs.101 crores on-money addition made by the AO over and above the special auditor's quantification to avoid double addition. It ruled that the profit rate on on-money, unexplained cash credits, loans, and investments should be assessed at a lumpsum 20% or the declared book results, whichever is higher, except for AY 2012-13. Disallowances under Section 40(a)(ia) and Section 40A(3) were deleted, and unexplained expenditures were also deleted as being covered by the allowed expenditure. The Revenue's appeals against the deletion of Section 68 additions and allowance of telescoping benefit were dismissed.

The Tribunal held that communication gaps in virtual hearings could not be ruled out, and there was a lack of effective compliance with Section 250(6) of the Act in the lower appellate order. Therefore, the matter was set aside and restored to the CIT(A)/NFAC for a fresh adjudication.

The Tribunal found that the Ld. CIT(E) had not decided the application on merits and restored the matter for fresh adjudication. The assessee was directed to provide necessary evidence for its activities.

The Tribunal noted that the assessee has opted for the Vivad se Vishwas Scheme and the Ld. CIT-DR raised no objection to the withdrawal. Accordingly, the appeal was dismissed as withdrawn.

The Tribunal found merit in the assessee's contentions regarding the amalgamation, holding that income of the amalgamated entity cannot be added in the hands of the assessee. Several grounds related to additions for purchases, suppression of production, job work, and certain expenses were also allowed.

The Tribunal held that since the quantum appeals against additions were already dismissed by a Co-ordinate Bench, there was no concealed income on which penalty could be levied. Therefore, the deletion of penalty by the Ld. CIT(A) was upheld.

The Tribunal found that the CIT(A) had correctly considered the evidence presented by the assessee, including sales bills, financial statements, and VAT returns, and noted that the AO had not conducted sufficient inquiry. The Tribunal also referenced coordinate bench decisions supporting the assessee.

The Tribunal noted that the proceeding initiated under Section 271(1)(c) of the Act culminated in an order of penalty that had become infructuous. Therefore, the appeal was dismissed as infructuous.

The Tribunal held that the assessee was not provided a proper opportunity of being heard and set aside the order of the CIT(E). The issue was remitted back to the CIT(E) for fresh consideration.

The CIT(A) deleted the addition, considering the repayment and evidence of TDS deducted by the prospective purchaser. The Tribunal upheld the CIT(A)'s order, finding that the identity and creditworthiness were not disputed and the transaction between related parties was substantiated by documentary evidence.

The Tribunal noted that the appeal suffered from low tax effect, as per CBDT Circular No. 9/2024. Liberty was granted to the Revenue for revival if the issues fall under specified exceptions.

The Tribunal acknowledged the possibility of communication gaps and, in the interest of justice, decided to restore the appeals back to the CIT(E) for fresh adjudication. The assessee is required to present their case effectively.

The Tribunal held that for notices issued under Section 148 beyond three years, approval must be obtained from the Principal Chief Commissioner (Pr. CCIT) as per Section 151(ii). Since the approval for the AY 2016-17 notice was obtained from the Pr. CIT, it was deemed an unauthorized approval, rendering the notice and subsequent assessment order invalid. The same reasoning was applied to AY 2017-18.

The Tribunal noted that the assessee's explanation for the delay in filing the appeals was not acceptable. Consequently, the Tribunal dismissed all the appeals filed by the assessee as barred by limitation.

The Tribunal noted that the assessee was absent for the hearing and proceeded ex-parte. The explanation provided by the assessee for the delay in filing the appeals was not found acceptable by the Tribunal.

The Tribunal heard the Ld. DR and perused the explanation of the assessee for the delay. The Tribunal found the explanation unacceptable and dismissed all the appeals as barred by limitation.

The Tribunal held that for AY 2012-13, the amendment to Section 92B is not applicable, hence no adjustment for outstanding receivables. For AY 2014-15 and 2016-17, since no interest was charged from non-AEs on delayed payments, no notional interest can be added for AEs. For corporate guarantee, the Tribunal directed the AO to apply a 1% rate.

The Tribunal upheld the decision of the CIT(A) to restrict the addition to 10% of the total addition on account of suppressed business receipts. This decision was based on the findings of a Coordinate Bench in similar cases, which found the 10% net profit ratio to be a rational basis derived from seized materials.

The Tribunal held that the reassessment order was passed in violation of mandatory provisions of law, specifically the non-issuance of a notice under Section 143(2) after filing of the return in response to a notice under Section 148. Following the Supreme Court's decision in Hotel Blue Moon, the reassessment order was deemed a nullity.

The Tribunal held that the approval under Section 153D of the Act was not granted for each assessment year separately and was issued in a mechanical manner without due application of mind, thus violating the provisions of the Act.