ITAT Delhi Judgments — August 2025

The Tribunal held that disallowances under Section 14A were not automatic and required AO satisfaction, leading to deletion in certain cases. Brokerage fees were allowed as revenue expenditure. Deductions for car parking rentals were allowed based on prior rulings. Settlement fees for contract termination were deemed revenue expenditure, not capital. TDS credit was directed to be given as per CIT(A) orders. Appeals of the revenue were dismissed, and appeals of the assessee were allowed.

The Tribunal held that for the share capital additions, the assessee had provided sufficient documents to establish the identity, creditworthiness, and genuineness of the transactions, and the CIT(A) was justified in deleting the addition. However, for two of the three sundry creditors, the assessee failed to establish the genuineness of the transaction and the nature/source of credit, hence the deletion by the CIT(A) was partly set aside.

The Tribunal held that the approval granted under Section 153D must reflect an independent application of mind by the approving authority for each assessment year and each assessee, rather than being a mechanical or consolidated exercise. Relying on High Court and ITAT judgments, the Tribunal found that the approval in this case was granted in a mechanical way, covering multiple assessees and assessment years through a single letter, and thus lacked the requisite application of mind. Consequently, the approval was vitiated, and the assessment orders were deemed liable to be quashed.

The Tribunal held that the disallowance under Section 14A concerning dividend income was not automatic and required AO's satisfaction. The disallowance of brokerage fees was deleted as it was incurred in the ordinary course of business. The denial of deduction u/s 80IAB on car parking rentals was deleted. The settlement fees paid for termination of service contracts were held to be revenue expenditure. TDS credits were directed to be granted fully.

The Tribunal held that Section 14A disallowances require AO's satisfaction and cannot be automatic. Brokerage fees were allowed as incurred in the ordinary course of business. Settlement fees for contract terminations were allowed as revenue expenditure driven by commercial expediency. Various other issues concerning TDS credit, interest, and penalty were also decided.

The Tribunal held that the CIT(Exemptions) did not specifically point out what information was lacking and should have provided a clear opportunity for the assessee to explain. Therefore, the order of the CIT(Exemptions) was set aside.

The Tribunal upheld the Ld. CIT(A)'s decision to delete the additions. It relied on its own prior decision in the assessee's individual case involving the same scrip, where similar additions were deleted. The Tribunal noted that the assessee fulfilled the conditions for Section 10(38) exemption, and the share transactions, conducted on a regulated stock exchange with STT payment and proper documentation, could not be treated as bogus, especially in the absence of adverse findings from regulatory bodies like SEBI.

The Tribunal decided on various grounds. It dismissed the Revenue's appeal regarding depreciation on UPS, software expenses, and 80JJAA deduction, while allowing the assessee's appeal on prior period expenses, commercial vehicle depreciation, and disallowance under Section 14A. Some grounds were decided based on preceding decisions in the assessee's own case.

The Tribunal held that the approval under section 153D of the Act was granted in a mechanical manner, without due application of mind and not independently for each assessment year as mandated by the provisions. Citing various judicial precedents, the Tribunal found the approval to be invalid.

The Tribunal held that notices issued under Section 148 on or after 01.04.2021 for reopening the assessment for AY 2015-16 are barred by limitation. Following the decisions of the Hon'ble Supreme Court and jurisdictional High Court, the reassessment orders were quashed as bad in law and void ab initio.

The Tribunal held that the assessment order passed under Section 143(3) ought to have been passed under Section 153C of the Act, given the facts related to the search and seized material. Therefore, the assessment order was quashed.

The Tribunal upheld the relief granted by the CIT(A) to the assessee. The addition of 2% of the cash deposits as income was deemed justified, considering the nature of transactions and the low profit ratio of the business. The Revenue's appeal was dismissed.

The Tribunal held that the Assessing Officer did not have valid jurisdiction as required by Section 120 of the Income Tax Act, and no proper order or notification empowering the Addl. CIT to act as Assessing Officer was produced by the revenue. Therefore, the assessment order was void ab initio, illegal, and without jurisdiction.

The Tribunal held that disallowance under Section 14A cannot be automatic and requires AO's satisfaction. Brokerage fees paid in the ordinary course of business were allowed. Settlement fees for termination of service contracts were considered revenue expenditure. The assessee was eligible for deduction under Section 80IAB. Short credit of TDS was directed to be rectified.

The Tribunal held that additions made under section 153A of the Income Tax Act must be based on incriminating material found during the search of the assessee's premises. Since no such material was found, and the evidence used was from searches of third parties or statements recorded post-search, the additions were not sustainable. The AO should have followed the procedure under section 153C for material found from third parties.

The Tribunal held that for AY 2004-05, the assessee had provided sufficient documents to establish the identity, creditworthiness, and genuineness of share applicants, and the CIT(A)'s deletion of the addition was justified. For AY 2006-07, the Tribunal partially allowed the revenue's appeal, upholding the addition related to two sundry creditors but deleting the addition related to one large creditor. The Tribunal also dismissed additions related to share discrepancies due to typographical errors.

The Tribunal decided various grounds of appeal concerning depreciation on UPS, software expenses, research and development expenses, deduction under Section 80JJAA, prior period expenses, depreciation on energy-saving devices and commercial vehicles, provision for warranty, and disallowance under Section 14A. The Tribunal affirmed the CIT(A)'s actions in most cases, dismissing some Revenue grounds and allowing others.

The Tribunal found that the CIT(Appeals) dismissed the appeals without considering the merits. Therefore, the appeals were restored to the CIT(A) for fresh adjudication after providing the assessee with an adequate opportunity to be heard.

The Tribunal held that the approval granted by the Additional Commissioner of Income Tax under Section 153D was mechanical and not in consonance with the statutory requirements, as it was a consolidated approval for multiple assessment years for one assessee. Consequently, the assessment orders were quashed.

The Tribunal observed that the assessee's submissions for condonation of delay were vague and lacked evidence. The assessee was aware of the proceedings and had represented before the CIT(Appeals) prior to the order being passed, yet failed to properly explain the significant delay.

The Tribunal condoned the delay, finding reasonable cause due to the CIT(Appeals) disposing of the appeal ex parte without proper opportunity. The appeal was restored to the CIT(Appeals) for fresh disposal on merits.

The Tribunal held that the violation of Section 13(1) by extending benefits to specified persons cannot be a reason to deny the whole exemptions under Section 11/12. The denial should be restricted to the extent of the violation. The CIT(A)'s order to restrict the disallowance was upheld.

The Income Tax Appellate Tribunal found that the approval granted by the Pr.CIT for initiating reassessment proceedings under Section 148 was mechanical and lacked independent application of mind, merely noting 'Yes, as per O/s.'. Citing Supreme Court and High Court precedents, the Tribunal held that such mechanical approval renders the reassessment proceedings invalid. Consequently, the reassessment proceedings initiated under Section 147 and the resulting re-assessment orders for all assessment years (2012-13 to 2015-16) were quashed.

The Tribunal restored the matter back to the file of the CIT(E) for fresh adjudication. The assessee was granted an opportunity to present necessary evidences to establish the genuineness of its activities.

The Tribunal noted that both the lower authorities decided the case ex-parte and not on merits. Therefore, the Tribunal set aside the impugned order and remitted the matter back to the AO for deciding the case afresh after providing adequate opportunity of being heard to the assessee.

The Tribunal held that the assessee had a reasonable cause for not maintaining books of account, as they were guided by ICAI guidelines for calculating F&O turnover. Consequently, the penalty levied by the AO was deemed uncalled for and deleted.

The Tribunal restored the matter back to the CIT(E) for fresh adjudication on merits. The assessee was directed to provide all necessary evidences to establish the genuineness of its activities.

The Tribunal held that the initiation of proceedings during the liquidation process and moratorium period is illegal and unsustainable as per the Insolvency and Bankruptcy Code, 2016. The assessment order was considered void ab initio and quashed.

The Tribunal held that initiation of proceedings during the liquidation period and under moratorium was illegal and unsustainable. Relying on the Supreme Court judgment in CIT vs. Moser Baer India Limited, the assessment order was deemed void ab initio and quashed.

The Tribunal held that the assessment order passed under Section 143(3) ought to have been passed under Section 153C of the Act, as the satisfaction for initiation of proceedings under Section 153C was recorded on 30.12.2022, which is deemed the date of search. Therefore, the assessment order was quashed.

The Tribunal held that the computation mechanism under Rule 8D(2) cannot be applied for calculating book profits under Section 115JB. The disallowance of expenses under Section 14A cannot exceed the exempt income. Therefore, the disallowance was restricted to the dividend income earned.

The Tribunal held that the assessee had correctly deducted TDS at the rate specified in the lower deduction certificate. They noted that a similar case involving the assessee's father had also been decided in favor of the assessee, and differential treatment was not warranted.

The Tribunal restored the appeal to the file of the CIT(A) for deciding the appeal on merits after providing the assessee an adequate opportunity to explain the delay.

The Income Tax Appellate Tribunal (ITAT) decided that the appeals should be restored to the file of the CIT(Appeals) for fresh adjudication. The CIT(Appeals) is directed to provide adequate opportunity to the assessee, and if the assessee fails to respond, then to proceed to dispose of the appeals on their merits.

The Tribunal observed that the appeals were dismissed without going into the merits. Therefore, the Tribunal restored the appeals to the file of the CIT(A) for fresh adjudication after providing the assessee with an adequate opportunity to present their case.

The Tribunal restored the appeal to the file of the CIT(A) to decide afresh after providing adequate opportunity to the legal heirs, noting that the original appeal was dismissed ex parte.

The Tribunal held that in the interest of natural justice, the assessee should be given one more opportunity to submit details of its charitable activities. The order of the CIT(E) was set aside, and the matter was restored for fresh adjudication.

The tribunal noted that both the Assessing Officer and CIT(A) decided the cases ex-parte without addressing the issues on merits. Consequently, the tribunal set aside the impugned orders for both assessment years and remitted the matters back to the AO for fresh consideration, ensuring adequate opportunity of being heard to the assessee.

The Tribunal noted that the assessee had received relief through rectification orders and no objection was raised by the Revenue for withdrawal.

The Tribunal found that the Pr.CIT granted approval for the reassessment mechanically by simply recording 'Yes, as per O/s.' or similar non-reasoned endorsements, without proper application of mind, for both the individual and multiple other cases. Relying on Supreme Court and High Court precedents, the Tribunal held that such mechanical approval under Section 151 renders the reassessment proceedings invalid. Consequently, the reassessment proceedings initiated under Section 147 and the subsequent assessment orders were quashed for all relevant assessment years (2012-13, 2013-14, 2014-15 & 2015-16).

The Tribunal noted that the lower authorities decided the cases ex-parte without addressing the merits. Considering the appeals were not decided on merit and the assessee was denied a proper hearing, the Tribunal set aside the impugned orders.

The ITAT held that the assessee had adequately demonstrated his role as a property broker and that the impounded documents related to transactions of third parties. It noted that the tax authorities possess sufficient powers to summon individuals or obtain original documents if genuineness is doubted, and the burden of proof cannot be stretched to an impossible extent for the assessee. Therefore, additions based on general assumptions without further inquiry were deemed unsustainable, and the impugned additions were deleted.

The Tribunal held that the reopening of assessment after four years from the end of the assessment year requires the Assessing Officer to prove that income escaped assessment due to the assessee's failure to disclose material facts. In this case, the reasons for reopening indicated a mere change of opinion by the AO and not any new information.