ITAT Delhi Judgments — December 2025

The Tribunal, citing the Supreme Court's decision in CIT vs. Prannoy Roy, held that interest under Section 234A is compensatory and should be charged only until the date of payment of self-assessment tax, not until the date of filing the return. Since the assessee had paid the self-assessment tax, including interest, before the extended due date for filing the return, the additional interest of Rs. 3,39,730/- charged by the CPC for the period up to the return filing date was deleted.

The Tribunal observed that the Tax Evasion Petition and the Assessing Officer's orders lacked specific details and a clear basis for arriving at the alleged bogus purchases figure. It further noted that in identical circumstances for A.Y. 2013-14, reassessment was quashed, and for A.Y. 2015-16, the issue was dropped. Finding the addition of Rs. 96,65,965/- on account of profit from alleged bogus purchases to be wholly unjustified and without basis, the Tribunal deleted it.

The Tribunal observed that the lower authorities failed to discuss segmental GP or comparable instances while assessing the assessee at a 5% GP rate. Considering the larger interest of justice, the Tribunal deemed a lump sum assessment of the assessee's GP at 1.5% to be just and proper for the given facts, with the rider that this specific assessment should not be treated as a precedent in any other case.

The Tribunal dismissed the Revenue's appeal, affirming the ld. CIT(A)'s decision to restrict the addition for bogus purchases to 6% of the alleged bogus amount, which equated to Rs.4,85,467/-. The Tribunal noted that while the purchases were questionable and intended to suppress profit, the sales were made through banking channels, and the assessee's prior profit percentages were low, justifying an estimated profit addition rather than the full amount under Section 69C.

The Tribunal held that the assessee had discharged its primary onus by providing complete details of creditors, including identity and purpose of credit. The CIT(A) erred in confirming the addition without further investigation or seeking a remand report.

The Tribunal held that the notice under Section 148 was not properly served on the assessee, either through postal mail or email. Consequently, the entire reassessment proceedings were vitiated.

The Tribunal, acknowledging the assessee's business and that its corresponding sales were not questioned, partly allowed the appeal. It directed a lump sum disallowance of 5% of the disputed bogus purchases, explicitly stating this resolution should not be considered a precedent.

The Tribunal held that the notice under Section 148 was not properly served on the assessee, either through postal mail or email. Consequently, the entire reassessment proceedings were vitiated.

The Tribunal decided various issues including disallowance of interest expenses, disallowance of expenses unsupported by bills, and addition on account of notional income. The Tribunal restored some issues to the AO for verification and allowed others based on the facts and legal precedents.

The Tribunal observed that the assessee's corresponding business sales were not disputed, and books of accounts were not rejected. In the interest of justice, the Tribunal restricted the disallowance to a lump sum of 5% of the impugned bogus purchases, specifying that this decision should not be treated as a precedent.

While acknowledging the assessee's declared salary income and the possibility of past savings, the Tribunal found that the assessee failed to fully prove the source of the cash deposits. In the interest of justice, the Tribunal restricted the addition to a lump sum of Rs. 2,00,000/- for each assessment year to cover the deficiencies, clarifying that this estimation should not be treated as a precedent.

Citing the Supreme Court judgment in *Collector, Land & Acquisition Vs. Mst. Katiji & Others*, the Tribunal ruled that technical aspects should give way to substantial justice. It directed the CIT(A)/NFAC to restore the assessee's appeal for fresh adjudication, providing three effective opportunities, on the condition that the assessee proves their case at their own risk and responsibility.

While acknowledging the assessee's declared salary income and the possibility of past savings, the Tribunal found that the assessee failed to fully prove the source of the cash deposits. In the interest of justice, the Tribunal restricted the addition to a lump sum of Rs. 2,00,000/- for each assessment year to cover the deficiencies, clarifying that this estimation should not be treated as a precedent.

The Tribunal held that rectification under Section 154 is not permissible when the Assessing Officer had already duly considered the ESI/PF issue during the regular assessment under Section 143(3). Relying on the Supreme Court's decision in T. S. Balaram, ITO vs. Volkart Bros., the Tribunal reversed the impugned rectification order.

The Tribunal decided various issues including disallowance of interest expenses, expenses unsupported by bills, and notional income. For some assessment years, the appeals were partly allowed, while for others, they were dismissed or allowed based on the specific grounds.

The Tribunal held that the addition was justified as the assessee failed to discharge its obligation to file a return of income in compliance with the statutory notice. It was also found that the payment was made to a paper/shell entity, and the recipient denied receiving the payment.

The Tribunal acknowledged the communication gaps and the lack of effective compliance with Section 250(6) of the Act by the lower appellate authority. In the interest of justice, the Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer for a fresh adjudication, granting the assessee three effective opportunities for hearing.

The Tribunal decided various issues including disallowance of interest expenses, expenses unsupported by bills, and notional income. For some assessment years, the appeals were partly allowed, while for others, they were dismissed or allowed based on the specific grounds.

The ITAT acknowledged that the assessee's reason for delay (blaming the CA without material support) was unsubstantiated. However, considering the delay, the ITAT condoned the 326-day delay subject to the assessee depositing Rs. 2,000/- to the Prime Minister's National Relief Fund. The matter was remanded to the CIT(A) for a fresh decision on merits after providing the assessee an opportunity of being heard.

The Tribunal held that the CIT(A) erred in deleting the addition. The assessee's admission of receiving the entire sale consideration in cash, despite the sales deed and bank entries suggesting otherwise, raised significant doubts about the genuineness of the transaction.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal agreed with the CIT(A)'s finding that disallowance under Section 14A cannot exceed the amount of exempt income. Therefore, the Revenue's appeal on this ground was dismissed.

The Tribunal observed that the CIT(A) passed an ex-parte order in violation of natural justice and did not address all the grounds of appeal. Consequently, the matter was remanded back to the CIT(A) with directions to decide the appeal afresh on its merits after providing the Assessee a proper opportunity of being heard.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal condoned the delay of 1050 days in filing the appeal before the CIT(A), subject to the Assessee depositing Rs. 2,000/- to the Prime Minister's National Relief Fund. Crucially, the Tribunal noted that the assessment order, which formed the basis for the Section 271B penalty, had been quashed by the CIT(A) in the quantum proceedings, a decision affirmed by the Tribunal. Therefore, the penalty order under Section 271B does not survive and was deleted.

The Tribunal held that the approval granted by the Joint CIT under Section 153D was mechanical and lacked application of mind, as it did not refer to the draft assessment order or the material on record. Consequently, the assessment order passed under Section 153A was vitiated.

The Tribunal held that the approval granted by the Joint CIT under Section 153D was mechanical and lacked application of mind, as it did not refer to the draft assessment order or the material on record. Consequently, the assessment order passed under Section 153A was vitiated.

The Tribunal upheld the CIT(A)'s decision, finding that the AO could not resort to a reverse mechanism to determine disallowable amounts and that the CIT(A) had rightly adjudicated the issue based on facts. The Tribunal found no reason to disturb the CIT(A)'s findings.

The Tribunal held that the amendment to Section 11(3) by the Finance Act, 2022, which removed the additional year for utilizing accumulated funds, is prospective. Therefore, for accumulations prior to the amendment, the assessee had the original time window to utilize the funds.

The Tribunal upheld the CIT(A)'s decision, finding that the AO could not resort to a reverse mechanism to determine disallowable amounts and that the CIT(A) had rightly adjudicated the issue based on facts. The Tribunal found no reason to disturb the CIT(A)'s findings.

The Tribunal deemed it appropriate to grant the assessee one more opportunity of being heard, given the ex parte nature of the prior proceedings. The issue is remitted back to the Ld. CIT(A) for fresh adjudication on merits, with a directive for the assessee to cooperate and appear without seeking unnecessary adjournments.

The Tribunal held that the impugned assessment years (2010-11 to 2012-13 for Ashok Kumar, and 2012-13 for Lekhraj) fell outside the permissible block period for proceedings under Section 153C, as the satisfaction notes were recorded in FY 2021-22. Relying on Supreme Court and Delhi High Court judgments, the Tribunal concluded that the jurisdiction assumed by the Assessing Officer was not tenable and, therefore, quashed all the assessment orders.

The Tribunal held that the impugned assessment years (2010-11 to 2012-13 for Ashok Kumar, and 2012-13 for Lekhraj) fell outside the permissible block period for proceedings under Section 153C, as the satisfaction notes were recorded in FY 2021-22. Relying on Supreme Court and Delhi High Court judgments, the Tribunal concluded that the jurisdiction assumed by the Assessing Officer was not tenable and, therefore, quashed all the assessment orders.

The Tribunal held that the impugned assessment years (2010-11 to 2012-13 for Ashok Kumar, and 2012-13 for Lekhraj) fell outside the permissible block period for proceedings under Section 153C, as the satisfaction notes were recorded in FY 2021-22. Relying on Supreme Court and Delhi High Court judgments, the Tribunal concluded that the jurisdiction assumed by the Assessing Officer was not tenable and, therefore, quashed all the assessment orders.

The Tribunal held that the impugned assessment years (2010-11 to 2012-13 for Ashok Kumar, and 2012-13 for Lekhraj) fell outside the permissible block period for proceedings under Section 153C, as the satisfaction notes were recorded in FY 2021-22. Relying on Supreme Court and Delhi High Court judgments, the Tribunal concluded that the jurisdiction assumed by the Assessing Officer was not tenable and, therefore, quashed all the assessment orders.

The Tribunal upheld the PCIT's order, stating that the AO made an apparent mistake on record by only adding the TDS benefit instead of the entire undisclosed commission income, despite having information about the full amount. The Tribunal emphasized that the assessee, being a company, must maintain accounts on a mercantile basis and should have recorded the commission fully, regardless of actual receipt. Therefore, the PCIT's initiation of proceedings under Section 263 was justified.

The Tribunal condoned the delay in filing the appeal to ITAT, finding it bonafide. It remanded the matter back to the Assessing Officer for fresh examination of the nature of the land sold, specifically its distance from municipal limits as per Section 2(14), after providing the assessee due opportunity of hearing.

The Tribunal held that the approval granted by the Joint CIT under Section 153D was mechanical and lacked application of mind, as it did not refer to the draft assessment order or the material on record. Consequently, the assessment order passed under Section 153A was vitiated.

The Tribunal held that the approval granted by the Joint CIT under Section 153D was mechanical and lacked application of mind, as it did not refer to the draft assessment order or the material on record. Consequently, the assessment order passed under Section 153A was vitiated.

The ITAT found that the assessee provided sufficient reasons for the delay, including a withdrawn writ petition and subsequent dispute with and replacement of counsel, which was not brought to the assessee's knowledge. The Tribunal held that the CIT(A) erred in dismissing the appeal *in limine* and should have adjudicated it on merits. Therefore, the ITAT set aside the CIT(A)'s order and remanded the matter for fresh adjudication on merits.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal held that the AO's assessment order lacked proper inquiry into the source of cash deposits, which were the immediate source of unsecured loans and capital introduction. Therefore, the PCIT's order under Section 263 was justified.

The Tribunal held that since the property was jointly owned and the impugned amount of Rs. 44,75,000/- had already been added as unexplained investment in the assessment of the assessee's wife, there was no legal justification for making the identical addition again in the hands of the assessee (husband). Therefore, the addition made in the assessee's hands was liable to be deleted.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal held that the 'protective' assessments must await the final outcome of the 'substantive' appeals pending before the CIT(A) to avoid multiplicity of proceedings and contradictory findings. Consequently, the assessee's appeals were restored to the CIT(A) for fresh adjudication after the finalization of the substantive assessments, keeping all other legal and factual issues open.

The Tribunal held that the approval granted under Section 153D was mechanical and lacked application of mind, thus vitiating the assessment orders. Consequently, the assessment orders were quashed.

The Tribunal held that since the very foundation for the penalty proceedings, i.e., the assessment orders under Section 153A r.w.s. 144, had been quashed by the coordinate bench, the penalty levied under Section 270A could not legally stand. Consequently, the penalty was deleted, and the assessee's appeals were allowed.