ITAT Delhi Judgments — February 2026

The Tribunal held that the assessee is entitled to deduction under Section 54 as the source of investment for the new property (registered in his wife's name) was from the sale of the old property. The Tribunal also ruled that interest earned on a savings bank account is eligible for deduction under Section 80TTA of the Act.

The Tribunal upheld the orders of the DRP and TPO, affirming that the benefit test for intra-group services is well-recognized and requires direct, substantial benefits. The assessee's generic explanations and failure to provide documentary evidence were insufficient.

The ITAT held that the issue regarding the calculation of deductions under Sections 36(1)(viia)(c) and 36(1)(viii) is highly debatable and cannot be categorized as a mistake apparent from the record under Section 154 of the Act. Therefore, the AO's action to recompute and add back the deduction amount was not permissible.

The Tribunal set aside the orders of the AO/TPO and DRP, restoring the matter to the AO/TPO for fresh adjudication. The assessee was given an opportunity to submit further evidence and be heard. A separate addition on account of interest was also restored to the AO for verification.

The tribunal noted that the assessee had passed away before the reopening proceedings were initiated. Citing the precedent of Savita Kapila Vs. ACIT (2020), the tribunal held that the impugned reopening itself was not sustainable in law.

The Tribunal held that the assessee failed to provide sufficient documentary evidence to establish the actual benefit derived from the intra-group services. Consequently, the arm's length price was determined to be Nil.

The Tribunal noted that the CIT(A) benefited the assessee by relying on a precedent where the book value of assets and liabilities was considered for share valuation. The department's argument that the AO was not given an opportunity to examine additional evidence was found to be of no consequence. The Tribunal found no substance in the grounds raised by the department on merits.

The Tribunal held that the assessment completed under Section 144 was valid despite the absence of a Section 143(2) notice, as the return was filed belatedly in response to a Section 142(1) notice and show cause notices were issued. Regarding the addition, the Tribunal found a partial failure to explain the cash deposits and made a lump-sum addition.

The Tribunal held that the initial transfer pricing adjustment for the trading segment was NIL as the assessee's margin fell within the arm's length range. Regarding the commission differential, the Tribunal deleted the addition, finding it unjustified and not made after providing the assessee an opportunity. Interest under sections 234A, 234B, and 234C was directed to be verified and charged as per law.

The Tribunal noted that the CBDT Circular No. 1916 dated May 11, 1994, allows certain limits of jewellery per family member to be considered explained. The Tribunal cited various High Court rulings supporting this circular. Since the revenue did not rebut this presumption, the jewellery was treated as explained.

The Tribunal held that the competent authority had gone too far in examining the financial actions of the trust and doubting the genuineness of its activities. It also found that the order of superseding registration was passed without following due process.

The Tribunal found that the AO did not provide sufficient opportunity to establish the source of cash deposits. Therefore, the order of CIT(A) was set aside, and the issue was remanded to the AO for fresh consideration. The grounds raised in the cross-objection regarding sundry creditors were dismissed.

The Tribunal found it appropriate to restore the appeal back to the CIT(A) for denovo adjudication after affording a reasonable opportunity of making submissions. The CIT(A) was directed to issue notice to the assessee via email.

The Tribunal held that the CIT(A) correctly followed binding judicial precedents from the Delhi High Court. The grounds raised by the Revenue lacked substance, and the appeal was dismissed.

The CIT(A) considered the agreements and found that the relationship with consultants was principal-to-principal, not employer-employee, thus upholding the deduction of TDS under Section 194J. The Tribunal affirmed that supervision and administrative controls do not convert a consultancy contract into an employment contract.

The Tribunal held that the approval granted by the Addl. CIT under Section 153D of the Act was invalid. The Tribunal noted that the approval was granted on the same day for multiple assessment years (specifically, for 43 cases on December 30, 2018, and a single approval for AYs 2011-12 to 2017-18 in the assessee's case). This indicated a lack of independent application of mind and a mechanical exercise of power, which is contrary to the principles laid down in various High Court and Supreme Court judgments, including Serajuddin, Anuj Bansal, and Sapna Gupta. The Tribunal found that the approval did not reflect a perusal of the draft assessment orders or the seized material. Consequently, the assessment orders passed based on such an invalid approval were quashed. The Tribunal allowed the appeals filed by the assessee and dismissed the appeals filed by the Revenue. The issue regarding the limitation period for reopening assessments under Section 149(1)(b) and the calculation of the block period under Section 153C were rendered infructuous by the decision on the validity of the approval.

The Tribunal held that the approval granted by the Addl. CIT under Section 153D of the Act was invalid. The Tribunal noted that the approval was granted on the same day for multiple assessment years (specifically, for 43 cases on December 30, 2018, and a single approval for AYs 2011-12 to 2017-18 in the assessee's case). This indicated a lack of independent application of mind and a mechanical exercise of power, which is contrary to the principles laid down in various High Court and Supreme Court judgments, including Serajuddin, Anuj Bansal, and Sapna Gupta. The Tribunal found that the approval did not reflect a perusal of the draft assessment orders or the seized material. Consequently, the assessment orders passed based on such an invalid approval were quashed. The Tribunal allowed the appeals filed by the assessee and dismissed the appeals filed by the Revenue. The issue regarding the limitation period for reopening assessments under Section 149(1)(b) and the calculation of the block period under Section 153C were rendered infructuous by the decision on the validity of the approval.

The Tribunal held that the reassessment proceedings for AY 2012-13 were beyond the limitation period as per the amended Section 149 of the Income Tax Act, considering the date of the search and the proviso to Section 149(1)(b).

The Tribunal held that the approval granted by the Addl. CIT under Section 153D of the Act was invalid. The Tribunal noted that the approval was granted on the same day for multiple assessment years (specifically, for 43 cases on December 30, 2018, and a single approval for AYs 2011-12 to 2017-18 in the assessee's case). This indicated a lack of independent application of mind and a mechanical exercise of power, which is contrary to the principles laid down in various High Court and Supreme Court judgments, including Serajuddin, Anuj Bansal, and Sapna Gupta. The Tribunal found that the approval did not reflect a perusal of the draft assessment orders or the seized material. Consequently, the assessment orders passed based on such an invalid approval were quashed. The Tribunal allowed the appeals filed by the assessee and dismissed the appeals filed by the Revenue. The issue regarding the limitation period for reopening assessments under Section 149(1)(b) and the calculation of the block period under Section 153C were rendered infructuous by the decision on the validity of the approval.

The Tribunal held that the reassessment proceedings for AY 2012-13 were time-barred. It referred to the Supreme Court's decision in Rajiv Bansal, emphasizing that the proviso to Section 149(1)(b) limits the retrospective operation of the amended section and protects assessees from reopening assessments beyond the old time limits.

The Tribunal held that the approval under Section 148B was granted mechanically without proper application of mind. It also noted inconsistencies in how additional income declared by the assessee was treated across different assessment years.

The Tribunal held that the reassessment proceedings for AY 2012-13 were time-barred. The ten-year period for reopening under Section 149(1)(b) of the old regime had expired before the notice under Section 148 was issued.

The Tribunal held that the approval granted by the Addl. CIT under Section 153D of the Act was invalid. The Tribunal noted that the approval was granted on the same day for multiple assessment years (specifically, for 43 cases on December 30, 2018, and a single approval for AYs 2011-12 to 2017-18 in the assessee's case). This indicated a lack of independent application of mind and a mechanical exercise of power, which is contrary to the principles laid down in various High Court and Supreme Court judgments, including Serajuddin, Anuj Bansal, and Sapna Gupta. The Tribunal found that the approval did not reflect a perusal of the draft assessment orders or the seized material. Consequently, the assessment orders passed based on such an invalid approval were quashed. The Tribunal allowed the appeals filed by the assessee and dismissed the appeals filed by the Revenue. The issue regarding the limitation period for reopening assessments under Section 149(1)(b) and the calculation of the block period under Section 153C were rendered infructuous by the decision on the validity of the approval.

The Tribunal held that the reassessment proceedings for AY 2012-13 were time-barred. The CIT(A) had correctly quashed the reassessment order on the grounds of limitation, as the notice under Section 148 was issued beyond the permissible period.

The Tribunal held that the approval granted under Section 153D was invalid as it was granted mechanically without independent application of mind, and often for multiple assessment years in a single approval. Consequently, the assessment orders passed based on such invalid approvals were quashed.

The Tribunal observed that powers under section 251 of the Act, as amended, are to be exercised judiciously. While the First Appellate Authority can refer cases back to the AO for fresh evaluation, this is not always justified, especially when a pure question of law is raised. The Tribunal stated that a pure question of law regarding the assumption of jurisdiction can be decided independently.

The Tribunal acknowledged the assessee's absence before the NFAC. In the interest of justice, the Tribunal restored the matter to the CIT(A), providing a final opportunity for the assessee to present its case and for the CIT(A) to decide based on facts and law.

The Tribunal noted that the assessee failed to furnish records and details during the original assessment and that the earlier Tribunal order lacked sufficient detail. The High Court had directed a fresh adjudication, and the Tribunal found it necessary to remand the issue back to the AO for fresh adjudication.

The Tribunal held that showing a low net profit rate cannot be a valid reason for reopening the assessment under section 147 of the Act, as there was no tangible material to support the reason for reopening. Furthermore, a similar addition in a prior AY was deleted by the ITAT in the assessee's own case.

The Tribunal held that the authorities below did not consider the settled position of law in including certain companies and also did not consider the 28 comparables proposed by the assessee. The matter is remanded to the AO/TPO for fresh consideration.

The Tribunal noted that the CIT(A) had relied on previous orders of the Tribunal in the assessee's own case for assessment years 2009-10, 2010-11, and 2011-12. The facts for the current assessment years were identical to the previous ones, and no new material was presented by the Revenue. The Tribunal therefore found no error in the CIT(A)'s order.

The Tribunal held that the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, deserved to be deleted. The assessee had inadvertently claimed deduction under Section 80-IC for eleven assessment years instead of ten, which was a mistake. The assessee revised its return to withdraw this claim. Crucially, the Tribunal noted that the tax payable under Minimum Alternate Tax (MAT) under Section 115JB was higher than the tax on normal income, both before and after the revision. Therefore, even with the incorrect claim, there was no loss to the revenue, and no tax was sought to be evaded. The Tribunal relied on the judgment of the Hon'ble Delhi High Court in CIT vs Nalwa Sons Investments Ltd., which held that no penalty can be levied for disallowance made while computing income under normal provisions if the income is assessed under Section 115JB, as the concealment had no role to play in the MAT computation. The Tribunal also noted that penalty for a similar claim in Assessment Year 2012-13 was deleted by the Ld. CIT(A) and no appeal was filed by the revenue. Accordingly, the AO was directed to delete the penalty.

The Tribunal held that the transaction was a family settlement and not a transfer as defined under Section 2(47) of the Act. It further noted that Section 56(2) of the Act would not apply as the property was received from a relative (member of HUF), making it not a deemed income.

The Tribunal held that the Section 153C satisfaction was not recorded for the assessment year 2013-14, but for assessment year 2012-13. The satisfaction recorded in 2015-16 rendered the assessment year 2013-14 as 'unabated', meaning additions should only be based on seized material. The court cited relevant Supreme Court and Delhi High Court judgments.

The Tribunal upheld the CIT(A)'s order, following its own previous decisions in the assessee's own case. The Tribunal found no infirmity in the CIT(A)'s deletion of disallowances for corporate guarantee, the 'Shahenshah Scheme' provision, and the Section 80IC deduction on interest income.

The Tribunal held that the cash deposit was verifiable from the cash withdrawal and opening balance documents, which were not questioned. Therefore, the addition made by the AO and confirmed by the CIT(A) was not justified.

The Tribunal found that the assessee, a commission agent in the vegetable market, could not sufficiently prove the impugned expenditure. However, the disallowance of 10% by the lower authorities was considered on a higher side. Therefore, a lump-sum disallowance of Rs.1,00,000/- was deemed appropriate, with the condition that it would not be treated as a precedent.

The Tribunal held that treating cash deposits as unexplained on the basis of books of account without legally rejecting them is not permissible. The impugned orders of the AO and CIT(A) were set aside as unsustainable.

The Tribunal acknowledged that the appeals were decided ex-parte without proper service of notice, which violates natural justice. Therefore, the assessee should be given an opportunity to present their case.

The Tribunal acknowledged that the appeals were decided ex-parte without proper service of notice, which violates natural justice. Therefore, the assessee should be given an opportunity to present their case.

The Tribunal held that maintaining two PANs is prohibited under Section 139A(7) of the Income Tax Act, 1961, irrespective of how the second PAN was obtained, and the assessee had not taken steps to cancel the additional PAN. Therefore, the decision of the CIT(A) was upheld.

The Tribunal held that the notice issued under section 148 was barred by limitation. The AO did not have possession of any document or evidence related to any 'asset' which would indicate escaped assessment. The addition made by the AO was therefore not sustainable.

The Tribunal noted that the Supreme Court's decision in CIT vs. M/s Carpet India allowed for re-examination of whether the assessees were direct exporters. Since the assessees had only claimed as supportive manufacturers, the Assessing Officer was directed to re-examine the issue afresh.

The Tribunal noted that the Supreme Court's decision in CIT vs. M/s Carpet India allowed for re-examination of whether the assessees were direct exporters. Since the assessees had only claimed as supportive manufacturers, the Assessing Officer was directed to re-examine the issue afresh.

The Tribunal noted that the Supreme Court's decision in CIT vs. M/s Carpet India allowed for re-examination of whether the assessees were direct exporters. Since the assessees had only claimed as supportive manufacturers, the Assessing Officer was directed to re-examine the issue afresh.

The Tribunal noted that an advance payment was made through cheque by the assessee's predecessor in interest. The Tribunal held that according to the provisos to Section 56(2)(vii)(b), such a payment through a specified channel should be treated as the fair market value of the asset.

The Tribunal acknowledged the possibility of communication gaps and deemed it appropriate in the interest of justice to restore the appeal to the CIT(A) for a fresh adjudication. The assessee was granted three effective opportunities for hearing at their own risk.

The Tribunal held that the jurisdiction of the appeal lies with the Bangalore Tribunal, not the Delhi Tribunal, based on the location of the Assessing Officer as per Supreme Court's decision in PCIT vs ABC Papers Ltd. Therefore, both appeals are dismissed for want of jurisdiction.

The Tribunal held that the CIT(A) erred in upholding the denial of full exemption under Section 54. Following judicial precedents, the Tribunal directed the AO to allow the deduction as claimed by the assessee.

The Tribunal held that the penalty show-cause notice issued by the Assessing Officer was vitiated because it failed to specify the particular limb of section 271(1)(c) under which the penalty was proposed. This defect was considered fatal to the penalty proceedings.