ITAT Delhi Judgments — September 2026

The Tribunal held that the CIT(A) order was passed ex-parte without giving sufficient opportunity of hearing, thus violating the principle of natural justice. The Tribunal noted that there was nothing on record to demonstrate that the notices sent to the assessee were duly served or received. Citing Section 250(2)(a) of the Act, which mandates the right to be heard for the appellant, the Tribunal emphasized that this is a mandatory statutory requirement. Consequently, the Tribunal found that the end of justice would be met by restoring the matter to the file of the CIT(A) for a fresh adjudication on merits, after affording an effective opportunity of hearing and considering the assessee's submissions. The assessee was directed to file necessary submissions and material before the CIT(A) within 60 days of the order. The appeal was allowed for statistical purposes.

The Tribunal held that the Revenue failed to produce cogent material to corroborate the seized document and link the alleged election expenses to the assessee. The Tribunal also noted that the dates on the seized document pertained to the subsequent assessment year.

The Tribunal held that the NFAC passed the order without giving the assessee an opportunity of being heard. Therefore, the case was restored to the NFAC to grant one final opportunity to the assessee.

The Tribunal, while acknowledging the assessee's arguments regarding the COVID-19 pandemic and EPFO relaxations, ultimately dismissed the appeal. The Tribunal noted that while the Jodhpur Bench of the Tribunal had decided a similar issue in favour of the assessee, the jurisdictional Delhi High Court in Woodland (Aero Club) Pvt. Ltd. vs. ACIT had taken a contrary view. The Delhi High Court held that the Assessing Officer was justified in making the disallowance u/s 143(1) because, at the time of passing the order, the Gujarat High Court's decision in CIT v. Gujarat State Road Transport Corporation, affirmed by the Supreme Court in Checkmate Services Pvt. Ltd. v. CIT, was in existence. The Tribunal found that the intimation u/s 143(1) was passed after the Gujarat High Court's judgment, making the disallowance legally permissible. The Tribunal rejected the assessee's arguments that the Delhi High Court's decision in Woodland (Aero Club) was per incuriam or that the issue was not final due to an SLP admitted by the Supreme Court. The Tribunal also held that the amendment to Section 29(1)(e) of the Income Tax Act, 2025 (presumably a typo and referring to Section 36(1)(va) or similar provision related to deductions) was prospective, operating from 01.04.2026, and did not alter the legal position mandated by Checkmate Services. Therefore, following the binding decision of the Hon'ble Delhi High Court, the disallowance u/s 36(1)(va) was upheld.

The Tribunal held that the assessee does not have a fixed place PE in India. It reasoned that the AO's reliance on the consolidated Form 10-K and website information was misplaced, as these documents pertained to the entire Donaldson group, not solely the assessee's Indian operations. The Tribunal emphasized that for a place of business to be considered at the disposal of a foreign enterprise, it must be used for carrying out the foreign enterprise's business, and mere information from a website is insufficient. The AO failed to discharge the onus of proving that the premises at Manesar, Gurgaon was at the assessee's disposal. Furthermore, the Tribunal found that DIFS is not a DAPE. It noted that DIFS's total turnover was Rs. 282 crores, with negligible sales to the assessee (Rs. 24.28 lacs) and significant overall purchases (Rs. 165 crores), establishing DIFS's economic independence. There was no evidence that DIFS had the authority to conclude contracts or habitually secured orders on behalf of the assessee. The Tribunal also found the AO's reference to a clause in the license agreement flawed, as it pertained to a segment already offered to tax as royalty. Consequently, the Tribunal held that the mandatory conditions for constituting a PE or DAPE under Article 5 of the India-US DTAA were not satisfied. Since no PE or DAPE was found, the issue of profit attribution did not arise.

The ITAT observed that the CIT(A) confirmed the addition without adequately considering the reconciliation statements, audited financial statements, and other supporting documents filed by the assessee. Consequently, the tribunal remanded the matter back to the CIT(A) for fresh adjudication after providing the assessee with an adequate opportunity to present its case.

The Tribunal held that the reassessment proceedings initiated under section 147 were vitiated due to the AO's wrong application of mind and incorrect reasons for reopening. Consequently, the assessment was quashed as void ab initio. The penalty under section 271(1)(c) was also deleted as it was based on the now-deleted quantum additions.

The Tribunal held that the addition of Rs. 44,15,000 made by the AO and upheld by the CIT(A) was not justified. The Tribunal noted that the assessee had provided sufficient evidence to demonstrate the genuineness of its sales activities, including cash book entries, VAT returns, and sale invoices. The Tribunal observed that the AO's contention of non-supply of documents was contradicted by the assessee's submission of replies and a certificate of production of documents before the AO. The Tribunal found that the cash deposits represented sales made prior to November 8, 2016, which were duly reflected in the assessee's books of accounts and income tax return. The Tribunal relied on several co-ordinate bench decisions, including Indowestern Commodities and Energy Trade Private Limited, DCIT vs Adarsh Kanch Udyog P. Ltd., ITO vs MOBI TRADELINK, and M/s HKT Retail Ventures Pvt. Ltd., which held that if trading results are accepted, books are not rejected, and sales are not doubted, no addition is permissible. The Tribunal concluded that accepting the sales made by the assessee and making a separate addition for cash deposits would amount to double addition. Therefore, the addition was set aside, and the AO was directed to delete the addition of Rs. 44,15,000. The issue regarding the applicability of Section 115BBE was also discussed in a cited case, indicating it applies from AY 2018-19 onwards.

The ITAT condoned the 369-day delay, finding sufficient cause and emphasizing the principle of natural justice. The case was remanded back to the CIT(A) for fresh adjudication on merits, directing the CIT(A) to provide adequate opportunity of being heard to the assessee.

The Tribunal quashed the reopening proceedings for RNT Metals Pvt Ltd due to insufficient notice period and also quashed the regular assessment for one year as it was framed without following proper procedure post-search action. For other issues, the Tribunal allowed partial relief on bogus purchases and cash additions, and allowed the director's appeal for statistical purposes due to double addition.

The Tribunal quashed the reopening proceedings for RNT Metals Pvt Ltd due to insufficient notice period and also quashed the regular assessment for one year as it was framed without following proper procedure post-search action. For other issues, the Tribunal allowed partial relief on bogus purchases and cash additions, and allowed the director's appeal for statistical purposes due to double addition.

The Tribunal held that the addition of ₹6,59,025/- made under Section 69A of the Act was unsustainable. The assessment order indicated that the addition was based on incriminating material found during a search in the case of Pavel Garg and family, and subsequent investigations involving M/s Combitic Global Caplet Private Limited and a statement from Shri Rakesh Prasad. However, the Tribunal observed that the assessment order did not reference any specific incriminating material or relevant extracts from Shri Rakesh Prasad's statement that implicated the assessee. Crucially, the Tribunal found that the alleged incriminating material and statement were not provided to the assessee, despite a specific request, thus violating the principles of natural justice. Citing the Supreme Court's decision in Andaman Timber Industries Vs. CCE, the Tribunal stated that such a failure is a serious flaw that renders the order a nullity. Consequently, the addition was directed to be deleted, and the impugned order was set aside.

The Tribunal agreed with the assessee's hypothesis that he acted as a mediator and was therefore entitled to protection under section 273B of the Act. The Tribunal noted from the submissions and evidence produced that the appellant had neither given nor accepted any loan or deposit falling within the meaning of section 269SS, which would attract penalty under section 271D. Consequently, the Tribunal held that no case for penalty under section 271D was made out. The Tribunal set aside the orders of the lower authorities and directed the Assessing Officer to delete the impugned penalty of Rs. 24,40,000. The ratio decidendi is that a person acting solely as a mediator in a transaction, where cash is temporarily held for safe custody and immediately transferred to the rightful owner, and where the transaction is bona fide and supported by evidence, is not liable for penalty under section 271D for contravention of section 269SS, especially if reasonable cause under section 273B is established.

The Tribunal held that the notice under section 148 was invalid because it was issued by an ITO when the returned income exceeded the pecuniary limit for such an officer, and there was a lack of a live nexus between the alleged escapement of income and the material on record. Consequently, the assessment order was quashed.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal dismissed grounds of appeal 1 and 2 as withdrawn. Regarding grounds 3 and 4, concerning the infirmity of proceedings under section 153A and the validity of action under section 132A read with section 153A, the Tribunal agreed with the CIT(A)'s finding that in the absence of a satisfactory explanation for the source of Rs. 80,10,000/-, the Assessing Officer was within his authority to invoke these sections. The Tribunal found no reason to interfere. For grounds 5 and 6, contesting the addition of Rs. 80,10,000/- under section 69A, the Tribunal noted that the assessee failed to provide contemporaneous evidence to support its claims. The Tribunal relied on the CIT(A)'s observation that the cash was found in the assessee's sole possession and that the assessee's statement to adjust tax demands against seized cash indicated ownership. The affidavits of brothers lacked corroborative value. The Tribunal concluded that the assessee's hypothesis was an afterthought and confirmed the CIT(A)'s order. Regarding ground 7, concerning the non-issuance of a show cause notice, the Tribunal noted that the AO had provided ample opportunities to the assessee before making the addition, dismissing the ground. The Tribunal did not specifically address ground 8 regarding the DIN on the notice of demand, but the overall dismissal of the appeal implies it was not found to be a decisive issue.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the CIT(A) did not commit a fatal mistake in providing relief to the assessee by admitting additional evidence. The Tribunal noted that the Assessing Officer had indeed called for certain evidences which the assessee could not produce, and the AO's objection in the remand report was that the additional evidence was not provided under section 133(6). However, the Tribunal observed that mere non-production of evidence under section 133(6) during the assessment stage does not automatically bar its production as additional evidence under Rule 46A. The Tribunal further found that the CIT(A) had demonstrated that the assessee submitted sufficient evidence, including additional evidence, to satisfy the conditions of identity, creditworthiness, and genuineness for the seven parties in question. It is a settled principle that no addition can be made under section 68 if the assessee satisfies all the laid down conditions. The Tribunal also noted that the Assessing Officer failed to bring any material on record during remand proceedings to suggest a tainted nature of the unsecured loans. Therefore, the Tribunal confirmed the order of the CIT(A) and dismissed the appeal of the Revenue. The issue of admitting additional evidence under Rule 46A was decided in favour of the assessee, and the merits of the addition under section 68 were also decided in favour of the assessee.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the assessee's activities, including running guest houses and hostels, had previously been decided by the Tribunal to be charitable and not business. Following precedents, the Tribunal directed the CIT(E) to grant the registration and approval.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the assessment for AY 2011-12 was beyond the permissible block period under Section 153A. It also found that additions for AYs 2013-14 and 2014-15 did not constitute 'assets' as defined, and that assessments for unabated years lacked incriminating material. The assessment for AY 2020-21 was found to be barred by limitation.

The Tribunal held that the assessee's grounds of appeal nos. 1 and 2 regarding the legality of the notice under Section 143(2) and the assessment order were not pressed and were dismissed as infructuous. Ground of appeal no. 8, concerning the denial of a personal hearing via video conferencing, was dismissed due to a lack of evidence that the assessee had requested it and it was denied. Grounds related to penalty proceedings and interest were dismissed as consequential and infructuous. The core issue revolved around the additions made based on the verification unit (VU) report. The Tribunal noted that the AO's inquiries under section 133(6) went unanswered, and the VU report was relied upon for additions. Crucially, the Tribunal found that the contents of the VU report were not confronted to the assessee, violating the principles of natural justice. The Tribunal disagreed with the CIT(A)'s view that VU reports are internal departmental matters and not required to be shared. The Tribunal concluded that drawing adverse conclusions without confronting the VU report was premature. Therefore, the addition of Rs. 35,83,661/- and the enhanced disallowance of Rs. 96,43,298/- (implied from the direction to delete Rs. 35,83,661/- and Rs. 96,43,298/-) made by the AO and enhanced by the CIT(A) were unsustainable. The Tribunal directed the AO to delete these additions. The grounds challenging the merits of these additions and the reliance on unconfronted VU reports were allowed. The Tribunal found the CIT(A)'s enhancement, relying on cases like Kanak Impex, to be without legal satisfaction due to the non-compliance with due process.

The Tribunal held that the AO lacked the 'reason to believe' that income had escaped assessment, as required by Section 147. The reasons recorded amounted to mere suspicion, not a bona fide belief based on tangible material.

The Tribunal held that the AO's disallowance under Section 40A(3) was not legally tenable as it was made without specific findings or pointing out specific violations. The Tribunal affirmed the co-terminous powers of the CIT(A), stating that the CIT(A) can examine any matter connected with the assessment. Therefore, the CIT(A)'s action of rejecting the books of account under Section 145(3) and applying a net profit rate of 6% on gross receipts was upheld. The Tribunal reasoned that the deeming provision of Section 40A(3) never came into operation because the AO lacked the necessary details to trigger it. The Tribunal also noted that the reasoning of the CIT(A) might be legally unsound, but the approach was not faulted. Regarding Ground No. 4 concerning depreciation, no arguments were advanced by either party, and it was dismissed as not pressed. The appeal of the Department was dismissed.

The Tribunal held that the reopening was invalid because the approval for the proceedings was granted by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT), as required by Section 151(ii) of the Act. Therefore, the reopening proceedings were quashed.

The Tribunal decided to remit the issue back to the file of the Ld. CIT(A) for an inquiry into whether the receipts reflected in Form 26AS were incorporated in the profit and loss account. The Ld. CIT(A) was granted liberty to call for a Remand Report from the Ld. AO and pass orders accordingly. The reasoning was based on the assessee's submission that the reassessment was based solely on Form 26AS without independent inquiry. The Tribunal found it necessary to ascertain the treatment of these receipts in the assessee's financial records. The operative direction is to remand the issue for further inquiry. No issue was expressly left undecided.

The Tribunal quashed the reopening proceedings for RNT Metals Pvt Ltd due to insufficient notice period and also quashed the regular assessment for one year as it was framed without following proper procedure post-search action. For other issues, the Tribunal allowed partial relief on bogus purchases and cash additions, and allowed the director's appeal for statistical purposes due to double addition.

The Tribunal held that the rejection order of the CIT(E) was indeed ex-parte, as evident from the conclusion drawn by the CIT(E) to reject the assessee's application on the premise of non-submission of required documents. The Tribunal acknowledged that no litigant benefits from the non-prosecution of their case. In the interest of justice, the Tribunal decided to remit the matter back to the file of the Ld. CIT(E) for re-adjudication de novo, in accordance with law, and by passing a speaking order. The assessee was granted liberty to file all necessary documents for registration and was directed to comply with all statutory notices, with non-compliance to be viewed adversely. The appeal was allowed for statistical purposes.

The Tribunal held that the CIT(E) rejected the registration application on a technical ground of misrepresentation without examining the genuineness of the charitable activities. The matter was restored to the CIT(E) for a decision on merits.

The tribunal found that its earlier order had already reversed the PCIT's Section 263 revision directions, which formed the sole basis for the impugned consequential assessment. Therefore, the tribunal held that the consequential assessment had no legal standing and quashed it.

The Tribunal held that after a search action, a regular assessment under Section 143(3) cannot be validly continued or completed. The Assessing Officer should have initiated proceedings under Section 148.

The Tribunal is examining the addition made under section 56(2)(vii) concerning the acquisition of a plot of land. The assessee's counsel is arguing against this addition.

The Tribunal held that the approval granted by the Principal Commissioner of Income Tax (PCIT) was mechanical and without application of mind, as it referred to a repealed section of the Act. Consequently, the reassessment proceedings were vitiated.

The Tribunal held that the approval obtained under Section 151 of the Act was not proper as the Assessing Officer was not sure of the total escaped income at the time of approval. The discrepancy between the amount for which approval was sought and the amount determined in the order under Section 148A(d) rendered the reopening invalid.

The tribunal held that the approval granted by the PCIT for reopening under Section 148 was mechanical and without application of mind, as it explicitly cited the non-existent Section 147(b). Consequently, the reopening and all subsequent proceedings were deemed invalid and quashed.

The Tribunal held that the assessee's activities, including running guest houses and hostels, had previously been decided by the Tribunal to be charitable and not business. Following precedents, the Tribunal directed the CIT(E) to grant the registration and approval.

The Tribunal held that the CIT(E) rejected the registration application on a technical ground of misrepresentation without examining the genuineness of the charitable activities. The matter was restored to the CIT(E) for a decision on merits.

The Tribunal quashed the reopening proceedings for RNT Metals Pvt Ltd due to insufficient notice period and also quashed the regular assessment for one year as it was framed without following proper procedure post-search action. For other issues, the Tribunal allowed partial relief on bogus purchases and cash additions, and allowed the director's appeal for statistical purposes due to double addition.

The Tribunal held that the assessee was not liable to deduct tax at source on the payments made to the overseas entities. It was an undisputed fact that the services were rendered by the overseas entities from outside India, and the Revenue did not dispute that these entities had a Permanent Establishment (PE) in India. Furthermore, it was not in dispute that the India-UAE DTAA contains no specific clause to tax FTS. In the absence of such a provision in the DTAA, the receipts, even if they were in the nature of FTS, would be treated as Business Income of the recipient. The Tribunal relied on the Madras High Court's decision in *Bangkok Glass Industry Co. Ltd.*, which held that in the absence of an FTS clause, such receipts are to be treated as Business Profits under Article 7 of the DTAA, not taxable in India if the recipient has no PE. The Tribunal also referred to its own decision in *Denso International Asia Co. Ltd.*, which followed the *Bangkok Glass Industry Co. Ltd.* ratio. Consequently, the impugned order of the CIT(A) was upheld. The appeal of the Revenue was dismissed.

The Tribunal upheld the CIT(A)'s decision, stating that the assessment order was invalid and void ab initio due to the absence of a mandatory notice under section 143(2). The Tribunal relied on the Supreme Court's decision in ACIT vs. Hotel Blue Moon.

The ITAT found that while the assessee had not complied with CIT(A)'s notices, natural justice principles required another opportunity. Therefore, the matter was remanded back to the CIT(A) for fresh adjudication after providing the assessee with adequate opportunity.

The Tribunal held that reassessment proceedings initiated against a deceased assessee without proper notification or legal representation are not sustainable in law. The Tribunal relied on the jurisdictional High Court's decision in Savita Kapila Vs. ACIT.

The Tribunal held that the belated filing of the return does not disentitle the assessee to the deduction, relying on the case law Chirakkal Services Co-op Bank Ltd. vs CIT. The assessee's grievance regarding the Section 80IA(4) deduction was accepted.

The Tribunal held that the disallowance under Section 36(1)(v)(a) is attracted when the assessee fails to comply with the statute, citing the larger bench decision in Checkmate Services Pvt. Ltd. The Tribunal also rejected the argument that such disallowances cannot be made under Section 143(1) processing, referencing a jurisdictional High Court decision.

The Tribunal held that the disallowance under Section 36(1)(v)(a) is attracted when the assessee fails to comply with the statute, citing the larger bench decision in Checkmate Services Pvt. Ltd. The Tribunal also rejected the argument that such disallowances cannot be made under Section 143(1) processing, referencing a jurisdictional High Court decision.