ITAT Delhi Judgments — October 2026

The Tribunal noted that the assessee's appeal before the CIT(A)/NFAC was filed within a month of the assessment order. The Tribunal found that the CIT(A)/NFAC had not considered this fact. In the larger interest of justice, the Tribunal decided to restore the assessee's appeal back to the CIT(A)/NFAC for fresh adjudication on merits. The Tribunal directed that the assessee would have three effective opportunities to present its case, subject to the condition that the taxpayer shall plead and prove its case at its own risk and responsibility. The appeal was allowed for statistical purposes.

The Tribunal noted that the Ld. CIT(A) had dismissed the assessee's appeal ex-parte, both on grounds of delay in filing before the CIT(A) and on merits. The assessee, described as a small farmer with limited knowledge of income tax law, had prayed for the restoration of the matter to the file of the AO. Considering the material facts and in the interest of justice, the Tribunal set aside the impugned orders of the Ld. CIT(A) dated 17.02.2025 and the penalty order dated 16.03.2022 of the Ld. AO. The matter was restored to the file of the Ld. AO for a fresh decision in accordance with law, after affording a fair opportunity of hearing to the assessee. The application for condonation of delay of 349 days in filing the appeal before the Tribunal was allowed. The appeal filed by the assessee was allowed for statistical purposes. The Tribunal did not decide the substantive issues raised by the assessee on merits.

The Tribunal held that the CIT(A) correctly deleted the additions made by the Assessing Officer. The Tribunal noted that the loan of Rs. 1,00,00,000/- was taken through banking channels from M/s Saivi Finance Pvt. Ltd. and the entire repayment was also effected through proper banking channels. The ledger account showed an opening balance, reflecting continuity from prior years. Crucially, the repayment of the loan was made prior to the issuance of the reassessment notice dated 19.03.2024, and even before the search in the Galaxy group. The Tribunal relied on the jurisdictional ITAT's decision in Real Innerspring Technologies Pvt. Ltd. vs. ACIT, which dealt with substantially similar facts involving the same group of entry operators, and held that repayment of loans before the issuance of notice under Section 148 constituted genuine transactions. The Tribunal found that the assessee had repaid the loan along with interest, indicating genuine utilization and repayment. Therefore, the additions under Section 68, and consequential additions under Sections 69C and 36(1)(iii), were deleted. The grounds of appeal of the Revenue were rejected as devoid of merit.

The Tribunal held that the CIT(A) correctly deleted the additions made by the Assessing Officer. The Tribunal noted that the loan of Rs. 1,00,00,000/- was taken through banking channels from M/s Saivi Finance Pvt. Ltd. and the entire repayment was also effected through proper banking channels. The ledger account showed an opening balance, reflecting continuity from prior years. Crucially, the repayment of the loan was made prior to the issuance of the reassessment notice dated 19.03.2024, and even before the search in the Galaxy group. The Tribunal relied on the jurisdictional ITAT's decision in Real Innerspring Technologies Pvt. Ltd. vs. ACIT, which dealt with substantially similar facts involving the same group of entry operators, and held that repayment of loans before the issuance of notice under Section 148 constituted genuine transactions. The Tribunal found that the assessee had repaid the loan along with interest, indicating genuine utilization and repayment. Therefore, the additions under Section 68, and consequential additions under Sections 69C and 36(1)(iii), were deleted. The grounds of appeal of the Revenue were rejected as devoid of merit.

The Tribunal noted that the CIT(A) had dismissed the appeal ex-parte due to the assessee's absence and non-filing of written submissions, thereby confirming the AO's ex-parte assessment order. The assessee's representative requested the restoration of the matter to the file of the AO. The Tribunal, after examining the record and rival contentions, observed that the CIT(A) had dismissed the appeal in the absence of the assessee. In the interest of justice, the Tribunal set aside the impugned orders of the CIT(A) and the AO. The matter was restored to the file of the AO for a fresh decision in accordance with the law, after affording a fair opportunity of hearing to the assessee. The Tribunal did not decide on the merits of the grounds raised by the assessee, specifically regarding the classification of income and the validity of reopening.

The Tribunal held that the learned CIT(A) had indeed violated the principles of natural justice. It found that the assessee was not afforded a proper opportunity to present its case, and a personal hearing, which was specifically requested, was denied. The Tribunal reasoned that adherence to natural justice is a fundamental requirement for any quasi-judicial authority. By failing to provide a fair hearing, the CIT(A) committed a significant procedural error. Consequently, the Tribunal set aside the order of the CIT(A) and remanded the matter back to the CIT(A) for fresh adjudication. The CIT(A) was directed to grant the assessee a reasonable opportunity of being heard and to pass a fresh order in accordance with law. The issue regarding the merits of the assessment was not decided by the Tribunal.

The Tribunal allowed the appeal, quashing the impugned assessment order. The Tribunal found that the original assessment under section 143(3) had already examined business expenses, including purchases from M/s Global Vision. The reopening was based on information from the investigation wing alleging bogus accommodation entries of Rs. 1,92,79,900/- through payments to Shera Kashyap. However, the show cause notice and consequential order under section 148A(d) lacked specificity regarding the nature of expenses, dates of payments, and bank details, indicating a non-application of mind by the AO. The Tribunal held that the reopening was based on vague information and a change of opinion, citing several Supreme Court and Delhi High Court decisions. The absence of vital information in the reasons for reopening vitiated the proceedings, as the AO could not form a belief that income had escaped assessment. The Tribunal also noted that the AO incorrectly stated in the order under section 148A(d) that no prior assessment was made, despite being aware of the section 143(3) assessment, indicating a failure to verify records. Consequently, grounds 1 and 2 were sustained, rendering other grounds academic. The assessment order was quashed.

The Tribunal held that the penalty proceedings, though separate, can be challenged based on the validity of the assessment order, especially when the penalty is founded on allegations of concealment of income. The Tribunal noted that the AO of the searched person recorded satisfaction on 22.07.2022, and the AO of the assessee recorded satisfaction on 03.03.2023, issuing a notice under Section 153C on the same date. The Tribunal found that the assessment year 2014-15 falls beyond the six-year period permissible under Section 153C, considering the satisfaction date. Relying on the case law cited by the assessee, the Tribunal concluded that the foundation of the assessment order was vitiated. Consequently, the penalty proceedings were held to be void-ab-initio and liable to be set aside. The appeal of the assessee was allowed, and the impugned penalty was quashed.

The Tribunal held that the addition of Rs. 26,35,000/- on account of cash deposited during the demonetization period was not justified. The Tribunal found that the AO's reliance solely on the alleged unusual surge in cash sales was insufficient, especially when the assessee had provided material evidence such as stock and sales statements, VAT returns, month-wise cash sales and deposits, and copies of bills. The Tribunal noted that the assessee demonstrated a growth in both credit and cash sales compared to the previous year, negating the allegation of an abnormal increase. The Tribunal concluded that making an addition on mere suspicion was not justified, given the nature of the assessee's business and the corresponding increase in sales during the festival season. Regarding the addition of Rs. 7,52,667/- on account of the difference in purchases, the Tribunal held that the assessee complied with Accounting Standard 11 and Section 145(2) of the Act by using the exchange rate on the date of payment for foreign creditors. The Tribunal found no mismatch requiring further reconciliation, as the difference arose from the timing of valuation. Consequently, the grounds were decided in favour of the assessee.

The Tribunal held that the CIT(A) had given credence to the assessee's books and reconciliations regarding sundry creditors. The CIT(A) found that after remand, the assessee explained Rs. 4,52,35,342/- out of Rs. 6,67,34,790/-, leaving Rs. 2,14,99,448/- unexplained. The CIT(A) then restricted the disallowance to 20% of this disputed amount, i.e., Rs. 42,99,890/-, as an estimate for any unverifiable portion. The Tribunal found no reason to interfere with this decision and dismissed the grounds of both the Revenue and the Assessee on this issue. Regarding the deletion of interest on advances to a group concern and the disallowance of sundry debtors write-back, the Tribunal found the CIT(A)'s decisions to be reasonable. For the deduction under section 80-IB(4), the Tribunal noted that the Revenue had not rebutted the CIT(A)'s findings that the assessee was eligible, had a unit in a notified area, and was manufacturing a specified product. Therefore, the Tribunal found no error in allowing the claim under section 80-IB(4)/80-IA and dismissed the Revenue's grounds. The operative direction was that both appeals were dismissed.

The Tribunal noted that the period for condoning delays due to Covid-19 had expired, and even excluding this period, there was a significant delay. The assessee failed to provide sufficient evidence for the reasons cited for the delay.

The Tribunal held that the issue of taxability of interest on compensation, particularly for agricultural land, is a debatable and controversial issue. While acknowledging that various judicial pronouncements exist, the Tribunal noted that the jurisdictional High Court of Punjab and Haryana has decided the issue against the assessee in cases like "Mahender Pal Narang" and "Puneet Singh". The Tribunal found that the CIT(A) correctly held that the issue was not amenable to rectification under Section 154 as it was debatable and not a "mistake apparent from record". The Tribunal agreed with the CIT(A)'s reasoning that the assessee had failed to claim the exemption in the original return or a revised return, and Section 154 cannot be used to make a fresh claim or rectify omissions that require further investigation. Therefore, the appeals were dismissed. No issue was expressly left undecided.

The Tribunal admitted the additional ground of appeal as it was purely legal. Regarding the jurisdiction of the AO, the Tribunal observed that while the Section 143(2) notice initially specified two issues (dividend income and expenses for earning exempt income), the case was selected for complete scrutiny. The Tribunal held that once a case is selected for complete scrutiny, it is open for the AO to enlarge the scope of assessment by examining issues other than those initially informed in the Section 143(2) notice. The Tribunal found no infirmity in the AO's order in making disallowances out of various expenses claimed by the assessee, dismissing the additional ground of appeal. For grounds 2 to 9, concerning disallowances of gratuity, 7th Pay Commission provision, CBS expenses, staff salary, leave encashment, consultancy fee, and interest subvention, the Tribunal noted that the assessee failed to file proper explanations and documentary evidence before the lower authorities. Therefore, the Tribunal set aside the orders of the lower authorities and remanded the matter to the AO for fresh examination, directing the assessee to appear and provide all necessary details and evidence. These grounds were allowed for statistical purposes.

The Tribunal held that the issue of taxability of interest on compensation, particularly for agricultural land, is a debatable and controversial issue. While acknowledging that various judicial pronouncements exist, the Tribunal noted that the jurisdictional High Court of Punjab and Haryana has decided the issue against the assessee in cases like "Mahender Pal Narang" and "Puneet Singh". The Tribunal found that the CIT(A) correctly held that the issue was not amenable to rectification under Section 154 as it was debatable and not a "mistake apparent from record". The Tribunal agreed with the CIT(A)'s reasoning that the assessee had failed to claim the exemption in the original return or a revised return, and Section 154 cannot be used to make a fresh claim or rectify omissions that require further investigation. Therefore, the appeals were dismissed. No issue was expressly left undecided.

The Tribunal held that while the assessee had failed to furnish the requisite details despite an opportunity, the CIT(E) had not recorded any specific adverse finding that the trust's objects were not charitable or that its activities were not genuine. The rejection was based on the inability to verify the conditions due to a lack of supporting material. The Tribunal acknowledged the assessee's onus to substantiate its eligibility but, in the interest of substantial justice, decided to grant the assessee one more opportunity. The impugned order was set aside, and the matter was restored to the CIT(E) for fresh adjudication. The assessee was directed to cooperate and furnish all required documents. The Tribunal explicitly stated that it was not expressing any opinion on the merits of the assessee's eligibility for registration. The appeals were allowed for statistical purposes.

The Tribunal held that the assessee had successfully discharged the three ingredients of Section 68 of the Income Tax Act, 1961: identity of the lenders, creditworthiness of the lenders, and genuineness of the transactions. The Tribunal noted that the assessee had furnished bank statements, audited financial statements, ITR acknowledgments, and certified ledger accounts of the lender companies. Furthermore, the lenders had complied with notices issued under Section 133(6) of the Act, and no discrepancies were pointed out by the AO. The Tribunal also observed that the loans had been fully or partly repaid. Crucially, the Tribunal relied on multiple previous ITAT orders that had already adjudicated similar issues concerning loans received from the impugned lender companies, finding them to be genuine and deleting additions made under Section 68. These prior decisions covered almost all the six lender parties in question. The Tribunal found no infirmity in the CIT(A)'s order, which placed reliance on these Tribunal orders. Consequently, the grounds raised by the revenue were dismissed for all years. The cross-objections filed by the assessee were dismissed as infructuous, being supportive of the CIT(A)'s order. Appeals related to AY 2015-16 were dismissed as duplicate. The operative direction was to dismiss the revenue's appeals and the assessee's cross-objections.

The Tribunal held that while the assessee had failed to furnish the requisite details despite an opportunity, the CIT(E) had not recorded any specific adverse finding that the trust's objects were not charitable or that its activities were not genuine. The rejection was based on the inability to verify the conditions due to a lack of supporting material. The Tribunal acknowledged the assessee's onus to substantiate its eligibility but, in the interest of substantial justice, decided to grant the assessee one more opportunity. The impugned order was set aside, and the matter was restored to the CIT(E) for fresh adjudication. The assessee was directed to cooperate and furnish all required documents. The Tribunal explicitly stated that it was not expressing any opinion on the merits of the assessee's eligibility for registration. The appeals were allowed for statistical purposes.

The Tribunal held that the assessee had successfully discharged the three ingredients of Section 68 of the Income Tax Act, 1961: identity of the lenders, creditworthiness of the lenders, and genuineness of the transactions. The Tribunal noted that the assessee had furnished bank statements, audited financial statements, ITR acknowledgments, and certified ledger accounts of the lender companies. Furthermore, the lenders had complied with notices issued under Section 133(6) of the Act, and no discrepancies were pointed out by the AO. The Tribunal also observed that the loans had been fully or partly repaid. Crucially, the Tribunal relied on multiple previous ITAT orders that had already adjudicated similar issues concerning loans received from the impugned lender companies, finding them to be genuine and deleting additions made under Section 68. These prior decisions covered almost all the six lender parties in question. The Tribunal found no infirmity in the CIT(A)'s order, which placed reliance on these Tribunal orders. Consequently, the grounds raised by the revenue were dismissed for all years. The cross-objections filed by the assessee were dismissed as infructuous, being supportive of the CIT(A)'s order. Appeals related to AY 2015-16 were dismissed as duplicate. The operative direction was to dismiss the revenue's appeals and the assessee's cross-objections.

The Tribunal held that the assessee had successfully discharged the three ingredients of Section 68 of the Income Tax Act, 1961: identity of the lenders, creditworthiness of the lenders, and genuineness of the transactions. The Tribunal noted that the assessee had furnished bank statements, audited financial statements, ITR acknowledgments, and certified ledger accounts of the lender companies. Furthermore, the lenders had complied with notices issued under Section 133(6) of the Act, and no discrepancies were pointed out by the AO. The Tribunal also observed that the loans had been fully or partly repaid. Crucially, the Tribunal relied on multiple previous ITAT orders that had already adjudicated similar issues concerning loans received from the impugned lender companies, finding them to be genuine and deleting additions made under Section 68. These prior decisions covered almost all the six lender parties in question. The Tribunal found no infirmity in the CIT(A)'s order, which placed reliance on these Tribunal orders. Consequently, the grounds raised by the revenue were dismissed for all years. The cross-objections filed by the assessee were dismissed as infructuous, being supportive of the CIT(A)'s order. Appeals related to AY 2015-16 were dismissed as duplicate. The operative direction was to dismiss the revenue's appeals and the assessee's cross-objections.

The Tribunal held that the assessee had successfully discharged the three ingredients of Section 68 of the Income Tax Act, 1961: identity of the lenders, creditworthiness of the lenders, and genuineness of the transactions. The Tribunal noted that the assessee had furnished bank statements, audited financial statements, ITR acknowledgments, and certified ledger accounts of the lender companies. Furthermore, the lenders had complied with notices issued under Section 133(6) of the Act, and no discrepancies were pointed out by the AO. The Tribunal also observed that the loans had been fully or partly repaid. Crucially, the Tribunal relied on multiple previous ITAT orders that had already adjudicated similar issues concerning loans received from the impugned lender companies, finding them to be genuine and deleting additions made under Section 68. These prior decisions covered almost all the six lender parties in question. The Tribunal found no infirmity in the CIT(A)'s order, which placed reliance on these Tribunal orders. Consequently, the grounds raised by the revenue were dismissed for all years. The cross-objections filed by the assessee were dismissed as infructuous, being supportive of the CIT(A)'s order. Appeals related to AY 2015-16 were dismissed as duplicate. The operative direction was to dismiss the revenue's appeals and the assessee's cross-objections.

The Tribunal held that the assessee had successfully discharged the three ingredients of Section 68 of the Income Tax Act, 1961: identity of the lenders, creditworthiness of the lenders, and genuineness of the transactions. The Tribunal noted that the assessee had furnished bank statements, audited financial statements, ITR acknowledgments, and certified ledger accounts of the lender companies. Furthermore, the lenders had complied with notices issued under Section 133(6) of the Act, and no discrepancies were pointed out by the AO. The Tribunal also observed that the loans had been fully or partly repaid. Crucially, the Tribunal relied on multiple previous ITAT orders that had already adjudicated similar issues concerning loans received from the impugned lender companies, finding them to be genuine and deleting additions made under Section 68. These prior decisions covered almost all the six lender parties in question. The Tribunal found no infirmity in the CIT(A)'s order, which placed reliance on these Tribunal orders. Consequently, the grounds raised by the revenue were dismissed for all years. The cross-objections filed by the assessee were dismissed as infructuous, being supportive of the CIT(A)'s order. Appeals related to AY 2015-16 were dismissed as duplicate. The operative direction was to dismiss the revenue's appeals and the assessee's cross-objections.

The Tribunal held that the assessee had successfully discharged the three ingredients of Section 68 of the Income Tax Act, 1961: identity of the lenders, creditworthiness of the lenders, and genuineness of the transactions. The Tribunal noted that the assessee had furnished bank statements, audited financial statements, ITR acknowledgments, and certified ledger accounts of the lender companies. Furthermore, the lenders had complied with notices issued under Section 133(6) of the Act, and no discrepancies were pointed out by the AO. The Tribunal also observed that the loans had been fully or partly repaid. Crucially, the Tribunal relied on multiple previous ITAT orders that had already adjudicated similar issues concerning loans received from the impugned lender companies, finding them to be genuine and deleting additions made under Section 68. These prior decisions covered almost all the six lender parties in question. The Tribunal found no infirmity in the CIT(A)'s order, which placed reliance on these Tribunal orders. Consequently, the grounds raised by the revenue were dismissed for all years. The cross-objections filed by the assessee were dismissed as infructuous, being supportive of the CIT(A)'s order. Appeals related to AY 2015-16 were dismissed as duplicate. The operative direction was to dismiss the revenue's appeals and the assessee's cross-objections.

The Tribunal held that the assessee had successfully discharged the three ingredients of Section 68 of the Income Tax Act, 1961: identity of the lenders, creditworthiness of the lenders, and genuineness of the transactions. The Tribunal noted that the assessee had furnished bank statements, audited financial statements, ITR acknowledgments, and certified ledger accounts of the lender companies. Furthermore, the lenders had complied with notices issued under Section 133(6) of the Act, and no discrepancies were pointed out by the AO. The Tribunal also observed that the loans had been fully or partly repaid. Crucially, the Tribunal relied on multiple previous ITAT orders that had already adjudicated similar issues concerning loans received from the impugned lender companies, finding them to be genuine and deleting additions made under Section 68. These prior decisions covered almost all the six lender parties in question. The Tribunal found no infirmity in the CIT(A)'s order, which placed reliance on these Tribunal orders. Consequently, the grounds raised by the revenue were dismissed for all years. The cross-objections filed by the assessee were dismissed as infructuous, being supportive of the CIT(A)'s order. Appeals related to AY 2015-16 were dismissed as duplicate. The operative direction was to dismiss the revenue's appeals and the assessee's cross-objections.

The Tribunal decided the issues as follows: 1. Regarding the Section 80JJAA deduction disallowance for AY 2018-19, the Tribunal held that the disallowance was not justified. The assessee's argument that this deduction was not disallowed in the initial assessment year (2016-17) as per its computation was found to be unrebutted by the Revenue. Therefore, the disallowance was deleted, and the assessee's appeal (ITA No. 421/Del/2024) was allowed. 2. Concerning the travel expenses for AY 2018-19, the Tribunal found no reason to interfere with the CIT(A)'s finding that the ad hoc disallowance by the Assessing Officer could not be upheld for want of rejection of books and specific defects. However, acknowledging the possibility of some reconciliation and verification of bills and vouchers, the Tribunal deemed it appropriate to allow a lumpsum disallowance of Rs. 10 lakhs, with the rider that it would not be treated as a precedent. The CIT(A)'s decision was upheld to the extent of Rs. 7,13,86,167/-. The Revenue's cross-appeal (ITA No. 442/Del/2024) was partly allowed. 3. For AY 2020-21, the Tribunal rejected the Revenue's appeal (ITA No. 549/Del/2024) outright. This was based on two grounds: the tax effect of Rs. 45,54,484/- was less than the prescribed limit of Rs. 60 lakhs as per CBDT Circular No. 09/2024, and the issue of Section 80JJAA deduction had already been accepted in AY 2018-19. The appeal was dismissed. No other ground or argument was pressed. The operative directions were the deletion of the Section 80JJAA disallowance, partial allowance of the travel expenses disallowance, and dismissal of the Revenue's appeal for AY 2020-21.

For AY 2003-04, the Tribunal dismissed the Revenue's appeal on Ground No. 8 concerning the disallowance of advertisement expenses. The Tribunal noted that the expenditure was incurred for the 'Sahara' brand and was shared among group entities based on a prior understanding with the Income Tax Department in AY 1996-97, which was accepted by the group concern. The Tribunal found that the direct nexus between the expenditure and the assessee's business was established through the prominent display of the 'Sahara' brand. The CIT(A)'s deletion of the addition was upheld. The Tribunal also stated that all other contents of its earlier order for AY 2003-04, except for Ground No. 8, would remain unchanged. The appeal of the Revenue was dismissed. The judgment does not contain specific findings or reasoning for AY 2004-05 regarding the newsprint wastage issue, other than noting the Revenue's appeal and the AO's arbitrary adoption of a 6% wastage rate. The operative direction for AY 2003-04 was dismissal of the revenue's appeal.

The Tribunal quashed the initiation of proceedings under Section 153C of the Act in the hands of the assessee. Consequently, the assessments framed under Section 153C for the assessment years under consideration were held to be illegal and void ab initio. The Tribunal relied on the decision of the Hon'ble Karnataka High Court in DCIT vs. Sunil Kumar Sharma, which was affirmed by the Hon'ble Supreme Court, holding that a consolidated satisfaction note recorded for different assessment years vitiates the entire assessment proceedings. The Tribunal also referred to a Madras High Court decision which held that Section 153C(3) of the Act will not apply to searches initiated on or after April 1, 2021, and that the date of handing over seized material to the assessee's AO is the date of initiation of search for the assessee. Since the consolidated satisfaction note was recorded for multiple years and the initiation of search for the assessee was subsequent to April 1, 2021, the jurisdiction under Section 153C was invalidly assumed. The remaining grounds raised by the assessee on the merits of the additions were rendered academic and not adjudicated.

The Tribunal partially allowed the assessee's appeal. Regarding the cash deposits of Rs. 13,35,000/- during the demonetization period, the Tribunal found that while the assessee had not fully discharged the onus of proof, a lumpsum addition of Rs. 1.5 lakhs would be just and proper. This provided the assessee with relief of Rs. 11,85,000/-. The Tribunal explicitly stated that this relief shall not be treated as a precedent. Concerning the assessment under section 115BBE, the Tribunal, relying on the Madras High Court decision in S.M.I.L.E. Microfinance Ltd. Vs. ACIT, held that this provision would only come into effect for transactions done on or after 01.04.2017. Therefore, the assessee was directed to be assessed under the normal provisions of the Act. No other grounds were pressed.

On the issue of Section 80JJAA deduction for AY 2018-19, the Tribunal held that the disallowance made by the lower authorities was not justified. The Tribunal noted that the assessee had provided an assessment order for AY 2016-17 where this deduction was not disallowed, and this fact was not rebutted by the Revenue. Therefore, the disallowance of Rs. 2,96,63,277/- was deleted, and the assessee's appeal (ITA No. 421/Del/2024) was allowed. Regarding the travel expenses for AY 2018-19, the Tribunal found no reason to interfere with the CIT(A)/NFAC's finding that the ad hoc disallowance by the Assessing Officer could not be upheld without rejecting books and specific defects. However, considering the possibility of reconciliation and verification of bills and vouchers, the Tribunal deemed it appropriate to allow a lumpsum disallowance of Rs. 10 lakhs, with the rider that it would not be treated as a precedent. The CIT(A)'s decision was upheld to the extent of Rs. 7,13,86,167/-. The Revenue's appeal (ITA No. 442/Del/2024) was partly allowed. For AY 2020-21, the Tribunal dismissed the Revenue's appeal (ITA No. 549/Del/2024) as the tax effect was below the prescribed limit in CBDT Circular No. 09/2024 and the issue of Section 80JJAA deduction had already been accepted in AY 2018-19. No other ground was pressed.

For AY 2003-04, the Tribunal dismissed the Revenue's appeal on Ground No. 8 concerning the disallowance of advertisement expenses. The Tribunal noted that the expenditure was incurred for the 'Sahara' brand and was shared among group entities based on a prior understanding with the Income Tax Department in AY 1996-97, which was accepted by the group concern. The Tribunal found that the direct nexus between the expenditure and the assessee's business was established through the prominent display of the 'Sahara' brand. The CIT(A)'s deletion of the addition was upheld. The Tribunal also stated that all other contents of its earlier order for AY 2003-04, except for Ground No. 8, would remain unchanged. The appeal of the Revenue was dismissed. The judgment does not contain specific findings or reasoning for AY 2004-05 regarding the newsprint wastage issue, other than noting the Revenue's appeal and the AO's arbitrary adoption of a 6% wastage rate. The operative direction for AY 2003-04 was dismissal of the revenue's appeal.

The Tribunal condoned the delay of 305 days in filing the appeal, relying on the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC). The Tribunal acknowledged the possibility of communication gaps in the newly introduced virtual hearing mechanism. In the larger interest of justice, the Tribunal decided to restore the assessee's appeal back to the CIT(A) for fresh adjudication. The CIT(A) was directed to provide three effective opportunities of hearing to the appellant, at the appellant's risk and responsibility. The appeal was allowed for statistical purposes, with the operative direction being a remand to the CIT(A). No specific issue was left undecided, as the matter was remitted for fresh consideration.

The Tribunal acknowledged the possibility of communication gaps at various levels, which could have led to the assessee's inability to file complete evidence before the Assessing Officer. The Tribunal also recognized that the additional evidence submitted by the assessee was relevant to the core of the matter. In the larger interest of justice, the Tribunal decided to restore the appeal back to the CIT(A) for a fresh adjudication. The CIT(A) was directed to admit the additional evidence and decide the appeal afresh after providing the assessee with three effective opportunities of hearing, at the assessee's risk and responsibility. The appeal was allowed for statistical purposes.

The Tribunal quashed the initiation of proceedings under Section 153C of the Act in the hands of the assessee. Consequently, the assessments framed under Section 153C for the assessment years under consideration were held to be illegal and void ab initio. The Tribunal relied on the decision of the Hon'ble Karnataka High Court in DCIT vs. Sunil Kumar Sharma, which was affirmed by the Hon'ble Supreme Court, holding that a consolidated satisfaction note recorded for different assessment years vitiates the entire assessment proceedings. The Tribunal also referred to a Madras High Court decision which held that Section 153C(3) of the Act will not apply to searches initiated on or after April 1, 2021, and that the date of handing over seized material to the assessee's AO is the date of initiation of search for the assessee. Since the consolidated satisfaction note was recorded for multiple years and the initiation of search for the assessee was subsequent to April 1, 2021, the jurisdiction under Section 153C was invalidly assumed. The remaining grounds raised by the assessee on the merits of the additions were rendered academic and not adjudicated.

The Tribunal quashed the initiation of proceedings under Section 153C of the Act in the hands of the assessee. Consequently, the assessments framed under Section 153C for the assessment years under consideration were held to be illegal and void ab initio. The Tribunal relied on the decision of the Hon'ble Karnataka High Court in DCIT vs. Sunil Kumar Sharma, which was affirmed by the Hon'ble Supreme Court, holding that a consolidated satisfaction note recorded for different assessment years vitiates the entire assessment proceedings. The Tribunal also referred to a Madras High Court decision which held that Section 153C(3) of the Act will not apply to searches initiated on or after April 1, 2021, and that the date of handing over seized material to the assessee's AO is the date of initiation of search for the assessee. Since the consolidated satisfaction note was recorded for multiple years and the initiation of search for the assessee was subsequent to April 1, 2021, the jurisdiction under Section 153C was invalidly assumed. The remaining grounds raised by the assessee on the merits of the additions were rendered academic and not adjudicated.

For AY 2003-04, the Tribunal dismissed the Revenue's appeal on Ground No. 8 concerning the disallowance of advertisement expenses. The Tribunal noted that the expenditure was incurred for the 'Sahara' brand and was shared among group entities based on a prior understanding with the Income Tax Department in AY 1996-97, which was accepted by the group concern. The Tribunal found that the direct nexus between the expenditure and the assessee's business was established through the prominent display of the 'Sahara' brand. The CIT(A)'s deletion of the addition was upheld. The Tribunal also stated that all other contents of its earlier order for AY 2003-04, except for Ground No. 8, would remain unchanged. The appeal of the Revenue was dismissed. The judgment does not contain specific findings or reasoning for AY 2004-05 regarding the newsprint wastage issue, other than noting the Revenue's appeal and the AO's arbitrary adoption of a 6% wastage rate. The operative direction for AY 2003-04 was dismissal of the revenue's appeal.

The Tribunal decided the issues as follows: 1. Regarding the Section 80JJAA deduction disallowance for AY 2018-19, the Tribunal held that the disallowance was not justified. The assessee's argument that this deduction was not disallowed in the initial assessment year (2016-17) as per its computation was found to be unrebutted by the Revenue. Therefore, the disallowance was deleted, and the assessee's appeal (ITA No. 421/Del/2024) was allowed. 2. Concerning the travel expenses for AY 2018-19, the Tribunal found no reason to interfere with the CIT(A)'s finding that the ad hoc disallowance by the Assessing Officer could not be upheld for want of rejection of books and specific defects. However, acknowledging the possibility of some reconciliation and verification of bills and vouchers, the Tribunal deemed it appropriate to allow a lumpsum disallowance of Rs. 10 lakhs, with the rider that it would not be treated as a precedent. The CIT(A)'s decision was upheld to the extent of Rs. 7,13,86,167/-. The Revenue's cross-appeal (ITA No. 442/Del/2024) was partly allowed. 3. For AY 2020-21, the Tribunal rejected the Revenue's appeal (ITA No. 549/Del/2024) outright. This was based on two grounds: the tax effect of Rs. 45,54,484/- was less than the prescribed limit of Rs. 60 lakhs as per CBDT Circular No. 09/2024, and the issue of Section 80JJAA deduction had already been accepted in AY 2018-19. The appeal was dismissed. No other ground or argument was pressed. The operative directions were the deletion of the Section 80JJAA disallowance, partial allowance of the travel expenses disallowance, and dismissal of the Revenue's appeal for AY 2020-21.

For AY 2003-04, the Tribunal dismissed the Revenue's appeal on Ground No. 8 concerning the disallowance of advertisement expenses. The Tribunal noted that the expenditure was incurred for the 'Sahara' brand and was shared among group entities based on a prior understanding with the Income Tax Department in AY 1996-97, which was accepted by the group concern. The Tribunal found that the direct nexus between the expenditure and the assessee's business was established through the prominent display of the 'Sahara' brand. The CIT(A)'s deletion of the addition was upheld. The Tribunal also stated that all other contents of its earlier order for AY 2003-04, except for Ground No. 8, would remain unchanged. The appeal of the Revenue was dismissed. The judgment does not contain specific findings or reasoning for AY 2004-05 regarding the newsprint wastage issue, other than noting the Revenue's appeal and the AO's arbitrary adoption of a 6% wastage rate. The operative direction for AY 2003-04 was dismissal of the revenue's appeal.

For AY 2003-04, the Tribunal dismissed the Revenue's appeal on Ground No. 8 concerning the disallowance of advertisement expenses. The Tribunal noted that the expenditure was incurred for the 'Sahara' brand and was shared among group entities based on a prior understanding with the Income Tax Department in AY 1996-97, which was accepted by the group concern. The Tribunal found that the direct nexus between the expenditure and the assessee's business was established through the prominent display of the 'Sahara' brand. The CIT(A)'s deletion of the addition was upheld. The Tribunal also stated that all other contents of its earlier order for AY 2003-04, except for Ground No. 8, would remain unchanged. The appeal of the Revenue was dismissed. The judgment does not contain specific findings or reasoning for AY 2004-05 regarding the newsprint wastage issue, other than noting the Revenue's appeal and the AO's arbitrary adoption of a 6% wastage rate. The operative direction for AY 2003-04 was dismissal of the revenue's appeal.

The Tribunal held that the proceedings initiated under Section 153C were void ab initio and liable to be quashed. The Tribunal observed that there was no communication on record to establish that the Assessing Officer of the searched person had recorded satisfaction before forwarding the documents to the assessee's Assessing Officer. The assessee's Assessing Officer initiated proceedings based on a satisfaction note recorded on April 18, 2022, even though the search was completed on October 18, 2019. Crucially, the satisfaction note of the searched persons was handed over to the assessee's Assessing Officer only on June 21, 2022. The Tribunal noted that the second satisfaction note recorded by the DCIT, CC-28, for AYs 2010-11 to 2013-14, acknowledged that proceedings for AYs 2014-15 to 2020-21 rested on the earlier satisfaction note of April 18, 2022, and for the first time, established escapement of income above Rs. 50 lakhs. However, the initiation of proceedings was not based on this second satisfaction note. The Tribunal emphasized that the initiation of proceedings under Section 153C requires the Assessing Officer of the searched person to record satisfaction, hand over the material, and then the jurisdictional Assessing Officer must establish the bearing of such material on the determination of the third person's total income. This was not established. The Tribunal relied on the Delhi High Court's decision in 'Saksham Commodities Ltd.' which held that the jurisdictional Assessing Officer must be satisfied that the material has a bearing on the determination of total income. Therefore, the entire proceedings were quashed. Other issues raised by the assessee were kept open.

The Tribunal held that the assessment framed under section 143(3) is invalid and quashed it. The reasoning was that once a search under section 132 is conducted and material is found relating to the assessee, any pending assessment under section 143(3) cannot validly continue. The Assessing Officer must necessarily proceed under the special provisions contained in section 148 of the Act. The Tribunal relied on its previous decisions in Pilot Industries Limited vs. DCIT and Pawan Kumar vs. DCIT, which held that assessments completed under section 143(3) after a search are bad-in-law and without jurisdiction, as they ought to have been framed under section 148, requiring prior approval under section 148B. The principle of 'generalia specialibus non derogant' (special provision overrides the general) was applied, stating that section 148, as a special provision triggered by search information, must prevail over section 143(3). The Tribunal also noted that the time for issuing a notice under section 143(2) in response to the original return had expired. The Tribunal allowed the assessee's ground regarding invalid assumption of jurisdiction. Regarding the second issue concerning the validity of the notice under section 143(2), the judgment states that the learned CIT(A)'s estimation of GP was challenged by both parties, and the Tribunal directed the AO to estimate GP at 6.96% based on segmental trends, rejecting the Revenue's contention for 18%. All other remaining issues were rendered academic.

The Tribunal held that the proceedings initiated under Section 153C were void ab initio and liable to be quashed. The Tribunal observed that there was no communication on record to establish that the Assessing Officer of the searched person had recorded satisfaction before forwarding the documents to the assessee's Assessing Officer. The assessee's Assessing Officer initiated proceedings based on a satisfaction note recorded on April 18, 2022, even though the search was completed on October 18, 2019. Crucially, the satisfaction note of the searched persons was handed over to the assessee's Assessing Officer only on June 21, 2022. The Tribunal noted that the second satisfaction note recorded by the DCIT, CC-28, for AYs 2010-11 to 2013-14, acknowledged that proceedings for AYs 2014-15 to 2020-21 rested on the earlier satisfaction note of April 18, 2022, and for the first time, established escapement of income above Rs. 50 lakhs. However, the initiation of proceedings was not based on this second satisfaction note. The Tribunal emphasized that the initiation of proceedings under Section 153C requires the Assessing Officer of the searched person to record satisfaction, hand over the material, and then the jurisdictional Assessing Officer must establish the bearing of such material on the determination of the third person's total income. This was not established. The Tribunal relied on the Delhi High Court's decision in 'Saksham Commodities Ltd.' which held that the jurisdictional Assessing Officer must be satisfied that the material has a bearing on the determination of total income. Therefore, the entire proceedings were quashed. Other issues raised by the assessee were kept open.

The Tribunal held that the proceedings initiated under Section 153C were void ab initio and liable to be quashed. The Tribunal observed that there was no communication on record to establish that the Assessing Officer of the searched person had recorded satisfaction before forwarding the documents to the assessee's Assessing Officer. The assessee's Assessing Officer initiated proceedings based on a satisfaction note recorded on April 18, 2022, even though the search was completed on October 18, 2019. Crucially, the satisfaction note of the searched persons was handed over to the assessee's Assessing Officer only on June 21, 2022. The Tribunal noted that the second satisfaction note recorded by the DCIT, CC-28, for AYs 2010-11 to 2013-14, acknowledged that proceedings for AYs 2014-15 to 2020-21 rested on the earlier satisfaction note of April 18, 2022, and for the first time, established escapement of income above Rs. 50 lakhs. However, the initiation of proceedings was not based on this second satisfaction note. The Tribunal emphasized that the initiation of proceedings under Section 153C requires the Assessing Officer of the searched person to record satisfaction, hand over the material, and then the jurisdictional Assessing Officer must establish the bearing of such material on the determination of the third person's total income. This was not established. The Tribunal relied on the Delhi High Court's decision in 'Saksham Commodities Ltd.' which held that the jurisdictional Assessing Officer must be satisfied that the material has a bearing on the determination of total income. Therefore, the entire proceedings were quashed. Other issues raised by the assessee were kept open.

The Tribunal held that the penalty under Section 270A was unsustainable on two grounds. Firstly, the notice issued under Section 274 read with Section 270A was defective as it failed to specify the precise charge or the applicable clause of Section 270A(9). The Tribunal, following the jurisdictional Delhi High Court's decision in *Schneider Electric South East Asia (HQ) Pte Ltd. v. ACIT*, emphasized that a mere recital of 'misreporting' without identifying the specific limb of Section 270A(9) makes the order arbitrary. The assessment and penalty orders also lacked a clause-specific finding demonstrating how the facts satisfied any particular limb of Section 270A(9). Secondly, on merits, the Tribunal found the assessee's explanation for the omission to be bona fide. The omission occurred during the COVID-19 pandemic, the interest was not reflected in Form 26AS, and the assessee subsequently disclosed the income in the revised return, which was accepted by the AO without additions. The Tribunal considered Section 270A(6)(a) and found the explanation plausible and bona fide, concluding that the omission did not constitute deliberate misrepresentation or suppression of facts warranting a 200% penalty. Consequently, the penalty of Rs. 3,08,384 was deleted.

The Tribunal decided all three issues in favour of the assessee. For issue (a), regarding the Rs. 30,79,700 addition, the Tribunal observed that while the AO noticed a mismatch, careful consideration of documents and confirmations established no mistake in the assessee's ledger account. The addition based on the mismatch was deleted. For issue (b), concerning the Rs. 1,36,55,949 addition and denial of exemption, the Tribunal respectfully followed its coordinate Bench's decision for AY 2018-19 on identical facts. The previous order had deleted the addition, holding that advances were in the ordinary course of construction or to other registered charitable institutions without personal benefit to specified persons, and that Section 40A(2)(a) was wrongly invoked. For issue (c), the Rs. 55,00,000 donation disallowance, the Tribunal again followed the coordinate Bench's decision for AY 2018-19, which allowed the ground by noting that the recipient trust was duly registered under Sections 12A and 80G and there was no prohibition against such application of funds. The operative direction was to delete the impugned disallowances and extend the benefit of Sections 11 & 12 to the assessee.

The Tribunal held that the proceedings initiated under Section 153C were void ab initio and liable to be quashed. The Tribunal observed that there was no communication on record to establish that the Assessing Officer of the searched person had recorded satisfaction before forwarding the documents to the assessee's Assessing Officer. The assessee's Assessing Officer initiated proceedings based on a satisfaction note recorded on April 18, 2022, even though the search was completed on October 18, 2019. Crucially, the satisfaction note of the searched persons was handed over to the assessee's Assessing Officer only on June 21, 2022. The Tribunal noted that the second satisfaction note recorded by the DCIT, CC-28, for AYs 2010-11 to 2013-14, acknowledged that proceedings for AYs 2014-15 to 2020-21 rested on the earlier satisfaction note of April 18, 2022, and for the first time, established escapement of income above Rs. 50 lakhs. However, the initiation of proceedings was not based on this second satisfaction note. The Tribunal emphasized that the initiation of proceedings under Section 153C requires the Assessing Officer of the searched person to record satisfaction, hand over the material, and then the jurisdictional Assessing Officer must establish the bearing of such material on the determination of the third person's total income. This was not established. The Tribunal relied on the Delhi High Court's decision in 'Saksham Commodities Ltd.' which held that the jurisdictional Assessing Officer must be satisfied that the material has a bearing on the determination of total income. Therefore, the entire proceedings were quashed. Other issues raised by the assessee were kept open.

The Tribunal noted that the assessee had filed an application to withdraw the instant appeal. The assessee's counsel explained that the appeal was filed against an order under section 80G(5) of the Act. However, the assessee subsequently applied for and obtained provisional registration under section 12A of the Act from AY 2022-23 to 2026-27. This subsequent development rendered the original appeal moot. The Revenue did not object to the withdrawal. Therefore, the Tribunal allowed the assessee's application and dismissed the appeal as withdrawn. No specific issue was left undecided, as the appeal itself was withdrawn.

The Tribunal held that the Revenue's appeal was to be rejected on the precise ground that the tax effect involved was below the threshold stipulated in CBDT Circular No. 9/2024. The Tribunal noted the fair concession made by the learned Departmental Representative regarding the tax effect and the applicability of the circular to pending appeals. Consequently, the Tribunal dismissed the Revenue's appeal. No specific issue regarding the merits of the assessment proceedings under section 147 r.w.s. 144 was decided, as the appeal was disposed of on a procedural ground related to tax effect. The operative direction was to dismiss the appeal.

The Tribunal held that the impugned loans received by the assessee from entities controlled by entry operators could not be proved sufficiently to escape the rigours of Section 68 of the Act. The Tribunal observed that the loan-giving entities had meager turnover, negligible fixed assets, few employees, and showed huge premium which did not justify their intrinsic worth. They also engaged in cross-holdings to boost capital for circular rotation of funds. The assessee failed to offer a plausible rebuttal or produce directors of the loan-givers to prove their NBFC activities, especially when some loans were squared up around the assessment period, and the loan-givers could not be located. The Tribunal emphasized the need to lift the veil of secrecy in cases of money laundering through accommodation entries. Consequently, the Tribunal upheld the AO's action in treating the impugned loans under Section 68 and reversed the CIT(A)'s relief. Regarding the disallowance of interest and the ad-hoc commission, the Tribunal, relying on the case of Shyam Realities, held that if the underlying loan transactions are considered non-genuine, the interest paid thereon is disallowable. The Tribunal also upheld the estimated commission payment. Therefore, the grounds raised by the assessee were rejected, and those raised by the revenue were allowed.

The Tribunal held that the impugned loans received by the assessee from entities controlled by entry operators could not be proved sufficiently to escape the rigours of Section 68 of the Act. The Tribunal observed that the loan-giving entities had meager turnover, negligible fixed assets, few employees, and showed huge premium which did not justify their intrinsic worth. They also engaged in cross-holdings to boost capital for circular rotation of funds. The assessee failed to offer a plausible rebuttal or produce directors of the loan-givers to prove their NBFC activities, especially when some loans were squared up around the assessment period, and the loan-givers could not be located. The Tribunal emphasized the need to lift the veil of secrecy in cases of money laundering through accommodation entries. Consequently, the Tribunal upheld the AO's action in treating the impugned loans under Section 68 and reversed the CIT(A)'s relief. Regarding the disallowance of interest and the ad-hoc commission, the Tribunal, relying on the case of Shyam Realities, held that if the underlying loan transactions are considered non-genuine, the interest paid thereon is disallowable. The Tribunal also upheld the estimated commission payment. Therefore, the grounds raised by the assessee were rejected, and those raised by the revenue were allowed.

The Tribunal held that the impugned loans received by the assessee from entities controlled by entry operators could not be proved sufficiently to escape the rigours of Section 68 of the Act. The Tribunal observed that the loan-giving entities had meager turnover, negligible fixed assets, few employees, and showed huge premium which did not justify their intrinsic worth. They also engaged in cross-holdings to boost capital for circular rotation of funds. The assessee failed to offer a plausible rebuttal or produce directors of the loan-givers to prove their NBFC activities, especially when some loans were squared up around the assessment period, and the loan-givers could not be located. The Tribunal emphasized the need to lift the veil of secrecy in cases of money laundering through accommodation entries. Consequently, the Tribunal upheld the AO's action in treating the impugned loans under Section 68 and reversed the CIT(A)'s relief. Regarding the disallowance of interest and the ad-hoc commission, the Tribunal, relying on the case of Shyam Realities, held that if the underlying loan transactions are considered non-genuine, the interest paid thereon is disallowable. The Tribunal also upheld the estimated commission payment. Therefore, the grounds raised by the assessee were rejected, and those raised by the revenue were allowed.