ITAT Hyderabad Judgments — April 2025

The Tribunal noted that the assessee failed to produce evidence to prove the genuineness and source of the donations. It concluded that the CIT(A) deleted the additions on technical grounds without fully addressing the substance of the alleged tax avoidance scheme. Therefore, the Tribunal set aside the CIT(A)'s order for the quantum appeals (A.Y. 2008-09 to 2010-11) and remanded the matter back to the Assessing Officer for fresh adjudication, including tracing the money trail. The related penalty appeals under Section 271(1)(c) for A.Y. 2009-10 and 2010-11 were also set aside, contingent on the outcome of the quantum proceedings.

The Tribunal held that the CIT(A) deleted the additions on technical grounds without proper inquiry. The Tribunal set aside the CIT(A)'s order and remanded the matters to the AO for fresh adjudication. The AO is to trace the money trail of alleged cash received and the assessee must prove the genuineness of donations.

The Tribunal found that ex-parte orders were passed by both lower authorities. The Tribunal held that adequate opportunity of hearing was not provided, violating principles of natural justice. Therefore, the matter was restored to the Assessing Officer for fresh verification.

The Tribunal upheld the PCIT's order, confirming that the Assessing Officer's failure to conduct a proper inquiry into the second property, which involved an unexplained cash investment, rendered the assessment order erroneous and prejudicial to the interest of the revenue. The Tribunal affirmed that the PCIT had validly exercised revisionary powers under Section 263 of the Income Tax Act.

The Tribunal found that the CIT(E) rejected the Section 80G application without proper reasoning or considering the documentary evidence and charitable activities of the assessee-trust. Concluding that the trust is prima facie eligible for Section 80G registration, the Tribunal set aside the CIT(E)'s order and remitted the matter back for re-verification and reconsideration.

The Tribunal held that the CIT(A) deleted the additions on technical grounds without a proper inquiry. The Tribunal set aside the CIT(A)'s order and remanded the matter to the AO for fresh adjudication, directing the AO to trace the money trail and the assessee to prove the genuineness of donations from its own funds.

The ITAT upheld the CIT(A)'s decision, ruling that the assessee is not a 'co-operative bank' under Section 80P(4) as it lacks an RBI license, citing the Supreme Court's decision in *Mavilayi Service Co-operative Bank Ltd.* It was held that providing credit facilities to non-members does not automatically disentitle the society from Section 80P(2)(a)(i) deduction for income from members, though profits attributable to non-members are not deductible. The ITAT also confirmed the eligibility for deduction under Section 80P(2)(d) for interest earned from investments with other co-operative societies/banks and allowed the deduction for interest paid on share capital.

The CIT(A) had quashed the assessment order, deeming the Section 153C notice invalid due to an improper satisfaction note. However, the ITAT, citing the Supreme Court's decision in Super Malls (P.) Ltd. vs. PCIT-8, found that since the AO for the searched person and the assessee were the same, the recorded satisfaction that documents belonged to the assessee was sufficient and the notice valid. The ITAT reversed the CIT(A)'s order and restored the matter to the CIT(A) to decide the appeal on merits.

The Tribunal noted the lack of direct evidence to prove the donations were linked to alleged cash receipts by the assessee. Due to procedural issues and the need for proper inquiry, the Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer for fresh adjudication.

The Tribunal acknowledged the assessee's valid reason for non-compliance and the ex-parte nature of the CIT(A)'s order. Emphasizing principles of natural justice, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for fresh adjudication on merits, ensuring the assessee receives another opportunity for a hearing.

The Tribunal noted conflicting claims regarding the submission of evidence (husband's bank statements showing cash withdrawals) between the assessee and the Assessing Officer, and the assessee's failure to appear before the CIT(A). Concluding that the matter required fresh examination, the Tribunal set aside the CIT(A)'s order and restored the case to the Assessing Officer, directing him to verify the relevant evidences filed by the assessee to prove the source of cash deposit.

The Tribunal held that the CIT(A) deleted the addition on technical grounds without proper inquiry. The Tribunal set aside the CIT(A) order and remanded the matters to the AO for fresh adjudication, directing the assessee to prove the genuineness of donations.

The Tribunal found that the assessee had not been provided adequate opportunity by the lower authorities to substantiate its claim for deduction u/Section 80P. Therefore, to meet the ends of justice, the matter for all appeals (ITA.No.176, 177 & 178/Hyd./2025) was restored to the file of the Assessing Officer for re-adjudication, with a direction to provide adequate opportunity of being heard to the assessee society. The penalty issue under Section 270A, being consequential, was also remitted back for re-adjudication.

The Tribunal condoned the 3-day delay in filing the appeals. It found that the assessee was not given adequate opportunity by the Assessing Officer and CIT(A) to furnish documentary evidence for its Section 80P deduction claim. Consequently, the matters were remitted back to the Assessing Officer for re-adjudication with directions to provide the assessee with a proper opportunity to be heard and submit all necessary evidence. The consequential penalty under Section 270A was also remitted.

The Tribunal considered the assessee's application for withdrawal of the appeal. The Department's DR raised no objection. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that a notice issued in the name of a dead person is void ab initio and cannot be sustained. It is a fundamental requirement that the notice for reopening an assessment must be issued to a living person, and the absence of this renders the entire proceeding invalid.

The Tribunal held that the CIT(E) had rejected the application without proper consideration of the documentary evidence and submissions. Therefore, the order of the CIT(E) was set aside.

The Tribunal held that the addition of Rs. 76.50 lacs for unexplained money was not justified as the assessee had provided a plausible explanation supported by cash withdrawals. The disallowance of expenditure of Rs. 17,92,629/- and sundry creditors of Rs. 38,29,272/- were set aside and remanded to the AO for fresh adjudication.

The Tribunal found that the assessee was not afforded adequate opportunity to present evidence and substantiate its claim for deduction under Section 80P. Consequently, the matters for both assessment years were restored to the Assessing Officer for fresh adjudication, with a direction to provide a proper opportunity of being heard. The penalty issue, being consequential, was also remitted.

The Tribunal found that the CIT(E) dismissed the application without adequately considering the documentary evidence and submissions provided by the assessee. Therefore, the Tribunal set aside the CIT(E)'s order and remanded the matter back for a fresh decision after providing the assessee-trust with an adequate opportunity of being heard.

The Tribunal held that assessment proceedings against a deceased person without involving legal heirs are void ab initio. The assessment order passed by the AO in the name of the deceased assessee is a nullity and cannot be sustained.

The Tribunal observed that the assessee had explicitly opted out of email service for notices in Form 35, yet the CIT(A) served notices only via the ITBA portal, without providing any physical notices. Concluding that the assessee was denied a reasonable opportunity of being heard, the Tribunal set aside the CIT(A)'s ex-parte order and remanded the matter for fresh adjudication, leaving the merits open.

The Income Tax Appellate Tribunal (ITAT) held that the assessment framed in the name of a deceased person is suffering from a fundamental defect and is a nullity in the eyes of law. The Tribunal set aside the assessment order, approving the CIT(A)'s decision, and directed the AO to continue the proceedings against the legal representatives of the deceased assessee from the stage at which it stood on the date of the assessee's death, as per Section 159 of the Income Tax Act.

The Tribunal held that the delay of 1379 days was inordinate and the assessee had not filed any application explaining the reasons for the delay. Therefore, the CIT(A) was justified in declining to condone the delay. The Tribunal upheld the order of the CIT(A).

The Tribunal held that the CIT(A) erred in passing an ex-parte order without ensuring proper service of notice, especially since the assessee had opted out of email communication. The appeals were allowed for statistical purposes, and the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the assessment order passed in the name of the deceased assessee is a nullity. The AO ought to have continued proceedings against the legal representatives as per Section 159(2)(a) of the Income Tax Act. The appeals were allowed for statistical purposes, and the assessment order was set aside.

The Tribunal held that the CIT(A) erred in dismissing the appeal for non-prosecution without considering the merits. The Tribunal stated that the CIT(A) has a statutory obligation to dispose of appeals on merits and cannot summarily dismiss them for non-prosecution.

The Tribunal held that since the CIT(A) adjudicated the appeal on merits, it implicitly condoned the delay in filing the appeal. Regarding the merits, the Tribunal found that the A.O. was statutorily obligated to allow the notional deduction under Section 24(a) for 'Income from House Property'. Therefore, the matter was restored to the A.O. for re-adjudication, allowing the assessee an opportunity to substantiate her claim.

The Tribunal found the CIT(E)'s order 'lackadaisical' for rejecting the application without considering documentary evidence and providing proper reasons. It emphasized that charitable activities by trusts should be encouraged. The case was remitted back to the CIT(E) for fresh consideration, with a direction to provide the assessee a proper hearing and consider all documentary evidence.

The Tribunal held that the assessment order passed against a deceased person without impleading the legal heirs and without following the procedures under Section 159 of the Income Tax Act is a nullity and cannot be sustained. The appeals were accordingly allowed in terms of setting aside the assessment.

The Tribunal noted that the issue of limitation regarding the notice u/s 148 was raised for the first time. Considering the judgment of the Hon'ble Supreme Court in Union of India vs. Rajiv Bansal, the Tribunal decided to remand the issue to the CIT(A) for adjudication.

The tribunal held that both appeals filed by the assessee are allowed for statistical purposes.

The Tribunal held that the ex-parte order by the CIT(A) was due to improper service of notices, as they were not sent to the email address provided by the assessee. Consequently, the CIT(A)'s order was set aside.

The Tribunal considered the facts presented, including the assessee's request to dismiss the appeal as infructuous due to a double upload. The Tribunal agreed with the assessee's submission and dismissed the appeal.

The Tribunal found the CIT(E)'s observation regarding lack of substantial charitable activity incorrect, considering the appellant's educational objects and its nascent stage of establishing universities. It noted the appellant's claim of submitting all necessary documents. The Tribunal set aside the CIT(E)'s order and remitted the matter back for reconsideration, directing the CIT(E) to re-examine the case based on the trust's objects and any additional evidence.

The Tribunal dismissed the assessee's appeal for condonation of delay, finding the reasons provided insufficient and not "bonafide" or "reasonable". Regarding the Section 80IA deduction, the Tribunal relied on previous judgments and held that the assessee is entitled to the deduction, remitting one specific aspect back to the Assessing Officer for verification of back-to-back agreements. Consequently, one of the assessee's appeals was dismissed, another was allowed for statistical purposes, and the Revenue's appeal was dismissed.

The Tribunal dismissed the assessee's appeal (ITA.No.359/Hyd./2022) for condonation of delay, finding the reasons insufficient. The Tribunal dismissed the Revenue's appeal (ITA.No.1415/Hyd./2019), affirming that constituent partners of JVs are eligible for Section 80IA deduction if they perform the infrastructure work. For the assessee's appeal (ITA.No.389/Hyd./2020) regarding 100% deduction on back-to-back sub-contracts, the Tribunal remanded the issue to the Assessing Officer for verification of agreements and directed to allow the full deduction if proven.

The Tribunal held that the sum of Rs. 4,43,00,000 given to Kamineni Health Care Pvt Ltd was an investment in shares and not a loan, funded by interest-free funds. Therefore, the disallowance of interest on this amount was deleted. For the advances to M/s United Steel Allied Ind Private Limited, the Tribunal upheld the CIT(A)'s view that it was a loan and directed the AO to recalculate interest disallowance for the actual period.

The Tribunal held that the satisfaction recorded by the Assessing Officer for initiating proceedings u/s 153C was vague and lacked specific linkage between the seized material and the income for the particular assessment year. It was found that the JDA, which was duly recorded in the books of account and involved refundable security, did not constitute incriminating material. Citing various judgments, the Tribunal concluded that the initiation of proceedings u/s 153C on the basis of invalid satisfaction was unsustainable in law and, therefore, quashed the proceedings.

The Tribunal held that the payments made to retailers were for sales incentives and promotion on behalf of the principal and did not fall under the definition of 'commission' under Section 194H. The genuineness of expenditure was also sufficiently proved.

The tribunal pronounced its order in the open court, concluding the hearing. The result indicated that both appeals filed by the assessee were allowed for statistical purposes.

The Tribunal held that the assessee had provided sufficient evidence, including bank statements and loan confirmations, to explain the source of investment for the property purchase. The lower authorities erred in ignoring these evidences.

The Tribunal observed that the Assessing Officer and CIT(A) sustained additions without adequately considering the assessee's explanation and bank statements. The assessee contended the deposits were re-deposits of loans taken for agricultural activities of its members. The Tribunal restored the issues back to the Assessing Officer for a de novo verification, granting the assessee an opportunity to present supporting documentary evidence.

The Income Tax Appellate Tribunal held that the initiation of Section 153C proceedings was invalid. It ruled that for an already completed assessment year, proceedings under Section 153C require specific incriminating material linking to undisclosed income, which was not established as the JDA was already part of the assessee's books. The satisfaction recorded by the AO was deemed vague and lacking the necessary nexus, thus quashing the proceedings.

The Tribunal acknowledged the assessee's contention that notices from the CIT(A) were not properly served, preventing them from explaining the delay or merits. Concluding that it was a fit case to grant another opportunity, the Tribunal set aside the CIT(A)'s order and remanded the matter for fresh adjudication. The assessee was directed to file a condonation of delay application, and the CIT(A) was instructed to provide a reasonable opportunity of hearing.