ITAT Hyderabad Judgments — April 2025

The Tribunal acknowledged the assessee's inability to provide proof but recognized the principle that no disallowance under Section 40(a)(ia) is warranted if the recipient has already paid taxes, citing the Supreme Court decision in Hindustan Coca Cola Beverages Pvt. Ltd. Therefore, the matter was remanded to the AO to grant the assessee a fresh opportunity to furnish the necessary evidence.

The Tribunal noted that the assessee's sole substantive ground of appeal concerns the addition of Rs. 13,83,500 made under Section 69A read with Section 115BBE of the Income Tax Act, 1961, which was confirmed by the CIT(A). The Tribunal observed that the CIT(A) upheld the addition based on the finding that the assessee had not furnished any evidence to controvert the AO's findings. However, the Tribunal found that the CIT(A) had not provided adequate reasons for his decision and adjudication of the issue, as required by Section 250(6) of the Income Tax Act, 1961. Therefore, the Tribunal decided to remit the issue back to the file of the CIT(A) with a direction to pass a reasoned order, giving proper reasons for his decision and adjudication. The CIT(A) is also directed to call upon the assessee to furnish his explanation and decide the issue on merits. The assessee bears the responsibility to plead and prove his case before the CIT(A). The appeal is allowed for statistical purposes.

The Tribunal held that the CIT(A) erred in summarily dismissing the appeal for non-prosecution without applying his mind to the grounds of appeal. The CIT(A) has a statutory obligation to dispose of the appeal on merits by passing a speaking order.

The Tribunal directed the AO/TPO to give effect to the DRP's corrigendum order regarding the inclusion of ACE BPO as a comparable. The Tribunal also upheld the exclusion of Informed Technologies, agreeing that its other income disqualified it from the comparable list based on the revenue filter.

The Tribunal held that since the DRP dismissed the assessee's objections as time-barred without adjudicating on merits, it did not issue any 'direction' under Section 144C(5). Therefore, the assessment order was not passed in pursuance of a DRP direction, and the appeal against it should lie before the CIT(A). The CIT(A)'s dismissal of the appeal on jurisdictional grounds was erroneous.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under section 153C was unlawful due to the absence of a valid satisfaction note for the relevant assessment year. Consequently, the revision order passed by the Principal CIT under section 263 was also quashed.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under section 153C was unlawful due to the absence of a valid satisfaction note for the relevant assessment year. Consequently, the revision order passed by the Principal CIT under section 263 was also quashed.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under section 153C was unlawful due to the absence of a valid satisfaction note for the relevant assessment year. Consequently, the revision order passed by the Principal CIT under section 263 was also quashed.

The Tribunal found the CIT(Exemption)'s orders to be non-speaking and cryptic, lacking a detailed analysis of the evidence provided by the assessee. Consequently, both rejection orders were set aside, and the matters were remanded back to the CIT(Exemption) for fresh adjudication after proper verification of all details and documents, and after providing the assessee an opportunity of being heard.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under Section 153C was unlawful due to the absence of a valid satisfaction note linking seized material to the total income for the relevant assessment years. Consequently, the PCIT's revision order under Section 263 was also quashed.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under Section 153C was unlawful due to the absence of a valid satisfaction note linking seized material to the total income for the relevant assessment years. Consequently, the PCIT's revision order under Section 263 was also quashed.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under Section 153C was unlawful due to the absence of a valid satisfaction note linking seized material to the total income for the relevant assessment years. Consequently, the PCIT's revision order under Section 263 was also quashed.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under Section 153C was unlawful due to the absence of a valid satisfaction note linking seized material to the total income for the relevant assessment years. Consequently, the PCIT's revision order under Section 263 was also quashed.

The Tribunal held that the PCIT's order passed under Section 263 of the Income Tax Act, 1961, was not sustainable in law and quashed it. The primary reasoning was that the assumption of jurisdiction by the Assessing Officer (AO) under Section 153C for the assessment years 2017-2018 and 2018-2019 was unlawful. This was because the satisfaction note recorded by the AO did not contain any discussion regarding seized material that had a bearing on the determination of the total income of the assessees for those specific assessment years. The Tribunal relied on the Supreme Court's decision in CIT vs. Sinhgad Technical Education Society, which held that initiation of proceedings under Section 153C and consequent assessment proceedings are null and void ab initio unless the AO records satisfaction with reference to incriminating material for each assessment year. Since the satisfaction note was invalid, any assessment order passed pursuant to it was also void ab initio. Consequently, the Tribunal held that the PCIT's assumption of jurisdiction to revise such an illegal assessment order under Section 263 was also illegal and void ab initio. As the revision order was quashed on this ground, other grounds raised by the assessee were rendered academic and did not require specific adjudication. The appeals were allowed.

The Tribunal held that the PCIT's order passed under Section 263 of the Income Tax Act, 1961, was not sustainable in law and quashed it. The primary reasoning was that the assumption of jurisdiction by the Assessing Officer (AO) under Section 153C for the assessment years 2017-2018 and 2018-2019 was unlawful. This was because the satisfaction note recorded by the AO did not contain any discussion regarding seized material that had a bearing on the determination of the total income of the assessees for those specific assessment years. The Tribunal relied on the Supreme Court's decision in CIT vs. Sinhgad Technical Education Society, which held that initiation of proceedings under Section 153C and consequent assessment proceedings are null and void ab initio unless the AO records satisfaction with reference to incriminating material for each assessment year. Since the satisfaction note was invalid, any assessment order passed pursuant to it was also void ab initio. Consequently, the Tribunal held that the PCIT's assumption of jurisdiction to revise such an illegal assessment order under Section 263 was also illegal and void ab initio. As the revision order was quashed on this ground, other grounds raised by the assessee were rendered academic and did not require specific adjudication. The appeals were allowed.

The Tribunal held that the PCIT's order passed under Section 263 of the Income Tax Act, 1961, was not sustainable in law and quashed it. The primary reasoning was that the assumption of jurisdiction by the Assessing Officer (AO) under Section 153C for the assessment years 2017-2018 and 2018-2019 was unlawful. This was because the satisfaction note recorded by the AO did not contain any discussion regarding seized material that had a bearing on the determination of the total income of the assessees for those specific assessment years. The Tribunal relied on the Supreme Court's decision in CIT vs. Sinhgad Technical Education Society, which held that initiation of proceedings under Section 153C and consequent assessment proceedings are null and void ab initio unless the AO records satisfaction with reference to incriminating material for each assessment year. Since the satisfaction note was invalid, any assessment order passed pursuant to it was also void ab initio. Consequently, the Tribunal held that the PCIT's assumption of jurisdiction to revise such an illegal assessment order under Section 263 was also illegal and void ab initio. As the revision order was quashed on this ground, other grounds raised by the assessee were rendered academic and did not require specific adjudication. The appeals were allowed.

The Tribunal held that the Assessing Officer's assumption of jurisdiction under Section 153C was unlawful due to the absence of a valid satisfaction note linking seized material to the total income for the relevant assessment years. Consequently, the PCIT's revision order under Section 263 was also quashed.

The Tribunal held that the PCIT erred in invoking Section 263 as the AO had taken a plausible view after due application of mind to the available material. An order cannot be considered erroneous and prejudicial to the revenue merely because the PCIT disagrees with the AO's view, especially when the AO's view is legally sustainable.

The tribunal dismissed the appeal *in limine* because it was barred by limitation due to the delay in filing and was invalid as it was unsigned and unverified. These defects violated the procedural requirements under Section 253 read with Rule 47 of the I.T. Rules, 1962, and Rule 47 read with Section 140 of the I.T. Act, 1961.

The Tribunal held that the assessee failed to provide sufficient evidence to substantiate the actual rendering of services or the economic benefit derived. The Service Agreement lacked specific deliverables and cost allocation details, and the email correspondences were not contemporaneous or specific enough. The visits by foreign personnel were of supervisory nature and of short duration, insufficient to prove actual service delivery.

The Income Tax Appellate Tribunal (ITAT) found that the CIT(A) failed to provide the assessee with an adequate opportunity to substantiate the delay in filing the appeal. Consequently, the ITAT set aside the CIT(A)'s order and remanded the case back for fresh adjudication, instructing the CIT(A) to reconsider the condonation of delay and directing the assessee to furnish all relevant documents.

The Tribunal found the CIT(Exemption)'s orders to be non-speaking and cryptic, lacking a detailed analysis of the evidence provided by the assessee. Consequently, both rejection orders were set aside, and the matters were remanded back to the CIT(Exemption) for fresh adjudication after proper verification of all details and documents, and after providing the assessee an opportunity of being heard.

The Tribunal held that the Ld. CIT(E) had not properly appreciated the documents submitted by the assessee and had not provided the assessee with an adequate opportunity of being heard. The Tribunal found that the assessee had filed all necessary documents, including details of charitable activities and audited financial statements. The Ld. CIT(E)'s order was found to be non-speaking and lacking specific reasoning for rejecting the applications. The rejection of applications for registration under Section 12AB and approval under Section 80G without assigning specific reasons was considered arbitrary and against the principles of natural justice. Therefore, the Tribunal set aside the orders of the Ld. CIT(E) and remanded the matters back to the Ld. CIT(E) for fresh adjudication, with a direction to provide the assessee with an appropriate opportunity of being heard before deciding the issue. The appeals were allowed for statistical purposes.

The Tribunal held that the Ld. CIT(E) had not properly appreciated the documents submitted by the assessee and had not given the assessee an adequate opportunity of being heard. The Tribunal found that the assessee had filed all necessary documents, including details of charitable activities and audited financial statements. However, the Ld. CIT(E)'s order did not point out any specific deficiency in the documents or the activities carried out. The Tribunal considered the Ld. CIT(E)'s order to be non-speaking and lacking reasoning, which is arbitrary and against the principles of natural justice. Therefore, in the interest of justice, the Tribunal set aside the orders of the Ld. CIT(E) and remanded the matters back to the file of the Ld. CIT(E) for fresh adjudication. The Ld. CIT(E) was directed to provide an appropriate opportunity of being heard to the assessee before deciding the issue. The appeals were allowed for statistical purposes.

The Income Tax Appellate Tribunal (ITAT) held that the AO was not justified in rejecting the books of accounts merely due to unsubstantiated loss at one branch, given other verifiable records. However, acknowledging the lack of full substantiation, the ITAT directed the AO to estimate profit at 5% of total contract receipts, aligning with the assessee's historical profit rates which were previously accepted.

The Tribunal condoned the delay of 36 days before the First Appellate Authority, finding the reasons to be bona fide and caused by genuine practical difficulties. Since the First Appellate Authority dismissed the appeal on technical grounds, the matter was remanded back for fresh adjudication on merits.

The Tribunal acknowledged the assessee's decision to settle the tax dispute under the Vivad-Se-Vishwas Scheme, 2024, and the payment of the determined tax. Consequently, the application for withdrawal was allowed, and the appeal was dismissed as withdrawn.

The Tribunal held that the provision for loss on inventory is an amount set aside as a provision for diminution in the value of an asset and should be added back to book profit under Section 115JB(2). The case laws relied upon by the assessee were distinguished and found not applicable.

The Tribunal allowed the assessee's appeal to be withdrawn. The reasoning was based on the assessee's clear intention to resolve the dispute under the Direct Tax Vivad Se Vishwas Scheme, 2024, evidenced by the filing of Form-1 and the issuance of Form-2 by the Department. The Ld. DR also conceded to this request. The Tribunal dismissed the appeal as withdrawn. However, the Tribunal provided an opportunity for the assessee to file a Miscellaneous Application to reinstate the case if their settlement under DTVSV, 2024 was not accepted by the Revenue for any reason, within the prescribed time under the Act. The operative direction was to dismiss the appeal as withdrawn, with liberty to seek reinstatement.

The Tribunal dismissed the assessee's appeal. It rejected the assessee's additional grounds challenging the validity of the assessment order (due to alleged lack of DIN for Section 153D approval) for want of evidence. On the merits, the Tribunal found the Assessing Officer's acceptance of the cash as business income without proper inquiry into its source or the nature of real estate business, and without applying Section 115BBE, rendered the assessment order erroneous and prejudicial. Thus, the Pr. CIT was justified in invoking Section 263 to set aside the assessment for fresh adjudication.

Considering the factual nature of the issue and in the interests of justice, the Tribunal decided to provide the assessee one more opportunity to present their case. The orders of the AO and CIT(A) were set aside, and the matter was restored to the file of the AO for fresh adjudication, with a direction to afford a reasonable opportunity of being heard to the assessee.

The Tribunal held that the AO/TPO passed the order without considering the Transfer Pricing (TP) documentation filed by the assessee. It also directed the AO/TPO to recompute the adjustment for interest on trade receivables by considering both trade receivables and trade payables.

The Tribunal found the AO's calculation of cash deposits unsubstantiated and noted that the CIT(A) erroneously failed to adjudicate the agricultural income issue on merits, despite a ground being raised. Given the factual nature requiring verification and natural justice, the Tribunal set aside the orders of the AO and CIT(A), remanding the matter back to the AO for fresh adjudication.

The Tribunal condoned the delay in filing the appeal before the Ld. CIT(A) after finding reasonable cause. The Tribunal set aside the AO's order and restored the issue to the AO's file, directing the AO to provide the assessee a reasonable opportunity to be heard and pass a fresh assessment order.

The Tribunal condoned the delay in filing the appeal before the Ld. CIT(A) after finding reasonable cause. The Tribunal set aside the AO's order and restored the issue to the AO's file, directing the AO to provide the assessee a reasonable opportunity to be heard and pass a fresh assessment order.

The Tribunal found that the AO's jurisdiction to reopen the assessment beyond three years, based on escaped income exceeding Rs. 50 lakhs, was fundamentally flawed. The initial information regarding large bank deposits, which formed the basis for issuing the Section 148A(b) and Section 148 notices, was later proven incorrect by the AO himself. Since the actual escaped income (TCS related) was less than Rs. 50 lakhs, the conditions under Section 149(1)(b) for extended reopening were not met, and the notice issued beyond the three-year limit of Section 149(1)(a) was illegal and void-ab-initio.

The Tribunal directed the AO to accept Rs. 4,50,000/- out of the Rs. 9 lakhs claimed as agricultural income for AYs 2015-16 and 2016-17, noting that the assessee was deriving agricultural income. It also allowed a source for cash deposit of Rs. 3,50,000/- out of differential cash withdrawals from AY 2015-16. In total, the Tribunal granted a further relief of Rs. 8 lakhs, reducing the sustained addition to Rs. 9,06,950/-.

The Income Tax Appellate Tribunal (ITAT) held that since the underlying quantum assessment orders had been set aside by the CIT(A) for fresh assessment, the penalty orders under Section 271(1)(c) could not survive. The ITAT set aside the penalty orders and remanded the matter to the Assessing Officer for reconsideration of the penalty, if required, after the outcome of the fresh quantum assessment proceedings.

The tribunal held that since the delay in filing the return of income had been condoned by the competent authority (CIT), the sole reason for denying the Section 80P(2) deduction no longer existed. Therefore, the impugned order of the CIT (A) denying the deduction was set aside, and the claim for deduction under Section 80P(2) was allowed.

The Income Tax Appellate Tribunal (ITAT) held that since the underlying quantum assessment orders had been set aside by the CIT(A) for fresh assessment, the penalty orders under Section 271(1)(c) could not survive. The ITAT set aside the penalty orders and remanded the matter to the Assessing Officer for reconsideration of the penalty, if required, after the outcome of the fresh quantum assessment proceedings.

The Tribunal condoned the delay of 366 days in filing the appeal, finding sufficient cause for the delay due to the assessee's non-awareness of the proceedings and the subsequent rejection of their VSVS scheme application. The ex-parte order of the CIT(A) was set aside, and the matter was remanded for fresh adjudication.

The Tribunal allowed the assessee to withdraw the appeal as it was being settled under the VSV Scheme. The appeal was dismissed as withdrawn.

The Tribunal held that the consolidated satisfaction note recorded by the AO was not in accordance with law as it failed to demonstrate how the seized material specifically impacted the income computation for each assessment year. Therefore, the assessment based on this note was invalid.

The Tribunal held that the consolidated satisfaction note recorded by the AO was not in accordance with law as it failed to demonstrate how the seized material specifically impacted the income computation for each assessment year. Therefore, the assessment based on this note was invalid.

The Tribunal held that the consolidated satisfaction note recorded by the AO was not in accordance with law as it failed to demonstrate how the seized material specifically impacted the income computation for each assessment year. Therefore, the assessment based on this note was invalid.