ITAT Hyderabad Judgments — August 2025

The Tribunal ruled that the penalty proceedings were initiated on 18.01.2017, when the AO referred the matter to the Additional CIT. Therefore, the last date for passing the penalty order was 31.07.2017, making the order passed on 31.08.2017 time-barred. The Revenue's alternative plea for exclusion of time under Explanation (i) to Section 275 was rejected as there was no evidence of a specific request for rehearing from the assessee. Consequently, the penalty order was quashed.

The Tribunal held that the penalty proceedings were initiated on 18.01.2017 when the Ld. Assessing Officer referred the matter to the Ld. Additional CIT. As the penalty order was passed on 31.08.2017, exceeding the six-month limitation period (31.07.2017) prescribed by Section 275(1)(c) of the Act, it was barred by limitation. The Revenue's alternative plea for exclusion of time due to a change of incumbent was rejected as no specific request for rehearing was made by the assessee under Section 129.

The Tribunal held that the penalty proceedings were initiated on 18.01.2017, making the penalty order passed on 31.08.2017 barred by limitation. The alternate plea for exclusion of time was also rejected.

The Tribunal held that the penalty proceedings were initiated on 18.01.2017, when the AO made a reference to the Addl. CIT. Therefore, the last date for passing the order was 31.07.2017. Since the order was passed on 31.08.2017, it was barred by limitation.

The Tribunal noted that while the assessee did not comply with lower authorities, they have now provided documents evidencing ownership of agricultural land. Considering the nature of the issue and principles of natural justice, the Tribunal decided to grant one final opportunity to the assessee to substantiate their claim of agricultural income.

The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal in limine, ruling that an appeal against an assessment order passed in pursuance of the Dispute Resolution Panel's directions is maintainable only before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision, confirming that the appeal against such an order correctly lies with the Tribunal under Section 253(1)(d) of the Income Tax Act.

The Tribunal noted the recurring nature of the issue and past remands to the CIT(A) for verification. Given the assessee's claim that M/s. REC Ltd. had settled the taxability of this interest income under the "Vivad Se Vishwas Scheme, 2020" for the relevant period, the Tribunal remanded the matter back to the CIT(A). The CIT(A) is directed to verify this claim, and if found to be in order, the impugned addition in the assessee's hands shall be vacated. The assessee's Cross-Objection was also allowed for statistical purposes after condoning a 118-day delay.

The tribunal held that Aurigene Discovery Technologies Ltd. is not functionally comparable to the assessee as the assessee is exclusively engaged in R&D services, while Aurigene operates in multiple segments with R&D forming a small part of its revenue, lacking segmental profitability data. The tribunal directed the AO/TPO to exclude Aurigene from the list of comparables, making other TP-related grounds academic. Additionally, the AO was directed to reconsider an addition for interest payable to MSMEs and rectify a computational error in the aggregate income-tax liability.

The Tribunal noted that the assessee had opted for the DTVSV Scheme and had filed the necessary forms for withdrawal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that the CIT(Exemptions) erred by not providing an opportunity to the assessee to explain the delay, especially since notices were issued after the deadline, creating a bona fide belief. Citing the new proviso to Section 12A(1)(ac) (introduced by Finance Act, 2024) which allows condonation of delay for reasonable cause, the Tribunal set aside the rejection order. The matter was remanded to the CIT(Exemptions) for fresh consideration, directing to allow the assessee to file an application for condonation of delay.

The Tribunal held that dismissing an appeal ex-parte without considering the merits would result in a denial of justice. Therefore, in the interest of justice, the impugned order was set aside, and the matter was remitted back to the Ld. CIT(A) for de novo adjudication, granting the assessee an opportunity to present their case on merits.

The Tribunal upheld the CIT(A)'s finding that the AO's order, passed to give effect to the Tribunal's earlier remand, was invalid and without jurisdiction. This was because the AO failed to issue a mandatory draft assessment order under Section 144C(1) before passing the final assessment, a procedural flaw already established as rendering such orders void by the jurisdictional High Court in the assessee's own case.

The Income Tax Appellate Tribunal quashed the PCIT's cancellation order, finding that the conditions precedent for invoking Section 12AB(4) were not satisfied. The Tribunal concluded that the PCIT's decision was based on suspicion and surmises rather than conclusive evidence, and that the society's activities were genuine, in line with its charitable objects, and it maintained proper books of account. The cash found during search was assessed in the hands of individuals on a substantive basis.

The Tribunal found that the PCIT (Central)'s allegations regarding specified violations under Section 12AB(4)(ii) were not sufficiently proven and were based on suspicion rather than concrete evidence. It held that the conditions precedent for cancelling registration were not satisfied, and thus, the PCIT's order of cancellation was illegal and could not be upheld. The Tribunal quashed the PCIT's order and restored the registration of the assessee society under Section 12AA/12AB of the Act.

The Tribunal held that the PCIT failed to establish specific violations warranting cancellation. The allegations were found to be based on suspicion and conjecture rather than concrete evidence. The cancellation order was quashed.

The Tribunal quashed the PCIT's cancellation order, holding that it was based on suspicion and surmises rather than conclusive evidence of specified violations under Section 12AB(4). It noted that the cash seized was assessed in the trustees' individual hands, indicating the AO's uncertainty about ownership, and found no material proof that the society existed for non-charitable purposes or that its activities were not genuine. The Tribunal also observed that the retrospective application of amended provisions was inappropriate for the assessment year.

The Tribunal quashed the PCIT's order, holding that the cancellation of registration was based on suspicion and surmises rather than concrete evidence of specified violations under Section 12AB(4) of the Act. It noted that the seized material and cash were either disowned by individuals or assessed in their hands, indicating uncertainty of ownership by the society. The Tribunal found no complaints from students or regulatory bodies regarding capitation fees and affirmed that the society maintained proper books of accounts, concluding that the conditions precedent for cancellation of registration were not satisfied.

The Tribunal quashed the cancellation order, finding that the Principal CIT (Central) failed to provide conclusive evidence for the alleged violations. It noted that the income from alleged capitation fees was protectively assessed in the hands of individual trustees, indicating the Assessing Officer's own doubt regarding the ownership of funds. The Tribunal emphasized that mere suspicion cannot substitute evidence and confirmed that the society was genuinely carrying out its educational activities.

The Tribunal held that the PCIT had erred in cancelling the registration. The allegations of excess fee collection, diversion of funds, and non-maintenance of books of accounts were not substantiated by cogent evidence. The Tribunal quashed the order of cancellation and restored the registration.

The Tribunal quashed the PCIT's cancellation order, finding that the PCIT's conclusions were based on suspicion and surmises rather than concrete evidence. Student confirmations denied paying capitation fees, and the seized diary was deemed an inconclusive 'dumb document' without clear links to the society or its activities. The income from the alleged excess fees was already assessed on a substantive/protective basis in the hands of individual trustees, indicating the AO's uncertainty of ownership, and the society maintained proper books and continued its charitable activities. Thus, the conditions precedent for cancellation under Section 12AB(4)(ii) were not met.

The Tribunal held that the PCIT had erred in cancelling the registration. The court found that the allegations of collecting excess fees, diversion of funds, and not maintaining proper books of accounts were not substantiated by conclusive evidence. The Tribunal noted that the society was primarily engaged in imparting education, which was its main objective, and that its activities were generally in accordance with its stated objectives. The court also pointed out that the PCIT had failed to demonstrate specific violations warranting cancellation.

The Tribunal held that the PCIT erred in cancelling the registration, as the grounds for cancellation were not substantiated by concrete evidence and were based on suspicion and surmises. The Tribunal quashed the cancellation orders and restored the society's registration.

The Tribunal quashed the PCIT's order, finding that the cancellation was based on suspicion and surmises without conclusive proof of specified violations. It noted that cash seized was already assessed on a substantive basis in individual trustees' hands and on a protective basis for the society, indicating uncertainty of ownership. The Tribunal found no complaints from students or regulatory bodies, no clear evidence of fund diversion from charitable objects, and held that the retrospective application of amended provisions of Section 12AB(4) was incorrect. The onus to prove violations was on the department, which failed to discharge it.

The Income Tax Appellate Tribunal (ITAT) found that the PCIT (Central)'s order was based on suspicion and surmises, lacking concrete evidence of specified violations under Section 12AB(4). It highlighted that cash found during the search was assessed protectively in individual hands, implying uncertainty of ownership, and that no conclusive proof of capitation fee collection or fund diversion by the society was established. The Tribunal affirmed that the society's educational activities were genuine and in line with its objects, and that mere suspicion could not justify cancellation of registration.

The Tribunal held that the conditions precedent for cancelling the society's registration under Section 12AB(4)(ii) were not met, as the PCIT (Central)'s decision was based on suspicion and surmises rather than conclusive evidence of specified violations or diversion of funds by the society. It was found that cash seized during search was assessed in the hands of individual trustees on a substantive basis, indicating the AO's uncertainty about its ownership by the society. Consequently, the Tribunal quashed the PCIT's order and restored the society's registration under Section 12AA/12AB for both assessment years.

The Tribunal held that the conditions precedent for cancellation of registration were not satisfied. The allegations were based on suspicion and surmises without concrete evidence. The Tribunal quashed the order of cancellation and restored the registration of the society.

The Tribunal observed that the law regarding trust registration has undergone amendments causing confusion and that the CIT(E) rejected the application routinely without considering the assessee's explanation for delay or the merits of the case. The Tribunal set aside the CIT(E)'s order and remanded the matter back for fresh consideration, directing the CIT(E) to evaluate the application for condonation of delay and the merits of the regular registration application.

The Tribunal condoned the delay in filing appeals before the CIT(A) considering the temple's administrative circumstances and reasonable cause. For the appeals concerning registration rejection, the Tribunal set aside the CIT(E)'s order and remanded the matter back to the CIT(E) for fresh adjudication after providing the assessee an opportunity to be heard and present relevant records.

The Tribunal held that the assessee had reasonable cause for the delay in filing appeals before the Ld.CIT(A) and condoned the delay. For the appeal before the Tribunal regarding registration, the delay of 275 days was also condoned, subject to a cost of Rs. 1,000/-.

The Tribunal condoned the delay of 403 days, noting that the assessee had substantiated the reasons with medical evidence and that a liberal approach is warranted for delays attributable to circumstances beyond the litigant's control. The appeal was admitted for adjudication on merits.

The Tribunal condoned the delays in filing appeals before the CIT(A) citing reasonable cause due to administrative issues and management changes. For the assessment years 2015-16, 2016-17, and 2018-19, the matters were remanded to the AO for fresh adjudication, directing the AO to consider net income after allowing deductions. For the AY 2024-25, the appeal was allowed by setting aside the CIT(E)'s order and remanding it for fresh consideration.

The Tribunal condoned the 97-day delay in filing the appeals, finding sufficient cause. It observed that the CIT(E)'s rejection orders were cryptic and non-speaking, failing to consider the evidence of charitable activities submitted by the assessee. Consequently, the Tribunal remitted the matter back to the CIT(E) for fresh consideration after providing the assessee a proper opportunity of being heard and considering all relevant evidence.

The Tribunal held that the CIT(A) should have considered the bonafide reasons explained by the assessee for non-appearance. The Tribunal decided to remit the issue back to the Assessing Officer for de-novo consideration.

The Tribunal held that the reasons provided for the delay were vague, general, and not supported by sufficient cause, amounting to negligence on the part of the assessee. Relying on Supreme Court judgments, the Tribunal declined to condone the delay.

The Tribunal condoned the delay in filing the appeal. It held that the CIT(E)'s rejection orders were cryptic, non-speaking, and passed without proper consideration of evidence or providing a show-cause notice, thus violating natural justice. The Tribunal found the assessee's activities to be charitable and eligible for registration, remanding the matter back to the CIT(E) for fresh consideration.

The Tribunal held that the payments made to ADP Australia for business support services were not taxable in India as they did not fall under the definition of Fees for Technical Services (FTS) and did not meet the 'make available' clause for royalty under the India-Australia Tax Treaty. The Tribunal also directed the Assessing Officer to re-compute the interest on overdue receivables from AEs using LIBOR plus 200 basis points instead of SBI-PLR rate.

The Tribunal held that the adjustment made under Section 50C during the processing of the return under Section 143(1) was not a prima facie adjustment and required detailed deliberation. Given the pending litigation regarding the property's title and valuation, the Tribunal set aside the order of the CIT(A) and restored the issue to the Assessing Officer for fresh consideration.

For the first three appeals, the Tribunal condoned the minor delays, acknowledging the temple's administrative issues and government management. For all four appeals concerning the assessment of income and registration rejection, the Tribunal set aside the orders of Ld. CIT(A)/CIT(E) and remanded the matters back to the Assessing Officer/Ld. CIT(E) for fresh adjudication. It emphasized that only net income, after allowing deductions, should be taxed for a trust, and the application for Section 12AB registration should be reconsidered after giving due opportunity.

The Tribunal found discrepancies and ambiguities in the facts recorded by the CIT(A). The CIT(A)'s order was set aside, and the matter was remanded to the Assessing Officer for fresh adjudication, considering the assessment order was ex-parte and based on estimation.

The Tribunal upheld the AO's proportional allocation of most expenses, finding no infirmity in that approach. However, the specific issue regarding the allocation of 'insurance and rent, fees, rates and taxes' was restored to the AO for limited verification to determine if these expenses belonged to the eligible unit.

The Tribunal noted that an order passed under Section 119(2)(b) is not an appealable order before the ITAT. The assessee's counsel acknowledged this and sought permission to withdraw the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal found that the CIT(E)'s rejection order was cryptic and failed to detail specific deficiencies in the submitted documents. In the interest of natural justice, the Tribunal set aside the CIT(E)'s order and restored the matter for fresh adjudication, granting the assessee an opportunity to present additional evidence and be heard.