ITAT Hyderabad Judgments — October 2025

The Tribunal condoned the minor and unintentional 17-day delay, finding it properly explained by the assessee's President's illness. It then remanded the matter back to the Ld. CIT(A) for fresh adjudication on merits, ensuring the assessee a reasonable opportunity of being heard.

The Tribunal observed that the CIT(A) dismissed the appeal without adequately considering the assessee's application for condonation of delay and without providing a sufficient opportunity of hearing. The matter is thus restored to the CIT(A) to reconsider the appeal and the delay condonation application on merits.

The ITAT condoned the minor delay in filing the appeals, accepting the reasons provided by the assessee. It held that the CIT(A) erred in dismissing the appeals *in limine* for non-prosecution without adjudicating them on merits, which violates Section 250(6). Consequently, the ITAT set aside the CIT(A)'s orders and remanded the matters for fresh adjudication on merits, ensuring proper opportunity of hearing for the assessee.

The ITAT condoned the minor delay in filing the appeals, accepting the assessee's explanation and noting no serious objection from the Revenue. The Tribunal held that the CIT(A) erred by dismissing the appeals in limine without deciding them on merits, which was contrary to Section 250(6) of the Income Tax Act. Therefore, the ITAT set aside the CIT(A)'s orders and remanded the cases for fresh adjudication on merits after providing the assessee a proper hearing opportunity.

The Tribunal found that the CIT(E) rejected the applications in a summary manner without proper consideration of the assessee's detailed reply and the nature of its objects, which were undisputed as charitable. It held that merely because activities were at an initial stage and little expenditure incurred, registration could not be denied if the objects were charitable. The matter was remanded for re-consideration after a proper physical hearing.

The Tribunal determined that the WhatsApp message was only a future expenditure estimate for the financial year 2021-22, not actual spending for the current assessment year. It observed that the seized diary and cash book reflected an actual expenditure of Rs. 25 lakhs, the source of which was accounted for by the assessee's business receipts and opening cash balance. Consequently, the Tribunal held that the addition of Rs. 35 lakhs was not sustainable given the lack of corroborative evidence and the explained sources for the actual expenditure of Rs. 25 lakhs.

The Tribunal held that the lower authorities failed to properly verify the source of the cash deposits, despite the assessee providing debtor confirmations and maintaining regular books of account. The AO's addition was based on presumption and conjecture without sufficient inquiry. The Tribunal noted that the debtor details and confirmations were indeed filed and that the AO himself acknowledged receipt of funds from identifiable persons.

The ITAT condoned the minor delay in filing the appeals, finding the reasons provided by the assessee to be sufficient and bonafide. It ruled that the CIT(A)'s dismissal of appeals *in limine* without deciding them on merits violated the provisions of Section 250(6) of the Income Tax Act. Consequently, the ITAT set aside the CIT(A)'s orders and remanded the cases back to the CIT(A) for fresh adjudication on merits, ensuring the assessee receives a proper opportunity of hearing.

The Tribunal found that the original assessment u/s 143(3) was completed after the AO had examined the assessee's claim for exemption u/s 54F, for which all relevant details were furnished. The reopening of the assessment u/s 147/148 was based on the same material already available to the AO during the original assessment proceedings, constituting a 'mere change of opinion'. Citing High Court and Supreme Court precedents, the Tribunal held that reopening an assessment based on a mere change of opinion, without any fresh tangible material, is not permissible and is bad in law, thus quashing the reassessment order.

The tribunal found substance in the assessee's reason for non-participation and set aside the orders of the CIT(A) and AO. The matter has been restored to the AO for fresh adjudication, directing the AO to provide the assessee a reasonable opportunity to submit evidence and substantiate her claims regarding the source of the cash deposits.

The Tribunal found that the CIT(A) erred by dismissing the appeal prematurely before the expiry of the deadline given to the assessee for submissions, thus violating natural justice. Furthermore, since the underlying quantum assessment was already set aside by the Tribunal for de novo adjudication, the penalty proceedings were also set aside to the AO to be taken up after the completion of the fresh assessment.

The Income Tax Appellate Tribunal dismissed the appeal, upholding the additions made by the AO and confirmed by the CIT(A). The Tribunal noted the assessee's consistent failure to participate in appellate proceedings or file submissions over 5.5 years, despite the CIT(A)'s excessive delay in disposing of the appeal.

The Tribunal deleted the addition of Rs. 9 crores for alleged on-money payment, finding no corroborative evidence and noting that the seller denied receiving cash. However, the Tribunal upheld the addition of Rs. 20,85,000/- as unexplained cash, concluding that the assessee could not adequately explain its source despite claiming it was from prior admitted income.

The Tribunal held that the CIT(A) had erred by dismissing the appeal based on facts and grounds not related to the assessee, constituting a miscarriage of justice.

The Tribunal dismissed the assessee's appeal for AY 2020-21, affirming that the ROC fee for increasing authorized share capital is a capital expenditure, not revenue, and not deductible under Section 37(1) or Section 35D. For the Revenue's appeals concerning AY 2016-17, 2017-18, and 2019-20, the Tribunal upheld the CIT(A)'s deletion of various additions made by the AO. It concluded that the seized documents were 'dumb documents' without sufficient corroborative details and that the assessee had reconciled the disputed expenditures and purchases with its books and supporting evidences. The cross-objections filed by the assessee for being time-barred and infructuous were also dismissed.

The Tribunal found that the DRP's rejection of objections on technical grounds without providing an opportunity to rectify the defect violated principles of natural justice. Consequently, the Final Assessment Order and DRP Directions were set aside, and the matter was remanded to the DRP to allow rectification of defects and decide the objections on merits after a proper hearing.

The Income Tax Appellate Tribunal (ITAT) observed that the CIT(A) dismissed the appeal solely on the ground of non-prosecution without addressing the merits of the case. Citing judicial precedents, the ITAT held that the CIT(A) is obliged to decide an appeal on its merits and cannot dismiss it merely for non-prosecution. Consequently, the ITAT set aside the CIT(A)'s order and remanded the matter back for fresh adjudication on merits after providing the assessee a reasonable opportunity of being heard.

The Tribunal held that the assessee's services were ITeS, not KPO, and the TPO erred in re-characterization. It directed the TPO to accept the assessee's TP documentation as rejected solely on minor filter issues. The Tribunal further ruled that COVID-related idle capacity costs, finance costs (for long-term borrowings for capital assets), and forex losses are non-operating expenses and should be excluded from PLI computation, directing the TPO to accept the assessee's PLI of -0.02%. L&T Technology Services Ltd. and XS CAD India Pvt. Ltd. were found not comparable due to functional differences and failure to meet the turnover filter and were directed to be excluded. The 60-day credit period for receivables allowed by the TPO was upheld, but for foreign currency receivables, the interest rate should be LIBOR+200 basis points instead of the SBI short-term deposit rate. The inclusion of three additional comparables (NPCC Engineering, Energy Infratech, AXIS CADESS) for AY 2021-22, based on the AY 2022-23 TPO order, was remanded to the AO/TPO for further verification.

The Tribunal dismissed the assessee's appeal for AY 2020-21, holding that the ROC fee was a capital expenditure and not allowable under Section 37(1) or Section 35D of the Income Tax Act. For the Revenue's appeals concerning AYs 2016-17, 2017-18, and 2019-20, the Tribunal dismissed all of them, upholding the CIT(A)'s decision to delete the various additions made by the AO. The Tribunal found that the seized documents were either reconciled with the books of accounts, lacked specific details, or were non-speaking documents. The assessee's cross-objections were dismissed as time-barred.

The ITAT held that the CIT(A) erred in dismissing the appeal solely for non-prosecution without deciding on its merits, citing a Bombay High Court judgment which emphasizes the CIT(A)'s obligation to dispose of an appeal on merits. The Tribunal clarified that the law does not empower the CIT(A) to dismiss an appeal merely for non-prosecution. Consequently, the case was remanded back to the CIT(A) with directions to re-adjudicate the matter and pass a speaking and reasoned order after affording the assessee a reasonable opportunity of being heard.

The ITAT observed that the CIT(A) did not validly serve the notices to the email address specified by the assessee in Form-35. Consequently, the ex-parte dismissal of the appeal by the CIT(A) was deemed unsustainable. The matter was set aside and remanded back to the CIT(A) for fresh adjudication after granting the assessee a reasonable opportunity of being heard.

The Tribunal condoned the 211-day delay, finding it neither deliberate nor intentional, and citing a justice-oriented approach. It set aside the ex-parte order of the CIT(A) and remanded the matter for fresh adjudication on merits, directing the CIT(A) to provide a reasonable opportunity of being heard to the assessee.

The ITAT held that the Ld. CIT(A) was statutorily obliged under Section 250(6) of the Income Tax Act to pass a speaking and reasoned order on each ground of appeal, even in an ex parte proceeding. The dismissal for non-prosecution without adjudication of specific grounds was a procedural irregularity. Consequently, the ITAT remanded the matter back to the Ld. CIT(A) for fresh adjudication on merits.

The Tribunal held that the CIT(A) failed to provide proper notice to the assessee for the hearing of the appeal, leading to an ex-parte dismissal. The matter was set aside to the CIT(A) for re-adjudication after affording a reasonable opportunity of being heard.

The Tribunal condoned the delay, finding the reasons genuine and bonafide. Following a Telangana High Court judgment which quashed notices issued under Sections 148A and 148, the Tribunal similarly quashed the assessment orders passed by the A.O. under Section 147 read with Section 144 for both assessment years, granting liberty to either party for revival based on the Supreme Court's decision on a pending SLP.

The Tribunal condoned the delay in filing the appeals, acknowledging a reasonable cause. It noted that the Telangana High Court had already quashed the notices issued under Section 148A and 148 and all subsequent orders, granting liberty for revival based on the Supreme Court's decision on a pending SLP. Consequently, the Tribunal also quashed the assessment orders passed by the AO.

The Tribunal held that the CIT(E) had not disputed the charitable nature of the assessee's objects and that rejection in a summary manner without properly appreciating the activities or the detailed reply filed by the assessee was unjustified. The Tribunal noted that non-incurrence of expenditure at an initial stage cannot be the sole reason to deny registration and that the prima facie verification should focus on the charitable nature of objects and whether activities are aligned with them. The impugned orders were set aside, and the matter was remanded to the CIT(E) for re-consideration after a physical hearing.

The Tribunal dismissed the assessee's appeal for AY 2020-21, upholding the disallowance of ROC fees as capital expenditure. However, it dismissed all of the Revenue's appeals, thereby upholding the CIT(A)'s deletion of major additions for unexplained expenditure, unproved purchases, and unexplained income, concluding that the seized documents were 'non-speaking' or the transactions were reconciled with the assessee's books and supporting evidence. The assessee's cross-objections were dismissed as time-barred and infructuous.

The Tribunal found the CIT(A)'s order contained observations incongruous with the assessee's facts and lacked proper appreciation. Therefore, the order was set aside, and the matter was remanded to the CIT(A) for fresh adjudication after a proper examination of facts and affording the assessee a reasonable opportunity to be heard and present evidence.

The ITAT found that the CIT(A) committed a gross failure by not sending three out of four notices for hearing to the correct email address provided by the assessee in Form-35. This denial of proper opportunity to be heard infringed natural justice. Therefore, the ITAT set aside the matter to the CIT(A) for re-adjudication, directing them to provide a reasonable opportunity of being heard to the assessee.

The Income Tax Appellate Tribunal (ITAT) held that the CIT(A) erred in dismissing the appeal solely for non-prosecution without adjudicating on the merits of the case. Citing a Bombay High Court judgment, the ITAT emphasized that the CIT(A) is statutorily obliged to pass a speaking order addressing the issues raised. The case was remanded back to the CIT(A) for fresh adjudication on merits after providing a reasonable opportunity of being heard.

The Tribunal held that sending notice to an old email ID, rendering it ineffective, did not constitute a proper and meaningful opportunity of hearing as directed by the previous remand order. Therefore, the CIT(A)'s order was set aside, and the matter was again remanded for fresh adjudication on merits, with a direction for the Assessee to update her email ID in Form-35.

The Tribunal held that the appeals were defective and not maintainable in their present form due to the unrectified defects and the assessee's lack of interest in prosecuting the appeals.

The Tribunal observed that the assessee failed to rectify the defects in the appeal memo despite notice. Therefore, the appeals were considered defective and not maintainable.

The Tribunal held that the appeals were defective as the appeal memos remained unsigned and the defects were not cured within the stipulated time. Consequently, the appeals were not maintainable and liable to be dismissed.

The Tribunal granted liberty to the assessee to withdraw the appeal as it had become infructuous due to the deletion of the addition by the CIT(Appeals). Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that the Ld. CIT(A) dismissed the appeals for non-prosecution without considering the merits, which is contrary to established legal principles. The Tribunal decided to set aside the CIT(A)'s order and remand the matters for reconsideration.

The Tribunal held that the AO erred in not admitting the assessee's corrected calculation of accumulated income. The reliance on the Goetze India Ltd. case by the AO was deemed not applicable as the assessee had corrected an error rather than making a fresh claim. The order of the CIT(A) was set aside.

The Tribunal held that the assessee could not adequately reconcile the seized documents and the advances in the finance business with their return of income, despite claims that such income was offered in the hands of their HUF and father. The case laws relied upon by the assessee were also distinguished.

The Tribunal held that the loose sheets and diaries, when reconciled with the assessee's books of accounts for the finance business, revealed a difference in net advances. The assessee's argument that these were 'dumb documents' was rejected as the assessee himself had attempted reconciliation. Therefore, the additions made by the AO and sustained by the CIT(A) were upheld.

The Tribunal held that the assessee was not properly notified as the notices were sent to an unrelated email address, depriving them of the opportunity to be heard. Therefore, the dismissal was set aside.

The Tribunal found that the CIT(A) dismissed the assessee's appeal due to a delay of 177 days without considering the 'reasonable and sufficient cause' explained by the assessee, which included her father's hospitalization and death. Therefore, the Tribunal set aside the CIT(A)'s order.

The Tribunal condoned the 25-day delay in filing the appeal. The appeal was allowed for statistical purposes, and the issue of disallowance of deduction under Section 80C for LIC premium was remanded to the Assessing Officer for verification of the additional evidence (LIC receipt) submitted by the assessee.

The Tribunal held that the delay in filing the appeal by the legal heir was due to the death of the assessee and subsequent family disturbance, constituting sufficient cause. The Tribunal condoned the delay and set aside the CIT(A)'s order, remanding the matter to the AO for reconsideration.

The Tribunal held that the AO made ad hoc disallowances without rejecting the books of accounts and without pointing out specific discrepancies. The assessee had provided substantial evidence for commission payments through banking channels and for land development expenses paid to regulatory authorities.