ITAT Hyderabad Judgments — January 2026

The Tribunal noted that the assessee had a substantial opening cash balance and regularly filed income tax returns for over 10 years. The cash deposits were explained by the opening balance and salary/interest income earned during the year. The Tribunal found that the AO and CIT(A) rejected the explanation based on a mismatch in dates without appreciating that salary is credited at the end of the month and deposits made subsequently are from prior salary income.

The Tribunal held that the assessee's benchmarking of interest on ECB loans at LIBOR + 500/450 basis points was at arm's length, considering the loan tenure of seven years. The addition of Rs. 2,28,23,848 on this account was directed to be deleted. Regarding the disallowance under Section 43B, the Tribunal restored the issue to the AO for verification, as the direction from the DRP for verification was not complied with.

The CIT(A) dismissed the appeal in limine due to the delay, finding no sufficient cause and relying on a High Court decision. However, the Tribunal found the assessee's reasons for delay to be a 'sufficient cause' and set aside the CIT(A)'s order.

The Tribunal held that as per Section 80P(2)(d), only interest earned from deposits with other cooperative societies is eligible for deduction. Interest earned from nationalized banks is not eligible for deduction, as confirmed by the Supreme Court in the case of Bengaluru Club vs. CIT. The assessee's reliance on other High Court decisions was found not applicable as they were rendered prior to the Supreme Court ruling.

The CIT(A) quashed the assessment order for want of valid assumption of jurisdiction but upheld the penalty. The Tribunal, upon reviewing the facts and legal arguments, noted that the penalty's genesis was in the assessment order. As the assessment order was quashed, the penalty could not survive independently.

The Tribunal held that the approval granted under section 153D was invalid as it was a single, omnibus approval for multiple assessment years without independent application of mind. Consequently, the assessment orders were quashed.

The Tribunal held that the approval granted under section 153D was invalid as it was a single, omnibus approval for multiple assessment years without independent application of mind. Consequently, the assessment orders were quashed.

The Tribunal held that the approval granted under section 153D was invalid as it was a single, omnibus approval for multiple assessment years without independent application of mind. Consequently, the assessment orders were quashed.

The Assessing Officer determined the TDS liability based on the Managing Director's admission during the survey. The CIT(A) confirmed this order. However, the assessee's representative submitted departmental records and audit reports showing NIL demand for AY 2014-2015, with only a sum of Rs. 2,13,682/- outstanding as per the audit report, which was subsequently paid.

The Tribunal held that the disallowance of seed purchases was excessive, especially considering the nature of the business and the evidence provided. The Tribunal also addressed the disallowance of ROC charges, allowing partial relief.

The Tribunal held that the document was digital evidence seized without adhering to the mandatory procedures of Section 65B of the Indian Evidence Act and the Digital Evidence Investigation Manual. Furthermore, the document was considered a 'dumb document' lacking specific details, rendering the AO's interpretation and subsequent additions unsustainable.

The tribunal ruled that the assessee's benchmarking of interest on ECB loans at LIBOR + 500/450 basis points was at arm's length, following previous decisions. The issue of disallowance under Section 43B was remitted to the Assessing Officer for fresh verification due to a potential double disallowance.

The Tribunal upheld the CIT(Appeals)'s decision to delete the disallowance under Section 14A, stating that no disallowance can be made if no exempt income was earned and the amendment to Section 14A is not retrospective. The Tribunal also dismissed the revenue's grounds regarding Section 80G and Section 80IA.

The Tribunal held that the additions made by the AO could not be sustained as the seized digital evidence (WhatsApp chat) was not supported by a certificate under Section 65B(4) of the Indian Evidence Act, 1872, and lacked corroborative evidence.

The Tribunal held that the CIT(A) was justified in deleting the addition made towards business promotion expenses. The Revenue's argument that the CIT(A) admitted additional evidence contrary to Rule 46A was not explicitly addressed in the provided excerpt regarding the outcome of this specific issue, but the assessee's counsel supported the CIT(A)'s order. Regarding the disallowance under Section 40A(2)(b), the Tribunal upheld the CIT(A)'s order. The Tribunal noted that the assessee had provided a comparative chart showing purchases from related parties and third parties, and the rates paid to related parties for Emerald Cut - TKH and Ruby Cut - THQ were less than the rates paid to third parties. The Tribunal found that the AO made an ad hoc disallowance of 10% without bringing on record any comparable cases or evidence to show that excessive prices were paid to related parties. The Tribunal relied on the decision in Principal CIT Vs. R.G. Buildwell Engineers Pvt. Ltd. (2018) 99 taxmann.com 283 (SC). The additions made by the AO towards shortage of stock were also deleted by the CIT(A), but the specific arguments and findings on this issue are not detailed in the provided excerpt.

The Tribunal held that the delay in filing TDS statements was not covered by any specific extension for late fees under section 234E. It also found no infirmity in the levy of interest under section 201(1A) for failure to pay tax and interest under section 220(2) for non-payment of demand. The appeal for AY 2021-22 was partly allowed for statistical purposes.

The Tribunal held that the CIT(A) order was a non-speaking order and failed to address the specific grounds of appeal regarding merits and validity of jurisdiction. Therefore, the appeal was restored to the file of the CIT(A) for a fresh adjudication with a direction to pass a speaking order.

The Tribunal held that the assessee failed to substantiate the source of the additional income, and therefore, it was rightly treated as income from undisclosed sources and taxed under Section 115BBE.

The Tribunal considered the rival submissions and the material on record. It was undisputed that there was a delay of 366 days. The assessee's primary explanation for the delay was non-receipt of notices or the order from the Ld. CIT(A). However, the Tribunal noted from the Ld. CIT(A)'s order that the assessee had responded to multiple notices electronically on various dates. Furthermore, perusal of Form No. 35 revealed that the assessee had opted for communication through email. The Tribunal found that once the assessee had accepted electronic mode of service and participated in proceedings through it, the plea of being unaware of the appellate proceedings or the passing of the order could not be accepted. The Tribunal also observed that the assessee had not provided any cogent evidence to demonstrate non-receipt of the order or a sufficient cause for the delay. The Tribunal reiterated that while "sufficient cause" is interpreted liberally, this liberality cannot extend to negligence or lack of bona fides. In this case, the assessee's conduct reflected a casual approach and failure to exercise due diligence. Therefore, the Tribunal concluded that the assessee failed to demonstrate any sufficient cause for the inordinate delay. Consequently, the delay was not condoned, and the appeal was dismissed as barred by limitation.

The Tribunal held that the reasons advanced by the assessee for the delay, namely engagement of staff in seasonal agricultural produce distribution, change of Secretary, and alleged lack of knowledge of the CIT(A)'s order until receipt of a recovery notice, do not constitute 'sufficient cause' within the meaning of settled legal principles. The Tribunal noted that the assessee, being a statutory body, is expected to function with due diligence. Furthermore, the Tribunal observed that the assessee had initially responded to a notice from the CIT(A) but subsequently remained non-responsive to subsequent notices, reflecting a casual and negligent approach. The reliance on the Punjab and Haryana High Court judgment in Market Committee, Babain vs. Maya Ram was found to be misplaced as the facts were distinguishable. The Tribunal also referred to the Supreme Court's judgment in Balwant Singh vs. Jagdish Singh & Ors., emphasizing that while a liberal approach may be adopted, the conduct of the party and absence of due diligence are material considerations. Applying these principles, the Tribunal concluded that the assessee failed to establish bona fide and sufficient cause for the inordinate delay. Consequently, the delay was not condoned, and the appeals were dismissed as barred by limitation. No specific issue regarding the merits of the assessment was decided as the appeals were dismissed on a procedural ground.

The Tribunal held that the reasons advanced by the assessee for the delay, namely engagement of staff in seasonal agricultural produce distribution, change of Secretary, and alleged lack of knowledge of the CIT(A)'s order until receipt of a recovery notice, do not constitute 'sufficient cause' within the meaning of settled legal principles. The Tribunal noted that the assessee, being a statutory body, is expected to function with due diligence. Furthermore, the Tribunal observed that the assessee had initially responded to a notice from the CIT(A) but subsequently remained non-responsive to subsequent notices, reflecting a casual and negligent approach. The reliance on the Punjab and Haryana High Court judgment in Market Committee, Babain vs. Maya Ram was found to be misplaced as the facts were distinguishable. The Tribunal also referred to the Supreme Court's judgment in Balwant Singh vs. Jagdish Singh & Ors., emphasizing that while a liberal approach may be adopted, the conduct of the party and absence of due diligence are material considerations. Applying these principles, the Tribunal concluded that the assessee failed to establish bona fide and sufficient cause for the inordinate delay. Consequently, the delay was not condoned, and the appeals were dismissed as barred by limitation. No specific issue regarding the merits of the assessment was decided as the appeals were dismissed on a procedural ground.

The Tribunal held that the reasons advanced by the assessee for the delay, namely engagement of staff in seasonal agricultural produce distribution, change of Secretary, and alleged lack of knowledge of the CIT(A)'s order until receipt of a recovery notice, do not constitute 'sufficient cause' within the meaning of settled legal principles. The Tribunal noted that the assessee, being a statutory body, is expected to function with due diligence. Furthermore, the Tribunal observed that the assessee had initially responded to a notice from the CIT(A) but subsequently remained non-responsive to subsequent notices, reflecting a casual and negligent approach. The reliance on the Punjab and Haryana High Court judgment in Market Committee, Babain vs. Maya Ram was found to be misplaced as the facts were distinguishable. The Tribunal also referred to the Supreme Court's judgment in Balwant Singh vs. Jagdish Singh & Ors., emphasizing that while a liberal approach may be adopted, the conduct of the party and absence of due diligence are material considerations. Applying these principles, the Tribunal concluded that the assessee failed to establish bona fide and sufficient cause for the inordinate delay. Consequently, the delay was not condoned, and the appeals were dismissed as barred by limitation. No specific issue regarding the merits of the assessment was decided as the appeals were dismissed on a procedural ground.

The Tribunal held that the reasons advanced by the assessee for the delay, namely engagement of staff in seasonal agricultural produce distribution, change of Secretary, and alleged lack of knowledge of the CIT(A)'s order until receipt of a recovery notice, do not constitute 'sufficient cause' within the meaning of settled legal principles. The Tribunal noted that the assessee, being a statutory body, is expected to function with due diligence. Furthermore, the Tribunal observed that the assessee had initially responded to a notice from the CIT(A) but subsequently remained non-responsive to subsequent notices, reflecting a casual and negligent approach. The reliance on the Punjab and Haryana High Court judgment in Market Committee, Babain vs. Maya Ram was found to be misplaced as the facts were distinguishable. The Tribunal also referred to the Supreme Court's judgment in Balwant Singh vs. Jagdish Singh & Ors., emphasizing that while a liberal approach may be adopted, the conduct of the party and absence of due diligence are material considerations. Applying these principles, the Tribunal concluded that the assessee failed to establish bona fide and sufficient cause for the inordinate delay. Consequently, the delay was not condoned, and the appeals were dismissed as barred by limitation. No specific issue regarding the merits of the assessment was decided as the appeals were dismissed on a procedural ground.

The Tribunal held that the notices issued under Section 148A and 148 by the Jurisdictional Assessing Officer (JAO) were bad in law as they were issued outside the prescribed faceless mechanism. Consequently, the assessment order was quashed for want of valid jurisdiction.

The Tribunal held that the notice issued under Section 148 by the JAO after the effective date of the CBDT notification was invalid. Consequently, the assessment order was quashed.

The Tribunal held that notices issued under Section 148 by the JAO after the CBDT notification mandating faceless reassessment were invalid. Consequently, the assessment orders and penalty orders based on these notices were quashed.

The Tribunal held that the notices and assessment order were invalid because they were issued by the Jurisdictional Assessing Officer (JAO) outside the faceless mechanism, violating the E-Assessment Scheme. Therefore, the assessment was quashed for want of valid jurisdiction.

The Tribunal held that the assessee had clearly specified an email ID for communication in Form No. 35, and the failure of the Ld. CIT(A) to use this specified ID for sending notices and the appellate order resulted in the assessee being unaware of the proceedings. Therefore, the delay of 181 days was considered reasonable and bona fide, occurring due to reasons beyond the assessee's control.

The Tribunal noted that while there was non-compliance by the assessee, it was partly due to the COVID-19 pandemic and the assessee's unfamiliarity with procedures. The assessee did respond to the final show-cause notice. Therefore, in the interest of substantial justice, the issue was remitted back to the AO for fresh adjudication.

The Tribunal held that notices issued under Section 148 and orders passed under Section 148A(d) by the JAO after the effective date of the faceless scheme were invalid. Consequently, the assessment and penalty orders were quashed.

The Tribunal held that notices issued under Section 148 and orders passed under Section 148A(d) by the JAO after the effective date of the faceless scheme were invalid. Consequently, the assessment and penalty orders were quashed.

The Tribunal condoned the delay, finding the assessee's reasons to be bonafide and substantial justice to be preferred over technicalities. While prima facie evidence suggested the land cost was separately reflected, the Tribunal felt verification from underlying records was necessary.

The Tribunal held that notices issued under Section 148 and orders passed under Section 148A(d) by the JAO after the effective date of the faceless scheme were invalid. Consequently, the assessment and penalty orders were quashed.

The Tribunal noted that the petition for condonation of delay was filed for the first time before them and the Ld. CIT(A) had not examined it. Considering the principles of natural justice, the Tribunal set aside the impugned orders on the limited issue of delay and remitted the matter back to the Ld. CIT(A). The Ld. CIT(A) is directed to first adjudicate the condonation petition and then proceed to hear the appeal on merits if the delay is condoned.

The Tribunal held that no taxable transfer occurred within the meaning of section 2(47) of the Act as the assessee had not received any consideration under the JDA during the relevant year. Possession was handed over only for the limited purpose of development, not in the nature of possession contemplated under section 2(47)(v) read with section 53A of the Transfer of Property Act.

The Tribunal noted that the petition for condonation of delay was filed for the first time before them and the Ld. CIT(A) had not examined it. Considering the principles of natural justice, the Tribunal set aside the impugned orders on the limited issue of delay and remitted the matter back to the Ld. CIT(A). The Ld. CIT(A) is directed to first adjudicate the condonation petition and then proceed to hear the appeal on merits if the delay is condoned.

The Tribunal held that the Assessing Officer (AO) erred in making additions for unexplained investment by adding two zeros to the figures in the seized documents and in estimating interest at an average rate of 21% on the total loan amount computed by adding two zeros. The Tribunal found that the CIT(A) sustained these additions without appreciating the facts. The Tribunal set aside the CIT(A)'s order and directed the AO to make additions for unaccounted cash loans strictly as per the figures recorded in the seized documents, without adding two zeros. The AO was also directed to compute additions for interest income based solely on the interest reflected in the seized material, without estimation. Finally, the AO was directed to compute the tax liability on these additions by applying the provisions of Section 115BBE of the Income Tax Act, 1961. The Tribunal rejected the assessee's argument regarding the application of Section 115BBE, stating that once additions are made under Sections 68, 69, 69A, and 69C, and the explanation is unsatisfactory, Section 115BBE becomes mandatory. The Tribunal noted that the assessee admitted the transactions in the seized documents related to his finance business were unaccounted.

The Tribunal held that the Assessing Officer (AO) erred in making additions for unexplained investment by adding two zeros to the figures in the seized documents and in estimating interest at an average rate of 21% on the total loan amount computed by adding two zeros. The Tribunal found that the CIT(A) sustained these additions without appreciating the facts. The Tribunal set aside the CIT(A)'s order and directed the AO to make additions for unaccounted cash loans strictly as per the figures recorded in the seized documents, without adding two zeros. The AO was also directed to compute additions for interest income based solely on the interest reflected in the seized material, without estimation. Finally, the AO was directed to compute the tax liability on these additions by applying the provisions of Section 115BBE of the Income Tax Act, 1961. The Tribunal rejected the assessee's argument regarding the application of Section 115BBE, stating that once additions are made under Sections 68, 69, 69A, and 69C, and the explanation is unsatisfactory, Section 115BBE becomes mandatory. The Tribunal noted that the assessee admitted the transactions in the seized documents related to his finance business were unaccounted.

The Tribunal held that the Assessing Officer (AO) erred in making additions for unexplained investment by adding two zeros to the figures in the seized documents and in estimating interest at an average rate of 21% on the total loan amount computed by adding two zeros. The Tribunal found that the CIT(A) sustained these additions without appreciating the facts. The Tribunal set aside the CIT(A)'s order and directed the AO to make additions for unaccounted cash loans strictly as per the figures recorded in the seized documents, without adding two zeros. The AO was also directed to compute additions for interest income based solely on the interest reflected in the seized material, without estimation. Finally, the AO was directed to compute the tax liability on these additions by applying the provisions of Section 115BBE of the Income Tax Act, 1961. The Tribunal rejected the assessee's argument regarding the application of Section 115BBE, stating that once additions are made under Sections 68, 69, 69A, and 69C, and the explanation is unsatisfactory, Section 115BBE becomes mandatory. The Tribunal noted that the assessee admitted the transactions in the seized documents related to his finance business were unaccounted.

The Tribunal held that the Assessing Officer (AO) erred in making additions for unexplained investment by adding two zeros to the figures in the seized documents and in estimating interest at an average rate of 21% on the total loan amount computed by adding two zeros. The Tribunal found that the CIT(A) sustained these additions without appreciating the facts. The Tribunal set aside the CIT(A)'s order and directed the AO to make additions for unaccounted cash loans strictly as per the figures recorded in the seized documents, without adding two zeros. The AO was also directed to compute additions for interest income based solely on the interest reflected in the seized material, without estimation. Finally, the AO was directed to compute the tax liability on these additions by applying the provisions of Section 115BBE of the Income Tax Act, 1961. The Tribunal rejected the assessee's argument regarding the application of Section 115BBE, stating that once additions are made under Sections 68, 69, 69A, and 69C, and the explanation is unsatisfactory, Section 115BBE becomes mandatory. The Tribunal noted that the assessee admitted the transactions in the seized documents related to his finance business were unaccounted.

The Tribunal held that the Assessing Officer (AO) erred in making additions for unexplained investment by adding two zeros to the figures in the seized documents and in estimating interest at an average rate of 21% on the total loan amount computed by adding two zeros. The Tribunal found that the CIT(A) sustained these additions without appreciating the facts. The Tribunal set aside the CIT(A)'s order and directed the AO to make additions for unaccounted cash loans strictly as per the figures recorded in the seized documents, without adding two zeros. The AO was also directed to compute additions for interest income based solely on the interest reflected in the seized material, without estimation. Finally, the AO was directed to compute the tax liability on these additions by applying the provisions of Section 115BBE of the Income Tax Act, 1961. The Tribunal rejected the assessee's argument regarding the application of Section 115BBE, stating that once additions are made under Sections 68, 69, 69A, and 69C, and the explanation is unsatisfactory, Section 115BBE becomes mandatory. The Tribunal noted that the assessee admitted the transactions in the seized documents related to his finance business were unaccounted.

The Tribunal held that the Assessing Officer (AO) erred in making additions for unexplained investment by adding two zeros to the figures in the seized documents and in estimating interest at an average rate of 21% on the total loan amount computed by adding two zeros. The Tribunal found that the CIT(A) sustained these additions without appreciating the facts. The Tribunal set aside the CIT(A)'s order and directed the AO to make additions for unaccounted cash loans strictly as per the figures recorded in the seized documents, without adding two zeros. The AO was also directed to compute additions for interest income based solely on the interest reflected in the seized material, without estimation. Finally, the AO was directed to compute the tax liability on these additions by applying the provisions of Section 115BBE of the Income Tax Act, 1961. The Tribunal rejected the assessee's argument regarding the application of Section 115BBE, stating that once additions are made under Sections 68, 69, 69A, and 69C, and the explanation is unsatisfactory, Section 115BBE becomes mandatory. The Tribunal noted that the assessee admitted the transactions in the seized documents related to his finance business were unaccounted.

The Tribunal held that the Assessing Officer (AO) erred in making additions for unexplained investment by adding two zeros to the figures in the seized documents and in estimating interest at an average rate of 21% on the total loan amount computed by adding two zeros. The Tribunal found that the CIT(A) sustained these additions without appreciating the facts. The Tribunal set aside the CIT(A)'s order and directed the AO to make additions for unaccounted cash loans strictly as per the figures recorded in the seized documents, without adding two zeros. The AO was also directed to compute additions for interest income based solely on the interest reflected in the seized material, without estimation. Finally, the AO was directed to compute the tax liability on these additions by applying the provisions of Section 115BBE of the Income Tax Act, 1961. The Tribunal rejected the assessee's argument regarding the application of Section 115BBE, stating that once additions are made under Sections 68, 69, 69A, and 69C, and the explanation is unsatisfactory, Section 115BBE becomes mandatory. The Tribunal noted that the assessee admitted the transactions in the seized documents related to his finance business were unaccounted.

The Tribunal held that the CIT(A) erred in dismissing the appeals for non-prosecution without adjudicating the issues on merits. The Tribunal noted that the assessee had explained the reasons for non-appearance and that it is a well-established principle to dispose of appeals on merits even in cases of non-appearance.

The Tribunal upheld the CIT(A)'s decision to delete the disallowances. It found that the expenses were well-documented, incurred through banking channels, and directly related to the assessee's core business activities of providing educational support services.

The Tribunal upheld the CIT(A)'s decision, finding that the expenses were well-documented, incurred through banking channels, and related to the assessee's core business activities, thus deleting the additions made by the Assessing Officer.

The Tribunal found that while the assessee's explanation for the cash deposits was not fully substantiated, the confirmation letter from the company should not have been summarily discarded. The matter was restored to the AO for further verification.

The assessee failed to appear before the appellate authorities and did not furnish any explanation or evidence. The CIT(A) dismissed the appeal ex parte, upholding the penalty.

The Tribunal held that interest paid on delayed payment of service tax is compensatory in nature and allowable as a deduction under section 37(1) of the Act. Regarding disallowance under section 14A, the Tribunal noted that for the assessment year in question, section 14A could not be invoked in the absence of any exempt income earned by the assessee. The amendment by the Finance Act, 2022, with an Explanation to Section 14A, is effective from April 1, 2022, and cannot be applied retrospectively.

The Tribunal held that the CIT(A) erred in dismissing the appeals for non-prosecution without adjudicating the issues on merits. The Tribunal noted that the assessee had explained the reasons for non-appearance and that it is a well-established principle to dispose of appeals on merits even in cases of non-appearance.