ITAT Hyderabad Judgments — September 2026

The Tribunal decided the following: For Issue 1: The assessee stated that this issue is pending before the Supreme Court and requested it be kept open. Accordingly, Ground No. 2 of the appeal was not adjudicated and was kept open for decision at an appropriate stage. For Issue 2: The judgment snippet provided does not contain the Tribunal's decision on the exclusion of comparables. The arguments of the assessee regarding Infosys BPM Limited and Integra Software Services Limited are recorded, along with reliance on case laws, but the Tribunal's finding and reasoning are not present in the provided text. For Issue 3: The Tribunal upheld the denial of deduction under Section 10AA for foreign exchange gains. The reasoning was based on the Supreme Court's decision in *Shah Originals Vs. CIT*, which held that income derived from export activity requires a direct, immediate, and proximate nexus. The Court clarified that export transactions conclude upon payment, and subsequent currency fluctuations in accounts like EEFC arise from independent financial transactions, not directly from export activity. The Tribunal found the assessee's reliance on *CIT Vs. Cognizant Technology Solutions India (P.) Ltd.* misplaced as the facts were different, with the Madras High Court finding a direct nexus in that case. Therefore, the Tribunal concluded that foreign exchange gains on reinstatement of trade payables and receivables cannot be considered income derived from the export of goods for Section 10AA purposes. The findings of the Ld. TPO/Ld. DRP were upheld. Operative Directions: The appeal was partly allowed for statistical purposes.

The Tribunal held that the Assessing Officer (AO) erred in disallowing the deduction under Section 35DD. The expenditure for amalgamation was incurred in Financial Year (FY) 2011-12, relevant to AY 2012-13, following High Court orders. Therefore, the AO's argument based on the appointed date (01.04.2009) for disallowing the claim for AY 2016-17 (the fifth year) was incorrect and against the principle of impossibility of performance. The Tribunal noted that the AO had accepted the claim for AY 2012-13 to AY 2015-16 (four years). Following the Supreme Court's decision in Shasun Chemicals and Drugs Limited v. CIT and the Delhi High Court's decision in Coforge Limited v. ACIT, the AO could not reject the claim for the fifth year without a change in facts. The Tribunal directed the AO to allow the deduction claimed under Section 35DD for AY 2016-17. The judgment does not explicitly record findings on the transfer pricing grounds (issues 1-6), implying they were either not pressed, decided in favor of the revenue, or not adjudicated upon in this specific part of the order.

The Tribunal noted that the Assessing Officer made the addition of Rs. 43,80,000/- based on AIR information, without verifying the assessee's bank account statements to ascertain the correct facts of cash deposits during the demonetization period. The assessee, however, submitted an application for admission of additional evidence, comprising bank account statements and details of the source of deposits, to demonstrate that the actual cash deposit was Rs. 7,74,000/-. The Tribunal found that these relevant records and details were not available before the lower authorities and required proper verification and examination. Therefore, in the interest of justice, the Tribunal set aside the matter to the Assessing Officer for fresh adjudication after verifying and examining the additional evidence filed by the assessee. The assessee was to be given a proper opportunity of hearing before passing a fresh order. The appeal was allowed for statistical purposes.

The Tribunal condoned the delay of 324 days in filing the appeal against the assessment order and 130 days in filing the appeal against the penalty order before the CIT(A), subject to a cost of Rs. 5,000/- in each appeal, totaling Rs. 10,000/-, to be paid to the Prime Minister's National Relief Fund. The Tribunal found prima facie merit in the assessee's explanation that the incorrect SBI branch was contacted by the Assessing Officer, leading to non-communication of the notice and lack of awareness of the proceedings. The Tribunal noted that the bank account was used for SBI clients of the Pattikonda branch, and without verifying this, assessing the entire transaction amount in the assessee's hands was unjustified. Consequently, the impugned orders of the CIT(A) in the quantum appeal were set aside, and the matter was remanded to the Assessing Officer for fresh adjudication after considering relevant records and the assessee's explanation. The penalty order was deleted as the quantum appeal was set aside, with liberty to the Assessing Officer to take appropriate steps post-remand proceedings.

The Tribunal held that the assessment order was not barred by limitation. The CIT(A) correctly noted that the ITAT's order dated 28.02.2018 was received by the Commissioner's office on 16.04.2018. As per Section 153(3), the limitation period is reckoned from the end of the financial year in which the order is received. Since it was received in FY 2018-19, the limitation expired on 31.12.2019, making the assessment order dated 27.12.2019 valid. Regarding the merits, the Tribunal found that the AO erred in not properly verifying the assessee's claim of advance payment made in 2001. The AO rejected the claim solely based on the sale deed not mentioning it, without conducting further inquiry. The Tribunal considered the payment of Rs. 4 lakhs via cheque on 21.03.2001 as evidence of investment in 2001, thus making the sale a long-term capital gain. Consequently, the assessee is eligible for deduction under Section 54F. The Tribunal also directed the AO to re-examine the valuation of the land as per the ITAT's earlier directions, considering the probable construction cost as of May 2008 or the SRO value of the land as on the date of the JDA. The grounds of appeal were considered partly allowed for statistical purposes.

The Tribunal condoned the delay of 244 days in filing the appeal, finding that there was no deliberate or willful attempt by the assessee to delay the filing. The delay was attributed to a bona fide mistake in verifying the appellate orders of the CIT(A), and the Tribunal adopted a justice-oriented and liberal approach, citing the Supreme Court decisions in Vidya Shankar Jaiswal and Collector Land Acquisition, Anantnag & Ors. Regarding the addition of Rs.1,83,88,329/- as unexplained expenditure, the Tribunal found that the cash payment vouchers and the statement of Sri Arumugham did not conclusively prove that the expenditure related to the assessee firm's business affairs. The Tribunal noted that Sri Arumugham clarified that the payments were made as per the instructions of M/s. Larenon Healthcare Pvt. Ltd. for their business purposes and that all of the assessee company's transactions were through banking channels. Consequently, the Tribunal set aside the order of the CIT(A) and deleted the addition. The legal ground challenging the validity of the assessment order under Section 143(3) was dismissed as infructuous because the assessee succeeded on merits.

The Tribunal held that the assessee had duly attached an application for condonation of delay, which was not considered by the learned CIT(A) due to its alleged non-availability on the portal. The Tribunal noted that the learned CIT(A) ought to have issued a notice to the assessee for clarification before dismissing the appeal in limine. Considering the assessee's grievance regarding the tax rate applied by the CPC and the fact that the assessee would be remediless if the delay was not condoned, the Tribunal decided to condone the delay, subject to a cost of Rs. 5,000/- payable to the Prime Minister's National Relief Fund. Since the learned CIT(A) had not adjudicated the appeal on merits, the impugned order was set aside, and the matter was remanded to the learned CIT(A) for adjudication on merits after providing a proper opportunity of hearing to the assessee and considering the relied-upon decisions. The Tribunal explicitly stated that the dismissal of the appeal in limine resulted in a wrong collection of tax.

The Tribunal held that the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is consequential to the additions made by the Assessing Officer in the quantum assessment. As the Tribunal, in its order dated 27.03.2026 in ITA.No.1730/Hyd./2025, had set aside the quantum assessment for Assessment Year 2012-2013 and remanded the matter to the Assessing Officer for fresh adjudication, the penalty levied on the basis of those additions could not survive. Therefore, the penalty was deleted. The Tribunal clarified that the Assessing Officer is at liberty to initiate penalty proceedings as per the outcome of the remand proceedings in the quantum matter. The issue regarding the leviability of penalty under Section 271AAC(1) was not explicitly decided, as the penalty was deleted on the ground of the set-aside quantum assessment.

The Tribunal held that the addition made by the Assessing Officer and sustained by the CIT(A) was not justified and should be deleted. The Tribunal noted that the initial confirmation from K Ravi contained a typographical error in the PAN, where 'P' was mistakenly used instead of 'A' as the first alphabet. The assessee subsequently filed a revised confirmation with the correct PAN (AHAPK6016D) and a copy of the PAN itself. The Tribunal observed that the transactions were undisputedly conducted through banking channels, reflected in the bank accounts of both the assessee and the creditors. Therefore, once the loan transaction was through banking channels and the assessee provided a creditor confirmation with a valid PAN, the addition was unwarranted. The Tribunal allowed the appeal.

The Tribunal held that the CIT(A) issued three notices, and the assessee sought adjournment for two of them. While the first adjournment request was granted, the second was denied, leading to an ex-parte order where the assessee's appeal was dismissed for non-filing of details and submissions. The Tribunal noted that the assessment order was also passed ex-parte, with the AO estimating income at 12% of sales against the assessee's claimed 1% commission income as an agricultural produce commission agent. Considering the facts and circumstances and in the interest of justice, the Tribunal granted one more opportunity to the assessee. The impugned order of the CIT(A) was set aside, and the matter was remanded for fresh adjudication after considering the details to be filed by the assessee, with an appropriate opportunity of hearing to be provided. The issue of the addition of Rs.2,19,43,863 was not decided on merits but was remanded for fresh consideration.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied on additions made purely on an estimation basis, especially when the quantum addition itself was based on an estimation by the ITAT. The Tribunal noted that the AO's reliance on Explanation 5A to Section 271 was not applicable as the ITAT had already determined the income based on estimation. Regarding the time-barring issue under Section 275, the Tribunal found that the show-cause notices were issued beyond the prescribed period, making the penalty unsustainable. For AY 2020-21, the Tribunal held that the penalty under Section 271AAB was invalid due to the AO's failure to record satisfaction and specify the charges in the show-cause notice. Citing the cases of PCIT Vs. Shri R. Elangovan and Kavya Boppana Vs. ACIT, the Tribunal concluded that the notice was defective and the penalty levied was unsustainable. Consequently, the penalty orders were set aside and deleted for all assessment years under appeal.

The Tribunal held that the issue concerning the addition on account of unexplained expenditure based on the diary entries (Ground No. 3(i) to (iv)) was allowed in favour of the assessee in part. The Tribunal directed the AO to consider the diary entries as unexplained expenditure under Section 69C, but after telescoping the amount of Rs.1,03,19,000/- to Rs.14,07,218/-. Regarding the addition under Section 69A (Ground No. 4), the Tribunal did not record any specific finding or decision in the provided text, implying it was either not pressed or decided in line with other grounds. For the issue of interest income on fixed deposits for bank guarantees (Ground No. 5 and 3(i) for AY 2020-21), the Tribunal allowed the appeal. It directed the AO to include the interest income (Rs.70,33,248/- for AY 2017-18 and Rs.84,65,808/- for AY 2020-21) while computing the deduction under Section 80IA(4), subject to verification that the FDRs were maintained for bank guarantees related to eligible infrastructure projects and not as independent investments. Grounds 1, 2, and 4 were dismissed as not pressed. The operative direction was to allow the appeal in terms of the observations.

The Tribunal held that the penalty levied under Section 270A for AY 2021-22 is not sustainable. The Tribunal noted that the addition of Rs. 20 lakhs was made based on WhatsApp messages and the statement of the General Manager, even though the assessee denied receiving cash. While the assessee accepted the addition to end litigation, this acceptance was not an admission of underreporting of income. The Tribunal distinguished the case of MAK Data (P.) Ltd. by stating that in the present case, the addition was based on third-party information without corroborative evidence, and the assessee consistently denied receipt of alleged cash. Therefore, following the decisions in Suresh Chandra Mittal and Sarath Gopal Bopanna, the penalty under Section 270A was deleted. For AY 2023-24, the Tribunal held that the penalty levied under Section 271AAB is not sustainable. The Tribunal observed that Section 271AAB applies when the assessee categorically admits undisclosed income in a statement recorded under Section 132(4). In this case, the assessee company never admitted undisclosed income. The addition was based on third-party evidence and a statement from a third party without corroboration. The Tribunal concluded that the AO erred in levying penalty under Section 271AAB as the facts did not meet the criteria for its applicability. The order of the CIT(A) was set aside, and the penalty was deleted.

The Tribunal held that there was no dispute that the Assessing Officer (AO) had not recorded satisfaction as required by law in the assessment order dated 01.11.2018, before initiating penalty proceedings under Section 271D. The Tribunal relied on the Supreme Court's decision in CIT Vs. Jai Laxmi Rice Mills, Ambala City, which clearly held that a penalty order passed without recorded satisfaction deserves to be set aside. The Tribunal also referred to the Andhra Pradesh High Court's decision in Grandhi Sri Venkata Amarendra Vs. JCIT, which stated that penalty under Section 271D cannot be levied if the AO has not recorded any finding of violation of Section 269SS or satisfaction that the transaction attracts penal consequences. The Tribunal found that the CIT(A) had upheld the penalty without appreciating these facts. Consequently, the Tribunal set aside the order of the CIT(A) and deleted the penalty levied by the AO under Section 271D.

The Tribunal condoned the delay of 14 days in filing the appeal, taking a lenient view of the assessee's explanation of personal and domestic issues and his age. Regarding the substantive issue, the Tribunal noted that the assessee provided details of gold loan credit and numerous withdrawals and subsequent deposits in the bank account, occurring on a regular, almost daily basis. The Tribunal observed that these transactions indicated business activity, specifically chit fund operations, as claimed by the assessee. It was held that prior withdrawals from the bank account could not be denied as a source for subsequent deposits, especially given the nature of the business. To resolve the dispute and considering the facts and circumstances, the Tribunal directed that the income of the assessee be estimated at 5% of the total deposit in the bank account. The AO was instructed to assess the income accordingly. The issue of gross violations of principles of natural justice was not explicitly decided but implicitly addressed by the Tribunal's engagement with the merits of the case.

The Tribunal held that while ordinarily, income arising from a property received as a gift from a spouse is assessable in the hands of the spouse under Section 64 of the Act, the facts of this case warranted a different conclusion. The assessee failed to disclose this fact to the AO in response to the notice under Section 148 or by filing a return of income. The claim was made only in response to a show cause notice after the limitation period for issuing a notice under Section 148 to the husband had expired. The Tribunal found this conduct to be mischievous, aimed at avoiding tax liability either in the assessee's hands or the husband's hands. Furthermore, the husband had also not filed any return of income for the relevant assessment year, leaving no opportunity for the AO to assess the income in his hands. Consequently, the Tribunal found no reason to interfere with the orders of the authorities below and upheld the addition. No issue was expressly left undecided.

The Tribunal held that the assessment orders passed by the ITO, Ward-1, Chirala, for both assessment years 2013-2014 and 2014-2015 are invalid due to a lack of jurisdiction. The Tribunal reasoned that the assessee had consistently filed returns with the ITO, Ward-6(1), Hyderabad, and the department had not issued any order under Section 127 of the Income Tax Act transferring the case to Chirala. Therefore, the ITO, Chirala, had no jurisdiction to conduct the survey or pass the assessment orders. The Tribunal also addressed the revenue's contention regarding Section 124(3), stating that this provision, which bars raising jurisdictional objections after assessment completion, does not validate an order passed by an officer who inherently lacks jurisdiction. The Tribunal found that the assessment order passed by an officer without jurisdiction is invalid, irrespective of whether the assessee raised an objection under Section 124(3). Consequently, the other grounds raised by the assessee were not adjudicated as the primary issue of jurisdiction was decided in favor of the assessee. The assessment orders were set aside.

The Tribunal dismissed Ground No. 2 regarding the validity of the notice under Section 143(2), citing the Special Bench decision in MD Sons vs. Income Tax Officer and noting that the assessee's representative did not press this ground. Regarding the additions related to sundry creditors (Rs. 13,25,232/-) and unsecured loans (Rs. 20,60,236/-), the Tribunal found that the assessee had provided explanations and additional evidence, including bank statements of the son, which required verification at the Assessing Officer's level. Consequently, the Tribunal remanded both issues to the Assessing Officer for verification, examination, and adjudication, with an opportunity for a hearing. The Tribunal noted that the omission of a purchase bill did not affect the income offered under Section 44AD, as the turnover was not disputed. The appeal was allowed for statistical purposes.

The Tribunal admitted additional evidence in the form of two valuation reports from an independent valuer submitted by the assessee. It held that while the DCF method is permissible and the choice of method lies with the assessee, the method must be justified with relevant details, including supporting evidence for future cash flows and an independent valuation report. The Tribunal noted that the assessee had not filed any valuation report before the AO and the CIT(A) had not considered the report submitted to them. Since the additional evidence (valuation reports) was crucial for determining the FMV, the Tribunal admitted it and remanded the issue back to the AO. The AO was directed to reconsider the addition under Section 56(2)(viib) in light of the admitted valuation reports and to examine supporting details for operational cash flow/income for subsequent years. The Tribunal set aside the CIT(A)'s order.

The Tribunal allowed the appeal. The Tribunal noted that the AO had made an addition of Rs. 32,50,000/-. However, during remand proceedings, the AO verified sale deeds confirming the sale of agricultural land for an aggregate consideration of Rs. 18,53,000/-. The AO also recorded that Rs. 32,50,000/- shown in the return was a clerical error and the actual sale consideration was Rs. 18,53,000/-. The land was confirmed to be rural agricultural land, and capital gains were exempt. The bank account verification showed deposits totaling Rs. 20,85,000/-, which the assessee explained as Rs. 18,53,000/- from sale proceeds and Rs. 2,32,000/- as agricultural income. The Tribunal observed that the AO had wrongly considered the maturity of a fixed deposit as a fresh deposit, leading to an inflated figure. The CIT(A) had accepted the sale consideration and agricultural income totaling Rs. 20,85,000/- but sustained an addition of Rs. 11,65,000/-. The Tribunal held that since the AO wrongly considered the total deposit amount by including the encashment of the fixed deposit, the addition sustained by the CIT(A) was contrary to the facts and record and therefore deleted.

The Tribunal held that the penalty levied under Section 271D was not sustainable and liable to be deleted. The Tribunal noted that the assessee sold an immovable property for Rs. 19,50,500, of which Rs. 14,50,000 was received by cheque and Rs. 5,00,500 in cash. The penalty was levied by considering the entire receipt as cash, indicating a non-application of mind by the Assessing Officer and confirmed by the CIT(A). Crucially, the Tribunal found that there was no assessment order or any other proceedings in the assessee's case, and therefore, no satisfaction was recorded by the Assessing Officer for initiating penalty proceedings under Section 271D. Following the decision in Nithyananda Rao Volimineni vs. Income Tax Officer and the Supreme Court's ruling in Jai Laxmi Rice Mills Ambala City, which held that satisfaction must be recorded in the original assessment order for initiating penalty proceedings under Section 271E (in pari materia with Section 271D), the Tribunal concluded that the penalty was invalid without such satisfaction. The penalty was accordingly set aside.

The Tribunal held that the CIT(A) had dismissed the assessee's appeal for non-prosecution without deciding the grounds raised on merits. This was considered not in accordance with Section 250(6) of the Act. The Tribunal noted that the AO had assessed the income under the head long-term capital gains and denied the claim of deduction under Section 54. The assessee had explained the sale of 6 flats and purchase of a villa, with the cost of acquisition exceeding the sale consideration. The CIT(A)'s dismissal for non-prosecution meant the grounds were not adjudicated. Therefore, in the interest of justice, the Tribunal allowed the assessee one more opportunity to present their case before the CIT(A). The impugned order of the CIT(A) was set aside, and the matter was remanded for fresh adjudication, subject to the assessee paying Rs. 5,000/- to the ITAT Tax Bar Association, Hyderabad, within one month.

The Tribunal held that the penalty levied under Section 270A for AY 2021-22 is not sustainable. The Tribunal noted that the addition of Rs. 20 lakhs was made based on WhatsApp messages and the statement of the General Manager, even though the assessee denied receiving cash. While the assessee accepted the addition to end litigation, this acceptance was not an admission of underreporting of income. The Tribunal distinguished the case of MAK Data (P.) Ltd. by stating that in the present case, the addition was based on third-party information without corroborative evidence, and the assessee consistently denied receipt of alleged cash. Therefore, following the decisions in Suresh Chandra Mittal and Sarath Gopal Bopanna, the penalty under Section 270A was deleted. For AY 2023-24, the Tribunal held that the penalty levied under Section 271AAB is not sustainable. The Tribunal observed that Section 271AAB applies when the assessee categorically admits undisclosed income in a statement recorded under Section 132(4). In this case, the assessee company never admitted undisclosed income. The addition was based on third-party evidence and a statement from a third party without corroboration. The Tribunal concluded that the AO erred in levying penalty under Section 271AAB as the facts did not meet the criteria for its applicability. The order of the CIT(A) was set aside, and the penalty was deleted.

The Tribunal held that the assessment orders passed by the ITO, Ward-1, Chirala, for both assessment years 2013-2014 and 2014-2015 are invalid due to a lack of jurisdiction. The Tribunal reasoned that the assessee had consistently filed returns with the ITO, Ward-6(1), Hyderabad, and the department had not issued any order under Section 127 of the Income Tax Act transferring the case to Chirala. Therefore, the ITO, Chirala, had no jurisdiction to conduct the survey or pass the assessment orders. The Tribunal also addressed the revenue's contention regarding Section 124(3), stating that this provision, which bars raising jurisdictional objections after assessment completion, does not validate an order passed by an officer who inherently lacks jurisdiction. The Tribunal found that the assessment order passed by an officer without jurisdiction is invalid, irrespective of whether the assessee raised an objection under Section 124(3). Consequently, the other grounds raised by the assessee were not adjudicated as the primary issue of jurisdiction was decided in favor of the assessee. The assessment orders were set aside.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied on additions made purely on an estimation basis, especially when the quantum addition itself was based on an estimation by the ITAT. The Tribunal noted that the AO's reliance on Explanation 5A to Section 271 was not applicable as the ITAT had already determined the income based on estimation. Regarding the time-barring issue under Section 275, the Tribunal found that the show-cause notices were issued beyond the prescribed period, making the penalty unsustainable. For AY 2020-21, the Tribunal held that the penalty under Section 271AAB was invalid due to the AO's failure to record satisfaction and specify the charges in the show-cause notice. Citing the cases of PCIT Vs. Shri R. Elangovan and Kavya Boppana Vs. ACIT, the Tribunal concluded that the notice was defective and the penalty levied was unsustainable. Consequently, the penalty orders were set aside and deleted for all assessment years under appeal.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied on additions made purely on an estimation basis, especially when the quantum addition itself was based on an estimation by the ITAT. The Tribunal noted that the AO's reliance on Explanation 5A to Section 271 was not applicable as the ITAT had already determined the income based on estimation. Regarding the time-barring issue under Section 275, the Tribunal found that the show-cause notices were issued beyond the prescribed period, making the penalty unsustainable. For AY 2020-21, the Tribunal held that the penalty under Section 271AAB was invalid due to the AO's failure to record satisfaction and specify the charges in the show-cause notice. Citing the cases of PCIT Vs. Shri R. Elangovan and Kavya Boppana Vs. ACIT, the Tribunal concluded that the notice was defective and the penalty levied was unsustainable. Consequently, the penalty orders were set aside and deleted for all assessment years under appeal.

The Tribunal held that the issue concerning the addition on account of unexplained expenditure based on the diary entries (Ground No. 3(i) to (iv)) was allowed in favour of the assessee in part. The Tribunal directed the AO to consider the diary entries as unexplained expenditure under Section 69C, but after telescoping the amount of Rs.1,03,19,000/- to Rs.14,07,218/-. Regarding the addition under Section 69A (Ground No. 4), the Tribunal did not record any specific finding or decision in the provided text, implying it was either not pressed or decided in line with other grounds. For the issue of interest income on fixed deposits for bank guarantees (Ground No. 5 and 3(i) for AY 2020-21), the Tribunal allowed the appeal. It directed the AO to include the interest income (Rs.70,33,248/- for AY 2017-18 and Rs.84,65,808/- for AY 2020-21) while computing the deduction under Section 80IA(4), subject to verification that the FDRs were maintained for bank guarantees related to eligible infrastructure projects and not as independent investments. Grounds 1, 2, and 4 were dismissed as not pressed. The operative direction was to allow the appeal in terms of the observations.

The Tribunal held that the issue concerning the addition on account of unexplained expenditure based on the diary entries (Ground No. 3(i) to (iv)) was allowed in favour of the assessee in part. The Tribunal directed the AO to consider the diary entries as unexplained expenditure under Section 69C, but after telescoping the amount of Rs.1,03,19,000/- to Rs.14,07,218/-. Regarding the addition under Section 69A (Ground No. 4), the Tribunal did not record any specific finding or decision in the provided text, implying it was either not pressed or decided in line with other grounds. For the issue of interest income on fixed deposits for bank guarantees (Ground No. 5 and 3(i) for AY 2020-21), the Tribunal allowed the appeal. It directed the AO to include the interest income (Rs.70,33,248/- for AY 2017-18 and Rs.84,65,808/- for AY 2020-21) while computing the deduction under Section 80IA(4), subject to verification that the FDRs were maintained for bank guarantees related to eligible infrastructure projects and not as independent investments. Grounds 1, 2, and 4 were dismissed as not pressed. The operative direction was to allow the appeal in terms of the observations.

The Tribunal condoned the delay of 324 days in filing the appeal against the assessment order and 130 days in filing the appeal against the penalty order before the CIT(A), subject to a cost of Rs. 5,000/- in each appeal, totaling Rs. 10,000/-, to be paid to the Prime Minister's National Relief Fund. The Tribunal found prima facie merit in the assessee's explanation that the incorrect SBI branch was contacted by the Assessing Officer, leading to non-communication of the notice and lack of awareness of the proceedings. The Tribunal noted that the bank account was used for SBI clients of the Pattikonda branch, and without verifying this, assessing the entire transaction amount in the assessee's hands was unjustified. Consequently, the impugned orders of the CIT(A) in the quantum appeal were set aside, and the matter was remanded to the Assessing Officer for fresh adjudication after considering relevant records and the assessee's explanation. The penalty order was deleted as the quantum appeal was set aside, with liberty to the Assessing Officer to take appropriate steps post-remand proceedings.

The Tribunal held that the issue concerning the addition on account of unexplained expenditure based on the diary entries (Ground No. 3(i) to (iv)) was allowed in favour of the assessee in part. The Tribunal directed the AO to consider the diary entries as unexplained expenditure under Section 69C, but after telescoping the amount of Rs.1,03,19,000/- to Rs.14,07,218/-. Regarding the addition under Section 69A (Ground No. 4), the Tribunal did not record any specific finding or decision in the provided text, implying it was either not pressed or decided in line with other grounds. For the issue of interest income on fixed deposits for bank guarantees (Ground No. 5 and 3(i) for AY 2020-21), the Tribunal allowed the appeal. It directed the AO to include the interest income (Rs.70,33,248/- for AY 2017-18 and Rs.84,65,808/- for AY 2020-21) while computing the deduction under Section 80IA(4), subject to verification that the FDRs were maintained for bank guarantees related to eligible infrastructure projects and not as independent investments. Grounds 1, 2, and 4 were dismissed as not pressed. The operative direction was to allow the appeal in terms of the observations.

The Tribunal held that the penalty levied under Section 270A for AY 2021-22 is not sustainable. The Tribunal noted that the addition of Rs. 20 lakhs was made based on WhatsApp messages and the statement of the General Manager, even though the assessee denied receiving cash. While the assessee accepted the addition to end litigation, this acceptance was not an admission of underreporting of income. The Tribunal distinguished the case of MAK Data (P.) Ltd. by stating that in the present case, the addition was based on third-party information without corroborative evidence, and the assessee consistently denied receipt of alleged cash. Therefore, following the decisions in Suresh Chandra Mittal and Sarath Gopal Bopanna, the penalty under Section 270A was deleted. For AY 2023-24, the Tribunal held that the penalty levied under Section 271AAB is not sustainable. The Tribunal observed that Section 271AAB applies when the assessee categorically admits undisclosed income in a statement recorded under Section 132(4). In this case, the assessee company never admitted undisclosed income. The addition was based on third-party evidence and a statement from a third party without corroboration. The Tribunal concluded that the AO erred in levying penalty under Section 271AAB as the facts did not meet the criteria for its applicability. The order of the CIT(A) was set aside, and the penalty was deleted.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied on additions made purely on an estimation basis, especially when the quantum addition itself was based on an estimation by the ITAT. The Tribunal noted that the AO's reliance on Explanation 5A to Section 271 was not applicable as the ITAT had already determined the income based on estimation. Regarding the time-barring issue under Section 275, the Tribunal found that the show-cause notices were issued beyond the prescribed period, making the penalty unsustainable. For AY 2020-21, the Tribunal held that the penalty under Section 271AAB was invalid due to the AO's failure to record satisfaction and specify the charges in the show-cause notice. Citing the cases of PCIT Vs. Shri R. Elangovan and Kavya Boppana Vs. ACIT, the Tribunal concluded that the notice was defective and the penalty levied was unsustainable. Consequently, the penalty orders were set aside and deleted for all assessment years under appeal.

The Tribunal held that the issue concerning the addition on account of unexplained expenditure based on the diary entries (Ground No. 3(i) to (iv)) was allowed in favour of the assessee in part. The Tribunal directed the AO to consider the diary entries as unexplained expenditure under Section 69C, but after telescoping the amount of Rs.1,03,19,000/- to Rs.14,07,218/-. Regarding the addition under Section 69A (Ground No. 4), the Tribunal did not record any specific finding or decision in the provided text, implying it was either not pressed or decided in line with other grounds. For the issue of interest income on fixed deposits for bank guarantees (Ground No. 5 and 3(i) for AY 2020-21), the Tribunal allowed the appeal. It directed the AO to include the interest income (Rs.70,33,248/- for AY 2017-18 and Rs.84,65,808/- for AY 2020-21) while computing the deduction under Section 80IA(4), subject to verification that the FDRs were maintained for bank guarantees related to eligible infrastructure projects and not as independent investments. Grounds 1, 2, and 4 were dismissed as not pressed. The operative direction was to allow the appeal in terms of the observations.

The Tribunal held that the issue concerning the addition on account of unexplained expenditure based on the diary entries (Ground No. 3(i) to (iv)) was allowed in favour of the assessee in part. The Tribunal directed the AO to consider the diary entries as unexplained expenditure under Section 69C, but after telescoping the amount of Rs.1,03,19,000/- to Rs.14,07,218/-. Regarding the addition under Section 69A (Ground No. 4), the Tribunal did not record any specific finding or decision in the provided text, implying it was either not pressed or decided in line with other grounds. For the issue of interest income on fixed deposits for bank guarantees (Ground No. 5 and 3(i) for AY 2020-21), the Tribunal allowed the appeal. It directed the AO to include the interest income (Rs.70,33,248/- for AY 2017-18 and Rs.84,65,808/- for AY 2020-21) while computing the deduction under Section 80IA(4), subject to verification that the FDRs were maintained for bank guarantees related to eligible infrastructure projects and not as independent investments. Grounds 1, 2, and 4 were dismissed as not pressed. The operative direction was to allow the appeal in terms of the observations.

The Tribunal held that the notice under Section 148 of the Act, dated 09.04.2022, was issued beyond a period of three years from the end of the relevant assessment year (AY 2018-19). As per Section 151 of the Act, as it stood after the Finance Act, 2021, for reassessments initiated beyond three years, approval from higher authorities like the Principal Chief Commissioner or Principal Director General was mandatory. In this case, the approval was obtained from the Principal Commissioner of Income-tax, Vijayawada, which was not the specified authority for reassessments beyond three years. The Tribunal rejected the revenue's contention that the proviso to Section 151, inserted by the Finance Act, 2023, could be applied retrospectively to exclude the period for furnishing a reply. Relying on the Supreme Court's decision in Assistant Commissioner of Income-tax vs. LinkedIn Singapore Pte. Ltd., the Tribunal concluded that the assumption of jurisdiction by the AO was invalid due to the lack of proper approval under Section 151. Consequently, the assessment order dated 01.03.2024 was quashed. Other contentions raised by the assessee were left undecided.

The Tribunal held that the issue concerning the addition on account of unexplained expenditure based on the diary entries (Ground No. 3(i) to (iv)) was allowed in favour of the assessee in part. The Tribunal directed the AO to consider the diary entries as unexplained expenditure under Section 69C, but after telescoping the amount of Rs.1,03,19,000/- to Rs.14,07,218/-. Regarding the addition under Section 69A (Ground No. 4), the Tribunal did not record any specific finding or decision in the provided text, implying it was either not pressed or decided in line with other grounds. For the issue of interest income on fixed deposits for bank guarantees (Ground No. 5 and 3(i) for AY 2020-21), the Tribunal allowed the appeal. It directed the AO to include the interest income (Rs.70,33,248/- for AY 2017-18 and Rs.84,65,808/- for AY 2020-21) while computing the deduction under Section 80IA(4), subject to verification that the FDRs were maintained for bank guarantees related to eligible infrastructure projects and not as independent investments. Grounds 1, 2, and 4 were dismissed as not pressed. The operative direction was to allow the appeal in terms of the observations.

The Tribunal considered the request made by the assessee's Authorized Representative. The AR submitted that the assessee had filed two appeals against the same order of the Ld. CIT(A), and the other appeal (ITA No. 1062/Hyd/2026) was scheduled for a future hearing. Based on this submission, the Tribunal granted permission to the assessee to withdraw the present appeal. Consequently, the appeal filed by the assessee was dismissed. No specific issue regarding the merits of the assessment or the CIT(A)'s order was decided, as the appeal was withdrawn. The operative direction was to dismiss the appeal as withdrawn.

The Tribunal held that the assessee failed to establish a "sufficient cause" for the delay in filing its appeals, amounting to 164 days. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that delay cannot be condoned on equitable or sympathetic grounds alone, and negligence, inaction, or lack of bona fides are valid reasons for refusal. The Tribunal found no satisfactory explanation for the 97-day period after the assessee admittedly acquired knowledge of the orders through recovery proceedings. Consequently, the assessee's appeals were dismissed in limine as barred by limitation, without adjudicating the grounds on merits. The Revenue's appeals were also dismissed, as stated in the concluding paragraph of the judgment.

The Tribunal held that the assessee failed to establish a "sufficient cause" for the delay in filing its appeals, amounting to 164 days. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that delay cannot be condoned on equitable or sympathetic grounds alone, and negligence, inaction, or lack of bona fides are valid reasons for refusal. The Tribunal found no satisfactory explanation for the 97-day period after the assessee admittedly acquired knowledge of the orders through recovery proceedings. Consequently, the assessee's appeals were dismissed in limine as barred by limitation, without adjudicating the grounds on merits. The Revenue's appeals were also dismissed, as stated in the concluding paragraph of the judgment.

The Tribunal condoned the delay of 66 days in filing the appeal before the Ld. CIT(A). The Tribunal found that the assessee's explanation regarding chronic piles requiring surgery and acute back pain necessitating bed rest constituted a reasonable and bona fide cause for the delay. The Tribunal noted that the Revenue had not demonstrated any deliberate or intentional delay. Citing the Hon'ble Supreme Court's decision in Vidya Shankar Jaiswal Vs. CIT, the Tribunal emphasized adopting a justice-oriented and liberal approach in condoning delays. Since the Ld. CIT(A) had not adjudicated the grounds on merits due to dismissing the appeal on limitation, the Tribunal set aside the impugned order and restored the matter to the file of the Ld. CIT(A) for fresh adjudication on merits, after providing the assessee an opportunity of being heard. The assessee was directed to cooperate and furnish necessary details without seeking unnecessary adjournments. The appeal was allowed for statistical purposes.

The Tribunal held that the assessee failed to establish a "sufficient cause" for the delay in filing its appeals, amounting to 164 days. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that delay cannot be condoned on equitable or sympathetic grounds alone, and negligence, inaction, or lack of bona fides are valid reasons for refusal. The Tribunal found no satisfactory explanation for the 97-day period after the assessee admittedly acquired knowledge of the orders through recovery proceedings. Consequently, the assessee's appeals were dismissed in limine as barred by limitation, without adjudicating the grounds on merits. The Revenue's appeals were also dismissed, as stated in the concluding paragraph of the judgment.

The Tribunal held that the assessee failed to establish a "sufficient cause" for the delay in filing its appeals, amounting to 164 days. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that delay cannot be condoned on equitable or sympathetic grounds alone, and negligence, inaction, or lack of bona fides are valid reasons for refusal. The Tribunal found no satisfactory explanation for the 97-day period after the assessee admittedly acquired knowledge of the orders through recovery proceedings. Consequently, the assessee's appeals were dismissed in limine as barred by limitation, without adjudicating the grounds on merits. The Revenue's appeals were also dismissed, as stated in the concluding paragraph of the judgment.

The Tribunal held that the assessee failed to establish a "sufficient cause" for the delay in filing its appeals, amounting to 164 days. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that delay cannot be condoned on equitable or sympathetic grounds alone, and negligence, inaction, or lack of bona fides are valid reasons for refusal. The Tribunal found no satisfactory explanation for the 97-day period after the assessee admittedly acquired knowledge of the orders through recovery proceedings. Consequently, the assessee's appeals were dismissed in limine as barred by limitation, without adjudicating the grounds on merits. The Revenue's appeals were also dismissed, as stated in the concluding paragraph of the judgment.

The Tribunal held that the assessee failed to establish a "sufficient cause" for the delay in filing its appeals, amounting to 164 days. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that delay cannot be condoned on equitable or sympathetic grounds alone, and negligence, inaction, or lack of bona fides are valid reasons for refusal. The Tribunal found no satisfactory explanation for the 97-day period after the assessee admittedly acquired knowledge of the orders through recovery proceedings. Consequently, the assessee's appeals were dismissed in limine as barred by limitation, without adjudicating the grounds on merits. The Revenue's appeals were also dismissed, as stated in the concluding paragraph of the judgment.

The Tribunal held that the assessee failed to establish a "sufficient cause" for the delay in filing its appeals, amounting to 164 days. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that delay cannot be condoned on equitable or sympathetic grounds alone, and negligence, inaction, or lack of bona fides are valid reasons for refusal. The Tribunal found no satisfactory explanation for the 97-day period after the assessee admittedly acquired knowledge of the orders through recovery proceedings. Consequently, the assessee's appeals were dismissed in limine as barred by limitation, without adjudicating the grounds on merits. The Revenue's appeals were also dismissed, as stated in the concluding paragraph of the judgment.

The Tribunal held that the order passed by the AO-TDS under section 201 of the Act in the name of the non-existing entity, EMC IT Solutions India Pvt. Ltd., despite specific intimation regarding the fact of amalgamation, is void ab initio. The Tribunal respectfully followed the decision of the Hon'ble Supreme Court in Maruti Suzuki India Ltd. (supra), which held that after amalgamation, the amalgamating entity ceases to exist, and any order passed subsequently in its name would be without jurisdiction. The Tribunal found the reliance placed by the learned CIT(A) on Sky Light Hospitality LLP (supra) and Mahagun Realtors Pvt. Ltd. (supra) to be misplaced. In Mahagun Realtors Pvt. Ltd. (supra), the taxpayer had suppressed the fact of amalgamation, whereas in the present case, the assessee had duly intimated the merger before the initiation of proceedings. The Tribunal also noted that merely mentioning the name of the amalgamated company in the body of the order does not fulfil the legal requirement when the order is addressed to and served on the erstwhile, non-existent entity. Consequently, the order passed under section 201 of the Act was quashed. As a result, Ground No. 1 raised by the assessee was allowed. The other grounds concerning the merits of interest levied under section 201(1A) were rendered academic and kept open.

The Tribunal considered the petition filed by the Learned CIT-DR for the Revenue seeking withdrawal of the appeal. The Revenue stated that a duplicate appeal, ITA No.2648/Hyd/2026, had been filed against the same impugned order dated 11.03.2026, involving identical issues and grounds. This duplication was attributed to an inadvertent mistake during the online filing process. The assessee's representative had no objection to the withdrawal. In light of these submissions and the fact that the assessee did not oppose the withdrawal, the Tribunal found no impediment to allowing the withdrawal. Consequently, the appeal filed by the Revenue was dismissed as withdrawn. No other issues were decided, and no specific ratio decidendi for substantive legal principles was established as the appeal was withdrawn on procedural grounds.

The Tribunal held that the CIT(Appeals), by declining to condone the delay and dismissing the appeal on limitation but then proceeding to decide the appeal on merits and upholding the AO's order, had implicitly treated the appeal as properly before him. Citing Vijayeswari Textiles Ltd. Vs. CIT, the Tribunal inferred that the CIT(Appeals) was not convinced that the appeal should be dismissed as barred by limitation. Consequently, the Tribunal held that the delay in filing the appeal before the CIT(Appeals) deserved to be condoned and the appeal was to be treated as admitted for adjudication on merits. Furthermore, the Tribunal found substance in the assessee's claim that the cash deposits could be sourced from business turnover and that this claim could not be summarily discarded, especially since the bank account was disclosed in the balance sheet. The Tribunal set aside the CIT(Appeals)'s order and restored the matter to his file for adjudication on merits, directing him to examine the assessee's explanation, conduct necessary verification, and afford a reasonable opportunity of being heard. The Tribunal explicitly stated that no opinion was expressed on the merits of the addition made by the AO under section 69A, and all issues remained open for adjudication.

The Tribunal held that the full brokerage expenditure of Rs. 4,20,000/- should be allowed. Regarding the cost of improvement of the old villa, the Tribunal directed the AO to allow the balance claim of Rs. 7,14,000/-, considering that the property was sold as a constructed villa and the assessee, being an NRI, might not have retained all purchase bills. For the improvement expenditure on the new residential property, the Tribunal allowed the corpus fund of Rs. 3,50,000/-, as it was mandatory and intrinsically connected with the ownership. The glass expenditure of Rs. 1,54,307/- from M/s NGS Glass Works was allowed as it was supported by an invoice. The electrical works expenditure of Rs. 1,31,924/- from M/s Evora Home Decor was allowed in the absence of disproving material. The marble purchase of Rs. 18,691/- from M/s Om Marmo World Private Limited was also allowed, stating that the absence of a bank statement was not sufficient to reject the expenditure. However, the claim of Rs. 8,50,000/- towards labour and other expenses, including painting, was sustained as disallowed due to lack of identifiable bills, invoices, or receipts. The AO was directed to recompute the Long Term Capital Gains (LTCG) and consequential exemption under Section 54 accordingly.

The Tribunal condoned the delay in filing the appeal, citing the assessee's illiteracy, lack of proper communication, and the liberal approach advocated by the Supreme Court in *Vidya Shankar Jaiswal vs. ITO (2025) 305 Taxman 83 (SC)*. The Tribunal noted that the assessee had opted out of email communication and no physical notice was served. On the merits, the Tribunal found the CIT(A)'s order to be cryptic and a verbatim reproduction of the AO's observations, without independent findings or affording an opportunity of being heard. The Tribunal observed that the CIT(A) failed to address the grounds of appeal and did not provide a speaking order. Consequently, the Tribunal set aside the order of the CIT(A) and remanded the matter back to the CIT(A) for re-decision with a direction to pass a speaking and reasoned order, afford an opportunity of hearing to the assessee, and consider the assessee's challenge to the AO's jurisdiction under section 144. The appeal was allowed for statistical purposes.