ITAT Hyderabad Judgments — October 2026

The Tribunal held that the reopening of the assessment is barred by limitation. The notice under Section 148 of the Act was issued on 19.07.2022. The Tribunal, referencing the Supreme Court's judgment in Union of India vs Rajeev Bansal and the Delhi High Court's decision in ADM Agro Industries Latur and Vizag Private Limited Vs. ACIT, noted that the period of limitation for issuing a notice under Section 148 for AY 2013-14, considering extensions and exclusions as per TOLA and the Supreme Court's directions, expired on 17.06.2022. Since the actual notice was issued on 19.07.2022, it was beyond the permissible time limit. Therefore, the Tribunal allowed the assessee's appeal, setting aside the reopening proceedings as time-barred.

The Tribunal decided both issues in favor of the assessee. For AY 2015-16, the Tribunal held that the penalty under section 271(1)(c) had no basis to stand upon, as the underlying additions were quashed and deleted by a co-ordinate bench of the Tribunal in a prior order (ITA No.1264/Hyd/2026). Consequently, the penalty for AY 2015-16 was ordered to be deleted. For AY 2016-17, the Tribunal noted that the quantum additions issue had been restored to the CIT(A) by a co-ordinate bench (ITA No.1263/Hyd/2025). Since the findings on quantum additions would influence the sustainability of the penalty, the Tribunal held it appropriate to restore the penalty appeal to the file of the CIT(A) for decision along with the quantum appeal. The ratio for AY 2015-16 is that a penalty under section 271(1)(c) cannot survive if the additions leading to it are deleted. The ratio for AY 2016-17 is that penalty proceedings should be adjourned or restored to the lower appellate authority when the underlying additions are subject to further adjudication.

The Tribunal held that the appeals of the Revenue were dismissed. The Tribunal disagreed with the Ld. DR's submissions. It found that the case was not one of furnishing inaccurate particulars or concealment of income. Although the assessee could not upload the return, the computation of income was uploaded and not disputed, with taxes paid on 3% net profits. The Tribunal noted that while the AO estimated net profit at 8% on an ad-hoc basis, which was reduced to 5% by the Ld. CIT(A), this did not constitute furnishing inaccurate particulars or concealment. Therefore, the Tribunal found no infirmity in the Ld. CIT(A)'s order and upheld it. The operative direction was that the Revenue's appeals were dismissed.

The Tribunal held that the disallowance made by the CPC, Bengaluru, under Section 143(1) of the Income Tax Act, 1961, for want of certain evidences was not sustainable. The Tribunal noted that no reasoning was provided by the CPC for rejecting the claim, either in the initial processing order or in the rectification order. The Tribunal further reasoned that the issue of availability or validity of evidence for the cost of improvement is a matter that should be examined during a scrutiny assessment under Section 143(3) and not during the summary processing of the return under Section 143(1). The CPC does not have the jurisdiction under Section 143(1) to make such disallowances based on a lack of evidence. Therefore, the disallowance made by the lower authorities was ordered to be deleted. The appeal filed by the assessee was allowed.

The Tribunal decided the issues as follows: Regarding the jurisdiction issue (additional ground 1), the judgment does not explicitly record a decision or finding by the Tribunal on this specific ground. It is not mentioned in the operative part of the order. Regarding the turnover (Grounds 1-3), the Tribunal restored the issue to the file of the Assessing Officer. The AO was directed to examine the bank accounts afresh, provide the assessee an opportunity for a hearing to explain the bank entries and the quantum of turnover, and then pass a fresh speaking order in accordance with the law. This implies that the Tribunal found merit in the assessee's contention that the turnover calculation needed re-examination. Regarding the net profit estimation (Grounds 4-6), the Tribunal restricted the profit to 2% of the turnover. The Tribunal noted that the AO had no valid justification for estimating profit at 5% when the assessee's books of account were duly audited and no defects were pointed out. The Tribunal also considered the nature of the edible oil business having a low profit margin. The assessee's counsel agreed to the profit being restricted to 2% of the turnover in open court. The general ground (Ground 7) was dismissed. The appeal was treated as partly allowed.

The Tribunal decided both issues in favor of the assessee. For AY 2015-16, the Tribunal held that the penalty under section 271(1)(c) had no basis to stand upon, as the underlying additions were quashed and deleted by a co-ordinate bench of the Tribunal in a prior order (ITA No.1264/Hyd/2026). Consequently, the penalty for AY 2015-16 was ordered to be deleted. For AY 2016-17, the Tribunal noted that the quantum additions issue had been restored to the CIT(A) by a co-ordinate bench (ITA No.1263/Hyd/2025). Since the findings on quantum additions would influence the sustainability of the penalty, the Tribunal held it appropriate to restore the penalty appeal to the file of the CIT(A) for decision along with the quantum appeal. The ratio for AY 2015-16 is that a penalty under section 271(1)(c) cannot survive if the additions leading to it are deleted. The ratio for AY 2016-17 is that penalty proceedings should be adjourned or restored to the lower appellate authority when the underlying additions are subject to further adjudication.

The Tribunal held that the appeals of the Revenue were dismissed. The Tribunal disagreed with the Ld. DR's submissions. It found that the case was not one of furnishing inaccurate particulars or concealment of income. Although the assessee could not upload the return, the computation of income was uploaded and not disputed, with taxes paid on 3% net profits. The Tribunal noted that while the AO estimated net profit at 8% on an ad-hoc basis, which was reduced to 5% by the Ld. CIT(A), this did not constitute furnishing inaccurate particulars or concealment. Therefore, the Tribunal found no infirmity in the Ld. CIT(A)'s order and upheld it. The operative direction was that the Revenue's appeals were dismissed.

The Tribunal allowed the appeal of the assessee. The core of the decision rested on the timing of the payments made by the assessee. The assessee had submitted that the impugned demand by the Assessing Officer was raised in respect of four installments of payment made in Financial Year 2007-08. Crucially, the assessee highlighted that Section 194-IA of the Income Tax Act, 1961, which mandates TDS on the purchase of property, was inserted by the Finance Act, 2013, and became effective from April 1, 2013. Since the payments in question were made in FY 2007-08, which was prior to the introduction of Section 194-IA, there was no legal obligation on the assessee to deduct TDS at that point. Consequently, the assessee could not be held liable as an 'assessee in default' for non-deduction of TDS. The Tribunal found merit in this submission and set aside the order of the Assessing Officer.

The Tribunal held that the impugned order of the Ld. CIT(A) was unsustainable because it was a non-speaking order. The CIT(A) had failed to provide any independent reasoning or discuss the merits of the penalty levied by the AO. Additionally, the Tribunal noted that the assessee's appeal against the quantum addition was still pending before the Ld. CIT(A), and the outcome of that appeal would significantly influence the validity of the penalty. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and restored the matter to its file. The Ld. CIT(A) was directed to decide the assessee's appeal concerning the penalty along with the pending quantum appeal, by way of a speaking order, in accordance with the law. The appeal was allowed for statistical purposes.

The Tribunal allowed the appeal on the legal ground raised by the assessee, specifically Ground No. 4, by respectfully following the cited judgments. The Tribunal noted that the words in Section 149(1)(b) refer to 'income chargeable to tax' which has escaped assessment. This 'income chargeable to tax' for capital gains, as per Section 48, is the sale consideration minus the cost of acquisition (or indexed cost). The Tribunal found that the AO had not applied its mind to the assessee's reply and the legal position regarding the application of the extended period under Section 149(1)(b). The revenue's contention that the entire sale consideration should be considered was rejected, as Section 48 clearly defines what constitutes 'income'. The Tribunal concluded that the 'income chargeable to tax' was less than Rs. 50 lakhs, making the invocation of Section 149(1)(b) for reopening beyond three years unsustainable. Consequently, the order passed under Section 148A(d) and the notice under Section 148 were set aside. Since the appeal was allowed on a legal issue, the Tribunal deemed it unnecessary to adjudicate on the merits of the case. The addition made by the AO was directed to be deleted.

The Tribunal allowed the appeal of the assessee. The primary issue decided was the validity of the assessment order due to the absence of a notice under Section 143(2). The Tribunal noted that the assessee filed a valid return in response to the notice under Section 148. It is a mandatory requirement for the AO to issue a notice under Section 143(2) to assume jurisdiction to complete the assessment when a valid return is filed. The Revenue's counsel could not controvert this issue or produce any documentary evidence that such a notice was issued. The Tribunal found that Section 292BB would not be applicable as there was no record of the notice being issued. Relying on the judgment in Balbir Singh vs. ACIT and other cited High Court and Supreme Court decisions (Hotel Blue Moon, Laxman Das Khandelwal, Jai Parabolic Springs Limited, etc.), the Tribunal held that the absence of a notice under Section 143(2) renders the assessment proceedings void and invalid. Consequently, the assessment order was quashed. The other contentions raised by the assessee regarding the merits of the disallowance were not adjudicated upon as the assessment itself was quashed.

The Tribunal held that the Revenue failed to establish that the sale/distribution of software, including module selection/configuration and alleged training/assistance, resulted in the grant of rights in the copyright underlying the software. It also failed to establish that the impugned receipts represented consideration for managerial, technical, or consultancy services rendered by the assessee. The Tribunal noted that the lower authorities characterized the same receipts as royalty and FTS without identifying the specific rights in copyright granted or services rendered. The factual link for the Revenue's contention was not established, as no specific training, managerial, technical, or consultancy services were identified as actually rendered by the assessee for the impugned receipts, nor was any identifiable consideration attributable thereto. The Tribunal directed the Assessing Officer to delete the addition of Rs. 43,54,66,906/-. The same conclusion was applied mutatis mutandis to AY 2023-24.

The Tribunal held that the Revenue failed to establish that the sale/distribution of software, including module selection/configuration and alleged training/assistance, resulted in the grant of rights in the copyright underlying the software. It also failed to establish that the impugned receipts represented consideration for managerial, technical, or consultancy services rendered by the assessee. The Tribunal noted that the lower authorities characterized the same receipts as royalty and FTS without identifying the specific rights in copyright granted or services rendered. The factual link for the Revenue's contention was not established, as no specific training, managerial, technical, or consultancy services were identified as actually rendered by the assessee for the impugned receipts, nor was any identifiable consideration attributable thereto. The Tribunal directed the Assessing Officer to delete the addition of Rs. 43,54,66,906/-. The same conclusion was applied mutatis mutandis to AY 2023-24.

The Tribunal held that while the assessee failed to diligently pursue its applications and comply with the notices, it was appropriate, in the interest of justice, to afford the assessee one more opportunity to substantiate its claims. The Tribunal set aside the impugned orders of the CIT(E) and restored the matters to the CIT(E)'s file for fresh adjudication. This restoration is subject to the assessee paying costs of Rs. 1,000/- in each appeal, totaling Rs. 2,000/-, to the Prime Minister’s National Relief Fund within 30 days. The assessee must furnish proof of payment to the CIT(E), who will then provide an adequate opportunity for hearing and submission of evidence. The Tribunal expressed no opinion on the merits of the assessee's claims for registration and approval. The ratio is that procedural lapses, if not wilful and if rectified with a cost, can be condoned to allow for a decision on merits, upholding principles of natural justice.

The Tribunal held that the addition made by the AO under Section 69C of the Act towards cash withdrawal from the bank account cannot be sustained. The Tribunal noted that Section 69C applies when an assessee incurs expenditure without explaining its source or if the explanation is unsatisfactory. In this case, the AO did not prove any unrecorded expenditure or failure to explain the source of cash withdrawal. The Tribunal acknowledged that the assessee received entire credits from M/s. SDG&PF and withdrew cash on the same day, claiming it was paid to farmers. However, the Tribunal found that while the receipt of funds from M/s. SDG&PF was supported by 'takpattis', the actual payment of cash to farmers was not conclusively proven with supporting evidence for the entire amount. Therefore, the issue was set aside to the AO for limited verification of the 'takpattis' to substantiate the cash payments to farmers. If the assessee provides relevant details, the addition will be deleted.

The Tribunal held that the Assessing Officer (AO) erred in assessing the foreign income declared in the updated return. The AO issued a summons under Section 131(1A) of the Block Money Act on January 11, 2023, which was specifically for Assessment Year 2021-22 and pertained to bank accounts. Crucially, no summons was issued for the impugned Assessment Year 2022-23. The assessee subsequently filed an updated return under Section 139(8A) on June 15, 2023, disclosing the foreign income. The Tribunal reasoned that as per Section 139(8A), an updated return cannot be filed if the AO has information about the assessee under the Block Money Act and has communicated it to the assessee prior to the filing of the updated return. Since the summons issued was for a different assessment year and did not communicate any undisclosed foreign income or asset for AY 2022-23, the condition for disallowing the updated return was not met. Therefore, the updated return filed by the assessee was valid. The Tribunal set aside the order of the CIT(A) and deleted the addition of Rs. 17,01,720 made by the AO towards undisclosed foreign income.

The Tribunal held that the assessee's appeal was confined to the claim of deduction under section 54F of the Act, as the quantum of capital gains and the year of taxability were accepted. The Tribunal noted that four residential properties were allotted to the assessee jointly with Mr. Vishnu Swaroop and Mr. Ashish Kumar. Crucially, the Tribunal observed that the Ld. CIT(A) had allowed deduction under section 54F in the case of Ashish Kumar concerning his interest in the residential properties received under the same JDA. The Tribunal found no material distinction concerning the assessee's entitlement to the deduction that was brought to its notice by the Revenue. Since deduction was allowed to Ashish Kumar on identical material facts, and the assessee's claim was denied without any material distinction being demonstrated, the Tribunal found merit in the assessee's contention. Accordingly, the Tribunal directed the AO to allow deduction under section 54F to the assessee in respect of his proportionate interest in the residential properties received under the JDA and to compute the deduction as per the statutory formula. The appeal was allowed for statistical purposes.

The Tribunal condoned the delay of 171 days in filing the appeal, being satisfied that the assessee was prevented by sufficient cause due to communication issues. Regarding the main issue of Section 80P deduction, the Tribunal admitted the additional evidence (English translations of bye-laws and financial statements) under Rule 29 of the ITAT Rules, 1963, as it was relevant to the assessee's activities and income source. However, it held that the entries in the translated financial statements and the claim that interest was solely from members required verification with original records, books of account, membership records, and supporting documents. Such factual verification could not be dispensed with. Consequently, the Tribunal set aside the order of the Ld. CIT(A) on this issue and restored the matter to the file of the AO for fresh adjudication. The AO was directed to examine the additional evidence, verify the nature and source of interest income, and determine its eligibility for deduction under Section 80P, considering the principles laid down in Totgars Co-operative Sale Society Ltd. Vs. ITO (supra). The Tribunal expressed no opinion on the merits of the claim. The issue of interest under Sections 234A and 234B was not explicitly decided as the matter was remanded.

The Tribunal held that the addition made by the AO under Section 69C towards cash withdrawal from the bank account cannot be sustained. The Tribunal noted that the assessee is a commission agent and received the entire credit in his bank account from M/s. SDG&PF via RTGS, which was withdrawn on the same day and allegedly paid to farmers. The Tribunal found that the AO had not proven any expenditure incurred by the assessee that was not recorded or that the source of cash withdrawal was unexplained. Section 69C applies when an assessee incurs expenditure and offers no explanation or an unsatisfactory explanation for its source. In this case, the source of funds received from M/s. SDG&PF was accepted. However, the Tribunal also noted that the assessee had not conclusively proved the payment of cash withdrawn to farmers with supporting evidence, although an excel sheet and some sample 'takpattis' were filed. Therefore, for the limited purpose of verifying the 'takpattis', the issue was set aside to the AO for verification. If the assessee submits relevant details of 'takpatti', the addition is to be deleted.

The Tribunal held that the CIT(Appeals) was not justified in dismissing the appeal in limine solely on the ground of limitation. The Tribunal found that the assessee's explanation for the delay, which included his advanced age, medical difficulties supported by documentation, dependence on pension income, and limited familiarity with electronic tax procedures, constituted sufficient cause. The Tribunal emphasized that the CIT(A) should have considered these circumstances collectively and adopted a liberal, justice-oriented approach, as mandated by Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji and Vidya Shankar Jaiswal v. Income Tax Officer. The dismissal of the appeal on limitation deprived the assessee of an opportunity to have his grievances adjudicated on merits. Consequently, the Tribunal set aside the impugned order of the CIT(Appeals) and restored the matter to his file with a direction to condone the delay and adjudicate the grounds raised by the assessee on merits after affording a reasonable opportunity of being heard. The Tribunal clarified that it had not expressed any opinion on the merits of the additions made by the AO. The appeal was allowed for statistical purposes.

The Tribunal noted that the assessee, who was an agriculturist before starting the liquor business, had filed new evidence before the Tribunal to support claims of opening capital and HUF receipts. While the AO and CIT(A) had rejected these due to lack of evidence at their level, the Tribunal found the new evidence, including land holdings and sale bills for paddy, and lease deeds for HUF property, to be potentially valid. However, since these were not verified by the AO, the Tribunal set aside these issues to the AO for verification. Regarding the liquor sales, the Tribunal observed that the sales were recorded in the assessee's books of account, which were audited. The AO's rejection was based solely on the perceived abnormality of sales on two specific days compared to the average. The Tribunal found the AO's reasoning insufficient to reject the explanation without rejecting the books of account. Therefore, this issue was also set aside to the AO for verification in light of the evidence filed by the assessee. The appeal was allowed for statistical purposes.

The Tribunal held that the show cause notice issued by the AO was not vague, as it clearly specified the reason for issuing the notice as 'underreporting of income as a consequence of misreporting of income'. Therefore, the assessee's argument based on the decision in Ernica Enterprises (P) Ltd. was rejected. Regarding the penalty levied at 200%, the Tribunal found that while the assessee had indeed 'underreported income' to the extent of Rs. 1,66,18,280/- (difference between income processed under Section 143(1) and assessed under Section 143(3)), the AO had not made out a case of 'misreporting of income' as defined under Section 270A(9) (clauses (a) to (f)). The AO levied the penalty at 200% without directing the case under these specific clauses. Therefore, the 200% penalty could not be upheld. The Tribunal set aside the order of the CIT(A) and directed the AO to levy penalty at 50% of the tax on the underreported income under Section 270A(2).

The Tribunal decided to admit the additional grounds, as they were legal in nature and the facts were on record. The assessee pressed only additional ground no. 2, concerning the validity of the penalty proceedings under Section 270A. The Tribunal considered the decision of the Hon'ble Delhi High Court in Schneider Electric South East Asia (HQ) Pte Ltd. Vs. ACIT. The Tribunal noted that in the present case, both the assessment order and the penalty notice dated 10.02.2025 expressly stated that penalty proceedings were being initiated for 'under-reporting of income in consequence of misreporting of income.' The Tribunal interpreted the Delhi High Court's decision to mean that the notice must communicate whether the penalty is for 'under-reporting' or 'misreporting.' It held that the present notice, by clearly stating 'under-reporting of income in consequence of misreporting of income,' adequately informed the assessee. Therefore, the Tribunal concluded that the notice was not vague merely because it did not cite a particular clause of Section 270A(9). Accordingly, additional ground no. 2 was dismissed. As only this ground was pressed, the appeal was dismissed.

The Tribunal held that the notice issued under section 148 of the Act dated 27.03.2023 was barred by limitation. The Tribunal found that the AO's computation of alleged escaped income at Rs. 57,57,235 included a duplicate entry of Rs. 17,00,500, as evidenced by the AO's own assessment order which stated total cash deposits in the ICICI Bank account as Rs. 26,30,500. Upon excluding the duplicate amount, the alleged escaped income was reduced to Rs. 40,56,735. This amount is below the statutory threshold of Rs. 50 lakhs stipulated in section 149(1)(b) of the Act, which is a prerequisite for issuing a notice beyond three years from the end of the relevant assessment year. The Tribunal rejected the revenue's contention that the initial figure of Rs. 57,57,235 conferred jurisdiction, emphasizing that the correctness of the amount must be examined with reference to the underlying material. Since the conditions for invoking the extended period under section 149(1)(b) were not met, and the ordinary period of three years from the end of AY 2016-17 (which expired on 31.03.2020) had also passed, the notice dated 27.03.2023 was beyond limitation. Consequently, the AO did not validly assume jurisdiction, and the assessment order dated 06.05.2024 was quashed. The remaining grounds on merits were rendered academic.

The Tribunal held that the CIT(A) erred in not referring the matter to the District Valuation Officer (DVO) for ascertaining the correct Fair Market Value (FMV) of the property, as the appellate proceedings are a continuation of assessment proceedings. Consequently, the issue of LTCG computation was set aside and remitted back to the AO with a direction to obtain a report from the DVO. Regarding STCG, the Tribunal found that the AO erred in computing a deemed STCG, as there is no such concept. For plant & machinery, sold for Rs. 1,20,000 as per the Sale Deed, the AO should have accepted the sale value. For Furniture & Fixtures, if the assessee could justify the sale consideration of Rs. 34,000 with evidence, the AO was directed to adopt it; otherwise, the AO was to consider the WDV as per Section 50(2). Grounds related to cost of improvement and transfer expenses were dismissed as withdrawn.

The Tribunal held that the addition made by the AO under Section 69C of the Income Tax Act, 1961, cannot be sustained. The Tribunal noted that the assessee is a licensed commission agent and received the entire credit in his bank account through RTGS from M/s. SDG&PF. The assessee withdrew this amount on the same day and claimed to have distributed it to farmers. The Tribunal found that the AO had not proved any expenditure incurred by the assessee that was not recorded in the books of accounts, nor had the AO established that the assessee failed to explain the source of the cash withdrawal. Therefore, the addition under Section 69C was not upheld. However, the Tribunal also observed that while the receipt of funds from M/s. SDG&PF was proven via "takpatti," the payment of cash withdrawn to farmers was not conclusively substantiated with supporting evidence for the entire amount. The assessee provided an excel sheet and some sample "takpattis" but not complete details. Consequently, for the limited purpose of verifying the "takpatti" for the entire amount, the issue was set aside to the file of the AO. The AO was directed to verify the claim in light of relevant "takpatti" issued by M/s. SDG&PF. If the assessee submits complete details, the AO is to delete the addition. The appeal was allowed for statistical purposes.

The Tribunal held that the assessment order dated 05.04.2021 was passed in violation of the principles of natural justice and the mandatory procedure prescribed under the faceless assessment provisions, specifically section 144B(1)(xvi)(b). The Tribunal noted that the assessment was completed after 01.04.2021, necessitating compliance with section 144B. It relied on the Hon'ble Delhi High Court's decision in Javin Construction Private Limited Vs. National Faceless Assessment Centre, which held that the issuance of a prior show-cause notice and draft assessment order is mandatory before passing a final assessment order involving variations prejudicial to the assessee. The Tribunal found that the AO did not issue a draft assessment order, depriving the assessee of the prescribed opportunity to respond to adverse variations. Consequently, the assessment order and the consequential order of the CIT(A) were set aside. The matter was restored to the AO with a direction to issue a show-cause notice along with a draft assessment order, afford the assessee an opportunity to submit objections, and then pass a reasoned assessment order. The remaining grounds concerning additions and disallowances were left undecided as the assessment was set aside.

The Tribunal held that the delay of 170 days in filing the appeal before the Ld. CIT(A) should be condoned. While acknowledging that the medical ground was raised for the first time before the Tribunal, the Tribunal noted that the medical records supported the existence of the illness and treatment during the relevant period, thus not being an afterthought. Considering the assessee-firm's constitution (husband and wife as sole partners), the illness and surgery of one partner could reasonably have affected both partners' ability to attend to appellate proceedings. The Tribunal found this explanation to furnish sufficient cause for condoning the delay. However, it was noted that the assessee should have presented the complete explanation and documents before the Ld. CIT(A) initially. The delay was condoned subject to the assessee paying Rs. 10,000/- to the Prime Minister's National Relief Fund within 15 days. The impugned order of the Ld. CIT(A) was set aside, and the matter was restored to the Ld. CIT(A) to admit the appeal and adjudicate on merits after providing an opportunity of being heard. No opinion was expressed on the merits of the assessment additions.

The Tribunal held that the assessee's contention has substance. It noted that the Tribunal, in a separate order (ITA No. 1919/Hyd/2025 for AY 2023-24, dated 06/05/2026), had set aside the CIT(A)'s order concerning the quantum assessment and restored the matter to the AO for de novo assessment. This de novo assessment was to include proper verification of additional evidence regarding credit card payments and claims for deduction under Chapter-VIA. Since the quantum assessment, which is the foundation for the impugned penalties, has been set aside, the penalties are also liable to be set aside and remanded to the AO. The AO is directed to take up the penalty proceedings after passing a fresh assessment order. The appeals were allowed for statistical purposes.

The Tribunal held that the assessee's contention has substance. It noted that the Tribunal, in a separate order (ITA No. 1919/Hyd/2025 for AY 2023-24, dated 06/05/2026), had set aside the CIT(A)'s order concerning the quantum assessment and restored the matter to the AO for de novo assessment. This de novo assessment was to include proper verification of additional evidence regarding credit card payments and claims for deduction under Chapter-VIA. Since the quantum assessment, which is the foundation for the impugned penalties, has been set aside, the penalties are also liable to be set aside and remanded to the AO. The AO is directed to take up the penalty proceedings after passing a fresh assessment order. The appeals were allowed for statistical purposes.

The Tribunal addressed the issue of the Rs. 80 lakhs cash seizure. The assessee claimed Rs. 24 lakhs was part of the sale consideration for the property and Rs. 56 lakhs represented advances from customers for construction services. The Tribunal accepted the explanation for Rs. 24 lakhs, noting that the sale agreement showed a cash receipt of Rs. 18 lakhs, and the AO had considered a higher sale consideration. Therefore, the AO was directed to accept Rs. 24 lakhs as explained from the sale consideration. Regarding the remaining Rs. 56 lakhs, the Tribunal found the additional evidence (confirmation letters) filed before it to be stereotyped and lacking details to identify the parties who paid advances, their PAN, or ITR details. Consequently, these additional evidences were rejected. As no other evidence was submitted to substantiate the claim of advances for construction services, the Tribunal held that the AO was justified in making an addition for the balance amount of Rs. 56 lakhs. Thus, the assessee received partial relief of Rs. 24 lakhs, and the addition of Rs. 56 lakhs was confirmed. The judgment does not explicitly detail the findings on all grounds raised by the assessee, particularly those concerning capital gains computation, cost of acquisition, and Section 54F deduction, but the overall result indicates a partial allowance.

The Tribunal condoned the delay of 198 days in filing the appeal, finding that the explanation provided by the assessee, including frequent transfers, reliance on professional assistance, and uncertainty regarding the appropriate remedy (revision vs. appeal), constituted sufficient cause. The Tribunal acknowledged the delay was substantial and the assessee's non-compliance during assessment proceedings, but considered these cumulatively with the explanation. The Tribunal noted the significant discrepancy in salary income as a factor supporting adjudication on merits. To balance the delay and lack of diligence, the Tribunal imposed a cost of Rs. 2,000 to be deposited in the Prime Minister's National Relief Fund. The Tribunal set aside the CIT(A)'s order and restored the assessment to the file of the AO for fresh adjudication, directing the AO to verify the actual salary income and TDS, and to provide the assessee with an opportunity to be heard. The appeal was allowed for statistical purposes.

The Tribunal held that the notice issued under section 148 of the Act, placed at page 22 of the paper book, did not bear any signature of the AO, either manual or digital. Following the decision of the Hon'ble Bombay High Court in Prakash Krishnavtar Bhardwaj Vs. ITO, the Tribunal held that an unsigned notice under section 148 is invalid and does not confer jurisdiction upon the AO to proceed with reassessment proceedings. Consequently, the assessment order dated 27.12.2018, passed under section 143(3) read with section 147 of the Act, was quashed as being without jurisdiction. Since the assessment order was quashed on this legal ground, the remaining grounds raised by the assessee were rendered academic and did not require separate adjudication. The appeal of the assessee was allowed.

The Tribunal condoned the delay of 563 days in filing the appeal, subject to the assessee depositing Rs. 5,000/- in the Prime Minister’s National Relief Fund within 30 days. The Tribunal found that the assessee's explanation regarding notices being sent to a different email address constituted a reasonable explanation for the lack of knowledge of the appellate order. While acknowledging the substantial delay, the Tribunal considered the surrounding circumstances and the subsequent steps taken by the assessee upon receiving the recovery notice as indicators of no deliberate intention to delay. The Tribunal also noted the assessee's failure to exercise reasonable diligence in following up the appeal, but this did not outweigh the explanation regarding the email communication. The Tribunal then addressed the grounds of appeal concerning the reassessment. It was noted that the assessment was completed ex-parte due to the assessee's non-compliance with the AO's notices and the subsequent failure to present the case before the Ld. CIT(A) due to the email issue. The significant discrepancy between the salary income reflected in Form 26AS and the income adopted by the AO required factual verification. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and restored the assessment to the file of the AO for fresh adjudication, allowing the assessee to furnish documents and explanations. The AO was directed to verify the actual salary income and TDS and determine the total income accordingly, providing a reasonable opportunity of being heard. The appeal was allowed for statistical purposes.

The Tribunal condoned the delay of 867 days in filing the appeal, finding that the explanation provided by the assessee, including his status as a government teacher, frequent transfers, lack of familiarity with online proceedings, and reliance on professional advice, cumulatively indicated that the delay was not deliberate. The Tribunal also accepted the assessee's contention that the dismissal of the appeal by the CIT(A) under section 249(4)(b) was unsustainable. The Tribunal reasoned that section 249(4)(b) requires payment of advance tax payable, and in this case, after considering the salary income of Rs. 5,10,420/- and the TDS of Rs. 27,897/-, no advance tax was payable by the assessee. The Tribunal further noted the substantial discrepancy in the salary income determined by the AO (Rs. 55,77,032/-) versus the assessee's claim (Rs. 5,10,420/-) and the ex-parte nature of the assessment. To serve the interests of substantial justice, the Tribunal set aside the order of the CIT(A) and restored the assessment to the file of the AO for fresh adjudication, allowing the assessee an opportunity to be heard and present evidence. The assessee was directed to deposit Rs. 5,000/- in the Prime Minister's National Relief Fund as a cost for the delay.

The Tribunal condoned the delay of 171 days, finding sufficient cause for the assessee's inability to file within the prescribed period, noting the prompt action upon knowledge of the order and the revenue's lack of serious objection. Regarding the deduction under Section 80P, the Tribunal admitted the additional evidence (English translations of bye-laws and financial statements) under Rule 29 of the ITAT Rules, 1963, as it was relevant to the assessee's activities and income source. However, it held that the entries in the translated financial statements and the claim that all interest income was from members required verification with original records, books of account, membership records, and supporting documents. Consequently, the Tribunal set aside the CIT(A)'s order on this issue and restored the matter to the AO for fresh adjudication. The AO is directed to examine the additional evidence, verify the nature and source of interest income, and determine its eligibility for deduction under Section 80P, considering the principles laid down in Totgars Co-operative Sale Society Ltd. Vs. ITO (supra). The AO shall afford the assessee an opportunity of being heard. No opinion was expressed on the merits of the claim.

The Tribunal held that the CIT(Appeals) erred in dismissing the assessee's appeal in limine solely on the ground of limitation without adjudicating the merits. The Tribunal found that the assessee's explanation for the delay, encompassing his advanced age, medical difficulties (supported by documents), dependence on pension income, limited familiarity with electronic tax procedures, and unawareness of the assessment proceedings until contacted by the JAO, constituted sufficient cause. The Tribunal emphasized a liberal and justice-oriented approach, citing Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji and Vidya Shankar Jaiswal v. Income Tax Officer, which advocate for advancing substantial justice. Consequently, the Tribunal set aside the CIT(Appeals)'s order, restored the matter to his file, and directed him to condone the delay and adjudicate the grounds on merits after affording the assessee a reasonable opportunity of being heard. The Tribunal explicitly stated that it had not expressed any opinion on the merits of the additions made by the AO. The appeal was allowed for statistical purposes.

The Tribunal held that the delay of 170 days in filing the appeal before the Ld. CIT(A) should be condoned. While acknowledging that the medical ground was raised for the first time before the Tribunal, the Tribunal noted that the medical records supported the existence of the illness during the relevant period, thus not being an afterthought. Considering the assessee firm's constitution (husband and wife as sole partners), the illness and surgery of one partner could reasonably affect both partners' ability to attend to appellate proceedings. The Tribunal found this explanation to furnish sufficient cause for condoning the delay. However, it was noted that the assessee should have presented the complete explanation and documents to the Ld. CIT(A) initially. The delay was condoned subject to the assessee paying costs of Rs. 10,000/- to the Prime Minister's National Relief Fund within 15 days. The impugned order of the Ld. CIT(A) was set aside, and the matter was restored to the Ld. CIT(A) to admit the appeal and adjudicate the grounds on merits after providing a reasonable opportunity of being heard. No opinion was expressed on the merits of the assessment additions.

The Tribunal held that the Commissioner of Income Tax (Exemptions) erred in rejecting the assessee's application for registration under Section 12AB of the Income Tax Act, 1961. The Tribunal found no dispute regarding the assessee's aims and objectives, which are charitable in nature, and that its activities are carried out in accordance with these objectives. The Tribunal emphasized that merely charging fees or generating a surplus does not automatically render an institution non-charitable, especially when the surplus is incidental and applied for educational purposes. Reliance was placed on the Supreme Court's decisions in *New Noble Educational Society* and *Queen's Educational Society v. CIT* [2015] 55 taxmann.com 255 (SC), which held that disproportionate weight should not be given to surpluses if they are incidental to the primary charitable activity, and that at the stage of registration, the focus should be on the activity itself. The Tribunal also directed the CIT(Exemptions) to condone the delay in filing the application for renewal due to medical exigencies, as the order of the CIT(E) did not specifically discuss the issue of limitation. Consequently, the appeal filed by the assessee was allowed, and the CIT(E) was directed to grant registration under Section 12AB.

The Tribunal held that the original rectification order passed by the AO under section 154 of the Act on 24.03.2014, concerning the admissibility of deduction under section 54F or section 54EC, was beyond the scope of section 154. The Tribunal reasoned that section 154 empowers rectification only for mistakes apparent from the record, not for debatable issues requiring examination of facts and interpretation of law. The issue of deduction under section 54F/54EC involves determining the nature of the capital asset, investment made, and statutory conditions, which is a substantive issue requiring adjudication, not mere rectification. The fact that the Tribunal had previously restored the issue for de novo consideration further supported its debatable nature. Therefore, the AO exceeded his limited jurisdiction under section 154. Consequently, the subsequent order dated 30.03.2023, being founded upon the invalid original rectification, was also quashed. The legal ground raised by the assessee was allowed, and the other grounds became academic. The Tribunal set aside the impugned order of the First Appellate Authority and quashed the AO's order.

The ITAT held that while the assessee failed to diligently pursue its applications and comply with the notices, it was appropriate, in the interest of justice, to grant the assessee one more opportunity to substantiate its claims. The Tribunal set aside the impugned orders of the CIT(E) and restored the matters to the CIT(E)'s file for fresh adjudication. This restoration is subject to the assessee paying costs of Rs. 1,000/- in each appeal, totaling Rs. 2,000/-, to the Prime Minister’s National Relief Fund within 30 days. The assessee must furnish proof of payment to the CIT(E), who will provide an adequate opportunity for hearing and submission of evidence. The Tribunal expressed no opinion on the merits of the registration and approval claims. The ratio decidendi is that procedural lapses, if not wilful and if rectifiable in the interest of justice, can be condoned by granting an opportunity for a fresh hearing, subject to reasonable costs.

The ITAT held that while the assessee failed to diligently pursue its applications and comply with the notices, it was appropriate, in the interest of justice, to grant the assessee one more opportunity to substantiate its claims. The Tribunal set aside the impugned orders of the CIT(E) and restored the matters to the CIT(E)'s file for fresh adjudication. This restoration is subject to the assessee paying costs of Rs. 1,000/- in each appeal, totaling Rs. 2,000/-, to the Prime Minister’s National Relief Fund within 30 days. The assessee must furnish proof of payment to the CIT(E), who will provide an adequate opportunity for hearing and submission of evidence. The Tribunal expressed no opinion on the merits of the registration and approval claims. The ratio decidendi is that procedural lapses, if not wilful and if rectifiable in the interest of justice, can be condoned by granting an opportunity for a fresh hearing, subject to reasonable costs.

The Tribunal upheld the order of the Ld. CIT(A) and dismissed the Revenue's appeal. The Tribunal noted that the CIT(A) deleted the addition by following the Tribunal's own decisions in the assessee's case for Assessment Years 2015-16, 2016-17, and 2020-21. The Tribunal referred to its earlier orders (ITA Nos. 300, 301 and 308/Hyd/2024) where, on identical issues, it had followed its decision for AYs 2011-12 to 2014-15 and dismissed the Revenue's grounds. The Tribunal found that the issue regarding the applicable rate of depreciation on mine development expenditure was covered by its previous decisions in the assessee's own case. The Revenue had not presented any distinguishing facts or changes in law to warrant a different view. Therefore, respectfully following its own precedents, the Tribunal upheld the deletion of the addition of Rs. 37,05,69,508/-.

The Tribunal held that the reassessment proceedings were invalid. The principal issue was whether the approval under Section 151 was granted with due application of mind. The Tribunal noted that the AO reopened the assessment for AY 2017-18 based on the entire purchase consideration of Rs. 92,27,250, assuming it represented income escaping assessment for that year. However, the assessee's contention, supported by details in the assessment order itself, was that payments were spread over AYs 2017-18, 2018-19, and 2019-20. The Tribunal found that the AO proceeded on the premise that the entire consideration was for AY 2017-18 without considering the year-wise payments. The Tribunal emphasized that while the AO need not conclusively establish escapement at the reopening stage, there must be a rational connection between the material and the belief of escapement. The approval under Section 151 is a statutory safeguard requiring due application of mind. A mechanical approval without considering material facts, such as the spread of payments over different years, defeats the purpose of this safeguard. The Tribunal found that the prescribed authority failed to consider this material discrepancy, rendering the approval mechanical and invalid. Consequently, the reassessment proceedings and the assessment order were quashed. The issue regarding Section 292BC was also decided in favor of the assessee, as the approval predated its effective date. Other grounds became academic.

The ITAT dismissed the assessee's appeal, rejecting the petition for condonation of delay. The Tribunal found that the assessee's explanation for the delay was not satisfactory. While the assessee claimed the email address was populated by default and he had not opted for email service, the Tribunal noted that the Form 35 did not indicate a clear 'No' to email service, and the same email address was used in duplicate appeals. Furthermore, the assessee had furnished submissions in the duplicate appeals, demonstrating participation in appellate proceedings, which contradicted the claim of being unaware of the disposal of the original appeal. The Tribunal also noted that the contention regarding the belief that the original appeal was pending due to duplicate appeals was raised orally for the first time and not supported by an affidavit, making it an afterthought. Citing Supreme Court judgments in P.K. Ramachandran, Basawaraj, and Pathapati Subba Reddy, the Tribunal emphasized that the law of limitation must be applied rigorously and delay cannot be condoned on equitable or sympathetic grounds without sufficient cause. The assessee failed to establish sufficient cause for the inordinate delay.

The Tribunal held that the notice issued under Section 148 of the Act on 02/04/2022 for AY 2018-19 was beyond a period of three years from the end of the assessment year. As per Section 151 of the Act (as available on the statute w.e.f. 01.04.2021), for reassessment proceedings initiated beyond three years, approval was statutorily obligated to be obtained from higher authorities, namely the Principal Chief Commissioner, Principal Director General, Chief Commissioner, or Director General. However, in this case, the AO obtained approval only from the Principal Commissioner of Income Tax, Hyderabad-2. The Tribunal noted that the proviso to Section 151, inserted by the Finance Act, 2023, which could potentially exclude the period of reply to a notice under Section 148A, cannot be applied retrospectively as it was effective from 01.04.2023. Citing the Hon'ble Supreme Court's decision in Assistant Commissioner of Income-tax, International Taxation vs. LinkedIn Singapore Pte. Ltd., the Tribunal concluded that the approval granted by an authority not vested with jurisdiction under Section 151 renders the assessment void. Consequently, the assessment order dated 13/12/2023 was quashed for want of valid assumption of jurisdiction. Other contentions were left undecided.

The Tribunal decided to set aside the order of the CIT(A) on the first issue concerning the addition of Rs.39,99,555/- under section 69A and restored the matter to the AO for fresh adjudication. The AO was directed to examine the confirmations and affidavits of the 21 persons, verify the claimed discrepancy with bank certificates, and conduct further necessary verification. The Tribunal expressed no opinion on the merits of the addition. This ground was allowed for statistical purposes. Regarding the second issue of addition of Rs.35,66,504/- on differential turnover, the Tribunal found that the assessee's submission regarding the incorrect amount considered by the AO required factual verification. Therefore, this issue was also set aside and restored to the AO for fresh adjudication, allowing the grounds for statistical purposes. On the third issue, concerning the applicability of the enhanced tax rate under section 115BBE, the Tribunal, following its own decision in Soma Shekhar Bingumalla vs. ITO (ITA No. 76/Hyd/2026) and respectfully following the Rajasthan High Court's view in Deepak Maratha vs. Union of India, held that the enhanced rate of 60% is not applicable for AY 2017-18. The AO was directed to compute tax liability at the unamended rate. The appeal was allowed for statistical purposes.

The Tribunal held that the cash receipt of Rs. 2 lakhs, being consideration for the transfer of immovable property received at the time of registration, constitutes a "specified sum" under Explanation (iv) to Section 269SS of the Act. The Tribunal reasoned that the definition of "specified sum" in Section 269SS is broad, covering money receivable in relation to the transfer of immovable property, whether as advance or otherwise, and irrespective of whether the transfer takes place. It noted that this definition is distinct from the narrower definition of "specified advance" in Section 269T. Consequently, since the transaction is governed by Section 269SS, it is expressly excluded from the purview of Section 269ST by virtue of Clause (ii) of the proviso to Section 269ST. As the penalty under Section 271DA is levied for contravention of Section 269ST, and the transaction does not fall under Section 269ST, the statutory basis for levying the penalty under Section 271DA is absent. The Tribunal deleted the penalty of Rs. 2,00,000/- levied under Section 271DA. The appeal of the assessee was allowed.

The Tribunal held that while the assessee failed to diligently pursue its applications and comply with the notices, it was appropriate, in the interest of justice, to afford the assessee one more opportunity to substantiate its claims. The Tribunal set aside the impugned orders of the CIT(E) and restored the matters to the CIT(E)'s file for fresh adjudication. This restoration is subject to the assessee paying costs of Rs. 1,000/- in each appeal, totaling Rs. 2,000/-, to the Prime Minister’s National Relief Fund within 30 days. The assessee must furnish proof of payment to the CIT(E), who will then provide an adequate opportunity for hearing and submission of evidence. The Tribunal expressed no opinion on the merits of the assessee's claims for registration and approval. The ratio is that procedural lapses, if not wilful and if rectified with a cost, can be condoned to allow for a decision on merits, upholding principles of natural justice.

The Tribunal upheld the order of the Ld. CIT(A) and dismissed the appeal of the Revenue. The Tribunal noted that the Ld. CIT(A) deleted the addition by following the decision of the Tribunal in the assessee's own case for AYs 2015-16, 2016-17, and 2020-21. The Tribunal referred to its own earlier decisions in ITA Nos. 300, 301, and 308/Hyd/2024 for AYs 2015-16, 2016-17, and 2020-21, where it had followed its decision for AYs 2011-12 to 2014-15 and dismissed the Revenue's grounds on the identical issue. The Tribunal found that the issue regarding the applicable rate of depreciation on mine development expenditure is covered by its previous decisions in the assessee's own case. Since the Revenue had not brought any distinguishing facts or change in law, the Tribunal respectfully followed its aforesaid decisions and upheld the deletion of the addition of Rs. 37,05,69,508/-. The operative direction was the deletion of the addition.