ITAT Pune Judgments — September 2025

The Tribunal held that the assessee was entitled to exemption under Section 11 of the Income Tax Act, and various expenses claimed were allowable as application of income. The Tribunal also ruled on the 'local authority' status and various other grounds, often setting aside or partly allowing appeals.

The Tribunal set aside the CIT(E)'s order, restoring the issue to the CIT(E)'s file. A final opportunity was granted to the assessee to explain and substantiate its case with requisite documents, to decide both applications afresh.

The Tribunal held that the CPC's disallowance under Section 143(1)(a)(ii) was not in accordance with the law. The assessee is a Co-operative Credit Society and is eligible for the claimed deductions under Section 80P.

The Tribunal considered various grounds of appeal, primarily concerning the allowability of exemption under Section 11, the assessee's status as a 'Local Authority', and various expenditure disallowances and income inclusions. Key decisions involved the procedural requirements for claiming exemption, the definition of 'local authority', and the treatment of expenses related to superannuation, gratuity, interest, and capital expenditures.

The Tribunal held that the error in mentioning the wrong sub-clause was a technical mistake and not a grave one. Following precedents, the Tribunal set aside the order of the CIT(E) and remanded the matter back for fresh adjudication, directing the CIT(E) to consider the application under the correct sub-clause and provide an opportunity of hearing to the assessee.

The Tribunal held that the assessee failed to provide complete details in response to the notices, particularly donation receipts, leading to the rejection by the CIT(E). However, considering the interest of justice, the Tribunal set aside the CIT(E)'s order.

The Tribunal held that the CIT(E) erred in not granting a virtual hearing, violating principles of natural justice. Following a Bombay High Court decision, the Tribunal directed the CIT(E) to provide an opportunity for a virtual hearing and remanded the case for denovo adjudication.

The Tribunal held that the assessee's application for registration was rejected by the CIT(E) on grounds that its activities were not genuine and did not align with its trust deed. The Tribunal also noted the denial of virtual hearing by the CIT(E) and, following the Bombay High Court's decision, directed the CIT(E) to provide a virtual hearing.

The Tribunal held that the assessee's activities were of a charitable nature and that the conditions for exemption under Section 11 were met, including the timely filing of audit reports and returns, with procedural lapses being condonable. The Tribunal also affirmed the assessee's status as a 'Local Authority' for the purposes of the Act. Various grounds raised by the Revenue were dismissed, while some grounds raised by the assessee were allowed or partly allowed.

The Tribunal set aside the orders of the CIT(E) and restored the issue to his file. The CIT(E) is directed to grant one final opportunity to the assessee to explain and substantiate its case.

The Tribunal held that the PCIT invoked Section 263 on a wrong appreciation of facts. The cessation of liability claim was not applicable as the interest was not from the debentures in question, and the education cess deduction was rectified by filing Form No.69.

The Tribunal held that there was a sufficient cause for non-compliance due to the medical emergency. The impugned orders were set aside, and the case was remanded to the CIT(E) for fresh adjudication, providing an opportunity to the assessee to present their case.

The Tribunal noted that the CIT(A) had already directed the Assessing Officer to delete the said addition. As the relief sought by the assessee had already been granted, the Tribunal found that no prejudice was caused to the assessee, and therefore, the appeal before the ITAT was not maintainable.

The Tribunal largely ruled in favor of the assessee. It allowed the Section 11 exemption, confirming that delayed filing of audit reports and returns would not deny the benefit if submitted during reassessment proceedings, and upheld the assessee's status as a 'Local Authority'. Capital expenditures were to be treated as an application of income under Section 11, and contributions to superannuation/gratuity funds were allowed as deductions. Accrued and paid interest expenses were allowed, with Section 14A deemed inapplicable for Section 11 income. However, Wharfage and environmental monitoring charges were to be taxed in the year they accrued, with directions for adjustment in later assessment years, while the issue of capital loss on fixed assets and prior period expenses was partly allowed and remanded for re-computation/verification.

The Tribunal found that the non-compliance was due to an employee's mistake and that the assessee should be given a final opportunity to present its case. The impugned order of the CIT(E) was set aside, and the matter was restored to the CIT(E)'s file for fresh adjudication.

The Tribunal upheld the assessee's entitlement to exemption under Section 11, finding procedural requirements for filing returns and audit reports to be directory, not mandatory, and confirming its status as a 'Local Authority'. It dismissed Revenue's appeals regarding the treatment of capital expenditure as application of income and the allowability of superannuation and gratuity fund contributions under Sections 36(1)(iv) and 36(1)(v). The Tribunal allowed the assessee's claim for accrued interest expenses by recognizing its bona fide change in accounting method from cash to mercantile, ruling that Section 14A was not applicable. It upheld the taxability of wharfage and environment monitoring charges in the year of accrual and remanded the issue of loss on sale of fixed assets and prior period expenses for re-computation by the Assessing Officer.

The Tribunal, following a coordinate bench's decision in a similar case (assessee's wife), held that the impugned land was agricultural land and not a capital asset. Consequently, no capital gains tax was leviable, and the grounds of appeal raised by the Revenue were dismissed.

The Tribunal held that the employees' contribution towards ESI/PF, if not deposited within the due dates prescribed by the respective welfare laws, is not allowable as a deduction. This decision was based on the Hon'ble Supreme Court's ruling in the case of Checkmate Services Pvt. Ltd.

The tribunal held that the CIT(A) cannot dismiss an appeal for non-prosecution and must decide the appeal on merits. The CIT(A)'s order was set aside for denovo adjudication.

The Tribunal noted that the assessee's inability to file details was due to a medical emergency in the family. Consequently, the Tribunal set aside the orders of the CIT(E) and remanded the matters for denovo adjudication, providing an opportunity to the assessee to present necessary documents.

The Tribunal held that the delay in filing the appeal before the CIT(A) was sufficiently caused by the Covid-19 pandemic and the trustees' medical emergency duties. Furthermore, relying on previous ITAT orders on identical grounds and various judicial precedents, the Tribunal ruled that the delay in filing the return and audit report should not disentitle the assessee to exemption under Section 11, especially when the registration certificate was available and the issue was procedural.

The Tribunal held that the assessee's activities were of a charitable nature and that its claim for exemption under Section 11 of the Income Tax Act was valid, considering the procedural delays in filing were beyond its control and that the audit report filing was directory in nature. The Tribunal also affirmed the assessee's status as a 'Local Authority' and allowed deductions for superannuation and gratuity funds as application of income. Several other grounds concerning capital vs. revenue expenditure, timing of income recognition, and prior period expenses were also adjudicated.

The Tribunal held that the error in selecting the clause was a bona fide clerical mistake and not a grave error. Relying on previous coordinate bench decisions, the Tribunal found that such technical mistakes should be corrected. The CIT(E)'s rejection was set aside.

The Tribunal held that the CIT(A)[NFAC] erred in rejecting the Revenue's rectification application. The CIT(A)[NFAC] had incorrectly applied a proviso to Section 251(1) of the Act and failed to follow the ITAT's directions for de-novo adjudication.

The Tribunal condoned the delay in filing the appeal. It was noted that the Tribunal had previously deleted the quantum addition made by the AO, on which the penalty was levied. Therefore, the penalty was held to be unsustainable.

The Tribunal held that the CIT(E) erred in rejecting the applications without granting a final opportunity to the assessee to explain and substantiate its case. The matter was restored to the CIT(E) with a direction to provide one last opportunity.

The Tribunal held that the error in mentioning the incorrect sub-clause was a technical mistake, not a grave one. Following previous decisions, the Tribunal set aside the CIT(E)'s order and remanded the matter for fresh adjudication, considering the application under the correct sub-clause.

The Tribunal held that earning rental income by letting out a part of the trust's premises, utilized for its objects, does not attract the proviso to Section 2(15). Therefore, the assessee should not be denied registration u/s 12A.

The Tribunal held that the filing of Form 10B is directory and not mandatory. Since the audit report was filed during the appellate proceedings and the assessee has a valid registration under section 12A, the benefit of sections 11 and 12 should be allowed.

The Tribunal held that the assessee's revised return was filed after the due date and the disclosure was a consequence of survey detection, not voluntary. The assessment of income was greater than the processed return, attracting Section 270A(2)(a). The appeal was dismissed.

The Tribunal held that substantial justice is more important than procedural delay and that grave injustice would be caused if the delay was not condoned. The Tribunal directed the CIT(A) to condone the delay and decide the appeal on merits.

The Tribunal found no infirmity in the Ld. Addl CIT(A)'s order, affirming that since the return was filed belatedly (after the due date of 31.10.2019), the deduction under Section 80P was rightly disallowed by the CPC as per Section 80AC and Section 143(1)(a)(ii). The Tribunal explicitly followed the decision of the Hon'ble Madras High Court in Veerappampalayam Primary Agricultural Cooperative Credit Society Limited vs. DCIT & Ors., stating that a decision from a higher judicial forum must be adhered to.

The Tribunal condoned the delay in filing the appeals, acknowledging the unique hierarchical structure and systemic limitations of a military unit. It held that fees u/s.234E could not be levied for the period prior to 01.06.2015, as the amendment to Section 200A was prospective. Fees could only be levied for the delay from 01.06.2015 onwards.

The Tribunal noted that the assessee was prevented by sufficient cause from effectively prosecuting the appeal. Therefore, the impugned order was set aside, and the case was remanded to the CIT(E) for denovo adjudication, providing the assessee an opportunity to present necessary documents.

The Tribunal held that the assessee, being a military unit with specific operational constraints, had shown a reasonable cause for the delay in filing appeals. Therefore, the delay was condoned. The Tribunal further held that fees u/s 234E are not leviable for the period prior to 01.06.2015, but are leviable for the period of delay from 01.06.2015 onwards.

The Tribunal found that the appellant was prevented by sufficient cause from effectively prosecuting the appeal and deserved another opportunity. The Tribunal set aside the CIT(Exemption)'s order and remanded the matter for de novo adjudication, directing the CIT(Exemption) to provide due opportunity to the assessee to file necessary documents and prove its case on merits.

The Tribunal observed that the CIT(A) erred in deleting the addition solely based on DNK's affidavit, which was filed after the assessment. The Tribunal held that the source of cash payments made by the assessee to DNK needed to be explained, and DNK owning up only the profit element or peak balance of transactions was insufficient. The issue was remanded for re-adjudication.

The Tribunal held that the assessee had indeed commenced activities since 1971, as evidenced by its long-standing operation and registration under earlier Acts. The rejection by the CIT was based on a discrepancy arising from a change in PAN status, and thus, the matter was remanded.

The Tribunal held that the assessee society had been in existence and providing educational facilities since 1971, thus its activities had commenced. The rejection by the CIT for the discrepancy was therefore not justified. The matter was remanded back to the CIT.

The Tribunal noted that the quantum appeal concerning the same issue (ITA No.1725/PUN/2025) had already been decided in favour of the assessee. Therefore, the penalty levied is not maintainable.

The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A)/NFAC. It held that fees under Section 234E cannot be levied for delays prior to 01.06.2015, as the enabling amendment to Section 200A was prospective. The case was remitted to the Assessing Officer (TDS) to verify and delete fees levied for the period prior to 01.06.2015, while sustaining fees for defaults committed from 01.06.2015 onwards.