ITAT Visakhapatnam Judgments — October 2025

The Tribunal condoned the one-day delay in filing the appeal, acknowledging the assessee's claim of non-receipt of notices due to an incorrect email ID used by the tax authorities after a change in management. Applying principles of natural justice, the Tribunal remitted the case back to the Ld. CIT(A) to provide the assessee one final opportunity to present its case and furnish relevant documents.

The Tribunal condoned the delay in filing the appeals after noting the reasons provided by the assessee. It directed the CIT(A) to provide one more opportunity to the assessee to establish its entitlement for exemption under section 10(23C)(iiiad) of the Act.

The ITAT rejected the assessee's application for admitting additional evidence concerning unsecured loans due to substantial delay and lack of credibility. It upheld the disallowance of delayed employee PF/ESI contributions, citing the Supreme Court's ruling in Checkmate Services. The disallowance of tax audit expenses for lack of TDS compliance proof was also sustained, as was the addition of unexplained cash credits under Section 68, as the assessee failed to prove the identity, creditworthiness of lenders, or genuineness of the transactions.

The Tribunal condoned the delay in filing the appeals, acknowledging the reasons provided by the assessee. It was held that the assessee should be given one more opportunity to establish their eligibility for exemption before the CIT(A).

The Tribunal held that the provision for gratuity, supported by an Actuarial Valuation Report, is an 'ascertained liability' and thus deductible for computing book profits under Section 115JB. It also directed the AO to allow the full TDS credit of Rs.1,38,850/- as the assessee had admitted the interest income difference.

The Tribunal found the assessee's claim regarding the cash deposit amount and the inclusion of FDR maturity proceeds plausible. It remanded the issue to the AO for re-verification of the cash deposits and directed the AO to allow a credit of Rs. 2.50 lakhs for cash in hand, as per CBDT Circular No. 03/2017. The appeal was allowed for statistical purposes.

The Tribunal allowed the appeal, deleting both additions. It ruled that Section 68 additions require 'books of account' as defined u/s 2(12A), which a bank passbook is not, especially for an assessee not engaged in business or profession. For the Section 56(2)(x)(b) addition, the Tribunal found a violation of natural justice as the AO changed the basis of addition without proper opportunity, and failed to refer the property valuation to a DVO despite the assessee's challenge supported by a valuer's report.

The Tribunal held that for AY 2018-19, the notice under Section 148, issued on 08.04.2022, was beyond the three-year limit from the end of the assessment year (March 31, 2022). As per Section 151(ii) of the Income-tax Act, 1961 (as amended w.e.f. 01.04.2021), approval from the Principal Chief Commissioner or Principal Director General was required. However, the AO obtained approval only from the Principal Commissioner of Income Tax, which was not the designated authority for cases beyond three years. Following the Supreme Court's Ashish Agrawal case, the Tribunal quashed the reassessment proceedings for lack of valid jurisdiction.

The Tribunal held that the A.O. erred by making a substantive addition for the same cash deposits in the hands of both the assessee and Shri Makindi Srinivas, which is contrary to settled legal principles. The issue was remanded back to the A.O. for reconsideration to ascertain the true ownership of the bank account and to consider any explanations furnished by the assessee.

The Tribunal noted that while the application was time-barred, procedural lapses should not defeat substantive rights of charitable trusts. It held that the assessee is at liberty to approach the CBDT for condonation of delay under Section 119(2)(b) of the Act. Upon such condonation, the CIT(Exemptions) is directed to consider the application for regular registration under Section 80G on its merits.

The Tribunal ruled that since the entire income earned by the assessee (commission) was subjected to TDS under Sections 194Q and 194A and offered for tax, the conditions of Section 199 read with Rule 37BA(2) of the Income Tax Rules, 1962 were met. Relying on prior decisions, the Tribunal directed the Assessing Officer to allow the full TDS credit as per Form 26AS for both assessment years.

The Tribunal noted the substantial delay and the assessee's consistent non-representation, concluding that the assessee was not interested in pursuing the case. Consequently, the appeal was dismissed in limine, being barred by limitation and deemed not maintainable.

The Tribunal observed that the assessee was not interested in pursuing the appeal. Consequently, the appeal was dismissed in limine as not maintainable due to being barred by limitation and the assessee's failure to prosecute the case.

The Tribunal observed that the amendment to Section 80AC, which mandates timely filing of returns for claiming certain deductions, is prospective and not applicable to A.Y. 2017-18. Therefore, the Revenue was not justified in disallowing the Section 80P deduction solely on the grounds of belated return filing for the impugned assessment year. The issue is set aside to the AO to examine the merits of the Section 80P claim made in the belated return.

The Tribunal acknowledged the delay but held that procedural lapses should not defeat substantive rights for charitable trusts. It directed the assessee to approach the CBDT for condonation of delay under Section 119(2)(b) and instructed the CIT(Exemptions) to dispose of the application on merits after such condonation.

The ITAT condoned the 106-day delay in filing the appeal before itself, finding the reasons genuine and following the principle of a lenient approach in condoning delays. Regarding the CIT(A)'s dismissal, the ITAT held that the CIT(A) erred in dismissing the appeal for a minor 4-day delay without providing the assessee an adequate opportunity to file a condonation application. The ITAT set aside the CIT(A)'s order and remanded the matter back to the CIT(A) to reconsider the issue after allowing the assessee to file and explain the reasons for the delay.

The Tribunal held that since the assessee offered its entire commission income for taxation, and the TDS was reported in its Form 26AS, the provisions of Section 199 and Rule 37BA(2) were duly complied with. Relying on identical previous judgments, the Tribunal directed the AO to allow full credit for the TDS claimed by the assessee for both assessment years.

The ITAT condoned the 106-day delay in filing the appeals before the Tribunal, finding the reasons genuine and bonafide. Regarding the CIT(A)'s dismissal, the ITAT held that the CIT(A) erred by not providing adequate opportunity and remanded the matter back to the CIT(A) for reconsideration of the delay, directing the assessee to file a proper condonation application.

The Tribunal condoned the 106-day delay in filing appeals before it due to the assessee's medical reasons. Regarding the appeals before the CIT(A), the Tribunal noted the minor 4-day delay and the assessee's willingness to file a condonation application if given the chance. Therefore, the Tribunal set aside the CIT(A)'s dismissal order and remanded the matter back to the CIT(A) to provide the assessee another opportunity to file the condonation application and explain the delay.

The Tribunal observed that making substantive additions for the same income in the hands of two different persons is contrary to settled law. It found that the AO erred by making a substantive addition in the assessee's hands without clear evidence of beneficial ownership and simultaneously making an addition in the bank account holder's hands. The case was remanded to the AO to properly ascertain the bank account's ownership and reconsider the assessment.

The Tribunal found that the assessee failed to substantiate the source of the remaining Rs. 9,69,830/- despite claiming funds from a brother and cash withdrawals. No concrete evidence was presented to connect the alleged sources to the specific unexplained amount or to counter the findings of the lower authorities. Consequently, the addition made by the AO and upheld by the CIT(A) was confirmed.

The Tribunal, applying Supreme Court rulings in Ashish Agarwal and Rajeev Bansal, found that the notice issued under Section 148 on 27/07/2022 for AY 2016-17 was beyond the extended limitation period. Consequently, the entire reassessment proceedings, the assessment order under Section 147 read with Section 144B, and the associated penalty were quashed as void ab initio.

The Tribunal held that the reassessment notice issued under Section 148 on 27/07/2022 was barred by limitation as per the Supreme Court's decisions in Ashish Agarwal and Rajeev Bansal. It found that the Revenue had exceeded the surviving/balance time limit for issuing the notice, rendering the entire reassessment proceedings and the resulting assessment order void ab initio and bad in law. Consequently, the penalty levied under Section 271(1)(c) was also quashed.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was ambiguous as it failed to specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Relying on the jurisdictional High Court decision, the Tribunal found such an ambiguous notice invalid and quashed the penalty order.

The Tribunal determined that the AO had conducted proper inquiry before granting deductions. Following a precedent, it held that interest income earned by a primary agricultural co-operative society from investing its own surplus funds with a district cooperative central bank is eligible for deduction under Section 80P(2)(a)(i). The PCIT's revisionary order was quashed.

The Tribunal quashed the assessment order, holding that the Section 148 notice, issued on 07.04.2022 for AY 2018-19 (beyond three years from the end of the assessment year), lacked proper approval. As per Section 151(ii) of the Income Tax Act (as amended by Finance Act, 2021), approval from a higher authority (Principal Chief Commissioner/Director General or Chief Commissioner/Director General) was required for such cases, but the AO obtained approval from the Principal Commissioner of Income Tax, who was not vested with the requisite jurisdiction. This invalidates the assumption of jurisdiction by the AO, rendering the subsequent assessment null and void.

The Tribunal found that the assessee had furnished a registration certificate confirming its status as a Primary Agricultural Cooperative Credit Society, making it eligible for the Section 80P(2)(a)(i) deduction. It clarified that while unsubstantiated expenditures can be disallowed, the deduction itself cannot be denied solely for lack of evidence for expenses. Thus, the Tribunal set aside the orders of the lower authorities and directed the AO to allow the claimed deduction.

The Tribunal condoned the delay in filing the appeal, finding the reasons genuine and bonafide. On merits, it held that for AY 2017-18, the condition of filing the return by the due date under Section 139(1) was not mandatory for claiming Section 80P deduction, as strict provisions of Section 80AC (pre-amendment) did not apply to Section 80P for that assessment year. Since the assessee filed the return and claimed the deduction before the assessment was completed, the deduction under Section 80P(2)(a)(i) should be allowed, and the addition made by the A.O. was set aside.

The ITAT upheld the CIT(A)'s order, ruling that Section 195 is not applicable to payments made to a resident intermediary who held independent rights in the property, rather than merely acting as an agent for non-residents. Furthermore, for payments made directly to NRIs, the assessee was not in default because the NRIs had already disclosed the capital gains in their returns and paid the corresponding tax, thereby satisfying the proviso to Section 201(1).

The Tribunal ruled that the reassessment proceedings initiated for AY 2015-16 by a notice under Section 148 dated 06.04.2022 were without jurisdiction and invalid. It determined that the notice was issued beyond the statutory limitation period under the unamended Section 149(1)(b) and that the relaxations under the Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA) were not applicable to such notices for AY 2015-16 issued after April 1, 2021, relying on Supreme Court precedents.

The Tribunal held that the CIT(A) erred in summarily dismissing the appeal for want of prosecution without adjudicating the specific legal grounds raised by the assessee, particularly regarding the penalty being time-barred under Section 275(1)(c) and immunity under Section 273B. Citing High Court precedents, the Tribunal emphasized that the CIT(A) must pass a speaking order addressing all issues. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication on merits, ensuring the assessee receives a reasonable opportunity of being heard.

The Tribunal held that the notice under Section 148 was issued beyond three years from the end of the assessment year and required approval from a higher authority as per Section 151(ii) of the Act. The AO obtained approval from the Principal Commissioner of Income Tax, which was not sufficient as per the statute.

The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s decision, confirming that the Rs. 9 crores paid by the purchaser to clear mortgages and settle title disputes were deductible under Section 48(i) of the Income Tax Act, 1961. The Tribunal reasoned that these payments were essential for perfecting the title and enabling the transfer of the property, thus qualifying as expenditure 'wholly and exclusively in connection with such transfer'. For the bank payments, the principle of 'diversion of income by overriding title' was applied, as the banks had a superior claim due to SARFAESI proceedings, meaning this portion never accrued to the assessee.

The Tribunal found the reasons for delay insufficient and not bona fide. It noted that the order in the other appeal, which was supposedly awaited, was passed after the present appeal was filed. Consequently, the condonation petition was rejected, and the appeal was dismissed in limine for want of sufficient cause.

The ITAT condoned a 102-day delay in filing the appeal due to bona fide reasons, adopting a justice-oriented approach. It observed that the CIT(A) had failed to take cognizance of the assessee-bank's written submissions and supporting documents regarding the TDS default on interest (including payments to exempted organizations and Forms 15G/H) and salaries (including tax regularly remitted and TDS on employees working in other branches). Consequently, the tribunal restored the matter to the CIT(A) for fresh adjudication after granting a reasonable opportunity of being heard and considering all fresh evidence. The same directions were applied for AY 2015-16.

The Tribunal condoned the delay in filing the appeals, emphasizing a justice-oriented approach. It found that the CIT(A) failed to adequately consider the assessee's material facts and written submissions, including regularly remitted TDS and TDS on salaries for employees working in other branches, leading to unresolved discrepancies in the demand. Consequently, both appeals for AY 2014-15 and 2015-16 were remanded to the CIT(A) for re-adjudication, with directions to provide the assessee a fresh opportunity of being heard.