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 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 held that the notice issued under Section 148 was invalid because the approval for issuing it was obtained from the Principal Commissioner of Income-tax, whereas for reassessment beyond three years, approval from a higher authority (Principal Chief Commissioner or Director General) was required. Consequently, the assessment order was quashed.

The Tribunal held that the addition under Section 56(2)(x)(B) was made without affording proper opportunity to the assessee and contrary to the show cause notice, violating the principles of natural justice. It also found that the assessee provided a valuer's report supporting a lower property value, which the AO should have considered.

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 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 held that for Ganga Devi, the CIT(A) correctly relied on the jurisdictional ITAT's decision in M/s. Polisetty Somasundaram v. DCIT, which deemed the pendrive evidence invalid due to non-compliance with Section 65B of the Indian Evidence Act. However, the CIT(A) upheld the addition of Rs. 6,91,551/- based on vouchers seized under Annexure A/PSS/CORP/4. The Tribunal noted that these vouchers were not disputed by the assessee and that the AO conducted an independent examination. Furthermore, a statement from Shri P. Shyam Sundar confirmed unaccounted cash receipts due to under-invoicing, which was not retracted. The Tribunal found no infirmity in the CIT(A)'s decision regarding this amount. Consequently, the grounds raised by the assessee were dismissed. For Ranaram, the Tribunal found the issues and grounds identical to Ganga Devi's case and applied the same reasoning mutatis mutandis. Therefore, the appeals for Ranaram were also dismissed.

The Tribunal held that for Ganga Devi, the CIT(A) correctly relied on the jurisdictional ITAT's decision in M/s. Polisetty Somasundaram v. DCIT, which deemed the pendrive evidence invalid due to non-compliance with Section 65B of the Indian Evidence Act. However, the CIT(A) upheld the addition of Rs. 6,91,551/- based on vouchers seized under Annexure A/PSS/CORP/4. The Tribunal noted that these vouchers were not disputed by the assessee and that the AO conducted an independent examination. Furthermore, a statement from Shri P. Shyam Sundar confirmed unaccounted cash receipts due to under-invoicing, which was not retracted. The Tribunal found no infirmity in the CIT(A)'s decision regarding this amount. Consequently, the grounds raised by the assessee were dismissed. For Ranaram, the Tribunal found the issues and grounds identical to Ganga Devi's case and applied the same reasoning mutatis mutandis. Therefore, the appeals for Ranaram were also dismissed.

The Tribunal held that for Ganga Devi, the CIT(A) correctly relied on the jurisdictional ITAT's decision in M/s. Polisetty Somasundaram v. DCIT, which deemed the pendrive evidence invalid due to non-compliance with Section 65B of the Indian Evidence Act. However, the CIT(A) upheld the addition of Rs. 6,91,551/- based on vouchers seized under Annexure A/PSS/CORP/4. The Tribunal noted that these vouchers were not disputed by the assessee and that the AO conducted an independent examination. Furthermore, a statement from Shri P. Shyam Sundar confirmed unaccounted cash receipts due to under-invoicing, which was not retracted. The Tribunal found no infirmity in the CIT(A)'s decision regarding this amount. Consequently, the grounds raised by the assessee were dismissed. For Ranaram, the Tribunal found the issues and grounds identical to Ganga Devi's case and applied the same reasoning mutatis mutandis. Therefore, the appeals for Ranaram were also dismissed.

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 Tribunal held that the cash withdrawals from the firm's capital account adequately explained the source of the Rs. 50 Lakhs investment. For the Rs. 45 Lakhs, the Tribunal found no material to suggest these investments were made on behalf of the assessee, despite being routed through him.

The Tribunal allowed the assessee's appeal on the legal ground concerning the validity of the notice under section 143(2). The Tribunal found that CBDT Instruction No. 5/2017, relied upon by the assessee, clearly stipulated that for F.Y. 2017-18, cases involving additions in earlier assessment years on recurring issues of law or fact, where the quantum of addition exceeded Rs. 10 lakhs (for charges other than eight metro cities), could be selected for compulsory manual scrutiny. In the present case, the addition in the earlier year was Rs. 3,43,759/-, which was well below the prescribed limit. Therefore, the Tribunal held that the scrutiny assessment proceedings were initiated based on an invalid notice and were not sustainable. Consequently, the assessment order was quashed as void-ab-initio. As a result of quashing the assessment order, the grounds raised on merits concerning the disallowance of coin commission expenses (Rs. 3,43,759/-) and business promotion expenses (Rs. 23,05,444/-) were not adjudicated and were left open.

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 ITAT condoned the delay of 106 days in filing the appeals before it, finding the assessee's explanation of health issues to be genuine and bonafide, and applying the principle of leniency from Collector, Land Acquisition vs. MST Katiji [1987] 167 ITR 471 (SC). Regarding the dismissal by the CIT(A) for a 4-day delay, the ITAT noted that while the assessee had admitted the delay and undertaken to file a condonation petition, they failed to do so despite multiple notices. However, considering the very small delay and the assessee's submission that they were willing to file the application and explain the reasons if given an opportunity, the ITAT found that the CIT(A) had not provided adequate opportunity. Therefore, the ITAT set aside the order of the CIT(A) and remanded the issue back to the CIT(A) with a direction to reconsider the matter after providing another opportunity of hearing to the assessee to file the condonation application and explain the reasons for the delay. The appeals were allowed for statistical purposes.

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 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 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 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 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 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 addressed two main issues. Firstly, regarding the validity of the notice under Section 148, the Tribunal found that the Assessing Officer had followed the procedure prescribed by CBDT Instruction 1/2022, which was issued consequent to the Hon'ble Supreme Court's decision in Union of India Vs. Ashish Agarwal. The AO had issued a deemed show-cause notice under Section 148A(b) on 24.05.2022, received a reply from the assessee, and passed an order under Section 148A(d) on 19.07.2022. The Tribunal concluded that the AO was well within his jurisdiction and the extended timelines while issuing the notice under Section 148 on 19.07.2022. Therefore, the legal grounds challenging the AO's jurisdiction were rejected. Secondly, concerning the addition under Section 69A, the Tribunal acknowledged that the CIT(A) had provided multiple opportunities to the assessee, which were not responded to. However, in the interest of natural justice and considering the assessee's prayer, the Tribunal decided to provide one final opportunity to the assessee to present its case before the CIT(A). The CIT(A) was directed to grant this opportunity, and the assessee was directed to furnish relevant documents without seeking unnecessary adjournments. The Tribunal stated that if the assessee failed to comply, the CIT(A) would be at liberty to pass an order based on the available material. The ground raised by the assessee on this issue was allowed for statistical purposes.

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 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 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 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 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 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, 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 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, 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 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 Tribunal held that the reassessment proceedings were invalid because the AO failed to obtain the necessary approval from the specified authority under Section 151 for issuing the notice under Section 148, as more than three years had elapsed from the end of the assessment year.

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 held that payments made to resident intermediaries, who had independent rights to transfer the property, were not payments to non-residents under Section 195. Additionally, the portion paid to non-residents was already taxed in their hands, thus no further liability could be fastened on the assessee.

The Tribunal held that for AY 2018-19, the assessee's appeal is dismissed. The Tribunal analyzed section 80AC, which states that no deduction under Chapter VI-A, heading 'C - Deductions in respect of certain incomes', shall be allowed unless the return of income is furnished on or before the due date specified under section 139(1). The Tribunal found that the assessee had not filed its return within the due date for AY 2018-19 and had filed it belatedly under section 139(4). The Tribunal clarified that section 80AC limits the allowability of deductions to returns filed on or before the section 139(1) due date and does not extend to returns filed under section 139(4). Therefore, the deduction under section 80P was not allowable for AY 2018-19. The judgment also mentions that appeal in ITA No. 432/VIZ/2025 for AY 2015-16 is allowed for statistical purposes, and ITA No. 433/VIZ/2025 for AY 2016-17 is partly allowed for statistical purposes, though the detailed reasoning for these specific outcomes is not fully elaborated in the provided text. The issue regarding interest income for AY 2015-16 was not explicitly decided in the provided excerpt.

The Tribunal held that the finance companies sold the plant and machinery for Rs. 2,40,00,000/-, adjusting the sale proceeds against an outstanding loan of Rs. 5,15,98,630/-. The assessee's contention was that after adjusting the notional value of machinery equivalent to the loan outstanding, a loss of Rs. 2.18 Crores was debited to the Profit & Loss Account and should be allowed as a business expenditure. However, the AO found that the WDV was computed as per the Companies Act, not the Income Tax Act. The Tribunal agreed with the AO that since the loss was computed as per the Companies Act, it could not be allowed as an expenditure under the Income Tax Act, specifically referencing Section 50(2) of the Act. The Tribunal did not dispute the short-term capital gains claimed by the assessee. Consequently, the addition made by the AO was sustained, and the assessee's ground was dismissed.

The Tribunal held that for AY 2018-19, the assessee's appeal is dismissed. The Tribunal analyzed section 80AC, which states that no deduction under Chapter VI-A, heading 'C - Deductions in respect of certain incomes', shall be allowed unless the return of income is furnished on or before the due date specified under section 139(1). The Tribunal found that the assessee had not filed its return within the due date for AY 2018-19 and had filed it belatedly under section 139(4). The Tribunal clarified that section 80AC limits the allowability of deductions to returns filed on or before the section 139(1) due date and does not extend to returns filed under section 139(4). Therefore, the deduction under section 80P was not allowable for AY 2018-19. The judgment also mentions that appeal in ITA No. 432/VIZ/2025 for AY 2015-16 is allowed for statistical purposes, and ITA No. 433/VIZ/2025 for AY 2016-17 is partly allowed for statistical purposes, though the detailed reasoning for these specific outcomes is not fully elaborated in the provided text. The issue regarding interest income for AY 2015-16 was not explicitly decided in the provided excerpt.

The Tribunal admitted the additional legal grounds raised by the assessee as they assailed the validity of the assessment order and went to the root of the matter. Regarding the first issue concerning the validity of the Section 148 notice, the Tribunal noted that the notice dated April 4, 2022, was issued beyond three years from the end of AY 2018-19. As per Section 151 of the Act, as amended by the Finance Act, 2021, effective from April 1, 2021, such a notice required prior approval from the specified authorities (Principal Chief Commissioner/Principal Director General/Chief Commissioner/Director General). The AO obtained approval from the Principal Commissioner of Income Tax-1, Visakhapatnam, who was not vested with the requisite jurisdiction under the amended Section 151. Therefore, the assessment framed under Section 147 read with Section 144B, dated January 17, 2024, was devoid of valid assumption of jurisdiction and was liable to be quashed. The Tribunal quashed the assessment order. Consequently, the penalty proceedings initiated under Sections 271AAC(1) and 271B(1)(c) for AY 2018-19 were also set aside as they were consequential to the quashed assessment order. The other legal grounds and grounds on merits were kept open.

The Tribunal admitted the additional legal grounds raised by the assessee as they assailed the validity of the assessment order and went to the root of the matter. Regarding the first issue concerning the validity of the Section 148 notice, the Tribunal noted that the notice dated April 4, 2022, was issued beyond three years from the end of AY 2018-19. As per Section 151 of the Act, as amended by the Finance Act, 2021, effective from April 1, 2021, such a notice required prior approval from the specified authorities (Principal Chief Commissioner/Principal Director General/Chief Commissioner/Director General). The AO obtained approval from the Principal Commissioner of Income Tax-1, Visakhapatnam, who was not vested with the requisite jurisdiction under the amended Section 151. Therefore, the assessment framed under Section 147 read with Section 144B, dated January 17, 2024, was devoid of valid assumption of jurisdiction and was liable to be quashed. The Tribunal quashed the assessment order. Consequently, the penalty proceedings initiated under Sections 271AAC(1) and 271B(1)(c) for AY 2018-19 were also set aside as they were consequential to the quashed assessment order. The other legal grounds and grounds on merits were kept open.

The Tribunal held that the notice issued under Section 148 of the Act was barred by limitation as per the first proviso to Section 149(1)(b) of the Act. Consequently, the reassessment proceedings and the assessment order were quashed.

The Tribunal noted that the CIT(A) dismissed the appeal ex-parte without granting a reasonable opportunity. The Tribunal decided to hear the case on legal grounds, including the validity of the notice and limitation.

The Tribunal held that Section 80AC disallows deductions under Chapter VI-C if the return of income is not filed by the due date specified in Section 139(1). A return filed under Section 139(4) (belatedly) does not qualify for such deductions.

The Tribunal held that the notice under Section 148 was invalid because it was issued beyond three years from the end of the assessment year without the prior approval of the specified authority as required by Section 151 of the Act. Consequently, the reassessment order was quashed.

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 amounts paid by the buyer to clear mortgages and title disputes were indeed deductible expenditures in computing capital gains. The Tribunal relied on the principles of diversion of income by overriding title and real income theory.

The Tribunal held that the notice under Section 148 was issued beyond three years from the end of the assessment year, requiring approval from the Principal Chief Commissioner or equivalent. As the approval was obtained from the Principal Commissioner, which was not statutorily mandated for notices issued beyond three years, the assumption of jurisdiction by the AO was invalid.

The Tribunal found that crucial aspects of the assessee's claim were not considered by the CIT(Appeals). Therefore, the matter was restored to the CIT(Appeals) for fresh adjudication after considering the assessee's submissions and evidence.

The Tribunal found that crucial aspects of the assessee's claim were not considered by the CIT(Appeals). Therefore, the matter was restored to the CIT(Appeals) for fresh adjudication after considering the assessee's submissions and evidence.

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 Tribunal held that the disallowances under Section 40A(3) were not sustainable as the genuineness of the transactions and identity of the payees were not disputed, and the CPC failed to consider the assessee's objections.