Annual Income Tax Case Digest: ITAT Decisions 2025 [Part XIII]

Vipul Mittal vsDCIT CITATION : 2025 TAXSCAN (ITAT) 1742

The bench of the Income Tax Appellate Tribunal, Delhi, quashed the assessment framed against the assessee after holding that the scrutiny notice under Section 143(2) of the Income Tax Act, 1961, had been issued without jurisdiction. The Tribunal held that the defect was incurable, thereby setting aside the assessment proceedings in a dispute involving long-term capital gain taxation.

The bench comprising of Judicial Member, Sudhir Kumar and Accountant Member, S. Rifaur Rahman admitted the additional grounds on jurisdiction and ruled in favour of the assessee. The Tribunal observed that under CBDT Instruction No. 01/2011, the jurisdiction in this case lay with the Deputy Commissioner since the declared income exceeded Rs. 20 lakh. However, the notice under Section 143(2) was issued by the ITO, who lacked jurisdiction.

Booking.Com India Support& MarketingServices Private Limited vs Principal Commissioner of Income TaxCITATION : 2025 TAXSCAN (ITAT) 1743

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the ESOP allowance by the AO is not erroneous and the CSR deduction under Section 80G is beyond the revisionary powers of the PCIT.

The two-member Bench of Sandeep Singh Karhail (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) held that the above-mentioned binding observations of the Jurisdictional High Court are sufficient for not sending the matter back to the file of the AO for verification, as it would be a futile exercise, as the issue has already been decided in several judicial decisions by the Co-ordinate Benches in favour of the assessee and against the revenue.

Sh. MahendraSingh Ratnawat vsDy. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1744

The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) quashed the 60% tax rate u/s 115BBE, holding that the cash represented fully verifiable business.

The two-member Bench of Gagan Goyal (Accountant Member) and Dr S. Seethalakshmi (Judicial Member) held that the search is completely verifiable from the audited books of accounts regularly maintained and deleted the addition. Also, the assessee on its own had disallowed a sum of Rs. 1,80,00,000/-, considering the same to be incurred for non-business purposes. Hence, held the disallowance of interest of Rs. 1,27,33,677/- is not sustainable.

Ashok Nariyanivs The ACIT CITATION : 2025 TAXSCAN (ITAT) 1745

The Jaipur bench of Income Tax Appellate Tribunal (ITAT) held that when the cash sales were duly recorded in the books of account, they could not be treated as unexplained under Section 68 and rejected the survey-based income tax addition.

The two-member Bench of Dr. M.L. Meena (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) observed that when the cash sales were duly recorded in the books of account and even part of the sales in new currency notes were already considered and part was not considered only due to the fact that in the survey statement, assessee has surrendered 60% of cash deposits as unrecorded sales. The Tribunal further observed that in support of the sales the assessee had submitted extensive details of cash, stock, vat returns etc. The Tribunal held that there was no reason to sustain the addition of the amount recorded as sales i.e., for an amount of Rs. 1,30,82,000/- as “unexplained cash deposits”.

GonemmanvaraNarappa vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1746

The Bangalore bench of Income Tax Appellate Tribunal (ITAT) rejected the assessee's claim of lawyers' negligence and refused to condone a delay of 1265 days in filing the income tax appeal.

The Tribunal opined that under Section 253(5) of the Income Tax Act, the Tribunal may admit the delay filed beyond the period of limitation where it is established that there exists a “sufficient cause” on the part of the assessee for not presenting the appeal within the prescribed time. The explanation, therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on the part of the assessee in not filing the appeal within the prescribed time.

Shri PushpinderOberai vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1747

The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the capital gains addition of Rs.55 lakh from the sale of a Noida property and allowed the deduction under section 54 of Income Tax Act,1961 after the source of funds was substantiated.

The two member bench comprising Rajpal Yadav (Vice President) and Manoj Kumar Aggarwal ( Accountant Member) noted that Smt. Sushila Kumaran had sold the property to another buyer through a sale agreement dated 04-01-2010 and received the sale consideration, with the assessee acting only as a confirming party.

M/s. Shree JainSwethambar MurtiPujak Sangh vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1748

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) granted the assessee one more opportunity to furnish complete donor details for the addition of Rs.1,26,453 treated as anonymous donations.

The two member bench comprising George George K(Vice President) and S.R.Raghunatha (Accountant Member) considered the submissions and examined the record. It observed that the assessee had only produced an unsigned and uncertified list of donor names and addresses before the First Appellate Authority, which was found unreliable.

ITO WardRajpura vs M/s RajpuraProperties CITATION : 2025 TAXSCAN (ITAT) 1749

The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT )upheld the Commissioner of Income Tax (Appeals)[CIT(A)]’s deletion of a Rs. 318.40 lakh disallowance under section 40A(3) of Income Tax Act,1961,for a cash payment made during a land purchase as business expediency.

The two member bench comprising Rajpal Yadav (Vice President) and Manoj Kumar Aggarwal (Accountant Member) found that the cash payment was justified and fully supported by the registered sale deed. The genuineness of the transaction and the identity of the seller could not be questioned.

Kamal Kant vsIncome Tax officerward CITATION : 2025 TAXSCAN (ITAT) 1750

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the set-off of business losses against capital gains and remanded the matter for verification after setting aside the orders of the tax authorities.

The two member bench comprising Sudhir Kumar (Judicial Member) and Manish Agarwal (Accountant Member) considered the rival contentions and reviewed the record. It noted that the co-ordinate bench had held that non-speculative business losses from F&O derivative trading could be set off against capital gains and other income, except salary.

Akshaya VinimayPvt. Ltd. vsACIT CITATION : 2025 TAXSCAN (ITAT) 1751

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) held that income tax additions are not valid without incriminating material found during a search.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and S.Rifaur Rahman (Accountant Member) heard both sides and reviewed the record. On the date of search, 06/01/2021, no assessment proceedings were pending for the year.

Anandi vs ITO CITATION : 2025 TAXSCAN (ITAT) 1752

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT) deleted the addition of Rs.6.48 lakh treated as unexplained Specified Bank Notes (SBN) deposits during demonetization, accepting that the amount represented the assessee’s past savings and prior bank withdrawals.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) considered the submissions and records. The assessee had consistently maintained that the cash deposited during demonetization was from bank withdrawals on various dates, along with past savings and cash received on different occasions.

Rajsila StoneCrusher vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1753

The Jabalpur Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of ₹7,24,937 deferred interest under section 40(a)(ia) of Income Tax Act,1961, for Tax Deducted at Source (TDS) non-deduction on submission of the payee’s tax certificate.

A single member bench of Kul Bharat (Vice President) heard both parties and reviewed the records. The AO had added Rs. 7,24,937/- under section 40(a)(ia) for non-deduction of tax at source on interest paid to M/s Tata Motor Finance Ltd. He noted that the assessee could have submitted the accountant’s certificate during assessment, so the additional evidence filed before the CIT(A) was initially considered beyond Rule 46A.

Partha Sarkarvs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1754

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of an interior decorator and deleted the addition of Rs. 11 lakh as unexplained money under section 69A of Income Tax Act,1961,noting that the amount was already offered to tax.

A single member bench of Rajesh Kumar (Accountant Member) after reviewing the submissions and the orders of the lower authorities, observed that the issue in the appeal was minor and did not require restoration to the AO. It noted that the assessee, an interior decorator, had received the amount for services rendered and had included it in income for tax purposes.

ITO vs LalkarCommodities PvtLtd CITATION : 2025 TAXSCAN (ITAT) 1755

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s restriction of additions to 1% in a client code modification case, noting that the assessee acted only as a broker and did not benefit from any alleged misuse.

A single member bench of Sandeep Gosain (Judicial Member) agreed with the CIT(A) that the additions were properly restricted to 1% and found no reason to interfere. The revenue’s grounds were therefore dismissed, with no order as to costs.

DayanandParyani vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1756

The Jabalpur Bench of Income Tax Appellate Tribunal ( ITAT ) partly allowed the appeal, restricting the addition of unexplained cash deposits in bank to 12% of the total deposits as interest on short-term loans.

A single member bench of kul Bharat (Vice President) noted that the AO added the entire credits in the assessee’s bank account without allowing set-off for withdrawals. It observed that the AO should have considered the appellant’s explanation of running a money-lending business and computed the addition based on peak credit.

Climax OverseasPvt. Ltd vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1757

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) held that disallowance for delayed employee contribution deposits, including Employees’ State Insurance (ESI) and Provident Fund, could not be made through rectification under section 154 of the Income Tax Act,1961.

The two member bench comprising Anubhav Sharma (Judicial Member) and S.Rifaur Rahman (Accountant Member) held that the disallowance for delayed employee contribution deposits could not be made through rectification under section 154 of the Act. The ground was upheld, and the appeal was allowed.

ChandrakantAtmaram Acharya vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1758

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) remanded the unexplained investment under Section 69 for fresh adjudication, as the farmer-assessee claimed that the investment treated as unexplained by the Department was made out of his life savings from agricultural income.

The two-member bench of Narendra P. Sinha(accountant member) and Siddhartha Nautiyal (judicial member) held that the file be restored to the AO for fresh consideration. Since there was a complete failure on the part of the assessee to respond during both the assessment and appellate proceedings, a cost of ₹5,000/- was imposed on the assessee.

Income from Seismic Vessels Taxed Under Article 21(4) of India-Norway DTAA as Assessee Not Engaged in Seabed Exploration: ITAT

M/s. SancoHolding vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1759

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) held that income from seismic vessels provided on bareboat charter by a Norwegian company falls under Article 21(4) of the India-Norway Double Taxation Avoidance Agreement (DTAA), as the assessee was not engaged in seabed exploration or exploitation.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) heard both parties and perused the record. It noted that Article 21 of the India-Norway DTAA provided that paras 2 and 3 applied to enterprises engaged in offshore exploration or exploitation of seabed, subsoil, or natural resources.

ParamasivamMahalingam vs vACIT CITATION : 2025 TAXSCAN (ITAT) 1760

The Income Tax Appellate Tribunal (ITAT), Delhi Bench has quashed an assessment order passed against assessee Paramasivam Mahalingam for the Assessment Year (AY) 2014-15, holding that the assessment was invalid as the mandatory approval under Section 153D of the Income Tax Act, 1961, was not produced by the Revenue.

The Bench comprising Shri Pradip Kumar Kedia (Accountant Member) and Shri Vimal Kumar (Judicial Member) noted that despite specific directions issued on 10 October 2024, the Revenue failed to furnish the approval papers under Section 153D of the Income Tax Act.

ITO, TDS vsM/s. Kushal InfraProject Industries India Ltd. CITATION : 2025 TAXSCAN (ITAT) 1761

The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has held that a penalty order under Section 271C of the Income Tax Act, 1961 was time-barred under Section 275(1)(c) of the Income Tax Act, thereby dismissing the Revenue’s appeal.

The Bench comprising Shri Vimal Kumar (Judicial Member) and Shri Naveen Chandra (Accountant Member) examined the record and cited rulings reported by Taxscan in Mahesh Wood Products Pvt. Ltd. and JKD Capital & Finlease Ltd., where it was held that limitation under Section 275(1)(c) begins from the initiation of penalty proceedings by the AO.

Conwest andManjula S BadaniJain vs CIT CITATION : 2025 TAXSCAN (ITAT) 1762

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) restored matter to the Commissioner of Income Tax (Exemption)[CIT(E)] after finding that the rejection of a fund approval application under section 80G(5) of Income Tax Act,1961, was solely due to selection of the wrong sub-clause in Form 10AB.

The two member bench comprising Pawan Singh ( Judicial Member) and Arun Khodpia (Accountant Member) considered the submissions and the order of the CIT(E). It noted that the main issue was the assessee’s selection of sub-clause (ii) instead of sub-clause (iii) while filing Form 10AB under section 80G(5).

Samkeet AryaHomes LLP vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1763

The bench of the Income Tax Appellate Tribunal, Ahmedabad, has upheld the addition of ₹1,77,24,909/- towards unexplained cash credits under Section 68 of the Income Tax Act, 1961, observing that the unsecured loans received by the assessee lacked credibility as the banking pattern revealed abrupt deposits followed by immediate outflows to the assessee, and the financial capacity of the creditors remained unproven.

The Bench comprising Dr. B.R.R. Kumar, Vice President, and Siddhartha Nautiyal, Judicial Member upheld the addition. It was noted that the assessee failed to establish the creditworthiness of the lenders, noting that their meagre incomes and sudden, unexplained deposits were inconsistent with their capacity to provide large loans.

The DCIT vsPiyush SubodhbhaiJhaveri CITATION : 2025 TAXSCAN (ITAT) 1764

The bench of the Income Tax Appellate Tribunal, Ahmedabad, dismissed the Revenue’s appeals against the deletion of additions made under Section 68 of the Income Tax Act, 1961, in connection with alleged accommodation entries. The Tribunal upheld the findings of the Commissioner of Income Tax (Appeals) [CIT(A)], observing that the transactions were genuine.

The Bench comprising T.R. Senthil Kumar, Judicial Member, and Narendra Prasad Sinha, Accountant Member upheld the orders of the CIT(A). It was observed that the assessee had furnished complete evidence to establish the identity, genuineness, and creditworthiness of the lender, including repayment details through cheques.

Priya BlueIndustries Pvt. Ltdvs The Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1765

The bench of the Income Tax Appellate Tribunal, Ahmedabad, has set aside the penalty imposed under Section 271BA of the Income Tax Act, 1961, ruling that the assessee had not deliberately defaulted in furnishing the requisite transfer pricing report, which is procedural in nature. Thus, cannot attract charges.

The Bench comprising of Judicial Member, Suchitra Kamble and Accountant Member, Narendra Prasad Sinha observed that Form 3CEB had indeed been prepared by the assessee well before the search proceedings and was furnished physically before the Transfer Pricing Officer.

GhanshyambhaiNanalal Charandasvs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1766

The bench of the Income Tax Appellate Tribunal, Ahmedabad, has set aside an ex-parte order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [CIT(A)], and remanded the matter for fresh consideration. The Tribunal held that the principles of natural justice were violated as the assessee’s submissions without due consideration of the remand report.

The Bench of comprising Judicial Member, T.R. Senthil Kumar and Accountant Member,Narendra Prasad Sinha observed that the CIT(A), had dismissed the appeal without considering either the assessee’s written submissions or the remand report filed by the AO. Thus, the Tribunal held, amounted to a violation of the principle of natural justice.

ColourfulEstates Pvt.Ltd. vsDCIT CITATION : 2025 TAXSCAN (ITAT) 1767

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has set aside additions and enhancements made against a Real Estate Developer ruling that both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] acted without proper legal foundation in computing income from the company’s real estate project.

On the issue of revenue recognition, the Tribunal held that the AO’s method of estimating 20 percent of customer advances as income was arbitrary and without basis. It observed that the assessee had already recognized revenue in accordance with PoCM from AY 2013-14 onwards and that the exercise was revenue-neutral over the life of the project. Further, the enhancements made by the CIT(A) were found to be unlawful since they were carried out without issuing a show-cause notice, a clear violation of Section 251(2).

Subbarao Jaladivs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1768

The Visakhapatnam Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Assessing Officer (AO) for de novo adjudication in a case where Rs. 6.37 crore cash deposits in a Buffalo Mandi Commission Agent business were treated as unexplained under section 69 of Income Tax Act,1961.

The two member bench comprising Sandeep Singh Karhail (Judicial Member) and S.Balakrishnan (Accountant Member) noted that the addition of Rs. 6,37,16,100/- under section 69 was based on cash deposits in the Union Bank of India account, which the assessee had not substantiated before the lower authorities.

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, upheld the order of the Commissioner of Income-tax (Appeals) [CIT(A)], which had allowed the deduction of Employee Stock Option Plan (ESOP) discount costs for the assessment year 2013-14 and dismissed the revenue’s appeal against Goldman Sachs.

The two-member bench of Shri Om Prakash Kant (Accountant Member) and Shri Raj Kumar Chauhan (Judicial Member) following its own previous decision and a judgment of the Bombay High Court in Income Tax Appeal No. 30 of 2017, held that such payments are compensatory in nature, arising from business exigencies, and not penal in character, thus allowable under section 37(1) of the Income Tax Act.

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) set aside the orders of both the Commissioner of Income Tax (Appeals) [CIT(A)] and the Assessing Officer (AO) and remitted the matter for fresh reassessment, observing that the CIT(A) failed to pass a reasoned order on the merits of the case as required by Section 250(6) of the Income-tax Act, 1961.

The two-member bench, comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member), observed that the CIT(A) had not adjudicated the appeal of the assessee on its merits.

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) held that the reopening of assessment based on information from the Investigation Wing regarding a bogus loan entry from M/s Aneri Fincap Ltd. was valid.

The two-member bench comprising Raj Kumar Chauhan (Judicial Member) and Om Prakash Kant Accountant Member) held that there is no substance in the plea that reassessment proceedings are invalid in law.

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) deleted a 3.31 crore addition on the ground that the difference between the stamp duty and the purchase consideration on the flat was within the 10% tolerance limit under Section 56(2)(x) of the Income Tax Act.

The two-member bench of Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) held that the assessee is eligible for a 10% tolerance limit under Section56(2)(x)(b)(B). Accordingly, the addition made by the AO is deleted.

The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) restricted bogus purchase allowance to 25% on the ground that there was real expenditure on the goods received even though the invoices were fictitious.

The two-member bench comprising Saktijit Dey (Vice President) and Padmavathy S (Accountant Member) held that there is no infirmity in the order of the CIT(A) in restricting the addition to 25% of the alleged bogus purchases.

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) upheld the revision under section 263 on the ground that the assessment was erroneous as the AO failed to conduct a sufficient inquiry into the loan repayment by the assessee.

The two-member bench comprising Raj KumarChauhan (Judicial Member) and Om Prakash Kant Accountant Member) held that the assessment order suffers from a clear lack of inquiry into a matter which went to the root of the issue. Therefore, the invocation of the revisional jurisdiction by the Ld. PCIT under clause (a) of Explanation 2 to section 263 of the Act is fully justified.

The Mumbai bench of Income Tax Appellate Tribunal remitted a matter of disallowance of incremental rent paid under Section 40(2)(b) to the related party for documentary verification.

The two-member bench of Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) held that it was appropriate to remit the matter back to the AO for the limited purpose of verification of documentary evidence, to objectively arrive at any excess payment of rent under Section 40A(2)(b).

The bench of the Income Tax Appellate Tribunal (ITAT), Chandigarh, held that income of ₹33 lakh surrendered during a survey conducted before the introduction of the higher tax rate under Section 115BBE of the Income Tax Act, 1961, could not be subjected to the enhanced 60% rate of taxation. The Tribunal ruled that such income, offered prior to the amendment, must be assessed as normal business income and not as deemed income under Section 115BBE.

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) recently upheld an estimation of 8% gross profit (GP) on unaccounted sales after noting that the assessee had failed to cooperate and substantiate its claims against the concerned Assessing Officer’s computation of undisclosed income.

The two-member Bench of Ravish Sood (Judicial Member) and Arun Khodpia (Accountant Member) sustained the 8% GP estimation on unaccounted sales and dismissed this particular ground raised by the assessee.

The Bench of the Income Tax Appellate Tribunal (ITAT), Chandigarh, held that a reassessment initiated on the basis of incorrect facts and without application of mind is invalid in law. The Tribunal dismissed the Revenue’s appeal, thereby upholding the order of the Commissioner of Income Tax (Appeals) [CIT(A)] that had quashed the reassessment proceedings against the taxpayer.

The Bench comprising Rajpal Yadav, Vice President and Manoj Kumar Aggarwal, Accountant Member upheld the CIT(A)’s decision, and confirmed that reassessment proceedings initiated on incorrect and unverified facts are void ab initio under Section 147 of the Income Tax Act, 1961.

The bench of the Income Tax Appellate Tribunal (ITAT), Lucknow, has held that cash deposits made during the demonetisation period, which were duly recorded as cash sales in the assessee’s books of account, cannot be treated as unexplained cash credits under Section 68 of the Income Tax Act, 1961. Accordingly, the Tribunal deleted the addition of ₹9.24 crore made by the Assessing Officer.

With respect to Section 115BBE of the Income Tax Act, the Tribunal observed that the higher tax rate of 60%, introduced by the Taxation Laws (Second Amendment) Act, 2016, was applicable only from Assessment Year 2018-19, however restricted itself to further expound. Therefore, directed the AO to delete the addition.

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that investments accepted as genuine in earlier scrutiny assessments cannot be doubted when the shares are subsequently sold and deleted the addition.

The two-member bench comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member) relied on its co-ordinate bench decision in the case of ACIT Vs Pawanputra Advertising Private Limited and the High Court decision in the case of PCIT Vs. Tulsyan and Sons Private Limited, directing the AO to delete the addition of ₹9,32,00,000. The appeal of the assessee was allowed.

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) recently clarified that failure by an assessee to appear following the institution of prosecution is not a valid ground for the Commissioner of Income Tax (Appeals) ( CIT(A) ) to dismiss an income tax appeal.

The two-member Bench of Ravish Sood (Judicial Member) and Arun Khodpia (Accountant Member) examined the statutory duties imparted on the CIT(A) under Sections 250 and 251 and observed that the order of the CIT(A) was centrally premised on absence rather than on a reasoned appraisal of the record and therefore set aside the ex-parte order relying on the decision of the Bombay High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) (2016).

The Single Member Bench comprising Partha Sarathi Chaudhury (Judicial Member) observed that the AO's action was without valid jurisdiction. It also held that in the absence of any valid inherent jurisdiction, the addition made by the AO is perverse, arbitrary, and bad in law. The tribunal set aside the CIT(A)'s order and directed the AO to delete the addition. The appeal of the assessee was allowed.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) remitted the matter back to the Assessing Officer (AO) for fresh examination, noting that the AO passed the order without considering documentary evidence submitted by the assessee and may have added an incorrect loan amount as unexplained investment.

In the interest of natural justice and fair play, the tribunal remitted the appeal back to the AO with a direction to examine the issue on merits, considering all details furnished and calling for any further required details. The appeal of the assessee was allowed for statistical purposes.

The bench of the Income Tax Appellate Tribunal, Chennai, ruled that any reassessment notice issued by a Jurisdictional Assessing Officer (AO) after the introduction of the faceless regime is invalid in law. Emphasising on the binding nature of the CBDT’s e-Assessment of Income Scheme, 2022, the Tribunal held that the issuance of notices under Section 148 of the Income Tax Act, 1961, must mandatorily follow the faceless procedure, and any deviation from it renders the reassessment proceedings void.

The Bench comprising of Judicial Member, S.S. Viswanethra Ravi and Accountant Member, S.R. Raghunatha clarified that the rights of the parties would remain open, with liberty to the Revenue to revive the appeal if the Supreme Court subsequently reverses the Hexaware Technologies Ltd. (2025) decision.

Accordingly, the appeal was allowed in favour of the assessee.

The Bench of the Income Tax Appellate Tribunal (ITAT), Chennai, held that salary earned for services rendered abroad is not taxable in India if the assessee is a non-resident, eligible for relief under the India-U.S. Double Taxation Avoidance Agreement (DTAA). The Tribunal directed the Assessing Officer to verify the Tax Residency Certificate (TRC) and, upon confirmation, grant relief under Article 16(1) read with Section 90 of the Income Tax Act, 1961.

The Bench comprising of Judicial Member, Manu Kumar Giri and Accountant Member, Jagadish remanded the matter to the AO for verification with the direction that if, upon verification, the AO finds the TRC, relief under Section 90 read with Article 16(1) of the India-U.S. DTAA must be granted, and the salary income of ₹1,31,04,562 should be excluded from taxable income in India.

The bench of the Income Tax Appellate Tribunal, Raipur, held that once the assessee had discharged the primary onus under Section 68 of the Income Tax Act, 1961, by furnishing documentary evidence to establish the identity, creditworthiness, and genuineness of the share applicants, the Assessing Officer (AO) was obligated to conduct independent verification before drawing any adverse inference. Therefore, the ITAT deleted the addition of ₹11,54,65,000 made under Section 68 on account of unexplained share capital and premium.

The Bench comprising of Ravish Sood, Judicial Member and Arun Khodpia, Accountant Member observed that the AO’s addition of ₹11.54 crore was based on general assumptions about money-laundering practices without any specific evidence linking the transactions to unexplained income.

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) upheld the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] to sustain a 20% adhoc disallowance of direct expenditure for Assessment Year (AY) 2016-17, noting the assessee's failure to fully prove the genuineness of the expenditure claimed.

The Tribunal held that while contracts can be executed with hired vehicles and machinery, there needs to be proper documentation, which the assessee lacked. Observing the inherent defects in the documents and explanations, the Tribunal found no infirmity in the CIT(A)'s conclusion to restrict the disallowance to 20% of the expenditure.

The Bench of the Income Tax Appellate Tribunal, Chandigarh, held that an appellate order cannot be declared invalid merely because it was passed in the name of a deceased assessee, where the appeal itself had been filed under the deceased’s name. However, observing that the Commissioner of Income Tax (Appeals) [CIT(A)] failed to admit additional evidence and did not adjudicate key legal issues, the Tribunal remanded the matter for fresh adjudication.

The Bench comprising Judicial Member, Laliet Kumar and Accountant Member, Manoj Kumar Aggarwal observed that grounds such as the validity of reassessment and service of statutory notice had not been adjudicated, rendering the appellate order incomplete. Thus, the appeal was allowed for statistical purposes.

The Bench of the Income Tax Appellate Tribunal, Lucknow, has ruled that corpus donations made voluntarily by donors cannot be disallowed merely because the charitable trust solicited them, so long as the donors have specifically earmarked the contributions towards the corpus.

The Bench comprising of Sudhanshu Srivastava, Judicial Member and Nikhil Choudhary, Accountant Member held that corpus donations made by donors, even if solicited, remain voluntary contributions when the donor specifically designates them towards the corpus fund of the trust. Accordingly, it was held that solicited donations earmarked for corpus purposes are voluntary in nature and eligible for exemption under Section 11(1)(d) of the Income Tax Act, 1961.

Dr. KondaboluBasavapunaiah& Dr. Lakshmi Prasad Trust vs Income Tax Officer – ExemptionWard CITATION : 2025 TAXSCAN (ITAT) 1769

The Visakhapatnam Bench of Income Tax Appellate Tribunal ( ITAT ) granted exemption under section 11 of Income Tax Act,1961 to a charitable trust for the sale of property to a trustee initially below market value, after the full market price was ultimately paid.

It held that the CIT(A) erred in denying exemption under section 11, directed the AO to grant the exemption, and allowed the grounds raised by the trust. The tribunal observed that the additional ground of appeal became academic.

AksharElecinfra Pvt. Ltd. vsThe Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1770

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) restored the matter to the Assessing Officer (AO), treating the disallowance of deduction under section 80JJAA of Income Tax Act,1961, for non-filing of Form 10DA as a technical lapse.

The two member bench comprising Dr.B.R.R. Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) considered the submissions and examined the record. It found that the claim under section 80JJAA related to the continuation of deductions already allowed in the preceding two years, for which Form 10DA had been filed.

Rameshwar Dayalvs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1771

The Income Tax Appellate Tribunal (ITAT), Agra Bench, remanded the matter of cash deposit addition of Rs. 10.05L linked to sale of agricultural land of wife of Ex - Army man for fresh adjudication, where he claims that the land is beyond 8 km of municipality and cannot be subject to capital gain tax.

The bench of M. Balaganesh ( Accountant member) observed that the NFAC had overlooked the evidence furnished and wrongly held that no supporting documents were filed.

Vinay Dugar vsThe ACIT CITATION : 2025 TAXSCAN (ITAT) 1773

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) had set aside Income Tax additions of ₹41.48L under Section 69A and diary additions under section 69C and upheld the family source explanation by the assessee.

The two-member bench of Gagan Goyal (Accountant Member) and Dr S. Seethalakshmi (Judicial Member), based on the findings, held that additions made under Income Tax Sections 69A and 69C were to be deleted and upheld the family source explanation.

SHRIDI SAI BABASUMANGALAMSANSTHA vs CIT CITATION : 2025 TAXSCAN (ITAT) 1774

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remitted back the matter concerning Shri Shirdi Sai Baba Sumangalam Sanstha, Faridabad, after the Commissioner of Income Tax (Exemption) [CIT(E)], Chandigarh rejected its application for registration under Section 12A of the Income Tax Act, 1961.

The Bench comprising Shri Shamim Yahya (Accountant Member) and Shri Anubhav Sharma (Judicial Member) observed that in the interest of justice, the assessee should be given another opportunity to present its case. The Tribunal noted that the rejection by the CIT(E) was made without proper representation from the assessee and hence warranted a fresh hearing.

Society ForCreation of Opportunities vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1777

In the case of the assessee Society for Creation of Opportunities through Proficiency in English, the AO raised a tax demand of ₹6,51,13,960/- by disallowing the exemption claimed under Section 10(23C)(iiiab) of the Income Tax Act, 1961. The cause for this disallowance was the assessee's failure to file its return in the correct statutory form.

The two-member bench of Annapurna Gupta (Accountant Member) and Siddhartha Nautiyal ( Judicial Member) held that the exemption under Section 10(23C)(iiiab) ought to have been allowed to the assessee.

PrayatnaCharitable Trust vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1778

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has set aside the denial of 80G registration, remanding the matter to the CIT(E) for fresh adjudication. The trust’s objects were misinterpreted as religious, whereas they pertained to educational and spiritual activities. It observed that the CIT(E) failed to properly consider the 5% expenditure limit on incidental religious activities under section 80G(5B).

The two-member bench of Annapurna Gupta (Accountant Member) and Siddhartha Nautiyal (Judicial Member) set aside the impugned order passed by the CIT(E) and restored the matter for fresh adjudication.

Shree NarayanCultural Mission vs The CIT(Exemption) CITATION : 2025 TAXSCAN (ITAT) 1779

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, while noting that the trusts claims on events like annadanam and pongala were Social-Cultural gatherings and not purely religious, directed the Commissioner of Income Tax [CIT(E)] to recompute the expenditure for S. 80G purposes.

The Tribunal held that events like Annadaanam and Pongala were not to be automatically categorized as religious, as they also carried strong social and cultural dimensions. Since the trust’s explanations were not considered earlier, the ITAT directed the CIT(E) to recompute and re-examine the expenditure, distinguishing clearly between religious, cultural, and administrative outlays.

Shri RajendraGanpat Jagtap vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1780

The bench of the Income Tax Appellate Tribunal, Pune, set aside the ex-parte order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)]. The Tribunal remanded the matter to the appellate authority, directing that the assessee be granted one final opportunity to substantiate his claim in relation to disallowance of expenses on improvement of land against long-term capital gains under the Income Tax Act, 1961.

The Bench comprising Vice President, Rama Kanta Panda and Judicial Member, Vinay Bhamore observed that although the CIT(A) granted three opportunities, the assessee neither filed submissions nor sought adjournment, leading to an ex-parte order. The Tribunal, however, accepted the plea that the assessee could not avail the opportunity due to technical and procedural reasons.

Shri RakeshKumar vs The IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1781

The bench of the Income Tax Appellate Tribunal, Raipur, dismissed an appeal concerning penalty under Section 271(1)(b) of the Income Tax Act, 1961. The dismissal followed the appellant’s decision to opt for resolution under the Direct Tax Vivad Se Vishwas Scheme, 2024.

The Bench comprising of Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia ruled that since the appellant had initiated the process of settling the tax dispute through the Direct Tax Vivad Se Vishwas Scheme, the appeal no longer required adjudication on merits.

Dosti RealtyLimited vs The Dy.CIT, Circle 1(1)(1) CITATION : 2025 TAXSCAN (ITAT) 1782

The bench of the Income Tax Appellate Tribunal, Mumbai, has held that disallowance of ₹2.06 crore under Section 154 of the Income Tax Act, 1961, was unsustainable, as the provision for expenses represented a crystallised liability of the relevant financial year. The Tribunal ruled that the Assessing Officer had exceeded his jurisdiction in invoking rectification powers under Section 154 for such an issue.

The Bench comprising of Saktijit Dey, Vice President and Girish Agrawal, Accountant Member observed that the AO had himself concluded that allowance of the expenses had resulted in under-assessment, which falls within the scope of reassessment under Section 147, not rectification under Section 154. Thus, held that the invocation of Section 154 jurisdiction was invalid.

Jay Singh vsITO CITATION : 2025 TAXSCAN (ITAT) 1783

The Agra bench of Income Tax Appellate Tribunal (ITAT) has restored the matter to the AO for fresh adjudication as the CIT(A) ignored affidavits on ₹22.01L cash deposits and the sale deed of the agricultural land of the farmer-assessee.

The Tribunal had observed that the CIT(A) ought to have either verified the circle rates of the agricultural land from the office of the land registering authority to arrive at the correct value of the land, or should have made third-party verification regarding the value of rates of land in the vicinity or neighbourhood, instead of outrightly rejecting the additional evidence filed by the assessee.

M/s. J K VStonex vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1784

The Jaipur bench of the Income Tax Appellate Tribunal quashed the reopening based on suspicions raised by the balance sheet and old loans. The Tribunal noted that the assessee had not commenced business during the year and that the loans were received through banking channels from identifiable individuals.

The two-membered bench of Rathod Kamlesh Jayantbhai (Accountant Member) and Dr S. Seethalakshmi (Judicial Member) observed that the assessee had not started the business activity; therefore, in view of the Delhi High Court decision in the case of Alankar Promoters LLP VS. ITO, reassessment proceedings under section 68 cannot be justified in the case of the assessee firm. And the Tribunal held that the re-assessment proceedings are not justified in this case, and the appeal of the assessee was allowed.

M/s. CapitalFortunes Pvt. Ltdvs Dy. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1785

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) set aside the First Appellate Authority’s (FAA) technical dismissal of appeal regarding disallowance of losses of ₹1.42 crore set off claim and restored the matter to the Assessing Officer (AO) for de novo adjudication.

The two member bench of Shri Vijay Pal Rao and Shri Madhusudan Sawdia held that the FAA erred by refusing to examine merits. Further observed that the approach of the First Appellate Authority is not in accordance with the settled principle that genuine claims of the assessee should not be rejected merely on technicalities.

LIC Mutual FundAsset Management Limited vs DCIT-1(2)(1) CITATION : 2025 TAXSCAN (ITAT) 1786

In a ruling in favour of LIC Mutual Fund, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) set aside the Principal Commissioner of Income Tax (PCIT)'s revision order under Section 263 of the Income Tax Act, 1961 holding it a "non-speaking order" that failed to address the assessee's detailed rebuttals.

The tribunal viewed that the matter be remitted to the file of the PCIT to allow him to consider the submissions so made by the assessee and pass a speaking order as per law after allowing reasonable opportunity to the assessee.

MundraInternational Container Terminal Private Limited vs DCIT, Circle 2(1)(1) CITATION : 2025 TAXSCAN (ITAT) 1787

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench held that a company which operates and maintains an infrastructure facility is eligible to claim a tax deduction under Section 80-IA of the Income-tax Act, 1961. The decision provides clarity on the scope of eligible activities for the tax incentive, emphasising that the benefit is not restricted only to the entity that develops the infrastructure.

The tribunal comprising Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member) found that Mundra International Container Terminal had entered into a sub-concession agreement with Adani Ports and Special Economic Zone Ltd, which in turn had a concession agreement with the Gujarat Maritime Board.

PrasannaPrabhakaran vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1788

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench held that an assessment order passed in the name of a deceased person is not automatically void. The tribunal decided that such an error is a curable irregularity, providing a major relief to a widow who was contesting a tax demand raised against her late husband.

The ITAT bench comprising Siddhartha Nautiyal (Judicial Member) and Narendra Prasad Sinha (Accountant Member), however, took a different view. It meticulously analysed the sequence of events, noting that the legal proceedings were validly initiated while Mr. Prabhakaran was still alive.

Shree ShivamAttires Pvt. Ltd vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1789

The Income Tax Appellate Tribunal, Raipur Bench, has allowed the deduction claimed by Shree Shivam Attires Pvt. Ltd. towards employees’ contribution to the Employees’ Provident Fund (EPF) and Employees’ State Insurance Corporation (ESIC) that had been deposited belatedly but before the due date of filing the income tax return under Section 139(1) of the Income Tax Act, 1961.

The Bench comprising Arun Khodpia (Accountant Member) and Ravish Sood (Judicial Member) was hearing the company’s appeal for AY 2018–19 against the order of the National Faceless Appeal Centre (NFAC) confirming disallowance under Section 36(1)(va) read with Section 43B. The disallowance of ₹25.81 lakh had been made on the ground that employees’ contributions were not deposited within the due dates prescribed under the respective welfare statutes.

DhaneshBadarmal Jain vs The Principal Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1790

The Income Tax Appellate Tribunal Ahmedabad Bench upheld an order that directed the disallowance of interest on unsecured loans that were already treated as unexplained. The tribunal stated that when the principal loan amount is added back to income as bogus, the corresponding interest claimed as an expense cannot be permitted as a deduction.

The bench comprising Siddhartha Nautiyal (Judicial Member) and Narendra Prasad Sinha (Accountant Member) found that the PCIT had rightly identified a lapse and a wrong conclusion in the assessment order. The tribunal held that the revision order was legally valid and dismissed the assessee’s appeal.

DCIT (CC) vsShapoorji Pallonjiand Company Pvt. Ltd. CITATION : 2025 TAXSCAN (ITAT) 1791

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeal against the Commissioner of Income Tax (Appeals)'s [CIT(A)] order, which had deleted a disallowance of ₹22.18 crore for manpower services paid by Shapoorji Pallonji and Company Pvt. Ltd. for AY 2012-13. The tribunal held the payments were genuine as they were made through banking channels with proper TDS deduction.

The bench of Justice (Retd.) C V Bhadang and Ms. Padmavathy S held that the AO had erred by relying entirely on the investigation report without conducting an independent inquiry. The tribunal noted that the assessee had provided sufficient documentary evidence to prove the genuineness of the transactions. It relied on the assessee's own case decided by the Bombay High Court, which held that additions cannot be made on suspicion alone.

Shri ChankiRamwani vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1792

The bench of the Income Tax Appellate Tribunal, Raipur (SMC), has remanded a matter back to the Additional/Joint Commissioner of Income Tax (Appeals) [CIT(A)] after finding that the earlier order confirming an addition for suppressed receipts on alleged suppression of business income was non-speaking.

The assessee had filed an affidavit dated 13.01.2025 regarding non-receipt of the CIT(A)’s order and also submitted admit a reconciliation chart of turnover and TDS credits. However, the Tribunal declined to admit these as additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963, but allowed the assessee to produce them before the CIT(A) under Rule 46A during remand proceedings.

Pradeep KumarAgrawal vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1793

The Raipur bench of the Income Tax Appellate Tribunal, held that the reopening of assessments for three consecutive years was legally sustainable, based on fresh information from the Investigation Wing pointing towards suspicious transactions. However, restricted the additions made by the Assessing Officer (AO), observing that the estimation of income at 5% of deposits was unjustifiable.

The Bench comprising Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia upheld the validity of reopening under Section 147, noting that the information received from the Investigation Wing was fresh material that the AO could act upon. The Bench held that merely on change of opinion, the action by AO cannot be termed illegal.

SomnathBandopadhaya vs ITO CITATION : 2025 TAXSCAN (ITAT) 1794

The bench of the Income Tax Appellate Tribunal, Ahmedabad, has partly allowed an appeal concerning additions made under Section 69A of the Income Tax Act, 1961. The Tribunal ruled that except for an amount of ₹63,133, the assessee had satisfactorily explained the sources of deposits in his NRE/NRI accounts, thereby setting aside the majority of the additions proposed by the Assessing Officer (AO).

The Bench of Dr. B.R.R. Kumar, Vice President and Suchitra Kamble, Judicial Member observed that the remand reports themselves recorded verification of almost all transactions. The only unexplained entry was for ₹63,133/-, while the rest were adequately substantiated through bank statements and supporting documents.