Half-Yearly Income Tax Case Digest: ITAT Decisions 2025 [Part III]

This half-yearly round-up analytically summarizes the key Direct Tax-Income Tax rulings of the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the first half of 2025.

Penalty u/s 271(1)(c) for Unexplained Cash Deposits: ITAT restores matter to AO

Chirag Uddin vs Income-tax Officer CITATION: 2025 TAXSCAN (ITAT) 270

The Agra Bench of Income Tax Appellate Tribunal ( ITAT ) restored the penalty under section 271(1)(c) of Income Tax Act,1961 for unexplained cash deposits to the Assessing Officer ( AO ) for fresh reassessment.

Chirag Uddin,appellant-assessee, was reassessed by the Revenue after it found an Rs. 8,25,000/- deposit in his bank account through AIR information. The assessee did not file a return of income or explain the source of the deposit. As a result, a notice under section 148 was issued on 30.03.2017, and a reassessment order was passed on 30.11.2017, adding Rs. 8,25,000/- as unexplained income.

CPC Assessed Income under New Regime via Form 10IE: ITAT sets aside Order as Return Filed under Old Regime, Conditions of S. 115 BAC Not Fully Met

Akshay Nitin Malu vs ITO CITATION: 2025 TAXSCAN (ITAT) 271

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the assessment order which was assessed under the new regime citing that the return was filed under the new regime and conditions under section 115 BAC not completely satisfied.

Akshay Nitin Malu (assessee) is an individual who is engaged in the business of manufacturing cloth looms. The assessee opted for the new tax regime under section 115 BAC and therefore filed form 10 IE on 18.07.2022 which is a requirement under section 115 BAC of the Income Tax Act.

CIT(A) fails to exclude COVID-19 period for Calculating Limitation: ITAT directs Recalculation of 90-Day limit starting from October 3, 2021

Bharat Shetty vs Income Tax Officer-2(1) CITATION: 2025 TAXSCAN (ITAT) 272

The Lucknow Bench of Income Tax Appellate Tribunal (ITAT) directed the commissioner of Income Tax (appeals)[CIT(A)] to recalculate the 90 limits starting from October 3, 2021, excluding the COVID-19 period.

Bharat Shetty (assessee), whose income was assessed by the Assessing Officer(AO) amounting to Rs. 1,13,35,754, and the assessment order was passed on 19/04/2021. The AO made an addition of Rs. 63,84,964 under section 56(2)(x) of the Income Tax Act.

ITAT Upholds ₹168.61 Crore TDS Credit Due to Form 26AS Discrepancy, Directs AO to Verify Income

DCIT vs Deendayal Port Authority Administrative Officer CITATION: 2025 TAXSCAN (ITAT) 273

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision allowing Tax Deducted at Source(TDS) credit of ₹168.61 crore, noting discrepancies in Form 26AS due to delayed TDS payments and revised filings, and directed the Assessing Officer (AO) to verify the credit.

The Revenue-appellant appealed against the order dated 31.03.2024, for AY 2019-20, passed by the CIT(A), challenging the AO’s order under Section 154 of the Act.In this case,Deendayal Port Authority,respondent-assessee,claimed TDS credit of ₹165.66 crore in its return, but the updated Form 26AS showed ₹167.86 crore. It filed a rectification application under Section 154, which the AO rejected on 11.08.2022, restricting the credit to the original amount.

Chhagan Bhujbal’s Agricultural Income under Scanner: ITAT directs AO to Verify Sales Records

Shri Chhagan Chandrakant Bhujbal vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 274

Chhagan Bhujbal, a prominent politician from Maharashtra and a member of the 15th Legislative Assembly, is facing scrutiny over the agricultural income declared in his tax returns for the assessment year 2013-14. The Income Tax Appellate Tribunal (ITAT) recently directed the Income Tax Officer (AO) to re-examine the sale records of agricultural produce after the Assessing Officer (AO) questioned the authenticity of the agricultural income shown by Bhujbal.

Bhujbal, seasoned politician , a senior figure in the Maharashtra Government and a member of the legislative assembly from Yeola, had declared agricultural income of Rs.50 lakh for the relevant financial year, primarily derived from the sale of grapes. However, the AO raised concerns about the genuineness of this income, particularly the sales transactions with wine companies.

ITAT Quashes Penalty for Under-Reporting: Holds Assessee’s Actions Bona Fide

DACSS Granites Pvt. Ltd vs ITO CITATION: 2025 TAXSCAN (ITAT) 275

In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Bengaluru Bench, has quashed the penalty levied on assessee for under-reporting income, marking a significant decision in favor of taxpayers.

This case, which pertains to the assessment year 2017-18, saw the Tribunal overturning the order of the Commissioner of Income Tax (Appeals) (CIT(A)) that upheld the penalty imposed by the Assessing Officer (AO).

‘Source of Source’ Requirement Restricted to Share Capital, Excludes Unsecured Loans and Applies Prospectively from AY 2023-24: ITAT

The Income Tax Officer vs Shri. Vastimal Bhim Raj Sancheti CITATION: 2025 TAXSCAN (ITAT) 276

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) clarified that the obligation to explain the “source of source” under Section 68 of the Income Tax Act, 1961, is restricted to credits like share capital and does not extend to unsecured loans received.

It explained the requirements applicable from Assessment Year (AY) 2023-24. Shri Vastimal Bhim Raj Sancheti, the assessee, had received unsecured loans amounting to Rs. 5.87 crore and Rs. 8.31 crore from Magnificent Realcon Pvt. Ltd. (MRPL) during the assessment years 2015-16 and 2016-17, respectively.

CIT(E)’s Order Set Aside: ITAT Remands Matter to AO for Re-examination in Light of Landmark Judgments

Brahmakshatriya Kanji Damji Hindu Sarvajanik Dharamshala Palitana vs CIT CITATION: 2025 TAXSCAN (ITAT) 277

In a significant development, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has set aside the decision of the Commissioner of Income Tax (Exemption) (CIT(E)) rejecting the registration application of the Brahmakshatriya Kanji Damji Hindu Sarvajanik Dharamshala Trust under section 12A of the Income Tax Act, 1961.

The ITAT has directed the CIT(E) to reconsider the matter in light of several landmark judgments related to the interpretation of Section 13(1)(b) of the Act.

Foundation’s S. 80G application rejected for Non-Compliance with CIT(E) Notices: ITAT remands matter for reasonable opportunity

M/s. MJN Foundation vs CIT CITATION: 2025 TAXSCAN (ITAT) 278

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter concerning the rejection of the Foundation’s application for approval under Section 80G (v) of the Income Tax Act, 1961, after observing that the Commissioner of Income Tax (Exemptions) [CIT(E)] denied the approval due to the foundation’s failure to comply with notices.

MJN Foundation, the assessee, is a charitable institution that was previously granted registration under Section 12A of the Income Tax Act, confirming its recognized charitable activities. The foundation filed Form No. 10AB on 29.03.2024, seeking approval under Section 80G(v) for tax-deductible donations.

Taxability of Lease Premiums and Rent Collected for State Government: ITAT Rules Funds Not Taxable

Maharashtra Industrial Development Corporation vs Commissioner of Income-tax (Exemptions) CITATION: 2025 TAXSCAN (ITAT) 279

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT) ruled that the funds received from lease premiums and rent collected on behalf of the Government of Maharashtra are not taxable in the hands of the assessee.

Maharashtra Industrial Development Corporation,appellant-assessee,is a statutory body engaged in industrial infrastructure development and registered as a charitable organization under section 12AA of the Act. It had claimed exemption under section 10(20A) until assessment year 2002-03 and later under section 11 of the Act.

Unexplained Cash Deposits of ₹14.53 Lakh: ITAT Deletes Addition u/s 68 of Income Tax Act

Dawoodi Bohra Jamat Godhra Dawoodi Bohra Masjid Vohrawad vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 281

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) deleted the addition of ₹14.53 Lakh under Section 68 of the Income Tax Act,1961 ruling that the unexplained cash deposit was legitimate.

Dawoodi Bohra Jamat Godhra,appellant-assessee,filed its income tax return on 06/07/2017, declaring ₹1,12,09,340 after claiming an exemption under Section 11. The return was processed under Section 143(1), but the case was reopened on 30/03/2021 through a notice under Section 148. This was based on information regarding cash deposits of ₹16,50,000 made in a bank account operated by MSB Educational Institute during the demonetization period.

Notice Issued via Email Despite Specification in Form 35 Not to Receive: ITAT Remands Matter Due to Improper Notice Service

R.K. Sipani Foundation vs ITO CITATION: 2025 TAXSCAN (ITAT) 283

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter due to CIT(A) failing to adhere to the explicit instructions in Form 35 where the assessee had requested not to receive notices via email. The R.K. Sipani Foundation, the assessee, raised 10 grounds of appeal against the CIT(A)’s order dated 30th July 2024.

The appeal highlighted that no notice of hearing was issued in accordance with procedural norms. The assessee had specifically mentioned in Form 35 that notices should not be sent via email, yet the CIT(A) failed to confirm whether notices were sent via any other mode.

S. 12A Application Pending Before CIT(E): ITAT Remands S. 80G Claim Rejection Matter for Concurrent Consideration

Shiv Manav Nirman Sansthan vs The CIT CITATION: 2025 TAXSCAN (ITAT) 284

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter concerning the rejection of Shiv Manav Nirman Sansthan’s application for registration under Section 80G of the Income Tax Act, 1961, citing that the matter be reconsidered by the Commissioner of Income Tax (Exemptions) [CIT(E)] alongside the assessee’s pending Section 12A application to ensure both issues are addressed.

Shiv Manav Nirman Sansthan, the assessee, applied for registration under Section 80G of the Income Tax Act, 1961, to receive donations eligible for tax deductions. However, the CIT(E) rejected the application on the grounds that the assessee was not registered under Section 12A, which is a prerequisite for Section 80G approval.

Construction on Land Owned by Taxpayer’s Mother is Valid: ITAT Grants full S. 54F Deduction, Accepts Approved Valuer’s Report

Sher Singh vs The ITO CITATION: 2025 TAXSCAN (ITAT) 285

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) granted full deduction under Section 54F of the Income Tax Act, 1961, citing construction on land owned by the taxpayer’s mother was valid and accepted the cost of construction as per the approved valuer’s report.

Sher Singh, a resident of Yamunanagar, filed an appeal for the assessment year 2008-09 against the order of the Commissioner of Income Tax (CIT) which confirmed the Assessing Officer’s (AO) addition of Rs. 46,08,371 as capital gains on the sale of agricultural land.

Denial of TDS and Advance Tax Credits for Amalgamated Company: ITAT Directs AO to Grant Credits

Deepshikha Trading Company vs ITO CITATION: 2025 TAXSCAN (ITAT) 286

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer (AO) to grant Tax Deducted at Source (TDS) and advance tax credits to the amalgamated company, which were denied in the assessment order.

Deepshikha Trading Company,appellant-assessee, filed its return of income on 30.09.2018, showing a total income of Rs. 16,92,420/-. The case was selected for scrutiny due to reasons like amalgamation during the year and large deductions claimed. After reviewing the reply, the income was accepted in the order under section 143(3) of the Act.

Penalty for Concealment of Income Related to Quantum Additions: ITAT Restores Matter to CIT(A)

Devendra Kumar Dubey vs Income-tax Officer CITATION: 2025 TAXSCAN (ITAT) 287

The Agra Bench of Income Tax Appellate Tribunal(ITAT) restored the penalty for concealment of income related to quantum additions to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication.

Devendra Kumar Dubey,appellant-assessee,filed his income tax return for the assessment year 2015-16 on March 23, 2017, declaring a total income of ₹2,94,410. The case was selected for limited scrutiny to verify the source of cash deposits. Despite being issued statutory notices under Sections 143(2) and 142(1), there was no response. A show cause notice under Section 144 also went unanswered.

12 Lakhs TDS Disallowance u/s 40(a)(ia): ITAT Remands Case to AO for Verification and Reassessment

Anup Nayak vs Commissioner of Income Tax (Appeals) CITATION: 2025 TAXSCAN (ITAT) 288

In a recent case, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) remanded the assessee’s case to the assessment officer (AO) for proper verification concerning the returns filed in the assessment year 2014-15. The appeal to the ITAT was made against the order of the Commissioner of Income Tax (Appeals)[CIT(A)], National Faceless Appeal Centre (NFAC).

The assessee, Anup Nayak, was engaged in contractual business and declared an income of ₹17 lakhs for the AY 2014-15. During scrutiny conducted on the assessee, the AO found that the appellant paid a sum of ₹12 Lakhs to financers. The AO instructed the assessee to produce the necessary documents for TDS on account of interest paid to financers.

ITAT Invalidates Section 263 Revision: Questions PCIT’s Limited Scrutiny Jurisdiction under Income Tax Act

Arabinda Paul vs PCIT CITATION: 2025 TAXSCAN (ITAT) 291

In a recent ruling decision, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) quashed the revisionary order under Section 263 of the Income Tax Act,1961, passed by the Principal Commissioner of Income Tax (PCIT), for the assessment year (AY) 2017-18. The appeal to the ITAT was filed against PCIT’s action, alleging invalid exercise of jurisdiction.

The assessee, Arabinda Paul, filed for his income tax return for the AY 2017-18, declaring a total income ₹4 Lakhs. The case was selected for limited scrutiny to verify cash deposits made during the AY. The assessment was concluded under Section 143(3), with the assessing officer (AO) accepting the returned income after verification of evidence.

Tech-constraints Faced By Senior Citizen: ITAT sets aside Ex- Parte Order

Mr. Anil Govind Wable vs ACIT CITATION: 2025 TAXSCAN (ITAT) 292

The Pune Bench of the Income Tax Appellate Tribunal ( ITAT ) set aside the ex-parte order by taking into consideration the technological constraints faced by the senior citizen and remanded the case back to the file of Commissioner of Income Tax ( Appeals ) [ CIT( A ) ].

The assessee, Anil Govind Wable, who is engaged in the business of civil contractor-ship, has appealed against the order passed by CIT ( A ) for the assessment year 2018-19.

Non-appearance due to communication made to former Accountant’s email: ITAT Remands matter to CIT(A)

Amod Steel Processors Spun Pipe Compound vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 293

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter back to the file of the Commissioner of Income Tax Appeals [ CIT( A ) ] for non-appearance as the communication was made to the former accountant’s email id.

The assessee has appealed against the ex-parte order passed by the CIT( A ) for the assessment year ( AY ) 2014-15.

Statement Recorded u/s 133A Lacks Evidentiary Value in Absence of Summons u/s 131: ITAT

DCIT vs Ahinsa Infrastructure and Developers Limited CITATION: 2025 TAXSCAN (ITAT) 295

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that the statement recorded under Section 133A of the Income Tax Act, 1961, lacked evidentiary value in the absence of summons under Section 131 of the Income Tax Act.

The revenue has appealed before the ITAT against the order passed by the Commissioner of Income Tax ( Appeals ) [ CIT( A ) ] in deleting the addition of Rs. 4.50 crores relating to income surrendered during the course of the survey operation and also the addition of Rs. 44.50 lakhs relating to unaccounted cash receipts.

ITAT slaps ₹10,000 Cost on Assessee for Failure to Justify Non-Compliance in Appellate Stage while remitting ex-parte NFAC Order

Hanubhai Devabhai Rathod vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 294

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) recently delivered a bittersweet decision for an Appellant, slapping a cost of ₹10,000 on the Assessee for not adequately complying with the Appellate Authority during the appeal stage, while remitting the ex-parte order passed by the National Faceless Appeals Centre (NFAC) for fresh adjudication.

Hanubhai Devabhai Rathod filed two Income Tax Appeals bearing similar issues against the Income Tax Officer with regards to the Assessment Years (A.Y.) 2016-17 and 2017-18.

Bt Cotton Farmer contests ₹3.3 Crore Disallowance on Income Tax: ITAT directs CIT(A) to conduct Fresh Adjudication

Axis Agri Services vs The Dy.CIT CITATION: 2025 TAXSCAN (ITAT) 289

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) recently remitted an Income Tax matter filed by a Bacillus Thuringiensis (Bt) Cotton farmer contesting an Income Tax disallowance of a cumulative ₹3.3 Crores on account of exempt income.

The Income Tax Appeal was filed before ITAT by Axis Agri Services, a partnership firm engaged in agricultural activities, specifically in the growing of hybrid seeds for Bt cotton, a genetically modified pest resistant cotton plant that produces an insecticide to combat bollworm. Axis Agri claimed income tax exemptions on agricultural income under Section 10(1) of the Income Tax Act, 1961 for the Assessment Years (A.Y.) 2017-18, 2018-19 and 2020-21.

Unexplained Investment of ₹1.65 Crore: ITAT Restores Matter Back to AO for Fresh Verification

Deepa Shinde A/1406 vs Income Tax Officer 22(1)(6) Piramal Chambers CITATION: 2025 TAXSCAN (ITAT) 282

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT) restored the matter of unexplained investment of ₹1.65 crore back to the Assessing Officer (AO) for fresh verification. Deepa Shinde,appellant-assessee,did not file a return of income for the assessment year 2014-15.

The AO found that the assessee had purchased immovable property worth Rs. 5,65,00,000/- in the financial year 2013-14. A notice under Section 148 was issued on 24.03.2021, but the assessee did not respond.

ITAT Dismisses Appeal after Assessee Opts for Settlement under Vivad Se Vishwas Scheme 2024

Amit Kumar Kajaria vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 290

The Income Tax Appellate Tribunal ( ITAT ) bench at Kolkata dismissed the appeal filed by the assessee as the bench observed that the assessee had opted for Settlement Under Vivad Se Vishwas Scheme 2024.

In this case, the assessee, the assessee, Amit Kumar Kajaria, HUF, has appealed against an order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ( NFAC ), Delhi, for the Assessment Year 2013-14.

ITAT Rules Reassessment Invalid for Non-Application of Mind in Approval Process u/s 151

Anil Kumar Jain vs DCIT CITATION: 2025 TAXSCAN (ITAT) 300

In a recent case, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that reassessing the assessee’s account was invalid. The appeal was made against an order made by the Commissioner of Income Tax (Appeals) [CIT(A)], which started the reassessment proceedings under Section 147 of the Income Tax Act.

The assessee, Anil Kumar Jain, declared an income of ₹ 81 Lakhs for the assessment year (AY) 2016-17, which was processed under Section 143(1) of the Income Tax Act. A search and seizure action under Section 132 targeted a group to which the assessee was linked and, based on the assessing officer’s (AO) findings, reopened the assessment under Section 147, issuing notice under

Unexplained ₹49.50 Lakh Cash Deposit: ITAT Sends Case back to AO for Verification

Shri Gangaiah Nagaraju vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 310

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) remanded a case involving an unexplained cash deposit of ₹49.50 lakh to the Assessing Officer ( AO ) for verification.

Gangaiah Nagaraju,appellant-assessee, was found to have made a cash deposit of Rs.49,45,800 and received contract income of Rs.3,03,315, with tax deducted at source. A notice under section 148 was issued on 29.3.2019 due to the assessee’s failure to file a return.

Additional Income declared in Survey considered as Business Income not Charged u/s 68, 69A: ITAT

Shri Alok Vijawat vs The PCIT CITATION: 2025 TAXSCAN (ITAT) 313

The Jaipur Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that additional income declared in the survey was considered business income and not charged under Sections 69 and 69A of the Income Tax Act, 1961.

Alok Vijawat (assessee), place was surveyed by the department on 16.01.2019 and identified disclosed income of Rs. 76,00,000. The assessee filed an Income Tax Return ( ITR ) on 31.10.2019 declaring a total income of Rs. 83,70,380. The assessee disclosed the additional income of Rs. 76,00,000 which was found during the survey as business income.

ITAT rules against S.80P Income Tax Exemptions for Cooperative Societies on Interest from Nationalized Banks: ITAT

Balwa Group Coop Society vs The ITO CITATION: 2025 TAXSCAN (ITAT) 314

In a noteworthy ruling, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) held that cooperative societies are not eligible to avail tax exemptions under Section 80 of the Income Tax Act, 1961 on interest income received from deposits held with nationalized banks.

In an income tax appeal filed by Balwa Group Coop Society (Balwa Society), the society contested an assessment order passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year (A.Y.) 2018-19 averring the fault of the Commissioner of Income Taxes (Appeals) ( CIT(A) ) in making addition of ₹18,86,277 on account of interest income received from nationalized banks.

Relief to Harry Potter Publisher: ITAT Remits Transfer Pricing and Corporate Tax matter to verify Confirmations and Explanations

Bloomsbury Publishing India Private Ltd. vs Addl.CIT CITATION: 2025 TAXSCAN (ITAT) 315

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently remitted a matter regarding discrepancies in transfer pricing and corporate tax of UK-origin publishing giant Bloomsbury Publishing India Private Ltd. ( Bloomsbury ), observing the need for additional verification and confirmations adduced by the Assessee to render a decision right in law.

An Income Tax Appeal was filed by Bloomsbury challenging an assessment against tax additions on transfer pricing adjustments and increase in sundry creditors, passed on the basis of the directions of the Dispute Resolution Panel (DRP)/ TPO with regards to Assessment Year (A.Y.) 2016-17.

ITAT Condones Delay of 107 Days in Filing Appeal Due to Assessee’s Health Issues and Covid-19 Pandemic

Divyesh Devabhai Pampania vs The I.T.O CITATION: 2025TAXSCAN (ITAT) 317

In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Rajkot Bench, has condoned a delay of 107 days in filing an appeal by an assessee, Divyesh Devabhai Pampania, citing health complications and the impact of the Covid-19 pandemic. The tribunal restored the matter to the Assessing Officer (AO) for fresh adjudication, emphasizing the importance of natural justice and fair play in tax proceedings.

The case pertains to the assessment year 2015-16, where the assessee had filed appeals against the orders of the Commissioner of Income Tax (Appeals) CIT(A), National Faceless Appeal Centre (NFAC), Delhi. The CIT(A) had dismissed the appeals due to a delay of 184 days in filing, refusing to condone the delay despite the assessee’s explanations.

Apartment Owners Association Gets Second Chance: ITAT Sets Aside CIT(A) Order due to Technical Glitch

Elegant Embassy III Apartment Owners Association VS The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 316

In a significant relief to an apartment owners association, the Income Tax Appellate Tribunal ( ITAT ), Bangalore Bench, has set aside the order of the Commissioner of Income Tax ( Appeals ) CIT( A ) and granted the association a second chance to present its case.

The ITAT’s decision came in response to a 367-day delay in filing the appeal, which was attributed to a technical glitch in updating the association’s email ID in the Income Tax records.

Cash Deposits during Demonetisation: ITAT deletes Addition u/s 69A of Income Tax Act

Jagdish Prasad vsIncome Tax Officer CITATION: 2025 TAXSCAN (ITAT) 319

In a recent case, the Lucknow Bench of the Income Tax Appellate Tribunal (ITAT) deleted the additions made by the assessing officer (AO) on certain cash deposits made during demonetisation.

The assessee forwarded the appeal against an order made by the Commissioner of Income Tax(Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC). The assessee, Jagdish Prasad, who primarily sells electrical and electronic goods through his firm, M/s Bharat Electricals, reported an income of ₹42 Lakhs under the presumptive taxation scheme of Section 44AD for the Assessment Year 2017-18.

879-Day Delay in Appeal Filing: ITAT Dismisses Appeal for Lack of Sufficient Cause

M/s. MFAR HoldingsPvt. Ltd vs DCIT CITATION: 2025 TAXSCAN (ITAT) 321

The Bangalore Bench of Income Tax Appellate Tribunal(ITAT) dismissed an appeal by the assessee due to a delay of 879 days, finding insufficient cause for the delay. MFAR Holdings Pvt. Ltd., appellant-assessee,engaged in real estate development and building maintenance services, filed its return of income on December 8, 2006, declaring a loss of ₹2.09 crore.

The case was selected for scrutiny, and an assessment under section 143(3) was completed on March 31, 2006, disallowing ₹1.08 crore in financial expenses, ₹3.71 lakh in building maintenance charges, and ₹37,913 in property tax. The loss was recomputed at ₹96.17 lakh.

Reassessment of ₹20.19 lakh LTCG as bogus: ITAT Quashes Assessment Due to Lack of Tangible Evidence

Pradip Kumar Jajodia(HUF) vs ITO CITATION: 2025 TAXSCAN (ITAT) 322

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the reassessment of ₹20.19 lakh Long Term Capital Gain ( LTCG ) as bogus due to lack of tangible evidence. Pradip Kumar Jajodia (HUF),appellant-assessee,, disputed the addition of ₹20,19,000, which was made by treating the LTCG from share sales as bogus and denying the exemption, along with the legality of the reassessment.

The assessee counsel referred to the reasons for reopening the assessment, which stated that the appellant had traded ₹20,19,000 in penny stocks of Appu Marketing and Manufacturing Ltd./Ejecta Marketing Ltd. (SCRIP CODE 538653). The Assessing Officer(AO) reviewed the company’s financials and found the rise in share prices was unrelated to fundamentals, suggesting the shares were manipulated. The AO concluded that the trade was a sham meant to launder undisclosed income and issued a notice under Section 148 to reassess the ₹20,19,000.

Tax Effect Below CBDT Limit: ITAT dismisses Revenue Appeal

Income TaxOfficer22(1)(6) vs Gajadharprasad Nathai Pal CITATION: 2025 TAXSCAN (ITAT) 323

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT)dismissed the revenue’s appeal since the tax effect, as shown in Form-36, was zero and fell below the ₹60,00,000 limit set by the Central Board of Direct Taxes(CBDT) circular.

The Revenue-appellant filed an appeal against the order passed by the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC) under section 250 of the Income Tax Act, 1961 for the Assessment Year (A.Y.) 2017-18, dated 23.09.2024, in the case of Gajadharprasad Nathai Pal, respondent-assessee, wherein partial relief was granted to the assessee.

Reassessment Invalid Due to Lack of Material Disclosure: ITAT Quashes AO’s Order

Eurofins PeenyaResources Private Limited vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 324

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) quashed the Assessing Officer (AO)’s reassessment order, ruling it invalid due to the absence of material disclosure.

Eurofins Peenya Resources,appellant-assessee, formerly Advinus Therapeutics Ltd., filed its income tax return on November 29, 2023, reporting a loss of ₹30.68 crore. After scrutiny, the assessed loss was revised to ₹8.16 crore under Section 143(3) of the Act.

Failure by AO to Verify Key Issues During Reassessment: ITAT Upholds PCIT’s order

M/s. FLsmidth Pvt.Ltd. vs The Principal Commissioner of Income Tax-1 CITATION: 2025 TAXSCAN (ITAT) 325

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the order of the Principal Commissioner of Income Tax ( PCIT ), finding that the Assessing Officer ( AO ) failed to verify key issues during reassessment, leading to an erroneous and prejudicial order.

FLsmidth Pvt. Ltd,appellant-assessee,filed its return for A.Y. 2014-15 on 30.11.2014, declaring Rs. 35,34,10,370/-, revised later to Rs. 57,25,24,130/-. The AO passed an order on 28.02.2018, assessing income at Rs. 61,28,16,850/-, with additions for Transfer Pricing (TP) adjustment (Rs. 3,71,56,870/-) and section 14A disallowance (Rs. 31,35,846/-).

Eligibility for S.10AA Deduction on Voluntary TP Adjustments Under APA: ITAT Upholds CIT(A)’s Decision [Read Order]

The DeputyCommissioner of Income Tax vs EYGBS CITATION: 2025 TAXSCAN (ITAT) 326

The Bangalore Bench of Income Tax Appellate Tribunal(ITAT) upheld the decision of the CIT(A) allowing a deduction under section 10AA of Income Tax Act,1961 on voluntary Transfer Pricing (TP) adjustments made under an Advance Pricing Agreement (APA).

The Revenue-appellant appealed against the order dated 14.6.2024 passed by CIT(A) for the Assessment Year(AY) 2017-18. In this case,EYGBS (India) Private Limited, respondent-assessee filed its income tax return on 30.10.2017, reporting a total income of Rs. 100,26,18,189. It claimed deductions of Rs. 44,89,19,404 under section 10AA and Rs. 11,92,067 under Chapter VIA.

Foreign AE as tested party for Trading Segment: ITAT Directs TPO to Reevaluate Arm’s-Length Price

Decathlon Sports IndiaVS The Deputy Commissioner CITATION: 2025 TAXSCAN (ITAT) 327

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Transfer Pricing Officer (TPO) to reassess the arm’s-length price for Decathlon Sports India Private Limited’s trading segment after rejecting the foreign associated enterprise (AE) as the tested party.

Decathlon Sports India Private Limited,appellant-assessee,is a subsidiary of Decathlon, France, engaged in trading sports goods. It imports goods from AEs and third-party vendors for resale in India.

ITAT quashes Search Assessment without lack of Proper Approval u/s 153D

Amit Gupta and SonsHUF VS DCIT CITATION: 2025 TAXSCAN (ITAT) 328

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has quashed the search assessment against the assessee for the assessment year 2013-14, noting a lack of proper approval under Section 153D of the Income Tax Act, 1961.

A search and seizure operation was conducted on 1-03-2016 against the Devipriya group in Meerut. Following this, the Principal Commissioner of Income Tax ( PCIT ), Meerut, transferred the case of the assessee to the Assessing Officer (AO), who recorded a satisfaction note and issued a notice under Section 153C on October 11, 2017.

Bogus Purchases Claim on Rs. 94.3 Crore: ITAT Upholds CIT(A) Relief Based on Supporting Evidence

Income Tax Officer-13(1)(1) vs Jaideep Metallics And Alloys Pvt Ltd CITATION: 2025 TAXSCAN (ITAT) 329

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision, dismissing the Revenue’s appeal against the deletion of a ₹94.3 crore addition on alleged bogus purchases, citing sufficient supporting evidence.

The Revenue-appellant challenged the 10/06/2024 order by the CIT(A) which allowed Jaideep Metallics and Alloys Pvt. Ltd.,respondent-assessee’s appeal against the 29/12/2022 Assessment Order for Assessment Year(AY)2021-2022 under Sections 143(3) and 144B of the Act.

Disallowance of TDS Credit Due to Non-Inclusion of Income: ITAT Sets Aside Matter to AO for Verification

IMNU Student ActivityAssociation vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 330

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)set aside the matter for verification by the Assessing Officer (AO) regarding the disallowance of Tax Deducted at Source (TDS) credit due to the non-inclusion of certain income in the return.

IMNU Student Activity Association,appellant-assessee,filed a return showing “NIL” income and paid taxes of Rs. 1,86,110/-. On 12.01.2024, an intimation under Section 143(1) was issued, confirming “NIL” income and a refund of Rs. 1,56,200/-. However, the TDS credit was granted at Rs. 1,48,769/- instead of the claimed Rs. 1,86,110/-.

Rejection of S.12AB Registration Due to Failure to Provide Documents: ITAT Restores Matter to CIT(E)

Guruvarya AacharyaKalapurna vs CIT CITATION: 2025 TAXSCAN (ITAT) 331

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT)restored the matter to the Commissioner of Income Tax(Exemption)[CIT(E)] after the rejection of the Section 12AB registration application under the Income Tax Act, 1961 due to the failure to provide necessary documents.

Guruvarya Aacharya Kalapurna Surishvarji Shekshanik Sangh,appellant-assessee, applied for registration under section 12AB of the Act. The CIT(E), rejected the application due to the assessee’s failure to provide necessary documents, including proof of expenses, bank statements, and donation details, raising concerns about the trust’s objectives and the genuineness of its activities.

₹19.5 Lakh Unexplained Cash Credit u/s 68 & 69 of Income Tax Act: ITAT Remands Case for Reassessment

Atul Dave vs TheIncome Tax Officer CITATION: 2025 TAXSCAN (ITAT) 332

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) remanded a recent case back to the Commissioner of Income Tax (Appeals)[CIT(A)] based on improper fact adjudication and the authority’s failure to consider relevant documents. The case involved an addition of ₹13 lakh made under Section 68 (unexplained cash credit) and ₹6.5 under Section 69 (unexplained money) of the Income Tax Act, 1961.

The assessee, Atul Dave, is the proprietor of Dave Travels. The assessment proceedings arose from an alleged unexplained cash transaction with Shree Sava Jewellers. The Income Tax department discovered that the jewellers had been involved in bogus accommodation entries. The assessing officer (AO) issues a notice under Section 148 to Dave asking for the details of ₹13 lakh transaction.

ITAT Remands Case to Assessing Officer for Fresh Adjudication Due to Lack of Reasonable Opportunity

EFY Technologies K 22Malviya Marg vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 333

In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has remanded a case back to the Assessing Officer (AO) for fresh adjudication, citing a lack of reasonable opportunity provided to the assessee during the assessment proceedings.

This case pertains to EFY Technologies, a Jaipur-based firm, which had challenged an addition of Rs. 1.5 crore made under Section 69A of the Income Tax Act, 1961, for the Assessment Year (AY) 2017-18.

ITAT quashes Penalty u/s 271B, Holds ‘Reasonable Cause’ for Delay in Tax Audit

Dr. MurugeshShantveerya Hiremath vs DCIT CITATION: 2025 TAXSCAN (ITAT) 334

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has quashed the penalty imposed under Section 271B of the Income Tax Act on a cardiologist, for the assessment year 2018-19. The Tribunal ruled that there was a “reasonable cause” behind the delay in getting the tax audit done for the relevant assessment year, which justified the cancellation of the penalty.

The case stems from a penalty of Rs.1,50,000 imposed by the Assessing Officer (AO) on Dr. Murugesh Shantveerya,appellant-assessee for failing to file the tax audit report on time, as per Section 44AB of the Income Tax Act. Dr. Shantveerya had filed his return of income on March 27, 2019, declaring an income of Rs. 4.4 crore, but did not upload the audit report within the prescribed time limit.

ITAT quashes AO’s Rs. 57.03 Lakh Cash Deposit Addition & Penalty, Grants Fresh Hearing

Shri Girja Shankar vsIncome Tax Officer CITATION: 2025 TAXSCAN (ITAT) 335

The Lucknow Bench Income Tax Appellate Tribunal (ITAT) quashed the addition of Rs. 56.50 lakh made by the Assessing Officer (AO) and the consequential penalty of Rs. 22.37 lakh imposed and directed a fresh hearing for the assessee. Shri Girja Shankar (assessee), against whom an ex parte assessment order was passed by the Assessing officer (AO).

The Total income of the assessee amounted to Rs. 57.03 lakh. The Assessing Officer added Rs. 56.50 lakh due to cash deposits of Rs. 36.50 lakh and Rs. 20 lakh in the bank account of the assessee. The AO also imposed a penalty of Rs. 22.37 lakh for alleged concealment of income.

ITAT upholds CIT(A) Order, Dismisses Revenue’s Appeal Due to Lack of Merit in Disallowances

Assistant Commissionerof Income Tax – 32(1) vs Fitrite Packers C/o. Parle Products Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 337

In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has dismissed an appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) CIT(A), which had granted relief to Fitrite Packers, a Mumbai-based partnership firm engaged in manufacturing biscuit and confectionery wrappers for the Parle Group.

The dispute pertained to the Assessment Year ( AY ) 2020-21, where the Revenue challenged the CIT(A)’s decision to allow the assessee’s appeal against disallowances made during the processing of its income tax return.

Taxpayer Unable to Collect Notice: ITAT Condones 340 Days Delay, Remands S.69A Matter

Govindbhai AtmaramThakor vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 338

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) condoned a delay of 340 days in filing an appeal considering the inability of the assessee to collect the notice and remanded the matter back to the Assessing Officer (AO) for fresh adjudication. Govindbhai Atmaram Thakor, (assessee) is an agriculturist and employer of Modern Denim Ltd.

The Assessing Officer (AO) observed that the assessee made substantial cash deposits in his bank account during the demonetization period, amounting to Rs. 10,00,500/-. The AO issued a notice to the assessee. The AO noted that the assessee did not file an Income Tax Return (ITR).

Declaration of Income as Less than that made in Survey under Presumptive Scheme u/s 44D: ITAT deletes Addition

M/s. Hotel Deepak vsDCIT, Central Circle 3 CITATION: 2025 TAXSCAN (ITAT) 339

In a recent decision, the Income Tax Appellate Tribunal (ITAT), Mumbai bench deleted the addition made for declaration of income less than that made in the survey proceedings by the director of a company, by following the application of Presumptive Taxation Scheme under Section 44AD of the Income Tax Act, 1961.

A survey action u/s 133A of the Act was conducted in the case of the Assessee on 22.01.2018, wherein the statement of Shri Chandrakanth Ramanna Shetty, one of the partners of the firm-restaurant, was recorded, who has admitted that the diary recovered during survey operation pertains to Hotel Deepak. Shri Chandrakanth Ramanna Shetty made the voluntary declaration of income of Rs.22,51,948/- on total sales of Rs.1,08,80,197/-, however, in pursuance to survey operation, by filling its return of income on 30.08.2018 declared its total income at Rs.12,32,100/-.

Addition of Rs. 3.53 Crore as Unexplained Income u/s 69A: ITAT Sets Aside CIT(A)’s Order

Shramik Nagri vs TheIncome Tax Officer CITATION: 2025 TAXSCAN (ITAT) 340

The Pune Bench of Income Tax Appellate Tribunal(ITAT) set aside the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] concerning the addition of Rs. 3.53 crore as unexplained income under Section 69A of the Income Tax Act,1961.

Shramik Nagri SahkariPatsansthaMaryadit,appellant-assessee, appealed against the order dated 28.09.2024 for the Assessment Year(AY) 2015-16 passed by CIT(A) . The assessee’s counsel contended that the appeal was dismissed due to non-compliance, as the Chartered Accountant was hospitalized.

Failure to Verify Applicability of ‘Vivad Se Vishwas Scheme’: ITAT Remits Matter to CIT(A)

Hindustan PetroleumCorporation Limited vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 341

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT) remitted the matter to the for fresh adjudication, finding that the Commissioner of Income Tax (Appeals)[CIT(A)] had failed to verify the applicability of the “Vivad Se Vishwas Scheme, 2020” before dismissing the appeal.

Hindustan Petroleum Corporation Limited,appellant-assessee,faced its second round of litigation regarding the assessment for AY 2011-12, completed on February 28, 2014, under Section 143(3). The CIT(A) granted partial relief on August 31, 2016. The tribunal disposed of the appeal on October 4, 2021, since the appellant opted for the “Vivad Se Vishwas Scheme, 2020.”

Bogus LTCG Addition of Rs. 1.49 Crore on Penny Stock: ITAT Upholds CIT(A) Decision

GYAN PRAKASH GUPTA vsITO CITATION: 2025 TAXSCAN (ITAT) 342

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision on the addition of Rs. 1.49 Crore for bogus long-term capital gains (LTCG) derived from penny stocks.

Gyan Prakash Gupta,appellant-assessee, appealed against the order dated 31.05.2019, passed by CIT(A) for the assessment year 2015-2016.The issue was the assessment of Rs. 1,49,56,620/- instead of the returned income of Rs. 41,630/-, due to an addition of Rs. 1,49,14,984/- for bogus LTCG from penny stocks.

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