ITAT Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan during the previous week, from 31st August 2025 to 6th September 2025.

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CIT(A) Obligated to Dispose Off Appeal on Merits, Cannot Dismiss on Non-Prosecution of Assessee: ITAT

Boppana Ashok Kumar vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1585

The Income Tax Appellate Tribunal (ITAT), Visakhapatnam Bench, has held that the Commissioner of Income Tax (Appeals) [CIT(A)] is under a statutory obligation to dispose of appeals on merits and cannot summarily dismiss them for non-prosecution.

The bench of Ravish Sood (JM) and S. Balakrishnan (AM), relying on the provisions of Sections 250 and 251 of the Income Tax Act and the Bombay High Court ruling in CIT v. Premkumar Arjundas Luthra (HUF), stated that once an appeal is filed, the CIT(A) must examine the assessment order on merits.

Cash Deposits Claimed from Building Material Business: ITAT Directs AO to Verify as Assessee Could Not Substantiate Turnover Beyond Returns

Prem Lata Sharma vs I.T.O. CITATION : 2025 TAXSCAN (ITAT) 1586

The Income Tax Appellate Tribunal ( ITAT ), Ranchi Bench, has directed the Assessing Officer (AO) to re-examine the case of assessee, who had deposited ₹26.60 lakh during the demonetization period, claimed to be sourced from her business of purchase and sale of building materials.

The bench of Ratnesh Nandan Sahay (AM) and George Mathan (JM) set aside the orders of the lower authorities and restored the matter to the AO, directing him to depute an Inspector to verify the assessee’s claim of carrying on business in building materials and to re-adjudicate the issue after granting her a proper opportunity of being heard.

Relief to Thermo Fisher: ITAT allows Depreciation Claim on Supply & Maintenance Contracts Acquired via Slump Sale

Thermo Fisher Scientific IndiaPrivate Limited vs The Deputy Commissioner of Income Tax-15(3)(1) CITATION : 2025 TAXSCAN (ITAT) 1588

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that manufacturing, supply, and maintenance contracts acquired through slump sale arrangements qualify as intangible assets or, alternatively, as goodwill, and are therefore eligible for depreciation under Section 32 of the Income-tax Act, 1961.

The ITAT bench comprising Amit Shukla (Judicial Member) and Arun Khodpia (Accountant Member) observed that the issue was squarely covered by its earlier orders in the assessee’s own cases for AYs 2010 - 11 and 2015-16, where depreciation on such business and commercial rights was allowed.

Concessional Tax Rate u/s 115BAA denied due to Non-Filing of Form 10-IC: ITAT direct AO to Re-consider Claim Conditionally

M/s. Finecab Wires & CablesPvt vs Dy. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1589

The Hyderabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer (AO) to reconsider its claim for the concessional corporate tax regime under Section 115BAA of the Income-tax Act, 1961, which had been denied solely due to non-filing of Form 10-IC.

The bench of Ravish Sood (JM) and Madhusudan Sawdia (AM) observed that while the assessee indeed failed to file Form 10-IC, it had clearly opted for the concessional regime in the ITR filed within Section 139(1) deadline.

Non-speaking, cryptic, and mechanical Income Tax Order by quasi-judicial authorities is Invalid: ITAT rules in Favour of Lions Club

Lions Club of Khammam CharitableTrust vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1590

The Income Tax Appellate Tribunal (ITAT) of the Hyderabad bench set aside the order which was passed by the income tax quasi-judicial authority as being non-speaking, cryptic and mechanical. The tribunal remitted the order against the Lions Club of Khammam Charitable Trust for reconsideration.

The two member bench of Ravish Sood, Judicial Member And Madhusudan Sawdia, Accountant Member held that non-speaking, cryptic, and mechanical orders passed by quasi-judicial authorities are not sustainable in law. The CIT(Exemption), while disposing off the application filed by the assessee trust for permanent registration under Section 12AB of the Act was expected to provide a reasoned order and specific findings after considering the material on record.

Bank Passbook Evidence Validates Loan Transaction: ITAT deletes Addition u/s 68, Remands Interest Disallowance Issue

Paltex vs ITO CITATION : 2025 TAXSCAN (ITAT) 1591

The Income Tax Appellate Tribunal (ITAT), Mumbai, ruled to delete an addition under Section 68 of the Income Tax Act, 1961, concerning unsecured loans. While granting this relief, the Tribunal partly allowed the appeal by remanding disallowances on interest to the Assessing Officer for fresh consideration in Assessment Year 2013-14.

Judicial Member, Pawan Singh, held that the bank passbook showing the debit entry corresponding to the loan, was important evidence establishing the genuineness of the transaction. Accordingly, the Tribunal deleted the addition of Rs. 2,50,000 under Section 68 and also allowed the consequential deduction of Rs. 19,333 interest on the loan.

Rectification to Correct Income Mistakenly Offered Twice Cannot Be Denied: ITAT Restricts Addition to Prevent Double Taxation

Jain Natural Pickles PrivateLimited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1592

The Income Tax Appellate Tribunal (ITAT), Jodhpur, has held that rectification under Section 154 of the Income Tax Act, 1961, is permissible where an inadvertent mistake in return filing results in double taxation of the same income.

The Bench comprising Anikesh Banerjee, Judicial Member and Dr. Mitha Lal Meena Accountant Member, ruled in favour of the assessee. It distinguished the Goetze (India) ruling by observing that the present case was not about making a new claim but correcting an error that resulted in double taxation.

Addition u/s 43CA r.w.s. 56(2) on Flat Sale Requires Merits-Based Review: ITAT sets aside Non-Prosecution Dismissal

Mangalam Developers vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1593

The Income Tax Appellate Tribunal (ITAT), Mumbai examined the validity of additions made under Section 43CA read with Section 56(2)(vii)(b) of the Income Tax Act, 1961, relating to flat sales below market value, and directed that such claims must be reconsidered where evidence of prior-year agreements and advance payments exists.

The division bench of Amit Shukla, Judicial Member, and Arun Khodpia, Accountant Member, ruled that the CIT(A) has no power to dismiss an appeal for want of prosecution. The bench emphasized that under Section 250 and Section 251 of the Income Tax Act, 1961, the appellate authority is statutorily bound to decide appeals on merits, irrespective of the assessee’s appearance.

AO Fails to Carry Out Adequate Verification with GST dept: ITAT Remands Alleged Bogus Purchase Addition of ₹10.51 Crore

Shri Basanthi Lal Sah vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1594

The Income Tax Appellate Tribunal (ITAT), Hyderabad remanded the matter of alleged Rs. 10.51 crore addition back to the Assessing Officer (AO) as it failed to verify the carry out the independent verification with the GST( Goods and Services Tax ) Department on the genuinity of the purchases.

The Bench comprises Judicial Member Ravish Sood and Accountant Member G. Manjunatha, held that the appellant had indeed filed invoices, e-way bills, and bank records, which prima facie supported the claim. However, the short lifespan of the suppliers’ GST registrations, their non-filing of returns, and non-compliance with statutory requirements created serious doubts.

Rejection of Books u/s 145 Does Not Retrospectively Waive Mandatory Obligation to Furnish Audit Report u/s 44AB: ITAT

Shri Naresh Kumar vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1595

The Income Tax Appellate Tribunal (ITAT), Hyderabad, held that the rejection of books under Section 145 during assessment proceedings does not retrospectively nullify the obligation to comply with section 44AB of the Act within the prescribed time.

The bench said that the requirement to obtain and furnish the audit report within the due date prescribed under section 44AB of the Act is mandatory, and the default is not cured by obtaining or furnishing the audit report belatedly, even if before completion of assessment.

CIT(A) & AO Ignores status of GST Angle in ₹25.17 cr Bogus Purchase Case: ITAT orders fresh Adjudication

Income Tax Officer vs RamlalManekchand HUF CITATION : 2025 TAXSCAN (ITAT) 1597

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has remanded a case involving alleged bogus purchases worth ₹25.17 crore to the Assessing Officer (AO) for a fresh inquiry, after noting that both the AO and the Commissioner of Income Tax (Appeals) [CIT(A)] failed to examine the Goods and Services Tax (GST) angle.

While remanding the matter to the AO, the bench of T.R. Senthilkumar (JM) and Narendra Prasad Sinha (AM) directed a comprehensive re-examination. The AO has been instructed to verify ITC claims from GST authorities, correlate findings with assessments of the five suppliers, and trace the flow of funds through their bank accounts.

Simultaneous Deductions u/s 80IB and S. 80HHC can be Deducted from Net Profit: ITAT follows Supreme Court decision, Allows Appeal

M/s Allahdad Tannery vs DCIT-1 CITATION : 2025 TAXSCAN (ITAT) 1598

The Income Tax Appellate Tribunal (ITAT), Lucknow, examined whether an assessee is entitled to claim simultaneous deductions under Section 80IB and Section 80HHC of the Income Tax Act, 1961. The Tribunal upheld that both deductions can be claimed together, provided the aggregate does not exceed the total profits of the business.

Representing the assessee, Ashish Jaiswal, argued that judicial precedent by the Supreme Court in Shital Fibers Ltd. v. Commissioner of Income Tax, supported its right to claim deductions under both Section 80IB and Section 80HHC simultaneously, subject to the ceiling that the combined deductions do not exceed the total profits of the business.

Trust Activities Not Found Wholly Religious: ITAT says Free Feeding, Education is Charitable, Orders Reconsideration of 12AB & 80G Applications

Shri Sadguru NirupadeshwaraNitya Dasoha Charitale Trust vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1599

The Income Tax Appellate Tribunal ( ITAT ), Bangalore Bench, has set aside the order of the Commissioner of Income Tax (Exemptions) [CIT(E)] which had classified Charitable Trust as a religious trust and denied it approval under Section 80G of the Income Tax Act.

The Tribunal held that the trust’s activities, such as free feeding (Dasoha), providing education, healthcare, agricultural awareness, and other welfare measures, were predominantly charitable in nature and not wholly religious. It directed the CIT(E) to reconsider the trust’s applications for registration under Section 12AB and approval under Section 80G afresh.

S. 194C(6) & 194C(7) Operates Independently: ITAT directs to Reconsider Disallowance of Transportation charges u/s 40(a)(ia)

Royal Impex vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1600

The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that Sections 194C(6) and 194C(7) of the Income Tax Act, 1961 operate independently and that failure to file Form 26Q under Section 194C(7) does not nullify the exemption available under Section 194C(6).

The Tribunal remanded the issue of disallowance of transportation expenses back to the Assessing Officer (AO) for fresh verification of the assessee’s evidence before making any disallowance under Section 40(a)(ia).

Income Tax Assessment Order issued without DIN is Void Ab Initio: ITAT

Kaliyaperumal Padmanaban vs TheITO CITATION : 2025 TAXSCAN (ITAT) 1601

The Income Tax Appellate Tribunal (ITAT), Mumbai ruled that the income tax assessment order issued without mentioning Document Identification Number (DIN) in is void ab initio.

The Bench comprising of Judicial Member, Aby T. Varkey and Accountant Member, Amitabh Shukla, rejected the respondent’s argument. It was held that the CBDT Circular mandates that the DIN must be quoted in the body of the communication itself, barring limited exceptions which were not applicable in this case. The absence of DIN in the order itself constitutes a violation of the binding Circular, rendering the assessment order invalid ab initio.

Notice by Non-Jurisdictional AO Invalid: ITAT Renders Addition u/s 69A Void Ab Initio

Gaytri Devi Sharma vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1602

The Income Tax Appellate Tribunal (ITAT), Jaipur, has ruled that a notice issued by a non-jurisdictional Assessing Officer is invalid, rendering the addition under Section 69A of the Income Tax Act, 1961, void ab initio. The Tribunal quashed the order in full and allowed the appeal.

The Bench comprising Accountant Member Rathod Kamlesh Jayantbhai and Judicial Member Narinder Kumar, accepted the additional ground that the jurisdictional notice was defective. The bench held that since the notice under Section 142(1) was issued by ITO Ward-7(1), Jaipur, whereas the territorial jurisdiction lay with ITO Ward-7(3), Jaipur, the initiation of proceedings itself was invalid.

Dispute Over ₹39.91 Lakh Time Deposit with Bank of Baroda: ITAT Remands Matter to AO for Readjudication

Shiv Prasad Ram vs I.T.O CITATION : 2025 TAXSCAN (ITAT) 1603

The Ranchi Bench of Income Tax Appellate Tribunal (ITAT ) remanded the matter to the Assessing Officer (AO) for readjudication in a dispute over an alleged ₹39.91 lakh time deposit with Bank of Baroda.

The two member bench comprising George Mathan (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member ) examined the submissions and observed that the assessment order was passed ex parte based on information regarding a time deposit of ₹39,91,000/- in the Bank of Baroda, Ranchi, allegedly in the name of the assessee. The assessee denied having such a deposit.

Taxing Corresponding Interest Income on Asset Transfer to SPVs on Assessee amounts to Double Taxation: ITAT

Asirvad Micro Finance Limited vsDeputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1604

The Income Tax Appellate Tribunal ( ITAT ), Chennai Bench has deleted additions made under Section 69A of the Income Tax Act, 1961 on demonetization cash deposits, relying on Reserve Bank of India (RBI) guidelines and the precedent set in the TASMAC ruling. The Tribunal also allowed relief on disallowed securitization finance costs.

The Bench comprising of Vice President, George George K. and Accountant Member, Amitabh Shukla, found merit in the appellant’s submissions. The Tribunal held that interest income rightfully belonged to SPVs, and taxing it in the assessee’s hands would result in double taxation. The addition of ₹28.99 crore was therefore deleted.

INR 25 Lakh Cash Contribution by Directors Treated as Unexplained: ITAT Sets Aside CIT(A) Order, Directs Fresh Hearing

E T Devassy and Sons FinancePvt. Ltd vs Deputy Commisioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1605

The Cochin Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax (Appeals)[CIT(A)] order and directed a fresh hearing in the matter concerning an addition of INR 25 lakh treated as unexplained cash contribution by directors for Assessment Year ( AY ) 2017-18.

The two member bench comprising Rahul Chaudhary (Judicial Member) and Inturi Rama Rao (Accountant Member) considered the submissions and material on record. The Assessing Officer had added INR 25,00,000 under Section 69A as unexplained investment. The CIT(A) relied on Section 68, though the assessee had not been put on notice about it.

TDS on Loan Acquisition Payments : ITAT Rules Payments to Piramal Enterprises Not Treated as Interest

Deputy Commissioner of IncomeTax (TDS) vs Piramal Enterprises Limited CITATION : 2025 TAXSCAN (ITAT) 1606

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that payments made to Piramal Enterprises Limited for acquiring loans, including NCDs, ICDs, and term loans, were part of the purchase consideration and not “interest,” and therefore, no Tax Deducted at Source (TDS) was applicable under sections 193 and 194A of Income Tax Act,1961.

The tribunal upheld the order of the CIT(A), which had relied on the above decisions and concluded that the assessee was not liable to deduct TDS under section 194A. Consequently, the appeal filed by the Revenue was dismissed.

House sold for ₹67 lakh but only ₹1,690 shown in ITR: Know how Section 54 exemption helped secure relief

Dilip Mohandas Devani vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1607

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) partly allowed the appeal concerning the treatment of capital gains, cost of improvement, and deduction under Section 54 of the Income Tax Act.

The two-member bench comprising Dr. B.R.R. Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) observed that the adoption of stamp duty value under Section 50C was in line with the law and found no reason to interfere with the order of the CIT(A).

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