ITAT Weekly Round-up
A Round-Up of the Income Tax Appellate Tribunal (ITAT) Cases Reported at Taxscan Last Week.
This weekly round-up encapsulates the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan during the previous week, from 30 November 2025 to 6 December 2025.
1. ITAT Deletes ₹37.87L Addition After AO Accepts Turnover Reconciliation: Holds CIT(A)’s Remand of 144 Order Improper
Monika Jain vs ITO Ward 6(1) CITATION: 2025 TAXSCAN (ITAT) 2143
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal by deleting the addition of ₹37,87,140, after noting that the Assessing Officer (AO) had accepted the assessee’s turnover reconciliation and held that once factual verification was complete and the AO himself confirmed the correctness of figures, the Commissioner of Income Appeals (CIT(A)) was not justified in setting aside the assessment under Section 144 of the Income Tax Act, 1961.
The Bench comprising Rathod Kamlesh Jayantbhai (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) observed that the very basis of the addition, turnover mismatch, did not survive after the AO’s verification.
2. Cash Sales of Jeweller on Demonetisation Day Held Genuine: ITAT Deletes S.68 Addition as Books Were Not Rejected
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal, holding that the huge cash sales recorded on 08.11.2016, on the day demonetisation was announced were genuine and could not be treated as unexplained cash credits under Section 68 Income Tax Act, 1961, when the books of account were never rejected.
The Bench comprising Dr. S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) held that when books are not rejected and sales are recorded out of accepted stock, cash receipts from such sales cannot be treated as unexplained credits.
3. No Transfer Order from Delhi AO to Jaipur AO: ITAT Quashes 153C Assessment for Lack of Territorial Jurisdiction
Sonu Dusad vs DCIT CITATION: 2025 TAXSCAN (ITAT) 2145
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) quashed the assessment framed under Section 153C of the Income Tax Act, 1961, holding that the Assessing Officer (AO) in Jaipur had no territorial jurisdiction to complete the assessment in the absence of a Section 127 transfer order from the Delhi AO who had originally initiated the proceedings and also condoned the delay in filing the appeal after finding that the Commissioner of Income Tax (Appeals) CIT(A) had ignored the High Court’s direction on deciding delay first.
The Bench comprising Dr. S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) observed that once the notice under Section 153C was issued by the Delhi AO, only that AO or another AO to whom the case was specifically transferred under Section 127 had the legal authority to complete the assessment. Since there was no evidence of any transfer, the Jaipur AO lacked jurisdiction.
4. ITAT Restores 10(23C)(vi) Exemption to Education Trust: Finds No Evidence of Personal Benefit or Misuse of Funds
Scholars Education Trust of India A-3G vs CIT CITATION: 2025 TAXSCAN (ITAT) 2148
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal of Scholars Education Trust of India, restoring the exemption granted under Section 10(23C)(vi) after holding that the Commissioner of Income Tax (Exemptions) (CIT(E)) had wrongly assumed violations and that there was no evidence of personal benefit, diversion of funds, or misuse of trust property.
The Bench comprising Dr. S. Seethalakshmi (Judicial Member) and Gagan Goyal (Accountant Member) examined the material and observed that the CIT(E) had not brought any evidence to show personal benefit, siphoning of funds, diversion of income, or commercial exploitation of property, and noted that the Trust’s activities were entirely educational, and the stay of the managing trustee on the premises served functional and safety purposes, particularly for the students.
5. VAT Accepted Books Cannot Be Rejected Without Defects: ITAT Deletes Bogus Purchase Addition After AO Makes No Independent Inquiry
Ahluwalia Erectors &Fabricators Private Limited vs DCIT/ACIT Circle-02 CITATION: 2025 TAXSCAN (ITAT) 2149
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal, deleting the bogus purchase addition after holding that when the books of account were accepted in Value Added Tax (VAT) assessments without finding any defects, the Assessing Officer (AO) could not reject them or make additions under Section 69C without conducting any independent inquiry.
The Bench comprising Rathod Kamlesh Jayantbhai (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) examined the records and observed that the AO had made the addition without making any independent inquiry, and merely followed information received from the VAT Department.
6. Bank of Baroda's Specific Condition Invalidates TP Adjustment on Corporate Guarantee Commission: ITAT
Precision Camshafts Limitedvs Assessment Unit, Income Tax Department CITATION: 2025 TAXSCAN (ITAT) 2151
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) directed the deletion of a Transfer Pricing (TP) adjustment of ₹21,46,000 proposed by the TransferPricing Officer(TPO) on account of corporate guarantee commission and ruling that the non-charging of the commission was due to a specific condition imposed by Bank of Baroda.
The two-member bench comprising Rama Kanta Panda (Vice President) and Vinay Bhamore (Judicial Member) observed that since the Bank of Baroda is an independent entity, the assessee was correct in not charging any Guarantee Commission.
The Tribunal followed its own binding precedent in the assessee's own case for the earlier Assessment Year (AY 2020-21), which had relied on the ITAT Mumbai decision in B.G. Shirke Construction Technology P. Ltd., Vs. DCIT.
CITATION: 2025 TAXSCAN (ITAT) 2156
The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue’s appeal and upheld the deletion of a penalty of ₹305,49,63,285 imposed on Central Bank of India, after holding that Minimum Alternate Tax (MAT) under Section 115JB is not applicable to the bank, rendering the penalty under Section 271(1)(c) unsustainable.
The Bench comprising Vikram Singh Yadav (Accountant Member) and Anikesh Banerjee (Judicial Member) noted that the quantum proceedings had conclusively settled the issue in favour of the assessee, MAT was inapplicable for the assessee, tax on book profits could not be levied, and therefore, the very basis for the penalty ceased to exist.
8. Salary arrears of Deceased cannot be Taxed on Individual Capacity of Legal Heir : ITAT says NFAC Ignores S. 159
Sheela Devi vs Income TaxOfficer CITATION: 2025 TAXSCAN (ITAT) 2158
The Income Tax Appellate Tribunal ( ITAT ), Agra Bench, has held that salary arrears belonging to a deceased person cannot be taxed in the personal/individual capacity of the legal heir. Instead, such income must be assessed in the status of “legal representative” as per Section 159 of theIncome Tax Act, 1961.
The Bench of M. Balaganesh observed that the NFAC had “completely ignored” Section 159 and had therefore upheld an assessment order contrary to the statutory scheme.
9. Preity Good News!’ ITAT Quashes ₹10.84 Cr Income Tax Addition against Bollywood Actress Preity Zinta
Preity G Zinta 403Parishram vs Income Tax Officer, Int Tax, Ward 4(3)(1) CITATION: 2025 TAXSCAN (ITAT) 2159
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) recently granted substantial relief to Bollywood actress Preity Zinta by deleting an income tax addition of ₹10.84 crore made under Section 68 of the Income Tax Act, 1961 for the Assessment Year (A.Y.) 2016-17.
The two-member Bench comprising Vice President Saktijit Dey and Accountant Member Girish Agrawal recorded that Zinta had placed on record complete documentary evidence including confirmations from all three entities of the Danish Merchant Group, their tax returns, bank statements, audited financials and details of loan movements which adequately established the identity, creditworthiness and genuineness of the lenders.
10. Consultant Failed Him’: ITAT remands ₹18.5L Income Tax Addition on Differently Abled Taxpayer, Condones 600+ days Delay
Rameshbhai Jashubhai Patelvs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2160
The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad bench, has remanded a matter of a ₹18.55 lakh income tax addition made against a 60% differently-abled taxpayer, after finding that the assessee was unable to respond to statutory notices due to physical limitations and the failure of his tax consultant.
Before the bench of Suchitra Kamble (Judicial member), the assessee argued that he is 60% handicapped, dependent on others for daily activities, and was completely unaware of procedural requirements. The Tribunal considered the assessee's physical disability and dependence on others, noting that such individuals often lack awareness of legal processes and depend on others, including consultants.
11. Sales Commission to Director’s Relatives allowable when Services Proven: ITAT Deletes ₹35.38 Lakh Disallowance
CPV Engineer Pvt. Ltd vsThe Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2162
The Income Tax Appellate Tribunal ( ITAT ), Bangalore Bench, has deleted a disallowance of ₹35.38 lakh made by the AssessingOfficer (AO) towards sales commission paid to the relatives of the directors, holding that the payments were genuine, the services rendered were proved, and the tax authorities had relied on assumptions rather than evidence.
However, the bench of Keshav Dubey ( Judicial member) and Prashant Maharishi ( Vice President ) found that such apprehensions were misplaced. The Tribunal observed that all recipients had disclosed the commission income in their tax returns and that tax had been deducted at source.
12. ‘Sexist Assumptions’ in CIT(A) Order: ITAT slams Authority for Ignoring Women’s Expertise, Deletes Sales Commission Disallowance
CPV Engineer Pvt. Ltd vsThe Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2162
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has strongly criticised the Commissioner of Income Tax (Appeals) [CIT(A)] for making sexist and baseless assumptions while disallowing sales commission paid by the assessee to 3 women professionals.
The bench of Keshav Dubey ( Judicial member) and PrashantMaharishi ( Vice President ) observed that the CIT(A) arrived at conclusions based on conjecture, gender bias, and personal assumptions, rather than on material evidence. It said that the tax authorities cannot disallow legitimate expenses simply because the commission recipients are related to directors or because the authority harbours preconceived notions about women’s participation in industrial or technical sectors.
13. Revenue cannot take advantage of Clerical mistakes in ITR Filing: ITAT grants Income Tax Exemption for Trust
M/s Fig Tree Foundation vsThe Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2163
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) granted an income tax exemption to a trust that made a clerical mistake in the Income Tax Return (ITR) filing and condemned the revenue for taking advantage of it.
The single-member bench comprising Waseem Ahmed (Technical Member) observed that CPC was correct in processing the return based on the information furnished, but the CIT(A) should have rectified the mistake once the assessee produced proof of registration. The tribunal explained that the Revenue cannot take advantage of clerical errors committed by the assessee and that the income must be assessed strictly within the framework of law.
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