ITAT Weekly Round-up
The Round-up of the Income Tax Appellate Tribunal (ITAT) Cases Reported at Taxscan from 16 February, 2026 to 22 February, 2026.
This weekly round-up encapsulates the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan, from February 17, 2026 to February 22, 2025. Fuel Expenses Cannot be Assumed or Calculated by Logic: ITAT Upholds Status Quo on Categorization of Income Head, Allows Appeal Gopal Muwel vs ITO CITATION : 2026 TAXSCAN (ITAT) 228 The Income Tax...
This weekly round-up encapsulates the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan, from February 17, 2026 to February 22, 2025.
Fuel Expenses Cannot be Assumed or Calculated by Logic: ITAT Upholds Status Quo on Categorization of Income Head, Allows Appeal
CITATION : 2026 TAXSCAN (ITAT) 228
The Income Tax Appellate Tribunal ( ITAT ), Indore Bench, upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] regarding categorizing income head of rented JCBs whose fuel expenditures the assessee had assumed.
The file was sent back to the AO with direction to analyse fuel expense through analysis and the appeal was ultimately allowed for statistical purposes.
Resident of India, Pensioner of UK Cannot be Denied Benefit of Foreign Tax Credit: ITAT
CITATION : 2026 TAXSCAN (ITAT) 230
The Income Tax Appellate Tribunal (ITAT), Indore Bench, held that if an individual is a resident of India but a pensioner of the United Kingdom (UK) even then they cannot be denied the benefit of foreign tax credit.
The two member bench of Bhagirath Mal Biyani (Accountant Member) and Paresh M Joshi (Judicial Member), remanded the case back to the Assessing Officer (AO) to verify Form No. 67.
'Seek Video Conferencing' Button Not to be Treated with Severity: Calcutta HC Refers to Reply to SCN, Upholds Principles of Natural Justice
Creative Poly Packs Pvt. Ltd. vsAssessment Unit, Income Tax Department & Ors.
2026 TAXSCAN (ITAT) 231
The Calcutta High Court observed the superiority of principles of natural justice and held that a reply to a show cause notice has more value than the ‘seek video conferencing’ button available at statutory forms.
The single bench of Justice Om Narayan Rai held that the AO shall pass fresh assessment after a personal hearing through video conferencing with the petitioner and their order must provide reasons for their assessment done. It was held that all matters of merit are to be decided by the AO after this opportunity of personal hearing.
AO's Independent Inquiry Cannot be Biased Towards SEBI Restrictions: ITAT Upholds Deletion of Addition in Income
DCIT (CC)-8(4) vs Reena RatneshJain
CITATION : 2026 TAXSCAN (ITAT) 232
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, upheld the deletion of addition as had been done by the Commissioner of Income Tax (Appeals) [CIT(A)]. ITAT gave the rationale that AO’s independent inquiry cannot be biased towards SEBI’s former restrictions.
The two member bench, comprising Makarand Vasant Mahadeokar (Accountant Member) and Saktijit Dey (Vice President), also observed that there had been no deficiencies in the justifications given by the assessee, taking into consideration the documentary evidence provided and that a selective approach cannot be applied by the AO in the assessment proceedings.
Various Appeals Filed by Aditya Birla Sun Life on Addition, Deduction and Disallowance Allowed: ITAT
Aditya Birla Sun Life AMCLimited vs DCITCircle-6(1)(1)
CITATION : 2026 TAXSCAN (ITAT) 233
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, heard various appeals for Assessment Year(s) [AY] 2017-18, 2018-19, 2022-23, 2023-24 on issues such as addition, deductions and disallowance and allowed them.
The two-member bench of Amit Shukla (Judicial Member) and Makarand Vasant Mahadeokar (Accountant Member) partly allowed the appeal for issues from AY 2017-18 and 2018-19, allowed for issues from AY 2022-23 and allowed for statistical purposes or remanded the matters from AY 2023-24.
ITAT Grants Deduction under Section 54F to NRI: Residential Houses Outside and Inside India Considered
CITATION : 2026 TAXSCAN (ITAT) 234
The Income Tax Appellate Tribunal (ITAT),Hyderabad Bench, granted deductions under Section 54F of the Income Tax Act (the Act) holding that the assessment by the Assessing Officer (AO) was correct and the Commissioner of Income Tax (Appeals) [CIT(A)] had erred.
The tribunal considered the inquiry report of the AO and the submissions made by the assessee at the scrutiny stage. Confirming that the AO had improperly prepared their assessment as there was lack of application of mind in exercising and questioning the assessee on the proviso to Section 54F, the bench held that the Pr. CIT had correctly considered the merits of their case and denied the deduction. However, adjudication remains to have taken place regarding this erroneous assessment and so the file was sent back to the Pr. CIT.
Urban Local Body Assessed as Partnership Firm: ITAT Considers Exemption, PAN Mix-up and Deletes Assessment
Municipal Council Dongargarh vsITO
CITATION : 2026 TAXSCAN (ITAT) 235
The Income Tax Appellate Tribunal (ITAT),Raipur Bench, considered that the assessee, an Urban Local Body, had been mistakenly allotted the status of a Partnership Firm in PAN and deleted the assessment carried out.
The bench of Paratha Sarathi Chaudhary (Judicial Member) and Avdesh Kumar Mishra (Accountant Member), set aside the order and deleted the income assessed by the AO, granting consequential relief to the assessee. The appeal was allowed accordingly.
ITAT Directs Deletion of ₹70L Unexplained Cash Deposit on Education Society after finding Records in Audited Books
The Falahe Darain EducationSociety vs Deputy Commissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 236
The Income Tax Appellate Tribunal, Ahmedabad Bench, directed the Assessing Officer (AO) to delete the addition made towards unexplained cash deposits amounting to ₹70,69,780 made on an Education Society after noting that the Society had submitted the list of students, along with cash books and bank statements regarding the deposits.
The tribunal also noted that the appellant had submitted its audited statement without any adverse comments made by the auditor. In the light of facts and circumstances, the tribunal directed the AO to delete the addition of ₹70,69,780 made on account of unexplained cash deposits.
Corpus Donation of ₹48.38 Lakh Received by Educational Trust from Multiple Donors Exempted u/s.11(1)(d) of Income Tax Act: ITAT
The Falahe Darain EducationSociety vs Deputy Commissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 236
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, held that the corpus donations received by the educational trust from different donors were eligible for exemption and directed the Assessing Officer (AO) to allow exemption of the entire corpus donation under Section 11(1)(d) of the Income Tax Act, 1961.
In light of the facts and circumstances of the case, the Tribunal directed the AO to allow the assessee’s claim of exemption under Section 11(1)(d) of the Act in respect of the entire corpus donation amounting to ₹48,38,779.
Consolidated Satisfaction is Improper Satisfaction, Lack Merit: ITAT
Alankit Insurance TPA Ltd. vsDCIT, Central Circle-28
CITATION : 2026 TAXSCAN (ITAT) 237
The Income Tax Appellate Tribunal (ITAT), New Delhi bench, broadly held that consolidated satisfaction during the assessment proceedings amounts to improper satisfaction as it lacks merit and proper application of mind.
The tribunal relied on PCIT Central v. Siddharth Gupta, PCIT v. Shiv Kumar Nayyar and Sakshi Agarwal v. DCIT to hold the view that consolidated or improper satisfaction are grounds to allow an appeal. Further, that all assessment years must be examined and only after the proper application of mind can the AO give approval/satisfaction note. The appeals from Assessment Years 2013-14 to 2020-21 have been allowed partly by the bench of Rifaur Rahman (Accountant Member) and Sudhir Kumar (Judicial Member).
Double Addition/Double Disallowance in Income Tax Assessment: ITAT Considers Doctrine of Merger Applicable
Peritus Exim Pvt. Ltd. vs DCITCircle19-1
CITATION : 2026 TAXSCAN (ITAT) 238
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, heard a case in which double addition and double disallowance was done in the assessment proceedings. The tribunal held that the doctrine of merger would be applicable in the present case.
However, the tribunal also observed that there was a direct connection with the rectification order passed by the AO. The tribunal disagreed that the doctrine of merger was not possible in the mentioned case. The two member bench of Raj Kumar Chauhan (Judicial Member) and Rifaur Rahman (Accountant Member) remitted the issue to the file of the Jurisdictional Assessing Officer to reconsider the submissions as per law and allowed the appeal for statistical purposes.
Repayment of Director’s own Deposit Not Deemed Dividend: ITAT Deletes ₹25L addition u/s 2(22)(e)
Anang Kunjviharibhai Shah vsIncome-Tax Officer
CITATION : 2026 TAXSCAN (ITAT) 239
The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad Bench held that repayment or withdrawal of a director’s own deposit maintained with a company cannot be treated as deemed dividend under Section 2(22)(e) of the Income-tax Act, 1961.
It set aside the order of the CIT(A) and deleted the addition of ₹25,00,000 made under Section 2(22)(e).
ITAT Grants S. 50C Proviso relief where Advance Received by Cheque Before Sale Deed Registration
CITATION : 2026 TAXSCAN (ITAT) 240
The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) held that where part of the sale consideration was received through bank account or electronic mode at the time of agreement to sell, the stamp duty value as on the agreement date and not the later registration date must be considered for capital gains computation.
The bench set aside the addition of ₹17.80 lakh made. The matter was remanded to the Assessing Officer for fresh determination based on the agreement date valuation.
Unsecured Loans’ Creditworthiness confirmed through PAN, ITR and Confirmations Sufficient: ITAT deletes S. 68 Addition
Deputy Commissioner of Incometax vs Techno Industries
CITATION : 2026 TAXSCAN (ITAT) 241
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that unsecured loans cannot be treated as unexplained cash credits under Section 68 where the assessee establishes creditworthiness through PAN, income tax returns, confirmations and bank statements.
In the same matter, on a separate issue relating to employees’ contribution to PF, the Tribunal reversed the CIT(A)’s relief and restored the disallowance, following the Supreme Court ruling in Checkmate Services (P) Ltd., holding that such contributions must be deposited within the due date under the respective statute to qualify for deduction.
PCIT Must Explain How Income Tax Assessment Order is Erroneous u/s 263: ITAT Allows Appeal
Studds Accessories Limited vsPCIT Faridabad
CITATION : 2026 TAXSCAN (ITAT) 242
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed the appeal by the assessee and held that PCIT has not explained how the assessing officer erred in assessment order regarding the income of the assessee thus making it erroneous.
The Principal Commissioner of Income Tax (PCIT), Faridabad, noticed that TDS has been deducted on the fees of INR 5,45,71,846/- paid by the assessee for professional or technical services. However as per the return of income they have been claimed at INR 3,27,75,797/-. The difference is observed to have no explanation and the Assessing Officer (AO) had not sought such explanation. The salary that the assessee paid in the assessment year was amounting to INR 11,55,18,514/- on which TDS has been deducted. On the return of income, the salary was claimed at INR 20,93,51,160/-. Again, no explanation was sought nor given.
Mutual Cooperative Society May Accept Deposits and Lend Loans to its Own Members: ITAT
Sree Narayana Guru CooperativeAnd Credit Society Limited vs ITO
CITATION : 2026 TAXSCAN (ITAT) 243
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, held that mutual cooperative societies may accept deposits and lend loans to its own members.
The tribunal observed that the AO had overlooked the fact the appellant had only transacted to the extent of INR 94,78,185/- in the AY in question. ITAT confirmed the status of the society which had been registered since 2006. Finally, the two member bench of Vimal Kumar (Judicial Member) and S. Rifaur Rahman (Accountant Member) allowed the appeal on the grounds raised by the assessee.
Disallowed Payments due to Inconsistency in Statements and Transactions Held Unreasonable as per Income Tax Act: ITAT Allows Appeal
Zeta Buildtech Pvt. Ltd. vs DCITCentral Circle 7
CITATION : 2026 TAXSCAN (ITAT) 244
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed an appeal in the case where disallowances were made without appreciating the facts. The tribunal made note of the delay of 87 days and condoned it following reasonable cause.
The two member bench of Raj Kumar Chahuan (Judicial Member) and S. Rifaur Rahman (Accountant Member) considered the following cases: CIT v. Pashupati Nath Agro Food Products Pvt. Ltd. (2017) and PCIT v. RG Buildwell Engineers Ltd. (2018) and allowed the appeal while also pointing to the stock verification report provided by the assessee and allowed the appeal.
Reduction of Accumulated Income for Charitable Trust Due to Technical Glitch in Form 10B: ITAT Remitted the Matter to AO
Shri Namo Narain Educational AndCharitable Trust vs Income Tax Officer Bareilly
CITATION : 2026 TAXSCAN (ITAT) 245
The Income Tax Appellate Tribunal (ITAT), Lucknow Bench, remitted the matter to the Assessing Officer (AO) after the Centralized Processing Centre (CPC) reduced the accumulated income of a charitable trust due to a technical glitch in Form 10B and directed the AO to pass order in accordance with law after providing reasonable opportunity to the appellant.
The appellant filed an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)). The appellant contended that the reduction in accumulation was made by CPC based on Clause 31(xi) of Form 10B. It was submitted that the amount of ₹16,00,000 represented borrowings made during the year, which was required to be reduced from application of income in accordance with Explanation 4(ii) to Section 11(1) of the Act.
Mere Inclusion of Scrip in ‘Penny Stock’ List without Material Evidence of Price Manipulation Not Justify Addition: ITAT
Dilip Bhanverlal Dangi (HUF) vsIncome Tax officer, Wd-26(1)(3)
CITATION : 2026 TAXSCAN (ITAT) 246
The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that mere inclusion of a company’s shares in an investigation report as a “penny stock”, without material evidence is not sufficient to justify addition under Section68 of Income Tax Act, 1961.
The bench of Beena Pillai (Judicial member) noted that the revenue failed to rebut the evidentiary value of the documents produced by the assessee or to demonstrate that the impugned transactions were non-genuine.
