ITAT WEEKLY ROUND-UP [July 19th - July 26th]

Addition of ₹99.2L Cash Deposit due to non compliance of Notice to prove source of cash: ITAT Allows One Final Opportunity to Assessee

Saroj KumarSenapati vs ITO CITATION : 2025 TAXSCAN (ITAT) 1315

The Cuttack Bench of the Income Tax Appellate Tribunal (ITAT) restored the appeal filed by the assessee as he had failed to appear during proceedings regarding the alleged substantiated cash deposits in the assessee’s bank and had not responded to the notices or show cause notices.

The bench composed of Duvvuru RL Reddy (Vice President) restored the issue to the file of the CIT(A). It was held that the assessee would get a reasonable opportunity of hearing. The assessee was directed to appear before CIT(A) without seeking any adjournment under any pretext. The CIT(A) has the liberty to pass an appropriate order if the assessee failed to comply.

Unexplained Source of Investment on 4Kg Gold: ITAT Directs to Consider R. 46 Evidence Citing Improper Rejection

Anshul Gupta vsITO CITATION : 2025 TAXSCAN (ITAT) 1316

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication and directed proper consideration of evidence submitted under Rule 46 in the case involved an addition for unexplained investment in 4 kilograms of gold under Section 69 of the Income Tax Act, 1961.

The Tribunal emphasized that appellate authorities must duly consider Rule 46 evidence before upholding additions. It held that the CIT(A)’s failure to engage with the evidence warranted restoration of the matter for fresh consideration. It also directed the CIT(A) to examine the Rule 46 evidence afresh and pass a reasoned order.

Surplus and Fee Receipts Not a Ground to Deny 80G Approval: ITAT Overturns CIT(E) Denial

Academy ofGeneral Education vs CIT CITATION : 2025 TAXSCAN (ITAT) 1317

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) directed the Commissioner of Income Tax (Exemptions) [CIT(E)] to grant approval under Section 80G of the Income Tax Act, 1961 and held that the rejection based on surplus accumulation and fee receipts, was unjustified.

The two-member bench comprising Prashant Maharishi (Vice-President) and Keshav Dubey (Judicial Member) observed that the CIT(E)’s rejection overlooked the trust’s substantial application of income toward educational activities, as evidenced in its Income & Expenditure Accounts.

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ITAT Upholds Deletion of ₹11.73 Cr Unexplained Cash Credit Addition Citing AO's Reliance on Unverified STR Information

INCOME TAXOFFICER vs AGL LOGISTICS PVT. LTD CITATION : 2025 TAXSCAN (ITAT) 1318

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of an addition of Rs. 11,73,52,801 made by the Assessing Officer (AO) as unexplained cash credits under Section 68 and held that the AO’s reliance on unverified Suspicious Transaction Report (STR) information lacked substantiation.

The two-member bench comprising Challa Nagendra Prasad (Judicial Member) and Rifaur Rahman (Accountant Member) observed that the AO based the addition solely on STR information without further verification.

Cash Deposit Addition of ₹9 Lakh: ITAT Remands With One More Opportunity For Production of Documentary Evidence

Tapas KumarChanda vs ITO CITATION : 2025 TAXSCAN (ITAT) 1319

The Cuttack Bench of the Income Tax Appellate Tribunal ( ITAT ) restored the appeal of Tapas Kumar Chanda to the Commissionerof Income Tax (Appeals)[ CIT(A) ] with a direction to grant one more opportunity to substantiate the source of cash deposits of Rs. 4,18,000, after the CIT(A) dismissed the appeal for lack of representation.

The single-member bench Comprising Duvvuru RL Reddy observed that the AO’s assessment under Section 144 was due to the assessee’s failure to produce documentary evidence. It further noted that the CIT(A) dismissed the appeal due to non-compliance, without adjudication on merits.

Expenditure Incurred on Leasehold Premises Satisfies Test of Ownership: ITAT Upholds Depreciation Deduction as Capital Expenditure

DCIT vs M/s.Add Lounge Service Pvt. Ltd CITATION : 2025 TAXSCAN (ITAT) 1320

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the depreciation deduction for improvements made to leasehold premises, dismissing the revenue’s appeal against the deletion of an addition of Rs. 53,42,103/- for the Assessment Year 2012-13.

The two-member bench comprising Mahavir Singh (Vice President) and Amitabh Shukla (Accountant Member), observed that the facts of the present case were identical to those in the assessee’s prior case.

Incomplete Analysis of ₹2.17 Cr Unsecured Loan: ITAT Directs to Verify Documents

AmbeyLaboratories Limited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1321

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has remitted the issue of a Rs. 2.17 crore addition under Section 68 of the Income Tax Act, 1961, back to the Assessing Officer (AO) for verification of documents, citing incomplete analysis by the tax authorities.

The two-member bench, comprising Vikas Awasthy (Judicial Member) and S. Rifaur Rahman (Accountant Member), observed that the assessee had submitted confirmations and other documents during appellate proceedings, which were only partially analyzed by the CIT(A).

AO made One Sided Addition u/s 68 without Examining Evidence: ITAT Remits ₹7.17 Matter for Fresh Adjudication

Anil KumarChauhan vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1322

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside an addition of Rs. 7,17,35,323/- made under Section 68 and directed the Assessing Officer (AO) to conduct a fresh adjudication with proper consideration of evidence.

The two-member bench comprising Shri Mahavir Singh (Vice President) and Shri Amitabh Shukla (Accountant Member), observed that the CIT(A)’s rejection of additional evidence under Rule 46A was not supported by concrete facts and was largely speculative.

Interest from Cooperative Banks Eligible for 80P Deduction: ITAT Allows ₹12.53 Lakh Claim Treating Banks as Societies

KallapannaAwade Ich Janata vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1323

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) held that interest earned from deposits/investments with cooperative banks qualifies for deduction under Section 80P(2)(d) of the Income Tax Act, 1961, as cooperative banks are essentially cooperative societies.

The single-member bench comprising Dr. Manish Borad (Accountant Member) observed that the issue was settled by coordinate benches of the Tribunal. The Bench also observed that the Benches have consistently held that interest from cooperative banks is allowable under Section 80P(2)(d), as such banks retain their character as cooperative societies despite obtaining banking licenses.

Gross Negligence of Accountant Not a Ground for Condonation: ITAT Dismisses Income Tax Appeal with 477-Day Delay

Shri KhambhatTaluka Sarvajanik Kelavani Mandal vs Income Tax Officer

CITATION : 2025 TAXSCAN (ITAT) 1324

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) dismissed an appeal filed by a charitable trust with a delay of 477 days and ruled that gross negligence on the part of the accountant does not amount to sufficient cause for condonation under Section 253(5) of the Income Tax Act, 1961.

The two-member bench comprising Sanjay Garg (Judicial Member) and Narendra Prasad Sinha (Accountant Member) observed that the assessee cannot escape by merely passing the blame for delay in filing the appeal to the accountant.

Demonetized Notes Received from Disclosed Debtors Cannot Be Treated as Unexplained Cash: ITAT

Goldman TapesPrivate Limited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1325

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that cash deposits in Specified Bank Notes (SBNs) received from disclosed debtors during the demonetization period cannot be treated as unexplained receipts when supported by books of accounts and debtor details.

The two-member bench comprising Saktijit Dey (Vice President) and Narendra Kumar Billaiya (Accountant Member) observed that the assessee had furnished complete debtor details and evidence reflected in regular books.

Arithmetic Mistake in Percentage Computation: ITAT Deletes ₹3.92 Cr Addition for Alleged Suppressed Revenue in Construction Project

M/s. I.P.Constructions Private Limited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1326

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs. 3,92,66,722/- for alleged suppressed revenue in a construction project, citing an arithmetic mistake in the computation of percentage completion by the Assessing Officer (AO).

The two-member bench comprising S. Rifaur Rahman (Accountant Member) and Vimal Kumar (Judicial Member) observed that the AO’s computation of percentage completion at 90.73% was an arithmetical mistake, as the correct calculation yielded 80.31%.

Partial Interest Disallowance Upheld u/s 57(iii): ITAT Dismisses Revenue Appeal on Nexus of Borrowed Funds for Interest Income

DCIT vs ShriMahesh Kumar Goyal CITATION : 2025 TAXSCAN (ITAT) 1327

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) upheld the partial disallowance of interest expenditure under Section 57(iii) of the Income Tax Act, 1961, emphasizing the rule of consistency with prior assessments and the verified nexus between borrowed funds and interest income.

The two-member bench comprising Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) observed that the rule of consistency favored the assessee, as no change in facts was demonstrated.

Additions for Unexplained Cash Deposits and Loans Made Without Proper Verification: ITAT Restores Matter to AO

HarishkumarKhushalray Bhatt vs ITO CITATION : 2025 TAXSCAN (ITAT) 1328

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Assessing Officer (AO ) for fresh adjudication after observing that additions for unexplained cash deposits and unsecured loans were made without proper verification of evidence and without granting adequate opportunity to the asseessee.

The two member bench comprising T.R.SenthilKumar (Judicial Member) and Makarand V. Mahadeokar(Accountant Member) examined the assessment order, appellate order, and documents submitted by the assessee. The key issues were the addition of ₹32.61 lakh for cash deposits under section 69A and ₹3.24 lakh for unsecured loans under section 68.

ITAT Holds Reassessment Void Ab Initio as Notice Issued Beyond Three-Year Limit for Income Below ₹50 Lakh

ETC ElectricPvt. Ltd vs ITO CITATION : 2025 TAXSCAN (ITAT) 1329

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) held the reassessment proceedings void ab initio as the notice under Section 148 of Income Tax Act,1961,was issued beyond the three-year limitation period, while the alleged escaped income was below ₹50 lakh.

The two member bench comprising Pradip Kumar Choubey (Judicial Member) and Rajesh Kumar (Accountant Member) heard both sides and reviewed the records. It noted that the original Section 148 notice was dated 29.06.2021, and material alleging escaped income of ₹21.5 lakhs was shared on 02.06.2022. The AO passed the order under Section 148A and issued a fresh notice under Section 148 on 27.07.2022, followed by a Section 143(2) notice on 04.01.2023.

Income Tax Exemption Denied due to Wrong PAN Used by Sikkimese Proprietor: ITAT Allows Claim u/s 10(26AAA)

Chandra SalesAgency vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1330

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of a Sikkim-based proprietor after finding that the exemption under Section 10(26AAA) of Income Tax Act,1961 was wrongly denied on account of the use of a Permanent Account Number (PAN) issued in the status of a firm.

The two member bench comprising Pradip Kumar Choubey (Judicial Member) and Rajesh Kumar (Accountant Member) noted that the assessee was a genuine resident of Sikkim, settled there before 01.04.1975, and ran a petrol pump under the proprietorship Chandra Sales Agency.The case was selected for scrutiny due to large cash deposits during FY 2016-17, including the demonetization period, and no return was filed.

Application of Form 10AB Rejected As Premature And Non-Maintainable: ITAT Remands Citing Commencement of Trust Activities

MAA ShardaKothari Foundation 7 vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1331

The Tribunal set aside the CIT(E)’s rejection of Form 10AB as premature due to non-commencement of activities, and remanded the matter for fresh adjudication, noting that the trust had since commenced charitable activities in March 2024.The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) set aside the order of the Commissioner of Income Tax (Exemption) [CIT(E)] rejecting the application in Form 10AB for regular registration under Section 12AB(1)(b) of the Income Tax Act, 1961, as premature and non-maintainable Citing commencement of activities.

The two-member bench comprising T.R. SenthilKumar (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that while activities had not commenced at the time of application, the trust had since started operations in March 2024 within the provisional registration period, as evidenced by Form 10BB and the return filed.

CIT(E) Erred in Denying 80G Approval Despite Grant of 12AB Registration: ITAT Directs Approval u/s 80G for Charitable Educational Trust

Dr. T.M.A. PaiFoundation vs CIT CITATION : 2025 TAXSCAN (ITAT) 1332

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) directed the Commissioner of Income Tax (Exemptions) [CIT(E)] to grant approval under Section 80G of the Income Tax Act, 1961 and held that the denial was erroneous as there was prior grant of registration under Section 12AB.

The two-member bench comprising PrashantMaharishi (Vice President) and Keshav Dubey (Judicial Member) observed that registration under Section 12A was granted after verifying the genuineness of activities and compliance with laws.

Non-Compliance Due to Unawareness of Proceedings: ITAT Remands ₹28.71 Lakh Unexplained Cash Deposit Addition u/s 69A to CIT(A)

GajananJagannath Kalbhor vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1333

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) set aside the order of the National Faceless Appeal Centre (NFAC) and remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication in a case involving an addition of Rs. 20.44 lakh as unexplained cash deposits under Section 69A of the Income Tax Act, 1961.

The single-member bench comprising Dr. Manish Borad (Accountant Member) observed that the assessee had not appeared, possibly due to unawareness or issues with communication of notices.

Discretionary Trust created under Deceased’s Will Not Liable to Income Tax at Maximum Marginal Rate u/s 164: ITAT

ShakuntalaBalvantray vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1334

The Ahmedabad Benchof the Income Tax Appellate Tribunal (ITAT) has held that a discretionary trust which is created under the Will of a deceased individual is not liable to income tax at the maximum marginal rate, as it falls under the exception provided in the first proviso to Section 164(1) of the Income Tax Act, 1961.

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The Bench, comprising Shri Sanjay Garg (Judicial Member) and Ms. Annapurna Gupta (Accountant Member), agreed with the assessee’s submissions and held that the AO is directed to charge the tax on the trust at the rate ordinarily applicable to the total income of an AOP and not at the maximum marginal rate.

Relief for Genpact: ITAT Allows S.10AA Deduction on Interest from FDs and Staff Loans

M/s. GenpactIndia Pvt.Ltd. vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1335

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) granted relief to Genpact India Pvt. Ltd. by allowing deduction under Section 10AA of Income Tax Act,1961 on interest income earned from fixed deposits and staff loans.

The two member bench comprising Mahavir Singh (Vice President) and Manish Agarwal (Accountant Member) heard both sides and examined the records. It held that the interest income earned from fixed deposits and staff loans should be treated as business income for the purpose of deduction under Section 10AA of the Act.

Relief for IndiGo: ITAT Upholds Deletion of Rs. 11.05 Crore Disallowance u/s 37 as AO’s Final Assessment Confirms Nil Income

DCIT vs M/s.Interglobe Aviation Limited CITATION : 2025 TAXSCAN (ITAT) 1336

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the deletion of Rs. 11.05 crore disallowance under section 37 in favor of Interglobe Aviation Limited ( IndiGo ), observing that the Assessing Officer (AO )’s final assessment under section 143(3) of Income Tax Act,1961confirmed nil income after proper scrutiny, leading to the dismissal of the Revenue’s appeal.

The two member bench comprising Anubhav Sharma (Judicial Member) and S.Rifaur Rahman ( Accountant Member) reviewed the submissions and records. The assessee declared nil income in the return. The AO disallowed expenses of Rs. 38.48 crore under section 37 while processing the return under section 143(1). On appeal, JCIT (A) deleted this disallowance after checking the facts and evidence.

S.12A Registration Declined Due to No Proof of Charitable Activities: ITAT Remands Matter to CIT(E) for Verification of Documents

DharmarthEducation Centre vs CIT(Exemption) CITATION : 2025 TAXSCAN (ITAT) 1337

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order passed by the Commissioner of Income Tax (Exemptions) ( CIT(E) ) rejecting registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961 of an assessee, and remanded the matter for fresh adjudication after proper verification of supporting documents.

The Bench comprising M. Balaganesh (Accountant Member) and Yogesh Kumar U.S. (Judicial Member) observed that the reason for rejection was the failure to prove charitable activities through bills/vouchers and supporting documents. However, the assessee maintained in its appeal grounds that such documents were submitted.

Bogus Accommodation Entries for Purchases: ITAT Restricts Unexplained Credit Addition to ₹12.50 Lakh Estimating Profit Element on Inflated Purchases

Shri VinodGupta vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1338

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) restricted the addition of unexplained credits to Rs. 12,50,000/- and estimated the profit element on inflated purchases obtained through bogus accommodation entries, while deleting the bulk of the Rs. 4,05,71,650/- addition made by the Assessing Officer (AO).

The two-member bench comprising Gagan Goyal (Accountant Member) and Narendra Kumar (Judicial Member) observed that while the purchases were bogus, inflating expenses via fictitious invoices, only the embedded profit element warranted addition, not the entire amount, to avoid double taxation on sales.

83-year Old Taxpayer with Diabetic Issue: ITAT Condones 332 Income Tax Appeal Delay

Ambalal HiralalOza vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1339

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) condoned a delay of 332 days in filing the appeal by an 83-year-old super senior citizen assessee, acknowledging health challenges and other circumstances, and set aside the ex-parte order for fresh adjudication on the valuation of sold immovable property.

The two-member bench comprising T.R. SenthilKumar (Judicial Member) and Narendra Prasad Sinha (Accountant Member) observed that the ex-parte nature of the impugned order and the assessee's status as co-owner of the property.

Bonus Paid Before Due Date Despite Audit Report Error: ITAT Deletes ₹14.03 Lakh Disallowance Citing Timely Payment

M/s RajasthanKnowledge Corporation Ltd vs The ACIT CITATION : 2025 TAXSCAN (ITAT) 1340

The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the disallowance of Rs. 14,03,538/- towards bonus expenditure on grounds of timely payment before the due date of filing the return.

The two-member bench comprising Gagan Goyal (Accountant Member) and Narendra Kumar (Judicial Member) observed that the bonus payment was made before the due date of filing the return.

Assessee’s Non-Compliance before AO & CIT(A): ITAT slaps ₹5,000 Costs and Remands ₹3.2 Cr Income Tax Addition, ₹1.07 Cr Penalty Issue

VijayabenRajubhai Thakor vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1341

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a matter back to the Commissioner of Income Tax (Appeals) ( CIT(A) ) for fresh adjudication, due to the non-compliance by the assessee before, both the Assessing Officer (AO) or before the CIT(A).

The Bench comprising Siddhartha Nautiyal (Judicial Member) and Narendra Prasad Sinha (Accountant Member) observed that no explanation was provided for the non-compliance at any stage. The Tribunal imposed costs of ₹5,000 which was to be paid to the Income Tax Department within 15 days of receipt of the order.

Valuation Report for Cost of Acquisition in LTCG Computation Accepted: ITAT Directs Re-Computation of ₹104.27 Lakh Gains

Shri Sukh PalSingh vsITO CITATION : 2025 TAXSCAN (ITAT) 1342

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) accepted the valuation report for computing the cost of acquisition as on 01-04-1981 and directed re-computation of long-term capital gains (LTCG) of Rs. 104.27 lakh.

The two-member bench comprising Rajpal Yadav (Vice President) and Manoj Kumar Aggarwal (Accountant Member) observed that the cost of acquisition adopted by the assessee was supported by the valuation report.

Income Tax Addition of ₹52.3 Lakh u/s 69A: ITAT Orders Remands for Enquiry Since Assessee Was Not Grossly Non-compliant

Genius MoneyChanger vs ITO CITATION : 2025 TAXSCAN (ITAT) 1343

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded an income tax addition of ₹52,34,050 which was made under section 69A of the Income Tax Act, 1961 for fresh adjudication. The Tribunal held that the assessment was made under section 144 due to partial compliance by the assessee and could not be considered grossly non-compliant.

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The bench comprising Pradip Kumar Kedia (Accountant Member) and Vimal Kumar (Judicial Member) set aside the addition and restored the matter to the AO’s file for a fresh adjudication. The AO was directed to provide the assessee a proper opportunity to submit evidence and explanations in support of its claim that the income was already taxed.

Setback to Indian National Congress: ITAT denies ₹199 Crore Income Tax Exemption Over Late Filing & Cash Donations Breach

Indian NationalCongress All India Congress Committee vs DCIT

CITATION : 2025 TAXSCAN (ITAT) 1344

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the appeal of the Indian National Congress (INC) against the denial of Rs. 199.15 crore income tax exemption under Section 13A of the Income Tax Act, 1961, citing violations related to delayed filing of return and receipt of cash donations exceeding the permissible limit.

The two-member bench, comprising Satbeer Singh Godara (Judicial Member) and M. Balaganesh (Accountant Member), upheld the findings of the lower authorities. The tribunal ruled that the return filed on 02.02.2019 was beyond the statutory “due date” as required under Section 139(4B), and such delay automatically disentitled the party from availing the Section 13A exemption.

ITAT Allows HRA Exemption of ₹7.8 Lakh for Salaried Employee, Slams CPC for Erroneous Disallowance

NikhilVinodchandra Shah vs The Dy. CIT CITATION : 2025 TAXSCAN (ITAT) 1345

The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench has ruled in favor of a salaried employee, allowing a house rent allowance (HRA) exemption of ₹7.8 lakh and criticizing the Centralized Processing Center (CPC) for incorrectly disallowing the claim. The tribunal found that the CPC’s adjustment under Section 10(13A) of the Income Tax Act, 1961, was unjustified and violated the rules.

The bench, comprising Judicial Member TR Senthil Kumar and Accountant Member Annapurna Gupta, allowed Shah’s appeal, holding that the HRA exemption was rightfully claimed. The tribunal’s decision highlights the importance of accurate processing by the CPC and reinforces the rights of salaried taxpayers to legitimate exemptions.

Kerala Co-op Bank Secures Tax Win: ITAT allows ₹16.5 Lakh Deduction u/s 80P

Kalliad ServiceCo-operative Bank Limited vs The Income Tax Officer

CITATION : 2025 TAXSCAN (ITAT) 1346

The Income Tax Appellate Tribunal (ITAT), Cochin bench, has ruled in favor of the appellant, a Co-operative Bank, allowing a deduction of ₹16.48 lakh under Section 80P of the Income Tax Act, 1961. The decision overturns the earlier denial of the claim by tax authorities, marking a significant relief for the cooperative bank.

Single Member Bench of Accountant Member Inturi Rama Rao pronounced the order, allowing the bank’s appeal and setting aside the earlier decisions of the AO and CIT(A). The decision underscores the importance of adhering to settled legal principles and provides a clear directive for tax authorities in such cases.

ITAT rejects Cable Operator's Plea, Upholds ₹5.2 Lakh Income Addition from Seized Records

TrivandrumCable Network vs The Deputy Commissioner of Income-tax

CITATION : 2025 TAXSCAN (ITAT) 1347

The Income Tax Appellate Tribunal (ITAT), Cochin bench, has dismissed the appeal filed by a cable operator, upholding the addition of ₹5.22 lakh as undisclosed advertisement income based on documents seized during a search operation. The tribunal ruled that the assessing officer was justified in making the additions under Section 153A of the Income Tax Act, 1961, as they were supported by incriminating evidence.

Single Member Bench of Accountant Member Inturi Rama Rao, while dismissing the appeal, emphasized that the assessing officer had properly justified the additions based on concrete evidence found during the search. The tribunal found no merit in the company's contention that the income estimation was arbitrary, as the seized documents provided a clear basis for the calculations.

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Scrap Dealer Gets Second Chance: ITAT Orders Fresh Hearing After ₹3.84 Crore Tax Dispute Dismissed Without Merit Review

Gaffar EbrahimShaikh vs ITO CITATION : 2025 TAXSCAN (ITAT) 1348

The Income Tax Appellate Tribunal (ITAT), Pune bench, has granted relief to a Maharashtra-based scrap dealer by directing a fresh hearing in his ₹3.84 crore tax dispute case. The tribunal ruled that the appellate authority's dismissal of his case without examining the merits was improper, giving the assessee another opportunity to present his arguments.

The bench, comprising Accountant Member Dr. Manish Borad and Judicial Member Vinay Bhamore, condoned a five-day delay in filing the appeal, accepting the assessee's explanation of family health issues. The tribunal emphasized that technicalities shouldn't override substantial justice, citing the Supreme Court's ruling in Collector Land Acquisition vs MST Katiji (1987).

Penalty Invalid If Specific Charge u/s 270A is Not Mentioned in Income Tax SCN: ITAT Deletes Penalties for Four Assessment Years

DD Target PMTLtd vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1349

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted penalties levied on an assessee under Section 270A of the Income Tax Act, 1961 for Assessment Years (AY) 2017–18 to 2020–21 and observed that the Assessing Officer (AO) failed to mention the specific sub clause of misreporting within the Show Cause Notice (SCN) and penalty orders.

The bench comprising M.Balaganesh (Accountant Member) and Yogesh Kumar U.S. (Judicial Member) in an open court held that non mentioning of the specific charge and the relevant clause of Section 270A(9) in the SCN and the penalty order rendered the penalty order invalid in law.

Rectification Order Passed After Vivad Se Vishwas Settlement Invalid: ITAT Quashes ₹1.13 Cr Additional Demand

ShetkariShikshan Prasarak vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1350

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has set aside an additional demand of ₹1,13,05,449 raised through a rectification order under Section 154 of the Income Tax Act, 1961 and declared it invalid as it was passed after the full and final settlement under the Vivad Se Vishwas (VSV) Scheme, 2020.

The two-member bench, comprising R.K. Panda (Vice President) and Vinay Bhamore (Judicial Member), observed that the VSV Scheme’s provisions under Sections 4 and 5 confer finality to the determination of the amount payable.

ITAT Denies Immunity from Penalty as Application u/s 270AA Not Filed in Prescribed Format

Sri Ganesh ChitFund vs ITO CITATION : 2025 TAXSCAN (ITAT) 1351

The Cuttack Bench of Income Tax Appellate Tribunal (ITAT) dismissed the appeal of the appellant-assessee, who had sought immunity from penalty under Section 270AA of Income Tax Act,1961,without filing the application in the prescribed format.

The two member bench comprising George Mathan (Judicial Member) and Rajesh Kumar ( Accountant Member) noted that under Section 270AA(1), an assessee could seek immunity from penalty under Section 270A by filing an application in the prescribed form, provided no appeal was filed against the assessment order. Section 270AA(2) further required that such application be made within one month from the end of the month in which the assessment order was received.

Income Estimation Invalid Without Invoking S.145 and Rejecting Books of Account: ITAT

Sat InderConstructions Private vs DCIT ASMNT CITATION : 2025 TAXSCAN (ITAT) 1352

The Cuttack Bench of Income Tax Appellate Tribunal ( ITAT ) held that income estimation is invalid without invoking Section 145 under the Income Tax Act,1961,and rejecting the books of account.

The two member bench comprising George Mathan (Judicial Member) and Rajesg Kumar (Accountant Member) noted that the AO had not rejected the books of account or invoked Section 145 in the assessment order. While issues like bogus labour charges and lack of plant and machinery were mentioned, there was no clear finding on book rejection.

Income Addition Based on Third-Party Disclosure Without Evidence Not Sustainable: ITAT

SandipkumarNatwarlal Patel vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1353

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) held that an income addition based solely on third-party disclosure without supporting evidence is not sustainable.

The two member bench comprising Dr.B.R.R. Kumar (Vice President) and Suchitra Kamble (Judicial Member) heard both parties and reviewed the records. It referred to Central Board of Direct Taxes (CBDT) guidelines which advised that no addition should be made based solely on a statement unless backed by credible evidence. The tribunal noted that the AO had not brought any independent evidence or documents to support the addition of Rs. 8,01,000.

Penalty u/s 271D Imposed for Cash Transaction in Wrong AY: ITAT Directs AO to Delete Penalty

Jogendra KumarPanda vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1354

The Cuttack Bench of Income Tax Appellate Tribunal ( ITAT ) directed the deletion of penalty imposed under Section 271D of Income Tax Act,1961, holding that the cash transaction in question pertained to the wrong assessment year (AY).

The two member bench comprising George Mathan (Judicial Member) and Rajesh Kumar (Accountant Member) noted that the land was sold through a sale deed dated 23.03.2016, which related to AY 2016-17.

Penalty u/s 271(1)(c) Imposed During Pendency of Quantum Appeal: ITAT Terms It Premature, Sets Aside Order

Murmu PankajKumar vs ITO CITATION : 2025 TAXSCAN (ITAT) 1355

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the penalty order passed under Section 271(1)(c) of Income Tax Act,1961, noting that it was imposed while the quantum appeal was still pending before the Commissioner of Income Tax (Appeal)[CIT(A)].

The two member bench comprising Keshav Dubey (Judicial Member) and Laxmi Prasad Sahu (Accountant Member) noted that the quantum appeal was still pending before the CIT(A) yet the authorities had proceeded with issuing penalty notices and passing the penalty order.

Religious Activity Struck Down in Trust Deed: ITAT Holds Charitable Nature for S. 80G Approval Citing Non Violation of 5% Threshold Limit

Jay BhawaniMandhani Charitable Trust vs CIT (Exemption) CITATION : 2025 TAXSCAN (ITAT) 1356

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) held that the trust qualifies for approval under Section 80G ofthe Income Tax Act, 1961, as the religious clause in its deed was struck off and religious expenditure was nil, complying with the 5% threshold limit.

The two-member bench, comprising Suchitra Raghunath Kamble (Judicial Member) and Bijayananda Pruseth (Accountant Member), observed that the CIT(E) failed to consider the struck-off portion of clause 4(13). The bench reviewed the trust deed and its English translation, confirming that the religious activities mentioned in the clause had been removed.

Mere Upload of Notice in Income Tax Portal Not a Valid Service: ITAT Quashes Assessment Order, Citing Lack of Real Time Alert

Maa ShardaCorporation vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1357

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) held that the Income Tax Department’s practice of merely uploading a notice on the e-filing portal, without issuing a real-time alert or serving it through prescribed modes like email or post, renders the notice invalid.

The single member bench comprising ParthaSarathi Chaudhury (Judicial Member), observed that Income Tax portal’s records did not clarify who issued the notice, to whom it was addressed, or its subject matter, suggesting the notice was not issued in accordance with statutory requirements.

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