ITAT WEEKLY ROUND-UP [ June 21st - 27th ]

M/s. Gheverchand Rikhabchand Jain vs The Asst. CIT CITATION : 2025 TAXSCAN (ITAT) 1112

The Income Tax Appellate Tribunal (ITAT) Mumbai bench has strongly criticized the Commissioner of Income Tax (Appeals) for denying a fair hearing to a taxpayer, calling it a violation of natural justice. The tribunal ordered tax authorities to re-examine a ₹13.47 crore addition related to unsecured loans, giving the assessee a proper chance to present evidence.

Mumbai-based Gheverchand Rikhabchand Jain, a trader in shares and securities, who had taken loans from multiple parties. Tax authorities had treated these loans as bogus and added the amount to the assessee's taxable income while also disallowing ₹2.85 crore in interest payments.

ITAT Upholds Tax on Unsold Inventory as 'Income from House Property,' Directs Recalculation of ALV Based on Market Rates

Sabarmati Capital One Limited vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1113

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the taxability of unsold flats held as stock-in-trade under the head "Income from House Property," while remanding the matter back to the Assessing Officer to reassess the Annual Lettable Value (ALV) based on prevailing market rates.

The assessee, Sabarmati Capital One Limited, is a real estate company engaged in the business of constructing and selling residential and commercial units. During the assessment proceedings for the year 2015–16, the Assessing Officer noticed that the company held several unsold flats and shops as stock-in-trade. Although the assessee had shown these properties in its books, it had not offered any notional income from them.

ITAT Sets Aside Penalty Order, Cites Denial of Fair Hearing Due to Improper E-Notice Delivery

Mohd Husain vs Income Tax Officer-1 CITATION : 2025 TAXSCAN (ITAT) 1110

The Income Tax Appellate Tribunal (ITAT) Lucknow has canceled a penalty order against a Raebareli taxpayer, ruling that authorities failed to provide a fair hearing by ignoring the assessee's request to avoid email communications. The tribunal directed tax officials to re-examine the case after proper notice delivery, emphasizing the importance of accommodating taxpayers' communication preferences.

The case involves Mohd Husain, a resident of Murar Mau in Raebareli, who was slapped with a ₹3.34 lakh penalty under Section 270A of the Income Tax Act for the 2017-18 assessment year. The dispute arose when tax authorities imposed the penalty and subsequently dismissed Husain's appeal, despite his clear request to receive notices through physical channels rather than email.

ITAT Holds 10% Tolerance Limit u/s 56(2)(x) Applicable Retrospectively, Cuts Addition in Property Valuation Case

NFAC, Delhi vs NRB Developers CITATION : 2025 TAXSCAN (ITAT) 1114

In a significant ruling, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the enhanced 10% tolerance limit under section 56(2)(x) of the Income Tax Act applies retrospectively. This decision has resulted in a substantial reduction of the addition made to the income of NRB Developers in a property valuation dispute for the assessment year 2018-19.

NRB Developers, who had purchased a property from Lotus Griha Nirman Pvt Ltd, covering around 6,180 square feet in a commercial building called “Lous Link Square” for a total consideration of Rs. 8.19 crore. The property was booked in March 2010, and payment was made through banking channels. At the time of registration, there was a significant difference of Rs. 9.04 crore between the value declared by the parties and the stamp duty value.

ITAT Sets Aside Rejection of 12AB Registration to Ujjain-Based NGO: Remands Matter to CIT (Exemption)

Mahavir Yuva Sarva vs CIT (Exemption) CITATION : 2025 TAXSCAN (ITAT) 1117

The Income Tax Appellate Tribunal (ITAT), Indore Bench, has set aside the order of the Commissioner of Income Tax (Exemption), which had denied permanent registration under Section 12AB of the Income Tax Act, 1961, to Mahavir Yuva Sarva Shiksha Samajik Samiti, a Ujjain-based charitable society, and cancelled its earlier provisional registration.

The Tribunal held that the rejection was solely based on the absence of donor PAN and address details for small-ticket donations and that the CIT (Exemption) had not recorded any adverse finding against the genuineness of the society or its charitable objects.

ITAT Quashes Assessment Orders on Grounds of Invalid Special Audit Reference: Allows Appeals of Legal Heirs

Smt. Rama Devi vs The DCIT(A) CITATION : 2025 TAXSCAN (ITAT) 1116

The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, has quashed assessment orders passed against late Laxman Rao Banapuram for the assessment years 2014–15 and 2015–16, holding that the reference made by the Assessing Officer (AO) to a special audit under Section 142(2A) of the Income Tax Act, 1961, was mechanical, arbitrary, and invalid, and therefore, the resultant assessments were time-barred.

The appeals were filed by the legal heirs, Rama Devi, B. Pramod, and B.V. Santosh, challenging the assessment orders passed on the deceased assessee, Laxman Rao. The AO had issued notice under Section 153A following a search operation conducted in December 2016 and subsequently invoked Section 142(2A) to refer the case for special audit just before the statutory deadline for completing assessment.

Two Income Tax Notice issued by CIT(A) in one Week amounts to Gross Violation of Opportunity to respond: ITAT Allows appeal of Geovista Technology LTD

Geovista Technologies vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1120

In a recent case, the Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) viewed that two income tax notices issued by the Commissioner of Income Tax (CIT(A)) in one week amount to gross violation of the opportunity to respond and allowed appeal of Geovista Technology Ltd.

Geovista Technologies Private Limited, the assessee has submitted that the CIT (A) has passed the impugned order ex-parte without giving an appropriate opportunity of hearing to the assessee. The AR has pointed out that the matter was listed for hearing on 3/12/2024 and the impugned order was passed on the same date denying any opportunity to the assessee to represent the matter.

ITAT directs De Novo Proceedings due to lack of Evidence to substantiate Deffered Revenue in P & L account
Gujarat State Road Development Corporation Ltd vs Deputy Commissioner of Income Tax

CITATION : 2025 TAXSCAN (ITAT) 1118

In a recent case, the Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) directs de novo proceedings due to lack of evidence to substantiate deferred revenue in the profit & loss account (P&L account).

Gujarat State Road Development Corporation Ltd., the assessee, appealed against the order passed by the Commissioner of Income Tax(Appeals), (CIT(A)), National Faceless Appeal Centre ( “NFAC”), Delhi vide order dated 14.06.2024 passed for A.Y. 2017-18.

Hiring of Charter Plane cannot be Treated as a Payment made for Professional or Technical Services: ITAT remands matter

M/s. Bombay Integrated Security (India) Limited vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1119

In a recent case, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that hiring a charter plane cannot be treated as a payment made for professional or technical services

Bombay Integrated Security (India) Limited, the assessee is engaged in providing security services and allied services. Basis TDS default reported in para 21(b)(ii) of the Tax Audit Report for the FY. 2021-22, a show cause notice was issued to the assessee as to why the assessee should not be treated as assessee-in-default for non-deduction of TDS on account of payment of Rs. 40,80,000/-, which was paid on 12-12-2021.

ITAT Holds Peak Credit Theory Not Applicable in Undisclosed Income Gold Stock Case; Directs AO to Verify Details as per CBDT SOP/Guidelines

Shah Maganlal Gulabchand vs The ACIT CITATION : 2025 TAXSCAN (ITAT) 1121

The Surat bench of the Income Tax Appellate Tribunal (ITAT) has held that the theory of peak credit is inapplicable in a case involving undisclosed income channeled through bogus gold trade transactions. The Tribunal ordered the Assessing Officer (AO) to verify all the details and evidence that are mandated as per the Central Board of Direct Tax (CBDT) Standard Operating Procedure (SOP) and Guidelines.

The appellant, Shah Maganlal Gulabchand Choksi is a Surat-based company engaged in the trading of gold and silver bullion. The Income Tax Department’s attention was attracted to the company after an investigation in the wake of demonetization.

Defective Income Tax Notice Invalidates S. 271(1)(C) Proceedings: ITAT Deletes Penalty

Mr. Vikas Jayram Bhukan vs ITO CITATION : 2025 TAXSCAN (ITAT) 1123

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has set aside a penalty of Rs. 13,44,580 imposed under Section 271(1)(c) of the IncomeTax Act, 1961, citing the defective income tax notice that failed to specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Vikas Jayram Bhukan (assessee), an individual engaged in the business of trading land and real estate, faced scrutiny for Assessment Year (AY) 2012-13. The assessee filed his Income Tax Return (ITR), declaring a total income of Rs. 9,49,160.

ITAT Remands Rejection of Charitable Trust Registration Due to Insufficient Verification of Seminar Expenses and TDS Deductions

Society on Promotion vs CIT(Exemption) CITATION : 2025 TAXSCAN (ITAT) 1122

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the rejection of applications for registration citing insufficient verification of seminar expenses and TDS deductions by the Commissioner of Income Tax (Exemption) [CIT(E)].

The tribunal ruled that the Commissioner of Income Tax (Exemption) [CIT(E)] failed to adequately verify the trust’s seminar expenses and the implications of TDS deductions by pharmaceutical donors.

ITAT permits Inclusion of Five Comparable Companies for Transfer Pricing, quashes Rs. 2.39 Cr Adjustment

Troy Chemicals India Pvt. Ltd vs CIT(A), NFA Ward-11(3)(1) CITATION : 2025 TAXSCAN (ITAT) 1124

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the inclusion of five additional companies as comparables for transfer pricing benchmarking and quashing a transfer pricing adjustment of Rs. 2,39,98,806 for Assessment Year (AY) 2021-22. Troy Chemicals India Pvt. Ltd. (assessee), a subsidiary of Troy Corporation, USA, is engaged in the trading of specialty chemicals in India. The assessee filed its income tax return on 14.02.2022, declaring a total income of Rs. 2,33,200.

The assessee entered into international transactions with its associated enterprise (AE), Troy Siam Company Ltd., involving the purchase of finished goods worth Rs. 79,76,34,766 and purchase returns of Rs. 31,35,888, adopting the Resale Price Method (RPM) for benchmarking.

S.11 & 12 Exemption Cannot Be Denied Merely Due to Delayed Registration of Trust: ITAT

Shree Koteshwar Mahadev Public vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1125

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) remanded the case concerning the denial of exemption under Sections 11 and 12 of the Income Tax Act, 1961 to Shree Koteshwar Mahadev Public Trust, observing that the lower authorities had not properly evaluated the trust's eligibility post-registration and did not provide adequate opportunity for hearing.

Shree Koteshwar Mahadev Public Trust, the assessee, had claimed exemption of Rs. 8,47,257 under Sections 11 and 12 for the Assessment Year 2013–14. The Centralized Processing Center (CPC), Bangalore, disallowed the claim and raised a demand of Rs. 2,12,580 under Section 143(1). The assessee later obtained registration under Section 12AA on 31.10.2017.

ITAT sets aside Income Tax Penalty on Fruit Dealer for Misreporting, Directs CIT(A) to Reconsider Immunity Despite Form 68 Lapse

Terai Fruits Company vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1126

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has set aside a penalty imposed for misreporting of income while directing the Commissioner of Income Tax (Appeals) ( CIT(A) ) to re-examine the firm’s claim for immunity, observing that a procedural lapse in form submission alone should not override the assessee’s substantive requirements.

The appellant, Terai Fruits Company, is a partnership firm involved in fruit trading, which fell under the income tax investigation for the Assessment Year (AY) 2018-19. According to data received from the Central Bank of India, the firm had deposited over ₹1.03 crore in cash into its bank account during the Financial Year (FY) 2017–18. However, they had not filed any return of income for that year, leading to reassessment proceedings under Section 147 of the Income Tax Act, 1961.

ITAT Upholds CIT(A) Order: No Addition u/s 68 for Share Capital and Unsecured Loans as Assessee Proves Identity, Creditworthiness, and Genuineness

ACIT vs Signature Global (India) Pvt. Ltd CITATION : 2025 TAXSCAN (ITAT) 1127

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has dismissed an appeal filed by the Revenue against Signature Global (India) Pvt. Ltd., ruling in favor of the assessee on issues related to share capital, unsecured loans, and disallowance under Section 14A of the Income Tax Act, 1961. The bench comprised Sudhir Pareek (Judicial Member) and S. Rifaur Rahman(Accountant Member).

The case pertained to the assessment year 2016-17, where the Revenue had challenged the order of the Commissioner of Income Tax (Appeals) [CIT(A)], which had deleted additions made by the Assessing Officer (AO). The AO had added Rs. 39,36,000 under Section 68 of the Act, alleging unexplained share capital and premium received by Signature Global from shareholder Vikas Garg. The AO contended that Garg’s declared income was insufficient to justify the investment. However, the CIT(A) found that the assessee had provided complete documentation, including bank statements, ITR acknowledgments, and confirmations, establishing the identity, creditworthiness, and genuineness of the transaction. The ITAT upheld the CIT(A)’s decision, noting that the assessee had even explained the "source of source" of the funds, with Garg receiving amounts from his mother and another individual.

ITAT Deletes Addition u/s 68, Rules Assessee Proved Source of Funds for Land Purchases in Earlier Years

Raksha Buildtech Private Limited vs ITO CITATION : 2025 TAXSCAN (ITAT) 1128

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has deleted an addition of Rs. 3.12 crore made under Section 68 of the Income Tax Act, 1961, holding that Raksha Buildtech Private Limited had sufficiently demonstrated the source of funds for land purchases made in earlier years. The bench comprised Judicial Member Sudhir Kumar and Accountant Member S. Rifaur Rahman.

The case pertained to the assessment year 2017-18, where the Assessing Officer (AO) had questioned the legitimacy of Rs. 70.64 crore worth of inventories shown in Raksha Buildtech’s balance sheet.

No S.153C Income Tax Assessment if Documents only ‘Pertain to’ and do Not ‘Belong to’ Assessee: ITAT Deletes ₹85L Addition

Rachita Sahgal vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1096

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an aggregate tax addition of ₹85.88 lakh, observing that the proceedings under Section 153C of the Income Tax Act, 1961 were initiated on the basis of documents that merely “pertained to” the assessees, but did not “belong to” them. A search and seizure operation was carried out by the Income Tax Department at the premises of the Navneet Dawar Group.

During the course of this search, certain documents suggesting unaccounted property transactions were allegedly recovered. The Department was of the view that these documents belonged to Rachita Sahgal & Vivek Sahgal, and proceeded to make additions of ₹42,94,000 each in each of their assessment orders for Assessment Year 2018–19, by invoking Section 153C.

Sale of REC/ Carbon Credits are Capital Receipt: ITAT Quashes Demand

Mayur Dyechem Intermediates LLP vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1093

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that income earned from the sale of Renewable Energy Certificates (RECs), also referred to as carbon credits, constitutes a capital receipt and is not taxable for Assessment Year (AY) 2017-18. The tribunal quashed the disallowance of a deduction of Rs. 12,27,384 claimed under Section 80IA of the Income Tax Act, 1961.

Mayur Dyechem Intermediates LLP (assessee), a firm operating a solar power plant, faced scrutiny for AY 2017-18. The assessee filed its income tax return on 02.09.2017, declaring a total income of Rs. 26,75,45,830.

ITAT Denies Section 54F Exemption for Property Purchased in Mother's Name

Ashok Kumar vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1092

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) denied a deduction under Section 54F of the Income Tax Act, 1961, citing that it cannot be claimed for a residential property purchased in the name of the assessee’s mother.

Ashok Kumar (assessee), an individual faced scrutiny for Assessment Year (AY) 2015-16. The assessee had filed his income tax return declaring an income of Rs. 2,70,000. The assessee sold a commercial property for Rs. 1,23,00,000 on 05.02.2015 which resulted in a Long-Term Capital Gain of Rs. 78,57,794 after indexing the cost of acquisition.

The assessee invested the capital gain in a residential property purchased on 30.06.2015 in the name of his mother, Smt. Promila Rani Yadav to claim deduction under section 54F of the Income Tax Act.

Loan Not Utilised for Business Purposes: ITAT upholds PCIT's Decision Directing AO to Verify Exemption u/s 14A

Thiruvenkitam Veeriah vs The Dy.Commissioner of Income-tax CITATION : 2025 TAXSCAN (ITAT) 1079

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of the Principal Commissioner of Income Tax (PCIT) and confirmed that the deduction claimed for interest paid on a borrowed loan was not permissible, as the loan was not used for business purposes.

Thiruvenkitam Veeriah Reddiar (assessee), represented through his legal heir Beena Veeriah Reddy, filed his income tax return for the Assessment Year (AY) 2020-21 on 15th February 2021, declaring a total income of Rs. 12,12,490.

ITAT Allows Goregaon Education Society’s Exemption Claim u/s 11 Despite Delay in Filing Forms 9A and 10 obeying CBDT Circular

The Goregaon Education Society vs ITO CITATION : 2025 TAXSCAN (ITAT) 1108

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) recently allowed an appeal filed by Goregaon Education Society while observing that the exemption under Section 11 of the Income Tax Act, 1961 cannot be denied due to delays in filing Forms 9A and 10, as the Central Board of Direct Taxes (CBDT) circulars permits such delay and the same are binding on the revenue authorities. The appellant Goregaon Education Society is a registered charitable organization under section 12A of the Income Tax Act and operates an educational institution. The Appellant filed their return for Assessment Year (2017-18), along with the income and expenditure account, balance sheet and Form No.10B declaring total income as Nil.

ITAT Allows Foreign Tax Credit Despite Delay in Filing Form 67, Says Compliance is Directory and Not Mandatory

Timirbaran Mazumder vs D.C.I.T./A.C.I.T CITATION : 2025 TAXSCAN (ITAT) 1129

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has recently allowed a Foreign Tax Credit (FTC) to an assessee, despite a delay in filing Form 67, holding that procedural lapses cannot extinguish substantive rights.

The appeal was filed by Timirbaran Mazumder, a resident individual who had claimed credit of ₹14.35 lakhs for taxes paid in the United States, under Section 90/90A of the Income Tax Act, 1961, read with the India-USA DTAA. The dispute arose from an intimation order passed under Section 143(1) for the Assessment Year 2018–19, where the Centralised Processing Centre (CPC) denied the FTC solely on the grounds of late filing of Form 67.

Accountant’s Negligence: Uneducated Taxpayer wins Second Chance, ITAT condones 87-Day Delay

Amol Babanrav Kolakar vs Addl./Jt./Dy./Asstt./ITO CITATION : 2025 TAXSCAN (ITAT) 1131

The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) has condoned a delay of 87 days in filing an appeal, granting relief to a taxpayer who claimed ignorance of proceedings due to negligence by his part-time accountant.

The appellant, Amol Babanrav Kolakar, had approached the Tribunal challenging an ex-parte order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi, in relation to Assessment Year 2017–18. His appeal before the CIT(A) had been dismissed without adjudication on merits, as it was filed late by 59 days without an accompanying condonation application.

ITAT quashes ₹1.26Cr Addition: No Need to Prove ‘Source of Source’ for Pre-2013 Loans

Pooja Equiresearch Pvt. Ltd vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1130

The Income Tax Appellate Tribunal (ITAT) Mumbai Bench has set aside an addition of ₹1.26 crore made under Section 68 of the Income Tax Act against the appellant holding that for assessment years prior to 2013-14, an assessee is not required to prove the “source of the source” of loans or credits reflected in its books.

The case involved Pooja Equiresearch Pvt. Ltd., whose assessment for the year 2011-12 was reopened based on information from the Kolkata Investigation Wing. The authorities alleged that the company had received accommodation entries in the form of loans from three entities, namely Brotex Vanijya Pvt. Ltd., Spring Enclave Pvt. Ltd., and Harsharatna Finance and Investment Pvt. Ltd. The Assessing Officer, after issuing notices and examining documents, was not satisfied with the creditworthiness of the creditors and the genuineness of the transactions.

Co-op Society wins ₹10.14L Tax Relief: ITAT rules FDR Interest Eligible for 80P Deduction

Aditya Urban Co–operative vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1134

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has granted substantial tax relief to a cooperative credit society, holding that interest earned on fixed deposits (FDRs) with cooperative banks qualifies for deduction under Section 80P(2)(d) of the Income Tax Act.

The appeal was filed by Aditya Urban Co-operative Credit Society Limited against the disallowance of deduction claimed under Section 80P amounting to ₹10,14,038 for Assessment Year 2018–19. The Assessing Officer had denied the claim on the ground that the interest earned on fixed deposits placed with cooperative banks was not income “from” cooperative societies, thereby not eligible under Section 80P(2)(d).

ITAT gives Taxpayer Second Chance: Ex-Parte CIT(A) Order Set Aside for Natural Justice

Abhishek Golecha vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1133

In a significant decision, the Income Tax Appellate Tribunal (ITAT), Nagpur Bench, has set aside an ex-parte order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] and granted the taxpayer a fresh opportunity to present his case. The ruling emphasizes the importance of adhering to the principles of natural justice in tax proceedings.

The case involved Abhishek Golecha, a resident of Nagpur, who had filed an appeal against an assessment order for the financial year 2015–16. The CIT(A) had dismissed his appeal earlier due to non-appearance, despite multiple notices being issued.

ITAT sets aside PCIT Order on Revenue Recognition, Holds No Revenue Prejudice as Income Declared in Subsequent Years

Shreeji Associates vs Principal Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1135

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) set aside an order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961. The bench held that the assessment order on the issue of revenue recognition did not contain any errors or cause harm to the Revenue since the income alleged to have been lost had been duly declared in subsequent years. The appellant, Shreeji Associates is a real estate firm engaged in the construction of residential bungalows and was subject to investigation for Assessment Year (AY) 2017–18.

Senior Citizen Not Familiar with Online Systems: ITAT Remands Section 12AB and 80G Matter for Reconsideration

Lothada-Piplana-Padavala vs The Commissioner of Income Tax (Exemptions) CITATION : 2025 TAXSCAN (ITAT) 1141

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the orders of the Commissioner of Income Tax (Exemptions) [CIT(E)] which rejected the application for registration under Section 12AB and approval under Section 80G and remanded the matters for fresh consideration. Lothada-Piplana-Padavala Industrial Association (assessee), a trust applied for registration under Section 12AB through Form 10AB and for approval under Section 80G. The CIT(E) issued notices requesting documents to verify the genuineness of the trust’s activities and compliance with relevant laws.

Technical Error in Charitable Institution Registration Application: ITAT Set Asides 3-Year Gap Cancellation Order, Remands Matter

Karnataka State Diploma in Nursing Examination Board vs CIT (Exemptions) Bangalore CITATION : 2025 TAXSCAN (ITAT) 1143’

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemptions) [CIT(E)] which cancelled the registration granted under Section 12AB of the Income Tax Act, 1961 citing technical error in charitable institution registration application.

Karnataka state Diploma in Nursing Examination Board (assessee), a society established under the Karnataka Societies Registration Act, 1960, on 01.04.1995, operates with the objective of preparing professional nurses and maintaining high standards of nursing education and practice. The assessee was granted registration under Section 12AB of the Income Tax Act.

The CIT(E) initiated proceedings after more than three years and alleged that the registration was invalid. The CIT(E) contended that the assessee had no prior registration under Section 12A or 12AA of the act.

Non-Compliance to Income Tax Notice Not Deliberate: ITAT Remands Matter to CIT(A)

Maa Harsiddhi Infra Developers Private Limited vs The Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1142

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the ex-parte order of the Commissioner of Income Tax (Appeals) [CIT(A)] which dismissed the appeal for non-compliance with notices citing it was not deliberate and remanded the matter for fresh adjudication.

Maa Harsiddhi Infra Developers Private Limited (assessee), a company filed an appeal before the CIT(A) against the assessment order. The CIT(A) issued multiple notices for hearings and required the assessee to submit responses and documents to substantiate its grounds of appeal.

Failure to Consider Submitted Documents for Trust Registration: ITAT Remands with One More Opportunity

Kodavaame vs CIT (Exemptions) CITATION : 2025 TAXSCAN (ITAT) 1144

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], which cancelled the registration under Section 12AB of the Income Tax Act, 1961, and remanded the matter for fresh adjudication.

Kodavaame (assessee) a trust applied for registration under Section 12AB through Form 10AB on 29.06.2024. The CIT(E) assigned the case to the Jurisdictional Assessing Officer (JAO) for verification, who issued multiple notices requesting documents to verify the genuineness of the trust’s activities and compliance with relevant laws. The CIT(E) alleged that the assessee failed to respond to these notices or submit the required documents.

Employee Fails to Respond to Income Tax Email: ITAT Condones 510-Day Appeal Delay Finding Grounds Genuine

Purshottam Narayanrao Jadhao vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1145

The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) has condoned a delay of 510 days in filing an Income Tax appeal and set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] and directed fresh adjudication on the merits.

Purshottam Narayanrao Jadhao (assessee), a labour contractor, faced scrutiny for AY 2014-15. The appeal of the assessee before the CIT(A) was dismissed due to a 510-day delay. The CIT(A) held that the assessee cannot be excused for the omission of his employee

Relief for Mahindra University: ITAT Quashes Rejection of 80G Approval, Orders Fresh Review by CIT(E)

MAHINDRA UNIVERSITY vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1146

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemption) [CIT(E)] which rejected the application for approval under Section 80G of the Income Tax Act, 1961 and directed the CIT(E) to reconsider the application after thorough verification of the university’s charitable educational activities.

Mahindra University (assessee), a private university established under the Telangana State Private Universities (Establishment and Regulation) Act, 2020, applied for approval under Section 80G to enable tax deductions for donations. The CIT(E) rejected the application, stating that the university had not carried out substantial charitable activities.

ITAT Condones 224-Day Delay: Remands Modi Charitable Trust’s 12A & 80G Applications Over Unfamiliarity with E-Notices

Modi Charitable Trust vs The CIT(Exemption) CITATION : 2025 TAXSCAN (ITAT) 1147

The Ahmedabad Benchof the Income Tax Appellate Tribunal (ITAT) in its recent ruling condoned a delay of 224 days in filing appeals and remanded back the matter upon being certain that the appellant was unfamiliar with income tax proceedings and did not regularly check the e-filing portal or emails due to lack of prior litigation experience.

The appellant Modi Charitable Trust, had filed two appeals against the orders passed by the Commissioner of Income Tax (Exemption) ( CIT(E) ), whereby the CIT(E) had rejected the applications of the assessee-trust for final/regular approval under sections 12A and 80G of the Income Tax Act, 1961.

ITAT Quashes Cancellation of Trust Registration Over Jurisdictional and Procedural Lapses, Rules Specified Violation Clause u/s 12AB(4) Not Applicable Retrospectively

Hemkunt Foundations vs Principal Commissioner Income Tax CITATION : 2025 TAXSCAN (ITAT) 1150

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the cancellation of registration under Section 12AB of the Income Tax Act, 1961 and ruled that the Principal Commissioner of Income Tax (PCIT) lacked jurisdiction and that the "specified violation" clause under Section 12AB(4) was inapplicable for the financial years in question.

Hemkunt Foundations (assessee) was registered under Section 12A and Section 80G of the Income Tax Act. The trust reapplied for registration post-amendment, which was granted on 24.09.2021. The Investigation Wing shared evidence found during the survey with the Assessing Officer (AO) and the PCIT, alleging multiple violations.

Notice Erroneously Issued in name of Bangalore Medical College Instead of Bangalore Medical College Alumni Association: ITAT Remands Matter

Bangalore Medical College Alumni Association vs CIT (Exemptions) Bangalore CITATION : 2025 TAXSCAN (ITAT) 1152

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], which rejected the application for approval under Section 80G of the Income Tax Act, 1961, and remanded the matter for fresh consideration.

Bangalore Medical College Alumni Association (assessee), a charitable trust, applied for approval under Section 80G through Form 10AB on 05.03.2024. The CIT(E) issued notices, requiring the assessee to appear and submit documents to verify the genuineness of the trust’s activities and compliance with the conditions under Section 80G of the Income Tax Act.

Claim of LTCG Exemption from Penny Stock Transactions Found Bogus: ITAT Upholds Disallowance

Chimanbhai Chhaganbhai vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1149

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the disallowance of ₹55.52 lakh claimed as Long Term Capital Gains (LTCG) exemption by the assessee, after finding the transaction to be part of a bogus penny stock scheme.

Chimanbhai Chhaganbhai Pokal,appellant-assessee, was found to have claimed bogus Long-Term Capital Gains (LTCG) exemption amounting to Rs. 55.52 lakhs. The Assessing Officer (AO) received information from the DDIT (Investigation), Calcutta, indicating that M/s. Jai Maa Kali Enterprise, linked to suspicious cash deposits, had transferred large sums to Mr. Ashok Kumar Kayan,an accommodation entry provider who admitted to issuing fake LTCG entries.

ITAT Condones 873 Day Delay in Filing Appeal due to COVID-19, Remands Matter to CIT(A) for Fresh Adjudication

Oxford Shiksha Samiti vs Income-tax Officer CITATION : 2025 TAXSCAN (ITAT) 1148

The Agra Bench of the Income Tax Appellate Tribunal (ITAT), in its recent ruling condoned delay in filing appeals that had previously been dismissed as time-barred by the Commissioner of Income-tax (Appeals) ( CIT (A) ) by relying on the Supreme Court’s directions to exclude the COVID-19 pandemic period for the purpose of computing limitation. The appellant Oxford Shiksha Samiti, had filed two appeals against two separate orders by the CIT(A) under section 250 of the Income Tax Act 1961, for the AY 2018–19 and 2019–20, in which the CIT(A) dismissed both first appeals as barred by limitation.

The limitation period for filing an appeal before the CIT(A) under section 249(2) of the Act is 30 days. However, under section 249(3) the first appellate authority may condone the delay if satisfied that the appellant had sufficient cause for not presenting it within that period. In the current case the CIT(A) was not satisfied to condone the said delay.

No Error in AO’s Order, Interest Deduction u/s 24(b) on Property Loan Valid: ITAT overturns PCIT’s Order

Raghav Bahl vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1151

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961, allowing the interest deduction claimed under Section 24B for Assessment Year (AY) 2013-14 to 2019-20.

Raghav Bahl (assessee) faced scrutiny following a search operation under Section 132 at his premises, part of the M/s PMC Group of cases. The assessee filed his Income Tax Return (ITR) declaring a total income of Rs. 1,04,53,330.

Relief to Muthoot Bankers: ITAT Allows ₹5L Interest Deduction u/s 40(b) as Payment was within 12% Limit and Authorized by Partnership Deed

Muthoot Bankers vs ITO CITATION : 2025 TAXSCAN (ITAT) 1153

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) in its recent ruling granted relief to Muthoot Bankers by allowing a deduction of ₹5,00,000 paid as interest to partner, as the payment was within the 12 percent limit and duly authorized by the partnership deed.

The appellant Muthoot Bankers, a firm engaged in finance and money lending, filed its return for the Assessment Year (AY) 2006-07 declaring a total income of ₹4,62,590. The return was processed and a refund of ₹6,830 was issued, which included interest under section 244A Income Tax Act, 1961 (ITA).

Ex-Parte Order Passed without Adjudicating Issue On Merits: ITAT Remits Rs. 3 Cr Sales and Purchases Matter to CIT(A)

Sh. Jagmohan Garg vs The DCIT CITATION : 2025 TAXSCAN (ITAT) 1154

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the ex-parte order of the Commissioner of Income Tax (Appeals) [CIT(A)] citing the failure to adjudicate the issue on merits and remanded the matter for fresh adjudication.

Jagmohan Garg (assessee), proprietor of M/s Garg Woolen Mills, Ludhiana, filed an appeal before the CIT(A) against an ex-parte assessment order passed under Section 144 of the Income Tax Act, 1961.

Past Assessment History Relevant When no Comparables Available: ITAT

M/s Deora Electric Works vs The JCIT CITATION : 2025 TAXSCAN (ITAT) 1155

The Allahabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has partly allowed the appeal of M/s Deora Electric Works, modifying the estimation of profits made by the Assessing Officer (AO) after rejecting the firm’s books under Section 145(3) of the Income Tax Act, 1961.

The Tribunal accepted the assessee’s submission in part, revising the net profit rate to 3.5% on contract receipts, while also remanding specific issues related to alleged suppression of receipts back to the AO for fresh verification.

MoU and Bank Records Support Loan Deal and Repayment: ITAT Flags Gaps in AO’s Unexplained Income Investigation

Uday Vithal Nagpure vs Income Tax Officer 15(1)(2) CITATION : 2025 TAXSCAN (ITAT) 1158

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the assessment order passed by the Assessing Officer (AO), which made additions totaling Rs. 2,23,53,793 under Section 68, and remanded the matter to the AO for fresh consideration.

Uday Vithal Nagpure (assessee) filed a return of income, declaring a total income of Rs. 1,51,860. The AO initiated the reassessment proceedings based on information from the Deputy Director of Income Tax (Investigation).

Disallowance of Related Party Payments u/s 40A(2)(b): ITAT Deletes Additions for AO’s Failure to Prove Excessiveness

Virbala Kiritkumar Patel vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1156

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted disallowances made under Section 40A(2)(b) for payments to related parties, holding that the Assessing Officer (AO) failed to justify the excessiveness of the amounts.

Virbala Kiritkumar Patel, appellant-assessee, was engaged in the business of building and land development. During assessment for AY 2009-10, the AO noticed that she had paid ₹1.57 crore as consultancy charges to a related party, M/s. Mangala Properties Pvt. Ltd.

Claim for deduction u/s. 80P(2)(a)(i) of Income Tax Act cannot be disallowed solely on ground of lending money to non-members : ITAT Allows Appeal of Cooperative society

Chittur Service Co-op. Bank Ltd vs The Income Tax Officer-1 & TPS CITATION : 2025 TAXSCAN (ITAT) 1157

In a recent ruling the ITAT Cochin bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal of cooperative society by holding that the claim for deduction under section 80P(2)(a)(i) of Income Tax Act, 1961 cannot be disallowed solely on ground of lending money to non-members

Chittur Service Co-op. Bank Ltd, the assessee challenged the different orders of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 04.12.2024 for Assessment Years (AY) 2016-17 & 2017-18. The appellant is a co-operative society registered under the KeralaState Co-operative Societies Act, 1969. The return of income for AY 2016-17 was filed on 24.03.2018 declaring Nil income after claiming deduction u/s. 80P of the Act. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1, Palakkad ( "the AO") denying the claim by holding that the appellant is not a co-operative society.

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