July 2026

The ITAT Delhi, in the case of Cloud 9 Projects Pvt. Ltd., quashed reassessment proceedings for AYs 2014-15 and 2015-16 on the ground that the section 148 notice was issued beyond the period of limitation. Following the Supreme Court’s decisions in Ashish Agarwal and Rajeev Bansal, and the Delhi High Court’s decision in Ram Balram Buildhome, the Tribunal calculated the surviving time limit after excluding certain periods. The assessment for AY 2014-15 was initially reopened by a notice dated 23.06.2021, which was deemed a show-cause notice under section 148A(b) as per Ashish Agarwal. The AO subsequently issued a fresh notice under section 148A(b) on 29.05.2022, and after considering the assessee’s reply, passed an order under section 148A(d) on 30.07.2022 and issued the final notice under section 148 on 31.07.2022. The Tribunal held that the AO had only 8 days of surviving limitation from the date of the assessee’s reply (12.06.2022), which expired on 20.06.2022, making the 31.07.2022 notice time-barred. For AY 2015-16, the Revenue conceded that TOLA did not apply, so the notice issued on 31.07.2022 was also beyond the limitation period. Consequently, all appeals of the assessee were allowed, and the reassessment and penalty orders were quashed.

In the case of Nitiben Nayaneshkumar Trivedi vs. ITO (ITA No. 2499/AHD/2025), the ITAT Ahmedabad SMC Bench allowed the appeal for statistical purposes, remanding the matter for de novo assessment. The assessee had time deposits and interest income but did not file return. The AO reopened assessment under section 147 and added Rs. 16,65,812 as unexplained money under section 69A. The CIT(A) dismissed the appeal. On appeal, the ITAT found that although the assessee was non-compliant, in the interest of justice, one more opportunity should be given. The ITAT set aside the CIT(A) order and remanded to the AO for fresh assessment, with a direction to the assessee to cooperate. The appeal was allowed for statistical purposes.

In this consolidated judgment, the Income Tax Appellate Tribunal, Delhi Bench ‘G’, disposed of 15 appeals (10 by assessee, 5 by Revenue) arising from reassessment proceedings initiated after a search on 21.01.2023. The assessee, Mirha Exports Pvt. Ltd., challenged the validity of reassessment for AYs 2013-14 to 2023-24 on grounds of limitation and lack of jurisdictional conditions under sections 149 and 153A. The Revenue challenged deletions of additions by CIT(A). The Tribunal held: (i) Reassessment for AY 2013-14 is barred by limitation as beyond 10 years; (ii) For AYs 2014-15 to 2017-18, notice u/s 148 is invalid as the escaped income is not represented by an ‘asset’; (iii) For AYs 2018-19 to 2020-21, conditions of section 149(1)(b) not met; (iv) For AY 2021-22, GP rate reduced from 16.5% to 10%; (v) For AY 2022-23, assessment under normal provisions instead of section 148 is invalid; (vi) For AY 2023-24, addition u/s 41(1) is not sustainable as liability not ceased. Consequently, the Revenue’s appeals were dismissed, assessee’s appeals (except partly allowed for AY 2021-22) were allowed.

The Revenue appealed against the order of the CIT(A) deleting the addition made by the AO treating the assessee’s income from sale of software and support services as royalty and fee for technical services. The Tribunal, following the Supreme Court’s decision in Engineering Analysis Centre for Excellence Pvt. Ltd. v. CIT (432 ITR 471) and the consistent orders in the assessee’s own case for earlier assessment years, held that such receipts are not taxable as royalty or FTS either under the Income Tax Act or under the India-USA DTAA. The review petition filed by the Revenue against the Supreme Court judgment was dismissed, confirming the finality of the law. Accordingly, the Tribunal dismissed the Revenue’s appeal.

The assessee appealed against penalty under section 271D of the Income Tax Act for alleged cash loan of Rs.50 lakhs based on a third party statement recorded during search. The Tribunal held that penalty cannot be sustained without providing opportunity of cross-examination and without corroborative evidence. The statement of a third party alone, especially when the assessee denies the transaction, does not establish the alleged violation. Relying on the Supreme Court decision in Common Cause v. Union of India and coordinate bench decision in DCIT v. Shri Gaurangbhai P. Upadhyay, the Tribunal deleted the penalty. The appeal was allowed.

This appeal by D.Y. Patil Education Society challenges the order of the Principal Commissioner of Income Tax (Central), Pune, rejecting its application for registration under section 12AA of the Income Tax Act, 1961. The Tribunal had earlier set aside the initial rejection and directed the CIT to examine the application strictly within the scope of section 12AA. Despite this, the CIT again rejected the application citing collection of capitation fee, personal use of trust funds, and other allegations without providing concrete evidence. The Tribunal found that the CIT exceeded its jurisdiction by considering issues beyond the scope of section 12AA, as per the Karnataka High Court precedent. The Tribunal emphasized that the source of income is not relevant for registration; only the genuineness of activities and application of funds for charitable purposes matter. Since the CIT failed to provide specific evidence and ignored the Tribunal’s directions, the impugned order is set aside, and the registration is directed to be granted. The appeal is allowed.

The assessee, Colvin Care Pvt. Ltd., appealed against the reassessment order for AY 2016-17, wherein the Assessing Officer had made an addition of Rs. 78,78,470/- under section 68 r.w.s. 115BBE. The primary ground was that the notice under section 148 was invalid due to lack of proper approval. The ITAT Delhi, in ITA No.6867/DEL/2025, held that since more than three years had elapsed since the end of the assessment year, the approval for issuing the notice under section 148 should have been obtained from the Principal Chief Commissioner as per section 151(ii) of the new regime, and not from the Principal Commissioner. Consequently, the notice was void ab initio and the resultant assessment order was quashed. The appeal was allowed.