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The Income Tax Appellate Tribunal (ITAT) is a quasi-judicial body in India that hears appeals against orders passed by the Income Tax Department under the Income Tax Act, 1961.
The ITAT Delhi held that satisfaction recorded after 1 April 2021 invalidates a Section 153C search assessment, mandating reassessment under Section 148 instead. The ruling clarifies the procedural switch introduced by the Finance Act 2021 amendment, directly impacting assessees and tax authorities in search-related proceedings.
ITAT Ahmedabad ruled that the Section 87A rebate cannot be denied on short-term capital gains taxed at the special rate under Section 111A for AY 2025-26, overturning the Addl. CIT’s reliance on CBDT circular 13/2025. Taxpayers with STCG can now claim the full ₹25,000 rebate, extending relief beyond other income sources.
The Kolkata ITAT ruled that the 10 % tolerance under Section 50C is retrospective, striking down the ₹9,94,312 addition for AY 2014-15 because the valuation gap was only 8.5 %. Taxpayers can therefore rely on the tolerance limit for past years, limiting exposure to Section 50C additions when the gap falls within the prescribed range.
The ITAT ruled that a higher TDS rate under Section 206AA cannot be imposed automatically if the deductor’s delay in filing returns is caused by the deductees’ failure to link or activate PAN-Aadhaar, a circumstance beyond the deductor’s control. Such matters must be remitted to the Assessing Officer for fresh assessment, shielding compliant deductors from unwarranted penalties. The decision benefits taxpayers who face third-party PAN linking delays.
The ITAT held that the Transfer Pricing Officer’s ad-hoc valuation method violated Section 92C and set aside the Rs 357.35 crore adjustment. The ruling reinforces that only the prescribed five methods may be used, affecting taxpayers facing TP adjustments.
ITAT Delhi allowed Section 80G deduction for CSR donations to registered entities, ruling that the Section 37(1) bar on deducting CSR spend as business expense does not preclude a separate charitable deduction. The bench followed multiple coordinate rulings to restore double tax relief for companies routing mandatory CSR contributions through eligible donees.
Bank deposits, including current-account balances, are deemed ‘another capital asset’ under Section 11(1A) of the Income-Tax Act. This allows charitable trusts to claim full exemption on capital-gain income reinvested in such deposits, expanding the range of tax-free investment options for trusts.
The ITAT Bangalore ruled that interest earned on deposits by a credit cooperative is an allowable deduction under Sec 80P(2)(a)(i), interpreting ‘attributable’ to mean income arising from the society’s credit activities. This clarifies that such interest can be claimed as business income, benefiting credit co-operatives seeking tax relief on deposit earnings.
The ITAT Delhi ruled that foreign shares held as a nominee are not taxable in the assessee’s hands, and any Section 10(1) notice must expressly state the relevant financial year. This clarifies that undisclosed foreign nominee assets escape tax liability unless properly disclosed, guiding tax practitioners and assessees with such holdings.
The ITAT held that Arcadis N.V.’s headquarters support fees and IT recharge amounts fail the ‘make-available’ test in Article 12 of the India-Netherlands DTAA, so they are not taxable as royalty. The ruling narrows the treaty’s royalty provision to genuine technical knowledge transfers, affecting multinationals receiving similar support fees from Indian subsidiaries.
ITAT Delhi has ruled that the Resale Price Method is the most appropriate transfer pricing method for distributors who merely resell imported goods without any value addition, affirming that gross profit margin analysis best reflects arm's length pricing in such cases. This sets a clear precedent for multinational distributors in India, reducing reliance on less suitable methods like TNMM when the distribution function is purely operational.
ITAT Bangalore rules that registered societies under the Karnataka Societies Registration Act are not liable for taxation at the maximum marginal rate under Section 167B of the Income-tax Act. The ruling clarifies that such entities are taxed at slab rates, offering relief to welfare associations and similar bodies from higher tax burdens.
Bombay High Court clarifies that taxpayers can claim bad debt deduction under Section 36(1)(vii) of the Income Tax Act by merely making a provision in the P&L account if litigation is pending, without requiring an express write-off. This ruling reconciles conflicting precedents and eases compliance for businesses awaiting dispute resolution.
ITAT Kolkata holds that any income tax assessment framed by an Assessing Officer beyond their prescribed pecuniary jurisdiction under CBDT Instruction 1/2011 is null and void from the outset, regardless of substantive correctness. This reinforces that jurisdictional compliance is a mandatory precondition for validity, affecting all assessees and tax authorities navigating delegated powers under the Income Tax Act.
The ITAT Cochin ruled that teachers paid hourly by coaching institutes without statutory benefits like PF, ESI, or appointment letters are independent professionals, not employees. This means TDS must be deducted under Section 194J for professional fees, not Section 192 for salary - a critical clarification for edtech firms and coaching centers nationwide.