ITAT Ahmedabad Judgments — September 2025

The tribunal set aside the CIT(A)'s order and restored the case to the Assessing Officer for fresh adjudication. This was granted as an additional opportunity to the assessee, who claimed non-compliance was due to a former consultant's inaction and had new Form 26A certificates, subject to a cost deposit of Rs. 5,000/-.

The Tribunal held that the Assessing Officer had conducted specific and detailed inquiries into all the issues, and the assessee's explanations, supported by judicial precedents, were on record. For the Makarba land deal, the alleged on-money was already taxed in AY 2023-24 upon sale deed execution, precluding double taxation. For TDR transactions and survey disclosures, the AO's acceptance after inquiry constituted a plausible view, and the PCIT could not assume revisional jurisdiction merely based on a difference of opinion or without demonstrating real prejudice. The Tribunal concluded that the twin conditions for exercising revisional jurisdiction under Section 263 were not met.

The CIT(A) deleted the addition, noting that the WhatsApp chat was from an unconnected third party, occurred a year after the sale, and the individual was neither examined nor was any corroborating evidence found. The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s decision, agreeing that the AO's addition was based on unfounded assumptions and presumptions without any material to establish a nexus between the assessee's transaction and the chat, or direct evidence of on-money. The Tribunal affirmed that a mere difference in market value cannot be the sole basis for an addition without concrete proof of understatement of consideration.

The Tribunal condoned the delay, acknowledging the sufficient cause. It ruled that while proceedings against a known deceased person are void, in this case, the AO was unaware of the death, and the legal heirs had not informed the department. Citing Section 159(1) and (3), the Tribunal set aside both quantum and penalty proceedings, remanding the matter back to the Assessing Officer to bring the legal heirs on record and provide a fresh opportunity of hearing.

The ITAT condoned the 536-day delay in filing the appeal, acknowledging the genuine reasons. While recognizing that assessment against a deceased person is generally void, the Tribunal distinguished this case as the legal heir had not informed the department about the death or surrendered the PAN. Citing Section 159(1) and (3), the ITAT ruled that the assessment and penalty orders should not be set aside as non-est but remanded the matter to the Assessing Officer to bring the legal heirs on record, grant them a proper hearing, and pass fresh orders on merits.

The Tribunal found that the assessee had sufficiently explained the sources of the cash deposit, including Rs.8,00,000 from cash withdrawals for his daughter's marriage, Rs.89,100 from cash rent received, and Rs.2,10,900 from personal savings. After reviewing bank statements and considering the circumstances, the Tribunal concluded that no addition under Section 69A was warranted.

The Tribunal observed that the CIT(E) rejected the applications for lack of substantial documents. Upon the assessee's request for another opportunity, the Tribunal remanded the cases back to the Ld. CIT(E) for fresh consideration, directing the CIT(E) to take into account all submissions and explanations provided by the assessees.

The Tribunal found that the AO had conducted sufficient inquiries and taken a plausible view on the matters. It noted that the alleged on-money from the Makarba land transaction was already taxed in A.Y. 2023-24, making re-taxation in earlier years double taxation. For TDR transactions, the seized documents were loose and not conclusively linked to the assessee individually, and the AO had accepted the assessee's explanation after due inquiry. The acceptance of survey-disclosed income as Short-Term Capital Gain by the AO was also deemed a plausible view, and the PCIT failed to demonstrate actual prejudice or lack of inquiry. Thus, the conditions for invoking Section 263 were not met.

The Tribunal set aside the CIT(A)'s order and remanded the case back to the Assessing Officer for de-novo consideration. The AO is directed to provide the assessee another opportunity to furnish all supporting evidence to substantiate the source of cash deposits.

The CIT(A) deleted the addition, and the ITAT upheld this decision, finding that the AO's addition was based on mere presumptions and lacked corroborative evidence. The WhatsApp chat was from a third party unrelated to the assessee or the transaction, occurred after the sale, and the person was not examined. No incriminating material was found during a search of the purchaser, and the Revenue failed to prove any actual receipt of 'on-money'.

The Tribunal found that the assessee had indeed filed the return of income on 30.03.2014, prior to the issuance of the Section 148 notice. Since the foundational jurisdictional fact for reopening (that no return was filed) was factually incorrect, the reopening of assessment under Section 147 was held to be invalid and without jurisdiction. Consequently, the entire assessment was quashed, rendering the other grounds challenging the additions academic.

The Tribunal upheld the CIT(A)'s deletion of the addition, finding that the WhatsApp chat was from an unconnected third party, lacked corroborative evidence, and no nexus was established with the assessee. The Revenue failed to discharge its burden of proving that the Assessee received unaccounted cash, and the addition was based on mere presumptions.

The Tribunal noted that the assessee's accounting method for income recognition and treatment of advances was appropriate, and that neither the Assessing Officer nor the CIT(A) had thoroughly verified the reconciliation provided. Concluding that the issue required further factual examination, the Tribunal set aside the matter to the Assessing Officer for a de novo adjudication, granting the assessee an opportunity to present supporting documents.

The Tribunal found that the assessee-trusts were not given sufficient opportunity to present substantial documents. Therefore, the matter was remanded back to the CIT(E) for fresh consideration of the applications, with directions to take into account any submissions and explanations provided by the assessees.

The Tribunal found that the reasons cited by the assessee in their affidavit, including the hospitalization of the responsible manager due to COVID-19, disruption in professional arrangements, and pandemic-related restrictions, were genuine. The Tribunal set aside the matter to the CIT(A) for reconsideration.

The Tribunal held that the assessee had discharged its onus by providing sufficient documentary evidence to prove the identity, genuineness, and creditworthiness of the loan and the authenticity of the purchases. The additions were not supported by law or facts.

The ITAT found the CIT(A)'s order cryptic, passed without considering the grounds of appeal or merits, and observed that the assessee was not given a fair and reasonable opportunity of hearing, particularly due to the Covid pandemic and short intervals between subsequent notices. Consequently, the ITAT set aside the CIT(A)'s order and remanded the matter for de-novo adjudication, directing the CIT(A) to provide adequate opportunity and decide on merits.

The ITAT found merit in the assessee's explanation, supported by documentary evidence such as pay-in slips with the consultant's PAN, a joint account opened and closed for the specific visa purpose, and withdrawals by the consultant. The tribunal held that the consultant's denial of ownership on oath could not override objective contemporaneous documentary evidence. Citing a similar case, the ITAT concluded that the addition under Section 69A was unjustified.

The Tribunal held that the disallowance for delayed deposit of employee contributions to PF/ESI was correctly confirmed based on High Court and Apex Court judgments. However, the addition for revenue mismatch was set aside and restored to the AO for fresh examination due to lack of detailed reconciliation.

The Tribunal held that TBOPL was not a registered shareholder of the assessee-company, thus the primary condition for applying Section 2(22)(e) was not met. Citing precedents, it reiterated that deemed dividend provisions apply only when the recipient is a shareholder. As it was a commercial lending, neither Section 2(22)(e) nor Section 201(1) of the Act were attracted.

The Tribunal held that the additions under Section 69C were not justified as the assessee had not incurred any expenditure. The differences were due to accounting timing or disputed bills, not actual unexplained purchases. The precondition of expenditure incurred for invoking Section 69C was absent.

The CIT(A) dismissed the assessee's appeal in limine due to a delay of 1116 days in filing, finding no sufficient cause. The ITAT, however, found that the CIT(A) had not provided a specific speaking order on the condonation of delay. Therefore, the ITAT set aside the CIT(A)'s order.

The Tribunal held that the addition made by the Assessing Officer was not called for. The Tribunal noted that the Ld. CIT(A) failed to consider the balance sheet, income and expenditure account, and bank statement submitted by the assessee, which showed the cash deposits were related to donations for the trust.

The ITAT acknowledged the assessee's inability to appear before the CIT(A) due to unforeseen circumstances and, in the interest of justice, remanded the case back to the CIT(A) for de-novo adjudication. The assessee is directed to comply with all notices and provide submissions without seeking unnecessary adjournments.

The Tribunal found that the assessee's failure to appear was due to unforeseen circumstances and, in the interest of justice, remanded the matter back to the CIT(A) for de-novo adjudication.

The Tribunal ruled that the second assessment order dated 31.05.2022 was invalid because the Assessing Officer (AO) is permitted to pass only one final assessment order for a given assessment year. Once the first final assessment order dated 15.09.2021 was passed and an appeal against it was pending, the Dispute Resolution Panel (DRP) ceased to have jurisdiction to issue further directions that would necessitate a second assessment order.

The Tribunal held that the reassessment proceedings were void ab initio and without jurisdiction. This was because the sanction for issuing the Section 148 notice, issued more than three years after the relevant assessment year, was granted by an incompetent authority (Principal Commissioner instead of Principal Chief Commissioner or Chief Commissioner) as explicitly required by Section 151(ii) of the Income Tax Act.

The Tribunal held that the assessee had discharged the onus of proof by furnishing documentary evidence for the sources of cash deposits, including the sale of jewellery with disclosed capital gains and details of gift donors. The Tribunal found that the Revenue failed to controvert this evidence, and thus, the addition under Section 69A was not sustainable.

The Tribunal held that the assessee failed to explain the inordinate delay of 816 days in filing the appeal. The Tribunal also found no merit in the grounds raised on merits, noting that the difference in agricultural income was rightly treated as income from other sources.

The assessee submitted a letter to the Tribunal expressing its intention to withdraw the appeal. Based on this withdrawal request, the Tribunal dismissed the appeal.

The Tribunal held that the PCIT correctly exercised his revisional jurisdiction under Section 263. The Assessing Officer's failure to inquire into or make additions for unpaid VAT and belated employee PF contribution rendered the assessment order erroneous and prejudicial to the revenue.

The Tribunal upheld the PCIT's revisional order under Section 263, agreeing that the AO's assessment was perfunctory and prejudicial to the Revenue for allowing significant expenditure without adequate inquiry or verification. The Tribunal rejected the assessee's jurisdictional ground regarding the absence of a Section 143(2) notice as not relevant to the current appeal against the Section 263 order. It also dismissed the assessee's claim for Section 10(23C)(iiiad) exemption due to non-compliance, failure to file Form 10B, and lack of evidence for multiple independent institutions.

The Tribunal held that the sanction obtained for initiating reassessment proceedings was from an incompetent authority under Section 151 of the Income Tax Act, as the notice under Section 148 was issued beyond three years from the relevant assessment year. This rendered the reassessment proceedings void ab initio and without jurisdiction. Consequently, the Tribunal dismissed the Revenue's appeals without delving into the merits of the addition.

The Tribunal acknowledged that the CIT(A) had provided opportunities but dismissed the appeal without merit examination. Considering the assessee's arguments regarding an opening cash balance and non-confrontation of the Verification Unit report, and with no objection from the Sr. DR, the Tribunal set aside the matter to the CIT(A) for fresh adjudication, allowing the assessee another opportunity to provide evidence.

The Tribunal condoned the 344-day delay in filing the appeal due to sufficient cause. It set aside the CIT(A)'s order and remanded the matter to the AO for fresh adjudication, directing the AO to consider all documents, including the dissolution deed and audited accounts of the proprietary concern, and to address both the legal issue of assessment on a dissolved firm and the factual issue of bank deposit reconciliation.

The Tribunal, while not condoning the delay before the CIT(A), noted from evidence that the assessee actually incurred a loss of Rs. 2,55,447/- from same-day share transactions, contradicting the AO's finding of bogus LTCG. Observing the AO's cryptic order and lack of cogent reasons for the addition, the Tribunal set aside the matter to the AO for re-examination, directing the assessee to pay Rs. 5,000/- to the Prime Minister's National Relief Fund and comply with the AO's directions.

The Tribunal held that the PCIT rightly found the assessment order erroneous regarding the claim of deduction u/s 32AC and government grants, as these issues were not properly examined by the AO. However, the finding regarding the suspicious transaction with M/s Ravi Trading Co. was set aside as the assessee was not properly confronted with the PCIT's revised understanding of the transaction, violating principles of natural justice.

The Tribunal found that the assessee had provided documentary evidence of sales, including cheque payments and lorry receipts, and had already credited the amount as sales and offered it to tax. It held that denying cross-examination, especially when adverse inferences are drawn from third-party statements, vitiates assessment proceedings. Citing High Court judgments, the Tribunal concluded that taxing the same income again under Section 69A would lead to double taxation.

The Tribunal held that the interests of justice would be served by remanding the matter back to the Ld. CIT(E) for fresh consideration of the application, taking into account submissions and explanations from the assessee.

The Tribunal noted that the primary issue of the Rs. 6.70 crores addition for accommodation entries had previously been remanded to the CIT(A) for fresh adjudication in a related appeal. Since the addition of commission expenses was consequential to this underlying issue, the Tribunal restored the matter of commission expenses back to the CIT(A) for fresh adjudication.

The Tribunal affirmed the CIT(A)'s decision, ruling that the clarificatory amendment to Section 14A by Finance Act, 2022, is prospective from 01-04-2022 and not applicable to AY 2017-18 and 2018-19. It was held that Section 14A would not apply as the assessee had not claimed any exempt income during the relevant assessment years, consistent with jurisdictional High Court pronouncements.

The Tribunal held that the amendment to Section 14A by the Finance Act, 2022, which introduced an explanation, is clarificatory and retrospective. However, the CIT(A) had rightly held that this amendment, effective from April 1, 2022, could not be applied retrospectively to the assessment years under consideration. The Tribunal found that the assessee had no exempt income in the relevant assessment years, and therefore, Section 14A would not apply. Consequently, the appeals filed by the Revenue were dismissed.

The Tribunal held that since the agreement for the property was fixed in 2013 and part payment was made by account payee cheques through a bank account, the provisions of Section 56(2)(x)(b) of the Act were not attracted. Therefore, the addition made by the Assessing Officer was deleted.

The tribunal held that while the cancellation of the deal might have been an afterthought to avoid tax liability, the fact remains that the deal was cancelled and any amount received by cheque was refunded. The PCIT could not rebut the cancellation of the deed. Therefore, the tribunal concluded that no unaccounted income could be taxed at this stage, the AO's view was plausible, and the assessment order was not erroneous. The PCIT's revision order under Section 263 was deemed unsustainable and quashed.

The Income Tax Appellate Tribunal (ITAT) affirmed the addition of Rs. 1.50 crores under Section 68, concluding that the assessee failed to establish the identity and creditworthiness of the lender and the genuineness of the transaction. The Tribunal noted the lender's cessation of business activities, lack of IT returns, and that a director of 'Jain Farms Private Limited' was also a partner in the assessee firm, suggesting the company was used to route the assessee's unaccounted income.

The Tribunal held that the assessee was denied a fair and reasonable opportunity of being heard before both the Assessing Officer and the CIT(A). The plea of the assessee regarding unawareness due to personal circumstances was considered. In the interest of justice, the matter was restored for fresh adjudication.

The Tribunal noted the assessee's failure to furnish details before the CIT(A) despite opportunities. However, in the interest of justice and based on the counsel's request for a fresh opportunity, the matter was remanded to the CIT(A) for de-novo adjudication, allowing the assessee to submit all relevant documents.