ITAT Ahmedabad Judgments — November 2025

The Tribunal noted that while the CIT(A) correctly identified the issue, their confirmation of the addition was not entirely correct given the applicability of the CBDT circular regarding trade advances. To ensure justice, the matter was set aside.

The Tribunal held that issuing notice under section 148 to a deceased person is invalid and void ab initio, as it does not confer jurisdiction on the Assessing Officer. Reliance was placed on judicial precedents stating that reassessment against a dead person is unsustainable. The CIT(A) failed to adjudicate this jurisdictional issue before remanding the matter.

The Tribunal quashed the assessment orders for AYs 2013-14 and 2014-15, finding gross violations of natural justice, including the failure to provide the assessee a proper opportunity to present the case and the mechanical granting of approval under Section 153D. The tribunal concluded that such assessment orders, passed in a hurried manner without application of mind, are not sustainable in law and cannot be restored for fresh assessment due to the AO's oversight of ongoing jurisdictional objections.

The Tribunal held that the PCIT's assumption of jurisdiction under Section 263 was not sustainable as the PCIT failed to conduct any independent inquiry and merely alleged inadequacy of inquiry by the AO. The Tribunal noted that the AO's assessment was approved by the Addl. CIT and no specific legal error or perversity was demonstrated by the PCIT, thus quashing the revisionary order.

The Tribunal condoned the 608-day delay, imposing a cost of Rs. 10,000 for each appeal. It set aside the ex-parte orders and directed the Ld. CIT(E) to grant the assessee a fresh opportunity of hearing to decide the registration applications under Section 12AB(1)(b)(ii) and 80G(v) on merits, provided the cost is paid.

The Tribunal found that the PCIT failed to address the fundamental jurisdictional objections raised by the assessee regarding the competence of the Assessing Officer to issue the section 148 notice. It held that such jurisdictional defects must be adjudicated as a preliminary issue, and the PCIT's non-adjudication vitiated the revisional order. The matter was remanded to the PCIT to first decide the jurisdictional issues before proceeding to the merits of the case under section 263.

The tribunal held that the AO had conducted sufficient inquiries and applied his mind, accepting the assessee's explanation after receiving PAN details and lender confirmations. Citing the Gujarat High Court in Ranchhod Jivabhai Nakhava, the tribunal ruled that once PAN and lender confirmations are provided, the initial onus under Section 68 is discharged, and further verification shifts to the AO of the lenders. The PCIT's revisionary order was found unsustainable as it was based on an assumption of inadequate inquiry without the PCIT conducting necessary verification, and also for traveling beyond the scope of the show cause notice.

The Tribunal dismissed all appeals filed by the Revenue, upholding the CIT(A)'s deletion of additions. It affirmed that no additions can be made for unabated assessment years without specific incriminating material found during the search related to the assessee and the relevant year. The Tribunal also ruled that third-party material, uncorroborated WhatsApp chats, and general statements or investigation reports cannot form the sole basis for additions, especially when contradicted by documentary evidence or sworn affidavits. The single appeal by assessee Smt. Anuradha Shivkumar Gogia regarding the confirmed addition for on-money in the Earth Erita project was allowed.

The CIT(A) upheld the AO's disallowance, holding that the assessee failed to prove the physical movement of goods and that the purchases were accommodation entries. However, the Tribunal, considering the settled judicial principle that entire purchases cannot be disallowed and that only profit embedded can be taxed, and noting the assessee's concession, restricted the disallowance to 2% of the impugned purchases, which amounted to Rs. 3,50,330/-.

The Tribunal held that the original assessment order, passed without awaiting the DVO report after a statutory reference, was unsustainable and without jurisdiction. It also ruled that the subsequent rectification order under Section 154, based on material not part of the original record, was invalid. The assessee's right under Section 50C(2) and principles of natural justice were violated, vitiating the assessment. Consequently, the Tribunal found the entire assessment process flawed due to jurisdictional infirmities and breach of mandatory procedure, rendering further adjudication on merits unwarranted.

The Tribunal condoned the 608-day delay in filing the appeals, noting the assessee's fresh evidence of amended objects. It set aside the CIT(E)'s orders and remanded the matter back to the CIT(E) to provide another opportunity of hearing to the assessee. The Tribunal also imposed a cost of Rs. 10,000/- per appeal (total Rs. 20,000/-) to be paid by the assessee to the Income Tax Department within two weeks.

The Tribunal held that the notices issued under Section 148 of the Act were beyond the permissible 'surviving time' as per Supreme Court judgments, rendering them invalid and time-barred. Consequently, the reassessment proceedings were quashed.

The Tribunal noted that the issue was identical to the assessee's mother-in-law's case, which was decided in favour of the assessee. It found that the assessee provided complete evidence proving the genuineness of transactions, was a regular investor, and KPL was not a penny stock. Citing various High Court and Supreme Court judgments, the Tribunal held that the addition made by the AO under Section 68 was not legally correct and ordered its deletion.

The Tribunal set aside the ex-parte quantum additions and restored the matter to the Assessing Officer (AO) for de novo assessment, conditional on the assessee depositing Rs.10,000/- for each quantum appeal (total Rs.20,000/-) to the Prime Minister's National Relief Fund. Consequentially, the penalty appeals were ordered to be deleted at this stage, with liberty for the AO to initiate fresh penalty proceedings if quantum additions are upheld after the de novo assessment.

The Tribunal held that once the assessee opts for the Vivad Se Vishwas Scheme and settles the dispute, the matters covered therein cannot be reopened under Section 263 of the Income Tax Act. The Gujarat High Court's decision in PCIT vs. Mrs. Swatiben Biharilal Parekh was relied upon.

The Tribunal condoned the 611-day delay in filing the appeal, finding reasonable cause. It set aside the CIT(A)'s order and remanded the matter back for fresh adjudication, allowing the assessee a final opportunity to furnish all relevant documents and evidence before the CIT(A), conditional on depositing Rs. 10,000/- to the Prime Minister's Relief Fund.

The Tribunal dismissed the assessee's appeal, affirming that the deduction under Section 35(1)(ii) was not allowable due to the retrospective withdrawal of the donee institution's approval and its fraudulent activities. The Tribunal emphasized that a claim's eligibility under law is paramount, regardless of the assessee's bona fide belief. The contention regarding the denial of cross-examination was also rejected, as the investigation was not aimed at the assessee.

The Tribunal set aside the orders of the CIT(A) in all three appeals and restored the matters for de novo adjudication, directing the assessee to furnish all required documents and comply with notices without seeking adjournments.

The Tribunal noted the assessee's failure to furnish required documents and explanations to the lower authorities. In the interest of justice, the Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer for fresh adjudication, directing the assessee to provide all relevant bank statements, documents, and details of toll charges.

The Tribunal, finding identical issues across appeals, set aside the CIT(A) orders and remanded the matters back to the CIT(A) for de novo adjudication. The assessee was directed to furnish all necessary documents and comply with notices without seeking adjournments.

The Tribunal held that while the assessee did not comply with the show cause notice, in the interest of natural justice, an opportunity should have been provided. Therefore, the matter was set aside.

The Tribunal set aside the quantum assessment orders and remanded the matter back to the AO for de novo assessment, subject to the assessee depositing Rs. 20,000/- (Rs. 10,000 per appeal) to the Prime Minister's National Relief Fund. The consequential penalties were deleted at this stage, with liberty granted to the AO to initiate fresh penalty proceedings after the de novo assessment, if warranted.

The Tribunal condoned the 435-day delay in filing the appeal and noted the assessee's consistent non-compliance during assessment and first appellate proceedings. Subject to the payment of a cost of Rs.5,000/- to the Prime Minister's National Relief Fund, the matter was set aside to the Jurisdictional Assessing Officer, directing another opportunity to the assessee to explain the source of cash payments against credit card expenses, allowing for submission of additional evidence.

The Tribunal set aside the orders of the CIT(A) and restored the matters for de novo adjudication. The assessee was directed to furnish all necessary documents and comply with notices without seeking unnecessary adjournments.

The Tribunal noted that the Hon'ble Bombay High Court had already quashed the underlying assessment orders, holding that demands prior to the resolution plan's effective date were extinguished. Consequently, as the foundation for the Section 263 orders ceased to exist, the Tribunal ruled that the PCIT's revisional orders could not survive. Therefore, the Tribunal quashed the orders passed by the PCIT under Section 263 for both assessment years.

The Tribunal acknowledged that the assessee, being uneducated farmers, were dependent on their CA. While there was negligence, the interest of justice warranted an opportunity to present their case. The quantum addition orders were set aside for de novo assessment upon deposit of costs, and consequential penalties were deleted.

The Tribunal found that the Assessing Officer had conducted adequate inquiries, and the assessee had provided comprehensive replies and rebuttals. The PCIT failed to demonstrate any specific error in the assessment orders or that they were prejudicial to the Revenue, instead merely substituting his view without independent inquiry. Therefore, the assumption of jurisdiction under Section 263 was unsustainable as it constituted a mere change of opinion.

The Tribunal noted the assessee's contention of fraudulent use of his Demat account and the claim of parallel assessment in Mr. Joshi's hands. Since the assessee requested an opportunity to furnish further evidence, the Tribunal set aside the CIT(A)'s order.

The Tribunal found the assessee's reasons for non-representation justifiable, acknowledging their dependence on the CA, despite some negligence on their part. It set aside the quantum assessment orders and remanded the matter to the AO for de novo assessment, conditional on the assessee depositing Rs. 20,000/- to the Prime Minister's National Relief Fund. The consequential penalty orders were deleted, with liberty granted to the AO to re-initiate penalties after the fresh assessment, if applicable.

The Bombay High Court quashed the original assessment orders for AY 2018-19 and 2019-20 because they were passed after the NCLT resolution plan approval and related to periods prior to its effective date. Since the underlying assessment orders, which were the subject of revision, no longer survived, the Tribunal held that the PCIT's revisional orders under Section 263 also became a nullity and were accordingly quashed.

The Tribunal restored the quantum addition appeals to the AO for de novo assessment, subject to the assessee depositing costs. Penalties levied consequential to these additions were ordered to be deleted.

The Tribunal held that the PCIT failed to demonstrate that the assessment orders were erroneous and prejudicial to the revenue. The PCIT did not independently verify the seized material, discuss the assessee's rebuttals, or provide any findings to support the claim of error. The PCIT's action was considered a mere change of opinion, which does not confer jurisdiction under Section 263.

The Tribunal noted the negligence of the assessee but also the lack of representation due to alleged CA's failure. To serve the interest of justice, the appeals were restored to the AO for de novo assessment upon payment of costs.

The Tribunal held that the reassessment notices issued under Section 148 were beyond the prescribed 'surviving time' as per Supreme Court judgments, making them invalid. Consequently, the reassessment orders were quashed.

The appeal was dismissed as withdrawn by the assessee. The assessee informed the Tribunal that the CIT(A) had already set aside the appeal to the AO for de novo adjudication as per Section 251(1)(a) of the Income Tax Act, rendering the present appeal unnecessary.

The Tribunal held that for the interest of justice, the assessee should be given an opportunity to furnish the necessary documents and details. Therefore, the impugned orders were set aside, and the matter was restored to the Ld. CIT(E) for fresh consideration.

The Tribunal held that the object related to religious programs was not for propagating religion but for raising funds for charitable activities. It was aimed at benefiting the public at large and guiding society towards moral and spiritual well-being.

The Tribunal set aside the quantum assessment orders for AY 2017-18 & 2018-19 and restored the matter to the Assessing Officer for a de novo assessment, conditional on the assessee depositing Rs. 20,000/- to the Prime Minister's National Relief Fund. The consequential penalty orders were deleted, with liberty granted to the AO to initiate fresh penalty proceedings if warranted after the de novo assessment.

The tribunal held that the Assessing Officer was not justified in making the addition under Section 69A, as the assessee's income was unconditionally exempt under Section 10(26AAB) and it was not statutorily required to file a return, as per CBDT Circular No. 18/2017. The tribunal noted that the department had accepted the assessee's exempt status in previous assessment years without any change in facts or law. Consequently, the additions for both assessment years were directed to be deleted.

The Tribunal found that both the CIT(A) and the Assessing Officer ignored the Valuation Officer's report and decided the case on surmises. The matter is remanded back to the Assessing Officer to consider the DVO report, adjudicate the issues on merit as per the Income Tax Act, and provide the assessee an opportunity of hearing.

The Tribunal considered the submissions and noted that the Institute's approval to receive donations under Section 35(1)(ii) had expired on March 31, 2006, and that subsequent donations were based on forged documents. The Tribunal also referred to previous judgments that upheld disallowance in similar cases.

The Tribunal held that the assessee's income is unconditionally exempt under Section 10(26AAB) as clarified by CBDT Circular No. 18/2017, and it was not statutorily required to file a return of income. Therefore, the Assessing Officer was not justified in treating the interest from 26AS as unexplained money under Section 69A, especially when the department had previously accepted the assessee's exempt status in other assessment years with similar facts.

The Tribunal held that the addition u/s 68 for unsecured loans was unwarranted as the balance amount of Rs. 10,00,000/- was duly repaid by the assessee in the subsequent year, supported by documentary evidence. The Tribunal also held that the disallowance u/s 40(a)(ia) could not be upheld because neither the AO nor the CIT(A) carried out the mandatory verification as directed by the previous ITAT order to ascertain if the payee had included the corresponding income in its return. One ground relating to bad debts was dismissed as not pressed.

The Tribunal held that the payments for the property purchase were made through account payee cheques from an SBI OD loan account, which was substantiated by bank statements and the sale deed. The disallowance of deduction under Chapter VI-A was also directed to be allowed, subject to prescribed ceilings.

The Tribunal partly allowed the appeal. It allowed the disallowance of commission of Rs.2,02,750/- and Rs.55,700/- paid to two parties, finding that sales were made through them and TDS was deducted. However, it upheld the disallowance of Rs.57,308/- and Rs.35,980/- paid to two other parties, as no sales were effected through them and no fresh evidence was presented. The ground regarding lack of video conferencing opportunity was dismissed as adequate opportunity was provided.