ITAT Ahmedabad Judgments — January 2026

The Tribunal condoned the 14-day delay in filing the present appeal. It set aside the CIT(A)'s order regarding quantum additions, restoring the matter to the AO for a de novo assessment, conditional on the assessee depositing Rs. 5,000/- to the Prime Minister's National Relief Fund. Consequently, the penalty levied u/s 271(1)(c) was deleted, with liberty granted to the AO to initiate fresh penalty proceedings after the de novo assessment.

The Tribunal held that the Assessing Officer failed to examine the actual utilization of the loan, relying solely on the bank's sanction letter. It directed the AO to verify the actual utilization of the loan and establish the nexus between the loan and the earning of interest income. If the loan was indeed used for business purposes and the interest earned was taxed, the interest deduction should be allowed.

The Tribunal held that the CIT(A)'s action of estimating on-money receipts and profits was not justified. It also upheld the CIT(A)'s decision to estimate deemed rent at 3% of the project cost.

The Tribunal held that the reopening of assessment was bad in law as the AO acted solely on audit objections without independent application of mind or forming his own belief regarding income escapement. For the depreciation issue, the capital subsidy was not received in the relevant year, and the audit objection was internally marked 'not accepted' by the AO. For the closing stock issue, the audit party exceeded its jurisdiction by applying its own formula, and the reopening was based on a mere opinion, not new tangible information. Consequently, the reopening and the assessment framed u/s 147 were quashed.

The Tribunal held that the CIT(A)'s action of estimating on-money receipts and profits was not justified. It also upheld the CIT(A)'s decision to estimate deemed rent at 3% of the project cost.

The Tribunal held that the CIT(A)'s action of estimating on-money receipts and profits was not justified. It also upheld the CIT(A)'s decision to estimate deemed rent at 3% of the project cost.

The Tribunal held that the assessment was framed and addition made without affording an opportunity of hearing to the assessee. The Tribunal noted that the assessee had a valid registration under Section 12A and was entitled to claim exemption to the extent income was applied for charitable purposes.

For AYs 2012-13 and 2015-16, the appeals were dismissed as not pressed. For AY 2009-10, Ground 1 was dismissed, respectfully following the Co-ordinate Bench decision in ACIT vs. Benefit Tradelink Pvt. Ltd. (175 taxmann.com 818), regarding additions made under Section 153A without incriminating material found on the assessee's premises. For Ground 2 (AY 2009-10), the Tribunal held that since the amounts received as student fees were already offered to tax by the entities managing the Sigma Group before the Settlement Commission, the provisions of Section 56(2)(vi) were not attracted, and no additions were called for on merits. For Ground 3 (AY 2009-10), the addition was restricted to Rs. 1,42,000/- after recomputing the assessee's proportionate contribution to the property investment. Thus, the appeal for AY 2009-10 was partly allowed. For AY 2010-11, Grounds 1 & 2 were dismissed, following the same precedent as for AY 2009-10. For Ground 3, the Tribunal held that since the purchase of property at Village Hanumanpura for Rs. 51,00,000/- was offered to tax before the Settlement Commission, no further addition was required. However, the Revenue was permitted to take action to tax the Rs. 12,71,890/- paid towards stamp duty and other expenses for registration, as this amount was not offered to tax and was paid by family members. For Ground 4, the addition of Rs. 6,00,000/- for investment in Krishna Leela Society was deleted as it was offered to tax before the Settlement Commission. For Grounds 5 & 6, the assessee's offer to tax the amounts of Rs. 85,000/- (unsecured loan) and Rs. 2,61,761/- (investment) was accepted. For Ground 7, the addition of Rs. 1,51,119/- was confirmed as it was a computation mistake by the Revenue. Thus, the appeal for AY 2010-11 was partly allowed. The operative direction was that appeals IT(SS)A No. 106 & ITA No. 537/Ahd/2023 were dismissed, and appeals IT(SS)Nos. 103 & 104/Ahd/2023 were partly allowed.

For AYs 2012-13 and 2015-16, the appeals were dismissed as not pressed. For AY 2009-10, Ground 1 was dismissed, respectfully following the Co-ordinate Bench decision in ACIT vs. Benefit Tradelink Pvt. Ltd. (175 taxmann.com 818), regarding additions made under Section 153A without incriminating material found on the assessee's premises. For Ground 2 (AY 2009-10), the Tribunal held that since the amounts received as student fees were already offered to tax by the entities managing the Sigma Group before the Settlement Commission, the provisions of Section 56(2)(vi) were not attracted, and no additions were called for on merits. For Ground 3 (AY 2009-10), the addition was restricted to Rs. 1,42,000/- after recomputing the assessee's proportionate contribution to the property investment. Thus, the appeal for AY 2009-10 was partly allowed. For AY 2010-11, Grounds 1 & 2 were dismissed, following the same precedent as for AY 2009-10. For Ground 3, the Tribunal held that since the purchase of property at Village Hanumanpura for Rs. 51,00,000/- was offered to tax before the Settlement Commission, no further addition was required. However, the Revenue was permitted to take action to tax the Rs. 12,71,890/- paid towards stamp duty and other expenses for registration, as this amount was not offered to tax and was paid by family members. For Ground 4, the addition of Rs. 6,00,000/- for investment in Krishna Leela Society was deleted as it was offered to tax before the Settlement Commission. For Grounds 5 & 6, the assessee's offer to tax the amounts of Rs. 85,000/- (unsecured loan) and Rs. 2,61,761/- (investment) was accepted. For Ground 7, the addition of Rs. 1,51,119/- was confirmed as it was a computation mistake by the Revenue. Thus, the appeal for AY 2010-11 was partly allowed. The operative direction was that appeals IT(SS)A No. 106 & ITA No. 537/Ahd/2023 were dismissed, and appeals IT(SS)Nos. 103 & 104/Ahd/2023 were partly allowed.

For AYs 2012-13 and 2015-16, the appeals were dismissed as not pressed. For AY 2009-10, Ground 1 was dismissed, respectfully following the Co-ordinate Bench decision in ACIT vs. Benefit Tradelink Pvt. Ltd. (175 taxmann.com 818), regarding additions made under Section 153A without incriminating material found on the assessee's premises. For Ground 2 (AY 2009-10), the Tribunal held that since the amounts received as student fees were already offered to tax by the entities managing the Sigma Group before the Settlement Commission, the provisions of Section 56(2)(vi) were not attracted, and no additions were called for on merits. For Ground 3 (AY 2009-10), the addition was restricted to Rs. 1,42,000/- after recomputing the assessee's proportionate contribution to the property investment. Thus, the appeal for AY 2009-10 was partly allowed. For AY 2010-11, Grounds 1 & 2 were dismissed, following the same precedent as for AY 2009-10. For Ground 3, the Tribunal held that since the purchase of property at Village Hanumanpura for Rs. 51,00,000/- was offered to tax before the Settlement Commission, no further addition was required. However, the Revenue was permitted to take action to tax the Rs. 12,71,890/- paid towards stamp duty and other expenses for registration, as this amount was not offered to tax and was paid by family members. For Ground 4, the addition of Rs. 6,00,000/- for investment in Krishna Leela Society was deleted as it was offered to tax before the Settlement Commission. For Grounds 5 & 6, the assessee's offer to tax the amounts of Rs. 85,000/- (unsecured loan) and Rs. 2,61,761/- (investment) was accepted. For Ground 7, the addition of Rs. 1,51,119/- was confirmed as it was a computation mistake by the Revenue. Thus, the appeal for AY 2010-11 was partly allowed. The operative direction was that appeals IT(SS)A No. 106 & ITA No. 537/Ahd/2023 were dismissed, and appeals IT(SS)Nos. 103 & 104/Ahd/2023 were partly allowed.

The Tribunal found that the CIT(A)'s estimation of 2% profit was on the higher side, considering the assessee's admitted net profit of 0.03%. Therefore, the Tribunal reduced the estimated profit to 1.5% of the accommodation entry amount.

The Tribunal remanded both issues back to the Assessing Officer for fresh adjudication. It held that the DVO's report on unexplained investment was not confronted to the assessee, and their books of accounts were not rejected, requiring re-examination. For the cash deposits, the Tribunal allowed the assessee a fresh opportunity to submit proper evidence for verification. The AO is to provide a natural justice hearing.

The Tribunal upheld the PCIT's finding that the AO's order was erroneous and prejudicial for failing to inquire into the "Exceptional Item" claim of Rs. 57.02 crore and a difference in sundry balance written off. However, it modified the PCIT's order, restricting the AO's fresh inquiry solely to these two specific issues, excluding other "losses" not part of the original show cause notice.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable because the show cause notice and penalty order failed to specify the precise limb (furnishing inaccurate particulars or concealment of income) under which the penalty was imposed. Additionally, considering that the assessee's quantum appeal was partly allowed, the department could not sufficiently prove either ground. Consequently, the penalty order does not survive, and the appeal is allowed.

Appeals for AY 2012-13 and 2015-16 were dismissed as not pressed. For AY 2009-10 and 2010-11, the tribunal dismissed grounds regarding the lack of incriminating material, but deleted additions for unaccounted student fees as these were already offered to tax by group entities. Additions for unexplained property investments were either deleted or restricted if already offered to tax before the Settlement Commission, with the Revenue being at liberty to pursue unoffered stamp duty/expenses. Certain unexplained loans, investments, and business profit were offered to tax by the assessee.

The Tribunal held that the appeal was defective due to multiple reasons, including being time-barred, lacking a proper condonation application, and grounds not arising from the order appealed against. The memorandum of appeal was also improperly signed.

The Tribunal held that the CIT(A) had passed the order without proper application of mind, confirming an incorrect addition amount and making factually incorrect observations about the assessee's submissions during assessment. The matter was therefore restored to the CIT(A) for fresh adjudication.

The Tribunal found that the CIT(A)'s estimation of 2% profit was on the higher side, considering the assessee's admitted net profit of 0.03%. Therefore, the Tribunal reduced the estimated profit to 1.5% of the accommodation entry amount.

The Tribunal found that the CIT(A)'s estimation of 2% profit was on the higher side, considering the assessee's admitted net profit of 0.03%. Therefore, the Tribunal reduced the estimated profit to 1.5% of the accommodation entry amount.

The Tribunal remanded both issues back to the Assessing Officer for fresh adjudication. It held that the DVO's report on unexplained investment was not confronted to the assessee, and their books of accounts were not rejected, requiring re-examination. For the cash deposits, the Tribunal allowed the assessee a fresh opportunity to submit proper evidence for verification. The AO is to provide a natural justice hearing.

The tribunal held that the objects identified as religious by the CIT(E) (organizing Satsang, providing accommodation/food for "Vaishnavs") were not purely religious but served broader charitable purposes or were incidental to the main charitable activities. The tribunal also noted the CIT(E)'s finding on religious expenditure was based on mere presumption. Consequently, the matter was set aside to the CIT(E) to provide the assessee another opportunity to furnish details of religious expenditures for re-examination, with approval to be granted if the expenses are within the 5% limit under Section 80G(5B).

The ITAT set aside the CIT(A)'s order, noting that the CIT(A) restricted the addition without verifying the genuineness of the assessee's Shroff business, especially given the non-filing of ITR and lack of a statutory license. The tribunal directed the Assessing Officer to provide another opportunity to the assessee to establish the genuineness of the Shroff business for the relevant assessment year and pass orders in accordance with the provisions of law.

The ITAT condoned the 368-day delay, acknowledging the assessee's reasonable belief. It ruled that Form 10B filing is a procedural requirement, and since the audit report was available to the AO during rectification u/s 154, the exemption u/s 11 could not be denied. The ITAT found the issue squarely covered by Jurisdictional High Court and other ITAT decisions and directed the AO to allow the exemption under Section 11.

The Tribunal held that the reopening of assessment was based on a mere change of opinion and lacked jurisdiction, as all relevant facts were available during the original assessment. Consequently, the reassessment order and the subsequent rectification order were quashed.

The Tribunal condoned the delay and, considering the assessee's genuine difficulties, remanded the matter back to the Assessing Officer for a de novo assessment. The assessee was directed to pay a cost of Rs. 5,000 to the 'Prime Minister's Relief Fund' and strictly comply with all future notices.

The Tribunal, relying on judgments from the Hon'ble High Courts of Karnataka and Bombay, held that notices issued under Section 148 of the Income Tax Act without a digital or manual signature are invalid and do not confer jurisdiction on the Assessing Officer. Since the Revenue admitted that the notices for AYs 2014-15 and 2015-16 did not bear visible digital signatures, these notices were deemed void ab initio, and consequently, the assessment orders based on them were also quashed.

The Tribunal admitted the additional ground regarding the validity of the Section 153C assessment for AY 2017-18, relying on Supreme Court judgments in National Thermal Power Co. Ltd. vs. CIT and CIT vs. Jasjit Singh. It was held that the assessment under Section 153C was null and void because no notice under Section 153C was issued by the Assessing Officer (AO). Consequently, the Revenue's appeal and the assessee's cross-objection for AY 2017-18 were dismissed as infructuous. For AY 2016-17, the Tribunal allowed the assessee's cross-objection on bogus purchases, holding no further addition was required as the assessee had removed them from total purchases. The addition on account of unexplained cash deposits was allowed as the assessee submitted vouchers. The addition on unsecured loans was allowed as the identity, creditworthiness, and genuineness were proved by the director's salary. The disallowance under Section 40(a)(ia) was remanded to the AO for verification of TDS returns and certificates from parties. The Revenue's appeal for AY 2017-18 was dismissed, and the assessee's cross-objection for AY 2016-17 was allowed.

The Tribunal found that notices were not effectively served on the correct email ID provided by the assessee in Form No. 35. Consequently, the ex-parte order passed by the CIT(A) was deemed without effective service of notice. The Tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication on merits, ensuring proper opportunity and service of notices.

The Income Tax Appellate Tribunal upheld the CIT(A)'s decision to delete the penalty. The Tribunal noted that the admitted income was voluntarily declared in the return and accepted by the AO as business income, and there was no material brought on record to disprove the assessee's contention. It was concluded that detection during a survey alone does not warrant penalty if the income is subsequently disclosed, as there was no concealment or inaccurate particulars.

The Tribunal condoned the delay, finding sufficient cause due to the incorrect email service and the potential for grave injustice. On merits, the Tribunal held that the AO's assessment order lacked basic ingredients and was therefore set aside.

The Tribunal held that both the Assessing Officer and CIT(A) failed to consider the detailed entries and receipts submitted by the assessee, which demonstrated that the donations were for the corpus fund. Therefore, the addition made was not justified.

The Tribunal, relying on judgments from the Hon'ble High Courts of Karnataka and Bombay, held that notices issued under Section 148 of the Income Tax Act without a digital or manual signature are invalid and do not confer jurisdiction on the Assessing Officer. Since the Revenue admitted that the notices for AYs 2014-15 and 2015-16 did not bear visible digital signatures, these notices were deemed void ab initio, and consequently, the assessment orders based on them were also quashed.

The Tribunal held that the reopening of assessment was based on a mere change of opinion and lacked jurisdiction, as all relevant facts were available during the original assessment. Consequently, the reassessment order and the subsequent rectification order were quashed.

The Tribunal, acknowledging the assessee's non-compliance before the CIT(A), decided to set aside the CIT(A)'s order in the interest of justice. The case was remanded back to the Assessing Officer for a de novo assessment, with a condition that the assessee cooperates and furnishes all required documents.

The Tribunal found no evidence from the Revenue to prove actual receipts by the assessee from M/s. Electrotherm India Limited and noted the Revenue had not claimed tax from the TDS deducted. Consequently, the Tribunal declined to interfere with the CIT(A)'s order deleting the addition. However, the Tribunal directed the Revenue to further examine the movement of funds and the claim of TDS under the assessee's old PAN in the interest of the exchequer.

The Tribunal noted that the CIT(A) passed an ex-parte order and did not fully adjudicate all grounds. It remanded the matter to the Assessing Officer to verify if the amounts reflecting in the assessee's bank accounts, pertaining to the alleged transactions, have indeed been assessed in the hands of Shri Sanjay Shah. If so, no addition should be made in the assessee's hands.

The Tribunal held that the unabsorbed losses had already crystallized on 30.08.2017 via a valid u/s 154 order, making the mistake of not allowing them in the 153C assessment apparent on record. Since the 153C assessment found no incriminating material or made no additions, the AO should have started with the income as per the u/s 154 order. The rejection based on Goetze India Ltd. was erroneous as the claim was already accepted and determined in the records.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause and holding that non-condonation would result in grave injustice, aligning with Supreme Court principles on liberal interpretation for condonation. Consequently, the addition of Rs. 9,55,400 made without hearing the assessee was set aside, and the issue was restored to the Assessing Officer for a fresh hearing with a proper opportunity given to the assessee.

The Tribunal held that the reopening was based on incorrect information as the assessee had denied the loan and provided evidence to support their denial. Consequently, the reopening and the assessment order were quashed.

The Tribunal upheld the CIT(A)'s order, observing that the assessee had explained the details of the unsecured loan and its repayment, which were transacted through banking channels. The Tribunal found no reason to interfere with the CIT(A)'s reasoned decision to delete the addition.

The Tribunal condoned the 3113-day delay in filing the appeal, noting it was not deliberate and the assessee acted promptly upon discovering the demand. It was observed that the Assessing Officer had mistakenly doubled the profit and gain business income. The matter was remanded back to the CIT(A) for proper adjudication, with the assessee required to pay Rs. 10,000/- to the Prime Minister Relief Fund, and an opportunity of hearing to be provided based on natural justice.

For ITA No. 1581/Ahd/2025, the tribunal held that no disallowance u/s 14A was called for as the assessee earned no exempt income, deleting the addition. For ITA No. 1580/Ahd/2025, the tribunal restricted the disallowance u/s 14A read with Rule 8D to the extent of the actual exempt dividend income of Rs. 32,95,039/- earned by the assessee.

The Tribunal ruled that the assessee was entitled to the Section 80P deduction for interest from fixed deposits with a co-operative bank. It further held that the adjustment under Section 143(1)(a)(v) for non-filing of ITR within the due date, being effective from April 1, 2021, was not applicable to Assessment Year 2019-20, rendering the CPC's disallowance illegal and without jurisdiction for this period.

The Tribunal held that the issues questioned by the PCIT were already subject to detailed scrutiny by the AO, and the PCIT failed to demonstrate any specific error or prejudice to the revenue. It was noted that the interest under Section 201(1A) was not claimed as an expense, and Section 80G explicitly provides for restrictions on CSR donations in specific sub-clauses, implying no further restrictions. Thus, the assessment order was found not to be erroneous or prejudicial.

The Tribunal held that since the assessee had disclosed the income, even if re-characterization led to an addition in the quantum assessment, the essential elements of concealment or furnishing inaccurate particulars required for imposing penalty under Section 271(1)(c) were not met. Consequently, the penalty imposed was deleted.

The CIT(A) deleted the addition, finding that the deposits with M/s Honeyvick Enterprises Pvt. Ltd. did not pertain to the assessment year in question. The Tribunal agreed, stating that if the transaction did not occur in the impugned year, no addition could be made.

For ITA No. 1581/Ahd/2025, the tribunal held that no disallowance u/s 14A was called for as the assessee earned no exempt income, deleting the addition. For ITA No. 1580/Ahd/2025, the tribunal restricted the disallowance u/s 14A read with Rule 8D to the extent of the actual exempt dividend income of Rs. 32,95,039/- earned by the assessee.

The Tribunal held that the reopening was based on incorrect information as the assessee had denied the loan and provided evidence to support their denial. Consequently, the reopening and the assessment order were quashed.

The Tribunal found that the reasons for reopening the assessment were identical to those of the assessee's sister concerns and lacked independent application of mind by the Assessing Officer. Furthermore, the Tribunal noted that similar appeals by the department had been dismissed.

The Tribunal held that the assessee's contention that the issue was examined during assessment proceedings was not supported by evidence, as the cash book was not furnished. The Tribunal also rejected the argument that the PCIT directed the AO to verify the source of investment in property, clarifying it was about verifying the utilization of withdrawals.