ITAT Ahmedabad Judgments — October 2026

The Tribunal noted that notices were issued to the assessee to furnish details and documents. The CIT(E) rejected the application on the ground that the assessee failed to furnish substantial documents. The assessee's counsel prayed for an opportunity to submit the same to the CIT(E). The Revenue's counsel argued that the assessee-trust needs to furnish requisite details/explanations and submissions before the CIT(E). Considering these submissions, the Tribunal held that the interests of justice would be served by remanding the matter to the CIT(E) for fresh consideration of the application under Section 12A(1)(ac)(iii), taking into account the submissions and explanations submitted by the assessee. Consequently, the issue regarding approval under Section 80G(5)(iii) was also set aside for fresh adjudication. The appeals were allowed for statistical purposes.

The Tribunal noted that notices were issued to the assessee to furnish details and documents. The CIT(E) rejected the application on the ground that the assessee failed to furnish substantial documents. The assessee's counsel prayed for an opportunity to submit the same to the CIT(E). The Revenue's counsel argued that the assessee-trust needs to furnish requisite details/explanations and submissions before the CIT(E). Considering these submissions, the Tribunal held that the interests of justice would be served by remanding the matter to the CIT(E) for fresh consideration of the application under Section 12A(1)(ac)(iii), taking into account the submissions and explanations submitted by the assessee. Consequently, the issue regarding approval under Section 80G(5)(iii) was also set aside for fresh adjudication. The appeals were allowed for statistical purposes.

The Tribunal held that the application for final approval under Section 80G(5) should not be rejected solely on the ground of the assessee inadvertently mentioning the incorrect sub-clause (ii instead of iii). The Tribunal observed that post the amendment to Section 80G w.e.f. 01.04.2021, there was significant confusion regarding the interpretation of the provisions, leading to mistakes by assessees and even tax authorities. The Tribunal noted that Co-ordinate Benches have consistently held that assessees should not be punished for bona fide mistakes in application forms, especially when the entire facts are on record and the assessee is otherwise eligible. The Tribunal found that the CIT(E) was aware of the assessee's eligibility but felt constrained by the incorrect clause mentioned. Therefore, the impugned order of the CIT(E) was set aside. The matter was restored to the file of the CIT(E) with a direction to treat the application as moved under the relevant clause (80G(5)(iii)) irrespective of the clause mentioned by the assessee and to decide the application afresh on merits. The appeal was allowed for statistical purposes.

The Tribunal allowed the ground raised by the assessee, respectfully following the decision of the Hon’ble jurisdictional High Court in PCIT Vs. Ashwinkumar Arban Co-Operative Society Ltd. The High Court held that a cooperative bank is a cooperative society registered under the Gujarat State Cooperative Societies Act, and therefore, interest earned by an assessee cooperative society from investment made with such a cooperative bank is eligible for deduction under Section 80P(2)(d). The High Court further clarified that the exclusion of applicability of Section 80P to cooperative banks by Section 80P(4) does not disentitle an assessee from claiming deduction under Section 80P(2)(d) in the absence of any amendment to that specific section. The High Court also distinguished the reliance placed by the revenue on decisions of the Karnataka High Court and the Supreme Court in the case of Totgars’ Cooperative Sale Society, noting that those decisions might have considered amendments to Section 194A(3)(v) which do not exclude cooperative banks from the definition of cooperative societies for the purpose of Section 80P. The Tribunal found that the conditions for invoking revisional powers under Section 263, as per the High Court's judgment, were not fulfilled. The operative direction was to allow the ground raised by the assessee.

The Tribunal held that the matter requires fresh examination by the AO. The Tribunal found that while the CIT(A) confirmed the addition based on the assessee's failure to furnish credible documentary evidence, it is necessary to establish whether the entries relied upon by the AO specifically pertain to the assessee and whether the alleged transactions are supported by reliable and corroborative evidence. The mere existence of entries in the records of a third party, without proper verification of their identity, nature, and connection with the assessee, requires careful examination before an addition can be sustained under Section 69A. The Tribunal also noted the assessee's specific issue regarding denial of cross-examination and non-supply of material. Where statements or third-party material form a material basis for an adverse finding, the assessee must be afforded a reasonable opportunity to examine and rebut such evidence. Therefore, the Tribunal set aside the impugned order of the CIT(A) and restored the matter to the file of the AO for denovo adjudication. The AO is directed to provide the assessee with the relevant seized material, examine the evidentiary nexus, verify the nature of alleged transactions with Tirth Gold, and provide an opportunity for cross-examination where legally warranted.

The Tribunal held that the issue requiring consideration was whether the assessee's claim regarding resolution under the Direct Tax Vivad Se Vishwas Scheme, 2024, and the consequential request for withdrawal of the appeal were duly examined by the Ld. CIT(A). While the assessee claimed to have filed Forms 1, 2, and 3, and paid the determined amount, the material did not conclusively establish whether the competent authority issued the final settlement order in Form 4 or if the statutory process was completed. The Tribunal found it inappropriate to presume settlement or disregard the claim without verification. The eligibility under the Scheme and the applicability of the notification dated 20.01.2025 also required examination. Consequently, the matter was restored to the Ld. CIT(A) for de novo adjudication, specifically to examine the Vivad Se Vishwas Scheme claim, verify all relevant documents (Forms 1, 2, 3, proof of payment, and Form 4 or final settlement communication), and decide the effect of the withdrawal request. If the dispute was validly settled, the appeal would be dealt with accordingly; otherwise, the Ld. CIT(A) would adjudicate on merits after affording a hearing.

The Tribunal held that for AY 2018-19, the JCIT(A) erred in several aspects. Firstly, the requirement to file Form 10B one month before the due date was not applicable for AY 2018-19. Secondly, the CPC's communication dated 19-08-2019 did not lead to the adjustment made in the Section 143(1) intimation, and the subsequent Section 154 rectification was beyond its scope as it did not address a mistake apparent from the record. The Tribunal found that the assessee's expenses exceeded its gross receipts, meaning no exemption was effectively claimed that was more than the income offered. The JCIT(A) also erred in assuming the assessee sought condonation of delay. Therefore, the rectification order under Section 154 was set aside as erroneous. For AY 2019-20, the Tribunal noted that the disallowance of all expenses was not permissible. The matter was restored to the JAO to examine the Section 12A registration documents and, if in order, allow exemption under Section 11, keeping in mind that legitimate expenses must be allowed, and only the surplus, if any, considered for disallowance. The order of the JCIT(A) was set aside for statistical purposes.

The Tribunal held that for AY 2018-19, the JCIT(A) erred in several aspects. Firstly, the requirement to file Form 10B one month before the due date was not applicable for AY 2018-19. Secondly, the CPC's communication dated 19-08-2019 did not lead to the adjustment made in the Section 143(1) intimation, and the subsequent Section 154 rectification was beyond its scope as it did not address a mistake apparent from the record. The Tribunal found that the assessee's expenses exceeded its gross receipts, meaning no exemption was effectively claimed that was more than the income offered. The JCIT(A) also erred in assuming the assessee sought condonation of delay. Therefore, the rectification order under Section 154 was set aside as erroneous. For AY 2019-20, the Tribunal noted that the disallowance of all expenses was not permissible. The matter was restored to the JAO to examine the Section 12A registration documents and, if in order, allow exemption under Section 11, keeping in mind that legitimate expenses must be allowed, and only the surplus, if any, considered for disallowance. The order of the JCIT(A) was set aside for statistical purposes.

The Tribunal held that the penalty under Section 271DA of the Income Tax Act was not justified. The issue was whether the cash contributions made by the partner on different dates attracted the provisions of Section 269ST, thereby warranting the penalty. Section 269ST prohibits the receipt of Rs. 2,00,000/- or more otherwise than through prescribed banking or electronic modes, in aggregate from a person in a single day, in respect of a single transaction, or in respect of transactions relating to one event or occasion. The penalty of Rs. 2,08,000/- was imposed by aggregating two cash contributions of Rs. 1,99,000/- and Rs. 9,000/- received on November 1, 2021, and November 16, 2021, respectively. The Tribunal noted that these two cash contributions were received on different dates, separated by fifteen days, and neither individually reached the Rs. 2,00,000/- threshold. Crucially, the Tribunal found no material to establish that these two cash receipts represented amounts received in respect of a single transaction or transactions relating to one event or occasion, as required by Section 269ST. The mere fact that both amounts were contributed by the same partner towards the firm's capital did not, by itself, establish a contravention of Section 269ST. Therefore, the aggregation of the two cash contributions was not sustainable. The penalty order was cancelled, and the assessee's appeal was allowed.

The Tribunal held that the learned CIT(A) committed a clear violation of the principles of natural justice by not furnishing the Remand Report to the assessee and relying on it without allowing the assessee an opportunity to file objections or a rejoinder. The Tribunal also noted that the assessee's contentions were not adequately addressed by the CIT(A). Consequently, the order of the CIT(A) confirming the addition of Rs. 51,93,500/- towards cash deposits and the addition of Rs. 14,25,000/- on account of unsecured loans was set aside. Both issues were restored to the file of the learned CIT(A). The CIT(A) was directed to furnish a copy of the Remand Report to the assessee, provide an adequate opportunity to file objections/rejoinder, and re-adjudicate the issues afresh, considering the additional evidence and submissions. Grounds 1 and 2 raised by the assessee were allowed for statistical purposes.

The Tribunal held that the initiation of reassessment proceedings under Section 148 of the Income Tax Act, 1961, for Assessment Year 2015-2016 was invalid. The Tribunal relied on the judgment of the jurisdictional Gujarat High Court in Narendra Maganlal Purohit vs. Deputy Commissioner of Income-tax, which in turn followed the Supreme Court's decision in Union of India vs. Rajeev Bansal. The Supreme Court had noted the Revenue's concession that for Assessment Year 2015-2016, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion during the period prescribed under TOLA. Since the notice under Section 148 for the present case was issued on April 13, 2021, which is after March 31, 2021, it was held to be invalid. Consequently, the reassessment proceedings and the assessment order were quashed. The Tribunal allowed Ground No. 2 raised by the assessee and dismissed all other grounds as infructuous.

The Tribunal dismissed the Revenue's appeal. The Tribunal noted that the assessee had produced detailed documentary evidence for each partner's capital contribution, including partner's ledger accounts, confirmations, ITR acknowledgments, bank statements, and entry-wise explanations of the source of credits, including 'source of source' documents. The Tribunal observed that the AO made only general observations and did not conduct any inquiry or verification to controvert the documentary evidence furnished by the assessee, failing to point out any infirmity. The Tribunal relied on the jurisdictional Gujarat High Court's decision in PCIT v. Vaishnodevi Refoils & Solvex, which held that if a firm furnishes details regarding capital introduced by partners and partners confirm the contribution, the firm discharges its onus. Any inquiry or addition regarding the partner's creditworthiness should be made in the hands of the partner, not the firm. The Tribunal found no infirmity in the CIT(A)'s order deleting the addition.

The Tribunal held that the case is one of under-reporting of income, not under-reporting in consequence of misreporting. While the assessee did not file the original return and filed it only after a Section 148 notice, and the declared income exceeded the maximum amount not chargeable to tax, thus falling under Section 270A(2), the AO failed to establish misreporting under Section 270A(9). The cash deposits were explained as business sale proceeds, and the AO accepted the returned income without additions. Therefore, the penalty at the higher rate of 200% for misreporting is not justified. However, the Tribunal rejected the assessee's contention that the case falls under the exclusions of Section 270A(6), as no explanation was provided for the failure to file the original return despite having taxable income. The Tribunal directed the AO to re-compute the penalty under Section 270A at the rate of 50% of the tax payable on the under-reported income, subject to verification. The penalty imposed at 200% was deemed unsustainable.

The Tribunal held that notional rental income in respect of unsold flats held as stock-in-trade by a real estate developer cannot be brought to tax under the head 'Income from House Property' for AY 2017-18. The Tribunal noted that Section 23(5) of the Act, which specifically addresses such situations by deeming the annual value to be nil for a period of two years from the end of the financial year of completion of construction, was inserted with effect from AY 2018-19. The Tribunal relied on the decisions of the Coordinate Bench in Galaxy Developers vs. ACIT and the Third Member decision in Moraj Finanz Corporation vs. DCIT, which held that notional annual letting value of unsold units held as stock-in-trade cannot be taxed under Section 22 for assessment years prior to the applicability of Section 23(5). The Tribunal further observed that a decision of the Hon'ble Jurisdictional High Court in CIT vs Classique Associate (Supra) also supports the view that income from unsold flats/units held as stock in trade cannot be assessed under the head 'Income from House Property'. Therefore, the addition of Rs. 5,79,697/- made on account of notional rental income and sustained by the CIT(A) was deleted. The appeal was allowed.

The Tribunal held that the penalty of Rs. 5,49,120/- levied under Section 270A of the Income Tax Act, 1961, was unsustainable. The Tribunal observed that the penalty order failed to establish how the assessee's case fell within the instances of misreporting specified under Section 270A(9) of the Act. It was not clear whether the penalty was levied for 'under-reporting' of income under Section 270A(2)(d) or 'mis-reporting' of income under Section 270A(9). The AO imposed a penalty at 200% of the tax sought to be evaded, which is applicable for misreporting. However, the AO's conclusion in the penalty order, while mentioning initiation for 'under reporting of income', later stated that the increased income due to assessment under Section 147 was considered 'mis reported income' and attracted penalty as per Section 270A(2)(d). The Tribunal noted that the AO did not indicate which specific offence under Section 270A(9) was committed. The Tribunal followed its earlier decisions in 'Hiro Mulchand Tanwani Vs. ITO' and 'Siddharth Laxminkant Vaderkar vs. ITO', which held that the levy of penalty under Section 270A on misreporting of income is unsustainable in law without establishing the specific statutory ingredients. Therefore, the penalty was deleted.

The Tribunal held that the order of the CIT(A) should be set aside and the case restored to the AO for fresh adjudication. The primary reason for this decision was the procedural irregularity of not providing the assessee with a copy of the remand report dated 29-05-2019, thereby denying the opportunity to file a rejoinder. The Tribunal also noted that the assessee's plea for referring the valuation of land to the DVO under Section 50C(2) was rejected, despite the assessee disputing the stamp duty valuation and relying on the precedent in Bhupendrabhai Bhikhalal Patel vs. ITO. Furthermore, the Tribunal observed that the AO and CIT(A) did not address the issue of the land being used for agricultural purposes for less than two years, and the assessee had not claimed under Section 54B. The Tribunal also acknowledged the assessee's contention regarding their share in jointly purchased land (16.21% vs. one-third adopted by AO) and directed the AO to give an opportunity to produce evidence for this. Consequently, the AO was directed to give the assessee a copy of the remand report, refer the valuation of land to the DVO where stamp duty value exceeded fair market value, and allow the assessee to produce evidence for their share in jointly purchased land.

The Tribunal held that the addition of Rs. 1.50 crores as unexplained expenditure under Section 69C was not sustainable on the material available on record. The Tribunal noted that while the assessee had regular business transactions with MEL, this did not, by itself, establish the genuineness of the disputed transaction. However, the addition was based on a WhatsApp communication between MEL employees and the statement of Shri Sanjay Singh. The Tribunal found that the WhatsApp communication, mentioning "1.5 ahmedabad khushi," lacked conclusive evidence to establish that the alleged cash was delivered to the assessee or its representative. The statement of Shri Sanjay Singh identified the recipient as "Ajay," but his identity and connection to the assessee were not established. There was no evidence that Ajay was an employee or agent of the assessee, nor any inquiry by the AO to link him to the assessee. The Tribunal also found that the alleged sequence of cash payment followed by a banking transfer did not, without corroboration, establish that the assessee received cash and routed it as alleged. The AO had not demonstrated, through examination of underlying records, that the specific expenditure was fictitious. The Tribunal also noted that the statement of Shri Amit Sharma was subsequently retracted. Ultimately, the Tribunal concluded that the AO had not established the identity of the cash recipient, their connection to the assessee, or the actual delivery of cash. The inference rested on interpretation of WhatsApp communication and alleged transaction sequence without necessary corroboration. Therefore, the CIT(A)'s deletion of the addition was upheld.

The Tribunal held that the issue required proper verification of the relevant bank accounts, KYC records, books of account, Sales Register, and other supporting evidence, especially considering the assessee's specific claims regarding account ownership and the source of deposits (cash sales). Since these claims were not effectively substantiated before the lower authorities, the Tribunal, in the interest of justice, restored the issue to the file of the Assessing Officer for fresh adjudication. The assessee was directed to deposit Rs. 10,000/- in the Prime Minister’s National Relief Fund as a cost for negligence in not properly representing the case before the lower authorities. Subject to this condition, the impugned order of the CIT(A) was set aside, and the matter was remanded. The AO was instructed to examine the assessee's claims and decide afresh. The grounds relating to the addition were allowed for statistical purposes, and consequential grounds for interest and penalty would be dealt with accordingly. No specific finding was made on the merits of the addition itself, as the matter was remitted.

The Tribunal held that the addition made by the AO was based on an erroneous re-computation of project profit under POCM, and it was not supported by any incriminating material found during the search. The assessee's consistent application of POCM, accepted in earlier years, was an admitted fact. Crucially, the AO had not pointed out any defects in the assessee's books of accounts nor rejected them under section 145(3). The search did not yield any evidence of unrecorded cash or hidden assets, and all project income was accounted for through bank channels and taxed over the project's duration. The addition was made solely by adopting an alternative working and revising the percentage of completion. The Tribunal emphasized that a Completion Certificate from a local authority cannot be treated as conclusive evidence of the completion of all contractual obligations of a developer. The assessee had demonstrated that substantial work related to amenities, finishing, infrastructure, and other project obligations continued even after the issuance of the Completion Certificate, and the corresponding expenditure incurred post-completion was not disputed by the Revenue. A reconciliation statement submitted by the assessee showed that the total revenue recognized over the project period exceeded the revenue considered by the Department, indicating that the alleged suppression arose due to timing differences in revenue recognition, not due to suppression of receipts or income. Therefore, in the absence of any finding of suppression of revenue, inflation of expenditure, or defects in the regularly maintained books of accounts, the AO was not justified in substituting the assessee's consistently followed accounting method with an estimated computation. The Tribunal found no infirmity with the CIT(A)'s order deleting the addition and upheld it.

The Tribunal noted that the AO required an explanation for the increase in sundry creditors. While the assessee provided tax audit reports and financial statements, specific party-wise details for the increase were not initially furnished. Before the CIT(A), party-wise details and confirmations were provided. The AO pointed out discrepancies in confirmations, primarily due to signatures by the accountant. The assessee admitted this was an inadvertent error and faced difficulty in obtaining fresh signatures. The Tribunal found that the increase in sundry creditors pertained to trade creditors from purchases and expenses. The genuineness should be examined through underlying transactions, purchase bills, invoices, transport documents, goods receipt records, and evidence of subsequent payments. The AO did not examine these aspects, and the assessee did not furnish complete supporting material. The Tribunal relied on the Gujarat High Court decision in Principal Commissioner of Income-tax v. Ambe Tradecorp (P.) Ltd. for the principle that supporting material and repayment of loans are crucial. For the loan addition, the Tribunal acknowledged that repayment is a relevant circumstance but needs examination in context with the loan's nature, lender's identity, book entries, and supporting evidence. The Tribunal restored both issues to the AO for fresh examination, directing the AO to provide the assessee an opportunity to furnish documentary evidence, verify payments, and examine discrepancies in confirmations. The addition of Rs. 4,00,51,024/- and Rs. 31,37,500/- were allowed for statistical purposes.

The Tribunal held that the addition made by the AO was based on an erroneous re-computation of project profit under POCM, and it was not supported by any incriminating material found during the search. The assessee's consistent application of POCM, accepted in earlier years, was an admitted fact. Crucially, the AO had not pointed out any defects in the assessee's books of accounts nor rejected them under section 145(3). The search did not yield any evidence of unrecorded cash or hidden assets, and all project income was accounted for through bank channels and taxed over the project's duration. The addition was made solely by adopting an alternative working and revising the percentage of completion. The Tribunal emphasized that a Completion Certificate from a local authority cannot be treated as conclusive evidence of the completion of all contractual obligations of a developer. The assessee had demonstrated that substantial work related to amenities, finishing, infrastructure, and other project obligations continued even after the issuance of the Completion Certificate, and the corresponding expenditure incurred post-completion was not disputed by the Revenue. A reconciliation statement submitted by the assessee showed that the total revenue recognized over the project period exceeded the revenue considered by the Department, indicating that the alleged suppression arose due to timing differences in revenue recognition, not due to suppression of receipts or income. Therefore, in the absence of any finding of suppression of revenue, inflation of expenditure, or defects in the regularly maintained books of accounts, the AO was not justified in substituting the assessee's consistently followed accounting method with an estimated computation. The Tribunal found no infirmity with the CIT(A)'s order deleting the addition and upheld it.

The Tribunal held that the PCIT's order under Section 263 was unsustainable and set it aside, allowing the assessee's appeal. The Tribunal found that the AO had indeed called for relevant details regarding transactions covered under Section 40A(2)(b) in response to a notice under Section 142(1), and the assessee had furnished a detailed reply on July 13, 2020. This indicated that the AO had examined the issue and taken a conscious view. The governing test for revision under Section 263 requires the assessment to be both erroneous and prejudicial to the revenue, and the Commissioner cannot invoke it merely because he has a different view if the AO has adopted a legally permissible one. The Tribunal distinguished between 'lack of inquiry' and 'inadequate inquiry,' stating that Section 263 cannot be invoked simply because the PCIT believes a more elaborate inquiry should have been conducted. The assessment order's silence on Section 40A(2)(b) payments does not automatically imply a lack of inquiry. Furthermore, the PCIT had not identified comparable market prices or quantified how the payment to related parties was excessive. The Tribunal also noted that in earlier assessment years, the revenue had accepted similar payments to parties covered under Section 40A(2)(b) without disallowance, and the payees were in a higher tax bracket. The Tribunal relied on precedents like CIT vs. Indo Saudi Services (Travel) (P) Ltd. and Shanti Multilink Pvt. Ltd. vs. PCIT, which held that if the AO had examined an issue, it cannot be treated as an omission to examine, and Explanation 2 does not grant unrestricted power to revise every assessment.

The ITAT held that the Commissioner of Income Tax (Appeals) was not justified in passing an ex-parte order without ensuring proper communication with the assessee. The Tribunal noted that the assessee had provided documentary evidence confirming the update of its email ID to asrbotad@gmail.com and that notices were sent to the previous consultant's email address. In the interest of justice, the Tribunal decided to grant the assessee an opportunity to present its case before the CIT(A). Consequently, the impugned order of the CIT(A) was set aside, and the matter was restored to the file of the CIT(A) for a fresh decision on merits after considering the grounds of appeal and passing a speaking order in accordance with the law. The addition of Rs. 1,48,67,683/- was not decided on merits.

The ITAT dismissed the appeal as barred by limitation. The Tribunal noted that the appeal was filed with an inordinate delay of 735 days. The assessee's explanation for the delay, citing reliance on professional assistance and change of auditor, was found to be insufficient and lacking particulars to establish a bonafide cause. The Tribunal observed that the assessee participated in consequential assessment proceedings after the PCIT's order and only challenged the revision order after the consequential assessment order was passed. This was considered an afterthought rather than a sufficient cause. The Tribunal relied on the decision in Pravin Babanrao Tambe vs. PCIT and Esha Bhattacharjee Vs. Managing Committee of Raghunathpur Nafar Academy. Consequently, the petition for condonation of delay was rejected, and the appeal was dismissed without adjudication on the merits of the grounds raised.

The Tribunal noted that for AY 2017-18, the CIT(A) dismissed the appeal ex-parte due to the assessee's non-compliance. While the assessee claimed the cash deposits were business receipts and bank credits related to credit card transactions, the AO treated them as unexplained for want of documentary evidence. The Tribunal acknowledged the assessee's submission that the appeal was dismissed on non-compliance and requested a hearing on merits. For AY 2023-24, the AO estimated net profit at 1% of turnover, and the CIT(A) confirmed this due to the assessee's non-compliance at the appellate stage. The assessee argued that the estimation was arbitrary and requested an opportunity to present evidence. The Tribunal found that the assessee had furnished some details at the assessment stage but failed to do so at the appellate stage. In the interest of justice, the Tribunal decided to set aside the CIT(A)'s order for AY 2023-24 and restore the issue of the Rs. 83,37,333/- addition to the CIT(A) for fresh adjudication, allowing the assessee an opportunity to furnish evidence. The appeals were allowed for statistical purposes.

The Tribunal noted that for AY 2017-18, the CIT(A) dismissed the appeal ex-parte due to the assessee's non-compliance. While the assessee claimed the cash deposits were business receipts and bank credits related to credit card transactions, the AO treated them as unexplained for want of documentary evidence. The Tribunal acknowledged the assessee's submission that the appeal was dismissed on non-compliance and requested a hearing on merits. For AY 2023-24, the AO estimated net profit at 1% of turnover, and the CIT(A) confirmed this due to the assessee's non-compliance at the appellate stage. The assessee argued that the estimation was arbitrary and requested an opportunity to present evidence. The Tribunal found that the assessee had furnished some details at the assessment stage but failed to do so at the appellate stage. In the interest of justice, the Tribunal decided to set aside the CIT(A)'s order for AY 2023-24 and restore the issue of the Rs. 83,37,333/- addition to the CIT(A) for fresh adjudication, allowing the assessee an opportunity to furnish evidence. The appeals were allowed for statistical purposes.

The Tribunal held that the delay of 803 days in filing the appeal was not liable to be condoned. The Tribunal found that the explanation provided by the assessee was not satisfactory. It noted that the firm had nine partners, and even after two partners left the country, seven remained. The discontinuation of business in 2005 did not preclude others from attending to tax matters. Furthermore, other tax proceedings for the firm were pursued during the same period, indicating continued attention to its affairs. The Tribunal also observed that the assessee had a prolonged non-compliance before the CIT(A) for over thirteen years. The contention that the tax consultant did not communicate the order was not sufficiently explained. Citing the principles from Esha Bhattacharjee and Mani Ram Seva Nyasi Sangh Ayodhya, the Tribunal concluded that there was gross negligence and a lack of care by the assessee. Consequently, the application for condonation of delay was rejected, and the appeal was dismissed as time-barred. The grounds relating to the merits of the penalty were not adjudicated due to the rejection of the condonation application. The issue of the penalty order being time-barred was examined and found not to be barred by limitation based on the dates recorded.

On Ground No. 1, the Tribunal upheld the reopening of assessment, finding no material to interfere with the CIT(A)'s findings, and dismissed this ground. On Ground No. 2, concerning the disallowance under Section 40(a)(ia), the Tribunal restored the issue to the Assessing Officer for fresh verification of TDS returns, challans, and payment details to determine the actual TDS deposited, any remaining unpaid amount, and the applicability of Section 40(a)(ia), allowing the ground for statistical purposes. On Ground No. 3, regarding the addition of notional rental income, the Tribunal also restored the issue to the Assessing Officer to verify the actual use of properties, examine supporting evidence, and decide afresh, allowing this ground for statistical purposes. The Tribunal did not decide Ground No. 4 on its merits but implicitly addressed it by remanding issues to the AO.

The Tribunal held that the assessee's appeal should be allowed for statistical purposes. Following the precedent set in Shri Mota Hanuman Dada Seva Trust vs. CIT(E), the Tribunal found the facts to be similar, where the assessee had inadvertently filed the application under the wrong section. The Tribunal reasoned that the CIT(E) rejected the application without confronting the assessee with this defect or allowing an opportunity to explain the inadvertent mistake. Therefore, the Tribunal set aside the impugned order of the CIT(E). The CIT(E) was directed to either treat the application as filed under Section 12A(1)(ac)(ii) or grant the assessee an opportunity to file a rectified application. The CIT(E) was also granted liberty to decide the application on its merits after affording the assessee an opportunity to submit necessary information and documents.

The Tribunal held that the Commissioner of Income Tax (Exemption) appeared to have failed to take notice of the documents filed by the assessee. The Tribunal noted that the assessee had submitted a paper book containing written submissions dated April 18, 2026 (digitally signed April 24, 2026) and acknowledgements of filing replies and documents on the Income Tax portal on April 24, 2026. The Tribunal reasoned that the Commissioner's belief of non-compliance might have stemmed from these filings not being brought to his attention. In the interest of fairness, the Tribunal set aside the order of the CIT(E) and restored the file for fresh consideration of the assessee's application. The CIT(E) was directed to consider the documents already submitted and any further documents deemed necessary. The appeal was allowed for statistical purposes.

The Tribunal held that it was just and proper to set aside the order of the CIT(E). The reasoning was based on the assessee's submission that notices were sent to an incorrect and non-functional email address, leading to the assessee's ignorance of the proceedings. The Tribunal found that the assessee had not been provided with an adequate opportunity to present its case. Therefore, the Tribunal restored the matter to the CIT(E) for fresh consideration, directing that the assessee be given an opportunity to furnish all relevant details and documents in support of its application. The ratio decidendi is that an order passed without providing a proper opportunity of being heard, especially when the assessee claims non-receipt of notices due to communication errors, is liable to be set aside. The operative direction was to set aside the order and restore the application for fresh consideration.

The Tribunal held that the suo motu adjustment of the business loss against capital gains by the CPC was incorrect. It relied on the decisions in "Ajay Kumar Singhania vs. DCIT" and "Scarlett Designs Pvt. Ltd. vs. ITO", which established that the set-off of business loss against capital gains under Section 71(2) of the Act is optional for the assessee. The Tribunal agreed that since the issue was debatable, the CPC lacked jurisdiction to make such an adjustment under Section 143(1). Therefore, the impugned action of the CPC was set aside, subject to verification that the assessee had duly paid the capital gains tax. Regarding the second issue, the Tribunal restored the matter to the file of the AO with a direction to decide the addition of Rs. 21,79,586/- afresh after providing the assessee with an adequate opportunity to present their case. The Tribunal found that this issue arose due to the confusion caused by the incorrect adjustment of capital gains against business loss.

The Tribunal held that the addition made by the AO was based on an erroneous re-computation of revenue under POCM and was not supported by any incriminating material found during the search. The assessee consistently followed POCM, which had been accepted in earlier years. The AO had not pointed out any defects in the audited books of account nor rejected them under Section 145(3). The search did not yield any evidence of unrecorded cash or hidden assets, and all project income was accounted for through bank channels and taxed over the project duration. The addition was made merely by adopting an alternative working and revising the percentage of completion. The Tribunal found that the Completion Certificate issued by the local authority cannot be treated as conclusive evidence of completion of all contractual obligations. The assessee demonstrated that substantial work relating to amenities, finishing, infrastructure, and other project obligations continued even after the issuance of the completion certificate, and the corresponding expenditure incurred post-completion was not disputed by the Revenue. A reconciliation statement showed that the total revenue recognized by the assessee over the project period exceeded the revenue considered by the Department, indicating that the alleged suppression of profit arose only due to timing differences in revenue recognition, not due to suppression of receipts or income. The Tribunal upheld the order of the CIT(A) deleting the addition, finding no infirmity in it. The grounds raised by the Revenue were dismissed.

The Tribunal held that the Ld. CIT(E) had issued only one notice, and the assessee failed to furnish the required details. Considering the explanation provided by the assessee's representative regarding the circumstances leading to non-compliance, the Tribunal was of the view that the application should not have been rejected without affording the assessee a further opportunity to submit the necessary information and documents. Accordingly, the Tribunal set aside the impugned order and restored the matter to the file of the Ld. CIT(E) for fresh consideration. The Ld. CIT(E) was directed to grant the assessee one more opportunity to furnish the requisite details and documents and then adjudicate the application afresh. The assessee was also directed to cooperate and ensure timely compliance. The appeal was allowed for statistical purposes.

The Tribunal noted that the assessee's AR submitted that the amount was a business advance and that relevant board resolutions were submitted during assessment. However, the AR also conceded that further details were not submitted at the assessment or appellate stages. The AR prayed that the matter be set aside to the AO to provide the assessee an opportunity to submit all relevant details. The CIT-DR had no objection to this suggestion. Consequently, the Tribunal set aside the issue of determining the nature of the payment of Rs. 20,00,000/- to the assessee by the company. The AO was directed to determine the applicability of Section 2(22)(e) of the Act to this payment, considering the details the assessee would submit in the set-aside proceedings and in accordance with the law. The appeal was allowed for statistical purposes.

The Tribunal dismissed the Revenue's grounds of appeal concerning the deletion of interest disallowance under Section 36(1)(iii) and the restriction of disallowance under Section 14A for AY 2015-2016. For the interest disallowance, the Tribunal found no infirmity in the CIT(A)'s order, noting that the interest-free advance was for commercial expediency to an SPV for a government project. The Tribunal also relied on the Supreme Court's decision in S.A. Builders Ltd. and the Bombay High Court's decision in PCIT v. ESSEL Infra Projects Ltd. For the Section 14A disallowance, the Tribunal upheld the CIT(A)'s decision to exclude the share of profit from the Joint Venture (PIPL-KCL) which is exempt under Section 10(2A), following the Pune Tribunal's decision in Desai Infra Projects (I) (P.) Ltd. v. PCIT, as no investment was made in the JV during the year. The appeals for AY 2015-2016 and 2016-2017 were dismissed. For AY 2018-2019 and 2020-2021, the appeals were partly allowed. The Tribunal directed the AO to allow deduction under Section 80IA(4) for specific projects, excluding revenues from resurfacing and routine maintenance work. Ground No. 4 for AY 2018-2019 was allowed for statistical purposes as it was not adjudicated by the CIT(A).

The Tribunal dismissed the Revenue's grounds concerning the deletion of interest disallowance under Section 36(1)(iii) and the restriction of disallowance under Section 14A for AY 2015-2016. For the interest disallowance, the Tribunal found no infirmity in the CIT(A)'s order, noting the commercial expediency of the loan to the SPV for a government project and citing the Hon'ble Supreme Court in S.A. Builders Ltd. and the Hon'ble Bombay High Court in PCIT v. ESSEL Infra Projects Ltd. For Section 14A, the Tribunal upheld the CIT(A)'s decision to exclude the share of profit from the Joint Venture (PIPL-KCL) exempt under Section 10(2A), following the Pune Bench of the Tribunal in Desai Infra Projects (I) (P.) Ltd. v. PCIT, as no investment was made from interest-bearing funds. The appeals for AY 2015-2016 and 2016-2017 were dismissed. For AY 2018-2019 and 2020-2021, the Tribunal partly allowed the appeals, directing the AO to allow Section 80IA(4) deduction for certain projects, excluding revenues from resurfacing and routine maintenance work. Ground 4 for AY 2015-2016 was allowed for statistical purposes as it was not adjudicated by the CIT(A).

The Tribunal dismissed the Revenue's grounds concerning the deletion of interest disallowance under Section 36(1)(iii) and the restriction of disallowance under Section 14A for AY 2015-2016. For the interest disallowance, the Tribunal found no infirmity in the CIT(A)'s order, noting the commercial expediency of the loan to the SPV for a government project and citing the Hon'ble Supreme Court in S.A. Builders Ltd. and the Hon'ble Bombay High Court in PCIT v. ESSEL Infra Projects Ltd. For Section 14A, the Tribunal upheld the CIT(A)'s decision to exclude the share of profit from the Joint Venture (PIPL-KCL) exempt under Section 10(2A), following the Pune Bench of the Tribunal in Desai Infra Projects (I) (P.) Ltd. v. PCIT, as no investment was made from interest-bearing funds. The appeals for AY 2015-2016 and 2016-2017 were dismissed. For AY 2018-2019 and 2020-2021, the Tribunal partly allowed the appeals, directing the AO to allow Section 80IA(4) deduction for certain projects, excluding revenues from resurfacing and routine maintenance work. Ground 4 for AY 2015-2016 was allowed for statistical purposes as it was not adjudicated by the CIT(A).

The Tribunal held that in the interest of proper disposal of the appeal, especially given the substantial addition, it was necessary for all relevant details to be brought on record and examined. Consequently, the Tribunal set aside the order of the CIT(A) and restored the matter for fresh consideration. The assessee was directed to forthwith file all relevant details and documents without seeking unnecessary adjournments or failing to comply with notices. The appeal was allowed for statistical purposes. The principle is that where a substantial addition is made and the assessee seeks to present crucial evidence not previously filed, the appellate authority should provide an opportunity for such evidence to be considered, particularly if it aids in the proper disposal of the case.

The Tribunal noted that the impugned order of the CIT(A) was ex parte. The assessee contended that they had a fair case on merits and had relied on various details and evidences furnished before the AO. The Tribunal, in the interest of justice, decided to give the assessee an opportunity to present their case before the CIT(A). For the negligence in not properly representing the case before the CIT(A), the assessee was burdened with a cost of Rs. 10,000/- to be deposited in the Prime Minister’s National Relief Fund within 60 days. Subject to this condition, the impugned order of the CIT(A) was set aside, and the matter was restored to the file of the CIT(A) for a fresh decision on merits after giving due opportunity to the assessee. The assessee was directed to remain vigilant. The appeal was treated as allowed for statistical purposes.

The Tribunal held that the action of the Assessing Officer in initiating penalty proceedings under Section 270A of the Act, when an addition was made under Section 69 of the Act, rendered the assessment order erroneous and prejudicial to the interest of Revenue. This was because Section 271AAC was specifically inserted for imposing penalty where income determined includes income referred to in Section 69, and Section 271AAC(2) explicitly bars penalty under Section 270A in such cases. The Tribunal found that the AO's action was in clear violation of Section 271AAC(1)/(2). An order passed without applying correct legal provisions is erroneous. The bar on levying penalty under Section 270A, as contained in Section 271AAC(2), makes the assessment order prejudicial to the revenue. The Tribunal relied on the High Court judgments in CIT v. Surendra Prasad Agarwal and Addl. CIT v. Indian Pharmaceuticals, which held that 'assessment' encompasses the entire procedure, including penalty liability. The Tribunal concluded that the PCIT had valid jurisdiction under Section 263 and found no infirmity in the revision order. Consequently, the appeal was dismissed.

The Tribunal dismissed the Revenue's grounds concerning the deletion of interest disallowance under Section 36(1)(iii) and the restriction of disallowance under Section 14A for AY 2015-2016. For the interest disallowance, the Tribunal found no infirmity in the CIT(A)'s order, noting the commercial expediency of the loan to the SPV for a government project and citing the Hon'ble Supreme Court in S.A. Builders Ltd. and the Hon'ble Bombay High Court in PCIT v. ESSEL Infra Projects Ltd. For Section 14A, the Tribunal upheld the CIT(A)'s decision to exclude the share of profit from the Joint Venture (PIPL-KCL) exempt under Section 10(2A), following the Pune Bench of the Tribunal in Desai Infra Projects (I) (P.) Ltd. v. PCIT, as no investment was made from interest-bearing funds. The appeals for AY 2015-2016 and 2016-2017 were dismissed. For AY 2018-2019 and 2020-2021, the Tribunal partly allowed the appeals, directing the AO to allow Section 80IA(4) deduction for certain projects, excluding revenues from resurfacing and routine maintenance work. Ground 4 for AY 2015-2016 was allowed for statistical purposes as it was not adjudicated by the CIT(A).

The Tribunal held that the gross principal amount of cash transactions cannot be added as income in the hands of the assessee. Following the coordinate bench decisions in 'ACIT vs. M/s Patel Madhavlal Maganlal & Co' and 'Dikesh Mehta vs. ITO', the Tribunal found no infirmity in the CIT(A)'s order in holding that the gross principal transactions cannot be assessed as the income of the assessee. The Revenue's appeal on this issue was dismissed. Regarding the commission income, the Tribunal found considerable merit in the assessee's contention that the 2% rate was excessive. Citing the assessee's statement on operational margins (0.035% to 0.10%), judicial guidance in Angadia cases (e.g., 'Dikesh Mehta' at 0.30%, 'Ravi Omprakash Agrawal' at 0.175%), and the principle from 'CIT v. Samir Synthetics Mill' that estimations must have a reasonable nexus with the industry and historical data, the Tribunal modified the CIT(A)'s order. The AO was directed to estimate and restrict the embedded commission income to a realistic rate of 0.30% on the total unaccounted turnover of Rs. 57,12,60,469, to be taxed at normal rates and not under Section 115BBE. The AO was also directed to recompute the final addition after adjusting for commission income already taxed. The assessee's cross objections were allowed.

The Tribunal held that the partnership firm, M/s. Shakti Enterprise, was dissolved on 19.06.2015, and its assets and liabilities were taken over by Chirag Barot, who continued the business in his individual capacity. The bank account in question, although retaining its old number, was operated by Chirag Barot in his individual capacity, as evidenced by the bank's certificate linking his individual PAN (AOXPB5994H) to the account. Chirag Barot had also disclosed these transactions in his individual return for AY 2017-18. The AO had verified these facts in the remand report. Therefore, the additions made by the AO in the hands of the firm were not sustainable and were ordered to be deleted. Regarding the penalty under Section 271F, the Tribunal noted that the firm stood dissolved and had no assessable income for the year, thus not being obligated to file a return. Consequently, the penalty was also not sustainable and ordered to be deleted. The Tribunal allowed both appeals.

The Tribunal held that the addition of Rs. 1,10,02,762/- treating the LTCG as bogus on account of accommodation entry was not justified and deleted the addition. The reasoning was that the AO primarily relied on the Investigation wing's report and general allegations of price rigging without establishing a direct nexus between the assessee and any accommodation entry provider. No material evidence such as a money trail or statements implicating the assessee were cited. The purchase and sale of shares were through a broker and reflected in the demat account, supported by documentary evidence from the assessee. The Tribunal noted that the assessee was a regular investor and had also disclosed LTCG on shares of M/s. Creative Merchants Limited. The AO's finding of bogus LTCG was based on presumption, not material fact. The Tribunal relied on the Gujarat High Court's decision in *Sanjaykumar Damjibhai Gangani* and *Jagat Pravinbhai Sarabhai*, which held that additions cannot be made merely on allegations of price rigging or penny stock without connecting the assessee to synchronized operations. The Tribunal found that no question of law, much less a substantial question of law, arose from the impugned order on the same reasoning. Consequently, the ground taken by the assessee was allowed. As the assessee received relief on merits, the Tribunal deemed it unnecessary to adjudicate the legal grounds. The appeals for AY 2017-18 and 2018-19 were also allowed on identical facts and grounds.

The Tribunal held that the addition of Rs. 1,10,02,762/- treating the LTCG as bogus on account of accommodation entry was not justified and deleted the addition. The reasoning was that the AO primarily relied on the Investigation wing's report and general allegations of price rigging without establishing a direct nexus between the assessee and any accommodation entry provider. No material evidence such as a money trail or statements implicating the assessee were cited. The purchase and sale of shares were through a broker and reflected in the demat account, supported by documentary evidence from the assessee. The Tribunal noted that the assessee was a regular investor and had also disclosed LTCG on shares of M/s. Creative Merchants Limited. The AO's finding of bogus LTCG was based on presumption, not material fact. The Tribunal relied on the Gujarat High Court's decision in *Sanjaykumar Damjibhai Gangani* and *Jagat Pravinbhai Sarabhai*, which held that additions cannot be made merely on allegations of price rigging or penny stock without connecting the assessee to synchronized operations. The Tribunal found that no question of law, much less a substantial question of law, arose from the impugned order on the same reasoning. Consequently, the ground taken by the assessee was allowed. As the assessee received relief on merits, the Tribunal deemed it unnecessary to adjudicate the legal grounds. The appeals for AY 2017-18 and 2018-19 were also allowed on identical facts and grounds.

The Tribunal held that the addition of Rs. 1,10,02,762/- treating the LTCG as bogus on account of accommodation entry was not justified and deleted the addition. The reasoning was that the AO primarily relied on the Investigation wing's report and general allegations of price rigging without establishing a direct nexus between the assessee and any accommodation entry provider. No material evidence such as a money trail or statements implicating the assessee were cited. The purchase and sale of shares were through a broker and reflected in the demat account, supported by documentary evidence from the assessee. The Tribunal noted that the assessee was a regular investor and had also disclosed LTCG on shares of M/s. Creative Merchants Limited. The AO's finding of bogus LTCG was based on presumption, not material fact. The Tribunal relied on the Gujarat High Court's decision in *Sanjaykumar Damjibhai Gangani* and *Jagat Pravinbhai Sarabhai*, which held that additions cannot be made merely on allegations of price rigging or penny stock without connecting the assessee to synchronized operations. The Tribunal found that no question of law, much less a substantial question of law, arose from the impugned order on the same reasoning. Consequently, the ground taken by the assessee was allowed. As the assessee received relief on merits, the Tribunal deemed it unnecessary to adjudicate the legal grounds. The appeals for AY 2017-18 and 2018-19 were also allowed on identical facts and grounds.

The Tribunal held that the disallowance of bad debts amounting to INR 36,95,988 was incorrect on facts and law. The assessee had provided sufficient documentary evidence, including ledger accounts and certification from the Executive Engineer, confirming the forfeiture of these amounts. The Tribunal noted that under the amended Section 36(1)(vii), writing off a debt as irrecoverable in the accounts is sufficient for claiming a deduction, and the assessee is not required to prove it became bad in a particular year. The CIT(A)'s finding that the appellant failed to furnish adequate evidence was deemed incorrect. Therefore, grounds of appeal 2 to 5 concerning bad debts were allowed, and the disallowance was deleted. Regarding rent payments of INR 4,80,000, the Tribunal found that the AO and CIT(A) had not brought any evidence on record to establish that the expenditure was excessive or unreasonable with reference to fair market value, as required by Section 40A(2)(b). Merely suspecting that the transaction was not revenue neutral was insufficient to disallow the entire expenditure. The assessee had provided evidence that the recipient companies had their own income, and the rent was accounted for as 'other income'. Thus, grounds of appeal 6, 7, and 8 were allowed, and the disallowance was deleted. Ground of appeal 9, challenging the initiation of penalty proceedings under Section 270A, was dismissed as premature. Grounds 10, 11, and 12, relating to interest under Sections 234A, 234B, and 234C, were dismissed as infructuous in view of the decision on merits. Ground 1 was general and required no adjudication. The appeal was partly allowed.

The Tribunal held that the approach of the Assessing Officer and the CIT(A) in brushing aside the documents furnished by the assessee without pointing out any defect or discrepancy was not sustainable. The Tribunal found that the cash sales, cash receipts, and cash deposits were all recorded in the assessee's books of account, and the AO had neither rejected the books of account nor disturbed the sales. Therefore, the provisions of Section 69A of the Act were not attracted. The Tribunal relied on the judgment of the Hon'ble High Court of Gujarat in PCIT v. Jewel World. Consequently, the addition of INR 50,00,000 made under Section 69A was deleted. Grounds 1 and 2 raised by the assessee were allowed.

The Tribunal held that the PCIT lacked jurisdiction to exercise revisionary powers under Section 263. The primary issue was whether the PCIT was justified in invoking Section 263. The Tribunal noted that for revision, the AO's order must be both erroneous and prejudicial. Explanation 2(a) to Section 263(1) deems an order erroneous if passed without making required inquiries or verifications. The Tribunal found that the AO had actively inquired into the purchases of capital assets. The assessee had provided complete purchase details, including invoices, ledger accounts, bank statements showing payments through banking channels, and the fixed asset register. The AO had examined these and formed a plausible view on the genuineness of the transactions. The DGARM report was not available to the AO during assessment. Furthermore, the report was dated 22/07/2020 and covered GST data only up to 31/03/2020, while the assessee's purchases were made in FY 2020-21. The supplier was listed as a fake ITC availer (List B), not a fake invoice issuer (List A). The GST registration of the supplier was not cancelled. Therefore, the deeming fiction in Explanation 2(a) to Section 263(1) was not attracted, and the PCIT's order was quashed, restoring the original assessment order. The technical grounds were allowed, and merit grounds were rendered infructuous.