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The Tribunal partially allowed the assessee's appeal. Regarding the issue of interest-bearing unsecured loans (Ground No. 2), the Tribunal held that the appeal before the CIT(A) only covered a part of the addition made by the AO. The PCIT's revisionary power under Section 263 was validly exercised on the balance amount of Rs. 5,26,28,101/-, as this portion was not considered and decided in appeal, and the doctrine of merger did not apply. The Tribunal relied on CIT v. Shri Arbuda Mills Ltd. (SC). For the issue of capital introduction by partners (Ground No. 3), the Tribunal accepted the assessee's contention, following Gujarat High Court decisions, that a partnership firm is not required to prove the source of its partners' capital. The Tribunal held that the PCIT erred in exercising revisionary powers on this issue. Concerning the utilization of funds for assets (Ground No. 4), the Tribunal found that no inquiry was conducted by the AO, thus attracting Explanation 2 to Section 263. The Tribunal held that the PCIT's exercise of revisionary power was justified on this issue. Consequently, Grounds 1, 2, and 4 were dismissed, and Ground 3 was allowed.
The Tribunal held that Ground No. 1 was dismissed as not pressed, based on the assessee's submission. Regarding Ground No. 3, concerning the adjustment of Rs. 2,24,59,261, the Tribunal accepted the assessee's contention that this issue was resolved by the subsequent intimation order dated 30/03/2024. The Tribunal noted that the Departmental Representative could not controvert this fact. Therefore, the CIT(A)'s order to the extent it pertains to the carry-forward of current year losses was set aside, and Ground No. 3 was allowed. For Ground No. 2, relating to the short grant of TDS, the Tribunal directed the Assessing Officer to verify the assessment records and grant credit as per law, taking into consideration the assessee's reply to the Section 139(9) notice. Ground No. 2 was allowed for statistical purposes. The appeal was partly allowed.
The Tribunal held that both appeals filed by the Revenue are dismissed. Regarding the first issue, the Tribunal noted that the assessee had obtained unsecured loans through banking channels, disclosed them in its audited accounts, and repaid them through banking channels. It relied on the judicial recognition that repayment of a loan is a good indicator of its genuineness, citing CIT vs Ayachi Chandrashekhar Narsangji. The Tribunal also found that the suspicion arising from the search in Shri Rajesh G. Mehta's case was not founded on facts that created a valid doubt on the genuineness of the loan transactions with Aneri Fincap Ltd. Therefore, there was no reason to interfere with the CIT(A)'s decision. Regarding the second issue, the Tribunal observed that the assessee had submitted all relevant details at the assessment stage, and no additional evidence was filed before the CIT(A). Consequently, the CIT(A) was under no obligation to seek a remand report. The Tribunal found no reason to interfere with the CIT(A)'s decision deleting the additions.
The Tribunal agreed with the Ld. CIT(A) that the claim for additional depreciation could not be decided on merits at that stage due to the absence of necessary details and documents. The Ld. A.R. requested that the matter be set aside to the AO for fresh assessment, allowing the assessee to submit the required evidence. The Ld. Sr. D.R. had no objection to this course of action. Therefore, in the interest of justice and fair assessment, the Tribunal restored the issue of additional depreciation relating to foreign exchange fluctuation to the Jurisdictional Assessing Officer for fresh assessment. The assessee was directed to submit all relevant details and documents to establish the correctness of the claimed amount. The appeal was allowed for statistical purposes.
The Tribunal held that the Revenue's appeal regarding the deletion of Rs. 3,39,79,750/- was dismissed. The reasoning was that Shri Ashit Shah was treated as the owner of the land, and even if the value of Rs. 3.39 crores was to be considered under Section 50C, it should be in the hands of Shri Ashit Shah. The assessee could not be considered the owner for the purpose of capital gains computation or Section 50C, as the matter rested with Shri Ashit Shah. Regarding the assessee's appeal concerning Rs. 10,00,000/-, the Tribunal directed that Rs. 5,00,000/-, which was the assessee's investment in the property subsequently sold by Shri Ashit Shah, should be considered as capital gain already offered to tax. The balance amount of Rs. 5,00,000/- was directed to be treated as commission income. The legal grounds raised by the assessee were not adjudicated upon as they became infructuous. The ratio is that once a transaction's ownership and tax implications are settled in the hands of one party (Shri Ashit Shah), the same cannot be re-imposed on another party (the assessee) for the same transaction, and income should be classified based on its nature and the assessee's contribution.
The Tribunal held that the Revenue's appeal regarding the deletion of Rs. 3,39,79,750/- was dismissed. The reasoning was that Shri Ashit Shah was treated as the owner of the land, and even if the value of Rs. 3.39 crores was to be considered under Section 50C, it should be in the hands of Shri Ashit Shah. The assessee could not be considered the owner for the purpose of capital gains computation or Section 50C, as the matter rested with Shri Ashit Shah. Regarding the assessee's appeal concerning Rs. 10,00,000/-, the Tribunal directed that Rs. 5,00,000/-, which was the assessee's investment in the property subsequently sold by Shri Ashit Shah, should be considered as capital gain already offered to tax. The balance amount of Rs. 5,00,000/- was directed to be treated as commission income. The legal grounds raised by the assessee were not adjudicated upon as they became infructuous. The ratio is that once a transaction's ownership and tax implications are settled in the hands of one party (Shri Ashit Shah), the same cannot be re-imposed on another party (the assessee) for the same transaction, and income should be classified based on its nature and the assessee's contribution.
The Tribunal noted that the assessee, considering the small amount involved, wished to withdraw the appeal and had filed a letter to that effect. The revenue's representative had no objection to this request. Since the assessee did not wish to pursue the matter further, the appeal was dismissed as withdrawn. The Tribunal did not decide on the merits of the case. The operative direction was to dismiss the appeal as withdrawn.
The Tribunal decided as follows: Issue 1 (Section 69A - Cash Deposits): The Tribunal found that the assessee had provided explanations and documents regarding cash rental receipts from farmers during the harvesting season. However, the Assessing Officer noted discrepancies, including the timing of deposits, failure to establish farmer identity, lack of stock records, and mathematical errors in the cash book. The CIT(A) sustained the addition. The Tribunal noted that the issue of cash deposits is linked to the quantum of potatoes stored, which would impact loading and unloading charges. Consequently, this issue was remitted to the Assessing Officer for fresh consideration, allowing the assessee an opportunity to be heard. Ground No. 1 was allowed for statistical purposes. Issue 2 (Section 68 - Unsecured Loan): The Tribunal held that the assessee had discharged the initial onus under Section 68 by furnishing loan confirmations, PAN, and bank statements of the lender. Although the lender did not respond to Section 133(6) notices, the Tribunal found that the Assessing Officer failed to bring on record material to controvert the assessee's stand. The failure of the lender to respond to a notice under Section 133(6) cannot be the sole basis for addition when the assessee has provided documentary evidence. Therefore, the addition of Rs. 10,39,000 was deleted. Ground No. 2 was allowed. Issue 3 (Business Expenses): The Tribunal found merit in the assessee's contention that loading and unloading charges are essential operational expenses for a cold storage facility. Given that the issue of cash deposits (Ground 1) was remitted, which has a bearing on these charges, the Tribunal remitted this issue also to the Assessing Officer for fresh consideration. Ground No. 3 was allowed for statistical purposes. Issue 4 (Section 115BBE Tax Rate): Since Issues 1 to 3 were remitted back to the Assessing Officer, the issue of the applicability of the tax rate under Section 115BBE was rendered infructuous and dismissed. Ground No. 4 was dismissed. Operative Directions: Issues 1 and 3 were remitted to the Assessing Officer for fresh adjudication. Issue 2 was allowed with deletion of the addition. Issue 4 was dismissed as infructuous. The assessee was directed to address infirmities pointed out by the AO in set-aside proceedings, and the AO was directed to grant benefit to the extent the assessee's stand is supported by evidence.
The Tribunal held that both appeals filed by the Revenue are dismissed. Regarding the first issue, the Tribunal noted that the assessee had obtained unsecured loans through banking channels, disclosed them in its audited accounts, and repaid them through banking channels. It relied on the judicial recognition that repayment of a loan is a good indicator of its genuineness, citing CIT vs Ayachi Chandrashekhar Narsangji. The Tribunal also found that the suspicion arising from the search in Shri Rajesh G. Mehta's case was not founded on facts that created a valid doubt on the genuineness of the loan transactions with Aneri Fincap Ltd. Therefore, there was no reason to interfere with the CIT(A)'s decision. Regarding the second issue, the Tribunal observed that the assessee had submitted all relevant details at the assessment stage, and no additional evidence was filed before the CIT(A). Consequently, the CIT(A) was under no obligation to seek a remand report. The Tribunal found no reason to interfere with the CIT(A)'s decision deleting the additions.
The Tribunal allowed Ground No. 1, quashing the reassessment proceedings as void ab initio. The Tribunal found that the assessee was granted only 6 days to respond to the notice under Section 148A(b), which was a violation of the mandatory statutory prescription of not less than seven days, thus infringing the principles of natural justice. The Tribunal also noted that the notice and order under Section 148A incorrectly named a third party with a similar name and contained contradictory statements regarding the filing of the return of income. The Tribunal relied on the decision in Mukesh J Ruparel Vs Income Tax Officer. Consequently, the notice under Section 148A(b) and the order under Section 148A(d) were held unsustainable in law. Grounds No. 2 and 3, pertaining to the merits of the addition, were dismissed as infructuous due to the quashing of the reassessment proceedings.
The Tribunal dismissed the Revenue's appeal and the Assessee's cross-objection. Regarding the primary issue, the Tribunal found no infirmity in the CIT(A)'s order deleting the addition under Section 69B. The AO's conclusion that the assessee made an investment exceeding the recorded amount was based on a valuation report. However, the valuation's premise that the franchise fee should be capitalized as an intangible asset, rather than treated as revenue expenditure, was contrary to the Mumbai Bench of the Tribunal's decision in ISPL's own case, which held it as revenue expenditure. Furthermore, there was no evidence that the assessee expended an amount in excess of what was recorded in its books. The AO's approach of inferring excess expenditure based on the valuation report and invoking Section 69B was not accepted. The Tribunal also upheld the CIT(A)'s finding that the application of the 'Royalty Relief Methodology' was inappropriate as the 'Mumbai Indians' brand could not be sub-licensed. The Tribunal also agreed that Section 56(2)(viia), introduced later, was not applicable to the assessment year in question. Consequently, the Revenue's grounds were dismissed.
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 dismissed both the grounds raised by the assessee. Regarding the limitation issue, the Tribunal found the assessee's plea to be misconceived, stating that the assessee had misconstrued the scope of the provisos to Section 149 read with Section 148A. Although the judgment excerpt does not detail the Tribunal's specific reasoning on the calculation of limitation, it clearly rejects the assessee's argument. On the merits of the addition, the Tribunal held that the investigation material, statements recorded under Section 132(4), bank trail analysis, and the established modus operandi of the recipient political party (Rashtriya Samajwadi Party (Secular)) constituted a complete chain of circumstances overwhelmingly demonstrating that the impugned donation was an accommodation entry, not a genuine contribution eligible for deduction under Section 80GGC. The Tribunal noted that mere payment through banking channels and production of donation receipts could not override the evidence of the recipient party being involved in providing accommodation entries. The Tribunal relied on the findings from the investigation and the consistent view of Co-ordinate Benches in identical matters, including the case of Abhishek Ashok Lohade (ITA No.816/PUN/2018), and the principles laid down by the Supreme Court in CIT v. Durga Prasad More and Sumati Dayal v. CIT. The appeal was dismissed.
The Tribunal held that the AO had proceeded merely on the basis of information received from the Investigation Wing without carrying out necessary independent verification, especially after the assessee disputed the number and quantum of transactions. The material on record did not establish that the assessee received Rs. 7,85,000 from M/s. Vinit Enterprise or that it was an accommodation entry. The Tribunal noted that the reasons recorded by the AO lacked specific dates and particulars of the alleged transactions, and the AO did not undertake independent verification, such as checking bank statements, to ascertain the correctness of the entries. The Tribunal found that the alleged entry of Rs. 7,85,600 was based on a single entry of Rs. 98,200 being repeated eight times, which was not substantiated. Consequently, the addition of Rs. 7,85,000 on account of the alleged accommodation entry from M/s. Vinit Enterprise was deleted. Following the Gujarat High Court decision in *CIT v. Mohmed Juned Dadani*, the Tribunal held that if the addition forming the basis of reassessment does not survive, other additions made in reassessment proceedings are also not sustainable. Accordingly, all remaining additions made by the AO were deleted. The Tribunal also noted that since the grounds on merits were allowed, it was not necessary to adjudicate the legal grounds. The appeal of the assessee was allowed.
The Tribunal noted that the assessee company does not wish to pursue the appeals and has submitted a letter requesting their withdrawal. The learned Departmental Representative had no objection to the assessee's request. Since the assessee does not want to proceed with the matter, both appeals were dismissed as withdrawn. The Tribunal did not decide on the merits of the orders passed by the PCIT under Section 263. The operative direction was to dismiss the appeals as withdrawn.
The Tribunal noted that the assessee company does not wish to pursue the appeals and has submitted a letter requesting their withdrawal. The learned Departmental Representative had no objection to the assessee's request. Since the assessee does not want to proceed with the matter, both appeals were dismissed as withdrawn. The Tribunal did not decide on the merits of the orders passed by the PCIT under Section 263. The operative direction was to dismiss the appeals as withdrawn.
The Tribunal noted that the assessee had provided the email address shajigar1983@gmail.com in Form No. 35 for receiving notices. However, the CIT(A) had issued notices to different email addresses (joshi.arpit31@gmail.com and vjkmrgujjar@gmail.com), which the assessee claimed did not belong to him. Given that the notices from the CIT(A) were not sent to the correct email address as per the assessee's Form 35, the Tribunal deemed it appropriate to set aside the matter to the file of the CIT(A). The CIT(A) was directed to grant another opportunity of being heard to the assessee, issuing notice to the correct email address shajigar1983@gmail.com. The assessee was also directed to comply with the notices and make submissions. Subsequently, the CIT(A) is to decide the matter on merits. The appeal was allowed for statistical purposes.
The Tribunal found that a confirmation from M/s D & G Enterprise/Vijay Jain, placed on record before the Tribunal, showed an opening balance of Rs. 82,93,019/- as on 01.04.2023, which was substantially higher than the closing balance of Rs. 44,08,895/-. The Tribunal held that the entire closing balance could not be treated as a credit arising during the year without examining the opening balance and transactions. Since the confirmation was fresh evidence, the factual position required verification at the assessment stage. Therefore, this issue was restored to the file of the Jurisdictional AO for fresh adjudication after examining the confirmation, opening balance, transactions, and other supporting documents. Regarding agricultural income, the Tribunal held that mere ownership of land does not establish agricultural operations or income. As the assessee claimed that relevant evidence was not considered by the CIT(A), this issue was also restored to the AO for examination of evidence and agricultural activity, including a comparison with preceding years' income. The grounds raised by the assessee were allowed for statistical purposes.
The Tribunal held that the assessment order dated 08.03.2025 was passed in breach of the principles of natural justice because it was issued before the hearing date of 10.03.2025, which was fixed by the AO himself. This deprived the assessee of an effective opportunity to be heard in response to the show-cause notice. The Tribunal also noted that the proceedings were pursuant to a Tribunal order setting aside the matter for adjudication on merits, and thus, an effective and meaningful opportunity to present evidence and explanations was crucial. The Tribunal found that the assessee claimed to have furnished proof of donation and explanations for bank credits earlier and during the set-aside proceedings. These aspects require factual verification by the AO. Consequently, the Tribunal set aside the impugned order of the NFAC and the assessment order dated 08.03.2025, restoring the matter to the AO for fresh adjudication on merits. The AO was directed to examine the bank credits, source of funds, donation proof, and other relevant documents, providing an adequate opportunity of hearing. The issue of the DIN number was not explicitly decided but was implicitly addressed by setting aside the AO's order. The addition under Section 69A was not decided on merits but was to be re-examined.
The Tribunal held that the AO, by referring the matter to the DVO under section 142A, had himself considered the fair market value of the property as on 01.04.2001 to be material and requiring verification. The assessment was completed without awaiting the DVO's report, which constituted relevant material for computing capital gains. The Tribunal noted that the limitation period for assessment could be extended by excluding the period of the DVO reference as per Explanation-1 to section 153. Therefore, the AO ought to have awaited the DVO's report. The fact that the DVO's report was received after the assessment order did not preclude its consideration by the PCIT, especially in light of Explanation-1(b) to section 263. The Tribunal found that the assessment order was erroneous and prejudicial to the interest of revenue. The PCIT was justified in exercising jurisdiction under section 263 and setting aside the assessment order to allow the AO to examine the DVO's report and pass a fresh order. The contention regarding other co-owners was not adjudicated as it did not require adjudication in the present appeal arising from a section 263 order.
The Tribunal dismissed the appeal for non-prosecution. The Tribunal noted that the assessee was provided with eight opportunities for hearing, and notices were duly served via email and physically. Despite these opportunities, the assessee neither appeared before the Tribunal nor filed any written submissions or supporting material. Furthermore, the documents required by the CIT(E) that would have enabled the Tribunal to examine the issues were also not placed on record. In the absence of any appearance or compliance, the Tribunal found no material to properly examine the issues or consider remanding the matter. The repeated failure to avail opportunities demonstrated the assessee's lack of interest in pursuing the appeal. Therefore, the appeal was dismissed.
The Tribunal held that the assessee had exercised the option under Section 115BAB by furnishing Form No. 10-ID. Section 115BAB(7) mandates that once the option is exercised in the prescribed manner for the first eligible assessment year, it applies to subsequent assessment years and cannot be withdrawn. The Tribunal found merit in the assessee's contention that the CPC was not justified in denying the benefit of Section 115BAB merely because no tax was computed under the said provision in AY 2020-21. However, the Tribunal also noted that the exercise of the option does not automatically grant entitlement to the concessional rate; it is subject to fulfilling the conditions prescribed under Section 115BAB(2). As it was not evident that the Assessing Officer had examined these conditions for the year under consideration, the Tribunal restored the issue to the jurisdictional Assessing Officer for fresh examination. The AO is to verify the fulfilment of conditions under Section 115BAB(2) for AY 2023-24 and then determine the tax liability. The assessee will be given an opportunity to be heard.
The Tribunal held that substantial justice would be served by giving the assessee a fair opportunity to present its case before the CIT(A) for adjudication on merits. The Tribunal noted that the CIT(A) dismissed the appeal without taking into account the relevant supporting documents that were now being placed before the ITAT. Therefore, 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. This was subject to the condition that the assessee deposits a sum of Rs. 10,000/- to the Prime Minister’s National Relief Fund as cost within 30 days of receipt of the order and furnishes proof of deposit. The assessee was also directed to remain vigilant and properly pursue its case before the CIT(A). The Tribunal explicitly stated that the appeal was allowed for statistical purposes.
The Tribunal held that the assessee had reasonable cause for the delay in filing the appeals before the CIT(A). The Tribunal noted that the CIT(A) had rejected the appeals solely on the ground of delay and had not adjudicated the Section 10(10B) claims on merits. Citing the Supreme Court's decision in N. Balakrishnan Vs. M. Krishnamurty, the Tribunal stated that where a lower forum refuses to condone delay, a superior forum can reconsider the cause afresh. The length of delay is not decisive; the acceptability of the explanation is important. The Tribunal found the assessee's explanation for the delay, stemming from a bona fide belief about the taxability of the BSNL VRS compensation and subsequent awareness of judicial developments, to be reasonable. Consequently, the Tribunal condoned the delay. As the CIT(A) had not decided the matter on merits, the Tribunal set aside the CIT(A)'s ex-parte order and restored the appeals to the CIT(A) with a direction to decide the issue of exemption of ex-gratia amount under Section 10(10B) on merits for both assessment years. The Tribunal explicitly left undecided the substantive claim for exemption under Section 10(10B).
The Tribunal held that the compensation received under the BSNL VRS-2019 is eligible for exemption under Section 10(10B) of the Act. This decision was based on the consistent view of the Tribunal, including jurisdictional benches, which had held similarly in the cases of identically placed BSNL employees. The Tribunal followed its own decisions in Jayeshkumar Tulsidas Sutaria, Kirtida Rajeshkumar Shah, Chhaganlal Bhimabhai, and Pravinkumar Ramjibhai Patel, as well as decisions from the Chennai and Pune Benches. For the issue of leave encashment exemption under Section 10(10AA) for AY 2020-21, the Tribunal admitted the ground, even though it was not raised before the CIT(A), citing the Supreme Court's decision in National Thermal Power Corporation Ltd. vs. CIT. Following the Kerala High Court's decision in Sanchar Nigam Pensioners’ Welfare Association vs. Union of India, the Tribunal directed the Assessing Officer to grant the benefit of exemption under Section 10(10AA) for the full amount of leave encashment, provided the assessee was an employee of the Department of Telecom (DoT) absorbed by BSNL and governed by Rule 37A of the CSS (Pension) Rules. The alternative contention regarding CBDT Notification No. 31 of 2023 was not considered in light of the directions given. Both grounds were allowed for statistical purposes.
The Tribunal held that the CIT(A) had erred by dismissing the appeal solely on the grounds of limitation without adjudicating the claim for exemption under Section 10(10B) on merits. The Tribunal noted that Section 249(3) of the Act empowers the CIT(A) to admit a belated appeal if sufficient cause is shown. Citing the Supreme Court's decision in N Balakrishnan Vs. M. Krishnamurty (1998) 7 SCC 123, the Tribunal stated that the superior forum is free to reconsider the cause for delay afresh, and the length of delay is not decisive; the acceptability of the explanation is important. The Tribunal found that the assessee had reasonable cause for the delay in filing the belated appeal. Therefore, the delay was condoned, and the order of the CIT(A) was set aside. The matter was restored to the CIT(A) with a direction to decide the issue of exemption of ex-gratia amount under Section 10(10B) on merits. No issue was expressly left undecided.
The Tribunal held that the compensation received under the BSNL VRS-2019 is eligible for exemption under Section 10(10B) of the Act. This decision was based on the consistent view of the Tribunal, including jurisdictional benches, which had held similarly in the cases of identically placed BSNL employees. The Tribunal followed its own decisions in Jayeshkumar Tulsidas Sutaria, Kirtida Rajeshkumar Shah, Chhaganlal Bhimabhai, and Pravinkumar Ramjibhai Patel, as well as decisions from the Chennai and Pune Benches. For the issue of leave encashment exemption under Section 10(10AA) for AY 2020-21, the Tribunal admitted the ground, even though it was not raised before the CIT(A), citing the Supreme Court's decision in National Thermal Power Corporation Ltd. vs. CIT. Following the Kerala High Court's decision in Sanchar Nigam Pensioners’ Welfare Association vs. Union of India, the Tribunal directed the Assessing Officer to grant the benefit of exemption under Section 10(10AA) for the full amount of leave encashment, provided the assessee was an employee of the Department of Telecom (DoT) absorbed by BSNL and governed by Rule 37A of the CSS (Pension) Rules. The alternative contention regarding CBDT Notification No. 31 of 2023 was not considered in light of the directions given. Both grounds were allowed for statistical purposes.
The Tribunal held that the assessee had reasonable cause for the delay in filing the appeals before the CIT(A). The Tribunal noted that the CIT(A) had rejected the appeals solely on the ground of delay and had not adjudicated the Section 10(10B) claims on merits. Citing the Supreme Court's decision in N. Balakrishnan Vs. M. Krishnamurty, the Tribunal stated that where a lower forum refuses to condone delay, a superior forum can reconsider the cause afresh. The length of delay is not decisive; the acceptability of the explanation is important. The Tribunal found the assessee's explanation for the delay, stemming from a bona fide belief about the taxability of the BSNL VRS compensation and subsequent awareness of judicial developments, to be reasonable. Consequently, the Tribunal condoned the delay. As the CIT(A) had not decided the matter on merits, the Tribunal set aside the CIT(A)'s ex-parte order and restored the appeals to the CIT(A) with a direction to decide the issue of exemption of ex-gratia amount under Section 10(10B) on merits for both assessment years. The Tribunal explicitly left undecided the substantive claim for exemption under Section 10(10B).
The Tribunal held that the assessee is entitled to the exemption claimed under Section 10(10AA) of the Act, and the restriction of the exemption to ₹3,00,000/- by the lower authorities is not sustainable. The Tribunal relied on the decision of the Ahmedabad Bench in Govardhan Deepchand Bhambhani v. ITO, which followed the principle that the enhanced limit for exemption under Section 10(10AA) as per CBDT Notification No. 31/2023 dated 24.05.2023, increasing the limit to ₹25,00,000/-, is applicable. This decision was also followed in Devendra Kumar Gupta Vs. CIT(Appeals) and Mohdhussain Gulamhussain Qureshi vs. ITO. The Tribunal found that the assessee's claim was within this revised limit. The Tribunal also noted the assessee's alternative contention regarding the exercise of jurisdiction under Section 154 but deemed it unnecessary to adjudicate separately due to the decision on the substantive issue. The disallowance of ₹5,90,808/- was directed to be deleted, and the AO was instructed to allow the exemption subject to verification of actual receipt and statutory conditions.
The Tribunal held that the foundation of the impugned additions was alleged entries in third-party records. The assessee had specifically requested the relied-upon material and an opportunity for cross-examination, but the record did not demonstrate that the specific seized document was furnished or that effective cross-examination was afforded. The Tribunal found that the AO had not brought any independent corroborative evidence on record to establish the actual incurrence of the alleged expenditure of ₹3,96,000. There was no demonstrated cash trail, bank withdrawal, transportation evidence, stock discrepancy, or independent confirmation. Similarly, the addition of ₹2,075 under Section 69A was based on the same third-party information without independent evidence of possession or ownership of unexplained money. The Tribunal noted that the assessee had offered income under Section 44AD, and in such circumstances, an isolated allegation of unrecorded purchase cannot automatically be treated as unexplained expenditure unless the department first establishes the factum of such expenditure and its nexus with the assessee by reliable evidence. The Tribunal concluded that the primary burden of establishing the alleged undisclosed transactions was not discharged by the AO. Consequently, the additions under Section 69C and Section 69A, and the consequential application of Section 115BBE and penalty under Section 271AAC, could not be sustained. The findings of the CIT(A) were set aside, and the additions were deleted.
The Tribunal held that the CIT(A) erred by dismissing the assessee's appeal solely on the ground of delay without adjudicating the grounds on merits. The Tribunal noted that the assessee's request for condonation of delay before the CIT(A) was not granted, leading to the dismissal of the appeal without considering the merits of the penalty levied under Section 271FA. The Tribunal acknowledged the assessee's submission that the delay in filing the SFT was technical and that no opportunity was provided to explain the reasons for the delay. Citing the Gujarat High Court's decision in Vareli Textile Industries v. CIT, the Tribunal emphasized that meritorious cases should not be dismissed on limitation grounds. The levy of penalty under Section 271FA is subject to the reasonable cause defense under Section 273B. Since the circumstances leading to the 129-day delay in filing the SFT were not examined, and the assessee was not afforded an opportunity to present its explanation and supporting evidence for reasonable cause, the matter was set aside to the CIT(A) for fresh adjudication. The CIT(A) was directed to condone the delay, afford the assessee a reasonable opportunity to explain the delay in furnishing the SFT and produce evidence, and then decide the penalty issue under Section 271FA afresh in accordance with law, considering Section 273B. The CIT(A) was also directed to pass a single order for the set-aside proceedings, as the appeals were duplicate.
The Tribunal held that the interests of justice would be served by giving the assessee an opportunity to present their case before the Ld. 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 de novo adjudication. The CIT(A) was directed to pass a fresh order after providing the assessee with due opportunity. The assessee was instructed to submit all relevant materials and supporting documents and to comply with notices without seeking unnecessary adjournments. The Tribunal did not decide on the merits of the additions made by the AO or the grounds raised by the assessee, as the case was remanded for fresh consideration.
The Tribunal noted that the assessee declared a gross loss of Rs. 58,61,129/- on a turnover of Rs. 12,00,71,805/-, resulting in a negative GP rate of 4.88%, a substantial variation from the preceding two years' positive GP rates of 19.27% and 15.23%. While a decline in GP alone might not justify rejection of books, the assessee's failure to furnish requisite details for purchases, sales, expenses, and other particulars, despite specific requests, deprived the AO of verification material. The assessee also failed to provide a satisfactory explanation for the loss and the abnormal increase in salary expenses (from Rs. 60,25,312/- to Rs. 1,34,97,657/-) despite a decline in turnover. The CIT(A)'s deletion of additions, based on the premise that the AO had not established suppression of sales or inflation of expenditure without considering the assessee's failure to provide basic details, was not considered appropriate. In the interest of justice, the Tribunal set aside the CIT(A)'s order and restored the matter to the AO for fresh adjudication. The AO is to provide an opportunity to the assessee to substantiate its claims with books of account and supporting documents, including explanations for the loss and increased salary expenses. The AO will then determine the income afresh, considering the implications of rejecting books versus disallowing expenditure to avoid duplication.
For AY 2017-18, the Tribunal held that the eligibility of the assessee for deduction under Section 80IA(4) had already been examined by a coordinate bench in the assessee's own case for earlier years, which found the assessee eligible after considering tender documents and the nature of activities. Since the Revenue failed to demonstrate any material change in the projects or contracts and did not produce relevant tender documents despite opportunities, the Tribunal followed the coordinate bench's decision, upholding the CIT(A)'s deletion of the Section 80IA disallowance. The first three grounds of the Revenue were dismissed. Regarding the Section 14A disallowance, the Tribunal found that the CIT(A)'s deletion was incorrect because the assessee had earned exempt income, and the absence of opening/closing balances in the balance sheet did not negate the applicability of Rule 8D. Therefore, the addition of Rs. 1,66,667/- under Section 14A read with Rule 8D was upheld. Furthermore, this disallowance was correctly considered for computing book profit under Section 115JB. The Revenue's ground on this issue was allowed. For AY 2018-19, the Tribunal held that the decision on the Section 80IA issue for AY 2017-18 was applicable mutatis mutandis, and thus the Revenue's grounds were dismissed. Regarding the Section 80G deduction for CSR expenses, the Tribunal noted that the assessment and appellate orders did not specify the recipient funds. Following its consistent view that only donations to Swachha Bharat Kosh and Clean Ganga Fund are ineligible, the Tribunal set aside the matter to the AO to verify if the donation was made to these specific funds. If not, the AO was directed to verify other eligibility conditions under Section 80G and allow the deduction as per law. This ground was allowed for statistical purposes. The appeals were partly allowed for AY 2017-18 and partly allowed for statistical purposes for AY 2018-19.
For AY 2017-18, the Tribunal held that the eligibility of the assessee for deduction under Section 80IA(4) had already been examined by a coordinate bench in the assessee's own case for earlier years, which found the assessee eligible after considering tender documents and the nature of activities. Since the Revenue failed to demonstrate any material change in the projects or contracts and did not produce relevant tender documents despite opportunities, the Tribunal followed the coordinate bench's decision, upholding the CIT(A)'s deletion of the Section 80IA disallowance. The first three grounds of the Revenue were dismissed. Regarding the Section 14A disallowance, the Tribunal found that the CIT(A)'s deletion was incorrect because the assessee had earned exempt income, and the absence of opening/closing balances in the balance sheet did not negate the applicability of Rule 8D. Therefore, the addition of Rs. 1,66,667/- under Section 14A read with Rule 8D was upheld. Furthermore, this disallowance was correctly considered for computing book profit under Section 115JB. The Revenue's ground on this issue was allowed. For AY 2018-19, the Tribunal held that the decision on the Section 80IA issue for AY 2017-18 was applicable mutatis mutandis, and thus the Revenue's grounds were dismissed. Regarding the Section 80G deduction for CSR expenses, the Tribunal noted that the assessment and appellate orders did not specify the recipient funds. Following its consistent view that only donations to Swachha Bharat Kosh and Clean Ganga Fund are ineligible, the Tribunal set aside the matter to the AO to verify if the donation was made to these specific funds. If not, the AO was directed to verify other eligibility conditions under Section 80G and allow the deduction as per law. This ground was allowed for statistical purposes. The appeals were partly allowed for AY 2017-18 and partly allowed for statistical purposes for AY 2018-19.
The Tribunal dismissed the legal ground regarding the reopening of the assessment. It held that the notice under Section 147 was issued within three years from the end of the relevant assessment year. Furthermore, under the amended provisions of Section 147 effective from April 1, 2021, the AO is empowered to initiate reassessment proceedings if escapement of income comes to his notice. The Tribunal found that the facts of the cases relied upon by the assessee (P.C. Snehal Engineers and Lambda Therapeutic Research Ltd.) were distinguishable as those reopenings were done beyond four years, requiring different conditions to be met. Regarding the merits of the addition, the Tribunal respectfully followed the Gujarat High Court's decision in Gujarat Flurochemicals Ltd. (supra), which held that disallowance under Section 14A read with Rule 8D cannot exceed the exempt income. Therefore, the AO was directed to restrict the disallowance to the extent of the exempt income of Rs. 1,66,349. The ground taken by the assessee on merits was partly allowed.
The Tribunal considered the rival submissions and noted that the CIT(E) had rejected the application because it was not maintainable under section 12A(1)(ac)(v). The assessee's Authorized Representative (AR) admitted that there was no modification in the Trust's objects and that the mistake was in selecting the correct sub-clause. In the interest of justice, the Tribunal decided to set aside the order of the CIT(E) and restore the matter to the file of the CIT(E). The CIT(E) was directed to allow the assessee an opportunity to rectify the mistake in Form No. 10AB. If a fresh Form No. 10AB was required, the delay in filing it was to be condoned. Subsequently, the CIT(E) was to decide the matter on merits based on the corrected or fresh application. The appeal was allowed for statistical purposes.
The Tribunal held that the order of the learned CIT(E) did not suffer from any infirmity. The CIT(E) had noted its inability to change or rectify the section opted by the applicant in Form 10AB through the ITBA portal. Consequently, the CIT(E) had permitted the assessee to file a fresh application under the correct section along with an application for condonation of delay. The Tribunal reasoned that even if it were to grant relief to the appellant, it would have to restore the matter to the CIT(E) for consideration under the appropriate section. Since the CIT(E) had already provided this relief, the impugned order was not flawed. The appeal was dismissed with a direction to the CIT(E) to consider any fresh application filed by the appellant, along with an application for condonation of delay, liberally and sympathetically in accordance with law.
The Tribunal held that the assessee's explanation for the tripling of agricultural income and reduction in expenses was not reasonable or logical, agreeing with the lower authorities.
The Tribunal held that the penalty under Section 270A for misreporting of income could not be sustained. The undisputed facts showed that the assessee had withdrawn the deduction claimed under Section 80GGC in the revised return filed in response to the notice under Section 148, and the AO had accepted this revised returned income without making any addition or variation. Section 270A contemplates penalties for under-reported income, with enhanced rates for misreporting. However, to sustain a penalty for misreporting, the case must fall within the specific circumstances enumerated in Section 270A(9). The penalty order did not demonstrate which clause of Section 270A(9) was attracted or how its ingredients were satisfied. The mere withdrawal of a claim during reassessment proceedings, without further material, does not, by itself, establish misrepresentation or suppression of facts. The Tribunal followed the decision in Niket Maheshbhai Shah (supra), which held that penalty for misreporting could not be sustained if the AO had not specified the limb of Section 270A(9) or demonstrated its ingredients. Since the assessment did not result in any addition and there was no specific finding establishing that the case fell within the specified circumstances of Section 270A(9), the levy of penalty for under-reporting of income in consequence of misreporting was not sustainable. Accordingly, the penalty of Rs. 41,600 was directed to be deleted. The issue regarding the limitation of reopening under Section 147 was not explicitly decided as the penalty was deleted on merits.
The Tribunal held that the approval granted by the Principal Commissioner of Income Tax (Pr. CIT) for the issuance of the notice under Section 148 dated 31.08.2022 was valid. Following the jurisdictional Gujarat High Court's decision in Dhanraj Govindram Kella, which interpreted the Supreme Court's decision in UOI v. Rajeev Bansal, it was concluded that the Pr. CIT was the competent authority under Section 151(i) of the Act for issuing the order under Section 148A(d) and the notice under Section 148 for AY 2017-18. Thus, the CIT(A)'s finding on this issue was set aside, and the Revenue's ground was allowed. Regarding the issue of the notice being beyond the surviving period, the Tribunal found that compliance was completed only on 26.07.2022 after the assessee requested an extension and personal hearing. Therefore, the notice dated 31.08.2022 was issued within the surviving period, and the assessee's objection was rejected. The Revenue's ground was allowed. Since the CIT(A) had not adjudicated the grounds on merits, the Tribunal set aside the matter to the CIT(A) for adjudication on merits, allowing the Revenue's grounds for statistical purposes. The cross-objection filed by the assessee was dismissed.
The Tribunal held that the CIT(A) erred by dismissing the assessee's appeal solely on the ground of delay without adjudicating the grounds on merits. The Tribunal noted that the assessee's request for condonation of delay before the CIT(A) was not granted, leading to the dismissal of the appeal without considering the merits of the penalty levied under Section 271FA. The Tribunal acknowledged the assessee's submission that the delay in filing the SFT was technical and that no opportunity was provided to explain the reasons for the delay. Citing the Gujarat High Court's decision in Vareli Textile Industries v. CIT, the Tribunal emphasized that meritorious cases should not be dismissed on limitation grounds. The levy of penalty under Section 271FA is subject to the reasonable cause defense under Section 273B. Since the circumstances leading to the 129-day delay in filing the SFT were not examined, and the assessee was not afforded an opportunity to present its explanation and supporting evidence for reasonable cause, the matter was set aside to the CIT(A) for fresh adjudication. The CIT(A) was directed to condone the delay, afford the assessee a reasonable opportunity to explain the delay in furnishing the SFT and produce evidence, and then decide the penalty issue under Section 271FA afresh in accordance with law, considering Section 273B. The CIT(A) was also directed to pass a single order for the set-aside proceedings, as the appeals were duplicate.
The Tribunal noted that the CIT(A) had dismissed the assessee's appeal without condoning the delay of 243 days and without adjudicating the grounds on merits. Citing the Gujarat High Court's decision in Vareli Textile Industries v. CIT, the Tribunal held that a meritorious case should not be dismissed on the grounds of limitation. Considering the assessee's submission regarding a potential double addition in respect of credit card payments through IndusInd Bank Limited, the Tribunal found that the grounds taken by the assessee required adjudication on merits. Therefore, the Tribunal set aside the matter to the file of the CIT(A) with a direction to condone the delay in filing the appeal and thereafter adjudicate the grounds on merits. The assessee was directed to make compliance and provide supporting evidence. The CIT(A) was empowered to call for a remand report from the AO on fresh evidence before deciding the grounds on merits. The appeal was allowed for statistical purposes.
The Tribunal condoned the delay of 104 days in filing the appeal, accepting the assessee's explanation that the delay was due to the email ID and phone number on the portal belonging to an erstwhile accountant, leading to the assessee being unaware of notices from the CIT(A). Regarding the addition of Rs. 25,70,000/-, the Tribunal noted that the assessee had raised grounds challenging the confirmation of this addition by the CIT(A). The specific grounds raised by the assessee questioned the basis of the addition, citing lack of cogent evidence, reliance on material collected behind the assessee's back, and denial of cross-examination. The judgment, however, does not record the Tribunal's decision on the merits of the addition or the grounds raised. The operative part of the judgment is limited to condoning the delay. The Tribunal did not decide the substantive issue of the addition.
The Tribunal held that the AO was incorrect in treating the investment in VCPL shares as unsubstantiated or bogus and the sale proceeds as unexplained credit. The assessee had provided substantial evidence, including a share purchase agreement dated 19.06.2021 involving Cosmos Asia Holdings II PTE Ltd., Singapore, as the buyer. The assessee's name appeared in the agreement for the purchase of 87,000 shares held jointly with his mother. A de-mat account statement showed the transfer of these shares on 15.07.2021. A certificate of foreign inward remittance confirmed the receipt of USD 20,644,872.70 (equivalent to INR 153,74,42,250/-) from the buyer. Form No. 20B filed by VCPL with the MCA listed the assessee as a shareholder. Crucially, a dematerialization request form indicated shares were submitted for dematerialization on 14.03.2013, and de-mat statements from 25.03.2013 onwards showed the shares in the assessee's account. The Tribunal found that the Ld. CIT(A) had rightly appreciated these facts. The addition under Section 68 was deleted.
The Tribunal, considering the facts and circumstances and the nature of the evidence submitted, decided to set aside the matter to the Assessing Officer for a fresh assessment. The Tribunal reasoned that the evidence had not been examined by the lower authorities and that allowing the assessee to present it before the Assessing Officer would be appropriate. The assessee was directed to participate proactively in the fresh assessment proceedings and submit all necessary details without causing undue delay. The Tribunal did not decide on the merits of the addition itself but remanded the case for a proper examination of the evidence. The appeal was allowed for statistical purposes.
The Tribunal noted that the assessee had submitted that the tax effect, including surcharge and education cess, was Rs. 45,78,072, which was below the monetary limit for filing appeals by the Revenue before the ITAT. The Senior Departmental Representative for the Revenue fairly conceded this point and withdrew the appeal. The Assessing Officer also clarified that the case did not fall under any of the exception clauses of CBDT Circular No. 09/2024. Consequently, the Tribunal held that the appeal filed by the Revenue was not maintainable due to the low tax effect and the absence of any exceptional circumstances. The ratio decidendi is that appeals filed by the Revenue below the prescribed monetary limits, without falling under any exceptions, are liable to be dismissed. The operative direction was to dismiss the appeal of the Revenue as withdrawn.
The Tribunal allowed the appeal of the assessee. It held that the interest earned by the assessee from the co-operative bank is eligible for deduction under Section 80P(2)(d) of the Act. The Tribunal relied on the consistent view of the jurisdictional Gujarat High Court in the cases of State Bank of India and PCIT vs. Ashwinkumar Arban Co-operative Society Ltd. These decisions held that Section 80P(2)(d) is applicable to interest earned by co-operative societies from investments made with co-operative banks, and Section 80P(4) does not preclude such deductions. The Tribunal distinguished the Karnataka High Court's decision in Totgar's Co-operative Sales Society, noting that the Gujarat High Court had considered and differed from it. The Tribunal clarified that while interest and dividend from entities that are not co-operative societies would not be eligible for deduction, the interest earned from co-operative banks and societies is deductible. The disallowance of Rs. 68,33,529/- was directed to be deleted. However, the Tribunal noted that interest received from the State Bank of India and Sardar Sarovar Narmada Nigam Ltd., not being co-operative societies, would not be eligible for deduction under Section 80P(2)(d). The Assessing Officer was directed to verify and allow deductions only on amounts received from co-operative banks or societies.
The Tribunal held that the issue of exemption under Section 10(10B) for BSNL VRS-2019 compensation is identical to issues decided in favour of the assessee by co-ordinate benches, including in Jayeshkumar Tulsidas Sutaria vs. ITO, Ward 7(2)(1), Ahmedabad (ITA Nos.2387 & 2388/AHD/2025) and other cited cases. The Tribunal found that mere executive status should not disqualify an employee from this exemption. Therefore, the issue of exemption under Section 10(10B) for both assessment years was decided in favour of the assessee. The Assessing Officer was directed to grant the exemption and refund due. For leave encashment exemption under Section 10(10AA) for AY 2020-21, the Tribunal, relying on the Kerala High Court's decision in Sanchar Nigam Pensioners’ Welfare Association vs. Union of India, directed the AO to grant the exemption after verifying that the assessee was a Department of Telecom (DoT) employee absorbed by BSNL and whose pension is governed under Rule 37A of the CSS (Pension) Rules. The alternative contention regarding CBDT Notification No. 31/2023 was not required to be considered in light of this direction. The assessee was directed to provide necessary details to the AO.
The Tribunal held that the issue of exemption under Section 10(10B) for BSNL VRS-2019 compensation is identical to issues decided in favour of the assessee by co-ordinate benches, including in Jayeshkumar Tulsidas Sutaria vs. ITO, Ward 7(2)(1), Ahmedabad (ITA Nos.2387 & 2388/AHD/2025) and other cited cases. The Tribunal found that mere executive status should not disqualify an employee from this exemption. Therefore, the issue of exemption under Section 10(10B) for both assessment years was decided in favour of the assessee. The Assessing Officer was directed to grant the exemption and refund due. For leave encashment exemption under Section 10(10AA) for AY 2020-21, the Tribunal, relying on the Kerala High Court's decision in Sanchar Nigam Pensioners’ Welfare Association vs. Union of India, directed the AO to grant the exemption after verifying that the assessee was a Department of Telecom (DoT) employee absorbed by BSNL and whose pension is governed under Rule 37A of the CSS (Pension) Rules. The alternative contention regarding CBDT Notification No. 31/2023 was not required to be considered in light of this direction. The assessee was directed to provide necessary details to the AO.