ITAT Bangalore Judgments — June 2025

The Tribunal held that interest income from credit facilities to members and from statutory deposits maintained with co-operative/scheduled banks is attributable to business and eligible for deduction under Section 80P(2)(a)(i). However, interest from voluntary investments of surplus funds (beyond statutory limits) in commercial/cooperative banks (defined as "banking company") is taxable as "income from other sources," and therefore, deduction under Section 80P(2)(d) is not available for such income, but proportionate expenses are deductible under Section 57. The case was remitted to the AO for re-computation based on these observations.

The Tribunal found that the assessee had submitted documents, but they may not have been properly considered. It granted another opportunity to the assessee to present their case to the CIT(A) with necessary documents.

The Tribunal held that interest income from statutory deposits made by the assessee is eligible for deduction under Section 80P(2)(a)(i), affirming the CIT(A)'s direction to quantify it. However, interest income from other surplus deposits was not considered business income and was assessed under Section 56, with proportionate deductions allowed under Section 57.

The Tribunal held that the CIT(A) erred by dismissing the appeal for non-prosecution without adjudicating the grounds. Additionally, the reopening of assessment was based on a mere reappraisal of existing material without any tangible new evidence, which is not permissible.

The Tribunal held that the estimation of profit by the lower authorities was not scientific. It found that the assessee's declared profit of 8.04% in the current year was within the accepted historical range and sufficient to cover potential leakage due to lack of audited books. Therefore, the Tribunal decided to estimate the income at 8% of the gross turnover.

The Tribunal held that the estimation of profit by the lower authorities was not scientific, ignoring the assessee's past declared profit rates. The Tribunal decided to estimate the income at 8% of the gross turnover, considering it reasonable and sufficient, and reversed the CIT(A)'s estimation of 20%.

The tribunal held that grounds related to transfer pricing adjustments were infructuous due to the MAP resolution. For the section 80G issue, the tribunal noted that receipts appeared to have necessary details, and set aside the issue to the AO for fresh adjudication, allowing the grounds for statistical purposes.

The Tribunal held that the assessee, being a senior citizen with his sisters, had explained the source of the cash deposits as withdrawals made from their bank accounts in FY 2015-16. The Tribunal found that the lower authorities had not adequately considered the evidence provided by the assessee, including affidavits and bank statements, and that the revenue had failed to show that the withdrawn cash was not available. Therefore, the addition was deleted.

The Tribunal noted that the AO made additions without verifying the return filed by the assessee, and the assessee's failure to appear was due to medical reasons. Consequently, the Tribunal decided to grant one more opportunity.

The Tribunal held that the assessee's failure to claim the Section 87A rebate in the original return constituted an error or omission, justifying the filing of a revised return. The Tribunal relied on the decision of the Bombay High Court in Chamber of Tax Consultant v. DGIT.

The Tribunal held that the additional evidences filed by the assessee, being annual reports of comparable companies, were relevant and should be admitted. The Tribunal also found that the TPO and DRP erred in not applying the turnover filter and in incorrectly classifying operating and non-operating items when computing margins.

The Tribunal noted that the assessee failed to represent its case before the lower authorities and the Tribunal. However, a written submission indicated the assessee did not receive notices and only filed a reply after checking the portal. The CIT(E) order did not consider this reply.

The Tribunal held that the Income Tax Act mandates that an intimation must be given to the assessee in writing or electronic mode before making any adjustments under Section 143(1)(a). Since no such intimation was provided, the adjustment made by the CPC was considered invalid.

The Tribunal observed that the assessee had not received the intimation order. Therefore, the matter was remitted to the jurisdictional assessing officer to supply the copy of the intimation and decide the issue afresh.

The Tribunal held that the addition made under Section 69A was bad in law, especially since the assessment order was passed on a deceased assessee. Considering the explanation of income sources by the legal heir and the fact that the assessee was no more, the Tribunal found it appropriate to allow the appeal.

The Tribunal upheld the decision of the lower authorities, confirming the addition of Rs.36 lakhs and Rs.1,97,600 as undisclosed income taxable at 60% under Section 115BBE. It found that the cash was not recorded in the books, not disclosed in the original return, and no evidence supported the claim that it originated from tyre sales. The Tribunal also held that CBDT Instruction No.1916 was not applicable to the gold coins as it pertains to jewellery and ornaments.

The Tribunal held that while filing Form 10DA on or before the due date is mandatory, the filing is a procedural aspect. Since the form was available to the CPC at the time of intimation and the assessee had claimed the deduction in prior years, the disallowance was not justified.

The Tribunal held that the scope of inquiry for 80G approval extends to the genuineness of activities and fulfillment of conditions, not necessarily the actual receipt of donations. The Tribunal found that the CIT(Exemptions)'s observations were sweeping statements without corroborative evidence. The Tribunal noted that the assessee had received substantial amounts from tuition fees and donations and had applied substantial funds towards its educational objects.

The Tribunal found that the Assessing Officer failed to grant the statutory minimum of 7 days to the assessee for responding to the notice under Section 148A(b). Relying on jurisdictional High Court judgments, which established that a minimum 7-day period is mandatory, the Tribunal held that the proceedings initiated were vitiated due to insufficient notice period. Consequently, the appeal filed by the revenue was dismissed.

The Tribunal noted the assessee's submission that the issue was settled under MAP and the subsequent filing of a withdrawal application. The Revenue's counsel had no objection to the withdrawal.

The Tribunal noted that the dispute had been resolved under the Mutual Agreement Procedure (MAP). The assessee had filed an application to withdraw the appeal. The Tribunal accepted the withdrawal application.

The Tribunal held that the assessee had filed the applications under the correct sections, and the CIT's rejection was based on a wrong assumption of facts.

The Tribunal acknowledged the assessee's failure to justify the source of deposits but questioned whether the entire amount could be treated as income, especially as a commission agent.

The Tribunal held that penalty under Section 271(1)(c) or 271B cannot be automatically confirmed merely because the quantum addition is confirmed. The AO must record specific findings about concealment of income or failure to comply with audit requirements without reasonable cause. The lower authorities failed to do so.

The Tribunal condoned the delay in filing the appeal, citing principles of natural justice. The ex-parte order of the CIT(A) was set aside, and the matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessee had filed the audit report in Form 10B within the due date and subsequently filed the correct Form 10BB within the extended timeline provided by CBDT Circular No. 2/2024. Therefore, the addition made by the CPC was unwarranted.

The Tribunal held that income from locker rent is eligible for deduction under section 80P(2)(a)(i). The issue of interest income from deposits was restored to the AO for verification as to whether deposits were statutory or operational.

The Tribunal condoned the delay in filing the appeal, subject to a cost of ₹1,000/-, due to the interest of justice. The matter was restored to the learned CIT-A for fresh adjudication.

The Tribunal held that penalty cannot be levied automatically merely because an addition is confirmed in assessment proceedings. The lower authorities erred in confirming the penalty as a consequential step without independent satisfaction. The assessee also had a reasonable cause for not obtaining the tax audit report.

The Tribunal held that penalty proceedings are separate from assessment proceedings and are not automatic consequences of additions made. The lower authorities wrongly confirmed the penalty without independent satisfaction and did not consider the reasonable cause presented by the assessee. Penalty orders were not sustainable.

The Tribunal held that the CIT(E) rejected the applications without providing a proper opportunity to the assessee and without clear, substantiated reasons. The Tribunal found that the assessee had submitted all required details and cooperated fully.

The Tribunal held that the assessee could not represent its case before the CIT(Exemptions) due to a trustee's injury and advised bed rest. Given this, and in the interest of justice, the case was remitted back to the CIT(Exemptions) for fresh decision.

The Tribunal held that penalty proceedings are distinct from assessment proceedings and cannot be automatically confirmed simply because an addition is confirmed in the assessment. The AO must record satisfaction regarding concealment of income, and the lower authorities failed to do so. Furthermore, in cases concerning Section 271B, the Tribunal found that the assessee had a reasonable cause for not obtaining the tax audit report due to the dispute over its charitable or business nature.

The Tribunal held that when income is offered under Section 44AD, the assessee is not obliged to maintain books of account or explain individual purchase entries, especially when the turnover does not exceed the prescribed limit and the gross receipts are undisputed. The AO's addition based on third-party information without independent verification was not sustainable.

The Tribunal held that the delay in filing the appeal before the CIT(A) was for sufficient cause, citing the COVID-19 lockdown and the CA's preoccupation. The CIT(A)'s order was reversed, the delay was condoned, and the case was restored to the CIT(A) for examination on merits.

The Tribunal condoned the delay, finding that the service defect prevented the assessee from being heard. The ex-parte order of the CIT(A) was set aside due to violations of natural justice.

The Tribunal held that the quantum of expenditure is not the sole criterion for granting registration; the genuineness of the activities and the intent of the trust are paramount. It noted that the assessee had commenced activities, incurred expenses for medical relief, and had accumulated funds for future projects as per the prescribed mode. Citing various judicial precedents, the Tribunal concluded that the CIT(E) erred in denying registration merely based on the lack of substantial expenditure and directed the CIT(E) to grant the registration.

The Tribunal held that penalty proceedings are separate and distinct from assessment proceedings. A confirmed addition in assessment does not automatically lead to penalty. The lower authorities erred in confirming the penalty solely on the basis of the quantum addition confirmation. The Tribunal found that the assessee had explained the reasonable cause for not obtaining the tax audit report.

The Tribunal held that the assessee had complied with the conditions under Section 270AA by paying the demand and filing the application for immunity within the stipulated period. The AO's failure to pass an order on the immunity application was not the assessee's fault.

The Tribunal held that the actual amount paid by the assessee, even if it differs from the registered document, should be considered for computing capital gains, provided it is supported by verifiable documents. The Revenue did not dispute the genuineness of the payments.

The Tribunal held that registration under Section 12A/12AA/12AB of the Income Tax Act is a mandatory precondition for claiming exemption under Section 11. Since the assessee did not have valid registration for the assessment years 2019-20 and 2021-22, the claim for exemption under Section 11(1)(d) was not allowable.

The Tribunal held that the CIT(E) rejected the applications without providing a clear, substantiated reason and without granting a proper opportunity of being heard to the assessee. The CIT(E) also erroneously concluded that the expenses were not related to the trust's objects and the project was commercial.

The Tribunal held that penalty proceedings are separate from assessment proceedings and cannot be automatically confirmed merely because the addition in assessment was confirmed. The lower authorities failed to provide specific findings of concealment or properly consider the assessee's reasonable cause for not obtaining the tax audit report.

The Tribunal condoned both delays, holding that procedural technicalities should not impede substantial justice. The CIT(A)'s order was set aside, and the matter was restored for re-adjudication on merits.

The Tribunal condoned the delay in filing the appeal, finding that the assessee, being a driver, may not have been well-versed with the Act's provisions. The case was remitted to the CIT(A) for fresh adjudication on merits.

The Tribunal condoned the delay in filing the appeal, finding that there were valid reasons for the assessee's non-appearance before the lower authorities due to communication errors. The matter was restored to the AO for fresh adjudication.

The Tribunal held that penalty cannot be levied automatically merely because additions were confirmed in assessment proceedings. It also found that the assessee had a reasonable cause for not obtaining tax audit as its claim for exemption u/s 11 & 12 was disputed.

The Tribunal held that penalty cannot be levied automatically merely because additions were confirmed in assessment proceedings. It emphasized that penalty proceedings are separate and require specific findings of default. The Tribunal also found that the assessee had shown reasonable cause for not obtaining a tax audit report under section 44AB.