ITAT Bangalore Judgments — July 2025

The Tribunal held that selecting the wrong section code was an inadvertent error and not fatal to the application, provided no prejudice was caused. The Tribunal noted that the assessee was not given an opportunity to be heard or to correct the mistake.

The Tribunal condoned the delay in filing the appeal for ITA No. 454/Bang/2025, finding sufficient cause. The appeal was allowed, directing the CIT(E) to grant registration under Section 12AB. The appeal in ITA No. 455/Bang/2025 was dismissed as withdrawn. The appeal in ITA No. 456/Bang/2025 was partly allowed, remitting the 80G approval issue back to the CIT(E) for fresh consideration.

The Tribunal held that disallowances and additions based solely on statements recorded under Section 132(4) of the Act, without any corroborating incriminating material found during the search, are not sustainable. Loose papers and diaries without being part of regularly maintained books of account are also considered irrelevant as evidence.

The Tribunal noted that the assessee could not produce sufficient documentary evidence for cash deposits made during demonetization. The Tribunal remitted the issue back to the AO to examine how the cash deposits were utilized and directed the assessee to provide documentary evidence.

The Tribunal held that entities registered under the Karnataka Souharda Sahakari Act, 1997, are eligible for deduction under section 80P of the Act, following a Karnataka High Court judgment. The addition under section 40(a)(ia) was also allowed for deduction under 80P. The addition under section 68 was remanded to the AO for fresh examination.

The Tribunal observed that the L/R, from a rural background, was unfamiliar with e-proceedings and lacked knowledge of the deceased's transactions. Considering that the AO admitted it was a joint account, and a specific request was made not to send notices to the provided email, the Tribunal set aside the lower orders and remitted the case to the AO for fresh assessment, granting a reasonable opportunity of being heard.

The Tribunal held that disallowance of depreciation cannot be sustained in the absence of incriminating material found during search. Regarding the addition based on loose paper, the Tribunal found that it was not corroborated, not part of regular books of account, and thus lacked evidentiary value. The addition was consequently deleted.

The Tribunal held that the assessee was not granted a reasonable opportunity of being heard and that the CIT(E) failed to independently decide the issue, instead relying on subordinate recommendations without furnishing them to the assessee. The CIT(E) also failed to grant a personal hearing.

The Tribunal held that the CIT(E)'s reasoning for rejecting the registration was flawed as the trust deed clearly stated that the benefits were open to all irrespective of caste, creed, or religion. The Tribunal found that the hostel facilities were for all deserving girl students, not just a particular community.

The Tribunal held that due to the assessee's non-appearance before the lower authorities, the grounds and merits could not be considered. However, considering the circumstances including the assessee's health issues, the Tribunal set aside the order of the CIT(A) and remitted the issue for denovo consideration.

The Tribunal condoned the delay in filing the appeal. It found that the CIT(E)'s rejection of 80G(5) approval based on meagre expenditure was incorrect, especially given that the Tribunal had already set aside a similar denial for Section 12AB registration in the assessee's own case. The Tribunal held that 80G(5) approval is consequential to 12AB registration and directed the CIT(E) to grant the approval.

The Tribunal held that while Form 67 is procedurally important, the non-filing with the original return was due to the procedure not being notified by the CBDT at that time. The assessee complied with the procedure upon revision and there was no doubt regarding the quantum of the claim. Therefore, the FTC should be allowed.

The Tribunal allowed the assessee's request to withdraw the appeals. The appeals were dismissed as withdrawn with liberty to reinstate them if the applications under the Vivad Se Vishwas Scheme were not accepted.

The Tribunal found that notices were sent via email despite the assessee explicitly opting out of email communication. This lack of proper communication prevented the assessee from presenting their case. Therefore, the case was remitted back to the CIT(A) for a fresh decision with an opportunity for the assessee to be heard.

The Tribunal held that statements recorded during a survey under section 133A do not have evidentiary value, especially when not supported by other evidence, and that admissions made under such circumstances can be retracted. Relying on various High Court and Supreme Court judgments, the Tribunal found no reason to interfere with the lower authorities' orders.

The Tribunal condoned the delay in filing the appeal for ITA 454/Bang/2025, finding sufficient cause. It held that the assessee had commenced activities, albeit minimal at the inception stage, and directed the learned CIT(E) to grant Section 12AB registration. The appeal for ITA 455/Bang/2025 was dismissed as withdrawn. For the Section 80G approval (ITA 456/Bang/2025), the Tribunal remanded the matter to the learned CIT(E) for fresh consideration, contingent upon the granted Section 12AB registration and after providing a reasonable opportunity to the assessee to submit necessary documents.

The Tribunal condoned a 248-day delay for the first appeal (ITA 454) and, upon reviewing evidence, concluded that the assessee had commenced activities, directing the CIT(E) to grant Section 12AB registration. The second appeal for Section 12AB registration (ITA 455) was dismissed as withdrawn by the assessee. For the Section 80G approval (ITA 456), the matter was remitted back to the CIT(E) for fresh consideration, instructing them to account for the now granted 12AB registration and to provide the assessee with an opportunity to submit all required documents.

The Tribunal held that statements recorded under Section 132(4) of the Income Tax Act, without any accompanying incriminating material found during the search, cannot form the basis for additions. Loose sheets and diary entries also lack evidentiary value unless they are part of regularly maintained books of account and are corroborated by independent evidence. Consequently, disallowances and additions made solely on such grounds were deleted.

The Tribunal held that the assessee was not granted a reasonable opportunity of being heard, and the Ld.CIT(E) failed to independently decide the issue, instead relying on subordinate recommendations. The Ld.CIT(E) also failed to grant a personal hearing. Therefore, the orders were set aside and remitted for denovo consideration.

The Tribunal noted that the AO admitted the deposit was in a joint account and the legal heir was not familiar with e-proceedings, hence could not view notices. The Tribunal found that further probe was required and granted one more opportunity to the assessee.

The Tribunal dismissed the appeal as not maintainable, citing CBDT Circular No. 9/2024 which sets a monetary limit for filing appeals. The tax effect in this case was Rs. 4,42,543/-, significantly below the Rs. 60 Lakhs limit, and the circular applies to pending appeals.

The Tribunal held that the assessment order was passed within the prescribed time limit, as the relevant date is the date of passing the order, not its dispatch or receipt. On merits, the Tribunal found that the assessee correctly adopted the Discounted Cash Flow (DCF) method for valuation as per Rule 11UA(2), and the AO was not justified in rejecting it and adopting the Net Asset Value (NAV) method. Therefore, the addition made by the AO was deleted.

The Tribunal noted that the reopening of assessment was questioned due to non-compliance with legal requirements and a lack of proper opportunity for the assessee. The Tribunal also considered the assessee's rural background and unfamiliarity with e-proceedings, which led to missed hearing notices.

The Tribunal held that statements recorded during a survey under Section 133A do not have evidentiary value, as the officer is not authorized to administer an oath, unlike in a search under Section 132(4). Therefore, any admissions made during a survey cannot form the sole basis for an assessment.

The Tribunal condoned the delay after being satisfied with the reasons provided by the assessee. Subsequently, upon learning that the assessee had opted for settlement under the Direct Tax Vivad se Vishwas Scheme, 2024, the Tribunal dismissed the appeal as withdrawn.

The Tribunal, at the request of the assessee's Ld.AR, dismissed both appeals as withdrawn. This dismissal was with liberty to reinstate the appeals if the assessee's applications under the Vivad Se Vishwas Scheme were not accepted.

The Tribunal dismissed the assessee's appeal, affirming the disallowance of the indexed cost of improvement. It concluded that the assessee failed to furnish sufficient documentary evidence, such as relevant financial statements from the year of expenditure, despite having ample opportunities before both lower authorities and the Tribunal. Consequently, for want of evidence, the claim for cost of improvement was rejected.

The Tribunal noted that the assessee failed to represent her case before the lower authorities and did not comply with notices. However, in the interest of justice, the matter is remitted back to the CIT(A) for a fresh opportunity.

The Tribunal held that a statement recorded under Section 132(4) of the Income Tax Act, without accompanying incriminating material found during a search, cannot be considered as incriminating evidence to justify additions or disallowances. Similarly, loose sheets or diaries, not part of regularly maintained books of account, are inadmissible as evidence on their own.

The Tribunal held that the mistake was technical and the trust's genuineness was not in doubt. The CIT(E)'s order was set aside, directing them to consider the application afresh after granting an opportunity of being heard.

The Tribunal found that the CIT(A) did not properly consider the assessee's detailed written submissions regarding the Section 43B disallowance. Therefore, the matter is remitted back to the Assessing Officer for fresh consideration after providing the assessee a reasonable opportunity of being heard and to submit documentary evidence.

The Tribunal found no infirmity in the order of the CIT(A) who had restored the appeals to the AO for fresh consideration and to provide the assessee an opportunity of hearing. The Tribunal agreed that the assessee's explanation for not filing details was bonafide.

The Commissioner of Income Tax (Appeals) (CIT(A)) noted that the AO had passed orders under Section 144 without giving the assessee a proper opportunity of hearing. Finding sufficient cause for the assessee's failure to provide details and deeming the explanation bonafide, the CIT(A) restored the appeals to the AO for fresh consideration, allowing the assessee an opportunity to represent their case. The Tribunal found no infirmity in the CIT(A)'s order.

The Tribunal found that the assessee had provided partial explanations and some documents were missing, leading to the disallowance by the AO and CIT(A). However, to ensure natural justice and proper adjudication, the Tribunal decided to remit the matter back to the AO.

The Tribunal found that the CIT(A) had rightly restored the appeals to the AO for fresh consideration, allowing the assessee an opportunity to present their case. The CIT(A) noted a sufficient cause for the assessee's failure to provide details during the assessment proceedings.

The Tribunal held that the CIT(A)'s order was not a speaking order and was passed without proper hearing, also noting the assessee's consistent plea regarding jurisdiction. The Tribunal condoned the delay in filing the appeal due to these circumstances.

The Tribunal condoned the delay in filing the appeal. It was held that the Ld.CIT(A) erred by sending notices to an email ID which the assessee had specifically requested not to be used, thus denying a proper opportunity.

The Tribunal condoned the delay due to its short duration and the lack of objection from the Revenue. The Tribunal noted that the assessee's adjustments regarding the sale of assets appeared prima facie to be as per law, but had not been verified by lower authorities. Therefore, the matter was set aside to the AO for fresh adjudication.

The Tribunal noted that the CIT(A) had decided the issue ex-parte, despite giving opportunities to the assessee. Considering the interest of justice, the Tribunal restored the issue back to the CIT(A) for fresh adjudication with a cost of Rs. 5,000/- per assessment year.

The Tribunal held that the CIT(A) was correct in deleting the penalty. The penalty notice did not specify the limb of Section 271(1)(c) under which it was initiated, and the AO's assessment order lacked the required satisfaction for penalty proceedings. Furthermore, even on merits, the disallowance of interest expenditure did not amount to furnishing inaccurate particulars, especially when the genuineness of the expenditure was not doubted.

The Tribunal condoned the delay in filing the appeal, emphasizing substantial justice over technicalities. It then decided to remit the entire issue back to the Assessing Officer for a fresh adjudication, considering the assessee's failure to represent properly before the lower authorities.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to the assessee not receiving the notices sent to the consultant's email. The Tribunal set aside the lower authorities' orders and remitted the case to the AO for a fresh consideration, granting the assessee an opportunity to present documents.

The CIT(A) found that the assessee had a sufficient and bonafide cause for not furnishing details during the assessment proceedings. Therefore, the CIT(A) restored the appeals to the AO for fresh consideration, granting the assessee an opportunity to present their case.

The Tribunal held that the appeal filed by the AO was not maintainable due to low tax effect, citing Board Circular 9/2024. The revenue was granted liberty to file a proper application if errors in tax computation are found.