ITAT Bangalore Judgments — September 2025

The Tribunal held that the assessee, a cooperative society, had explained the nature and source of the cash deposits as collections from members and loan recoveries. The Tribunal found that the AO and CIT(A) had erred in making the addition merely because the assessee was not authorized to collect SBNs, as the identity and creditworthiness of the members were not doubted.

The Tribunal condoned the delay in filing the appeal. It directed the AO to re-examine the documents submitted by the assessee regarding the payments and to verify the husband's bank account. The AO was instructed to decide the issue afresh after gathering necessary information.

The Tribunal held that both the AO and CIT(A) erred by not considering the details submitted by the assessee, including a statement of facts and supporting documents. The matter was restored to the AO for fresh examination of the deduction claim.

The Tribunal held that section 80P is a benevolent provision to be interpreted liberally. The assessee, being a registered cooperative society extending credit facilities, is eligible for deduction. The denial of deduction based on the society's activities and lack of mutuality was not upheld.

The Tribunal noted that the assessment order was passed under Section 144 without hearing the assessee, and the CIT(A) had passed conflicting orders. Therefore, the Tribunal directed the AO to decide the issue afresh after providing the assessee an opportunity to be heard and furnish details.

The Tribunal restored the issue to the Assessing Officer, directing the assessee to prove its mutual nature and that contributors and beneficiaries are members. The AO is to re-examine the cash deposit and its source from regular books of accounts, potentially using Section 133(6) powers.

The Tribunal held that the assessee had provided details of parties who paid cash advances, and these advances were subsequently reflected as sales in the company's books. Since the cash receipt was confirmed and later accounted for as sales, and no proper inquiry was made by the AO, the addition under section 69A was unjustified.

The Tribunal held that the AO erred in comparing interest paid on an unsecured loan from relatives with the interest rate on a secured bank loan. The interest rate for unsecured loans is naturally higher. The AO should have compared with the market rate for similar unsecured loans.

The Tribunal held that the assessee cannot be denied TDS credit merely because the employer failed to deposit the deducted tax. Relying on various High Court judgments, the Tribunal directed the AO to grant the TDS credit to the assessee.

The Tribunal condoned the delay in filing the appeal, finding the reasons to be bona fide. The Tribunal directed the deletion of the addition of Rs. 4,53,600/- confirmed by the CIT(A), stating that the assessee had sufficient cash withdrawals to cover the deposits and there was no evidence to suggest the withdrawn cash was used for other purposes or that the deposits were out of unaccounted income.

The Tribunal held that the initiation of proceedings under Section 153C of the Act by the AO was not correct. The expenditure in question was already disclosed in the financial statements and the return of income, and therefore, could not be treated as incriminating material or undisclosed income. The Tribunal also noted that the AO had previously accepted the expenditure as revenue in earlier assessment proceedings, and a change of opinion was not permitted.

The Tribunal held that the AO erred in taxing notional interest as no interest had accrued or become payable as per the loan agreement's terms. The CIT(A) had rightly deleted the addition, and the revenue's appeal was dismissed.

The Tribunal found that the information regarding R&R expenses was already disclosed in the financial statements and returns, and had been verified and accepted as revenue expenditure during regular assessment proceedings under Section 143(3) for some assessment years. Consequently, the Tribunal held that this disclosed information could not be treated as 'undisclosed income' or 'incriminating material' to justify the initiation of proceedings under Section 153C. The reassessment, being a 'change of opinion' without fresh incriminating material, was deemed invalid, and thus the entire assessment framed under Section 153C was quashed.

The Tribunal held that the initiation of proceedings under Section 153C was not correct as the expenditure was not undisclosed income but a change of opinion, which is not permitted. The Tribunal found that the R&R expenses were disclosed in the financial statements and verified during regular assessment proceedings under Section 143(3), and thus could not be treated as incriminating material for invoking Section 153C.

The ITAT allowed the appeal, deleting the addition. It ruled that the cash deposit of Rs. 2 lakhs was below the Rs. 2.5 lakhs threshold specified in CBDT Instruction No. 3/2017 dated 21.02.2017, which exempts individuals without business income from further verification for deposits up to this amount. Therefore, the assessment order was beyond the scope of permissible enquiry.

The Tribunal held that the addition was unsustainable in law as it was based on third-party material not confronted to the assessee, violating principles of natural justice and the NFAC's SOPs. The AO's failure to provide cross-examination and share evidence was a procedural unfairness.

The Tribunal held that the CIT(A) failed to decide the appeal on its merits and instead dismissed it for non-prosecution. The Tribunal restored the issue back to the CIT(A) to decide the appeal afresh after granting the assessee an opportunity of hearing.

The Tribunal held that the CIT(A) improperly dismissed the appeal for non-prosecution without considering the facts and the assessee's claim for exemption. The case was restored to the AO to examine the exemption claim under Section 10(23AA) on merits.

The Tribunal held that the cash deposits were collections from members towards loan repayments and not unexplained investments. The AO failed to consider the documents and explanations provided by the assessee.

The Tribunal held that the assessee had provided sufficient cause for the delay in filing the appeal, including reliance on incorrect advice from a consultant and technical issues with the income tax portal. The Tribunal directed the CIT(A) to condone the delay and decide the appeal on its merits.

The Tribunal held that the payments made to the foreign company were for services rendered outside India and did not constitute a business connection or permanent establishment in India. Therefore, the disallowance made by the AO under Section 40(a)(i) was not warranted. The addition made by the AO was deleted.

The Tribunal held that the initiation of proceedings under Section 153C was incorrect as the R&R expenses were disclosed and not incriminating. The Tribunal also noted that the Assessing Officer had previously accepted these expenses as revenue expenditure, and a change of opinion is not permitted. Therefore, the addition made by the AO was deleted.

The Tribunal condoned the delay due to the assessee's genuine reasons and held that the CIT(A) erred by dismissing the appeal ex parte without considering the assessee's explanation regarding the source of funds and her bank withdrawal evidence.

The Tribunal held that in a search case, the assessment should be completed under Section 153A, not Section 147/148. Since the AO issued notice under Section 148 instead of Section 153A, proper jurisdiction was not exercised.

The Tribunal, relying on Supreme Court and High Court judgments (e.g., Maruti Suzuki India Ltd. and Spice Entertainment Ltd.), held that assessment orders passed against a non-existent entity (the erstwhile partnership firm) after its conversion to a company are void ab initio and suffer from jurisdictional legal infirmity. Despite the Revenue's arguments and attempts to distinguish the case from previous rulings (like Mahagun Realtors Pvt. Ltd.), the Tribunal found that the department was aware of the firm's conversion and failed to assess the successor entity. The provisions of Section 292B of the Income Tax Act cannot cure such a substantive defect.

The Tribunal held that while the assessee was given opportunities, there were issues with providing complete documentation. The Tribunal restored the issue to the Assessing Officer to allow the assessee to substantiate the cash deposit with proper documentation, including sales books, cash flow statements, and audited accounts.

The Tribunal held that additions made solely on the basis of a statement recorded under Section 132(4) without corroborative evidence are not sustainable. For certain assessment years, it was found that no incriminating material was available for those specific years. Additions for bogus purchases were deleted as they were based on information from the investigation wing without proper evidence. The Tribunal directed that additions for unaccounted sales should be limited to the gross profit earned.

The Tribunal held that for assessment years 2017-18 and 2018-19, additions for unaccounted cash sales were not sustainable due to lack of incriminating material found during search and because these were concluded assessments. For assessment year 2018-19, the addition on account of bogus purchases was also deleted as it was based on information received from the investigation wing and not on any incriminating material. For subsequent years, the issue of quantum was addressed, directing that only the profit element from unaccounted sales should be taxed, not the entire sale proceeds.

The Tribunal held that additions based solely on statements without corroborative evidence are not sustainable. For AY 2017-18 and 2018-19, the additions for unaccounted cash sales were deleted due to lack of incriminating material and the fact that these were concluded assessments. The additions for bogus purchases for AY 2018-19 were also deleted as they were not based on any incriminating material found during search. For AY 2019-20 and 2020-21, the Tribunal directed that additions for unaccounted sales should be limited to the gross profit earned, not the entire sale amount, as the books of account were not rejected. The assessment order for AY 2020-21 was quashed due to the non-issuance of a mandatory notice under Section 153C.

The Tribunal held that the assessee had shown sufficient cause for the delay in filing appeals before the CIT(A)/NFAC and condoned the delay. Due to the haste in passing the penalty order without proper opportunity of hearing, the Tribunal remitted the issue back to the AO for fresh adjudication.

The Tribunal acknowledged the assessee's failure to submit documents to lower authorities but noted the claim of having filed the ITR with a higher declared capital gain. In the interest of justice, the Tribunal remitted the entire issue back to the Assessing Officer for fresh adjudication, directing the AO to provide a reasonable opportunity of hearing and requiring the assessee to produce all necessary supporting documents.

The Tribunal condoned the delay in filing the appeal before the CIT(A), finding the explanation for delay to be plausible. The Tribunal also noted that the assessee could not represent her case before the AO and thus remitted the issue to the AO for fresh consideration, granting the assessee a reasonable opportunity to be heard.

The Tribunal condoned the delay of 630 days, citing the principles laid down by the Apex Court in Collector, Land Acquisition v. Mst. Katiji and Ors., emphasizing substantial justice over technicality. The appeal was then remitted to the Assessing Officer for fresh adjudication, granting the assessee an opportunity to present its case.

The Tribunal held that the assessee had a reasonable cause for accepting cash payment, considering his age, lack of awareness of tax laws, and the bonafide belief that the transaction was genuine and properly accounted for. The penalty under Section 271D was deemed not imposable.

The Tribunal condoned the delay in filing the appeal due to sufficient cause shown by the assessee's director. However, since the CIT(A)/NFAC dismissed the appeal without considering the merits, the Tribunal remitted the entire issues back to the AO for fresh consideration.

The Tribunal held that for AY 2017-18 and 2018-19, additions for unaccounted cash sales were wrongly made as there was no incriminating material found during the search for these years. The Tribunal also deleted the addition for bogus purchases for AY 2018-19 as it was based on information from the investigation wing, not incriminating material. For AY 2019-20 and 2020-21, the Tribunal directed that only the gross profit on unaccounted sales should be added, not the entire sale consideration. For AY 2020-21, the assessment order was quashed due to the absence of a Section 153C notice.

The Tribunal noted that the assessee did not provide sufficient evidence to explain the cash deposits and failed to appear during appellate proceedings. The Tribunal decided to remit the entire issue back to the AO for fresh adjudication, emphasizing the need to provide the assessee with a reasonable opportunity of being heard.

The Tribunal held that the issue is covered by the Supreme Court's decision in CIT vs. G. M. Knitting Industries Pvt. Ltd., where it was held that if the certificate (Form 10CCB) is filed before the final assessment order, the assessee is entitled to the deduction. The Tribunal noted that the amendment regarding pre-filing of returns was procedural.

The Tribunal held that the assessee had provided a valid explanation for the source of the cash deposits, which were collections from sundry debtors and part of their business operations. The Tribunal found no violation of law in accepting old currency notes before the 'appointed date' and set aside the addition.

The Tribunal noted that both the assessment order and the CIT(A) order were passed ex-parte. In the interest of justice, the Tribunal decided to remit the issue back to the AO for fresh adjudication.

The Income Tax Appellate Tribunal held that the CIT(A) does not possess the power to dismiss an appeal for non-prosecution and must decide cases on their merits. Consequently, the ITAT restored the appeal back to the CIT(A) with a direction to provide the assessee an opportunity for hearing and then decide the issue on its merits.

The Tribunal condoned the delay, citing the principles laid down by the Apex Court in Collector, Land Acquisition v. Mst. Katiji and Ors., emphasizing substantial justice over technicalities. The Tribunal found no malafide intention and noted that the delay was due to circumstances beyond the assessee's control.

The Tribunal acknowledged that both parties conceded to the issues being remitted to the CIT(A)/NFAC for fresh consideration. A token cost of Rs. 5,000/- per assessment year was imposed on the assessee due to negligence.

The Tribunal condoned the delay in filing the appeal, relying on the Supreme Court judgment in Collector of Land Acquisition Vs. MST Katiji. The Tribunal remitted the issue back to the file of the AO with a cost of Rs. 10,000/- for each appeal, directing the assessee to cooperate and produce necessary evidence.