ITAT Bangalore Judgments — March 2026

The Tribunal found the assessee's reason for non-appearance to be bonafide. Therefore, in the interest of justice, the matter was remitted back to the CIT(Exemptions) for fresh consideration, with a direction to grant a reasonable opportunity of hearing to the assessee.

The Tribunal held that the CIT(A) confirmed the protective additions without ascertaining whether substantive additions were made in the hands of the cooperative society or the assessee, and without providing clear findings. The Tribunal also noted procedural defects including notices sent to the assessee's email when physical service was preferred.

The assessee submitted a memo stating they no longer wished to pursue the appeals. In view of this submission, the Tribunal treated both appeals as withdrawn.

The Tribunal held that the CIT(Exemption) failed to provide the appellant with an opportunity for a hearing before relying on the Assessing Officer's report and did not apply independent judgment. The rejection of registration under Section 12AB violated principles of natural justice and the provisions of the Act.

The Tribunal held that the CIT (Exemption) failed to follow the principles of natural justice and the provisions of the Act by rejecting the applications without providing a proper opportunity for hearing and by not exercising independent judgment. The religious nature of objectives, in itself, does not disqualify a trust for registration under Section 12AB.

The Tribunal found that while the CIT's concerns regarding safety and legal compliance for running a school were justified, the appellant was given a very short period (10 days) to furnish the required documents. Therefore, the Tribunal restored both appeals back to the CIT (Exemption) to grant the appellant an opportunity to produce the necessary details within 120 days.

The Tribunal clubbed the related appeals for convenience. The specific findings on the merits of the case are not detailed in this excerpt, but the proceedings were initiated under Section 250 of the Income Tax Act, 1961.

The Tribunal found that the assessee had provided a reasonable cause for not appearing before the CIT. The Tribunal also noted that the CIT's order did not discuss the details submitted by the assessee. Therefore, the Tribunal restored both appeals to the CIT for fresh adjudication.

The Tribunal held that the final assessment order passed by the AO on July 29, 2024, was barred by limitation as it was passed beyond the one-month period prescribed after the DRP directions were uploaded on May 29, 2024. It was further held that the AO cannot pass a final assessment order based solely on the TPO's order without receiving and acting upon the DRP's directions, making the order illegal and bad in law.

The Tribunal held that the order rejecting the registration was not legally sustainable as the assessee was not provided with a reasonable opportunity to be heard on the specific grounds cited for rejection, which were not communicated prior to the denial. The matter was thus restored to the CIT(E) for reconsideration.

The Tribunal held that the assessee's updated return was invalid as assessment proceedings were pending. However, the additions made by the AO were confirmed regarding the salary and Chapter VIA deduction discrepancies. The issue of unexplained bank credits was remitted to the AO. The Tribunal also directed the AO to give credit for taxes paid.

The Tribunal held that the assessee failed to appear before the AO and the CIT(A) and did not provide necessary documentation or explanations. Despite being given multiple opportunities, the assessee did not present their case effectively. The appeals were filed before the Tribunal after the CIT(A) dismissed the appeals for both assessment years due to the assessee's lack of cooperation.

The Tribunal found that the assessee had provided a reasonable cause for not appearing before the CIT, attributing the oversight to busy schedules during the audit and return filing period. The Tribunal also noted that the CIT's order did not discuss the merits of the application details provided by the assessee.

The Tribunal held that the CIT(A) failed to ascertain in whose hands the income was taxable and whether substantive additions were made elsewhere. The non-compliance by the assessee was due to emails going to spam and a physical notice was only served later. The Tribunal also noted the Assessing Officer's lack of clarity on substantive additions.

The assessee, through their counsel, submitted a memo stating they did not wish to pursue the appeals. Consequently, the tribunal treated the appeals as withdrawn.

The CIT(A)/NFAC dismissed the assessee's appeal, agreeing with the AO's ex-parte assessment due to the assessee's non-compliance with notices. The Tribunal, considering the assessee's plea of being a senior citizen and the failure to represent the case before lower authorities, decided to grant one more opportunity.

The Tribunal held that the appeal was not maintainable as the Memorandum of Appeal and Grounds of Appeal were not signed by the appellant, which is a requirement as per section 140 of the Act. Consequently, the appeal was dismissed.

The Tribunal held that there was sufficient cause for the delay, as the assessee was genuinely unaware of the proceedings due to communication errors. Citing various judicial precedents, the Tribunal emphasized preferring substantial justice over technicalities. Consequently, the delay was condoned, and the matter was remitted to the CIT(A)/NFAC for fresh adjudication.

The Tribunal noted that while the CIT's concerns about compliance with building and safety regulations for operating a school were valid, the appellant was given a very short period (10 days) to submit the required documents. Therefore, the Tribunal restored both appeals back to the CIT (Exemption).

The Tribunal noted that the assessee failed to establish the nexus between the 'loan against property' and the construction of the house property before the lower authorities. However, considering the assessee's explanation regarding non-representation before the lower authorities due to advocate's email issues, the Tribunal decided to restore the issue to the AO.

The Tribunal clubbed the appeals as they were interrelated and disposed of them together. The order discusses the quantum appeal in ITA No. 3146/Bang/2025. The assessee's non-compliance with notices issued under sections 148 and 142(1) after the case was reopened is noted.

The Tribunal held that the issue regarding the allowability of ESOP expenditure in the assessee's own case is settled in favour of the assessee by the Karnataka High Court, which upheld the Tribunal's earlier decision. Therefore, the Revenue's appeal has no merit.

The Tribunal consolidated multiple appeals concerning the same assessment year due to interrelated issues. The appeals were filed against orders passed by the CIT(A)/NFAC under section 250 of the Income Tax Act, 1961.

The ITAT found the assessee's reasons for the delay in filing the appeal before the CIT(A)/NFAC to be plausible and sufficient. The Tribunal acknowledged that the assessment and CIT(A)/NFAC orders were ex-parte and, in the interest of justice, decided to remit the matter back to the Assessing Officer for a fresh decision.

The Tribunal found the assessee's explanation for non-response to be bonafide and genuine. Therefore, the Tribunal remitted both applications back to the CIT(Exemptions) for fresh consideration, directing a reasonable opportunity of being heard to the assessee.

The Tribunal noted the assessee's persistent failure to appear before or provide submissions to the lower authorities despite numerous opportunities. The appeals were filed before the Tribunal with explanations for non-compliance, but the fundamental lack of cooperation with the AO and CIT(A) was a significant factor.

The Tribunal held that the CIT(A)'s order was not sustainable as it did not ascertain the merits of the additions, particularly whether substantive additions were made elsewhere. The Tribunal also noted issues with notice delivery and the assessee's lack of proper opportunity to be heard.

The Tribunal permitted the assessee to withdraw the appeal as the grievance no longer survived after the fresh assessment order. The Revenue had no objection to the withdrawal.

The Tribunal held that the assessee failed to provide adequate evidence to substantiate the rendition of consultancy services by Shri Prakash Nath Swamiji, making the expenditure not wholly and exclusively for the purpose of business. The Tribunal also upheld the disallowances for delayed deposit of PF/ESI contributions and non-deduction of TDS, citing relevant Supreme Court decisions and statutory provisions. The initiation of penalty proceedings was deemed premature.

The excerpt does not contain the tribunal's holding or decision on the merits of the case. It only identifies the parties, assessment year, and the filing of the appeal.

The Tribunal held that the issue of eligibility for deduction under section 80P on the interest income was already decided and attained finality. However, the Tribunal found merit in the assessee's submission regarding the allowability of corresponding expenditure (cost of funds and administrative expenses) and restored this limited issue to the Assessing Officer for fresh examination.

Regarding the provision for interest, the Tribunal held that even if disallowed, the addition would be absorbed by the deduction u/s 80P(2)(a)(i), leading to a revenue-neutral exercise. For the interest income from scheduled banks, the Tribunal found that the AO did not properly examine the nature and source of funds, which are crucial for determining eligibility for deduction u/s 80P(2)(a)(i).

The Tribunal held that the verification of a return is a procedural requirement. A delay in verification, when the return was filed within the due date, is a curable procedural defect and does not invalidate the return. Therefore, the denial of deduction based solely on delayed verification is not justified.

The Tribunal held that the AO and CIT(A) erred in disallowing the deduction u/s 80P(2)(a)(i) based solely on the society's name and a partial reading of its objects. A careful perusal of the byelaws showed that providing credit facilities to members was indeed an objective. Therefore, the assessee is eligible for deduction u/s 80P(2)(a)(i) on the enhanced profit arising from the addition related to provisions.

The Tribunal held that the CIT(A) erred in dismissing the appeal in limine without adjudicating on merits, as the assessee had provided a detailed statement of facts. The Tribunal also found that the AO's estimation of agricultural income lacked a scientific basis and cogent material, particularly considering the nature of crops and verifiable banking transactions. The addition made by the AO was not sustained.

The Tribunal noted that the assessee had produced some documents like land records, cultivation details, sale invoices, and expense statements, but the AO had rejected the claim due to perceived discrepancies and assumptions regarding agricultural yield without comprehensive verification. The Tribunal found that a fresh examination at the AO's level was required.

The Tribunal condoned the delay in filing the appeal before the CIT(A), citing the Supreme Court's directives regarding the exclusion of the Covid-19 pandemic period for limitation purposes. It noted that the assessment was ex parte and the CIT(A) had not adjudicated on merits. Therefore, in the interest of substantial justice, the Tribunal set aside the orders of the lower authorities and remanded the entire matter back to the AO for fresh adjudication on merits, providing the assessee an opportunity to explain the nature and source of deposits.

The Tribunal held that the addition made by the AO and sustained by the CIT(A) under Section 69A was not justified. The Tribunal noted that the ownership of the land and the fact of agricultural activity were not disputed, and the AO did not provide material to show income from sources other than agriculture. The absence of bills alone cannot be a sole ground for treating receipts as unexplained income, especially given the nature of rural agricultural transactions.

The Tribunal held that there was no prohibition for co-operative societies to accept demonetized notes before December 31, 2016. The Specified Bank Notes (Cessation of Liabilities) Act, 2017, which prohibited such transactions, came into effect later. The Tribunal noted that the AO made the addition without verifying the details provided by the assessee explaining the nature and source of the credit.

The Tribunal held that the Assessing Officer incorrectly invoked Section 69A by isolating only the demonetization period deposits without considering the overall pattern of bank transactions. The consistent cash flow indicated small-scale business activities, and the omission of business income appeared to be a mistake.

The Tribunal held that the CIT(A) should have examined the issues on merits after granting an adequate opportunity of hearing. Passing an ex-parte order without considering the merits defeats the purpose of appellate proceedings.

The Tribunal held that the Assessing Officer is duty-bound to dispose of objections raised by the assessee against the reopening proceedings by passing a speaking order before passing the reassessment order. Failure to do so vitiates the assessment order. Following the decisions of the Hon'ble Supreme Court and Karnataka High Court, the Tribunal quashed the reassessment.

The Tribunal noted that the AO's addition under Section 68 might lead to double taxation if the amounts were already offered as income. The Tribunal found that while the assessee failed to provide adequate details, the issue of verification of cash deposits and their taxability needed further examination.

The Tribunal held that the reassessment notice u/s 148 was validly issued on 31.03.2021. Regarding the grounds related to gross receipts and net profit, the Tribunal found the AO's estimation to be on the higher side and directed the AO to recompute income based on Form 26AS receipts at a net profit rate of 0.50%.

The Tribunal, following the jurisdictional High Court's decision in Tumkur Merchants Souharda Credit Cooperative Ltd., held that interest income earned by a cooperative society on temporary investment of its surplus business funds is attributable to its business and eligible for deduction under Section 80P(2)(a)(i). However, the matter was remanded for fresh examination to ascertain the source of funds for such investments.

The Tribunal held that the AO had made proper inquiries and taken a conscious decision based on the materials available. The PCIT's revision under Section 263 was based on a difference of opinion, which is not permissible. The assessment order was therefore not erroneous.

The Tribunal held that interest income earned from statutory deposits, fixed deposits, and saving bank accounts maintained by the cooperative society, where such deposits are a statutory requirement or a prudent business decision to park surplus funds, is attributable to the business of providing credit facilities. Therefore, such interest income is eligible for deduction under Section 80P(2)(a)(i) of the Act, except for interest on income tax refund.

The Tribunal held that interest income earned by a cooperative society from surplus funds deposited in banks is attributable to its business of providing credit facilities and is eligible for deduction under Section 80P(2)(a)(i). Regarding demonetized deposits, the Tribunal found that the assessee had provided details of members and transactions, and the AO had not properly verified the source. The issue was remitted to the AO for fresh verification.

The Tribunal condoned the delay in filing the appeal, stating that the assessee's unawareness of the assessment order until penalty proceedings and subsequent engagement of a Chartered Accountant constituted sufficient cause. It further held that the Assessing Officer's addition of the entire sale consideration without allowing for cost of acquisition or construction was unjust. The case was remanded back to the Assessing Officer to allow the assessee 90 days to substantiate her claims regarding construction and acquisition costs and other expenses.