ITAT Bangalore Judgments — April 2026

The Tribunal held that while the assessee has a responsibility to submit necessary documents, the CIT(Exemptions) did not consider the assessee's email seeking an adjournment, which was sent before the order was passed. Therefore, in the interest of justice, the matter should be reconsidered.

The Tribunal acknowledged that the assessee could not represent his case before the CIT(A)/NFAC and accepted the grounds presented, including the affidavit and death certificate regarding his mother's passing. In the interest of justice and fair play, the Tribunal decided to remit the issue back to the CIT(A)/NFAC for a fresh decision.

The Tribunal held that the rejection of the application was due to a bonafide, unintentional, and clerical mistake in filing the application under the wrong clause. The Tribunal observed that procedural lapses should not override substantial justice and that the assessee should have been allowed to rectify the mistake.

The Tribunal noted that the quantum appeal was remanded by a previous order and was pending before the CIT(A). Therefore, the Tribunal held that the penalty appeal could not survive until the quantum appeal was decided on merits. The penalty appeal was remitted back to the CIT(A) to be clubbed with the pending quantum appeal.

The Tribunal held that the assessee should be provided an opportunity to submit documentary evidence for claiming deductions and exemptions, particularly those available in Form 16, which were inadvertently omitted. It was noted that the revenue should not benefit from the assessee's ignorance, and taxing income not legally due is impermissible. The matter was remanded to the AO for a de novo assessment.

The Tribunal held that the denial of exemption solely on the ground of procedural lapses (incorrect audit form) is not justified when the substantive conditions for exemption are met. The Tribunal emphasized that genuine claims should not be denied due to inadvertent technical errors, citing various Supreme Court and High Court judgments.

The Tribunal condoned the delay of 54 days in filing the appeal before the CIT(A)/NFAC, finding the assessee's explanation plausible. The entire issues in dispute were remitted back to the CIT(A)/NFAC for fresh adjudication on merits after granting a reasonable opportunity of being heard.

The Tribunal noted that the assessee could not properly represent their case before the lower authorities. In the interest of justice, the Tribunal decided to set aside the orders and remit the entire issue back to the Assessing Officer for a fresh decision.

The Tribunal held that the reassessment proceedings and the order passed were bad in law because the AO failed to dispose of the objections filed by the assessee against the reasons for reopening the assessment. This failure violated the mandatory procedure as laid down by the Hon'ble Jurisdictional High Court and Supreme Court.

The Tribunal found that the CIT(A) order was ex-parte and against the principles of natural justice. Considering the assessee had cooperated with the AO and the order was ex-parte, the Tribunal decided to remit the issue back to the CIT(A) for fresh consideration.

The Tribunal held that when issues are remanded by a higher appellate authority to the AO or TPO, a draft assessment order must be issued first, allowing the assessee the option to approach the DRP. The AO's failure to issue a draft assessment order before passing the final assessment order, as required by Section 144C of the Income Tax Act, renders the assessment order unsustainable.

The Tribunal noted that the issue of deduction on interest earned from investments, both statutory and from idle funds, had been decided in favor of the assessee by a co-ordinate bench for earlier assessment years. The Tribunal emphasized the wider import of 'attributable to' in Section 80P(2)(d), indicating that income from investments of surplus funds, even if not immediately required for lending, is considered part of the business activity of providing credit facilities.

The Tribunal held that the CIT(A) should have considered the submissions and evidence filed by the assessee before dismissing the appeal. Dismissal without considering materials violates principles of natural justice. The matter was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the CIT(A) erred in dismissing the appeals ex-parte without considering the submissions and evidence filed by the assessee, violating principles of natural justice. The issues required factual verification and examination of evidence. Therefore, the appeals were set aside to the CIT(A) for fresh adjudication.

The Tribunal held that the rejection of the assessee's segmental financial statements by the lower authorities was not justified and restored the issue to the Assessing Officer for fresh examination. Regarding interest on overdue receivables, the Tribunal directed reconsideration of the working capital adjustment claim and, if not granted, upheld the addition with a direction to use LIBOR plus markup for benchmarking.

The Tribunal held that the delay in filing appeals was for sufficient cause due to the Assessee's precarious situation arising from the incorrect PAN classification. The Assessee's income is exempt under Section 10(26AAB), and the incorrect PAN does not warrant denial of this exemption.

The Tribunal noted that the quantum appeal concerning the addition of Rs. 19,78,810 was restored to the Assessing Officer for fresh adjudication, with directions to decide in accordance with the Double Taxation Avoidance Agreement. Therefore, the present penalty appeal was deemed premature.

The Tribunal is considering the Revenue's appeal regarding disallowances under Section 40(a)(i) for payments made to foreign entities, specifically concerning whether these payments constitute Fees for Technical Services (FTS) or Fees for Included Services (FIS) taxable in India under Section 9(1)(vii) or applicable DTAA provisions, and if TDS under Section 195 was required. The appeal was filed late.

The Tribunal held that the rejection of a prior application for registration under Section 12AB does not preclude a subsequent application from being granted if all statutory requirements are met. The failure to appeal a previous rejection should not prejudice the current application's eligibility.

The Tribunal held that the essential conditions for invoking Section 153C were not met as the assessee himself was the searched person. The assessment proceedings initiated under Section 153C were consequently quashed for the assessment years 2011-12 to 2016-17. However, for assessment year 2017-18, the additions based on the assessee's statement under Section 132(4) were upheld.

The Tribunal held that since the search was conducted at the assessee's own premises and documents were seized therefrom, the assessee is the 'searched person' and not an 'other person'. Consequently, the proceedings under Section 153C were held to be invalid. The Tribunal upheld additions for AY 2017-18 based on a statement recorded under Section 132(4).

The Tribunal held that the First Appellate Authority erred in not condoning the 84-day delay in filing the appeals, considering the assessee's precarious situation with its incorrect PAN classification and inability to file returns. It was further held that the assessee's income is indeed exempt under Section 10(26AAB) of the Income Tax Act, irrespective of the PAN issue, and the assessment orders should be set aside on merits.

The Tribunal noted that the assessee faced communication issues under the faceless scheme. The assessee's counsel argued that nominal members do not disentitle the society from Section 80P deduction, citing a Supreme Court ruling, and that investments were in registered cooperative societies.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause due to the circumstances of the company being in liquidation. However, the Tribunal subsequently dismissed the assessee's appeal as infructuous because the company was in liquidation, assessed at a loss, and the Income Tax Department had not claimed any dues from the impugned order.

The Tribunal held that filing of form 10B before the processing of the return of income, even if belated, constitutes substantial compliance for claiming exemption under sections 11 and 12. The Tribunal followed the Gujarat High Court's decision that while the requirement to file the audit report is substantive, the timelines for filing are directory.

The Tribunal held that the filing of Form 10B before the processing of the return, even if delayed, constitutes substantial compliance for claiming exemption under sections 11 and 12. The requirement of filing the audit report is substantive, but the timelines for filing are directory, especially when the report is available before the assessment is finalized.

The Tribunal noted the assessee's contention that the presence of nominal members does not disentitle them from claiming deduction under Section 80P, citing a Supreme Court decision. The Tribunal also considered the assessee's arguments regarding deduction of expenses against interest income and levy of interest under sections 234A, 234B, and 234C.

The Tribunal held that the assessment proceedings should have been initiated under Section 153A, not Section 153C, as the assessee was the searched person and documents were seized from his premises. The assessment orders under Section 153C were deemed invalid. However, for AY 2017-18, the addition based on the assessee's statement under Section 132(4) was upheld due to lack of corroborative evidence to the contrary.

The Tribunal held that since the search was conducted at the assessee's premises and documents were seized therefrom, the assessee is the 'searched person' and not an 'other person'. Therefore, the assessment should have been made under Section 153A, not Section 153C. The assessment orders for AY 2011-12 to 2016-17 were quashed.

The Tribunal held that for Section 153C to apply, a search must be conducted on a primary person, and documents relating to an 'other person' must be found. In this case, the search was conducted at the assessee's residence, and incriminating documents pertaining to the assessee were seized from his premises. Therefore, the assessee was the 'searched person,' and Section 153C was incorrectly invoked. However, for AY 2017-18, additions were based on the assessee's voluntary disclosure under Section 132(4), with no subsequent retraction or contradictory evidence, leading to upholding the addition.

The Tribunal held that the assessee was the 'searched person' because the search was conducted at their premises and documents were seized from there. Therefore, proceedings under Section 153C were incorrectly invoked. The assessment orders for Assessment Years 2011-12 to 2016-17 were quashed.

The Tribunal held that since the search was conducted at the assessee's residence and documents were seized therefrom, the assessee was the 'searched person' and assessment should have been under Section 153A, not Section 153C. For Assessment Year 2017-18, additions based on a Section 132(4) statement were upheld.

The Tribunal held that the delay in filing the appeal before the CIT(A) was for sufficient cause, considering the appellant's precarious situation due to the incorrect PAN. The Tribunal also confirmed that the appellant is an Agricultural Produce Marketing Committee and its income is exempt under Section 10(26AAB) of the Income Tax Act, regardless of the PAN status.

The Tribunal held that the assessee's income is indeed exempt under Section 10(26AAB) as it is an Agricultural Produce Marketing Committee. The error in PAN status, which prevented timely filing and correct classification, was not a sufficient reason to deny exemption. The delay in filing appeals before the CIT(A) was condoned due to the peculiar circumstances faced by the assessee.

The Tribunal held that the CIT(A) erred by dismissing the appeal for non-prosecution without deciding on merits. The CIT(A) also lacked the power to dismiss an appeal solely for non-prosecution without considering the substantive issues. Sending notices via email without explicit confirmation from the assessee in Form 35 was not proper service.

The ITAT held that the CIT(A) failed to consider the assessee's detailed statement of facts, violating principles of natural justice. The Tribunal restored the issue to the Assessing Officer for re-examination.

The Tribunal held that interest earned by the cooperative society from its surplus funds deposited in banks is attributable to its business of providing credit to members and therefore eligible for deduction under section 80 P(2)(a)(i). The Tribunal followed the Karnataka High Court's decision in Tumkur Merchants Souharda Credit Cooperative Ltd.

The Tribunal held that it is not mandatory for the AO to issue a fresh notice under section 143(2) when passing an assessment order pursuant to a section 263 order, as it is considered a continuation of the original proceedings and not a fresh assessment or reassessment. The cited Supreme Court decision in Hotel Blue Moon was deemed not applicable as it pertained to block assessments.

The Tribunal held that the entire investment in bitcoin was disclosed, and the compensation received resulted in an overall loss, not taxable gain. Therefore, the addition made by the Assessing Officer was incorrect. The matter was remitted to the Assessing Officer for further verification of the loss and confirmation that no taxable gain exists.