ITAT Bangalore Judgments — April 2026

The Tribunal held that Section 153C was incorrectly invoked as the assessee was the searched person, not an 'other person'. Therefore, the assessment orders for AY 2011-12 to 2016-17 were quashed. However, for AY 2017-18, the additions based on the assessee's own disclosure under Section 132(4) were upheld.

The Tribunal held that Section 153C was incorrectly invoked as the assessee was the searched person, not an 'other person'. Therefore, the assessment orders for AY 2011-12 to 2016-17 were quashed. However, for AY 2017-18, the additions based on the assessee's own disclosure under Section 132(4) were upheld.

The Tribunal held that Section 153C was incorrectly invoked as the assessee was the searched person, not an 'other person'. Therefore, the assessment orders for AY 2011-12 to 2016-17 were quashed. However, for AY 2017-18, the additions based on the assessee's own disclosure under Section 132(4) were upheld.

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 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 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 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 Section 153C was incorrectly invoked as the assessee was the searched person, not an 'other person'. Therefore, the assessment orders for AY 2011-12 to 2016-17 were quashed. However, for AY 2017-18, the additions based on the assessee's own disclosure under Section 132(4) were upheld.

The Tribunal held that the delay in filing the appeal before the CIT(A) was for sufficient cause and should have been condoned. It further held that the APMC's income is exempt under Section 10(26AAB) of the Income Tax Act, irrespective of its PAN status.

The Tribunal held that filing of Form 10B before the processing of the return, even if delayed, constitutes sufficient compliance for claiming exemption under Sections 11 and 12. The delay in filing is considered a procedural aspect and not a substantive bar to claiming the exemption.

The Tribunal held that Section 153C was incorrectly invoked as the assessee was the searched person, not an 'other person'. Therefore, the assessment orders for AY 2011-12 to 2016-17 were quashed. However, for AY 2017-18, the additions based on the assessee's own disclosure under Section 132(4) were upheld.

The Tribunal held that the delay in filing the appeal before the CIT(A) was for sufficient cause and should have been condoned. It further held that the APMC's income is exempt under Section 10(26AAB) of the Income Tax Act, irrespective of its PAN status.

The Tribunal held that the delay in filing the appeal before the CIT(A) was for sufficient cause and should have been condoned. It further held that the APMC's income is exempt under Section 10(26AAB) of the Income Tax Act, irrespective of its PAN status.

The Tribunal held that the delay in filing the appeal before the CIT(A) was for sufficient cause and should have been condoned. It further held that the APMC's income is exempt under Section 10(26AAB) of the Income Tax Act, irrespective of its PAN status.

The Tribunal held that filing of Form 10B before the processing of the return, even if delayed, constitutes sufficient compliance for claiming exemption under Sections 11 and 12. The delay in filing is considered a procedural aspect and not a substantive bar to claiming the exemption.

The Tribunal held that Section 153C was incorrectly invoked as the assessee was the searched person, not an 'other person'. Therefore, the assessment orders for AY 2011-12 to 2016-17 were quashed. However, for AY 2017-18, the additions based on the assessee's own disclosure under Section 132(4) were upheld.

The Tribunal held that Section 153C was incorrectly invoked as the assessee was the searched person, not an 'other person'. Therefore, the assessment orders for AY 2011-12 to 2016-17 were quashed. However, for AY 2017-18, the additions based on the assessee's own disclosure under Section 132(4) were upheld.

The Tribunal held that the ITAT's directions to the DRP and TPO were not properly complied with, leading to an irregularity in the assessment. The Tribunal directed the AO to recompute the arm's length price adjustment by excluding five specific comparable companies.

The Tribunal decided that the disallowance of INR 32,69,18,269 under Section 40(a) of the Act was unjustified. The Tribunal noted that the assessee had provided comprehensive details via email on 24.03.2021, including a reconciliation of expenditure and payments, and a summary of expenses subject to TDS. The assessee had asserted that tax was not deductible on this sum, which comprised numerous low-value transactions. Since the DRP did not specify under which section tax should have been deducted or paid, and the AO raised no adverse comments during remand proceedings, the disallowance was deemed lacking justification. The Tribunal directed the Assessing Officer to delete this disallowance. Regarding the TDS credit, both parties agreed to a review by the Assessing Officer, with an opportunity for the assessee to be heard. The Assessing Officer was directed to verify the credit and grant it, providing a hearing if the credit is less than claimed. Ground No. 1, being general, was dismissed as no arguments were advanced. The ratio is that disallowances under Section 40(a) require specific identification of the non-deductible nature of expenses and failure to deduct tax, and mere lack of detailed documentation, when other evidence suggests non-deductibility or low-value transactions, may not justify disallowance.

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 decided on the remaining grounds as follows: Grounds 1 to 6, pertaining to transfer pricing issues including imputation of interest on delayed receivables, were permitted to be withdrawn by the assessee and were accordingly dismissed as withdrawn. Regarding ground 7, concerning the set-off of brought forward losses and unabsorbed depreciation, the Tribunal, after examining the schedules of the return of income for AY 2014-15 and AY 2015-16, found that these claims were not given effect to by the AO in the final assessment order. Therefore, this issue was remitted back to the AO to recompute the income after giving effect to the unabsorbed depreciation and brought forward losses. For ground 8, regarding the surcharge calculation, the Tribunal observed that the AO had applied a 12% surcharge on a total tax of Rs. 3,35,62,118/-, which amounted to Rs. 40,27,454/-. The Tribunal noted that for domestic companies with total income exceeding Rs. 10 crores, the surcharge should be 10% of the income-tax. Thus, the AO's calculation of 12% was deemed incorrect, and this issue was also remitted to the AO for recomputation in accordance with law. On ground 9, concerning the non-computation of tax liability under Section 115JB, the Tribunal agreed with the assessee that the AO had erred by computing tax liability only under normal provisions. This issue was remitted to the AO for a fresh calculation as per Section 115JB. Lastly, for ground 10, relating to the levy of interest under Section 234B, the Tribunal considered it consequential in nature and remitted it to the AO to recalculate the interest after considering the other issues raised by the assessee.

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 noted that the assessee submitted a comprehensive paper book before it, which included various documents supporting the construction expenses and claim. The assessee also cited medical issues and portal difficulties for not submitting these documents earlier. Considering the sufficient cause shown, the matter was remitted back to the Assessing Officer.

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.

The Tribunal found the assessee's explanation for the delay to be plausible and sufficient. Consequently, the delay was condoned, and the case was remitted back to the CIT(A)/NFAC for adjudication on its merits.

The Tribunal held that the assessee had shown sufficient cause for the delay in filing the appeal before the CIT(A)/NFAC, citing limited administrative and technical resources in a rural setting. The Tribunal condoned the delay and remitted the issue back to the AO for a fresh decision.

The Tribunal held that the income earned by the assessee from the sale of software products as software licenses, sale of software embedded in hardware, and hardware replacement and support services is not royalty within the meaning of Article 12 of the India-Switzerland DTAA. The Tribunal relied on the decisions of the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence P. Ltd. (supra), which was also sustained in review, and subsequent decisions in Microsoft Regional Sales Pte Limited and MOL Corporation. The Tribunal found that these decisions cover the facts of the present case, including the nature of software licenses and embedded software. The reasoning was that the supply of software licenses, even post-amendment, does not constitute royalty as per the beneficial provisions of the tax treaty. The Tribunal explicitly noted that the Supreme Court's decision in Engineering Analysis Centre of Excellence P. Ltd. covers the sale of software products as software licenses, sale of software embedded in hardware, and hardware replacement and support services. Therefore, the addition made by treating the income as royalty/FTS was deleted.

The Tribunal held that a fresh notice under section 143(2) is not mandatory when an assessment is modified or re-done pursuant to a section 263 order, as these proceedings are a continuation of the original assessment. The CIT(A)'s order was reversed.

The Tribunal held that the final assessment order was passed beyond the one-month period prescribed by Section 144C(13) of the Income Tax Act, 1961, from the end of the month in which the DRP's directions were received. Therefore, the assessment order was annulled.

The Tribunal held that when the High Court admits an appeal on substantial questions of law, the sustainability of the addition becomes debatable. Therefore, the penalty cannot be levied as the assessee cannot be held guilty of concealment or furnishing inaccurate particulars.