ITAT Bangalore Judgments — July 2026

The Tribunal held that additions based solely on third-party statements and uncorroborated entries in an excel sheet, without independent corroborative evidence or an opportunity for cross-examination, cannot be sustained. The Tribunal followed numerous judicial precedents on identical facts.

The Tribunal held that Section 2(22)(e) of the Income Tax Act was not attracted as the assessee did not hold any shares in the lender companies, and therefore, the addition made under this section was not sustainable. The disallowance under Section 14A was also directed to be recomputed.

The Tribunal admitted additional evidence, including a stock book, and held that while purchases might be from unknown sources, sales out of these purchases were not disputed. Therefore, the entire purchase could not be treated as income.

The Tribunal held that the issue of whether interest on statutory deposits is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961, needs to be restored to the Assessing Officer (AO). The Tribunal noted that the assessee is a co-operative society required to maintain certain statutory deposits as per the Karnataka Co-operative Societies Act, 1959. While the Tribunal acknowledged the assessee's argument that such interest income is attributable to its business and cited precedents like Cambay Electric Supply Industrial Co. Ltd. v. CIT and CIT v. Karnataka State Co-operative Apex Bank Ltd., it also noted that the specific quantum of amounts required to be deposited statutorily was not provided to the AO. Therefore, in the interest of justice, the issue was set aside to the AO to compute the required statutory deposit quantum and allow deduction for the corresponding interest income. The AO was also directed to verify if any interest/dividend was received from investments with other Co-operative Societies, which would be eligible for deduction under Section 80P(2)(d). The impugned order was set aside for statistical purposes.

The Tribunal condoned the delay in filing the appeal, citing substantial justice over technicalities. It set aside the CIT(E)'s order, granting the assessee another opportunity to furnish documents for registration under Section 80G.

The Tribunal held that as per Section 12A(2) of the Act, registration benefits should apply from the assessment year relevant to the financial year in which the application was made. Therefore, the registration should have been granted from AY 2026-27.

The Tribunal held that Section 2(22)(e) of the Income Tax Act was not attracted as the assessee did not hold any shares in the lender companies, and therefore, the addition made under this section was not sustainable. The disallowance under Section 14A was also directed to be recomputed.

The Tribunal found that the transaction with Vihaan resulted in a bank balance and a corresponding liability payable by the assessee to Vihaan. The matter was restored to the Assessing Officer to determine beneficial ownership of the funds.

The Tribunal held that the addition for creditors' balances under Section 68 was not justified as the assessee had substantiated the transaction with adequate evidence, including invoices and the supplier's PAN. The Tribunal also directed the AO to verify and allow carry-forward of current year loss.

The Tribunal found that the transaction with Vihaan resulted in a bank balance and a corresponding liability payable by the assessee to Vihaan. The matter was restored to the Assessing Officer to determine beneficial ownership of the funds.

The Tribunal noted the assessee's request to withdraw the appeal due to the existence of a prior appeal with defects. The Revenue had no objection to the withdrawal.

The ITAT restored the application to the CIT(E) with a direction to provide an adequate opportunity of hearing. The assessee was directed to furnish all requisite documents to substantiate its claim.

The ITAT held that the CIT(A) should have adjudicated the appeal on merits, even if the assessee failed to comply with notices. The tribunal restored the matter to the CIT(A) for fresh adjudication after considering the submitted written arguments.

The Tribunal found that the assessee had not furnished complete details and the CIT(E) had rejected the application on that basis. However, the Tribunal granted the assessee one more opportunity to furnish all required details.

The Tribunal held that the AO's estimation of gross profit was arbitrary as the assessee's books of accounts were not rejected and the trend showed increasing turnover and profit over the years. The AO should not have estimated the gross profit when the books were found to be in order.

The Tribunal held that deposits made in demonetised notes after the announcement do not automatically constitute unexplained cash credits. However, the assessee must substantiate the source and nature of these deposits with credible evidence.

The Tribunal accepted the assessee's contention that the deposits represented the purchase of demand drafts from the cooperative society for business payments. The Tribunal found no contrary material and directed the deletion of the additions.

The Tribunal held that the notice issued under Section 148 of the Act for AY 2015-16 was barred by limitation, as it was issued beyond the prescribed period. Consequently, the reassessment order and subsequent proceedings were quashed.

The Tribunal condoned the delay, finding sufficient cause. It restored both the quantum and penalty proceedings to the Assessing Officer for de novo adjudication, allowing the assessee to present their case.

The Tribunal held that the Assessing Officer (AO) erred in law by including the Transfer Pricing (TP) adjustment of INR 5,42,75,740 in the final assessment order. The Tribunal noted that the AO himself recorded in the assessment order that the adjustment proposed was NIL to give effect to the Hon'ble DRP's directions. However, the AO proceeded to pass the final assessment order disregarding these directions, which is a clear violation of section 144C of the Income Tax Act, 1961. The Tribunal emphasized that as per section 144C(10), every direction issued by the DRP is binding on the AO, and under section 144C(13), the AO is duty-bound to pass the assessment order in conformity with these directions. The AO misdirected himself by not giving effect to the binding directions of the DRP, rendering the assessment order, which was a replica of the draft assessment order, illegal, bad in law, and void ab initio. Therefore, the assessment order incorporating the TP adjustment contrary to the DRP's directions was quashed. The appeal filed by the assessee was allowed.

The Tribunal noted that the assessee failed to respond to the CIT(E)'s notices, leading to an ex parte rejection. To ensure justice, the Tribunal restored the application to the CIT(E) for fresh adjudication, allowing the assessee another opportunity to present its case and documents.

The Tribunal condoned the delay, finding sufficient cause. It restored both the quantum and penalty proceedings to the Assessing Officer for de novo adjudication, allowing the assessee to present its case.

The Tribunal restored the appeal to the CIT(A) for de novo adjudication on merits, granting the assessee another opportunity to present its case after the ex parte order.

The Tribunal accepted the assessee's contention that the deposits represented the purchase of demand drafts from the cooperative society for business payments. The Tribunal found no contrary material and directed the deletion of the additions.

The Tribunal held that the notices issued under Section 148A(b) were illegal and bad in law as they did not provide the minimum seven days' time for response, violating principles of natural justice. Consequently, all subsequent proceedings were quashed.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The Tribunal held that the Faceless Appeal Scheme, 2021, mandates granting a personal hearing upon request. Since the CIT(A) failed to provide this, the appeals were set aside and restored for de novo adjudication.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The ITAT condoned the delay, finding sufficient cause for the late filing. The tribunal restored the matter to the CIT(A) for a fresh adjudication on merits, granting the assessee another opportunity to present its case.

The Tribunal held that the Faceless Appeal Scheme, 2021, mandates granting a personal hearing upon request. Since the CIT(A) failed to provide this, the appeals were set aside and restored for de novo adjudication.

The Tribunal, in the interest of justice, granted the assessee one more opportunity to furnish supporting documents. The issue was restored to the AO for de novo adjudication, with a cost of Rs. 5000/- imposed on the assessee.

The Tribunal found that the details submitted by the assessee in appeal were not verified by lower authorities. Therefore, the issue was restored to the Assessing Officer for de novo adjudication after verification of the submitted details.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The Tribunal held that the assessees are entitled to exemption for retrenchment compensation under Section 10(10B) and full exemption for leave encashment under Section 10(10AA). Delays in filing appeals before the CIT(A) were condoned.

The Tribunal held that the CIT(A) erred in dismissing the appeal due to delay, as the period of limitation was extended by the Supreme Court's directions during the COVID-19 pandemic. The matter was restored to the CIT(A) for adjudication on merits.

The Tribunal held that the penalty orders were passed beyond the limitation period prescribed under Section 275(1)(c) of the Income Tax Act. Since the penalty proceedings were initiated based on information from another assessee's search, the limitation period was calculated from the date of the show cause notice.

The Tribunal held that the penalty orders were passed beyond the limitation period prescribed under Section 275(1)(c) of the Income Tax Act. Since the penalty proceedings were initiated based on information from another assessee's search, the limitation period was calculated from the date of the show cause notice.

The Tribunal held that interest earned by a cooperative society providing credit facilities on surplus funds temporarily parked in bank deposits is attributable to its business and eligible for deduction under Section 80P(2)(a)(i).

The Tribunal held that interest earned by a cooperative society from parking surplus funds with banks is attributable to its business of providing credit facilities and is eligible for deduction under Section 80P(2)(a)(i). The Tribunal distinguished this from deductions under Section 80P(2)(d) concerning investments with other cooperative societies.

The Tribunal held that the assessee had discharged the primary onus under Section 68 by proving the identity and genuineness of the transaction, which was routed through banking channels. Low returned income alone is not sufficient to reject creditworthiness when bank statements are available.

The Tribunal, considering the assessee's plea for a last opportunity and in the interest of substantial justice, decided to remand the matter back to the CIT(Exemptions) for fresh consideration. The assessee was cautioned against seeking unnecessary adjournments.

The Tribunal held that the penalty orders were passed beyond the limitation period prescribed under Section 275(1)(c) of the Income Tax Act. Since the penalty proceedings were initiated based on information from another assessee's search, the limitation period was calculated from the date of the show cause notice.

The Tribunal held that assessments under Section 153C are only valid if based on incriminating materials seized during a search. Additions made based on regular books of accounts, without such materials, are not sustainable.

The Tribunal permitted the assessee to withdraw the appeal as the subsequent application was approved and the grievance was addressed. The appeal was accordingly dismissed as withdrawn.

The Tribunal held that Section 35D(2)(c) specifically refers to expenditure incurred by a company in connection with the issue of shares or debentures. Since the assessee is a trust and its units are distinct from shares or debentures, the deduction is not available to it.

The Tribunal admitted the additional evidence filed by the assessee, finding sufficient cause for non-furnishing before lower authorities. The matter was restored to the AO for de novo adjudication.