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The Tribunal held that the assessee's activities, which involve recruitment and training of insurance agents for TATA AIA Insurance Company, constitute ordinary business activity and not professional or technical consultancy. The Tribunal noted that the assessee is not engaged in insurance agency business earning commission or brokerage. The Tribunal referred to Section 44AA of the Act, stating that the assessee's activities do not fall within the notified professions. The Tribunal concluded that the requirement for being a professional is rendering services requiring specific knowledge, skill, or training, and the activity must fall within the professions covered by Section 44AA. Since the assessee's activities were contractual business support services and not a notified profession or technical consultancy, the provisions of Section 44ADA were not applicable. The Tribunal directed the AO to delete the addition made under Section 44ADA and allowed the assessee to compute profits under Section 44AD, subject to statutory conditions. The grounds raised by the assessee were allowed.
The Tribunal held that the penalty levied under section 270A of the Income-tax Act was not sustainable. The Tribunal noted that the issue of deduction under section 80P(2)(d) for interest earned from cooperative banks was highly debatable, especially given conflicting decisions of the Karnataka High Court and pronouncements from other High Courts. The Tribunal found that the Karnataka High Court's decision dated June 16, 2017, which was relied upon by the lower authorities, was not considered in an earlier favorable decision of the same High Court dated January 5, 2017. Furthermore, this decision was pending before the Supreme Court. The Tribunal also observed that the penalty notice alleged only under-reporting of income, but the penalty order imposed it for under-reporting arising from misreporting, making the charge imprecise. Crucially, the Tribunal found that the assessee's claim did not fall within any of the six categories of misreporting specified in section 270A(9). The Tribunal concluded that a debatable claim, even if later found to be legally untenable, does not constitute misreporting. Moreover, even if income was under-reported, the penalty could not be imposed as the bona fide claim fell within the exclusion in section 270A(6)(a). Accordingly, the Tribunal directed the deletion of the penalty.
The Tribunal considered the rival submissions. Cash of ₹12 lakh was found at the assessee's residence during the search. The assessee had provided inconsistent explanations for its source. Before the Tribunal, the assessee produced invoices for the sale of gold and photographs of his wife engaged in tailoring work. The lower authorities had made the addition due to the lack of substantiation. Since jewellery-sale invoices were now produced, the Tribunal directed the assessee to submit them to the Assessing Officer. The Assessing Officer was instructed to verify the bills, examine the issuing parties, and investigate how cash of that magnitude was paid. After this inquiry, the Assessing Officer is to decide the addition in accordance with the law. The grounds concerning the validity of assessment proceedings and approval under section 153D were not pressed and were dismissed. Therefore, ground number 5, relating to the addition of cash, was restored to the Assessing Officer for fresh consideration. The appeal was partly allowed for statistical purposes.
The Tribunal held that the addition of Rs. 2,00,000 made by the Assessing Officer was unwarranted. The assessee had consistently maintained that the deposit represented sales proceeds and had furnished the complete cash book of Royal Traders for the period preceding demonetisation, supported by monthly and daily sales registers. The Tribunal noted that Royal Traders had a total turnover of Rs. 53,68,170 and average monthly sales of approximately Rs. 4,47,000. In these circumstances, singling out the Rs. 2,00,000 cash deposit made during the demonetisation period and treating it as unexplained was considered inappropriate. The Tribunal also found that the CIT(A) had required unusual particulars, such as the Permanent Account Number of each customer, without considering that the concern's turnover had been taxed under section 44AD. Therefore, the Tribunal reversed the orders of the lower authorities and allowed ground no. 2 of the assessee's appeal, directing the deletion of the addition. The ratio decidendi is that where a business has a substantial turnover and a history of regular cash deposits, a specific cash deposit during a period of cash crunch, if explained by business collections and supported by sales records, should not be treated as unexplained income under section 68, especially when the assessee is covered by presumptive taxation provisions like section 44AD.
The Tribunal noted that the learned PCIT(A) had passed the order ex parte due to the assessee's non-compliance with hearing notices. However, the assessee was now duly represented and wished to pursue the appeals on merits. The assessee's learned AR undertook to comply with all notices if the appeals were restored to the file of the First Appellate Authority. In the interest of justice, the Tribunal decided to grant the assessee one more opportunity to present its case on merits before the learned PCIT(A)/CIT(A). Consequently, the common impugned order was set aside, and the matters were restored to the file of the learned PCIT(A)/CIT(A) for de novo adjudication. The Tribunal directed that no order should be passed without affording a reasonable opportunity of hearing. The assessee was also directed to furnish/update their email address for receiving hearing notices and to appear on all scheduled dates without default. As the matters were being restored for adjudication on merits, the other grievances raised by the assessee were not adjudicated at this stage. The grounds raised by the assessee were allowed for statistical purposes.
The Tribunal allowed the assessee's appeal on a legal ground. The Tribunal noted that the AO initially proposed to add Rs. 33,60,000/- based on cash deposits and issued a notice under Section 148A(b) with proper approval. However, while completing the assessment, the AO made a new addition of Rs. 33,95,000/- representing loan repayments. This amount was neither mentioned in the Section 148A(b) notice nor in the order passed under Section 148A(d). Crucially, the AO did not obtain the necessary approval from the specified authority for treating this new amount as escaped income. The Tribunal emphasized that post-April 1, 2021, the procedure under Section 148A, including obtaining prior approval for enquiries and passing an order under Section 148A(d), is mandatory before issuing a notice under Section 148. Since the AO failed to follow this procedure for the Rs. 33,95,000/- addition, it was deemed unsustainable. Consequently, the addition of Rs. 33,95,000/- was set aside. The Tribunal did not adjudicate on the other grounds raised on merits.
The Tribunal condoned the delay of 80 days in filing the appeal, accepting the assessee's explanation of a medical reason supported by a medical certificate. The Tribunal acknowledged the assessee's submission that he was engaged in the fish trading business and was suffering from a medical issue that prevented his appearance before the revenue authorities. Considering these circumstances and the assessee's claim of possessing supporting records for cash deposits, the Tribunal decided to grant one more additional opportunity of being heard. Consequently, the Tribunal set aside the assessment order and the penalty order, remitting the issue to the file of the AO for denovo consideration. The AO was directed to await the outcome of the quantum appeal before deciding the penalty proceedings and to grant a personal hearing to the assessee. The assessee was also given liberty to produce necessary documents. The appeal was partly allowed for statistical purposes.
The Tribunal held that the assessee's activities, as reflected in its Memorandum of Association, included managing the temporal affairs of the Oblates of St. Francis de Sales and promoting their spiritual, educational, and other interests. The Tribunal noted that the assessee also received significant foreign contributions and undertook religious activities alongside operating schools. Therefore, the Tribunal found that the assessee's registration as solely a charitable trust required modification to reflect its religious-cum-charitable nature. The Tribunal directed the learned CIT(E) to examine the matter further and, if the legal requirements were met, grant registration as a religious-cum-charitable trust. The ratio decidendi is that an entity's registration status must accurately reflect its declared and evidenced objects and activities, including both religious and charitable components, for the correct application of relevant Income Tax Act provisions.
The Tribunal condoned the delay of 80 days in filing the appeal, accepting the assessee's explanation of a medical reason supported by a medical certificate. The Tribunal acknowledged the assessee's submission that he was engaged in the fish trading business and was suffering from a medical issue that prevented his appearance before the revenue authorities. Considering these circumstances and the assessee's claim of possessing supporting records for cash deposits, the Tribunal decided to grant one more additional opportunity of being heard. Consequently, the Tribunal set aside the assessment order and the penalty order, remitting the issue to the file of the AO for denovo consideration. The AO was directed to await the outcome of the quantum appeal before deciding the penalty proceedings and to grant a personal hearing to the assessee. The assessee was also given liberty to produce necessary documents. The appeal was partly allowed for statistical purposes.
The Tribunal held that the three companies, Mindtree Ltd. (turnover Rs. 10,525.3 crores), LTI Mindtree Ltd. (turnover Rs. 14,406 crores), and Tata Consultancy Services (turnover Rs. 1,60,341 crores), should be excluded from the comparable set for the software development segment. The reasoning was that their massive turnovers, brand value, and scalability of operations and assets are not comparable to the assessee's FAR, which has a turnover of Rs. 55.6 crores. The Tribunal also directed the AO to adopt LIBOR + appropriate markup or any other suitable rate for benchmarking interest on receivables, acknowledging that the assessee raised invoices in USD and the TPO had noted that LIBOR + markup should be applied in such cases. The appeal was partly allowed.
The Tribunal dismissed the assessee's appeal. Regarding the addition of Rs. 13,40,160/- under section 69A, the Tribunal noted that while the assessee claimed cash deposits were from earlier withdrawals, no reconciliation statement was provided either before the CIT(Appeals) or the Tribunal. The onus was on the assessee to furnish such reconciliation. The Tribunal also observed that the CIT(Appeals) categorically denied the existence of a remand report, and the assessee's contention of a favorable remand report was not substantiated. The Tribunal found no infirmity in the CIT(Appeals)'s order in confirming the addition due to the lack of reconciliation and information on disputed credits. Therefore, the grounds raised by the assessee were dismissed. The Tribunal did not explicitly address the sustainability of the section 148 notice or the assessment being based on different reasons, as the primary issue of reconciliation for the sustained addition led to the dismissal.
The Tribunal condoned the delay of 56 days in filing the appeal before it, finding the explanation offered by the assessee in her condonation application and affidavit to be plausible and a sufficient cause for the delay. The Tribunal agreed with the assessee's contention that due to a change of address, she lacked communication and could neither represent her case before the AO nor file the appeal before the CIT(A)/NFAC within the prescribed period. Consequently, in the interest of justice, equity, and fair play, the Tribunal decided to remit the entire issues in dispute back to the file of the Assessing Officer (AO) to decide afresh in accordance with the law. The assessee was directed to be granted a reasonable opportunity of being heard and to produce all relevant documents. The assessee was also directed to update her contact details on the income tax portal, with a warning against future defaults. The issue regarding the addition of Rs. 2,24,00,000/- and the assessee's share of Rs. 79,00,000/- was not adjudicated on merits by the Tribunal, as the matter was remanded to the AO.
The Tribunal held that the penalty proceedings initiated under section 274 read with section 270A of the Act are vitiated due to a defective notice. The Tribunal noted that section 270A(2) contains different circumstances for under-reporting of income, and the AO was required to specify the particular clause applicable to the assessee's case. The notice issued was general, referring only to 'under-reporting of income' without specifying the relevant sub-clause. This lack of specificity deprived the assessee of a proper opportunity to defend its case, violating the principles of natural justice. The Tribunal relied on the decision of the Madras High Court in PCIT v. Shri R. Elangovan, which held that where a section provides for different contingencies for penalty, the AO must specify the clause under which the assessee is proceeded against. Consequently, the penalty levied under section 270A was deleted. The appeals of the assessee were allowed.
The Tribunal held that once an assessment order is set aside by a competent authority under section 263 of the Act, it cannot form the basis for further appellate adjudication. An appeal under section 246A arises from a specific assessment order. If that order is itself set aside and a fresh assessment is directed, the foundation of any pending appeal against the original order ceases to exist. The Tribunal found merit in the assessee's concern regarding parallel proceedings, inconsistent findings, and overlapping consequences. The Tribunal reasoned that the original assessment order dated March 19, 2024, was set aside by the PCIT on March 18, 2025, and a fresh assessment order was passed on February 19, 2026. Therefore, when the CIT(A) passed the impugned order on March 31, 2026, the original assessment order was no longer the operative assessment. Consequently, the impugned order of the CIT(A) confirming the addition based on the original assessment could not be sustained. The Tribunal set aside the CIT(A)'s order and declared the appellate proceedings arising from the original assessment as infructuous. The Tribunal clarified that it had not opined on the merits of the cash receipts addition and that the assessee could raise all contentions in the pending appeal against the fresh assessment. The CIT(A) was directed to adjudicate the appeal against the fresh assessment independently, without being influenced by the now-set-aside order.
The Tribunal held that the learned CIT(A), NFAC, wrongly assumed jurisdiction in passing the impugned orders. The Tribunal referred to CBDT Circular dated 06/10/2022 and a notification dated 13/10/2022, which stipulated that appeals against penalty orders passed in cases where assessment was completed pursuant to a search under section 132 of the Act remain with the jurisdictional CIT(A) and are not transferred to the NFAC, even after the implementation of the Faceless Appeal Scheme, 2021. Therefore, the Tribunal found the orders passed by the NFAC to be without jurisdiction. The Tribunal set aside the impugned orders and restored the appeals to the file of the jurisdictional CIT(A) for de novo adjudication. Ground No. 2 raised by the assessee, concerning jurisdiction, was allowed. Other grounds were kept open.
The Tribunal held that the assessee's failure to comply with the two notices issued by the Assessing Officer was supported by reasonable cause. Considering the assessee is a small businessman with limited education, limited means to engage a tax consultant, and was represented by his accountant, the Tribunal found that his non-compliance was due to circumstances beyond his control. Therefore, the Tribunal directed the Assessing Officer to delete the penalty of ₹20,000 imposed under section 271(1)(b) of the Act. The Tribunal explicitly clarified that it had not examined the merits of the assessment, and thus the assessee's grounds concerning jurisdiction and the validity of the assessment order did not require adjudication at that stage. The ratio decidendi is that non-compliance with statutory notices can be excused if there is a reasonable cause, particularly for individuals with limited means and understanding.
The Tribunal allowed Ground No. 2, holding that the addition of ₹1,250,000 based on the survey declaration was unsustainable. The Tribunal noted that the assessee's actual gross profit rate of 9.88%, as evidenced by audited annual accounts, was substantially the same as the 10% rate declared during the survey. Furthermore, the assessee's excise licence prohibited the sale of items other than liquor and beer in sealed bottles, and no evidence of unaccounted sales was found during the survey. The Tribunal found no basis to sustain the addition and directed its deletion. The Tribunal also allowed Ground No. 3, finding that the addition of ₹13,27,500 relating to demonetisation deposits was unwarranted. While the CIT(A) confirmed the addition for want of a day-to-day cash book and cash-flow statement, the Tribunal noted that month-wise cash-flow data was available in the paper book and had been furnished to the lower authorities. The Tribunal concluded that the assessee had sufficiently explained the source of the cash deposits from cash sales and directed the deletion of this addition.
The Tribunal held that the estimation of profit at 8% of total turnover by the Assessing Officer could not be sustained in the absence of any identified defect in the books of account. The Tribunal noted that the AO had no opportunity to examine the assessee's books, although they were audited and filed with the return. The Tribunal stated that books can only be rejected if they disclose latent, patent, or glaring defects, which were not established. Since neither the AO examined the books nor did the assessee produce them during assessment proceedings, the Tribunal restored the issue to the AO for examination of the books and necessary inquiry. The assessee was directed to substantiate its books with evidence, and the AO was to assess total income accordingly. If the books correctly reflected income, the reported results would be accepted. Grounds 2 and 3 were allowed for statistical purposes. The alternative proposal of 6% profit rate was dismissed as it would still involve determining income without examining books. Ground 4 concerning interest under Sections 234A and 234B was dismissed as consequential. Ground 5 was general and dismissed. The appeal was allowed for statistical purposes.
The Tribunal noted that the assessee is a co-operative society otherwise eligible for deduction under Section 80P. The issue arose because the return was not filed within the time prescribed under Section 139(1), which, under Section 80AC, barred the deduction. The assessee's appeal to the CIT(A) was dismissed for delay. The Tribunal acknowledged the assessee's contention regarding the delay and the subsequent reassessment order. The Tribunal held that the assessee's remaining remedy is to apply under Section 119(2) of the Act to the Central Board of Direct Taxes or the specified authority for condonation of delay in filing the return. The matter was restored to the Assessing Officer. The assessee was given 90 days from the receipt of the order to file such an application. If an application is filed within this period, the Assessing Officer is to wait for its disposal before denying the deduction. If no application is filed, the reassessment order under Section 147 will stand. The appeal was allowed for statistical purposes.
The Tribunal held that the learned CIT(A), NFAC, wrongly assumed jurisdiction in passing the impugned orders. The Tribunal referred to CBDT Circular dated 06/10/2022 and a notification dated 13/10/2022, which stipulated that appeals against penalty orders passed in cases where assessment was completed pursuant to a search under section 132 of the Act remain with the jurisdictional CIT(A) and are not transferred to the NFAC, even after the implementation of the Faceless Appeal Scheme, 2021. Therefore, the Tribunal found the orders passed by the NFAC to be without jurisdiction. The Tribunal set aside the impugned orders and restored the appeals to the file of the jurisdictional CIT(A) for de novo adjudication. Ground No. 2 raised by the assessee, concerning jurisdiction, was allowed. Other grounds were kept open.
The Tribunal held that the interest income of ₹2,510,475 earned by the assessee is attributable to its business of providing credit facilities to its members. Applying the decision of the Hon'ble Karnataka High Court in *Tumkur Merchants Souharda Credit Co-operative Ltd. v. ITO*, the Tribunal reasoned that funds not immediately required for lending cannot remain idle, and depositing them to earn interest does not constitute a separate business. The interest income bears the same characteristics as the income considered by the Karnataka High Court, and the distinguishing features of the Supreme Court decision in *Totgars Co-operative Sale Society Ltd. v. ITO*, relied upon by the lower authorities, are absent in this case. Therefore, the interest income is eligible for deduction under Section 80P(2)(a)(i). The Tribunal noted that the assessee made no claim under Section 80P(2)(d), so that provision is not applicable. Consequently, the AO is directed to grant the assessee a deduction under Section 80P(2)(a)(i) for the interest income of ₹2,510,475. Grounds 2 and 3 of the assessee's appeal are allowed. Grounds 1, 4, 5, 6, and 7, being general or alternative grounds, are dismissed.
The Tribunal held that the interest income of ₹77,31,599 is attributable to the assessee's business and therefore eligible for deduction under section 80P(2)(a)(i) of the Income-tax Act. The Tribunal relied on the decisions of the Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Co-operative Ltd. v. ITO and the Hon’ble Bombay High Court in Gateway Terminals India Private Limited v. Deputy Commissioner of Income-tax. The Karnataka High Court held that interest earned by a cooperative society engaged in providing credit facilities on funds temporarily deposited with banks is attributable to that business and deductible under section 80P, as depositing funds to earn interest does not constitute a separate business. The Tribunal distinguished the facts from the Supreme Court decision in Totgars Co-operative Sale Society Ltd. v. ITO. Consequently, Ground No. 3 was allowed, and the AO was directed to grant the deduction. Ground No. 1, being general, was dismissed. Ground No. 2 supported the finding on Ground No. 3. Ground No. 4 concerned the Supreme Court decision already considered. Ground No. 5 relied on judicial precedents covered by the High Court decision. Grounds Nos. 6 to 11 raised alternative contentions, and Grounds Nos. 12 and 13 were general, and thus these grounds were dismissed. The assessee made no claim under section 80P(2)(d), so that provision was not applicable. The issue of deduction under section 57(iii) was not explicitly decided as the primary claim under section 80P(2)(a)(i) was allowed.
The Tribunal condoned the delay of 1,102 days, finding sufficient cause for the delay due to circumstances beyond the assessee's control, including reliance on a tax consultant and subsequent guidance from a pensioners' association. The Tribunal respectfully followed the decisions of coordinate Benches which held that the enhanced leave-encashment exemption limit of ₹25 lakh, introduced by CBDT Notification No. 31/2023, applies retrospectively to Assessment Year 2020-21. The reasoning was that the amendment rationalised and updated an existing provision to reflect current economic realities, intended to alleviate hardship and ensure parity. It was considered beneficial legislation that should be construed liberally and applied retrospectively where no vested right of the Revenue was adversely affected. Denying the enhanced exemption would create an unjust distinction and defeat the amendment's purpose. The Tribunal directed the Assessing Officer to grant exemption for the entire leave-encashment amount of ₹9,22,762 received by the assessee. No issue was expressly left undecided.
The Tribunal held that the learned CIT(A), NFAC, wrongly assumed jurisdiction in passing the impugned orders. The Tribunal referred to CBDT Circular dated 06/10/2022 and a notification dated 13/10/2022, which stipulated that appeals against penalty orders passed in cases where assessment was completed pursuant to a search under section 132 of the Act remain with the jurisdictional CIT(A) and are not transferred to the NFAC, even after the implementation of the Faceless Appeal Scheme, 2021. Therefore, the Tribunal found the orders passed by the NFAC to be without jurisdiction. The Tribunal set aside the impugned orders and restored the appeals to the file of the jurisdictional CIT(A) for de novo adjudication. Ground No. 2 raised by the assessee, concerning jurisdiction, was allowed. Other grounds were kept open.
The Tribunal decided as follows: 1. Regarding the addition of ₹946,032 (Ground No. 4), the Tribunal found that the difference arose from erroneous invoices, while actual receipts were supported by agreement, conduct, and books of account. Since the assessee did not receive the disputed amount, only real income is taxable. The addition was directed to be deleted. Ground No. 4 was allowed. 2. Regarding the disallowance under Section 14A (Ground No. 5), the Tribunal noted that the AO failed to record the necessary satisfaction under Section 14A(2) before invoking Rule 8D. The assessee had claimed only ₹11,956 as expenditure for earning exempt income, and the AO neither examined the correctness of this claim nor recorded dissatisfaction. The disallowance was held contrary to Section 14A(2) and directed to be deleted, retaining the assessee's suo motu disallowance of ₹11,956. Ground No. 5 was allowed. 3. Regarding the addition to book profit under Section 115JB (Ground No. 7), the Tribunal found no corresponding addition in the assessee's book profit computation and dismissed this ground as unfounded. Ground No. 7 was dismissed. The Tribunal also dismissed general grounds and consequential grounds not pressed by the assessee.
The Tribunal held that the assessee was not afforded a proper opportunity of hearing before either the learned Assessing Officer or the learned CIT(A). The CIT(A) could not dismiss the appeal for non-prosecution, as section 251 of the Act requires the appeal to be decided on its merits even in the assessee’s absence. Therefore, the order of the CIT(A) was unsustainable. Furthermore, since the assessee was also denied an adequate opportunity before the Assessing Officer, remanding the matter to the CIT(A) would serve no useful purpose. In the interest of justice and with the consent of both parties, the Tribunal restored the entire matter to the file of the learned Assessing Officer. The assessee is to substantiate the taxability and quantum of capital gains with evidence, and the Assessing Officer is to verify and decide the matter afresh. The issue of penalty proceedings under section 271(1)(c) or 270A was not decided on merits.
The Tribunal held that the penalty imposed under section 270A was unsustainable in law. The primary reasoning was that the show-cause notice issued by the Assessing Officer did not specify the specific limb of section 270A(9) under which the assessee was alleged to have under-reported income due to misreporting. The Tribunal noted that without this specific disclosure, the assessee could not know the precise nature of the alleged misreporting. Citing the Delhi High Court's decision in Schneider Electric South-East Asia (HQ) Pte. Ltd. v. Assistant Commissioner of Income Tax, the Tribunal stated that a penalty notice is erroneous and liable to be quashed if the AO fails to specify the limb of under-reporting or misreporting. While acknowledging a conflicting view from the Rajasthan High Court in Spun Well Tex Private Limited, the Tribunal preferred the Delhi High Court's view, which had been followed by several coordinate benches of the Tribunal. The Tribunal found that several coordinate benches had deleted penalties in similar circumstances, relying on the Delhi High Court's decision, even though that decision pertained to the rejection of immunity under section 270AA. The Tribunal concluded that a penalty cannot be sustained where the Assessing Officer neither specifies the applicable limb of section 270A(9) in the show-cause notice nor makes it discernible from the assessment order. Consequently, the penalty of ₹15,972,186 was cancelled. Grounds 2 to 5 were allowed, and remaining grounds were dismissed as infructuous.
The Tribunal allowed the assessee's application for admission of additional evidence under Rule 29 of the ITAT Rules, 1963, finding that the documents were relevant for adjudicating the issues. Since these details were not examined by any lower authorities, the Tribunal, in the interest of justice, restored the matter to the jurisdictional AO for de novo adjudication after examining the additional evidence. The Tribunal set aside the impugned order and directed the assessee to cooperate with the AO. The Tribunal noted that as the matter was being restored to the AO, other grievances raised by the assessee did not require adjudication at that stage. The grounds raised by the assessee were allowed for statistical purposes. The ratio is that where an assessee is prevented from filing crucial evidence due to procedural constraints and short notice, and such evidence is filed before the appellate tribunal, the matter should be remanded to the AO for fresh adjudication after admitting the evidence, to ensure natural justice and proper examination of facts.
The Tribunal quashed the assessment order dated March 29, 2022, passed under section 147 read with section 144B of the Income-tax Act, 1961, allowing ground No. 2.4 of the appeal. The Tribunal found that the Assessing Officer reopened the assessment on the same information that was available and considered during the original assessment under section 143(3), where no adjustment was made on the issue of foreign payments. Therefore, the reassessment rested solely on a change of opinion, which is impermissible under section 147. The Tribunal noted that the Assessing Officer had specifically sought details of remittances to non-residents and tax deducted at source during the original assessment, and the assessee had furnished the information. The assessment order indicated that the Assessing Officer verified the information but made no addition or disallowance, demonstrating that he had applied his mind to the issue. Grounds 1.1, 2.2, 2.3, and 10 were dismissed as general or not argued. Ground 3, alleging violation of natural justice, was dismissed for lack of specific instances. Grounds 4-7, concerning the taxability of foreign payments, were dismissed as the appeal against the order under section 201 was still pending before the CIT(A), and deciding these issues would render that appeal infructuous. Ground 8 became infructuous. Ground 9, concerning the carry-forward of loss under section 72, was allowed to the extent that the assessee was directed to substantiate its claim before the Assessing Officer for verification and determination of the eligible loss.
The Tribunal held that the assessee had filed his return of income and Form 67 well before the due dates and had completed the necessary formalities for claiming FTC. The Tribunal noted that the CPC denied the FTC without any prior communication to the assessee, which was contrary to the principles of natural justice. The Tribunal referred to several of its own prior decisions in cases like Ms. Brinda Ramakrishna vs. ITO, Vinoth Kumar Laxmipathi vs. CIT(A), and M/s. 42 Hertz Software India Pvt. Ltd. vs. ACIT, where similar directions were issued to grant FTC under Section 90. Therefore, the Tribunal decided to condone the delay in filing the appeal before the CIT(A) and set aside the order of the CIT(A). The issue of granting the necessary deduction for FTC was remitted to the file of the Joint Assessing Officer (JAO) for necessary action.
The Tribunal admitted the additional grounds of appeal, finding them to be purely legal and critical for fair adjudication, with all facts already on record. The Tribunal held that the adjustment made by the AO under Section 154 for disallowing employee's contribution to provident fund and ESI deposited beyond the due date was not correct prior to Assessment Year 2021-22. The Tribunal relied on the Memorandum explaining the provisions of the Finance Bill 2021, which indicated that amendments clarifying these provisions were intended to take effect from April 1, 2021, and subsequent assessment years. The Tribunal also referred to decisions of the Chhattisgarh High Court in Sanjay Kumar Sharma vs. Income Tax Officer and Delhi High Court in Principal Commissioner of Income Tax vs. TV Today Network Ltd., which supported the assessee's position for assessment years prior to 2021-22. The Tribunal directed the AO to delete the disallowance of Rs. 87,01,378/-. Other issues were deemed academic and dismissed.
The Tribunal held that the appeal filed by the assessee was not maintainable. The primary reason for this decision was the non-compliance with procedural requirements. The Registry had noted several defects, including the appeal fees being paid under an incorrect head, and Form 36 along with the grounds of appeal not being signed by the appellant. The assessee had not rectified these defects. In accordance with Rule 4A(2)(iv) of the ITAT Rules, 1963, an appeal cannot be proceeded with if such defects are not removed. Therefore, the Tribunal found it necessary to return the appeal and application back to the assessee company. The substantive grounds of appeal concerning additions under Section 68 and the CIT(A)'s findings were not examined due to the preliminary procedural defects.
The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, on July 30, 2022, for Assessment Year 2015-16, is invalid and barred by limitation. The reasoning is that the first proviso to the substituted Section 149(1) acts as a statutory bar, as the six-year limitation period under the old regime for AY 2015-16 expired on March 31, 2022. The Tribunal found that procedural compliance with Section 148A or exclusion of time under erstwhile provisos cannot override this fundamental jurisdictional defect of limitation. The Tribunal respectfully followed the decisions of the Hon'ble Apex Court and the jurisdictional High Court, as well as a coordinate bench decision in Abbur Subramanyam Venkata Kumar, which held that a notice issued on April 8, 2022, for AY 2015-16 was invalid and barred by time. Consequently, the reassessment order passed on May 30, 2023, is quashed. Since the sole legal ground was decided in favor of the assessee, other grounds became academic. The operative direction is to quash the reassessment order.
The Tribunal condoned the delay of 288 days in filing the appeal, finding the reason provided by the assessee (care of his ailing father) to be a plausible and sufficient cause. Regarding the addition of Rs. 77,54,950/- as unexplained cash deposits, the Tribunal upheld the orders of the lower authorities. The Tribunal noted that the assessee failed to provide any books of accounts, documentary evidence relating to loans given or repaid, or confirmation letters from borrowers to substantiate his claim of being in the money lending business. Furthermore, the assessee did not possess a license to conduct such business. The assessee also failed to provide any relevant documents or evidence before the CIT(A)/NFAC or the Tribunal. In the absence of any material on record to support the assessee's claim and to warrant interference with the orders of the AO and CIT(A)/NFAC, the grounds of appeal were dismissed. The appeal was dismissed.
The Tribunal noted that while the assessee had not appeared before the AO and CIT(A), the submission was that the export income was from vegetables, hence agricultural income and not taxable. The Tribunal considered the assessment order for AY 2020-21, where similar income was accepted as agricultural income after the assessee participated and produced records. The Tribunal acknowledged that details were not produced in the current appeal, leading to the income being treated as business income. Considering the facts and the assessee's plea for an opportunity to produce documents, the Tribunal decided to set aside the orders of the lower authorities. The issue was remitted to the file of the AO for fresh consideration based on documents to be produced by the assessee. If the assessee demonstrates the income is from vegetable exports, it could be entitled to exemption. The appeal was allowed for statistical purposes.
The Tribunal held that the penalty proceedings initiated under section 274 read with section 270A of the Act are vitiated due to a defective notice. The Tribunal noted that section 270A(2) contains different circumstances for under-reporting of income, and the AO was required to specify the particular clause applicable to the assessee's case. The notice issued was general, referring only to 'under-reporting of income' without specifying the relevant sub-clause. This lack of specificity deprived the assessee of a proper opportunity to defend its case, violating the principles of natural justice. The Tribunal relied on the decision of the Madras High Court in PCIT v. Shri R. Elangovan, which held that where a section provides for different contingencies for penalty, the AO must specify the clause under which the assessee is proceeded against. Consequently, the penalty levied under section 270A was deleted. The appeals of the assessee were allowed.
The Tribunal condoned the delay of 665 days in filing the appeal, finding sufficient and bona fide cause due to the death of the assessee's Chartered Accountant, service of notices at an incorrect email address, and prompt action upon learning of the order. The Tribunal restored the entire matter to the file of the Assessing Officer (AO). The assessee is directed to furnish necessary details within 90 days. The AO is to decide afresh whether the cash deposit of ₹1,919,500 made during the demonetisation period represents funds received from members. If verification of KYC details supports the assessee's explanation, the addition shall be deleted. Otherwise, the AO may decide afresh after giving the assessee an opportunity of being heard. Ground No. 1 is allowed, and remaining grounds are dismissed as infructuous. The ratio is that procedural lapses by tax authorities or circumstances beyond the assessee's control leading to non-compliance should be considered for condonation of delay and restoration of proceedings, especially when principles of natural justice are violated.
The Tribunal held that the CIT(A)'s findings on both issues were not based on an independent and investor-wise examination of the primary material. For the disallowance under section 36(1)(iii), the Tribunal noted the assessee's grounds but did not provide a specific finding or reasoning in the provided excerpt, implying it was part of the overall remand. Regarding the addition under section 68, the Tribunal found that the CIT(A) made a generalized finding without an investor-wise examination of facts and supporting documentary evidence. The reliance on SEBI registration of AIFs was insufficient. The Tribunal emphasized the need for an investor-wise examination of financial particulars, available funds, bank transactions, and other material demonstrating financial capacity and creditworthiness. Consequently, the matter was restored to the CIT(A) for a fresh examination and adjudication, requiring an investor-wise assessment of documentary evidence, including financial statements, bank statements, and income-tax returns, to determine identity, creditworthiness, and genuineness of transactions. The assessee was directed to furnish all requisite documents. The revenue's ground was allowed for statistical purposes.
The Tribunal condoned the delay of 260 days in filing the appeal, citing the assessee's undergoing of Corporate Insolvency Resolution Process and the appointment of a Resolution Professional. The Tribunal noted that both assessment and first appellate proceedings were concluded without complete supporting evidence from the assessee. Considering the subsequent developments under the Insolvency and Bankruptcy Code and the appointment of the Resolution Professional, the Tribunal, in the interest of justice, set aside the impugned order of the CIT(Appeals). The matter was restored to the file of the Assessing Officer for de novo consideration. The assessee, through the Resolution Professional, was directed to furnish all relevant evidence, including confirmations, bank statements, and income-tax particulars, to establish the identity, creditworthiness of lenders, and genuineness of transactions. The AO was instructed to examine the evidence afresh and decide the issue in accordance with the law after providing a reasonable opportunity of hearing to the assessee. The appeal was allowed for statistical purposes.
The Tribunal held that the issue is covered by the judgment of the Hon'ble Bombay High Court in Chamber of Tax Consultants v. CIT (Exemptions) [2026] 184 taxmann.com 374 (Bom.). The Tribunal found that the CIT(Exemptions) had accepted this judgment and granted registration. The Tribunal reasoned that once registration is granted based on a binding judgment of the jurisdictional High Court, the CIT(Exemptions) cannot make the benefit of such registration dependent on the outcome of a proposed SLP before the Hon'ble Supreme Court. The judgment of the jurisdictional High Court continues to bind authorities within its jurisdiction unless stayed, modified, or reversed. The Tribunal also referred to similar decisions by its coordinate benches in Keshavlal Vajechand Kapadia Charity Trust v. CIT (Exemptions) [2026] 187 taxmann.com 1010 (Mumbai-Trib.) and Bai Manekbai A. Dubash Hareshwar Pandit Trust v. CIT (Exemptions) [2026] 188 taxmann.com 541 (Mumbai-Trib.), which directed the deletion of identical conditional riders. The Tribunal directed the CIT(Exemptions) to delete the conditional rider, and the registration under Section 12AB shall operate without the qualification. The Tribunal noted that if the legal position is altered by the Hon'ble Supreme Court, consequences shall follow at that stage. No issue was expressly left undecided.
The Tribunal held that the rejection of the assessee's application by the Ld. CIT(Exemptions) solely on the ground of selecting an incorrect clause (clause (iii) instead of clause (ii)) in Form No. 10AB was not justified. The Tribunal noted that the assessee already possessed a valid regular approval under Section 80G and had filed the application for continuation. The mistake in selecting the clause was procedural and curable, especially since the assessee's intention to seek continuation of the existing approval was clear from the record. The Tribunal found support from several of its own previous decisions and those of other benches, which consistently held that such procedural defects should not lead to the rejection of an application if the assessee is otherwise eligible and the intention is clear. The Tribunal directed the Ld. CIT(Exemptions) to treat the Form No. 10AB filed by the assessee as an application for renewal under clause (ii) of the first proviso to Section 80G(5). If any procedural correction was required in the electronic form, the CIT(Exemptions) was directed to permit the assessee to make such corrections. The CIT(Exemptions) was further directed to examine the application on merits and grant approval if the assessee satisfied the conditions under Section 80G, without rejecting it on account of the wrong clause selected in the original form. The assessee was to be granted a reasonable opportunity of hearing. The issue regarding Form 10AD was implicitly addressed by restoring the application to be treated as filed under the correct provision.
The Tribunal held that an order passed under Section 201 of the Act in the name of a non-existent entity, despite prior intimation of amalgamation, is void ab initio and without jurisdiction. The Tribunal quashed the order passed by the Assessing Officer.
The Tribunal noted that the Assessing Officer (AO) had added incomes based on the assessee's statement under Section 132(4) for AYs 2018-19 and 2019-20, as these incomes were not reported for those years. The assessee's primary contention was that these incomes were realized and offered to tax in AY 2020-21, and since the AO accepted the return for AY 2020-21, taxing the same income again for AYs 2018-19 and 2019-20 would amount to double taxation. The Tribunal observed that the assessee could not challenge the AY 2020-21 assessment order directly as it was based on the returned income, leading to the filing of a Section 264 application before the PCIT. This application was dismissed, and the dismissal order is currently under challenge before the Karnataka High Court in W.P. No. 21977/2025, which is pending. The Tribunal acknowledged that the outcome of the writ petition would significantly impact the present appeals. In the interest of justice and to avoid hardship to the assessee, the Tribunal decided to set aside the orders of the CIT(A) and remit the appeals back to the CIT(A). The CIT(A) is directed to await the outcome of the writ petition before proceeding with the appeals in accordance with the law. The issue of penalties under Section 270A was implicitly linked to the quantum additions.
The Tribunal held that the penalty levied under section 270A of the Income-tax Act, 1961, could not be sustained. The primary reason for this decision was the defect in the notice issued by the Assessing Officer. The Tribunal noted that section 270A(2) outlines different circumstances under which income is considered to have been under-reported. However, the notice issued to the assessee merely referred to 'under-reporting of income' without specifying the applicable clause under section 270A(2). This vagueness denied the assessee a proper opportunity to present its defense, violating the principles of natural justice. The Tribunal found support from the Madras High Court's decision in PCIT v. Shri R. Elangovan, which emphasized the need for the AO to specify the particular clause under which penalty proceedings are initiated. Consequently, the Tribunal quashed the penalty proceedings as invalid and directed the deletion of the penalty. The issue of whether the income was indeed under-reported was not decided on merits due to the procedural defect.
The Tribunal restored the matter to the AO for fresh adjudication, granting the assessee an opportunity to be heard and present its case. A token cost was imposed on the assessee for negligence.
The Tribunal held that while the assessee may not be eligible for exemption under Section 11 due to non-compliance, the entire gross receipts cannot be taxed. Revenue expenditures incurred to earn such income, along with depreciation, must be allowed as deductions.
The Tribunal held that while the exemption under Section 11 might be denied due to non-filing of Form 10B, the entire gross receipts cannot be taxed. Allowable revenue expenditures incurred to earn the income must be considered.
The Tribunal held that if the quantum appeal is set aside, the penalty proceedings based on that assessment cannot sustain. Therefore, the penalty proceedings are also set aside for fresh consideration.
The Tribunal held that the addition under Section 69A was not sustainable because the source of the money was explained as business receipts of a partnership firm. The mere fact that Specified Bank Notes were received after a certain date does not automatically make the money unexplained.
The Tribunal held that the denial of exemption was incorrect because the assessee had obtained final registration under Section 12AB before the return was processed under Section 143(1). The proviso to Section 12A(2)(b) allows the exemption to relate back to the provisional registration period.