ITAT Bangalore Judgments — October 2026

The Tribunal found that the AO issued a show-cause notice on 15/12/2019, requiring a response by 18/12/2019, and passed the assessment order on 20/12/2019 without further opportunity. The assessee claimed to have filed all details before the CIT(A), but these were not considered. The Tribunal noted that the CIT(A)'s order, in parts, referred to facts of AY 2020-21, reproduced AO's findings multiple times, and lacked adjudication of issues or consideration of evidence. Therefore, the impugned order was set aside. The Tribunal restored the matter to the AO for de novo adjudication, granting the assessee another opportunity to furnish all details. The assessee was directed to comply with notices and furnish income details. The AO was instructed to provide a reasonable and adequate opportunity of hearing. The grounds raised by the assessee were allowed for statistical purposes. The additional ground regarding the validity of the Section 143(2) notice was dismissed in view of the decision in M.D. Sons v/s ITO. The operative direction is to restore the matter to the AO for fresh assessment.

The Tribunal noted that the assessee's appeal against the quantum proceedings (disallowance of provision for warranty) is pending before the learned CIT(A). Considering this, the Tribunal decided to restore the matter to the file of the jurisdictional Assessing Officer for fresh adjudication, without delving into the merits of the penalty levied under section 271(1)(c). The Tribunal directed that no order should be passed without affording a reasonable and adequate opportunity of hearing to the assessee. Consequently, the impugned order of the CIT(A) was set aside, and the grounds raised by the assessee were allowed for statistical purposes. The principle derived is that when the underlying quantum appeal is pending, and the penalty appeal is before the Tribunal, it is appropriate to remand the matter for fresh consideration by the Assessing Officer to ensure proper adjudication after the quantum issue is resolved.

The Tribunal disposed of the appeal by remanding it to the file of the Ld. Assessing Officer. The Tribunal noted that if the Hon'ble High Court quashes the re-assessment proceedings, the Revenue's appeal before the Tribunal would become infructuous. However, if the assessee does not succeed before the Hon'ble High Court, the Revenue will have the liberty to revive this appeal by making an application, and it would then be heard on merits. This decision was made with the consent of both parties. The Tribunal did not decide the merits of the assessment or the reopening.

The Tribunal noted that the assessment proceedings were conducted during the Covid-19 pandemic period, and the assessee claimed difficulty in furnishing requisite details due to lockdowns. While the assessee had submitted sample sales bills and purchase confirmations, the lower authorities found them insufficient to substantiate the claim of cash sales amounting to INR 16,69,38,150. The Tribunal acknowledged the assessee's argument regarding the difficulty in collating details during the pandemic and the subsequent submission of additional evidence before the CIT(A). Considering the interest of justice and fair play, the Tribunal decided to grant one more opportunity to the assessee to substantiate his claim. The matter was restored to the file of the Assessing Officer for de novo adjudication, with a direction to the assessee to fully cooperate and furnish all required details. The Tribunal set aside the impugned order for statistical purposes.

The Tribunal condoned the delay in filing the appeal by the Revenue, finding sufficient cause. The Tribunal noted that the grounds raised by the Revenue were confined to the relief granted by the learned CIT(A) under Section 80P. The assessee's claim for deduction on interest earned from the investment of surplus funds and the alternative claim under Section 80P(2)(d) were decided against the assessee by the CIT(A). The surviving relief in favor of the assessee was limited to interest earned on deposits made under statutory compulsion. The Tribunal referred to a Coordinate Bench decision in Shri Shanteshwar Vividoddeshagala Sahakara Sangha Niyamit vs. ITO, which observed that interest from mandatorily maintained fluid resources as statutorily required under the Karnataka Cooperative Societies Act and rules thereunder is eligible for deduction under Section 80P(2)(a)(i), and only the balance interest over and above the mandatory SLR is liable to be charged under Section 56. The Tribunal found that the deposits in question were statutorily mandated, restricting the assessee's ability to use these funds for its business operations without prior approval.

The Tribunal allowed the assessee's appeal. Regarding the reopening, it held that while the information from the Investigation Wing constituted tangible material, the reopening rested solely on conjecture and surmise. The AO received complete information only on April 3, 2017, and the reopening was based on a suspicious transaction report concerning the investor without sufficient inquiry into whether the investors were tainted. The Tribunal also noted inconsistencies in the dates of information received by the AO. On merits, the Tribunal found that the assessee had discharged its initial burden under section 68 by providing documents related to the investor's identity, creditworthiness, and transaction genuineness. It noted that the investor's share capital had been accepted in a prior assessment year. Crucially, the Tribunal held that the denial of cross-examination of witnesses whose statements underpinned the addition violated natural justice, citing the Supreme Court's decision in Andaman Timber Industries. Therefore, the addition under section 68 could not stand, and the reopening was also found to be unsustainable.

The Tribunal dismissed the Revenue's appeal for AY 2016-17 and subsequent years on the issue of interest expenditure under Section 36(1)(iii). It held that investment in SPVs is an integral part of the assessee's business activity, upholding the CIT(A)'s finding that the assessee is engaged in the business of operating, developing, and maintaining airports through its SPVs. The Tribunal also dismissed the Revenue's appeal concerning CSR expenditure, stating that similar issues were adjudicated for AY 2016-17 and the findings would apply mutatis mutandis. Regarding Section 14A, the Tribunal upheld the CIT(A)'s decision to restrict the disallowance to investments that yielded exempt income, following the Special Bench decision in Vireet (P.) Ltd. and the Tribunal's own decision in the assessee's case for AY 2014-15. The assessee's cross-objection was dismissed as not pressed. The operative direction was that the Revenue's appeals were dismissed, and the assessee's cross-objection was dismissed.

The Tribunal condoned the delay of 78 days in filing the appeal before the CIT(A)/NFAC, finding the assessee's explanation of the director's severe medical crisis to be plausible and a sufficient cause. The Tribunal acknowledged that the assessee could not represent its case properly before the AO, leading to an ex-parte order. Consequently, the Tribunal decided to remit the quantum appeal (ITA No. 698/Bang/2026) back to the AO for a fresh adjudication on merits, granting the assessee a reasonable opportunity of being heard. The Tribunal also remitted penalty proceedings under Section 270A (ITA No. 700/Bang/2026) to the AO for fresh consideration, as penalty proceedings based on an assessment order that is set aside cannot sustain. Regarding the penalty under Section 271DA (ITA No. 699/Bang/2026), the Tribunal found good and sufficient reason to delete the penalty. The Tribunal reasoned that the assessee had no control over its customer, a farmer from a remote location, who deposited cash directly into the assessee's bank account without the assessee's consent or direction, and this was against a total sales volume of Rs. 9,48,23,828/-. Therefore, the penalty was deleted. The issue of the AO rejecting books of accounts, additions on unaccounted purchases, unexplained expenditure, ad hoc additions, and unexplained credits were implicitly remitted to the AO for fresh adjudication.

The Tribunal held that the learned CIT(A)'s order was not infirm and that the assessee was entitled to the full deduction of Rs. 5,95,11,403 claimed under section 11(1)(a) of the Act. The Tribunal found no basis to hold that the remuneration of Rs. 87,48,000 paid to Mr. Atul Satija for the year, compared to Rs. 57,48,000 in the last year, was excessive or unreasonable. This conclusion was based on Mr. Satija's qualifications, extensive professional experience with major corporations, MBA from ISB, service on advisory boards, prior remuneration of Rs. 3 crore from a corporate position, recognition received by the trust under his leadership, and his recognition as a top impact leader. The Board had approved his remuneration and bonuses after evaluating his performance, and performance-based bonuses were paid across the organization. The Tribunal noted that his remuneration represented a small percentage of the trust's total donation receipts. Therefore, section 13(1)(c) of the Income-tax Act was not applicable. The Assessing Officer's grounds lacked merit and were dismissed. The issue of accumulation under section 11(1)(a) was implicitly decided by upholding the CIT(A)'s direction to allow the deduction claimed under section 11(1)(a).

The Tribunal held that the assessee was not afforded an effective opportunity of hearing before either the Assessing Officer or the NFAC. The assessment order was passed ex parte, and the NFAC dismissed the appeal without a proper hearing, even though the assessee sought an adjournment. The NFAC should have fixed another hearing date or cautioned the assessee. Furthermore, the NFAC did not exercise its powers under section 250(4) to obtain relevant material or make enquiries, especially since the assessment was ex parte. The Tribunal noted that the assessee has now filed a comprehensive paper book addressing all issues and claims the gift from the mother is exempt. Therefore, the Tribunal restored the entire appeal to the file of the Assessing Officer. The assessee is directed to file the paper book and any further information within 90 days. The Assessing Officer is to examine the material, decide the issues in accordance with law, and grant an adequate opportunity of hearing. All grounds of appeal are allowed for statistical purposes. The operative direction is to restore the appeal to the Assessing Officer for fresh adjudication.

The Tribunal condoned the delay of 78 days in filing the appeal before the CIT(A)/NFAC, finding the assessee's explanation of the director's severe medical crisis to be plausible and a sufficient cause. The Tribunal acknowledged that the assessee could not represent its case properly before the AO, leading to an ex-parte order. Consequently, the Tribunal decided to remit the quantum appeal (ITA No. 698/Bang/2026) back to the AO for a fresh adjudication on merits, granting the assessee a reasonable opportunity of being heard. The Tribunal also remitted penalty proceedings under Section 270A (ITA No. 700/Bang/2026) to the AO for fresh consideration, as penalty proceedings based on an assessment order that is set aside cannot sustain. Regarding the penalty under Section 271DA (ITA No. 699/Bang/2026), the Tribunal found good and sufficient reason to delete the penalty. The Tribunal reasoned that the assessee had no control over its customer, a farmer from a remote location, who deposited cash directly into the assessee's bank account without the assessee's consent or direction, and this was against a total sales volume of Rs. 9,48,23,828/-. Therefore, the penalty was deleted. The issue of the AO rejecting books of accounts, additions on unaccounted purchases, unexplained expenditure, ad hoc additions, and unexplained credits were implicitly remitted to the AO for fresh adjudication.

The Tribunal dismissed the Revenue's appeal for AY 2016-17 and subsequent years on the issue of interest expenditure under Section 36(1)(iii). It held that investment in SPVs is an integral part of the assessee's business activity, upholding the CIT(A)'s finding that the assessee is engaged in the business of operating, developing, and maintaining airports through its SPVs. The Tribunal also dismissed the Revenue's appeal concerning CSR expenditure, stating that similar issues were adjudicated for AY 2016-17 and the findings would apply mutatis mutandis. Regarding Section 14A, the Tribunal upheld the CIT(A)'s decision to restrict the disallowance to investments that yielded exempt income, following the Special Bench decision in Vireet (P.) Ltd. and the Tribunal's own decision in the assessee's case for AY 2014-15. The assessee's cross-objection was dismissed as not pressed. The operative direction was that the Revenue's appeals were dismissed, and the assessee's cross-objection was dismissed.

The Tribunal held that the income disclosed in the return filed in response to the notice under section 148 is excluded from under-reported income under section 270A(6)(a) of the Income-tax Act. The Tribunal found the assessee's explanation for not filing the return under section 139(1) to be bona fide, citing the abrupt departure from India due to the COVID-19 pandemic and urgent family obligations. The Tribunal noted that the salary income was subject to TDS, and the remaining income, primarily bank interest, was insignificant. The Tribunal also observed that the penalty under section 270A is discretionary, as indicated by the word "may" in section 270A(1). Given the assessee's circumstances and the bona fide explanation, the Tribunal found no justification for levying the penalty. Accordingly, the Tribunal reversed the orders of the lower authorities and directed the Assessing Officer to delete the penalty of Rs. 29,74,189.

The Tribunal dismissed the Revenue's appeal for AY 2016-17 and subsequent years on the issue of interest expenditure under Section 36(1)(iii). It held that investment in SPVs is an integral part of the assessee's business activity, upholding the CIT(A)'s finding that the assessee is engaged in the business of operating, developing, and maintaining airports through its SPVs. The Tribunal also dismissed the Revenue's appeal concerning CSR expenditure, stating that similar issues were adjudicated for AY 2016-17 and the findings would apply mutatis mutandis. Regarding Section 14A, the Tribunal upheld the CIT(A)'s decision to restrict the disallowance to investments that yielded exempt income, following the Special Bench decision in Vireet (P.) Ltd. and the Tribunal's own decision in the assessee's case for AY 2014-15. The assessee's cross-objection was dismissed as not pressed. The operative direction was that the Revenue's appeals were dismissed, and the assessee's cross-objection was dismissed.

The Tribunal dismissed the Revenue's appeal for AY 2016-17 and subsequent years on the issue of interest expenditure under Section 36(1)(iii). It held that investment in SPVs is an integral part of the assessee's business activity, upholding the CIT(A)'s finding that the assessee is engaged in the business of operating, developing, and maintaining airports through its SPVs. The Tribunal also dismissed the Revenue's appeal concerning CSR expenditure, stating that similar issues were adjudicated for AY 2016-17 and the findings would apply mutatis mutandis. Regarding Section 14A, the Tribunal upheld the CIT(A)'s decision to restrict the disallowance to investments that yielded exempt income, following the Special Bench decision in Vireet (P.) Ltd. and the Tribunal's own decision in the assessee's case for AY 2014-15. The assessee's cross-objection was dismissed as not pressed. The operative direction was that the Revenue's appeals were dismissed, and the assessee's cross-objection was dismissed.

The Tribunal condoned the delay of 78 days in filing the appeal before the CIT(A)/NFAC, finding the assessee's explanation of the director's severe medical crisis to be plausible and a sufficient cause. The Tribunal acknowledged that the assessee could not represent its case properly before the AO, leading to an ex-parte order. Consequently, the Tribunal decided to remit the quantum appeal (ITA No. 698/Bang/2026) back to the AO for a fresh adjudication on merits, granting the assessee a reasonable opportunity of being heard. The Tribunal also remitted penalty proceedings under Section 270A (ITA No. 700/Bang/2026) to the AO for fresh consideration, as penalty proceedings based on an assessment order that is set aside cannot sustain. Regarding the penalty under Section 271DA (ITA No. 699/Bang/2026), the Tribunal found good and sufficient reason to delete the penalty. The Tribunal reasoned that the assessee had no control over its customer, a farmer from a remote location, who deposited cash directly into the assessee's bank account without the assessee's consent or direction, and this was against a total sales volume of Rs. 9,48,23,828/-. Therefore, the penalty was deleted. The issue of the AO rejecting books of accounts, additions on unaccounted purchases, unexplained expenditure, ad hoc additions, and unexplained credits were implicitly remitted to the AO for fresh adjudication.

The Tribunal held that the revisionary order passed by the PCIT under section 263 is quashed and the assessee's appeal is allowed. The Tribunal found that it is undisputed that donations qualifying under section 80G are deductible even when they form part of CSR expenditure, as section 80G does not prohibit such a deduction if prescribed conditions are met. The Act contains no bar to allowing a deduction under Chapter VI-A for eligible donations made towards CSR activities. Although CSR expenditure is not allowable as business expenditure under section 37(1), this restriction does not preclude a deduction under section 80G. The Tribunal noted that Explanation 2 to section 37(1) merely disallows CSR expenditure when computing income under the head 'Profits and gains of business or profession' and does not restrict deductions under Chapter VI-A. The Tribunal acknowledged divergent views on the eligibility of CSR expenditure for deduction under section 80G but emphasized that where the Assessing Officer adopts one of the plausible views, the mere fact that the Commissioner prefers an alternative view does not render the assessment erroneous. Citing *CIT (Central) v. Max India Ltd.*, the Tribunal stated that where two views are reasonably possible, and the AO has taken one such view, the Commissioner's preference for an alternative interpretation does not justify invoking revisionary jurisdiction under section 263. Therefore, the assessment order was not erroneous, and the PCIT could not exercise jurisdiction under section 263.

The Tribunal held that the issue of jurisdiction under section 147 versus section 153C was a substantial question of law. It noted that the assessee's grounds of appeal, particularly ground No. 2, raised a serious contention regarding the invocation of section 147 when the entire proceedings were based on seized material from a third party, suggesting section 153C should have been applied. The Tribunal observed that the CIT(A) had not dealt with this specific legal ground, rendering the appellate order non-speaking on this crucial aspect. Consequently, the Tribunal found it necessary to set aside the order of the CIT(A) and restore the matter to the file of the CIT(A) for fresh adjudication on all grounds of appeal, including the jurisdictional issue. The Tribunal explicitly stated that it was not venturing into the merits of the addition at this stage. The operative direction was to remand the matter back to the CIT(A) for a fresh decision.

The Tribunal addressed the grounds raised by the assessee. Regarding the legality of the search and assessment under section 153A, the judgment does not explicitly record the Tribunal's finding on this issue, implying it was not the primary focus or was implicitly accepted by proceeding to the merits. On the issue of additions based on seized document A/IY/03 (unexplained expenditure), the Tribunal allowed the assessee's appeal for AY 2010-11 concerning the addition of ₹3,12,84,800. The Tribunal found that the seized documents did not adequately support the addition, as the figures were not explained, did not represent monetary transactions, and the aggregation of figures for other individuals did not correspond to the addition made. The Tribunal noted that the assessee's contention was not considered by the CIT(A). Similarly, the addition of ₹2,20,955 for AY 2010-11 was also directed to be deleted for similar reasons. For AY 2006-07, the addition of ₹1,05,79,000 based on A/IY/03 was upheld by the lower authorities, but the Tribunal's specific finding on this is not detailed in the provided excerpt, though it is mentioned that Ground No. 4 (challenging addition of ₹3,12,84,800) was allowed. The Tribunal confirmed the business profit at 60% as estimated by the AO for AY 2010-11, dismissing Ground No. 3. The issue of interest under sections 234A, 234B, and 234C was not explicitly decided in the provided excerpt. The appeals for AY 2010-11 were partly allowed.

The Tribunal held that the reassessment proceedings under Section 148 were validly initiated. It distinguished the case from situations requiring Section 153C, stating that Section 153C applies only if incriminating material belonging to the assessee is found during a search of another entity and transferred to the assessee's AO. In this case, information from the search at Renuka Mata Multi-State Co-operative Bank Ltd. directly indicated the assessee's substantial cash deposits, justifying the initiation of reassessment under Section 148. The Tribunal rejected the assessee's contention that Section 153C should have been invoked, as no such material was found. On the merits, the Tribunal found that the assessee had provided substantial third-party evidence, including bank statements, books of account, purchase and sales invoices, and details of parties for receipts and payments, to support the cash deposits. The AO's remand report also found no unaccounted income in the deposits after verifying these documents. The Tribunal held that while not obtaining an audit under Section 44AB or declaring commission income under 'commission business without books' might have separate consequences, it did not establish that the income recorded in the books was unaccounted. The suspicion arising from cash realisations matching invoices could not override the evidence produced. Therefore, the Tribunal directed the AO to delete the additions of ₹1,82,30,050 for AY 2016-17 and ₹1,65,99,815 for AY 2017-18.

The Tribunal held that the reassessment proceedings were not bad in law on the grounds of procedural infirmities, as the assessee had not provided sufficient evidence to substantiate these claims. Regarding the addition of Rs. 12,18,000 for cash deposits, the Tribunal found no merit in the assessee's arguments, as no documentary evidence was produced to support the claim of business receipts from friends and relatives. The Tribunal, however, disagreed with the authorities below regarding the disallowance of exemption under Section 54, loss from house property, and TDS credit. Citing the Supreme Court's decision in Commissioner of Income-tax v. Sun Engineering Works (P.) Ltd., the Tribunal clarified that while reassessment proceedings are generally for the benefit of the Revenue, the return filed under Section 148 is to be treated as a return under Section 139. The Tribunal reasoned that the Section 54 exemption is part of computing capital gains, the house property loss can be set off under Section 71(3A), and TDS credit follows the year of income assessment. Therefore, the AO should have verified these claims based on their respective provisions rather than outright rejection. The Tribunal directed the AO to verify the eligibility for Section 54 exemption, house property loss, and TDS credit, and grant them if the conditions are met, after providing the assessee with a reasonable opportunity of being heard. The Tribunal expressly left undecided the grounds related to procedural infirmities in reassessment proceedings.

The Tribunal allowed Ground No. 3 of the assessee's appeal, quashing the reassessment order as time-barred. The Tribunal noted that the original notice under section 148 dated June 29, 2021, was treated as a notice under section 148A(b) pursuant to the Supreme Court's decision in Union of India v. Ashish Agarwal. A subsequent notice under section 148A(b) was issued on May 18, 2022. The assessee did not respond. The order under section 148A(d) was passed on June 30, 2022, after obtaining approval under section 151. A fresh notice under section 148 was also issued on the same date. The Tribunal found that the time allowed for responding to the notice under section 148A(b), including the extension sought, expired on June 17, 2022. The order under section 148A(d) was required to be passed by June 19, 2022, but it was passed on June 30, 2022. Therefore, both the order under section 148A(d) and the fresh notice under section 148 were barred by limitation. The Tribunal respectfully followed the Supreme Court's decision in Union of India v. Rajeev Bansal and decisions of coordinate benches. Consequently, Ground No. 3 was allowed, and the remaining grounds were rendered academic. The appeal was allowed on this basis.

The Tribunal allowed the assessee's appeal. It noted that the CIT(A) had accepted the turnover declared by the assessee and the Revenue had not challenged this finding. The Tribunal found that the assessee had not obtained a tax audit report under section 44AB because more than 95% of business transactions were through banking channels and the turnover was below Rs. 10 crore, a contention accepted by the CIT(A). However, the CIT(A) had estimated the gross profit at 5% against the declared 2.5%. The Tribunal, considering the year-wise profit ratio details submitted by the assessee (ranging from 1.50% to 2.96% for assessment years 2018-19 to 2025-26) and the AO's own record of 2.31% in the preceding year, concluded that the Revenue Authorities had not estimated the gross profit ratio scientifically. Citing the Supreme Court decision in Brijbhusan Lal Praduman Kumar vs. CIT, the Tribunal held that the average profit declared in earlier and subsequent years provides a reasonable basis for estimation. Therefore, the Tribunal accepted the assessee's declared gross profit rate of 2.50% as reasonable and sufficient, considering the inherently low profit margins in the pharmaceutical distribution business, which was not disputed by the CIT(A). The addition made by the CIT(A) was deleted, and the grounds raised by the assessee were allowed.

The Tribunal held that the CIT(A) had fundamentally misconstrued the issue, treating the demand as a late-filing fee under section 234E instead of interest for delayed remittance of TDS under section 201(1A). The CIT(A)'s order was therefore unsustainable. The Tribunal noted that the assessee had initiated the payment process well before the due date of 7 January 2025, with final approval recorded on that date. Although the assessee's bank account was debited on 8 January 2025, the Tribunal, following precedents such as Standard Chartered Bank v. Dy. CIT and Kumudam Publications (P.) Ltd. v. CIT, held that payment is deemed to be made on the date the instruction is tendered to the bank, provided sufficient funds are available and the delay in actual credit is attributable to the bank or clearing house. The Tribunal found no delay on the part of the assessee in tendering the payment. Accordingly, the Tribunal directed the Assessing Officer to delete the interest charged of ₹1,81,79,890.

The Tribunal held that the addition made by the AO under Section 69A was not justified and directed its deletion. The Tribunal noted that the assessee was engaged in retail paint trading and deposited Rs. 1,88,48,475/- in his bank accounts, from which Rs. 1,88,09,397/- was paid to Asian Paints for material purchase. The Tribunal found that the sheer volume of purchases from Asian Paints indicated significant retail trading transactions, and without proportionate sales, such large purchases would not occur. The Tribunal observed that the Revenue Authorities compared the declared VAT turnover with cash deposits but disregarded the revised VAT return, which showed a total turnover of Rs. 1,70,84,517/-. The Tribunal accepted the assessee's consistent plea that all sales were in cash and deposited in the bank. The fact that the cash deposits were used for substantial purchases from Asian Paints substantiated the claim that the cash was generated from sales of paints. Therefore, the Tribunal found merit in the assessee's submissions, deleted the addition, and allowed the grounds raised.

The Tribunal addressed the grounds raised by the assessee. Regarding the legality of the search and assessment under section 153A, the judgment does not explicitly record the Tribunal's finding on this issue, implying it was not the primary focus or was implicitly accepted by proceeding to the merits. On the issue of additions based on seized document A/IY/03 (unexplained expenditure), the Tribunal allowed the assessee's appeal for AY 2010-11 concerning the addition of ₹3,12,84,800. The Tribunal found that the seized documents did not adequately support the addition, as the figures were not explained, did not represent monetary transactions, and the aggregation of figures for other individuals did not correspond to the addition made. The Tribunal noted that the assessee's contention was not considered by the CIT(A). Similarly, the addition of ₹2,20,955 for AY 2010-11 was also directed to be deleted for similar reasons. For AY 2006-07, the addition of ₹1,05,79,000 based on A/IY/03 was upheld by the lower authorities, but the Tribunal's specific finding on this is not detailed in the provided excerpt, though it is mentioned that Ground No. 4 (challenging addition of ₹3,12,84,800) was allowed. The Tribunal confirmed the business profit at 60% as estimated by the AO for AY 2010-11, dismissing Ground No. 3. The issue of interest under sections 234A, 234B, and 234C was not explicitly decided in the provided excerpt. The appeals for AY 2010-11 were partly allowed.

The Tribunal held that the reassessment proceedings under Section 148 were validly initiated. It distinguished the case from situations requiring Section 153C, stating that Section 153C applies only if incriminating material belonging to the assessee is found during a search of another entity and transferred to the assessee's AO. In this case, information from the search at Renuka Mata Multi-State Co-operative Bank Ltd. directly indicated the assessee's substantial cash deposits, justifying the initiation of reassessment under Section 148. The Tribunal rejected the assessee's contention that Section 153C should have been invoked, as no such material was found. On the merits, the Tribunal found that the assessee had provided substantial third-party evidence, including bank statements, books of account, purchase and sales invoices, and details of parties for receipts and payments, to support the cash deposits. The AO's remand report also found no unaccounted income in the deposits after verifying these documents. The Tribunal held that while not obtaining an audit under Section 44AB or declaring commission income under 'commission business without books' might have separate consequences, it did not establish that the income recorded in the books was unaccounted. The suspicion arising from cash realisations matching invoices could not override the evidence produced. Therefore, the Tribunal directed the AO to delete the additions of ₹1,82,30,050 for AY 2016-17 and ₹1,65,99,815 for AY 2017-18.

The Tribunal addressed the grounds raised by the assessee. Regarding the legality of the search and assessment under section 153A, the judgment does not explicitly record the Tribunal's finding on this issue, implying it was not the primary focus or was implicitly accepted by proceeding to the merits. On the issue of additions based on seized document A/IY/03 (unexplained expenditure), the Tribunal allowed the assessee's appeal for AY 2010-11 concerning the addition of ₹3,12,84,800. The Tribunal found that the seized documents did not adequately support the addition, as the figures were not explained, did not represent monetary transactions, and the aggregation of figures for other individuals did not correspond to the addition made. The Tribunal noted that the assessee's contention was not considered by the CIT(A). Similarly, the addition of ₹2,20,955 for AY 2010-11 was also directed to be deleted for similar reasons. For AY 2006-07, the addition of ₹1,05,79,000 based on A/IY/03 was upheld by the lower authorities, but the Tribunal's specific finding on this is not detailed in the provided excerpt, though it is mentioned that Ground No. 4 (challenging addition of ₹3,12,84,800) was allowed. The Tribunal confirmed the business profit at 60% as estimated by the AO for AY 2010-11, dismissing Ground No. 3. The issue of interest under sections 234A, 234B, and 234C was not explicitly decided in the provided excerpt. The appeals for AY 2010-11 were partly allowed.

The Tribunal acknowledged the assessee's claim of exempt agricultural income and the subsequent ex parte assessment and appellate orders due to the assessee's failure to respond to notices. The Tribunal found that the assessee's inability to attend to tax matters due to his father's serious illness constituted sufficient cause for non-compliance, warranting a fresh opportunity in the interest of justice. The Tribunal noted that the burden of proving agricultural income rests on the assessee. Since the assessee did not appear before the lower authorities, the Tribunal restored the entire issue to the Assessing Officer. The assessee is directed to furnish detailed particulars of agricultural landholding, crops, cultivation methods, seeds, expenditure, sales records (including parties and places), and supporting third-party evidence from agricultural departments and sellers. The Assessing Officer is to verify these details, re-examine the issue after providing a hearing opportunity, and assess the income accordingly. Ground No. 3 was allowed, and the matter was remanded to the Assessing Officer without expressing any view on the merits.

The Tribunal held that the issue was squarely covered in favour of the assessee by the full bench decision of the Honourable Karnataka High Court in Commissioner of Income Tax vs. Hewlett Packard Global Soft Ltd. [2017] 87 taxmann.com 182 (Karnataka) (FB). This decision held that assessees covered under Section 10A or 10B are entitled to 100% exemption or deduction in respect of interest income earned on deposits made in the ordinary course of business, including interest from staff loans. Such interest income would not be taxable as 'Income from other Sources' under Section 56. The Tribunal reasoned that the incidental activity of parking surplus funds or advancing staff loans is an integral part of their export business activity, a commercial expediency, and the interest income cannot be de-linked from the profits and gains derived by the undertaking engaged in the export of articles as envisaged under Section 10A or Section 10B. Therefore, the appeal filed by the Assessing Officer did not survive on both grounds and was dismissed.

The Tribunal addressed the grounds raised by the assessee. Regarding the legality of the search and assessment under section 153A, the judgment does not explicitly record the Tribunal's finding on this issue, implying it was not the primary focus or was implicitly accepted by proceeding to the merits. On the issue of additions based on seized document A/IY/03 (unexplained expenditure), the Tribunal allowed the assessee's appeal for AY 2010-11 concerning the addition of ₹3,12,84,800. The Tribunal found that the seized documents did not adequately support the addition, as the figures were not explained, did not represent monetary transactions, and the aggregation of figures for other individuals did not correspond to the addition made. The Tribunal noted that the assessee's contention was not considered by the CIT(A). Similarly, the addition of ₹2,20,955 for AY 2010-11 was also directed to be deleted for similar reasons. For AY 2006-07, the addition of ₹1,05,79,000 based on A/IY/03 was upheld by the lower authorities, but the Tribunal's specific finding on this is not detailed in the provided excerpt, though it is mentioned that Ground No. 4 (challenging addition of ₹3,12,84,800) was allowed. The Tribunal confirmed the business profit at 60% as estimated by the AO for AY 2010-11, dismissing Ground No. 3. The issue of interest under sections 234A, 234B, and 234C was not explicitly decided in the provided excerpt. The appeals for AY 2010-11 were partly allowed.

The Tribunal held that the Assessee's appeal is dismissed. The Assessee, a developer, paid service tax on the landowners' share of the constructed property as per law, which was recoverable from them. The Assessee claimed this write-off as a deduction under Section 37(1) based on commercial expediency, arguing that recovery would have exposed it to delay compensation claims. However, the Tribunal found no evidence that landowners had made any such claim, nor was there material to establish who was responsible for the project delay. Without such evidence, no nexus was established between the service tax recoverable and any alleged delay compensation. The Tribunal further noted that the Assessee did not incur expenditure during the year but merely wrote off service tax recoverable from landowners. The Assessee provided no justification for bifurcating the amount between two years. As neither the expenditure nor the liability arose during the year, the claim failed to satisfy Section 37(1). The Assessee failed to establish any commercial expediency for writing off the service tax amount.

The Tribunal held that the assessee is eligible to claim foreign tax credit. It respectfully followed the principles laid down by the Hon'ble Supreme Court in Goetz India Ltd. vs. CIT and a Coordinate Bench's decision in the assessee's own case for AY 2020-21. These precedents empower appellate authorities to allow legitimate claims even if not included in the original or revised return. Therefore, the Tribunal directed the Assessing Officer (AO) to consider the foreign tax credit claim after verifying supporting documents. Regarding the disallowance of delayed employee PF contribution, the Tribunal noted that the assessee voluntarily disallowed the contribution while filing the return, and this disallowance was not challenged before the AO or CIT(A). Consequently, the Tribunal dismissed the grounds related to PF contribution as not maintainable. The order of the lower authorities was set aside concerning the foreign tax credit and remitted to the AO for fresh consideration.

The Tribunal held that the penalty under Section 271C of the Income-tax Act is not leviable for belated remittance of TDS after the tax has been deducted. The Tribunal reasoned that penal provisions must be construed strictly and literally. A plain reading of Section 271C indicates it applies to a failure to deduct tax at source, not to a failure to deposit the deducted tax. The judgment noted that Parliament provided consequences for non-payment or belated remittance of TDS under Sections 201(1A) and 276B of the Act. The Tribunal relied on CBDT Circular No. 551, which discusses penalties for failure to deduct tax at source and mentions interest under Section 201(1A) and prosecution under Section 276B for delayed remittance. The Tribunal also referenced the Supreme Court's decision in Commissioner of Income Tax vs. Pranoy Roy, which held that Section 271C is not applicable for belated remittance of TDS. Consequently, the orders of the lower authorities upholding the penalty were reversed, and the Assessing Officer was directed to delete the penalties for both assessment years. The issue of reasonable cause under Section 273B was rendered moot.

The Tribunal held that the penalty under Section 271C of the Income-tax Act is not leviable for belated remittance of TDS after the tax has been deducted. The Tribunal reasoned that penal provisions must be construed strictly and literally. A plain reading of Section 271C indicates it applies to a failure to deduct tax at source, not to a failure to deposit the deducted tax. The judgment noted that Parliament provided consequences for non-payment or belated remittance of TDS under Sections 201(1A) and 276B of the Act. The Tribunal relied on CBDT Circular No. 551, which discusses penalties for failure to deduct tax at source and mentions interest under Section 201(1A) and prosecution under Section 276B for delayed remittance. The Tribunal also referenced the Supreme Court's decision in Commissioner of Income Tax vs. Pranoy Roy, which held that Section 271C is not applicable for belated remittance of TDS. Consequently, the orders of the lower authorities upholding the penalty were reversed, and the Assessing Officer was directed to delete the penalties for both assessment years. The issue of reasonable cause under Section 273B was rendered moot.

The Tribunal held that the assessee is not entitled to immunity from penalty under section 270AA of the Income Tax Act, 1961. The Tribunal observed that the penalty was levied by the Assessing Officer under section 270A(9) of the Act, which deals with cases of under-reporting of income in consequence of misreporting of income. The Tribunal referred to the provisions of section 270AA(3), which explicitly states that immunity from penalty under section 270A is not available where the proceedings for penalty have been initiated under the circumstances referred to in sub-section (9) of section 270A. The Tribunal found that the assessee had falsely claimed deductions under Chapter VI-A without producing any documentary evidence, and the AO had disallowed these claims due to the non-availability of evidence. Therefore, the penalty levied under section 270A(9) was upheld, and the issue raised by the assessee was dismissed. The appeal filed by the assessee was accordingly dismissed.

The Tribunal noted that the assessee had erroneously claimed capital gains in AY 2022-23, whereas the sale of land occurred on 24.08.2020, and the capital gain ought to have been offered in AY 2021-22. The assessee had obtained condonation from the Principal Commissioner of Income Tax for filing a revised return for AY 2021-22 and subsequently filed revised returns for both AY 2021-22 and AY 2022-23. The Tribunal found that the lower authorities had ignored these revised returns. Therefore, the Tribunal directed the AO to examine the documents furnished by the assessee in support of the income declared in the revised return and frame the assessment accordingly, providing the assessee an opportunity of being heard. The assessee was also directed to produce the documents before the AO. The grounds related to capital gains and unexplained time deposits were statistically allowed as the issue was remanded. Other grounds raised by the assessee were dismissed as infructuous.

The Tribunal condoned the delay of 11 days in filing the appeal before it, finding the explanation plausible and sufficient cause. It also condoned the delay of 125 days in filing the appeal before the CIT(A)/NFAC, accepting the explanation as plausible and sufficient cause. The Tribunal admitted additional evidence, a confirmation letter from Shri Chetankumar K. Shirur, under Rule 29 of the ITAT Rules, 1963, deeming it crucial for deciding the issue of beneficial ownership of the bank account. The Tribunal noted that both parties conceded the assessee, a farmer, could not represent his case properly before the AO due to lack of education and technological familiarity. The Tribunal observed that the CIT(A)/NFAC dismissed the appeal without adjudicating on merits. Considering the confirmation letter from Shri Chetankumar K. Shirur stating that the bank account belonged exclusively to his proprietorship and that the transactions did not belong to the assessee, the Tribunal, in the interest of justice, equity, and fair play, remitted the issue to the AO for fresh consideration after examining the additional evidence and granting the assessee a reasonable opportunity of being heard. The issue of whether the deposits constituted the assessee's turnover was expressly left undecided by the Tribunal, pending the AO's re-examination.

The Tribunal noted that the assessments were framed under Section 144 due to the assessee's failure to furnish details, and the CIT(A) dismissed the appeals on grounds of limitation. Consequently, neither the AO nor the CIT(A) had the opportunity to decide the issues on merits. The Tribunal acknowledged that the assessee is a trust claiming exemption under Section 11, but failed to provide the required details to the AO. The assessee's undertaking to produce details and request for remittance to the AO for fresh consideration were considered. In the interest of justice, the Tribunal decided to set aside the orders of the lower authorities for both AYs and remit the issues to the AO for fresh consideration. The assessee was granted liberty to produce necessary documents during remand proceedings and directed to cooperate with the AO. This indulgence was granted on the condition that the assessee deposit Rs. 5,000/- as cost in each appeal towards the Prime Minister’s National Relief Fund within four weeks. The appeals were allowed for statistical purposes.

The Tribunal held that the assessee's intention was to sell agricultural lands after converting them to non-agricultural status and sub-dividing them into plots over time, with the motive of earning profit. This modus operandi was considered an adventure in the nature of trade, not an investment, indicating an intention to maximize profit. The Tribunal found that the assessee had levelled the land and enhanced its saleability, further supporting the intention to resell. Consequently, the Tribunal set aside the CIT(A)'s order and upheld the AO's view that the income should be treated as business income arising from an adventure in the nature of trade. However, since the AO had disallowed expenditure due to non-submission of documentary evidence, the Tribunal directed the AO to estimate the profit at 12% on the gross sale value as income from business. The grounds raised by the Revenue were partly allowed. The Cross Objection filed by the assessee was dismissed as infructuous.

The Tribunal condoned the delay in filing Form No. 10B. The Tribunal noted that the assessee filed Form No. 10B along with the return of income on 15.11.2023, which was beyond the due date but prior to the processing under Section 143(1). The Tribunal relied on various judicial pronouncements, including decisions of the Hon'ble Bombay High Court in St. Thomas High School vs. Commissioner of Income Tax (Exemption), the Hon'ble Madras High Court in Suga Jeeva Oozhiyangal vs. CIT(Exemptions), and Coordinate Benches of the Tribunal in Anasuya Foundation vs. Income Tax Officer (Exemptions) and M/s. Aditi Educational Trust vs. ITO. These decisions held that delay in filing Form 10B can be condoned, and exemption under Section 11 should not be denied merely on a procedural breach when the assessee is otherwise entitled to it and no prejudice is caused to the revenue. The Tribunal reasoned that a justice-oriented approach should be adopted, and technicalities should not bar substantial relief. The Tribunal set aside the impugned order and restored the issue to the file of the Jurisdictional Assessing Officer (AO) to verify the assessee's claim under Section 11 on merits. The assessee was directed to cooperate with the AO. The grounds raised by the assessee were allowed for statistical purposes.

The Tribunal allowed the assessee's appeal. It found that the Karnataka Cooperative Bank Ltd. issued clarifications on 31.01.2025 and 14.07.2026, stating that the assessee's sole bank account had limited transactions (Rs. 46,000/- credited, Rs. 45,500/- debited). The bank confirmed that the account with significant withdrawals (Rs. 3,27,59,951/-) and deposits (Rs. 33,15,750/-) belonged to M/s. Sai Agro Seeds. The bank further clarified that the assessee's PAN was inadvertently and erroneously linked to other customers' accounts due to a data entry error. The Tribunal noted that the CIT(A) had overlooked these crucial bank clarifications and the bank statements of M/s. Sai Agro Seeds, which were filed by the assessee. The Tribunal held that the CIT(A) erred in demanding proof of transactions from the assessee for a third party's account and that the bank's clarification, supported by the assessee's own account statement, should be given weight. Consequently, the additions made under Sections 68 and 69A, and the consequential tax under Section 115BBE, were deleted. The Tribunal also noted that the penalties under Sections 271AAC(1), 271F, and 272A(1)(d) were confirmed without valid reason, implying they would also be deleted as a consequence of the primary additions being deleted. The grounds raised by the assessee were allowed.

The Tribunal condoned the delay of 261 days in filing the appeal, accepting the assessee's explanation regarding his basic education, lack of technological savviness, business management responsibilities, and post-surgery health issues. Regarding the addition of Rs. 5,15,600/- under Section 68, the Tribunal noted that the AO had accepted the entire cash deposits made during the year as out of sale proceeds, given the declared sales of Rs. 18,98,21,779/-. However, the AO singled out the demonetization period deposits for further verification. The assessee contended that these deposits were from sales proceeds and the closing cash balance of Rs. 5,86,563/- as of November 8, 2016, as per audited books. The Tribunal, considering that the assessee's accounts were audited as per Section 44AB, found the cash deposited during the demonetization period to be fully explained. Therefore, the Tribunal directed the AO to delete the addition of Rs. 5,15,600/- made under Section 68 read with Section 115BBE. The appeal was allowed.

The Tribunal noted that the assessments were framed under Section 144 due to the assessee's failure to furnish details, and the CIT(A) dismissed the appeals on grounds of limitation. Consequently, neither the AO nor the CIT(A) had the opportunity to decide the issues on merits. The Tribunal acknowledged that the assessee is a trust claiming exemption under Section 11, but failed to provide the required details to the AO. The assessee's undertaking to produce details and request for remittance to the AO for fresh consideration were considered. In the interest of justice, the Tribunal decided to set aside the orders of the lower authorities for both AYs and remit the issues to the AO for fresh consideration. The assessee was granted liberty to produce necessary documents during remand proceedings and directed to cooperate with the AO. This indulgence was granted on the condition that the assessee deposit Rs. 5,000/- as cost in each appeal towards the Prime Minister’s National Relief Fund within four weeks. The appeals were allowed for statistical purposes.

The Tribunal upheld the order of the learned CIT(A). Regarding the condonation of delay, the Tribunal did not agree with the assessee's reason that the issue required thorough analysis and consultation with tax professionals, stating that the delay was not justified. The Tribunal also noted that Form 67 was not available to the CPC at the time of processing the return. Consequently, the Tribunal found no infirmity in the CIT(A)'s decision to dismiss the appeal for delay and also on merits. The grounds raised by the assessee were dismissed. The Tribunal did not expressly leave any issue undecided.

The Tribunal held that the orders of the lower authorities should be set aside. The Tribunal found that the assessee had made efforts to explain the transactions by providing bank statements, RTGS details, KSBCL ledger, and confirmation letters from the wine shop owners. The Tribunal noted that while the lower authorities found technical defects in the confirmations, they did not conduct sufficient inquiries. The AO could have summoned KSBCL officials and the wine shop owners, and issued notices under section 133(6) to verify the assessee's version. The Tribunal observed that the documents filed by the assessee almost proved that the money belonged to the wine shop owners and was sent to KSBCL for liquor purchases. Therefore, the addition was not required. The appeal filed by the assessee was allowed.

The Tribunal condoned the delay of 67 days in filing the appeal, finding sufficient cause based on the assessee's serious medical condition, citing principles from Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) and People Education & Economic Development Society Vs/ ITO (100 ITD 87). Regarding the addition of Rs. 8,49,000/-, the Tribunal noted that while the AO accepted Rs. 3,88,000/- as closing cash balance, the remaining amount was claimed from personal savings, wife, and parents, which was not substantiated with documentary evidence by the lower authorities. However, the assessee before the Tribunal claimed to have furnished a corrected cash book and supporting reconciliation during the first appellate proceedings, which the CIT(A)'s order seemed to contradict. In the interest of justice, equity, and fair play, the Tribunal decided to remit the entire issue in dispute back to the file of the AO for a fresh decision, directing the assessee to produce the corrected cash book along with sales, purchase, and ledger accounts. The AO was directed to grant a reasonable opportunity of being heard to the assessee.

The Tribunal held that the non-payment of GST, while collected, would not automatically be treated as underreporting or misreporting of income under Section 270A. The Tribunal also found that the AO had failed to specify the limb under which the penalty was being imposed in the penalty notice. The assessment order and penalty notice did not mention the specific limb of violation. Although the penalty order eventually stated the penalty was levied under Section 270A(8) for underreporting in consequence of misreporting, the initial notice was deficient. The Tribunal noted that penalty proceedings are quasi-criminal in nature, requiring the AO to specify the limb in the notice to provide an effective opportunity to the assessee. Relying on coordinate bench decisions, the Tribunal set aside the penalty order on this legal ground, without adjudicating the other grounds. The ratio decidendi is that a penalty under Section 270A cannot be sustained if the penalty notice fails to specify the limb of violation, thus denying the assessee an effective opportunity to defend themselves.

The Tribunal held that the orders of the CIT(E) rejecting the applications for registration under Section 12AB and approval under Section 80G were not in accordance with the provisions of the Act and were against the principles of natural justice. The Tribunal observed that the assessee had conducted various activities towards its objects, supported by financial statements and photographs. The CIT(E)'s conclusion that activities had not commenced was not supported by evidence. The Tribunal agreed with the assessee that the quantum of expenditure is a matter for the AO at the assessment stage, not for the CIT(E) during registration. Furthermore, the CIT(E) had not provided a show cause notice or a personal hearing before passing adverse orders, violating natural justice. Citing judgments from the Supreme Court and the Jurisdictional High Court, and orders of coordinate benches, the Tribunal found that the manner of application of funds and the quantum of expenditure are issues to be examined by the AO. Consequently, the Tribunal set aside the orders of the CIT(E) and restored the issues to the file of the CIT(E) for fresh consideration in accordance with law. The CIT(E) was directed to consider the applications afresh, allowing the assessee to furnish necessary documents. The cancellation of provisional registration and 80G approval was also deemed not in order.

The Tribunal held that the orders of the CIT(E) rejecting the applications for registration under Section 12AB and approval under Section 80G were not in accordance with the provisions of the Act and were against the principles of natural justice. The Tribunal observed that the assessee had conducted various activities towards its objects, supported by financial statements and photographs. The CIT(E)'s conclusion that activities had not commenced was not supported by evidence. The Tribunal agreed with the assessee that the quantum of expenditure is a matter for the AO at the assessment stage, not for the CIT(E) during registration. Furthermore, the CIT(E) had not provided a show cause notice or a personal hearing before passing adverse orders, violating natural justice. Citing judgments from the Supreme Court and the Jurisdictional High Court, and orders of coordinate benches, the Tribunal found that the manner of application of funds and the quantum of expenditure are issues to be examined by the AO. Consequently, the Tribunal set aside the orders of the CIT(E) and restored the issues to the file of the CIT(E) for fresh consideration in accordance with law. The CIT(E) was directed to consider the applications afresh, allowing the assessee to furnish necessary documents. The cancellation of provisional registration and 80G approval was also deemed not in order.