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The Tribunal held that the addition of Rs. 4,60,415/- is unsustainable. The AO's approach of estimating 5% of fresh unsecured loans as income, without bringing specific material on record to establish that the borrowings represented unexplained income, is wholly unsustainable. The Tribunal emphasized that an addition cannot be sustained merely on an ad hoc percentage. The burden lies on the revenue to demonstrate, with specific facts and material, why and to what extent any part of the loans is liable to be treated as unexplained income. There is no statutory presumption that 5% of a loan transaction represents income. The Ld. CIT(A) failed to examine the evidentiary basis and legal justification for the estimation. Accordingly, this addition was deleted. Regarding the disallowance of expenses, the Tribunal found that all evidences like bills and vouchers were on record, and no tangible reason was given by the AO for the disallowance. Therefore, no addition is called for on this ground. The appeal of the assessee is allowed.
The Tribunal held that mere delay in the registration of the final conveyance deed beyond the assessee's control should not prevent a legitimate statutory exemption. While the sale consideration was paid within the statutory period, the CIT(A) had confirmed the disallowance based on the failure to establish possession within two years. The assessee has now provided purchase agreements, a possession letter, and other documents. Since the revenue contended that some of these documents were not presented to the lower authorities, and neither the AO nor the CIT(A) conducted a factual verification of possession within the stipulated period, the Tribunal set aside the CIT(A)'s order. The matter was restored to the file of the AO for verification of the agreements, possession letter, and other documents. If the AO finds that possession was obtained and consideration was paid within the stipulated two years, the deduction under Section 54B shall be allowed. The assessee is directed to furnish all necessary evidence, and a reasonable opportunity of being heard will be provided. All contentions of the assessee are left open. Ground No. 1 is allowed for statistical purposes.
The Tribunal dismissed both appeals. Regarding the classification under Section 12AB(1)(b), the Tribunal noted that while the trust deed allowed for donations to religious places, the financial analysis showed that religious donations constituted 16.9% of total donations and 16.4% of total expenses. Crucially, the Tribunal examined Section 80G(5B) which limits expenditure of a religious nature to 5% of total income. In this case, donations for religious purposes exceeded this prescribed limit. Consequently, as per Explanation 3 to Section 80G, the institution is deemed to be one where charitable purposes do not include any purpose which is wholly or substantially of a religious nature. This unambiguous language of the Act led to the rejection of both appeals. The operative direction was dismissal of both appeals.
The Tribunal held that the rejection of the application for registration under section 12AB was upheld. The CIT(E) was not satisfied about the genuineness of the assessee's activities, as there was no ongoing activity and no documentary evidence of steps towards revival. The Tribunal referred to section 12AB(1)(b) which requires the CIT(E) to be satisfied about the genuineness of activities and compliance with other laws. The assessee's admission of non-operational status and lack of evidence supported the CIT(E)'s finding on this aspect. However, the Tribunal found that the CIT(E) erred in cancelling or superseding the existing registration as an automatic consequence of rejecting the new application. The cancellation of existing registration requires following the specific procedure under section 12AB(4), including identifying a specified violation, issuing a show-cause notice, and providing an opportunity of hearing, as per the principle in Nazir Ahmad v. King Emperor. Since this procedure was not followed, the cancellation was set aside and the matter was restored to the CIT(E) for fresh adjudication on the cancellation aspect, if he proposes to proceed, by following the due process. The appeals were partly allowed for statistical purposes.
The Tribunal held that the cash deposits of INR 14,37,910/- were sufficiently explained by prior cash withdrawals aggregating to INR 15,73,500/- from the same bank account during the relevant financial year. The Tribunal noted that the bank statements and the 'Peak Credit Summary' clearly indicated sufficient cash availability from documented withdrawals to cover the subsequent deposits. In the absence of contrary evidence showing the withdrawn funds were used elsewhere, the Tribunal found that the assessee had discharged the primary onus under Section 69A. Therefore, the addition of INR 14,37,910/- made by the Assessing Officer under Section 69A was deleted. Consequently, Grounds 1, 2, and 3 were allowed. Regarding Ground 4, the Tribunal dismissed the initiation of penalty proceedings under Section 274 read with Section 271AAC(1) as premature. The appeal was partly allowed.
The Tribunal held that the addition of Rs. 43,37,745/- made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, was not justified. The Tribunal noted that the assessee had received loans totaling Rs. 42,00,000/- from a corporate entity on 03.11.2012 and 05.11.2012. Crucially, the Tribunal observed that the identity, genuineness, and creditworthiness of the loan parties were not disputed. Additionally, the receipt of the loan, its repayment, and the repayment of interest were also not doubted. Based on these facts, the Tribunal found no basis to affirm the Assessing Officer's decision that the loan was obtained from a bogus entry provider. Consequently, the appeal filed by the assessee was allowed.
The Tribunal condoned the delay of 669 days in filing the appeal, considering the bona fide and unavoidable circumstances presented by the assessee, including medical condition and treatment, supported by documentary evidence. The Tribunal noted that the assessee failed to file submissions or documentary evidence before the AO and CIT(A) despite opportunities. The assessee expressed willingness to ensure compliance if the matter was restored to the AO. The Tribunal, considering the facts and the assessee's willingness to comply, found it appropriate to restore the matter back to the file of the AO for a denovo assessment. The AO was directed to ensure compliance before him. The appeal was allowed for statistical purposes. The Tribunal did not explicitly decide on the merits of grounds 2 to 5, as the matter was remanded for fresh assessment.
The Tribunal dismissed both appeals. Regarding the classification under Section 12AB(1)(b), the Tribunal noted that while the trust deed allowed for donations to religious places, the financial analysis showed that religious donations constituted 16.9% of total donations and 16.4% of total expenses. Crucially, the Tribunal examined Section 80G(5B) which limits expenditure of a religious nature to 5% of total income. In this case, donations for religious purposes exceeded this prescribed limit. Consequently, as per Explanation 3 to Section 80G, the institution is deemed to be one where charitable purposes do not include any purpose which is wholly or substantially of a religious nature. This unambiguous language of the Act led to the rejection of both appeals. The operative direction was dismissal of both appeals.
The Tribunal held that the penalty levied under Section 270A for misreporting of income was not sustainable. The Tribunal relied on the decision in Hiro Mulchand Tanwani Vs. ITO and Siddharth Laxminkant Vaderkar Vs. Income Tax Officer, which held that a claim of deduction made in the return, even if ultimately found inadmissible, does not automatically lead to the conclusion that the assessee has misreported income. The Tribunal noted that penalty proceedings are distinct from assessment proceedings and that Section 270A distinguishes between 'under-reporting' and 'misreporting'. The Revenue failed to establish that the assessee furnished false evidence, suppressed facts, or made deliberate misrepresentation. The Tribunal also observed that the Assessing Officer had not specified the sub-limb of Section 270A(9) under which the penalty for misreporting was levied. Therefore, the deletion of the penalty by the CIT(A) was upheld. The appeal filed by the Revenue was dismissed.
The Tribunal held that the reassessment proceedings were valid. Regarding the grounds challenging the validity of reassessment proceedings (Grounds 1-6), the Tribunal found that the notice under Section 148 was issued within three years when the time granted for reply to the Section 148A notice was excluded, and Proviso 5 to Section 149(1) was considered. Therefore, Section 149(1)(b) was not attracted, and Section 149(1)(a) was applicable, allowing reassessment even if income escaping assessment was less than Rs. 50 Lakhs. The approval under Section 151 was taken from the correct authority (PCIT), and any reference to Section 149(1)(b) in the approval form was a clerical error. The approval was deemed authenticated as per Rule 127A of the IT Rules. The AO followed the procedure under Section 148A, and the conditions for the deeming fiction under Explanation 2(iv) to Section 148 were not met, necessitating the Section 148A procedure. Thus, Grounds 1-6 were dismissed. On Ground 7, concerning the disallowance under Section 80GGC, the Tribunal held that the donation made to the Rashtriya Samajwadi Party was bogus, as evidenced by investigation material, statements recorded under Section 132(4), bank trail analysis, and the established modus operandi of the recipient political party. The assessee failed to establish that the contribution was a genuine donation eligible for deduction. The Tribunal relied on Supreme Court judgments in CIT v. Durga Prasad More and Sumati Dayal v. CIT, stating that taxing authorities are not required to wear blinkers and can look beyond apparent transactions. The disallowance of Rs. 1,00,000/- was upheld.
The Tribunal held that the rejection of the application for registration under section 12AB was upheld. The CIT(E) was not satisfied about the genuineness of the assessee's activities, as there was no ongoing activity and no documentary evidence of steps towards revival. The Tribunal referred to section 12AB(1)(b) which requires the CIT(E) to be satisfied about the genuineness of activities and compliance with other laws. The assessee's admission of non-operational status and lack of evidence supported the CIT(E)'s finding on this aspect. However, the Tribunal found that the CIT(E) erred in cancelling or superseding the existing registration as an automatic consequence of rejecting the new application. The cancellation of existing registration requires following the specific procedure under section 12AB(4), including identifying a specified violation, issuing a show-cause notice, and providing an opportunity of hearing, as per the principle in Nazir Ahmad v. King Emperor. Since this procedure was not followed, the cancellation was set aside and the matter was restored to the CIT(E) for fresh adjudication on the cancellation aspect, if he proposes to proceed, by following the due process. The appeals were partly allowed for statistical purposes.
The Tribunal held that no addition was called for on the count of cash payment towards credit card expenditure. The reasoning was based on the fact that the evidence of payment of the credit card was on record and was not in dispute. Since the assessee provided a summary of the source of funds and their utilization, and this evidence was not contested by the Revenue, the Tribunal found no basis for the addition. The ratio decidendi is that if the source of payment for credit card expenses is demonstrably from the books of a corporate entity in which the assessee is a director, and this evidence is not disputed, then no addition can be made on that count. The appeal of the assessee was allowed, with no specific issue left undecided.
The Tribunal noted that all the appeals involved a common issue regarding provisions for bad and doubtful debts under Section 36(1)(viia). The Tribunal referred to a Special Bench decision in the assessee's own case (ITA No. 156/Chd/2017, ITA No. 425/Chd/2017, ITA No. 1181/Chd/2018 & ITA No. 283/Chd/2019) dated 05/05/2026. In that decision, the Special Bench, considering the Karnataka High Court's ruling in Bellad Bagewadi Urban Souhard Sahakari Bank Niramit vs. CIT, held that banks are bound by RBI guidelines and that provisions made for standard assets as per these guidelines should be allowed as deduction under Section 36(1)(viia), subject to the overall ceiling. The Special Bench answered the reference in the affirmative. However, the present bench, after considering the rival submissions and the Special Bench order, concluded that the matter required re-adjudication at the level of the Ld. CIT(A) to take into account the Special Bench decision. Therefore, the appeals were restored to the file of the Ld. CIT(A) with directions to re-adjudicate the issue in accordance with the Special Bench's decision. The issue of interest under Section 234D for AY 2011-12 was not explicitly decided.
The Tribunal held that Section 13(1)(b) cannot be invoked at the stage of considering an application for registration under Section 12A/12AB. The scope of inquiry by the Commissioner at this stage is limited to the genuineness of the trust, its execution, and whether its activities conform to its declared objects. The question of denial of exemption under Section 11 on the ground of Section 13(1)(b) applicability arises only during assessment proceedings, not at the registration stage. The Tribunal noted that the CIT(E) had not recorded any finding that the assessee had actually incurred any expenditure for the benefit of the particular caste, relying solely on the objects of the trust. Therefore, the order of the CIT(E) denying registration under Section 12A was set aside and the matter was remanded for reconsideration. For the Section 80G renewal, the matter was also restored to the CIT(E) for adjudication based on the decision regarding Section 12A registration and the reasons for the delay in filing the application.
The Tribunal noted that all the appeals involved a common issue regarding provisions for bad and doubtful debts under Section 36(1)(viia). The Tribunal referred to a Special Bench decision in the assessee's own case (ITA No. 156/Chd/2017, ITA No. 425/Chd/2017, ITA No. 1181/Chd/2018 & ITA No. 283/Chd/2019) dated 05/05/2026. In that decision, the Special Bench, considering the Karnataka High Court's ruling in Bellad Bagewadi Urban Souhard Sahakari Bank Niramit vs. CIT, held that banks are bound by RBI guidelines and that provisions made for standard assets as per these guidelines should be allowed as deduction under Section 36(1)(viia), subject to the overall ceiling. The Special Bench answered the reference in the affirmative. However, the present bench, after considering the rival submissions and the Special Bench order, concluded that the matter required re-adjudication at the level of the Ld. CIT(A) to take into account the Special Bench decision. Therefore, the appeals were restored to the file of the Ld. CIT(A) with directions to re-adjudicate the issue in accordance with the Special Bench's decision. The issue of interest under Section 234D for AY 2011-12 was not explicitly decided.
The ITAT condoned the delay of 120 days in filing the appeal, finding that the delay was explained by the assessee and the Revenue did not seriously oppose it. On the merits, the Tribunal acknowledged that the assessee had failed to participate before the AO and the CIT(A), leading the lower authorities to proceed ex-parte and make additions. However, the ITAT also recognized that assessment proceedings aim to determine correct tax liability. Since the CIT(A) had not adjudicated the issue on merit but dismissed the appeal due to non-participation, the Tribunal decided to give the assessee one more opportunity. Consequently, the ITAT set aside the orders of the lower authorities and remanded the matter back to the file of the AO. This was made subject to the assessee paying a cost of Rs. 5,000/- to be deposited in the PGI Poor Relief Fund. The AO was directed to examine all evidence and legal contentions raised by the assessee and decide the issue afresh after providing a reasonable opportunity of being heard. The AO was also given liberty to decide the matter based on available material if the assessee failed to cooperate. The appeal was allowed for statistical purposes.
The Tribunal held that the approach adopted by the Learned CIT(A) was untenable and could not be countenanced. The Tribunal found that the CIT(A) dismissed the appeal on two grounds: (i) the assessee opting for the Direct Tax Vivad se Vishwas Scheme, 2024 (DTVSV 2024), implying an admission of the addition, and (ii) the assessee's failure to prosecute the appeal. The Tribunal clarified that under Section 250(6) of the Act, the CIT(A) is required to adjudicate the appeal by a written order stating the points for determination, the decision, and the reasons, even if the assessee fails to appear or make proper representations, citing CIT vs. Premkumar Arjundas Luthra (HUF). Furthermore, the Tribunal held that opting for the DTVSV, 2024 does not amount to an admission or concession of liability. The Tribunal set aside the impugned order of the CIT(A) and directed the CIT(A) to adjudicate the appeal afresh as per law. The assessee was granted liberty to raise all legal contentions, including those challenging the reopening under Section 147/148 and the validity of approval under Section 151. The assessee was directed to cooperate, produce all relevant documents without unnecessary adjournments, and a reasonable opportunity of being heard was to be granted. The Tribunal allowed grounds 1 to 6 for statistical purposes without returning any findings on the merits of the addition. No issue was expressly left undecided.
The Tribunal noted that all the appeals involved a common issue regarding provisions for bad and doubtful debts under Section 36(1)(viia). The Tribunal referred to a Special Bench decision in the assessee's own case (ITA No. 156/Chd/2017, ITA No. 425/Chd/2017, ITA No. 1181/Chd/2018 & ITA No. 283/Chd/2019) dated 05/05/2026. In that decision, the Special Bench, considering the Karnataka High Court's ruling in Bellad Bagewadi Urban Souhard Sahakari Bank Niramit vs. CIT, held that banks are bound by RBI guidelines and that provisions made for standard assets as per these guidelines should be allowed as deduction under Section 36(1)(viia), subject to the overall ceiling. The Special Bench answered the reference in the affirmative. However, the present bench, after considering the rival submissions and the Special Bench order, concluded that the matter required re-adjudication at the level of the Ld. CIT(A) to take into account the Special Bench decision. Therefore, the appeals were restored to the file of the Ld. CIT(A) with directions to re-adjudicate the issue in accordance with the Special Bench's decision. The issue of interest under Section 234D for AY 2011-12 was not explicitly decided.
The Tribunal held that it was fit and proper in the interest of justice to restore the matter back to the file of the CIT(A) for fresh consideration. This decision was based on the fact that the appeal had gone completely unrepresented before the CIT(A). The Tribunal directed the assessee to submit all relevant details and submissions without undue delay or seeking unnecessary adjournments. The appeal was allowed for statistical purposes. The specific finding on the addition made under Section 69 of the Act was not decided as the matter was remanded.
The ITAT condoned the delay of 657 days in filing the appeal, finding that the assessee had duly explained the reasons for the delay and it was not deliberate or intentional. On merits, the Tribunal held that the matter required to be remitted back to the Assessing Officer (AO). The Tribunal noted that adequate opportunity had not been afforded to the assessee and that the additions were made on account of alleged cash deposits in three bank accounts, which prima facie did not belong to the assessee. The ITAT set aside the orders of the lower authorities and remanded the matter to the AO, subject to the assessee paying a cost of Rs. 3000/- to the PGI Poor Relief Fund. The AO was directed to consider that one of the bank accounts in question does not belong to the assessee, examine all evidence and legal contentions, and decide the issue afresh after providing a reasonable opportunity of being heard. The assessee was directed to cooperate and not seek unnecessary adjournments.
The Tribunal held that Section 13(1)(b) cannot be invoked at the stage of considering an application for registration under Section 12A/12AB. The scope of inquiry by the Commissioner at this stage is limited to the genuineness of the trust, its execution, and whether its activities conform to its declared objects. The question of denial of exemption under Section 11 on the ground of Section 13(1)(b) applicability arises only during assessment proceedings, not at the registration stage. The Tribunal noted that the CIT(E) had not recorded any finding that the assessee had actually incurred any expenditure for the benefit of the particular caste, relying solely on the objects of the trust. Therefore, the order of the CIT(E) denying registration under Section 12A was set aside and the matter was remanded for reconsideration. For the Section 80G renewal, the matter was also restored to the CIT(E) for adjudication based on the decision regarding Section 12A registration and the reasons for the delay in filing the application.
The Tribunal held that the CIT(E) had not considered crucial documents and submissions made by the assessee, including the One Time Settlement (OTS) documents, correspondence with the bank, notices under the SARFAESI Act, and details of financial assistance extended by trustees and specified persons. The Tribunal noted that the contributions from specified persons were interest-free and aimed at protecting the institution from financial collapse, which could be a valid ground for granting registration. The Tribunal found it inappropriate to verify these documents for the first time in appellate proceedings. Therefore, the Tribunal set aside the impugned orders and restored the matters to the file of the CIT(E) for a fresh examination. The assessee was directed to furnish all relied-upon documents, and the CIT(E) was instructed to objectively verify the utilization of funds, the interest-free nature of loans, and the absence of personal benefit to specified persons. The CIT(E) was also directed to afford an adequate opportunity of hearing and pass a fresh, reasoned order. The Tribunal clarified that it had not expressed any opinion on the merits of the controversy. The appeals were allowed for statistical purposes.
The Tribunal held that the material on record was insufficient to sustain the impugned addition. The primary basis for the addition was the statement of the proprietor of M/s Vinayak Traders, recorded behind the assessee's back. The Tribunal noted that while proceedings under the Income Tax Act are not governed by strict rules of evidence, an assessment must be founded upon material with rational probative value, and the assessee must have a reasonable opportunity to explain and rebut adverse inferences. The statement of the proprietor, without adequate independent corroboration or an effective opportunity for cross-examination, could not be regarded as sufficient substantive evidence. The subsequent withdrawal of funds by the supplier, even if established, was a circumstance giving rise to suspicion but did not conclusively establish that the assessee's purchases were bogus. The Tribunal distinguished between material sufficient for reopening and material sufficient to sustain an addition. Since the Revenue failed to bring on record independent and corroborative material or afford an effective opportunity for cross-examination, the addition could not be sustained. The benefit of doubt therefore went in favour of the assessee. The appeal was allowed on merits.
The Tribunal condoned the delay in filing the appeals, considering the ex-parte nature of the orders and the assessee's submission of being a layman. Regarding the addition of Rs. 1,16,08,000/-, the Tribunal noted that the assessment order did not even mention the bank account in which the alleged cash deposits were made. The assessee's claim of total deposits being Rs. 12,52,870/- was also considered. The Tribunal held that the matter had not been examined properly at the lower authorities' level, specifically citing the Assessing Officer's failure to mention bank account details. In the interest of justice, the Tribunal restored the matter to the Assessing Officer for a denovo assessment, directing the assessee to cooperate. For statistical purposes, Appeal No. 688/Chd/2026 was treated as allowed. Consequently, the other three appeals (ITA Nos. 686, 687 & 689/Chd/2026) relating to penalties were also restored to the Assessing Officer for fresh adjudication and were allowed for statistical purposes. No issue was expressly left undecided.
The Tribunal condoned the delay in filing the appeals, considering the ex-parte nature of the orders and the assessee's submission of being a layman. Regarding the addition of Rs. 1,16,08,000/-, the Tribunal noted that the assessment order did not even mention the bank account in which the alleged cash deposits were made. The assessee's claim of total deposits being Rs. 12,52,870/- was also considered. The Tribunal held that the matter had not been examined properly at the lower authorities' level, specifically citing the Assessing Officer's failure to mention bank account details. In the interest of justice, the Tribunal restored the matter to the Assessing Officer for a denovo assessment, directing the assessee to cooperate. For statistical purposes, Appeal No. 688/Chd/2026 was treated as allowed. Consequently, the other three appeals (ITA Nos. 686, 687 & 689/Chd/2026) relating to penalties were also restored to the Assessing Officer for fresh adjudication and were allowed for statistical purposes. No issue was expressly left undecided.
The Tribunal held that once the assessee has raised a specific claim before the appellate authorities and has placed supporting material on record, the claim requires examination on its factual and legal merits. The Tribunal found that the mere fact that the claim was not reflected in the relevant column of the original return does not, in the facts and circumstances, obviate the requirement of examining the underlying claim and supporting evidence in accordance with law. The Tribunal noted that the claim was available for examination before the appellate authorities along with supporting material, including Form No.16. Therefore, in the interest of substantial justice, the Tribunal restored the matter to the file of the Assessing Officer for fresh examination of the assessee's claim for exemption of Rs.10,00,000/- towards gratuity under section 10(10) and Rs.3,00,000/- towards leave encashment under section 10(10AA). The Assessing Officer was directed to examine the claims on merits, considering the statutory provisions and documentary evidence, and to provide the assessee with a reasonable opportunity of being heard. The Tribunal explicitly stated that it had not expressed any opinion on the ultimate allowability of the exemptions.
The Tribunal held that the CIT(E) had not considered crucial documents and submissions made by the assessee, including the One Time Settlement (OTS) documents, correspondence with the bank, notices under the SARFAESI Act, and details of financial assistance extended by trustees and specified persons. The Tribunal noted that the contributions from specified persons were interest-free and aimed at protecting the institution from financial collapse, which could be a valid ground for granting registration. The Tribunal found it inappropriate to verify these documents for the first time in appellate proceedings. Therefore, the Tribunal set aside the impugned orders and restored the matters to the file of the CIT(E) for a fresh examination. The assessee was directed to furnish all relied-upon documents, and the CIT(E) was instructed to objectively verify the utilization of funds, the interest-free nature of loans, and the absence of personal benefit to specified persons. The CIT(E) was also directed to afford an adequate opportunity of hearing and pass a fresh, reasoned order. The Tribunal clarified that it had not expressed any opinion on the merits of the controversy. The appeals were allowed for statistical purposes.
The Tribunal condoned the delay in filing the appeals, considering the ex-parte nature of the orders and the assessee's submission of being a layman. Regarding the addition of Rs. 1,16,08,000/-, the Tribunal noted that the assessment order did not even mention the bank account in which the alleged cash deposits were made. The assessee's claim of total deposits being Rs. 12,52,870/- was also considered. The Tribunal held that the matter had not been examined properly at the lower authorities' level, specifically citing the Assessing Officer's failure to mention bank account details. In the interest of justice, the Tribunal restored the matter to the Assessing Officer for a denovo assessment, directing the assessee to cooperate. For statistical purposes, Appeal No. 688/Chd/2026 was treated as allowed. Consequently, the other three appeals (ITA Nos. 686, 687 & 689/Chd/2026) relating to penalties were also restored to the Assessing Officer for fresh adjudication and were allowed for statistical purposes. No issue was expressly left undecided.
The Tribunal condoned the delay of 417 days in filing the appeal, subject to a cost of Rs. 20,000 to the PM National Relief Fund. Regarding the substantive grounds, the Tribunal, respectfully following the coordinate bench's decision in ITA No. 3784/Del/2024, held that the delay in filing Form 10B online was a curable defect. Consequently, the Tribunal condoned the delay in filing the audit report. It was also held that the assessee did file the return of income within the time limit prescribed for a belated return. Since these aspects were not considered by the Ld. Addl/Jt. CIT(A) due to the assessee's non-compliance before him, the matter was restored to the file of the Ld. Addl/Jt. CIT(A). The Ld. Addl/Jt. CIT(A) was directed to decide the issue afresh after taking into consideration the audit report filed in Form 10B as valid, given the condonation of delay. The appeal was allowed for statistical purposes.
The Tribunal condoned the delay in filing the appeals, considering the ex-parte nature of the orders and the assessee's submission of being a layman. Regarding the addition of Rs. 1,16,08,000/-, the Tribunal noted that the assessment order did not even mention the bank account in which the alleged cash deposits were made. The assessee's claim of total deposits being Rs. 12,52,870/- was also considered. The Tribunal held that the matter had not been examined properly at the lower authorities' level, specifically citing the Assessing Officer's failure to mention bank account details. In the interest of justice, the Tribunal restored the matter to the Assessing Officer for a denovo assessment, directing the assessee to cooperate. For statistical purposes, Appeal No. 688/Chd/2026 was treated as allowed. Consequently, the other three appeals (ITA Nos. 686, 687 & 689/Chd/2026) relating to penalties were also restored to the Assessing Officer for fresh adjudication and were allowed for statistical purposes. No issue was expressly left undecided.
The Tribunal held that the issue concerning manufacturing/quantitative analysis requires fresh adjudication. The assessee's alternative quantitative working and the errors pointed out in the AO's calculations cannot be disregarded. Given the technical nature involving manufacturing processes, raw material consumption, and labour, an objective determination with expert assistance is necessary. The Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) is directed to call for a comprehensive remand report from the AO, covering manufacturing analysis, quantitative calculations, labour/man-hours, assumptions, assessee's objections, and alternative working. The AO is to obtain expert assistance from the Institute of Wood Science and Technology (IWST) for technical aspects and incorporate this in the remand report. The CIT(A) will then adjudicate the appeal afresh after considering the remand report, expert opinion, assessee's objections, and alternative calculations. The Tribunal clarified that it was not expressing any final opinion on the merits of additions based on diary entries or partner statements, which will be examined afresh by the CIT(A). The Tribunal also clarified that the allegation of the diary being fabricated is not to be reopened as it has attained finality. The matter is restored solely for examining the manufacturing/quantitative analysis and its consequential evidentiary effect. The CIT(A) shall decide the appeal afresh without being influenced by any observations in this order. The appeal is allowed for statistical purposes.
The Tribunal held that Section 115BBE is prospective in nature and does not apply to Assessment Year 2017-18, following the decision of the Rajasthan High Court in Deepak Maratha and various coordinate benches of the Tribunal. Consequently, Ground No. 4 of the appeal was allowed. Regarding Ground No. 1, the Tribunal found no reason to disallow depreciation on the amount that was declared for investment in fixed assets and capitalized, especially after holding that Section 115BBE is not applicable for AY 2017-18. Therefore, Ground No. 1 was also allowed. Grounds No. 2 and 3 were considered consequential to the above grounds and thus stood allowed without separate adjudication. The appeal of the assessee was allowed in its entirety.
The Tribunal held that the CIT(A) was required to dispose of the grounds raised before it in accordance with law and on the basis of available material. The fact that the assessee did not avail the opportunities granted by the CIT(A) did not dispense with the requirement of a reasoned adjudication of the specific grounds raised, especially when one ground challenged the very jurisdiction of the Assessing Officer to reopen the assessment. The issues relating to the validity of reopening and the merits of additions under sections 68 and 69C involved examination of facts and documents. The Tribunal found that the CIT(A) had not examined these substantive grounds on their merits. Therefore, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to adjudicate all grounds, including the legal ground on reassessment validity and grounds relating to additions under sections 68 and 69C and adjustment against brought-forward losses, strictly in accordance with law. The assessee was granted one effective and final opportunity to substantiate its claims. As a condition for fresh adjudication, the assessee was directed to plant 300 trees of Indian/native origin at its own cost, with a compliance report to be furnished to the CIT(A).
The Tribunal noted that the assessee's counsel declined to advance arguments on the merits of the additions, confining submissions to jurisdictional and limitation issues. The Tribunal observed that the CIT(A) had dismissed the appeal ex-parte after granting multiple opportunities, which the assessee challenged. However, the Tribunal also noted that the issues relating to jurisdiction and limitation, specifically raised before the CIT(A), had not been appropriately adjudicated in a speaking order due to the assessee's non-compliance. Considering the failure of the assessee to properly assist the first appellate authority and the Tribunal on the merits, and the lack of proper adjudication on jurisdictional and limitation issues, the Tribunal deemed it appropriate in the interest of justice to restore the matter to the file of the CIT(A) for fresh adjudication. The impugned order of the CIT(A) was set aside, and the matter was remanded for a comprehensive, reasoned, and speaking order on all grounds, including jurisdictional/legal grounds and merits, after affording adequate opportunity to both parties. The Tribunal explicitly stated it expressed no opinion on the merits of the issues.
The Tribunal held that the CBDT has issued circulars empowering Commissioners to condone delays in filing Form No. 10 under genuine hardship. Therefore, the assessee should be allowed to approach the appropriate authority for condonation.
The Tribunal held that the notice under Section 148 of the Act, though dated 31.03.2021, was actually issued on 01.04.2021. While this date was within the extended time limit under TOLA, the Supreme Court in Union of India Vs. Ashish Agarwal had ruled that notices issued under Section 148 between 01.04.2021 and 30.06.2021 were deemed to be notices under Section 148A(b). The AO was required to supply materials, obtain the assessee's reply, pass an order under Section 148A(d), and then issue a fresh notice under Section 148 within the surviving period. In this case, the AO had a surviving period of 89 days from 01.04.2021 but failed to take these mandatory steps. Therefore, the notice under Section 148 was invalid, and the consequent assessment order passed under Section 147 r.w.s. 144B was quashed. The first ground taken by the assessee was allowed, and all other grounds became infructuous.
The Tribunal held that the reopening of the assessment was invalid. The reasons recorded by the AO did not demonstrate a live and rational nexus between the information available and the conclusion that income had escaped assessment due to a transaction with M/s. Ayan Trading Co. The alleged transaction was neither identified during reassessment nor established in the assessment order. Furthermore, the addition ultimately made by the AO related to different parties and different transactions (bogus purchases from M/s. SP Trading Company and M/s. Patel Trading Company) without a necessary nexus to the transaction forming the basis of reopening. The Tribunal relied on the Gujarat High Court decision in CIT v. Mohmed Juned Dadani, which held that if no addition is made on the reopened issue, no other addition can be made. Consequently, the reassessment order and the additions made therein were quashed as the assumption of jurisdiction for reassessment was invalid. The grounds related to reopening were allowed, rendering other grounds inconsequential. The same reasoning was applied to AY 2014-15.
The Tribunal held that the assessee had member collections of Rs. 38.10 crores, which were business receipts. The assessee had no surplus funds of its own to cover partner withdrawals. The borrowed funds were used for land purchase, and there was no nexus between borrowed funds and partner withdrawals. This was a diversion of business collections for partner capital without interest. The assessee failed to establish any genuine business purpose or commercial expediency for advancing business funds to the partner. The diversion of member's collection towards partner's capital withdrawal violated RERA guidelines, which mandate utilization of such funds for the project. The Tribunal upheld the disallowance of proportionate interest under Section 36(1)(iii) in principle. However, regarding the quantum, the AO disallowed interest on the total debit balance of Rs. 8,40,95,200. The Tribunal noted an opening debit balance of Rs. 5,13,83,000 and an incremental debit of Rs. 3,27,12,200. Following the Karnataka High Court's decision in CIT vs. Sridev Enterprises, the matter was set aside to the AO to verify disallowance in earlier years. If no disallowance was made in earlier years, the current year's disallowance should be restricted to the incremental debit balance of Rs. 3,27,12,200.
The Tribunal held that the reopening of the assessment was invalid. The reasons recorded by the AO did not demonstrate a live and rational nexus between the information available and the conclusion that income had escaped assessment due to a transaction with M/s. Ayan Trading Co. The alleged transaction was neither identified during reassessment nor established in the assessment order. Furthermore, the addition ultimately made by the AO related to different parties and different transactions (bogus purchases from M/s. SP Trading Company and M/s. Patel Trading Company) without a necessary nexus to the transaction forming the basis of reopening. The Tribunal relied on the Gujarat High Court decision in CIT v. Mohmed Juned Dadani, which held that if no addition is made on the reopened issue, no other addition can be made. Consequently, the reassessment order and the additions made therein were quashed as the assumption of jurisdiction for reassessment was invalid. The grounds related to reopening were allowed, rendering other grounds inconsequential. The same reasoning was applied to AY 2014-15.
The Tribunal noted that the fact of land purchase and the difference between stamp duty value and sale consideration (Rs. 3,29,09,469) were not disputed. The assessee's grievance was that the AO adopted the stamp duty value on the date of sale deeds instead of the Banakhat agreements, and that substantial payments were made through banking channels at the time of Banakhat. The Tribunal observed that while sale deeds referred to advance payments by cheque, they lacked specific details like Banakhat dates, cheque numbers, and dates. Crucially, the evidence for payment of advance on or before the Banakhat date, and the encashment of cheques, was not brought on record by the assessee. The proviso to Section 56(2)(x) requires payment by account payee cheque or banking channel on or before the agreement date for stamp duty value on the agreement date to be considered. Since this crucial evidence was lacking, the Tribunal found that the issue required verification of facts. Therefore, the matter was set aside to the jurisdictional AO with a direction to allow the assessee another opportunity to produce copies of Banakhats, details of cheque payments made on or before the respective Banakhat dates, bank statements, copies of cheques, dates of presentation and encashment, and accounting entries. The AO is to verify these and decide the issue by a speaking order. The grounds related to interest under Sections 234A, 234B, 234C and penalty under Section 270A were not adjudicated as they are consequential. The assessee's grounds were allowed for statistical purposes.
The Tribunal held that the commission payment to the Managing Director was eligible for deduction. The Tribunal noted that the commission was paid for services rendered in managing various aspects of the business, including marketing, HR, export, and finance, as approved by the Board of Directors. The commission rate was increased to 10% of PBT in AY 2016-17 from 5% in earlier years, reflecting significant growth in turnover (30%) and net profit (60%) under the director's leadership. The Tribunal found that the commission was linked to performance, not shareholding, and that dividend was separately declared at 143%. Furthermore, the commission was treated as salary, TDS was deducted, and the director paid tax on it, indicating no revenue loss. The Tribunal relied on judicial precedents, including AMD Metplast Pvt. Ltd. and BMO Advisers P. Ltd., which allowed similar commission payments. The disallowance was deleted based on consistency of approach and the fact that similar payments in earlier years were accepted by the revenue.
The Tribunal held that the Assessing Officer had sufficient justification to question the reliability of the disclosed sale consideration and reject the books of account under Section 145 of the Act. This was based on cumulative circumstances including substantial variation in sale rates, discrepancies between financial statements and party-wise sales, issues with booking advances and purchasers, the disclosed sale rate being lower than the average inventory rate, a prior year loss, and higher profitability of a sister concern. However, the Tribunal found that the AO's estimation of sale consideration at Rs. 21,03,80,000 was not adequately supported. The estimation of profit margins (20% and 5%) lacked a clear working or comparable market evidence. The assessee was also not given an opportunity to explain the average inventory cost or the AO's estimation methodology. Therefore, the issue of suppressed sale consideration and consequential profit was restored to the AO for fresh examination. The AO was directed to provide an opportunity to the assessee, examine unit-wise transactions, cost records, sale deeds, and other relevant material to determine suppressed consideration based on cogent material and a reasonable methodology, considering individual unit characteristics. The CIT(A)'s order was set aside.
The Tribunal held that the reopening of the case was justified. It found that the investigation report, based on the statement of Darshan P. Sadhani, established a nexus between Sadhani brothers and the three persons from whom the assessee had taken loans. Sadhani brothers admitted to maintaining IT files and managing bank accounts for beneficiaries to provide accommodation entries, including taking possession of passbooks and signed cheque books. Therefore, the grounds challenging the reopening were dismissed. Regarding the addition of Rs. 17,17,000/-, the Tribunal noted that the loans from the three creditors were repaid in the next financial year. Citing the Gujarat High Court's decision in PCIT Vs. Ojas Tarmaek (P.) Ltd., the Tribunal held that if a loan amount is repaid during the year or in the subsequent year and all transactions are through banking channels, it cannot be treated as an accommodation entry. Consequently, the addition of Rs. 17,00,000/- and the consequential addition of Rs. 17,000/- were deleted. The grounds related to the merit of the addition were allowed.
The Tribunal held that the GST reversal of Rs. 2,64,11,386 is allowable as business expenditure. The Tribunal reasoned that upon obtaining BU permission, the sale of units became exempt from GST, making the accumulated input GST credit, to the extent it could no longer be utilized against output GST liability, unrecoverable and chargeable to the Profit & Loss Account as expenditure. The cash outflow for the GST on inputs had occurred in earlier years, and the reversal in AY 2022-23 was a statutory consequence of the project completion with unsold units, making the ITC cease to be recoverable. The Tribunal found that the CIT(A)'s reasoning conflated the original payment of GST with the later statutory extinction of the right to recover that GST. The Tribunal allowed grounds of appeal Nos. 2 to 4. For the issue of GST reversal/provision of Rs. 85,59,538 (Ground No. 5), the Tribunal allowed the appeal for statistical purposes, directing the AO to examine the claim for AY 2023-24 and allow the expense in only one year to avoid double deduction. The Tribunal's ratio is that a statutory reversal of unutilizable input tax credit, arising from a change in taxability upon project completion, constitutes an allowable business expenditure in the year of such reversal.
The Tribunal condoned the delay of 427 days in filing the appeal, citing the assessee's active pursuit of the Vivad Se Vishwas Scheme and the Supreme Court's decision in Collector, Land Acquisition, Anantnag v. Mst. Katiji. Regarding the issues: 1. The addition of INR 10,72,000/- was deleted. The Tribunal accepted the assessee's contention that the cash deposits were sourced from accumulated capital savings and foreign earnings. The Tribunal also noted that the NRO account was jointly held by four family members, making the sole attribution to the assessee untenable. The Tribunal accepted the assessee's explanation supported by passport extracts and bank statements showing prior withdrawals and foreign income disclosure in the USA. 2. The ground relating to the addition of INR 1,39,021/- as interest income was dismissed as not pressed by the assessee. 3. Ground No. 3, relating to the application of Section 115BBE, was allowed as a consequence of deleting the addition under Section 69. 4. Ground No. 4, concerning penalty proceedings, was dismissed as premature and the levy was set aside. 5. Ground No. 5, regarding interest under Sections 234A and 234B, was dismissed as consequential.
The Tribunal held that the AO's treatment of the entire cash deposit of Rs. 37,63,000/- as unexplained solely because it occurred during demonetization was not justified. The Tribunal noted the assessee's disclosed cash sales and an opening cash balance of Rs. 8,89,319/-, suggesting that the availability of cash needed to be examined in the overall context of transactions and regular cash sales. The AO had not provided cogent reasons for rejecting the books of account, nor was there material to establish their unreliability. Similarly, the basis for applying an 8% net profit rate was not substantiated, as the AO neither examined prior years' profits nor provided comparable cases. Regarding unsecured loans, the assessee had placed additional evidence requiring examination. Therefore, all three issues were set aside to the Assessing Officer for fresh adjudication. The assessee was to be given an opportunity to substantiate its claims with evidence, and the AO was directed to examine the books of account, cash availability, cash sales, additional evidence for loans, and other relevant material, passing a speaking order. The AO was cautioned not to be influenced by the Tribunal's observations.
The Tribunal held that once an assessment has attained finality through the Vivad Se Vishwas Scheme, it cannot be disturbed under Section 263. The settlement under the scheme conclusively settles disputes and prevents subsequent reopening.
The tribunal held that since the foundational provision (Section 92BA(i)) that triggered the penalty was omitted from the statute before the penalty order was passed, the penalty could not be sustained. The omission of a provision is considered as if it never existed, unless there is a saving clause.
The tribunal held that since the foundational provision (Section 92BA(i)) that triggered the penalty was omitted from the statute before the penalty order was passed, the penalty could not be sustained. The omission of a provision is considered as if it never existed, unless there is a saving clause.
The Tribunal concurred with the statutory mandate of Section 57(iv) that only 50% of the interest income is taxable. Therefore, the addition was restricted to 50% of the interest amount.