ITAT Cochin Judgments — October 2025

The Tribunal held that filing a return of income is not mandatory in the absence of taxable income. Since the assessment, even after notice under section 148, resulted in Nil income, no prejudice was caused to the Revenue. Thus, the penalty levied under section 272A(2)(e) for non-filing of return under section 139(1) was not warranted and directed the AO to delete it.

The Tribunal considered the rival contentions and opined that for the interest of justice, the matter should be restored to the file of the AO for de novo adjudication. The assessee's counsel argued that the first appellate authority's finding regarding non-production of documents was factually incorrect.

The Tribunal held that filing a return of income is not mandatory in the absence of taxable income. Since the assessment concluded with nil income, the levy of penalty for not filing the return under section 139(1) was not warranted.

The CIT(A) dismissed the assessee's appeal. The Tribunal noted that the CIT(A) had not adjudicated all grounds, specifically the pleas that the order under section 148A(d) was illegal due to insufficient response time and non-disposal of objections.

The Tribunal found that the NFAC failed to adjudicate the grounds of appeal and the written submissions of the appellant. Therefore, the order passed by the NFAC was deemed unreasonable.

The Tribunal condoned the delay of 182 days, finding sufficient cause for the assessee's non-appearance. The matter was restored to the file of the CIT(A) for a fresh adjudication.

The Tribunal found that the assessee was denied a reasonable opportunity to present its case regarding the nature of the property before the revenue authorities and the CIT(A). Therefore, the matter was restored to the CIT(A) for fresh adjudication after granting the assessee a full opportunity to be heard and to furnish all relevant evidence.

The Tribunal considered the rival contentions and was of the opinion that the interest of justice would be met by restoring the matter to the file of the AO for de novo adjudication after providing a reasonable opportunity of hearing to the appellant.

The Tribunal held that the interest of justice would be met by restoring the matter to the AO for de novo adjudication, affording the appellant a reasonable opportunity of hearing, considering the rival contentions.

The Tribunal noted that the assessee was not granted sufficient opportunity to submit documents and had demonstrated reasonable cause for non-submission. Therefore, the matter was restored to the AO for fresh consideration after allowing the assessee to submit all relevant documents and evidence.

The Tribunal noted that the NFAC dismissed the appeal without considering the detailed submissions filed by the assessee, proceeding with an ex-parte order. To meet the ends of justice, the matter was remanded to the NFAC for fresh disposal.

The Tribunal found that the NFAC dismissed the appeal without considering the appellant's detailed submissions and proceeding with an ex-parte order. To meet the ends of justice, the matter was remanded to the NFAC for fresh disposal.

The Tribunal referred to the Kerala High Court's decision in Chavakkad Service Co-Operative Bank Ltd. v. ITO, which held that if audit reports are made available before the Assessing Authority at the time of assessment finalization and the delay in obtaining them from statutory auditors under the Kerala Co-operative Societies Act and Rules is a reasonable cause, then no penalty under section 271B should be imposed.

The Tribunal held that the appellant is a co-operative society duly registered under the Kerala State Co-operative Societies Act, 1969, classified as a primary agricultural credit co-operative society and it does not enjoy banking licence. The ratio of the decision of the Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. (supra) is squarely applicable.

The Tribunal noted that the assessee was denied an opportunity to submit evidence before the revenue authorities. Therefore, in the interest of justice, the matter was restored to the file of the CIT(A). The assessee was directed to furnish all relevant documents and evidence, and the CIT(A) was asked to decide the matter afresh after granting a reasonable opportunity of being heard.

The Tribunal held that the delay in obtaining audit reports from statutory auditors under the Kerala Co-operative Societies Act and Rules could be seen as a reasonable cause for the delayed submission of audit reports. Therefore, no penalty under section 271B was to be imposed on the assessee.

The Tribunal found that the assessment order and its confirmation by the CIT(A) lacked proper verification of the assessee's books of accounts, cash book, and supporting sales/receipts. The addition was made based on presumptions without detailed verification, rendering the order unsustainable. Therefore, the matter is remanded back to the AO for fresh adjudication, proper verification, and providing the assessee an opportunity to be heard.

The Tribunal held that the power to condone the delay in filing the return of income is conferred upon the Pr.CIT u/s. 119B of the Act and the Tribunal is not vested with such powers. Therefore, the appeal filed by the appellant society has no merit.

The Tribunal noted that the National Faceless Appeal Centre (NFAC) had discussed penalty under section 272(1)(d) without considering the facts of the present case. Therefore, the matter was remanded back to NFAC for fresh disposal.

The Tribunal held that the PCIT did not provide sufficient opportunity to the assessee to respond to the notice under Section 263, violating the principle of natural justice. The notice was issued on 24.03.2025, and the revisional order was passed on 28.03.2025, a very short period.

The Tribunal held that while the assessee failed to provide evidence for agricultural income, the AO should have estimated it based on local inquiries rather than totally disbelieving it. Regarding cash deposits, the AO and CIT(A) should have provided an opportunity for the assessee to submit evidence.

The Tribunal observed that the assessee was denied a reasonable opportunity to present their case on merits due to the dismissal on grounds of limitation. The Tribunal cited case law suggesting that condoning delay can lead to a decision on merits, while rejecting it can defeat justice.

The Tribunal noted that the assessee was denied a reasonable opportunity to present their case on merits due to the dismissal on limitation. The Tribunal decided to restore the matter to the file of the Ld. CIT(A) for de novo adjudication on the issue of limitation, while also directing the assessee to file an affidavit explaining the delay.

The Tribunal held that when a provision for bad and doubtful debt is debited to the Profit & Loss Account and simultaneously the corresponding amount is reduced from Loans & Advances/Debtors on the asset side of the Balance Sheet, it amounts to an actual write-off. Such an actual write-off does not attract Clause (i) of Explanation 1 to Section 115JB(2) of the Act. The decision of the CIT(A) was upheld.

The Tribunal held that the CIT(A) had rightly passed the order apportioning the income based on the ratio of timber purchase, as the revenue had not challenged similar orders for previous assessment years. The AO's order giving effect to the CIT(A)'s direction had some mistakes, leading to the assessee's further appeal. The Tribunal found no merits in the revenue's appeal.

The Tribunal held that the interest paid on the loan amount for capital contribution to the firm should be eligible for set-off against the interest income earned from the firm. It also directed the AO to adopt the actual interest rate of 18% instead of the restricted 12%.

The Tribunal held that the delay in filing the audit report was due to genuine reasons beyond the company's control, stemming from internal disputes and NCLT proceedings, which qualifies for reasonable cause under Section 273B. The Tribunal noted that the Principal Commissioner of Income Tax (PCIT) had condoned the delay in filing the return. Given the PCIT's condonation and the reasonable cause for the delay, imposing a penalty under Section 271B was deemed not fit.

The Tribunal held that when the AO revalued the closing stock by including the tax and duty component, he was bound to revalue the opening stock on the same basis. This is supported by judicial precedents that necessitate adjustments in opening stock when closing stock is revalued.

The CIT(A) dismissed the assessee's appeal for non-prosecution without delving into the merits of the additions. The tribunal held that the CIT(A) is obligated to decide appeals on merits, even if ex-parte, and that the CIT(A)'s order did not follow the procedure outlined in Section 250(6) of the Act.

The Tribunal acknowledged the assessee's medical condition and technical limitations, finding the non-compliance to be technical and venial. The penalty was reduced from Rs. 30,000 to Rs. 10,000, with the balance amount to be deleted.

The Tribunal held that the penalty levied under Section 271B is unsustainable in law and on facts. The Tribunal followed the ratio laid down by the Hon'ble Kerala High Court in the case of Chavakkad Service Co-operative Bank Ltd., where it was held that delay in obtaining audit reports from statutory auditors can be a reasonable cause for delayed submission.

The Tribunal held that the penalty notice issued under section 274 r.w.s. 271(1)(c) was defective because it failed to specify whether the penalty was for concealment of income or for furnishing inaccurate particulars. This lack of specificity renders the penalty proceedings void ab initio and unsustainable in law, following judicial precedents.

The Tribunal noted that the assessee denied any transaction with the company providing the alleged bogus entries and asserted its total purchases were only Rs. 23,13,615/-. The Tribunal also noted the appellant's submission that it does not deal in garments.

The Tribunal held that the CIT(A)'s estimation of profit at 17% was arbitrary, lacking basis in past history. The Tribunal remitted the matter back to the AO to adopt the average of the preceding three years' GP rate for de novo assessment.

The Tribunal found no basis for the CIT(A) to estimate the profit at 17% and held that such estimation should be based on past history and not be arbitrary. The matter was remitted back to the AO to adopt the average GP rate of the preceding three years.

The Tribunal held that both the AO and the CIT(A) failed to provide the appellant an opportunity to produce further evidence to support their explanation regarding the cash deposits. It is a settled legal principle that such an opportunity must be given before rejecting an explanation.

The Tribunal held that the CIT(A)'s order was cryptic, arbitrary, and against natural justice as it confirmed the AO's action without addressing the assessee's contentions. Therefore, the matter was remanded back to the CIT(A).

The Assessing Officer (AO) accepted the additional income and completed the assessment. The CIT(A) allowed the appeal, relying on a Supreme Court decision that no addition can be made without incriminating material. However, the Tribunal noted that the appellant admitted additional income in response to the 153C notice, making the other limb of the Supreme Court decision applicable.

The Tribunal held that the delay in obtaining audit reports from statutory auditors under the Kerala Co-operative Societies Act and Rules constituted a reasonable cause for delayed submission. Following the decision of the Hon'ble Kerala High Court in Chavakkad Service Co-Operative Bank Ltd. v. ITO, the penalty levied under section 271B was deemed unsustainable.

The Tribunal held that the appellant bank cannot be treated as an assessee in default as there was no obligation to deduct tax at source when Form 15G/H was furnished, provided the interest income did not exceed the basic exemption limit or the depositor was a senior citizen who declared their total income, including bank interest, as Nil.

The Tribunal held that the appellant bank cannot be treated as an assessee in default for not deducting tax at source on interest paid to senior citizens, provided valid Form 15G/H was obtained and the conditions for exemption were met. The matter was remanded to the AO for verification of the claim regarding Form 15G.

The Tribunal held that the bank cannot be treated as an assessee in default because it had complied with section 197A(1C) by obtaining Form 15G/H. There is no obligation on the bank to verify the taxable income of the depositors. The matter was remanded to the AO for verification of claims regarding Form 15G.

The Tribunal found that the assessee was not granted sufficient opportunity during the assessment and appellate proceedings. Therefore, to provide natural justice, the matter was restored to the file of the CIT(A) for fresh adjudication after allowing the assessee to present all relevant documents and evidence.

The CIT(A) dismissed the assessee's appeal for non-prosecution. The Tribunal condoned the delay in filing the appeal due to the assessee's unawareness of the CIT(A)'s order. The Tribunal held that the CIT(A) should have disposed of the appeal on merits even if ex-parte.

The Tribunal held that the CIT(A) was duty-bound to dispose of the appeal on merits, even if ex-parte. The dismissal of the appeal for non-prosecution was contrary to legal position. The Tribunal condoned the delay in filing the appeal due to the assessee's ignorance of the CIT(A)'s order.

The CIT(A) dismissed the assessee's appeal for non-prosecution. The Tribunal condoned the delay in filing the appeal, noting that the assessee was unaware of the CIT(A)'s order.

The CIT(A) dismissed the assessee's appeal for non-prosecution, which is against the settled legal position that appeals should be disposed of on merits even if ex-parte. The Tribunal condoned the delay in filing the appeal before it, attributing it to the assessee's ignorance of the CIT(A)'s order.

The Tribunal condoned the delay in filing the appeal, acknowledging the appellant's ignorance of the CIT(A)'s order. The Tribunal held that the CIT(A) erred in dismissing the appeal for non-prosecution without disposing it on merits, citing legal precedent.

The CIT(A) had allowed the appeals, holding that in the absence of incriminating material, no addition could be made, relying on the Supreme Court decision in Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. However, the Tribunal found that since the appellant admitted additional income in response to the notice u/s. 153C, the decision in Abhisar Buildwell Pvt. Ltd. was applicable, and the CIT(A) failed to apply the correct legal principle.

The Tribunal held that the deduction under Section 80P(2)(a)(vi) is only for the labour of members. Since a significant portion of the work was done by non-members, the condition for deduction was not met. However, the Tribunal restored the matter to the AO to ascertain the exact utilization of member and non-member labour for proportionate deduction. Regarding Section 40(a)(ia), the Tribunal upheld the CIT(A)'s deletion of additions, finding that the payments were direct to workers and not through any contract or sub-contract.