ITAT Cuttack Judgments — June 2026

The quantum assessment appeal was restored to the Assessing Officer for re-assessment with a cost imposed on the assessee for non-cooperation. The penalty appeal was allowed as the assessment no longer survived.

The quantum assessment appeal was restored to the Assessing Officer for re-assessment with a cost imposed on the assessee for non-cooperation. The penalty appeal was allowed as the assessment no longer survived.

The Tribunal restored the issues to the Assessing Officer for re-adjudication. This was done to grant the assessee an adequate opportunity to be heard and produce all necessary evidence.

The Tribunal held that the notice under Section 274 read with Section 270A was invalid because it did not mention the specific provisions of Section 270A that the Assessing Officer intended to rely upon. Consequently, the penalty was quashed.

The Tribunal held that the penalty notice under Section 274 r.w.s. 270A was invalid because it did not mention the specific provisions or clauses of Section 270A that the Assessing Officer intended to rely upon for levying the penalty.

The Tribunal restored the issues to the Assessing Officer for re-adjudication after granting an adequate opportunity to the assessee. A cost of Rs. 10,000 was imposed on the assessee for non-cooperation.

The Tribunal allowed the appeal of the assessee and cancelled the penalty levied under Section 271B. The Tribunal considered the rival submissions and noted the decision of the Allahabad High Court in CIT vs. District Co-Operative Bank, which held that cooperative societies cannot get their accounts audited through private chartered accountants and that the audit by the Registrar of Cooperative Societies is appropriate. The Tribunal also noted that the assessee had obtained a Section 44AB audit report which was available with the Assessing Officer during the assessment proceedings. While acknowledging the CIT(A)'s reliance on the Kerala High Court decision in Perookkada Service Cooperative Bank Ltd. (holding that audit by Registrar is not valid under Section 44AB), the Tribunal also referred to a subsequent Kerala High Court decision in Chavakkad Service Co-operative Bank Ltd. which stated that if the audit report is available with the Assessing Officer during assessment, Section 271B should not normally be levied. Faced with conflicting High Court decisions, the Tribunal followed the principle laid down by the Supreme Court in CIT vs. Vegetables Products Ltd. that a decision in favour of the assessee should be preferred. The Tribunal also emphasized that the Section 44AB audit report was available with the AO during assessment and no prejudice was caused to the revenue due to the delay. Therefore, the penalty was cancelled.

The tribunal held that the facts of the current assessment year were not distinguishable from a previous year where a similar issue was decided in favor of the assessee. Following the precedent, the addition made by the Assessing Officer was deleted.

The tribunal held that penalty under Section 271B is not leviable when the assessee has not maintained books of account and income is estimated. In the second appeal, it was held that penalty under Section 271(1)(c) is not permissible when the final assessment is concluded with an estimated income.

The Tribunal held that interest income earned from cooperative banks and nationalized banks is not eligible for deduction under Section 80P, following the Supreme Court decision in The Mavilyi Service Co.op Bank Ltd. The penalty under Section 270A was quashed due to a defective show-cause notice.