ITAT Guwahati Judgments — October 2025

The Tribunal held that the AO erred in making adjustments without providing a prior opportunity to be heard as mandated by Section 143(1)(a). It also held that the delay in filing Form 10CCB was a directory, not mandatory, condition, and the deduction under Section 80-IE should be allowed if the form was filed before the assessment order.

The tribunal dismissed the appeal on account of low tax effect, finding that it did not fall under any exceptions specified in para 3.1 of CBDT Circular No. 5/2024. However, the Revenue was granted liberty to seek revival of the appeal should any such exceptions become applicable.

The Tribunal, in the interest of substantive justice, set aside the impugned order and remanded the case back to the file of the Ld. AO for fresh assessment. The assessee is directed to comply with all notices, failing which the Ld. AO may take an adverse view.

The Tribunal held that the AO erred in making adjustments without providing a prior opportunity to be heard as mandated by Section 143(1)(a). It also held that the delay in filing Form 10CCB was a directory, not mandatory, condition, and the deduction under Section 80-IE should be allowed if the form was filed before the assessment order.

For the interest disallowance, the ITAT found the assessee failed to conclusively prove the term loan's utilization solely for business. Citing S.A. Builders, the ITAT remanded this issue back to the AO for fresh investigation to establish the exact nexus. Regarding the EPF contribution, the ITAT directed the AO to verify if the assessee had already disallowed the amount, stating that if so, no further addition should be made.

The Tribunal condoned the 95-day delay in filing the appeal, finding that the assessee had shown sufficient cause. On the merits, the Tribunal held that section 44AD of the Income Tax Act is optional and provides an assessee with the choice for presumptive income computation, but does not mandate its application. An assessee always retains the option to prepare a profit and loss account based on duly maintained books of accounts. Therefore, the action of the lower authorities to mandatorily apply section 44AD and make the addition was not sustainable.

The Tribunal noted that in a similar case for the immediately preceding assessment year, the matter regarding cash deposits was remanded back to the AO. Following this precedent and considering the lack of satisfactory reconciliation of cash deposits and opportunity for deemed rental income, the Tribunal decided to remand both issues back to the Ld. AO for fresh assessment. The assessee is directed to provide explanations and the AO is free to conduct further inquiry, setting aside the impugned order.

The Tribunal condoned the 18-day delay in the Revenue's appeal. On merits, the Tribunal upheld the CIT(A)'s decision, finding no reason to interfere as the provision was made in compliance with a High Court directive. It was noted that the CIT(A) had already applied Section 40(a)(ia) for non-deduction of TDS, resulting in a partial disallowance.

The Tribunal observed that complete facts regarding the assessee's qualification for Section 10(26) exemption, the geographical source of income, and the agricultural income claim were not evident from the lower authorities' orders. In the interest of justice, the impugned order was set aside and the matter remanded to the AO for fresh assessment. The assessee is required to furnish all documents to prove known sources, and the AO is authorized to conduct further inquiries.

The Tribunal acknowledged the inadequate presentation of facts and the assessee's claim of insufficient opportunity. Consequently, the impugned order was set aside, and the matter was remanded to the Ld. AO for fresh assessment. The assessee is granted a second chance to prove the bona fide nature of the deposits by presenting all necessary documents, including VAT returns, for the Ld. AO's evaluation and fair conclusion.

The Tribunal dismissed the Revenue's appeal due to low tax effect, as it did not demonstrate that the case fell under any exceptions mentioned in para 3.1 of CBDT Circular No. 5/2024, dated 15.03.2024. However, liberty was granted to the Revenue to revive the appeal if an exception to the monetary limit is found applicable later.

The Tribunal condoned the 380-day delay, finding the reasons to be genuine and bona fide, and admitted the appeal for adjudication. The case was restored to the file of the Ld. CIT(A) for fresh adjudication on merits, with a direction to afford the assessee a reasonable opportunity of hearing.

The Tribunal found that the TPO/DRP summarily rejected or ignored the assessee's detailed transfer pricing report, which adopted an "other method" for ALP determination. The Tribunal set aside the AO's order on this point and remanded the issue back to the AO/TPO to properly consider the assessee's transfer pricing report and either agree with it or rebut it through a legally recognized methodology.

The ITAT upheld the CIT(A)'s decision, dismissing the Revenue's appeal. The Tribunal found that the AO's presumption of fact was based solely on a mismatch between the turnover in Form 26AS and the assessee's higher reported turnover, despite the assessee having produced all necessary records. The ITAT affirmed that a Form 26AS mismatch or absence of TDS certificates alone is not sufficient to deny exemption under Section 10(26) or make additions when the books of accounts are duly presented and no defects are found.

The Tribunal found a prima facie case for the assessee regarding bonus payment and deemed it necessary to give the assessee an opportunity to present documents for TDS credit. Consequently, the Tribunal set aside the impugned order and remanded both issues back to the Assessing Officer for fresh examination and appropriate decisions after providing the assessee an opportunity to present all available documents.

The Tribunal noted the assessee's failure to rebut the presumption under section 132(4A) regarding seized documents and to produce the seller for verification. However, it also stated that mere writing on a sheet does not automatically create tax liability. The case was remanded back to the AO with directions for the assessee to identify the author of the loose sheet and produce Mr. Ravee Jain for verification or provide his correct address for summons.

The Tribunal found that neither the AO nor the CIT(A) had conducted a proper analysis of the cash flow and withdrawals. Therefore, the order of the CIT(A) was set aside.

The Tribunal, considering the assessee's plea of a communication gap and the interest of natural justice, decided to grant a second chance to present facts before the CIT(A). The impugned order was set aside and remanded for fresh adjudication.

The Tribunal noted that the assessment was made ex-parte under Section 144. While the CIT(A) confirmed the addition, the assessee claimed comprehensive documentary evidence (invoices, ledgers, bank statements, VAT returns) was submitted. Considering these claims and with no objection from the Departmental Representative, the Tribunal set aside the CIT(A)'s order and remanded the case to the AO for reconsideration and re-framing the assessment, granting the assessee an opportunity of being heard.

The Tribunal found that the assessment was ex-parte and the CIT(A) dismissed the appeal on account of delay. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the case back to the Assessing Officer for fresh consideration, directing the AO to reframe the assessment after providing the assessee an opportunity of being heard. The appeal was allowed for statistical purposes.

The Tribunal found the assessee's explanation regarding the source of cash deposits as sale proceeds of ancestral property to be unsubstantiated, noting the lack of proper documentation and confirmation from co-owners. The Tribunal set aside the order of the CIT(A) and remanded the case back to the Assessing Officer for reconsideration, directing to provide the assessee with another opportunity of being heard.

The Tribunal observed that the assessee failed to provide cogent evidence for the cash deposits to the lower authorities, but also noted the potential applicability of Section 10(26) if substantiated. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the case back to the Assessing Officer. The AO is directed to reframe the assessment after providing the assessee a fresh opportunity to present evidence for their claims, including any potential exemption.