ITAT Indore Judgments — February 2026

The CIT(A) allowed the assessee's appeal, holding that the assessee could not be penalized for the delay in approval, as the application was made timely. The CIT(A) relied on various High Court and Supreme Court decisions. The Tribunal upheld the CIT(A)'s decision, agreeing that the assessee should not be penalized for the delay in the grant of approval by the authorities.

The Tribunal noted that the assessee's plea was that the deposits represented business turnover already disclosed and audited. Crucially, for intervening AYs 2017-18 and 2018-19, the AO had accepted similar explanations for bank deposits. Therefore, the Tribunal set aside the CIT(A)'s orders.

The Tribunal set aside the CIT(A)'s order on the quantum appeal (ITA No: 653/Ind/2025) and remanded the case back to CIT(A) for de novo adjudication, noting that the order was ex-parte and notices were sent to incorrect email IDs. For the penalty appeal (ITA No: 654/Ind/2025), the Tribunal partly set aside the order and reduced the penalty from Rs. 20,000/- to Rs. 10,000/-, considering the quick succession of notices and the assessee's circumstances.

The Tribunal noted that the assessee consistently claimed the deposits were from disclosed business turnover, supported by audited books. The AO had accepted similar explanations in intervening years. The Tribunal found that the additions were made without demonstrating that the deposits exceeded recorded business receipts.

The Tribunal noted that the assessment orders and appellate orders were passed ex-parte. The CIT(A) orders did not state the points for determination, decision, and reasons as required by section 250(6). Considering the totality of facts and the assessee's submission that necessary documents are now available, the Tribunal decided to grant one more opportunity.

The Tribunal noted that the CIT(A) dismissed the first appeal due to the appellant's non-compliance and failure to provide substantiating evidence. The Tribunal found that the assessment order was not adjudicated on merits and therefore set aside the impugned order.

The Tribunal held that the AO failed to conduct a "second stage inquiry" as mandated by the proviso to Section 68 of the Income Tax Act, 1961. This failure made the assessment order erroneous and prejudicial to the revenue, justifying the revision by the PCIT.

The Tribunal noted that the issues were not examined on merits due to lack of complete evidence. The CIT(A) orders also did not comply with Section 250(6) of the Act. Given the ex-parte nature of the assessments and the need for verification of primary evidence, the Tribunal deemed it appropriate to grant one more opportunity to the assessee.

The Tribunal observed that the impugned order of the CIT(A) was an ex-parte order and the assessee's replies were not considered. The assessee had sought time to produce documents and filed an RTI application. The Tribunal, considering these facts, set aside the impugned order and remanded the case back to the Assessing Officer for a de novo assessment.

The Tribunal found the impugned order to be improper, considering that a first appeal regarding the Quantum Assessment Order is pending. The Tribunal set aside the impugned order and remanded the case back to the Assessing Officer for a fresh decision.

The tribunal first condoned the delay in filing the appeal, acknowledging the "sufficient cause" presented by the assessee including deaths and reconstitution, in line with Section 253(5) of the Act and the principle of "substantial justice." On the merits, the tribunal upheld the disallowance, ruling that a partnership firm, being a distinct taxable entity, cannot claim interest expenditure for a period when it was not in existence and was instead operating as a proprietorship concern. The AO's action was found to be correct and in line with the Income Tax Act.

The Tribunal noted that the assessee had failed to provide substantiating evidence for their claims and had not actively pursued the appeal. The ITAT also observed that notices sent to the assessee during the first appellate proceedings went to incorrect email addresses, leading to an ex-parte order. Therefore, the Tribunal set aside the order on Quantum assessment and remanded it for de novo adjudication. Regarding the penalty, the Tribunal reduced it from Rs. 20,000 to Rs. 10,000 due to the short gap between notices and the Covid-19 period.

The Tribunal held that the interest income earned from the temporary parking of IPO funds is intrinsically linked to the setting up of the project. Therefore, it should be allowed to be set off against the capital cost of the project, in accordance with the directions of the ITAT. The revenue's appeal was dismissed.

The ITAT upheld the CIT(A)'s order, finding no infirmity in the remand of the case back to the AO under Section 251 for extensive factual verification. The Tribunal directed the assessee to cooperate with the AO and present all relevant information and evidence during the fresh proceedings, allowing the AO to pass a reasoned order on merits.

The Tribunal found that the CIT(A)'s dismissal was improper due to the migration of the appeal from a physical to a faceless system and subsequent bounced notices. The CIT(A)'s order was set aside, and the matter was remitted back to the CIT(A) for fresh adjudication after providing the assessee full opportunity to make submissions.

The Tribunal held that the adjustment made by the AO invoking section 50C while processing the return under section 143(1) is outside the permissible scope of section 143(1)(a)(ii). The Tribunal referred to various co-ordinate bench decisions that consistently held that substitution of stamp duty value under section 50C cannot be treated as an 'incorrect claim apparent from information in the return' and requires examination beyond the return, which can only be done in regular assessment proceedings.

The Tribunal held that the assessee had responded to the notices, and since the assessment was completed under section 143(3) after considering the submissions, it could be inferred that the AO condoned the earlier defaults. The Tribunal also considered the affidavit explaining administrative constraints and the absence of key finance personnel as a reasonable cause under section 273B.

The Tribunal noted that the CIT(A) had passed an ex-parte order due to the assessee's non-representation and lack of evidence regarding a settlement commission. However, the assessee presented evidence of settlement before the Tribunal. In the interest of justice, the Tribunal decided to remand the matters back to the CIT(A) for a fresh adjudication.

The Income Tax Appellate Tribunal noted that the assessee had a non-representation before the CIT(A) leading to an ex-parte order. While the CIT(A) dismissed the appeal, the assessee presented new evidence (an order and application from the Income Tax Settlement Commission) before the Tribunal. Considering the interest of justice, the Tribunal decided to give the assessee another opportunity.

The tribunal observed that the assessee had deducted tax at a lower rate than prescribed under Section 194J for professional services. The lower authorities confirmed the demand due to non-compliance and lack of evidence from the assessee. However, considering the principle of natural justice and the assessee's submission that it is a local authority that did not get a proper opportunity, the matter was remanded.

The Tribunal observed that the assessee's plea for condonation of delay was supported by sufficient cause, considering the communication issues and the unfortunate demise of their counsel. The Tribunal found that the assessee could not be made to suffer due to circumstances beyond their control.

The Tribunal condoned the delay in filing the appeal, citing 'sufficient cause'. For the leave encashment, the case was remanded to the AO to re-compute the exemption u/s 10(10AA) considering the revised limit of Rs. 25,00,000/- (as per CBDT Notification No. 31/2023). For the ex-gratia payment, the additional grounds claiming it as retrenchment compensation u/s 10(10B) were admitted, and this issue was also remanded to the AO for fresh adjudication to determine its correct classification.

The Tribunal found that the CIT(A)'s *in limine* dismissal violated Section 250(6) by not providing a reasoned order, and the assessee was denied reasonable opportunities for hearing. It was also noted that the AO's disallowance was made without further opportunity after rejecting the assessee's reply. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the entire matter back to the AO for fresh adjudication, directing both parties to ensure proper hearings and avoid unnecessary adjournments.

The Tribunal condoned the delay in filing the second appeal. It held that the assessee should not be penalized for the CA's mistake in belatedly filing Form 10B, especially since the audit was completed on time and the form was eventually filed. Therefore, the tribunal set aside the impugned order and remanded the matter back to the Assessing Officer for de novo consideration of the belatedly filed Form 10B, with a caution to the assessee to adhere to procedural timelines in the future.

The Tribunal found that the assessee, being uneducated, had sufficient and plausible reasons for the delay in filing the first appeal, supported by an affidavit, as notices were sent to an incorrect/disputed email ID. The Tribunal held that the ex-parte assessment and the CIT(A)'s order were not on merits. Consequently, the Tribunal condoned the delay, set aside both the CIT(A)'s order and the assessment order, and remanded the case back to the Assessing Officer for a de novo assessment on merits, directing the assessee to cooperate.

The Tribunal condoned the significant delay in filing the appeals, recognizing the assessee's documented medical and financial hardships as sufficient cause. It found that the CIT(A) erred by dismissing the appeals without complying with the requirements of Section 250(6) to pass a speaking order. Consequently, the Tribunal set aside the CIT(A)'s orders and remanded the cases for fresh adjudication, directing the assessee to actively participate and not seek unnecessary adjournments.

The ITAT condoned the delay in filing the appeal, citing "sufficient cause" under Section 253(5). Due to the ex-parte nature of the CIT(A) order and the need for fresh evidence regarding cash deposits, the tribunal remanded the case to the AO for fresh adjudication with a proper opportunity of hearing.

The Tribunal observed that the assessment was made ex-parte under section 144 without adjudication on merits. Considering the assessee's illiteracy, lack of knowledge of IT procedures, and non-registration on the e-filing portal, the Tribunal deemed it appropriate to set aside the impugned orders. The case was remanded back to the file of the AO for fresh adjudication on merits, with the expectation that the assessee would fully cooperate by providing all necessary details.

The ITAT condoned the delay in filing the appeals, accepting the assessee's explanation as 'sufficient cause' under Section 253(5), emphasizing that substantial justice should prevail over technicalities. The Tribunal noted the CIT(A)'s failure to adhere to Section 250(6) by not providing proper reasons for dismissal. Consequently, the ITAT set aside the CIT(A)'s orders and remanded the matters back for fresh adjudication on merits, directing the assessee to actively participate in the proceedings.

The ITAT condoned the delay, finding "sufficient cause" due to the assessee's genuine hardships and medical/financial challenges, referencing Section 253(5) of the IT Act and Supreme Court precedents. The tribunal noted that the CIT(A) had dismissed the appeals without complying with the mandate of Section 250(6) to state points for determination and reasons. Consequently, all four appeals were remanded back to the CIT(A) for fresh adjudication on merits, with directions for the assessee to diligently participate.

The Income Tax Appellate Tribunal condoned the significant delay in filing the appeals, accepting the assessee's explanation of genuine physical and financial hardships as "sufficient cause" under Section 253(5) of the Income Tax Act. Acknowledging that the CIT(A) failed to comply with Section 250(6) by not passing a reasoned order, the Tribunal remanded all four appeals back to the CIT(A) for fresh adjudication on merits, directing that a proper hearing opportunity be provided to the assessee.

The Tribunal held that the assessee is entitled to the benefit of the proviso to section 12A(2) and is eligible for exemption under sections 11/12 for AY 2018-19. It clarified that processing under section 143(1) constitutes 'assessment proceedings pending' as required by the proviso, rejecting the CIT(A)'s view. The matter was remanded to the AO to verify the continuity of the assessee's objects and activities and to allow the exemption, subject to the assessee paying Rs. 10,000/- as costs for avoidable litigation.

The Tribunal found sufficient cause for the delay in filing the first appeal, noting that the email ID used for communication was not the assessee's and belonged to an estranged former counsel. The Tribunal condoned the delay, set aside the CIT(A)'s order, and remanded the case back to the Assessing Officer for fresh adjudication of the penalty and quantum assessment, considering all facts and circumstances.

The Tribunal, noting that similar issues concerning M/s Jay Jyoti India Pvt. Ltd. had been previously decided, held that the said company and other Sharad Darak group companies were not paper or shell companies. Consequently, the addition of Rs. 82,00,000/- under Section 68 was deleted, and the impugned order was set aside.

The Tribunal noted that the quantum assessment order was pending before the CIT(A). Considering this, and the pendency of the quantum appeal, the Tribunal held that it would be in the interest of justice to set aside the impugned penalty order and remand the matter back to the CIT(A).

The tribunal condoned the delay in filing the appeal. The tribunal held that multiple notices issued for the same issue within a short period constitute a single continuing default, not separate offenses. Therefore, penalty cannot be levied for each notice individually.

The Tribunal noted that the assessee had filed an affidavit explaining the delay, and that the revenue had no objection to condoning the delay. The Tribunal found that the assessee had a 'sufficient cause' for the delay and decided to condone it. The Tribunal also noted that the CIT(A) had dismissed the appeal on the ground of non-compliance with Section 249(4)(b) of the Act, which was not sustainable. The Tribunal decided to remand the matter back to the AO for fresh adjudication.

The Tribunal found merit in the assessee's prayers and decided to remit the issues to the AO for fresh adjudication. This includes re-computing capital gains for transactions at S.No. 2, 4 & 5 by referencing the DVO, examining cancellation evidences for transactions at S.No. 1 & 3 and re-computing capital gains, and allowing the cost of acquisition/improvement.

The Tribunal noted that while the assessee received the assessment and impugned orders, they did not receive notices under sections 148, 142(1), and show cause notices. The Tribunal found a contradiction in this claim. Despite the lack of compliance, the Tribunal decided to set aside the impugned order and remand the case back to the AO for a de novo assessment, considering the principles of natural justice.

The Tribunal held that the CIT(A)'s order was ex-parte and decided without proper opportunity of hearing, violating principles of natural justice. The Tribunal also noted that the assessee had failed to produce documentary evidence at the first appellate stage but expressed willingness to do so if given another opportunity. The revenue had no objection to setting aside the order and remanding the matter.

The assessee's advocate requested to withdraw the appeals, and the Departmental Representative had no objection. The Tribunal allowed the withdrawal of the appeals.