ITAT Jaipur Judgments — September 2026

The Tribunal held that the CIT(A) was unjustified in confirming the additions without proper verification. The assessee's reliance on documents found during the search was valid, and the CIT(A) erred in not considering the request for a remand report.

The Tribunal, after hearing both parties and perusing the record, was of the considered view that the assessee deserved one more opportunity to present his case. The Tribunal restored the file to the Assessing Officer with a direction to provide one more opportunity to the assessee to present his case and produce necessary evidence in support of the claim for exemption under section 10(38). The assessee was cautioned to fully comply with the directions of the AO in the set-aside proceedings, failing which the AO would be at liberty to pass an order based on available material, even if ex-parte. The Tribunal did not decide the substantive grounds of appeal but allowed the appeal for statistical purposes to provide the assessee with a fresh opportunity.

The Tribunal held that the CIT(A)'s order was unjustified as it was based on contrary findings. The Tribunal found that the bank statement itself contained narrations clarifying the credit entries as pension and FD interest, thus explaining the deposits.

The Tribunal noted that the assessee had filed an application seeking withdrawal of the appeals. The reason provided was that the assessee's subsequent application for registration under Section 12A and 80G, filed after the initial rejection, had been allowed by the CIT(Exemption). This development rendered the appeals against the rejection orders infructuous. The learned DR had no objection to the withdrawal. Therefore, the Tribunal held that the appeals filed by the assessee were dismissed as withdrawn. No specific issue was decided on merits, and the operative direction was to dismiss the appeals as withdrawn.

The Tribunal noted that the assessee had filed an application seeking withdrawal of the appeals. The reason provided was that the assessee's subsequent application for registration under Section 12A and 80G, filed after the initial rejection, had been allowed by the CIT(Exemption). This development rendered the appeals against the rejection orders infructuous. The learned DR had no objection to the withdrawal. Therefore, the Tribunal held that the appeals filed by the assessee were dismissed as withdrawn. No specific issue was decided on merits, and the operative direction was to dismiss the appeals as withdrawn.

The Tribunal held that the TPO/AO erred in rejecting the Cost Plus Method (CPM) with GP/COP as the PLI, especially since it was accepted in prior years and upheld by the ITAT in the assessee's own cases. The Tribunal also found that the application of the Berry ratio with OP/VAE as the PLI under TNMM was inappropriate for a manufacturing entity and had been rejected in prior years. Regarding outstanding receivables, the Tribunal found the TPO's mark-up of 400 basis points over LIBOR to be ad hoc and not supported by comparable uncontrolled transactions. Citing the Rajasthan High Court's decision in CIT v. Vaibhav Gems Ltd., the Tribunal held that an ad hoc mark-up over LIBOR was improper. The Tribunal directed that for AY 2022-23, if any adjustment survives after verification, the interest rate should be six-month LIBOR plus 1.85% (as per a bank document for packing credit in foreign currency), and this rate should be applied only to invoices realized after 180 days. The AO/TPO was also directed to verify the credit period granted to non-AEs and compare it with the realization period from AEs. For AY 2019-20, the issue of receivables was to be re-verified. Crucially, the Tribunal directed the AO to recompute the book profit under Section 115JB for both years without adding any transfer pricing adjustment, including interest on receivables, as the DRP's direction was binding and TP adjustments are not permitted under Section 115JB. Grounds related to receivables for AY 2022-23 were allowed for statistical purposes. Ground 10 in both years concerning Section 115JB was allowed.

The Tribunal noted that the assessee had filed a written application seeking withdrawal of the appeals. The reason provided for withdrawal was that the assessee trust's applications for registration under Section 12A and Section 80G, which were initially rejected, had subsequently been allowed by the Ld. CIT(Exemption) upon fresh applications. As a consequence, the appeals filed against the rejection orders were rendered infructuous. The revenue's representative (Ld. DR) did not object to the withdrawal. Therefore, the Tribunal held that the appeals filed by the assessee were dismissed as withdrawn. No specific finding was made on the merits of the original rejection orders, as the appeals were withdrawn due to subsequent events.

The Tribunal noted that the assessee had filed a written application seeking withdrawal of the appeals. The reason provided for withdrawal was that the assessee trust's applications for registration under Section 12A and Section 80G, which were initially rejected, had subsequently been allowed by the Ld. CIT(Exemption) upon fresh applications. As a consequence, the appeals filed against the rejection orders were rendered infructuous. The revenue's representative (Ld. DR) did not object to the withdrawal. Therefore, the Tribunal held that the appeals filed by the assessee were dismissed as withdrawn. No specific finding was made on the merits of the original rejection orders, as the appeals were withdrawn due to subsequent events.

The Tribunal set aside the orders of the lower authorities and restored the matter to the AO. The AO is directed to examine the assessee's claim that the liquor shop's income was already assessed in the hands of an association of persons.

The Tribunal held that the appellant was not provided with a reasonable opportunity of being heard as there was no evidence of proper service of notices. Therefore, the impugned orders were set aside and the matter was remanded for fresh adjudication.

The Tribunal found that the source of the deposit, explained as agricultural income, was not examined on merits by either the AO or the CIT(A). Therefore, the case was restored to the AO for a fresh decision after allowing the assessee to furnish evidence.

The Tribunal held that the assessee had offered a bona fide explanation, supported by the jurisdictional High Court's judgment at the time of filing the return. Therefore, the amount could not be considered under-reported income for penalty purposes.

The Tribunal held that the penalty order was founded on the original assessment order, which no longer existed. Since the fresh assessment order did not initiate any penalty proceedings under section 271A, the penalty could not be sustained.

The Tribunal held that the AO's order was passed beyond a reasonable period of four years from the end of the financial year, making it barred by limitation. Consequently, the order of the AO and the consequential interest demand were quashed.

The Tribunal dismissed the appeals, finding that the assessee failed to provide necessary documentation to establish the genuineness of its activities and that the religious nature of its objects was not adequately addressed. The Tribunal also noted that the rejection of the 12AB registration was independently sustainable, rendering the 80G issue moot.

The Tribunal held that the assessee was not given adequate opportunity of being heard as the time provided to reply to the show cause notice was insufficient. Therefore, the impugned order was not sustainable in law.

The Tribunal found that the CIT(A) failed to adjudicate the appeal on merits and did not follow the requirements of Section 250(6) of the Act. Therefore, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal dismissed the appeals, finding that the assessee failed to provide necessary documentation to establish the genuineness of its activities and that the religious nature of its objects was not adequately addressed. The Tribunal also noted that the rejection of the 12AB registration was independently sustainable, rendering the 80G issue moot.

The Tribunal held that the appellant was not provided with a reasonable opportunity of being heard as there was no evidence of proper service of notices. Therefore, the impugned orders were set aside and the matter was remanded for fresh adjudication.

The Tribunal held that the AO had made an inquiry into the issue, even if the PCIT considered it inadequate. The PCIT's order under Section 263 was set aside as the twin conditions of the order being erroneous and prejudicial to the revenue were not satisfied.

The Tribunal held that the CIT(A) was justified in examining the bank statements as additional evidence, even if the procedure under Rule 46A was not strictly followed, given the nature of the documents and the best judgment assessment. The addition was deleted as the AO misread Yen figures as Rupees, the source of deposits was explained and accepted in the husband's case, and the assessee was a non-resident.

The Tribunal condoned the delay in filing the application, finding that the CIT(E) erred in treating the trust as purely religious and in concluding that religious expenditure exceeded the permissible limit. The Tribunal set aside the CIT(E)'s order and restored the application for fresh consideration.

The Tribunal held that the assessee is entitled to the full exemption of Rs 9,29,033 as it falls within the revised limit of Rs 25,00,000. The addition made by the AO was directed to be deleted.

The Tribunal held that the AO's method of calculating unexplained deposits by simply subtracting withdrawals and small deposits from total deposits was not a proper examination of the books of account. The matter was restored to the AO for a fresh assessment after verification of the society's books and member-wise transactions.

The Tribunal held that the appellant was not provided with an adequate opportunity of being heard by the CIT(E) and that their right to be heard was violated. Therefore, the impugned orders were set aside to be decided afresh.

The Tribunal held that the CIT(A) erred by dismissing the appeal without granting a reasonable opportunity of being heard, violating the principles of natural justice. The impugned order was set aside for fresh adjudication.

The Tribunal held that the ex-parte orders passed by the CIT(E) could not attain finality as the appellant had a right to be heard. The appeals were set aside to be decided afresh after providing a reasonable opportunity of being heard to the assessee.

The Tribunal condoned the delay of 175 days in filing the appeal before the CIT(A), finding that the inter-se dispute among partners constituted a sufficient cause. The CIT(A)'s order was set aside, and the case was remitted back for a fresh decision on merits.

The Tribunal held that the assessee was not given adequate opportunity of being heard by the CIT(E) as the time provided to reply to the show cause notice was insufficient. Therefore, the impugned order was not sustainable in law.

The Tribunal held that in view of the Supreme Court's decision in Checkmate Services P Ltd. vs CIT, no deduction is allowable for employees' contribution to PF and ESI if not deposited within the prescribed limits under the respective acts.

The Tribunal noted that the order rejecting the Section 12AB registration was set aside, and subsequently, registration was granted. Therefore, the CIT(A)'s order was not sustainable.

The Tribunal held that denial of exemption under Section 11 solely due to discrepancies in the return and audit report, especially when a revised audit report clarified them, is not sustainable. The assessee had substantially applied its income for charitable activities and was eligible for exemption.

The Tribunal condoned the delay in filing the appeal, citing the assessee's age, reliance on a tax consultant, and the consultant's negligence. On merits, the Tribunal held that the assessee is eligible for the entire exemption amount of leave encashment in view of the revised limits specified by CBDT Notification No. 31/2023.

The Tribunal held that the penalty proceedings were vitiated because the notice issued under Section 274 did not specify the limb of Section 270A under which the penalty was being levied. Additionally, the Tribunal noted that the assessee had rectified the mistake by withdrawing the deduction, rendering the penalty proceedings redundant.

The Tribunal held that Section 40A(3) disallowance was not sustainable as the assessee had offered the income from undisclosed sales and no deduction was claimed. The addition for the loan from the father-in-law was upheld due to lack of proper verification. The estimation of household expenses by the AO was also upheld.

The Tribunal held that subsequent applications filed by the assessee were not maintainable as a previous appeal had already been remanded back to the CIT(E) with specific directions. The CIT(E) was expected to comply with the earlier Tribunal order before considering any new applications.

The Tribunal held that the appellant was not provided with an adequate opportunity of being heard by the CIT(E) and that their right to be heard was violated. Therefore, the impugned orders were set aside to be decided afresh.

The Tribunal held that the ex-parte orders passed by the CIT(E) could not attain finality as the appellant had a right to be heard. The appeals were set aside to be decided afresh after providing a reasonable opportunity of being heard to the assessee.

The Tribunal held that Section 40A(3) disallowance was not sustainable as the assessee had offered the income from undisclosed sales and no deduction was claimed. The addition for the loan from the father-in-law was upheld due to lack of proper verification. The estimation of household expenses by the AO was also upheld.

The Tribunal held that the CIT(A) had taken a plausible view in deleting the additions as no incriminating material was found during the search. Therefore, the additions made by the AO were not sustainable.

The Tribunal held that the assessee was not provided with an adequate opportunity of being heard by the CIT(A) as there was no proof of service of notices. Therefore, the impugned order of the CIT(A) was set aside.

The Tribunal condoned the delay in filing the appeals at both levels, citing sufficient cause due to the death of the assessee's mother and the professional misconduct of the tax practitioner. The ex-parte order of the CIT(A) was set aside.

The Tribunal restored the issue of whether the land was a capital asset to the AO for fresh verification, including the Tehsildar's report and municipal records. The claim for deduction under section 54B was admitted for examination on merits.

The Tribunal held that both penalties were consequential to the quantum additions and the validity of the assessment. Since the quantum appeal was restored to the CIT(A) for decision on merits, the penalties could not stand independently.

The Tribunal condoned the delay in filing the appeal before the CIT(A) as the assessee had sufficient cause due to notices being issued to the wrong address. Consequently, the assessment order passed ex-parte was set aside.