ITAT Jaipur Judgments — October 2026

The Tribunal allowed both appeals for statistical purposes. Regarding the denial of 12A registration, the Tribunal noted that while the CIT(E) had denied it on the grounds of non-registration under the RPT Act and lack of genuineness of activities, a certificate of registration under the RPT Act, dated 16.12.2024, was produced before the Tribunal. The Tribunal found that sufficient opportunity of hearing might not have been given to the assessee by the CIT(E) to establish the genuineness of its activities. Therefore, in the interest of justice, the issue was restored to the file of the CIT(E) to take note of the RPT Act registration, verify it, and provide the assessee an opportunity to establish the genuineness of its activities before passing a fresh order. Consequently, the denial of 80G approval, being consequential to the 12A registration, was also restored to the file of the CIT(E) to be reconsidered along with the 12A application.

The Tribunal noted that the CIT(E) had rejected the assessee's application for 80G approval on the sole ground that registration under section 12AB was not provided, and thus, 80G approval could not be granted. The Tribunal found no illegality or perversity in the CIT(E)'s order based on the facts presented at that time. However, the assessee subsequently brought on record the registration issued by the CIT(E) under section 12AB. This registration made the assessee eligible for the consequential approval under section 80G. In light of this development, the Tribunal held that it had no option but to set aside the impugned order in the interest of justice. The Tribunal decided to provide another opportunity to the assessee to obtain the 80G approval by producing the 12AB registration. Consequently, the impugned order was set aside, and the CIT(E) was directed to pass a fresh order after providing the assessee with an adequate opportunity of being heard. The appeal was allowed for statistical purposes.

For AY 2018-19 and 2019-20 (ITA Nos. 1271 and 1269/JPR/2026), the Tribunal held that the assessment years are specified previous years and the definition of 'undisclosed income' under Explanation (c) to Section 271AAB includes income represented by transactions found in the course of a search, not recorded or disclosed before it. Relying on the Supreme Court's decision in K. Krishnamurthy v. DCIT, the Tribunal found that the sustained income was indeed undisclosed income found during the search. The alternative plea that penalty could only be computed on a lesser amount for AY 2018-19 was rejected, as the Sadguru paper corroborated the admitted practice and was not the sole measure of undisclosed income. The objection to the Parmar Plastics paper for AY 2019-20 was also dismissed as the sustained income was based on admitted rates and the Assessee's own offer. The computation directed by the CIT(A) was found to follow the statutory scheme, and no circumstances justified withholding the penalty. Thus, Ground No. 1 for these years was dismissed. For AY 2016-17 (ITA No. 1270/JPR/2026), the Tribunal noted that the AO initiated penalty proceedings on both the addition and the Rs 20,00,000 declared in the Section 153A return. However, the CIT(A) deleted the penalty on the Rs 20,00,000. The remaining penalty was on the sustained addition of Rs 19,61,979. The Tribunal found that the AO set off the Rs 20,00,000 declared against this addition, resulting in no assessment beyond the return. The CIT(A) himself considered the sustained addition as part of the additional income offered. Following the Delhi High Court's ruling in Pr. CIT v. Neeraj Jindal, the Tribunal held that concealment must be judged against the return filed under Section 153A. Since the sustained addition formed part of this return, there was no concealment or furnishing of inaccurate particulars. MAK Data (P.) Ltd. was distinguished as the surrendered sum was not included in the return. Therefore, the AO was directed to delete the penalty for AY 2016-17, allowing Ground No. 1.

The Tribunal noted that the CIT(E) had declined registration under Section 12A(1)(ac)(ii) and approval under Section 80G(5)(ii) primarily on the grounds of an incomplete Form 10AB and non-registration under the Rajasthan Public Trust Act, 1959. The assessee's counsel requested one more opportunity to file a complete/correct Form 10AB and stated that an application for registration under the Rajasthan Public Trust Act, 1959, was pending and expected to be issued shortly. Considering these submissions and in the interest of justice, the Tribunal decided to grant one more adequate opportunity to the appellant to rectify the deficiencies pointed out by the CIT(E). The Tribunal set aside the impugned orders and directed the CIT(E) to pass a fresh order after providing this opportunity. The appeals were allowed for statistical purposes.

The Tribunal noted that the CIT(E) had rejected the applications for registration under Section 12AB and approval under Section 80G primarily due to the assessee's lack of registration under the Rajasthan Public Trust Act, 1959. The assessee then brought to the Tribunal's notice that an application for registration under the Rajasthan Public Trust Act, 1959, had been filed on 04.04.2026 and was pending. In light of this development, the Tribunal found no option but to remand the matter back to the CIT(E). The CIT(E) was directed to decide the applications afresh after providing the appellant with an adequate opportunity of being heard and upon compliance with necessary formalities. The impugned orders of the CIT(E) were set aside. The appeals were allowed for statistical purposes.

The Tribunal held that the discrepancy in Form 29B, which was irreconcilable with the audited financial statements, indeed amounted to a mistake apparent on record. The Tribunal noted that the assessee had provided a revised Form 29B, which was duly reconciled with the audited financial statements. The Tribunal found the CIT(A)'s order unsustainable and set it aside. The Assessing Officer was directed to grant relief to the assessee based on the revised Form 29B, reconciled with the audited financial statements, in accordance with the law. The ratio decidendi is that an error in a statutory form, which is inconsistent with the audited financials and can be corrected with a revised form, constitutes a mistake apparent from the record, warranting rectification under Section 154. The appeal filed by the assessee was allowed.

The Tribunal held that the assessee was not granted adequate opportunity to complete the formalities. The deficiency letter was issued on 17.01.2026, giving only five days for compliance, after which the applications were rejected. The Tribunal found this insufficient. It noted that the assessee had applied for registration under the Rajasthan Public Trust Act, 1959, on 29.01.2026, and this was still pending. To impart substantial justice, the Tribunal decided that the assessee should be given an adequate opportunity to make the necessary compliances. Consequently, the impugned orders passed by the CIT(E) were set aside. The Tribunal directed the CIT(E) to pass a fresh order after providing the assessee with adequate opportunity. The appeals were allowed for statistical purposes.

The Tribunal noted that the Ld. CIT(A) had decided the issue solely on the basis of the Hon'ble Jurisdictional High Court's decision, which had been set aside by the Hon'ble Supreme Court in the case of ITO Vs. Tej Partap Singh and others. The Supreme Court's order, dated 10.04.2026, set aside the High Court judgments on the limited ground that the JAOs lacked competence to initiate proceedings, and this view was altered by subsequent amendments. The Supreme Court remitted the matters to the respective High Courts for fresh consideration, granting liberty to the assessees to amend their petitions and to the Revenue to file submissions. Crucially, the Supreme Court stated that it had not expressed any opinion on the merits of the controversy, including the validity, scope, effect, retrospectivity, or applicability of the amended provisions. Given that the Ld. CIT(A)'s decision was based on a High Court order that was subsequently set aside by the Supreme Court, and no decision on the merits was rendered by the Ld. CIT(A), the Tribunal found it appropriate to restore the issue back to the file of the Ld. CIT(A) for fresh adjudication after the decision of the Hon'ble Jurisdictional High Court as directed by the Apex Court. The appeal of the Revenue was allowed for statistical purposes.

The Tribunal noted that the CIT(E) had rejected the applications for registration under Section 12AB and approval under Section 80G primarily due to the assessee's lack of registration under the Rajasthan Public Trust Act, 1959. The assessee then brought to the Tribunal's notice that an application for registration under the Rajasthan Public Trust Act, 1959, had been filed on 04.04.2026 and was pending. In light of this development, the Tribunal found no option but to remand the matter back to the CIT(E). The CIT(E) was directed to decide the applications afresh after providing the appellant with an adequate opportunity of being heard and upon compliance with necessary formalities. The impugned orders of the CIT(E) were set aside. The appeals were allowed for statistical purposes.

The Tribunal upheld the order of the Ld. CIT(A) and dismissed the appeal of the Revenue. The Tribunal found that the Ld. CIT(A) had correctly noted that the tax liability arose on the conversion of a capital asset into stock-in-trade upon the transfer of the property in the hands of the owner of the property, as per Section 45(2) of the Act. Capital gains are deemed to accrue and are chargeable to tax only in the previous year in which such stock-in-trade is actually sold or otherwise transferred. The AO had admitted that the tax liability for the surrender on account of conversion of capital asset into stock-in-trade lay with the companies M/s Makkar Buildcon Pvt. Ltd., M/s Makson India Hospitality Pvt. Ltd., and M/s. Ken Infra Vision LLP. Since there was no ambiguity in the ownership of the stock-in-trade and the actual owners had accepted their tax liability, the protective addition made in the hands of the assessee was held to be unjustified. The Tribunal also noted that the factual findings of the Ld. CIT(A) regarding the silver jewellery issue remained uncontroverted.

The Tribunal condoned the delay of 18 days in filing the appeal, citing the Hon'ble Supreme Court's decision in Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), emphasizing a liberal construction of 'sufficient cause' to advance substantial justice. Regarding the addition under Section 41(1), the Tribunal noted that the assessee had principally agreed to the addition before the AO, and the CIT(A) had found the assessee's explanation before him to be general and unsubstantiated. The Tribunal did not decide this issue on merits as the appeal was allowed for statistical purposes on the second ground. Concerning the disallowance of transport expenditure, the Tribunal held that the assessee's plea that the AO did not issue a show cause notice constituted a sufficient reason for not producing the vouchers before the AO earlier. The Tribunal agreed with the assessee that the CIT(A) should have admitted the additional evidence (transport bills) as they contained details of transporters and were easily verifiable. The Tribunal directed the CIT(A) to admit the additional evidence and adjudicate the issue afresh after necessary verification. Ground of appeal No.2 was allowed for statistical purposes.

The Tribunal condoned the delay of 1079 days in filing the appeal, considering the assessee's status as a senior citizen, his lack of familiarity with tax laws, and the negligence of his tax consultant, citing the Supreme Court's decision in Collector, Land Acquisition vs. MST Katiji for a liberal interpretation. On merits, the Tribunal held that the assessee is eligible for the exemption of Rs. 7,60,770/- on account of leave encashment. The Tribunal noted that CBDT Notification No. 31/2023 dated 24.05.2023 revised the limit under Section 10(10AA) to Rs. 25,00,000/-. Following its own coordinate benches and the principle that CBDT circulars, if beneficial, have the force of law, the Tribunal allowed the assessee's claim. The AO was directed to allow the exemption of Rs. 7,51,755/- (the judgment mentions Rs. 7,51,755/- in para 13, but the facts state Rs. 7,60,770/- was received and Rs. 4,60,770/- was disallowed, implying the claim was for the entire amount) in view of the revised limit.

The Tribunal held that the assessee's explanation for the cash deposit of Rs.30,23,816/- was duly explained and substantiated. The Tribunal acknowledged the existence of a significant time gap between the various transactions (sale of land, transfer of funds, withdrawal of cash, and deposit by the assessee). However, it found that the parties who allegedly gave the cash to the assessee had confirmed doing so, and the sources of credit in the donors' bank accounts were traced to land sales. The Tribunal noted that no infirmity was found in the documents filed by the assessee, and the Revenue had no other evidence to contradict the explanation. Therefore, the Tribunal concluded that the assessee's explanation could not be rejected solely on the basis of the time gap when considering the test of human probabilities. The Tribunal found the addition of Rs.30,23,816/- to be grossly unjustified and directed its deletion. The appeal of the assessee was allowed.

The Tribunal held that the jurisdiction assumed by the AO to reopen the case under Section 147 was deficient and without application of mind. The AO incorrectly recorded gross profit as escaped income, despite the tax audit report clearly showing the net profit. This demonstrated a lack of application of mind to the available information, rendering the assumption of jurisdiction invalid. Consequently, the assessment order was quashed. Regarding the additions made under Sections 68, 69, and the estimation under Section 44AD, the Tribunal found that the assessee had sufficiently discharged its onus by furnishing confirmations, details, PAN numbers, and demonstrating that transactions were through banking channels. The Tribunal also agreed that Section 44AD could not be invoked as the assessee's turnover exceeded the prescribed limit. Therefore, all additions and estimations were held to be unjustified and against the law. The AO was directed to assess income only to the extent of net profits reflected in the profit and loss account, with all other additions and estimations to be deleted. The issue of interest under Sections 234A, 234B, and 234C was implicitly deleted as part of the overall quashing of additions.

The Tribunal condoned the delay of 351 days in filing the appeal, citing the principle of liberal construction of "sufficient cause" from Collector, Land Acquisition v. Mst. Katiji. The Tribunal allowed Ground No. 2, which challenged the ex parte disposal of the appeal by the CIT(A), holding that the assessee's case had not been heard on merits at the first appellate stage. The Tribunal noted that the CIT(A)'s order failed to comply with Section 250(6) of the Act, as it primarily relied on the AO's findings without examining factual issues like telescoping and the basis for profit estimation. The Tribunal also observed discrepancies in the assessment order regarding figures for excess cash and GP rates. Consequently, the Tribunal set aside the impugned order and restored the appeal to the CIT(A) for a fresh decision on all grounds, after affording the assessee a reasonable opportunity of being heard. The assessee was directed to cooperate and not seek adjournments without reasonable cause. The Tribunal explicitly stated that no opinion was expressed on the merits of the additions, and all contentions were left open. Grounds 3 to 8 were left open for adjudication by the CIT(A). Ground 1 was also left open, with liberty to the assessee to raise it before the CIT(A). Ground 9 was considered general.

The Tribunal held that the assessee should be given one more opportunity to prove its case before the Ld. CIT(E). The rejection of the applications for registration under Section 12AB and approval under Section 80G was based solely on the non-registration under the Rajasthan Public Trust Act, 1959. The Tribunal acknowledged that the assessee had initiated the process for registration under the said Act and had taken steps such as issuing notices. Therefore, to substantiate justice, both appeals were remanded back to the Ld. CIT(E). The Ld. CIT(E) was directed to decide the applications afresh in accordance with the law upon production of necessary documents by the appellant, specifically the Rajasthan Public Trust Act registration certificate. The appeals were allowed for statistical purposes.

The Tribunal held that the scope of the second round of litigation was limited by the Tribunal's previous direction to verify if advances were made in earlier years out of interest-free funds. The learned CIT(A)'s observation that this fact would not help the assessee was contrary to the Tribunal's specific direction. The Tribunal noted that the advance to Metro Colonizers India Ltd. remained unchanged from assessment year 2008-09 onwards, and no part of it was advanced during the year under consideration. Furthermore, on the AO's own figures for assessment year 2008-09, interest-free funds exceeded the advances. The Tribunal applied the principle from *Hero Cycles (P.) Ltd. v. CIT* and *CIT v. Reliance Industries Ltd.*, stating that where interest-free funds were available when advances were made, the presumption is that advances came out of those funds, and a comparison of closing balances alone does not prove diversion of borrowed capital. The disallowance, built on presumption and widened beyond the Tribunal's restoration scope, was not sustained. The entire disallowance of Rs. 20,28,018, as enhanced to Rs. 26,75,774, was deleted. Ground No. 1 was allowed. Ground No. 2 was left open as academic.

The Tribunal noted that the CIT(E) had declined registration under Section 12A(1)(ac)(ii) and approval under Section 80G(5)(ii) primarily on the grounds of an incomplete Form 10AB and non-registration under the Rajasthan Public Trust Act, 1959. The assessee's counsel requested one more opportunity to file a complete/correct Form 10AB and stated that an application for registration under the Rajasthan Public Trust Act, 1959, was pending and expected to be issued shortly. Considering these submissions and in the interest of justice, the Tribunal decided to grant one more adequate opportunity to the appellant to rectify the deficiencies pointed out by the CIT(E). The Tribunal set aside the impugned orders and directed the CIT(E) to pass a fresh order after providing this opportunity. The appeals were allowed for statistical purposes.

The Tribunal held that the learned JCIT(A) was not justified in refusing to condone the delay. While the assessee's attempt to exclude the period from March 15, 2020, to February 28, 2022, as a matter of course, based on the Supreme Court's order in Re: Cognizance for Extension of Limitation, was not entirely correct because the limitation expired before March 15, 2020, the Tribunal considered the pandemic and its restrictions as relevant factors for assessing 'sufficient cause'. The Tribunal noted that the delay of 1032 days (as calculated by the Tribunal) was explained by a rectification application filed under section 154, the subsequent order, reliance on the chartered accountant, and the pandemic. The Tribunal found the sequence of events consistent with the explanation and observed that the assessee, an individual from a rural area, relied on professional advice. The Tribunal distinguished the case from C.I. Builders (P.) Ltd. v. Pr. CIT, where the delay was significantly longer and the facts were materially different. The Tribunal condoned the delay, set aside the impugned order, and restored the appeal to the file of the JCIT(A) for a decision on merits. The Tribunal expressed no opinion on the merits of the adjustment.

The Tribunal held that the learned CIT(E)'s satisfaction regarding the objects and genuineness of the Assessee's activities must be based on a proper examination of the record, which had not occurred. The Tribunal noted that while the Assessee uploaded documents on 14.03.2026, the impugned order did not discuss them, stating the reply remained deficient and the case was decided due to approaching limitation. The order also relied on verification reports and newspaper cuttings without recording that these were put to the Assessee. Consequently, the Tribunal set aside both impugned orders and restored the applications to the file of the learned CIT(E) for a fresh decision. The learned CIT(E) was directed to provide a reasonable opportunity of being heard, call for further information, conduct necessary verification, and confront the Assessee with adverse material. The Assessee was directed to cooperate. The application under section 80G was to be decided after or along with the section 12AB application. The Tribunal made no observation on the merits of the documents or the Assessee's activities.

The Tribunal held that the assessee should be given one more opportunity to prove its case before the Ld. CIT(E). The rejection of the applications for registration under Section 12AB and approval under Section 80G was based solely on the non-registration under the Rajasthan Public Trust Act, 1959. The Tribunal acknowledged that the assessee had initiated the process for registration under the said Act and had taken steps such as issuing notices. Therefore, to substantiate justice, both appeals were remanded back to the Ld. CIT(E). The Ld. CIT(E) was directed to decide the applications afresh in accordance with the law upon production of necessary documents by the appellant, specifically the Rajasthan Public Trust Act registration certificate. The appeals were allowed for statistical purposes.

The Tribunal held that the learned CIT(E)'s satisfaction regarding the objects and genuineness of the Assessee's activities must be based on a proper examination of the record, which had not occurred. The Tribunal noted that while the Assessee uploaded documents on 14.03.2026, the impugned order did not discuss them, stating the reply remained deficient and the case was decided due to approaching limitation. The order also relied on verification reports and newspaper cuttings without recording that these were put to the Assessee. Consequently, the Tribunal set aside both impugned orders and restored the applications to the file of the learned CIT(E) for a fresh decision. The learned CIT(E) was directed to provide a reasonable opportunity of being heard, call for further information, conduct necessary verification, and confront the Assessee with adverse material. The Assessee was directed to cooperate. The application under section 80G was to be decided after or along with the section 12AB application. The Tribunal made no observation on the merits of the documents or the Assessee's activities.

For AY 2018-19 and 2019-20 (ITA Nos. 1271 and 1269/JPR/2026), the Tribunal held that the assessment years are specified previous years and the definition of 'undisclosed income' under Explanation (c) to Section 271AAB includes income represented by transactions found in the course of a search, not recorded or disclosed before it. Relying on the Supreme Court's decision in K. Krishnamurthy v. DCIT, the Tribunal found that the sustained income was indeed undisclosed income found during the search. The alternative plea that penalty could only be computed on a lesser amount for AY 2018-19 was rejected, as the Sadguru paper corroborated the admitted practice and was not the sole measure of undisclosed income. The objection to the Parmar Plastics paper for AY 2019-20 was also dismissed as the sustained income was based on admitted rates and the Assessee's own offer. The computation directed by the CIT(A) was found to follow the statutory scheme, and no circumstances justified withholding the penalty. Thus, Ground No. 1 for these years was dismissed. For AY 2016-17 (ITA No. 1270/JPR/2026), the Tribunal noted that the AO initiated penalty proceedings on both the addition and the Rs 20,00,000 declared in the Section 153A return. However, the CIT(A) deleted the penalty on the Rs 20,00,000. The remaining penalty was on the sustained addition of Rs 19,61,979. The Tribunal found that the AO set off the Rs 20,00,000 declared against this addition, resulting in no assessment beyond the return. The CIT(A) himself considered the sustained addition as part of the additional income offered. Following the Delhi High Court's ruling in Pr. CIT v. Neeraj Jindal, the Tribunal held that concealment must be judged against the return filed under Section 153A. Since the sustained addition formed part of this return, there was no concealment or furnishing of inaccurate particulars. MAK Data (P.) Ltd. was distinguished as the surrendered sum was not included in the return. Therefore, the AO was directed to delete the penalty for AY 2016-17, allowing Ground No. 1.

The Tribunal held that the assessee is entitled to the rebate under Section 87A of the Act for the Assessment Year 2024-25, notwithstanding that the total income includes taxable short-term capital gains chargeable at special rates under Section 111A. The Tribunal reasoned that there is no express bar in Section 87A or Section 111A for denying the rebate in such circumstances. The Tribunal noted that the Finance Bill 2025 proposes prospective amendments to Section 87A, implying that no such restriction was in force for the relevant assessment year. The Tribunal also referred to the Bombay High Court's decision in The Chamber of Tax Consultants vs. Director General of Income Tax (Systems), which held that system-based denials cannot override statutory rights and that each case must be adjudicated on its merits. The Tribunal found that the denial of rebate by the CPC was based on system-driven logic rather than statutory mandate. The CIT(A)'s interpretation upholding the denial was considered not in consonance with the plain language of the law. The Tribunal directed the AO to allow the rebate of Rs. 25,000/- claimed by the assessee under Section 87A and recompute the tax liability. The grounds of appeal raised by the assessee were allowed.

The Tribunal upheld the order of the CIT(A), dismissing the appeal filed by the Revenue. The Tribunal found that the CIT(A)'s order was well-reasoned. It was undisputed that the assessee maintained audited books of account, which were not rejected by the AO under Section 145(3). The assessee had provided substantial evidence, including ledger accounts showing cash sales that tallied with the VAT output ledger, denomination-wise details of cash deposits, bank deposit slips, and purchase bills from Indian Oil Corporation. The Tribunal agreed with the CIT(A) that the AO had not recorded any findings that the purchases were bogus or the sales were fictitious or inflated. The CIT(A)'s reliance on judicial precedents, including the Rajasthan High Court's decisions in CIT v. Jai Kumar Bakliwal and CIT v. Khandelwal Constructions, and the Supreme Court's decision in CIT v. P.K. Noorjahan, was found to be appropriate. These judgments emphasized that additions under Section 69A cannot be made merely on suspicion when books of account are maintained and not rejected, and that the provision is discretionary. The Tribunal noted that the addition of the entire gross deposits amounted to taxing turnover rather than profit, which is not permissible when books are not rejected. The assessee had discharged the primary burden by furnishing evidence, and the Revenue had failed to bring on record any material to disprove the books of account. Therefore, the addition made by the AO was not sustainable and was rightly deleted by the CIT(A).

The Tribunal held that since the assessee had provided reasons for the delay in filing the appeal through a notarized affidavit, it was fit to set aside the matter back to the file of the CIT(A). The Tribunal directed the CIT(A) to grant one more opportunity of hearing to the assessee, consider the notarized affidavit, and then pass a fresh order in accordance with the law. The Tribunal also noted that the assessee should cooperate by filing all required documents before the CIT(A) for a decision on merits. The issue of the merits of the assessment itself was not decided by the Tribunal, as the appeal was allowed for statistical purposes to enable a fresh adjudication by the lower appellate authority.

The Tribunal noted that subsequent to the impugned order, the CIT(E) passed another order on 24.09.2026, granting registration to the Assessee under section 332(7)(a) of the Income-tax Act, 2025 (this appears to be a typographical error and likely refers to section 12AB of the Income Tax Act, 1961, as per the context of the appeal) for a period of ten years. This new registration was granted subject to the condition that the Assessee obtains and submits the certificate of registration under the Rajasthan Public Trust Act, 1959, by 30.06.2027. Since the Assessee's primary grievance, which was the refusal of registration, had been resolved by the subsequent grant of registration, the appeal was rendered infructuous. The Tribunal stated that a dispute that has ceased to exist requires no adjudication. Therefore, the Tribunal refrained from expressing any view on whether the application was filed under the correct clause or whether registration under the RPT Act was a precondition, leaving these questions open as purely academic. Ground No. 1 was dismissed as infructuous. Ground No. 2 was general and required no adjudication. Ground No. 3, seeking costs, was also dismissed as no case was made out.

The Tribunal set aside the impugned order and restored the Assessee's application to the file of the learned CIT(E) for a fresh decision. The Tribunal noted two significant flaws in the CIT(E)'s order: first, the reliance on verification from a different entity with a different PAN and application date, and second, the contradictory recording of a reply to the show cause notice while stating no reply was furnished and then not discussing the reply. The Tribunal held that natural justice requires that submissions on record be considered. Regarding the section code, the Tribunal stated that the correct clause under section 12A(1)(ac) needs to be identified based on facts, and the proviso allowing condonation of delay should be considered. On the RPT Act, the Tribunal refrained from expressing a view on its necessity for charitable objects under section 12AB(1)(b)(i)(B), leaving it for the CIT(E) to decide. The Tribunal also noted that the CIT(E)'s remark on the admissibility of an appeal under the RPT Act was beyond its authority. On genuineness, the Tribunal found the queries detailed but noted the CIT(E) had not examined the trust deed's objects clause when holding the hostel activity outside section 2(15). The CIT(E) was directed to give the Assessee a reasonable opportunity of being heard and to call for necessary information. The Tribunal expressed no view on the merits of any issue. Ground No. 1 was allowed for statistical purposes. Ground No. 3 (costs) was dismissed.

The Tribunal held that the revision under section 263 is to correct errors, not to re-examine a completed assessment. The twin conditions for revision – that the order is erroneous and prejudicial to revenue – were not satisfied. On the first issue (loans), the Tribunal found that the AO had indeed made inquiries, including a specific notice under section 142(1) dated 30.11.2023, which reproduced the auditor's note and called for documentary evidence. The assessee provided a reply, which the AO accepted. The PCIT's order failed to address this inquiry or demonstrate inadequacy. The Tribunal noted that the mode of receipt of loans is a matter for penalty under section 269SS, not necessarily an error in assessment. The ratio of Ganpat Ram Bishnoi (supra) was applied, stating that revision cannot be invoked merely because more inquiry *could* have been conducted. On the second issue (accounts variation), the Tribunal found that the PCIT's order and show cause notice did not specify which asset or liability differed, by how much, or for which year. The AO had examined amalgamation details, and the variation as of 31.03.2020 was a reclassification and set-off, not affecting the current year's income. The PCIT failed to show how this variation impacted the income or caused revenue loss. Therefore, the PCIT's order was quashed, and the AO's assessment order was restored.

For ITA No. 1260/JPR/2026 (AY 2018-19), the Tribunal held that the declaration of income under Section 153A is a condition for a lower penalty rate under Section 271AAB(1A)(a), not a basis for deletion. The Tribunal, referencing K. Krishnamurthy v. DCIT, found that the cash consideration for scrap sales, evidenced by loose papers and admissions, met the definition of 'undisclosed income' under Explanation (c) to Section 271AAB, as it represented income found in the course of search and not recorded in books. The previous year was a specified previous year under Section 271AAB(1A)(b). Thus, the penalty of Rs. 3,43,031 was confirmed. For ITA No. 1272/JPR/2026 (AY 2016-17), the Tribunal held that once the CIT(A) found the sustained addition to be part of the declared income, no addition survived over the returned income. As no penalty was initiated on the declared income of Rs. 6,50,000, and the AO did not invoke Explanation 5A to Section 271(1)(c), the penalty was not sustainable. Furthermore, based on the CIT(A)'s formula, the tax sought to be evaded was nil under Section 115JB. The penalty of Rs. 2,49,197 was directed to be deleted.

For ITA No. 1260/JPR/2026 (AY 2018-19), the Tribunal held that the declaration of income under Section 153A is a condition for a lower penalty rate under Section 271AAB(1A)(a), not a basis for deletion. The Tribunal, referencing K. Krishnamurthy v. DCIT, found that the cash consideration for scrap sales, evidenced by loose papers and admissions, met the definition of 'undisclosed income' under Explanation (c) to Section 271AAB, as it represented income found in the course of search and not recorded in books. The previous year was a specified previous year under Section 271AAB(1A)(b). Thus, the penalty of Rs. 3,43,031 was confirmed. For ITA No. 1272/JPR/2026 (AY 2016-17), the Tribunal held that once the CIT(A) found the sustained addition to be part of the declared income, no addition survived over the returned income. As no penalty was initiated on the declared income of Rs. 6,50,000, and the AO did not invoke Explanation 5A to Section 271(1)(c), the penalty was not sustainable. Furthermore, based on the CIT(A)'s formula, the tax sought to be evaded was nil under Section 115JB. The penalty of Rs. 2,49,197 was directed to be deleted.

The ITAT condoned the 3-day delay in filing the assessee's cross-objection, finding the delay to be accidental and not deliberate, and in the interest of substantial justice. Regarding the Revenue's appeal, the Tribunal held that the Ld. CIT(A) was justified in deleting the addition of Rs. 1,88,24,970/-. The Revenue had not controverted the fact that the outstanding sundry creditors included a bank overdraft of Rs. 2,41,97,454/-, which was substantiated by bank confirmations. The Tribunal reasoned that bank overdraft is a loan and not a sundry creditor arising from day-to-day business activity. Therefore, it was correctly excluded by the Ld. CIT(A) from the unexplained credits. The grounds raised by the Revenue were dismissed. The assessee's cross-objection, challenging the confirmation of additions by the AO, was partly allowed for statistical purposes, with the issue of expenses disallowed by the AO being restored to the AO to determine income on a reasonable basis, after which unexplained credits would be recalculated. The Tribunal found no merit in the Revenue's grounds of appeal.

The Tribunal noted the assessee's written application seeking withdrawal of the appeal. The application detailed that subsequent rectification proceedings under Section 154 of the Income Tax Act, 1961, had resulted in the grant of consequential relief, a refund of ₹12,00,219, and correction of the assessed income to ₹3,48,85,450. The assessee stated that no substantive grievance survived for adjudication. The learned Departmental Representative had no objection to the withdrawal. In light of these submissions, the Tribunal held that the appeal should be dismissed as withdrawn. The Tribunal did not decide on the merits of the original grievance regarding Section 10AA deduction, as the appeal was withdrawn.

The Tribunal held that the assessee was a Non-Resident Indian for the Assessment Year 2015-16. The primary issue was the assessee's residential status under Section 6(1) of the Income Tax Act, 1961. The AO and CIT(A) had treated the assessee as a resident based on his stay in India for 158 days in the impugned year and over 365 days in the preceding four years, satisfying Section 6(1)(c). However, the Tribunal found that Explanation 1(a) to Section 6(1)(c) was applicable to the assessee, who was a citizen of India and left India as a member of the crew of an Indian ship for employment outside India. This explanation mandates that the period of 'sixty days' in sub-clause (c) should be substituted with 'one hundred and eighty-two days'. Since the assessee's stay in India was 158 days, which is less than 182 days, he did not qualify as a resident under Section 6(1)(c) even with the benefit of Explanation 1(a). The Tribunal also noted that the assessee's case could fall under Explanation 1(b) as well, leading to the same conclusion. Consequently, the income earned outside India was not taxable in India. The Tribunal did not specifically address the jurisdictional issue raised in ground 1, focusing solely on the residential status. The appeal was allowed.

The Tribunal held that Ground No. 1, challenging the validity of reassessment proceedings, was not pressed by the assessee and was therefore dismissed as not pressed. Regarding Ground No. 2, concerning the addition of Rs. 11 lakhs, the Tribunal found that the assessee had consistently explained the source of investment as accumulated family funds from agricultural operations. The assessee provided an irrigation certificate demonstrating irrigation of 60 bighas of land by him and his joint family, along with electricity bills for irrigation. Affidavits from his father and himself stated an estimated family income of Rs. 55 lakhs over the last 8 years, and the assessee had declared agricultural income in his return. The Tribunal noted that the revenue had not disputed the irrigation certificate or the electricity bills. While the revenue argued for more documentary evidence, the Tribunal considered the assessee's background as an agriculturist in a backward area where retaining extensive documentation might be difficult. The Tribunal concluded that the evidence furnished, including the irrigation certificate, electricity bills, and affidavits, sufficiently substantiated the assessee's explanation of earning agricultural income. Therefore, the source of the Rs. 11 lakhs investment in agricultural land was deemed sufficiently established, and the addition was directed to be deleted. The appeal was allowed.

The Tribunal held that the CIT(A) erred in treating the construction bills as inadmissible additional evidence. The bills were produced before the AO, and Rule 46A of the Income Tax Rules, 1962, only bars evidence not produced during the AO's proceedings. The AO's assessment order acknowledged the submission of construction bills. The existence of construction was not disputed, and the AO himself allowed section 54 exemption, which presumes a residential house was sold. Therefore, the cost of construction could not be taken at nil. However, the claim for construction cost was not accepted as is, due to unavailable bills totaling Rs. 4,65,101 and an estimate being presented as expenditure. The Tribunal also noted that part of the construction was financed by home loans, which required verification. Regarding sale and purchase expenses, brokerage on sale is deductible under section 48(i), and registration/brokerage on the new flat forms part of its cost under section 54. The matter was set aside to the AO for fresh determination of construction cost and verification of expenses, allowing the assessee to produce further evidence. Ground No. 1 was allowed for statistical purposes. Ground No. 3 (costs) was dismissed due to the assessee's non-compliance before the AO.

The Tribunal held that the notice under section 148 of the Act dated March 31, 2023, issued to the deceased Smt. Asha Garg, is invalid. The Tribunal noted that Smt. Asha Garg died on November 28, 2020, and the notice was addressed to her alone, despite the department being aware of her death, as evidenced by the statement of the legal heir and the assessment order itself referring to the assessee as 'Late Smt. Asha Garg'. No notice was issued to the legal representative as mandated by section 159(2)(b) of the Act. Following the Rajasthan High Court's decision in Devendra Pareek v. ACIT, the Tribunal held that proceedings against a deceased person cannot be initiated under section 148A, and section 159 must be invoked by issuing notice to the legal representative. A notice to a deceased person is legally a notice to no one. The Tribunal further held that section 292BB of the Act, which deems service of notice upon participation, does not validate a notice issued to a person against whom no lawful proceeding could be taken, nor can jurisdiction be conferred by acquiescence. Therefore, the assessment order dated March 13, 2024, founded on the invalid notice, is void. Grounds 1 and 2 are allowed, and grounds 3 to 8 are left undecided as they have become academic.

The Tribunal held that the reassessment proceedings were not challenged on the grounds of lack of reasons or approval under Section 151, and the issue regarding Section 143(3A) and the Faceless Scheme was not pressed. The Tribunal found that the CIT(A) had no jurisdiction to enhance the assessment by introducing new sources of income that were not considered by the Assessing Officer (AO). Relying on Supreme Court decisions in CIT v. Shapoorji Pallonji Mistry and Rai Bahadur Hardutroy Motilal Chamaria, the Tribunal stated that an appellate authority cannot enhance an assessment by discovering new sources of income not mentioned in the return or considered by the AO. The enhancement of Rs 10,00,000 (bank credits), Rs 8,25,000 (sale consideration of plots), and Rs 1,34,813 (pension income) were held to be beyond the CIT(A)'s jurisdiction. The Tribunal deleted these enhancements. The Tribunal expressed no opinion on the taxability of these items, leaving it open for the Revenue to pursue under other provisions. Grounds related to the adequacy of opportunity and merits of enhanced items were left undecided. General grounds were not adjudicated separately. The appeal was partly allowed.

The ITAT noted that the additions in both assessment years were based on WhatsApp chats found in a third party's phone during a search in another case. The assessee had not participated in the proceedings for AY 2020-21 and had merely denied the transaction without supporting material for AY 2019-20. The CIT(A) had also decided the appeals ex parte. The Tribunal acknowledged the assessee's non-compliance but emphasized the principle of audi alteram partem, stating that an addition founded on third-party material must be tested after giving the concerned person a real opportunity to respond. Therefore, to serve the interest of justice, the Tribunal set aside the orders of the CIT(A) and restored the matters to the file of the AO for fresh assessment. The AO was directed to afford a reasonable opportunity of being heard to the assessee and to examine all aspects uninfluenced by the Tribunal's observations. The assessee was directed to cooperate and furnish necessary details. Ground No. 1 challenging the validity of the Section 148 notices was left unadjudicated. Grounds 2 and 3 were allowed for statistical purposes.

The Tribunal held that the assessee had applied for registration under the RPT Act, 1959, vide an application dated 24.03.2026, which was under process and a certificate was being issued in due course. Since the assessee had applied for registration under the RPT Act, it was entitled to one more opportunity to have its case decided on merits. Consequently, the matter was required to be put back before the CIT(E) to consider the issuance of registration under section 12A(1)(ac)(ii) of the Act under the rules. The appeal was allowed for statistical purposes by remanding it back to the CIT(E) after providing an adequate opportunity of being heard to the appellant. No issue was expressly left undecided.

The Tribunal held that there was no illegality or perversity in the order passed by the CIT(E). The Tribunal noted that the assessee had not appeared before the ITAT despite being served with three notices. The Tribunal perused the impugned order, which rejected the application on grounds of non-maintainability, non-registration under the Rajasthan Public Trust Act, 1959, absence of a dissolution clause, and failure to prove the genuineness of activities and non-compliance. The Tribunal observed that the assessee had filed a partial reply before the CIT(E) and thereafter failed to comply with a show-cause notice. The assessee virtually did not appear to comply with the conditions to prove the genuineness of its activities, nor did it prove its registration under the Rajasthan Public Trust Act, 1959. Consequently, the appeal filed by the assessee was dismissed.

The Tribunal held that the assessee's applications for registration under Section 12AB and approval under Section 80G were rejected by the CIT(E) primarily due to non-registration under the Rajasthan Public Trust Act, 1959. The Tribunal noted that the assessee had subsequently submitted documents demonstrating that the process for obtaining registration under the Rajasthan Public Trust Act, 1959, was complete and registration was being issued. In light of this development, the Tribunal decided to grant the assessee one more opportunity. The case was remanded back to the CIT(E) to decide the applications afresh upon the production of the registration under the Rajasthan Public Trust Act, 1959. The appeals were allowed for statistical purposes. No issue was expressly left undecided.

The Tribunal held that the impugned order passed by the Ld. CIT(E) was not sustainable in the eyes of law. A bare perusal of the order indicated that the appellant was given only one opportunity to file a reply within four days, and the order was passed thereafter. The Tribunal found that the appellant was not given adequate opportunity to present documents and evidence to support its case. This lack of opportunity was considered a violation of the rule of natural justice. Consequently, the Tribunal set aside the order of the CIT(E). The appeal was allowed for statistical purposes, with a direction to decide the matter afresh after providing the appellant with an adequate opportunity of being heard. No specific finding was made on the merits of the grounds concerning violation of Section 13(1)(c) and the genuineness of activities, as the matter was remanded.

The Tribunal held that the assessee's applications for registration under Section 12AB and approval under Section 80G were rejected by the CIT(E) primarily due to non-registration under the Rajasthan Public Trust Act, 1959. The Tribunal noted that the assessee had subsequently submitted documents demonstrating that the process for obtaining registration under the Rajasthan Public Trust Act, 1959, was complete and registration was being issued. In light of this development, the Tribunal decided to grant the assessee one more opportunity. The case was remanded back to the CIT(E) to decide the applications afresh upon the production of the registration under the Rajasthan Public Trust Act, 1959. The appeals were allowed for statistical purposes. No issue was expressly left undecided.

The ITAT noted that the additions in both assessment years were based on WhatsApp chats found in a third party's phone during a search in another case. The assessee had not participated in the proceedings for AY 2020-21 and had merely denied the transaction without supporting material for AY 2019-20. The CIT(A) had also decided the appeals ex parte. The Tribunal acknowledged the assessee's non-compliance but emphasized the principle of audi alteram partem, stating that an addition founded on third-party material must be tested after giving the concerned person a real opportunity to respond. Therefore, to serve the interest of justice, the Tribunal set aside the orders of the CIT(A) and restored the matters to the file of the AO for fresh assessment. The AO was directed to afford a reasonable opportunity of being heard to the assessee and to examine all aspects uninfluenced by the Tribunal's observations. The assessee was directed to cooperate and furnish necessary details. Ground No. 1 challenging the validity of the Section 148 notices was left unadjudicated. Grounds 2 and 3 were allowed for statistical purposes.

The Tribunal decided to set aside the impugned orders and restore the issues to the file of the learned CIT(A) for fresh adjudication. Regarding the penalty under Section 271(1)(b), the Tribunal acknowledged the assessee's request for an opportunity to explain the non-compliance with the notice issued by the Assessing Officer. The learned counsel sought one further opportunity to do so. The Tribunal found merit in this request and restored the issue to the CIT(A) for a fresh decision on merits after providing the assessee a reasonable opportunity to explain the alleged default. For the penalty under Section 271F, the Tribunal noted that the assessee's contention that no return was required due to Nil total income in the consequential assessment was not substantiated with documentary evidence and was raised for the first time before the Tribunal. In the interest of justice, the matter was restored to the CIT(A) to examine this claim in light of relevant assessment orders and supporting evidence, and to decide afresh after affording a reasonable opportunity of being heard. Both appeals were allowed for statistical purposes.

The Tribunal held that the addition of ₹12,55,000 under section 69A was not sustainable. The Revenue failed to demonstrate that the documentary evidence furnished by the assessee was effectively disproved or that any independent material established the receipt as unexplained money. The Tribunal noted that the statement of Shri Vipin Garg, while relevant, did not, without a demonstrated nexus to the specific transaction and consideration of the assessee's evidence, conclusively prove non-genuineness. The AO relied on the statement and non-response to a section 133(6) notice but did not adequately controvert the documentary evidence. Crucially, the notice under section 133(6) was issued to Shri Vipin Garg, not M/s Shree Ram Trading Company, the actual transacting entity. Furthermore, the complete statement of Shri Vipin Garg was not furnished, and no cross-examination opportunity was given. The Tribunal also emphasized that section 69A applies to money not recorded in books, whereas the impugned amount was recorded as sales and received through banking channels. The Tribunal upheld the deletion of the addition, citing precedents where recorded sales are not treated as unexplained income based solely on third-party statements without corroboration. The grounds challenging the validity of reassessment proceedings were left undecided as the appeal failed on merits.

The Tribunal held that the addition of Rs. 5,20,490 could not be sustained. The primary reasoning was that the AO and CIT(A) materially relied on the statement of Shri Purshottam Chhipa, recorded under Section 132(4), to conclude that the disputed bills represented purchases without actual delivery of goods. The assessee had specifically raised an objection regarding the lack of opportunity to cross-examine Shri Chhipa, and the orders of the lower authorities did not establish that such an opportunity was provided. The Tribunal cited Andaman Timber Industries v. CCE (2015) and CIT v. Odeon Builders (P.) Ltd. (2019) to emphasize that denial of cross-examination when a third-party statement is the basis for an adverse conclusion vitiates the adjudication. While acknowledging deficiencies in the assessee's documentation, the Tribunal found that the procedural safeguard of cross-examination was crucial and its denial was consequential. The Tribunal also noted that Shri Chhipa stated raising bills in cash, while the assessee recorded payment by cheque, which would explain the source of payment from books of account. Consequently, the addition was deleted. The alternative plea for restricting the addition to the GP rate and the challenge to Section 115BBE did not survive. The grounds challenging the validity of reassessment proceedings were left open as the appeal was allowed on merits.

The Tribunal held that sufficient cause had been shown for the delay of 15 days in filing the appeal before the Tribunal. The affidavit explained that the appellate order was received by the authorized representative, who communicated it to a former cashier. The Secretary only became aware of the order later and then sought professional advice. The Tribunal condoned this delay and admitted the appeal. Regarding the delay of 250 days before the CIT(A), the Tribunal found the explanation in the affidavit satisfactory. The Tribunal reasoned that the assessee's participation in assessment proceedings does not automatically mean it was aware of the orders passed, nor does it imply the delay was deliberate. Therefore, the Tribunal was satisfied that sufficient cause was shown for the delay before the CIT(A). Consequently, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file for fresh adjudication on merits, after affording the assessee a reasonable opportunity of being heard. The issue of penalty under Section 271(1)(b) was not decided on merits by the Tribunal, as the CIT(A) had dismissed the appeal on delay.

The Tribunal condoned a delay of 70 days in filing the Revenue's appeal. On the merits, the Tribunal acknowledged the assessee's claim of acting as a power-of-attorney holder and receiving sale consideration on behalf of the actual owner. The primary reason for the CIT(A) upholding the addition was the assessee's failure to substantiate the subsequent transfer of funds to the alleged owner. The assessee has now expressed a willingness to provide bank statements and supporting evidence. In the interest of justice, the Tribunal granted the assessee a further opportunity to substantiate the claim. The impugned order was set aside regarding the addition of ₹11,10,214, and the issue was restored to the AO for fresh examination. The assessee is to furnish relevant bank statements and evidence of transfer to Shri Sayar Chand Bairwa. The AO is directed to examine the power of attorney, sale deed, flow of funds, and other materials, and decide afresh after providing a reasonable opportunity of hearing. Grounds challenging the validity of reassessment proceedings were kept open.