ITAT Jodhpur Judgments — September 2025

The Tribunal condoned the delay in filing the appeals after considering the appellant's explanation regarding the e-filing password issue. The Tribunal noted that the Assessing Officer had reopened assessments based on information about investments made by the assessees with M/s U B Investment.

The Tribunal found that the assessee had provided sufficient documentary evidence and a history of declaring similar income to explain the sources of the cash deposits. It held that income already disclosed or plausibly explained cannot be treated as undisclosed income or subjected to double taxation. Therefore, the addition made under Section 68 and the application of Section 115BBE by the lower authorities were deemed infirm and perverse to the facts on record, leading to the deletion of the addition.

The Tribunal upheld the CIT(A)'s decision, confirming that the interest subsidies under TUFS and RIPS were capital receipts and thus not taxable. It found no reason to interfere with the CIT(A)'s findings, relying on various Supreme Court and High Court judgments that supported the admission of additional grounds and the capital nature of such subsidies.

The Tribunal held that the requirement to file Form 10IE is directory, not mandatory. The failure to file Form 10IE by the due date does not invalidate the assessee's claim for the new tax regime, especially when the option was exercised in the preceding year.

The Tribunal condoned the delay in filing the appeals for Sunil Kumar Goyal, accepting the reason of not having e-filing password from a previous consultant. It rejected the argument about inconsistency between the reasons for re-opening and the subject matter of assessment. However, finding that neither the Assessing Officer nor the CIT(A) had discussed the documents submitted by the assessees regarding the source of funds for the investments, the Tribunal remanded all four appeals to the Assessing Officer for fresh adjudication after proper verification.

The Tribunal held that the AO disallowed expenses without rejecting the books of account. The CIT(A) also did not point out specific lacunae in the expenses. The assessee had undergone tax audit and maintained books of account as per Section 44AB. No contradiction was established between audited books and lower authorities' findings.

The Tribunal condoned the delay in filing the second set of appeals, finding merit in the explanation provided by the appellant regarding the late filing. The Tribunal noted that the Assessing Officer reopened assessments based on information regarding investments made by the assessees with M/s U B Investment.

The Assessing Officer (AO) added Rs. 10 lakhs as unexplained income. The CIT(A) restricted the addition to Rs. 8,75,000/-. The Tribunal noted that the assessee provided an affidavit explaining the source of the cash, and the revenue authorities did not disprove the documentary evidence or provide contrary material.

The Tribunal noted that a notice under section 148 cannot be validly issued to assess any case on a protective basis. Such assessments are considered hit and trial and go against the AO's duty to form a firm opinion. Therefore, the notice and subsequent assessment were deemed invalid.

The Tribunal held that while the AO's initial findings pointed to a larger unexplained investment, the assessee's alternate submission, supported by a chart, indicated that only Rs. 7,00,000 related to the impugned assessment year. Considering the assessee's 50% share, the addition was restricted to Rs. 3,50,000.

The Tribunal held that the scope of enquiry for granting registration under Section 12AB is confined to the genuineness of activities and their consonance with stated objects. Issues related to allowability of exemption or specific expenditure violations are for assessment proceedings. The rejection solely on alleged violations of Section 13(1)(c) without doubting the charitable objects is not justified.

The Tribunal held that the scope of inquiry for granting registration under Section 12AB is limited to the genuineness of the trust's activities and their consonance with stated objects. Issues concerning the allowability of exemption and specific expenditure violations are matters for assessment proceedings. The rejection was primarily based on allegations that fall within the assessment domain and not solely on the denial of registration.

The Tribunal condoned the delay in filing Sunil Kumar Goyal's appeals after considering the explanation provided. The appeals were consolidated and heard together as they involved common issues on similar facts. The Tribunal noted that the Assessing Officer reopened assessments based on information about investments made by the assessees with M/s U B Investment, but did not adequately discuss the source of funds for these investments as presented by the assessees.

The Tribunal held that the notice issued under section 153C of the Act for A.Ys 2014-15 and 2015-16 was bad in law because a consolidated satisfaction note was recorded instead of one for each assessment year, following the ruling of the Hon'ble Supreme Court. The addition of capital introduced by partners was deleted, as the partners were tax-paying entities, and the source of funds was sufficiently explained. The disallowance of conversion and development expenses was also deleted as the expenses were found to be included in the closing stock and not capitalized.

The tribunal noted that the assessee had provided explanations and affidavits regarding the source of the cash, including past savings and family settlement. The revenue authorities failed to disprove the evidence or provide contrary material.

The Tribunal held that the mandate of filing Form 10-IE is directory, not mandatory. The failure to file Form 10-IE within the prescribed due date does not invalidate the assessee's claim of opting for the new regime, especially when the option was exercised in the preceding year and not invalidated due to specified violations.

The Tribunal noted that notices were issued to the assessee, but there was non-compliance. Despite this, considering the issue involved and the opportunity not fully availed by the assessee, the Tribunal decided to remit the matter back to the Assessing Officer for a fresh decision.

The Tribunal considered the purpose of the TUFS and RIPS schemes, which were for technological upgradation, capacity expansion, and employment generation. Following judicial precedents from the Rajasthan High Court and Supreme Court, the Tribunal held that the subsidy was a capital receipt.

The Tribunal considered the purpose of the TUFS and RIPS schemes, which was to promote technological upgradation, capacity expansion, and modernization in the textile industry. Relying on the 'purpose test' laid down in the Ponni Sugar case and other precedents, the Tribunal held that the subsidy received for these objectives was a capital receipt and not chargeable to tax.

The Tribunal noted that the application for registration was withdrawn by the appellant. The appellant's counsel admitted to submitting a withdrawal application. Therefore, the appeal against the dismissal of the registration application was deemed not maintainable.

The Tribunal allowed the prayer of the appellant's AR. The appeal was dismissed as having been withdrawn, with liberty to revive it if no settlement is reached under the Vivad Se Vishwas Scheme.

The Tribunal acknowledged the assessee's claim of being a simple person but noted the non-compliance with notices. Considering the large addition amount, the Tribunal decided to afford another opportunity to the appellant for participation in proceedings before the Assessing Officer, with the condition of depositing costs.

The Tribunal held that the interest subsidy received under TUFS and RIPS was for technological upgradation, capacity expansion, and employment generation, thus qualifying as a capital receipt. The Tribunal upheld the CIT(A)'s decision, relying on various High Court and Supreme Court judgments.

The Tribunal noted that the assessee maintained accounts on a cash basis, while the disputed receipt was considered on an accrual basis. The AO's verification was found to be improper and incomplete. The Tribunal restored the matter to the AO for de novo verification.

The Tribunal held that the scope of enquiry for granting registration under Section 12AB is limited to the genuineness of activities and their consonance with the stated objects. Issues related to exemption allowability or specific expenditure violations are for assessment proceedings. The rejection based solely on alleged violations of Section 13(1)(c) without doubting the genuineness of charitable objects was not justified.

The Tribunal held that a consolidated satisfaction note under Section 153C for multiple assessment years is bad in law, following the precedent set by the Hon'ble Supreme Court. Consequently, the initiation notices under Section 153C and the assessments for AY 2014-15 and 2015-16 were quashed. Regarding the capital introduction, the Tribunal affirmed that capital introduced by partners, who are tax-paying entities, cannot be assessed as unexplained income in the hands of the firm. The expenses debited to the P&L account and adjusted in closing stock were found to be correctly treated and not a sustainable addition. The cross-objection regarding an ad-hoc addition was restored to the CIT(A) for further verification.

The Tribunal held that the satisfaction note for initiating action under Section 153C must be recorded separately for each assessment year, and a consolidated note vitiates the proceedings. Following the Supreme Court's affirmation of the Karnataka High Court's decision in DCIT vs. Sunil Kumar Sharma, the initiation notice under Section 153C was quashed. The Tribunal also held that capital introduced by partners, who are tax-paying entities, cannot be assessed as unexplained income in the hands of the firm.

The Tribunal held that penalty under section 271(1)(c) cannot be levied when additions are sustained purely on an estimated basis and when the AO fails to prove concealment of income or furnishing of inaccurate particulars. The disallowance of purchases on an ad hoc/estimated basis does not equate to furnishing inaccurate particulars.

The Tribunal condoned the delay in filing the appeals, finding sufficient cause. It was noted that the cancellation of provisional registration was due to the absence of the Rajasthan Public Trust Act registration, which has now been obtained. Therefore, the assessee is no longer in default. The Tribunal directed the restoration of the applications to the CIT(E) for verification of the RPT Act registration and subsequent grant of registration.

The Tribunal condoned the delay of 163 days in filing the appeals, finding sufficient cause. It was noted that the assessee has since obtained the requisite registration under the Rajasthan Public Trust Act, 1959, thus rectifying the default. Consequently, the applications for registration were restored to the file of the Ld. CIT(E).