ITAT Kolkata Judgments — September 2025

The Tribunal condoned the delay of 1016 days in filing the appeals. The Tribunal also set aside the orders of the CIT(Appeals) and remitted the matter back to the CIT(Appeals) to decide the appeals afresh on merit, cautioning the assessee to cooperate with the proceedings.

The Tribunal held that the interest income earned by the cooperative society from its investments in nationalized banks, derived from its primary activities, is eligible for deduction under Section 80P(2)(a)(i). The decision relied on the jurisdictional High Court's ruling which distinguished the case from the Supreme Court's decision in Totgar's Cooperative Sale Society Ltd.

The Tribunal held that the CIT(A) had issued multiple notices, but the assessee failed to respond. However, the CIT(A) dismissed the appeal without adjudicating on merits. The Tribunal set aside the CIT(A)'s order to ensure principles of natural justice and remitted the matter back to the CIT(A) for a fresh hearing, cautioning the assessee to cooperate.

The Tribunal held that since the assessee had no exempt income during the year, the disallowance of expenditure under Section 14A was not sustainable. The Tribunal relied on various judicial pronouncements, including decisions from the Hon'ble Madras High Court and the assessee's own case.

The ITAT condoned the 1016-day delay, finding sufficient cause. It set aside the CIT(Appeals)'s orders and remanded the matter back to the CIT(Appeals) for a fresh decision on the merits of the appeal, cautioning the assessee to cooperate promptly.

The Tribunal held that the CIT(A) erred by dismissing the appeal without adjudicating it on merits or passing a reasoned order, which is a duty cast upon the CIT(A) under Section 250(6) of the Act. Citing various judicial precedents, the Tribunal clarified that the CIT(A) cannot dismiss an appeal merely for non-prosecution. Consequently, the Tribunal set aside the orders of both the CIT(A) and the AO, remanding the matter back to the AO for a de novo reassessment, with conditions including payment of ₹1,00,000/- cost and production of directors for cross-examination.

The Tribunal set aside the orders of the Ld. CIT (Exemption), noting that the denial was based solely on a wrong section code. The matter was remanded to the Ld. CIT (Exemption) to provide the assessee an opportunity to correct the section code, be heard, and allow for the merits of the application and genuineness of charitable activities to be examined afresh.

The Tribunal held that the denial of exemption was based on a technicality of quoting the wrong section code, and in the interest of justice, the assessee should be given another opportunity to file its submission and correct the section code.

The Tribunal held that since there was no petition or affidavit seeking condonation of delay, the appeal was not maintainable and was liable to be dismissed.

The Tribunal, relying on Supreme Court and High Court precedents, held that once a notice under Section 143(2) for scrutiny assessment has been issued, no intimation under Section 143(1) can be validly issued thereafter. Thus, the intimation under Section 143(1) issued in this case, being subsequent to the Section 143(2) notice, was deemed bad in law and quashed.

The Tribunal set aside the Ld. CIT (Exemption)'s order, finding that the rejection was due to the absence of a comprehensive reply. The matter was remanded back to the CIT (Exemption) to provide another opportunity to the assessee to justify its activities and claim for approval, and then decide the application afresh.

The Tribunal condoned the delay, considering the assessee's explanation and the lack of benefit derived from the delay. The Tribunal set aside the order of the Pr. CIT with directions to grant the assessee another opportunity of being heard.

The ITAT observed that the assessee was effectively denied the opportunity to submit evidence. Therefore, in the interest of justice, the matter was restored to the file of the CIT(A) for fresh adjudication. The CIT(A) is directed to provide a reasonable opportunity of hearing to the assessee, and the assessee is required to furnish all relevant documents and cooperate fully.

The Tribunal observed that the assessee was effectively denied the opportunity to submit evidence. Therefore, the matter was restored to the file of the Ld. CIT(A) for fresh adjudication, with a direction to grant the assessee a reasonable opportunity of being heard. The Tribunal clarified that it had not expressed any opinion on the merits of the case.

The Tribunal condoned the delay in the Revenue's appeals. It ruled that no addition could be made under Section 153A for unabated assessment years without incriminating material found during the search, relying on the Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. As no such material was found for the alleged bogus loans, the Section 68 addition was deleted, and the CIT(A)'s decision on merits was affirmed.

The Tribunal condoned the delay in the Revenue's appeals and, after reviewing all submitted documents, found no infirmity in the CIT(A)'s order. It held that the assessee had sufficiently established the identity, creditworthiness, and genuineness of the loans, which were also repaid. Consequently, the Revenue's appeals were dismissed on merits, and the assessee's cross-objections were dismissed as infructuous.

The Tribunal, relying on the Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd., held that no incriminating material was found during the search related to the assessee. Therefore, no addition could be made in respect of unabated assessment years without such material. On merits, the Tribunal found no infirmity in the CIT(A)'s decision to delete the addition under Section 68, as the assessee had provided documentary evidence (loan confirmations, ITR acknowledgements, audited financial statements, bank statements, TDS certificates) establishing the genuineness and creditworthiness of the loans, which the AO had not disputed.

The Tribunal upheld the CIT(A)'s decision, finding no infirmity. It observed that the assessee had provided sufficient documentation (loan confirmations, PAN, audited accounts, ITRs) to prove the identity and creditworthiness of the lenders and the genuineness of the transactions, noting also that the loans were repaid in a subsequent year. Consequently, the Revenue's appeals were dismissed on merits, and the assessee's cross-objections were dismissed as infructuous.

The Tribunal condoned the Revenue's delay and ruled that no addition could be made in unabated assessment proceedings without incriminating material found during the search, citing the Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. The Tribunal further upheld the CIT(A)'s deletion of the Section 68 addition on merits, finding that the assessee provided sufficient documentation for the loans, and the addition was based on a retracted statement without substantive defects.

The Tribunal held that for unabated assessment years, no addition could be made under Section 153A in the absence of incriminating material found during the search, citing the Supreme Court's judgment in Abhisar Buildwell. On merits, the Tribunal found no infirmity in the CIT(A)'s decision to delete the addition, as the assessee had provided sufficient evidence for the genuineness, identity, and creditworthiness of the creditors, which the AO had not disputed during assessment proceedings. Consequently, the Revenue's appeals were dismissed, and the assessee's cross-objections were allowed.

The Tribunal held that no incriminating material was found during the search, making the addition in unabated assessment proceedings unsustainable as per the Supreme Court's ruling in PCIT vs. Abhisar Buildwell Pvt. Ltd. On merits, the Tribunal found that the assessee had sufficiently proven the genuineness, identity, and creditworthiness of the loan creditors through extensive documentary evidence, and the AO had not disputed these documents.

The Tribunal affirmed that disallowances for belated PF/ESI contributions are valid adjustments under Section 143(1)(a)(ii) and that the Supreme Court's ruling in Checkmate Services Pvt. Ltd. applies. However, acknowledging the assessee's claim of timely payments in some instances, the Tribunal remitted the matter back to the AO to verify actual payment dates against statutory due dates using the challans provided by the assessee. Additions are to be deleted if timely payment is proven, otherwise sustained.

The Tribunal found that the assessee had provided comprehensive documentary evidence regarding the identity of the creditors, genuineness of the transactions, and their creditworthiness. It held that mere non-appearance of directors or low income of group companies, especially when the transactions were through banking channels and the share capital was received in prior years, cannot be the sole basis to disbelieve genuine transactions. Citing judicial precedents, the Tribunal directed the Assessing Officer to delete the addition.

The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s decision, finding no infirmity in the impugned order. The ITAT noted that the assessee had provided comprehensive documentary evidence, including ledgers, invoices, bills of lading, and customs clearance documents, to substantiate that the purchases identified by 'RAM' bills were legitimate import transactions from Ningbo Engineering Import & Export Co. Ltd., and not bogus indigenous purchases as presumed by the AO.

The Tribunal noted that a similar issue in the assessee's wife's case had been set aside to the AO with a direction to refer the property valuation to the DVO. Accordingly, the Tribunal remitted the present appeal back to the Assessing Officer to reconsider the issue afresh, along with the wife's case, and to refer the valuation of the property to the DVO if necessary.

The Tribunal observed that while the CIT(A) provided ample opportunities, dismissing the appeal ex-parte without considering the basic facts on record was incorrect, as an appellate authority should decide on merits even in cases of non-prosecution. Thus, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for reconsideration, directing to provide a sufficient opportunity of hearing to the assessee.

The Tribunal found the reasons for the delay to be genuine and condoned it. The Tribunal noted that the CIT(A) order was passed ex parte on a technical issue, not on merits.

The Tribunal remitted the issue back to the AO, setting aside the CIT(A)'s orders. The AO is directed to verify the actual payment dates for PF and ESI contributions against the due dates, based on the challans and evidence provided by the assessee. If payments are found to be on or before the due date, the additions shall be deleted; otherwise, they will be sustained.

The Tribunal held that reassessment proceedings initiated by issuing a notice under Section 148 against a dead person are bad in law, null, and void. Relying on the Delhi High Court's judgment in *Savita Kapila vs. ACIT*, it emphasized that legal representatives have no statutory obligation to inform the tax department of a death, and the CIT(A) also failed to initiate proceedings against the legal representative under Section 159.

The Income Tax Appellate Tribunal upheld the order of the CIT(A), finding that the assessee had sufficiently discharged its onus by providing comprehensive documentation regarding the identity, creditworthiness, and genuineness of the share subscribers. The Tribunal observed that the Assessing Officer had not found any defects in the submitted documents and based the addition merely on suspicion. Therefore, the addition under Section 68 was correctly deleted.

The Income Tax Appellate Tribunal dismissed the revenue's appeals, upholding the CIT(A)'s decision. The Tribunal reiterated that, in the absence of incriminating material found during a search, no addition can be made for an unabated/completed assessment year, in line with the Hon'ble Supreme Court's ruling in Abhisar Buildwell. It also noted the possibility for the AO to consider reopening under Sections 147/148 read with Section 150 of the Act.

The CIT(A) deleted the addition, finding that the assessee had discharged its onus by providing sufficient documentation proving the identity, creditworthiness, and genuineness of the share subscribers. The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s decision, confirming that there was no infirmity in the order and that the assessee had fulfilled the requirements of Section 68 of the Income Tax Act.

The Tribunal, citing the Delhi High Court in Savita Kapila vs. ACIT, ruled that a notice under Section 148 issued against a deceased person is invalid, rendering all subsequent reassessment proceedings null and void. It emphasized that legal heirs are not statutorily obligated to inform the revenue of the assessee's death. Consequently, the reassessment proceedings were set aside.

The Tribunal referred to the Supreme Court's decision in Union of India v. Rajeev Bansal and held that the notices issued under Section 148 were invalid as they were beyond the prescribed time limits. The court noted that the time limit for issuing such notices, even considering relaxations, had expired.

The tribunal, relying on the Delhi High Court's judgment in Savita Kapila vs. ACIT, held that reassessment proceedings initiated by issuing a notice under Section 148 of the Act against a dead person are bad in law, null, and void. It clarified that legal representatives are not statutorily obligated to inform the Income Tax Department about the assessee's death.

The Tribunal condoned the delay in filing the appeal due to the order not being communicated to the assessee. It was held that the CIT(A) dismissed the appeal for non-prosecution without granting a sufficient opportunity of hearing.

The Tribunal held that issuing a notice under Section 148 to a deceased person is bad in law. There is no statutory obligation for legal representatives to intimate the death of the assessee, and the proceedings initiated against a dead person are null and void.

The Tribunal condoned the delay. It held that the CIT(A) is statutorily bound under Section 250(6) to pass a reasoned order on merits and cannot dismiss an appeal for non-prosecution. Citing precedents, the Tribunal set aside both the CIT(A)'s order and the AO's assessment, remanding the matter back to the AO for a de novo reassessment, ensuring a proper opportunity for the assessee to be heard.

The Tribunal held that the material found during the search of finance brokers, which occurred prior to the relevant assessment year, had no bearing on the assessment. It also noted that the assessee retracted their statement given under survey, and there was no corroborative evidence to support the alleged cash loan transactions.

The Tribunal observed that the Ld. CIT(A)'s order was ex parte and that the assessee was not afforded a reasonable opportunity of being heard. In the interest of justice, the Tribunal remanded the entire issue back to the Ld. CIT(A) for fresh examination, with a direction to provide the assessee a proper opportunity.

The ITAT found that the assessee maintained audited books of account and the disputed amount was already included in the sales turnover and offered to tax. The Tribunal held that Section 68 cannot be invoked when receipts are accounted for as sales, thus quashing the CIT(A)'s order and directing the AO to delete the addition.

The Tribunal allowed most of the assessee's grounds, holding that disallowance of interest for interest-free advances is not justified if the assessee has sufficient interest-free funds. It ruled that TDS provisions under Section 195 are not applicable for payments to non-residents without a Permanent Establishment (PE) in India, made in foreign currency, for work not carried out in India. The Tribunal also held that estimated disallowances without a proper basis, defect finding, or comparable analysis are unsustainable, especially when regular books of accounts are maintained.

The Tribunal found that the assessee, an interior decorator, had rendered services for the amount and included it in their total income offered to tax. Consequently, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

The Tribunal found no basis for restricting the brought forward losses and directed the Ld. AO to allow the full amount of ₹8,35,902/- to be set off. It also ruled that the MAT credit claim of ₹12,94,923/- was valid as per the Act and available in assessment records, directing the Ld. AO to allow it.

The tribunal noted that the investments were made in preceding assessment years and had been consistently accepted by the department without doubt in prior scrutiny assessments. It found that the assessee had provided ample evidence (purchase/sale bills, bank statements, ITRs, confirmations) establishing the identity, creditworthiness, and genuineness of the transactions and purchasers, which the AO failed to disprove with independent evidence. Citing precedents regarding additions based on retracted statements without corroborative material, the tribunal set aside the Ld. CIT(A)'s order and directed the AO to delete the addition.

The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s order, confirming the deletion of the addition made under Section 68. The ITAT concluded that the assessee had discharged its onus by providing sufficient evidence for the identity and creditworthiness of the lenders, and the genuineness of the transactions, including repayment of loans and TDS deduction on interest. The ITAT emphasized that the AO's reliance on third-party statements without cross-examination and without further verification was unsustainable.