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2,176 tribunal orders from the Kolkata bench in 2026.
Showing 40 of 2,176 orders. Use the months below for the rest.
The Tribunal held that the notice issued under Section 148 for Assessment Year 2015-16 is barred by limitation. The reasoning was based on the concession made by the Revenue before the Apex Court in the case of Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693. In that judgment, the Revenue conceded that for Assessment Year 2015-2016, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The Tribunal also referred to a Delhi High Court decision in Gopal Bansal vs. ACIT, which quashed proceedings for AY 2015-16 initiated by a notice under Section 148 dated August 31, 2024, as time-barred. Consequently, the Tribunal quashed the notice issued under Section 148 for AY 2015-16 and set aside all consequential orders.
The Tribunal upheld the CIT(A)'s order, dismissing the Revenue's grounds of appeal. Regarding the reassessment proceedings (Grounds 1 & 2), the Tribunal agreed with the CIT(A) that the reopening was invalid. It noted that the assessment was reopened after four years from the end of the relevant AY, requiring satisfaction of the conditions in the first proviso to Section 147, which necessitates a failure on the part of the assessee to disclose material facts. The Tribunal found no material to support such a failure and observed that the AO acted on borrowed satisfaction without independent application of mind. The Tribunal relied on decisions of the Bombay High Court in Principal Commissioner of Income-tax-5 vs. Shodiman Investments (P.) Ltd. and Delhi High Court in PCIT Vs. Meenakshi Overseas (P.) Ltd. On merits (Ground 3), the Tribunal found the assessee's case strong. The assessee had furnished all details and evidence regarding the loan creditor, and the director of the lender company had appeared and provided evidence. The loan had also been repaid. Therefore, the Tribunal agreed with the CIT(A)'s deletion of the addition under Section 68, citing decisions of the Calcutta High Court and Gujarat High Court in similar cases where loan creditors' details and repayment were established. The appeals for AY 2015-16 and 2016-17 were also dismissed as the issues were similar.
The Tribunal held that the sole reason for the CPC treating the return as defective was an erroneous click of a radio button in the e-filing utility, indicating 'NO' to the 5% threshold queries, despite the assessee's actual cash receipts and payments being within the 5% statutory cap. The Tribunal emphasized that section 139(9) provides a mechanism for rectifying defects to prevent the summary rejection of bona fide returns. When a taxpayer provides a specific explanation demonstrating that section 44AB is not attracted on facts, revenue authorities should not adopt a hyper-technical approach and disregard substantive compliance due to automated validation hurdles. The Tribunal cited the principle that procedure is the handmaid of justice, not its mistress, and an assessee should not be penalized for an inadvertent clerical error. If cash transactions are within the 5% limit, an audit report under section 44AB is not statutorily mandated. Treating a validly filed return as invalid in such a scenario is harsh and contrary to the spirit of CBDT Circular No. 14(XL-35) of 1955. Consequently, the Tribunal set aside the impugned order of the CIT(A) and the action of the CPC declaring the return invalid. The matter was restored to the jurisdictional Assessing Officer (JAO) with a direction to verify the assessee's books of accounts to ascertain if cash receipts and payments did not exceed 5% of the total turnover/payments. If verified, the return would be treated as valid and processed accordingly. The assessee was directed to cooperate fully.
The Tribunal held that the assessment framed by the AO is invalid and cannot be sustained. The Tribunal found merit in the assessee's contention that the notice under Section 143(2) was issued by the ITO Ward 1(3), Kolkata, while the assessment was framed by the ACIT Circle 1(1), Kolkata. This was in violation of CBDT Instruction No. 1/2011, which delineates pecuniary jurisdiction for issuing such notices. The returned income of ₹3,44,76,440 clearly fell under the jurisdiction of the DC/AC as per the said instruction. The Tribunal relied on the jurisdictional High Court's decisions in PCIT vs. M/s Shree Shoppers Ltd. and PCIT vs. Mintu Das, where similar procedural irregularities in issuing notices under Section 143(2) led to the quashing of assessment proceedings. The defect in issuing the notice was considered incurable as it goes to the root of the matter. Consequently, the assessment was quashed as invalid, and the appeal of the assessee was allowed.
The Tribunal held that the assessee had discharged its onus cast upon it by Section 68 of the Act. The Tribunal noted that the assessee had filed all details and evidences concerning the six subscriber companies, and that notices under Section 133(6) and Section 131 of the Act were complied with by the subscribers, who filed all requested details and evidences. The Tribunal found that the AO's addition was made merely for the reason that there was no personal appearance by the directors of the subscriber companies, which it considered insufficient grounds for addition when all other documentation was provided. The Tribunal relied on the decision of the Hon'ble Calcutta High Court in PCIT vs. Bright Commodeal Pvt Ltd (ITAT No. 162 of 2025), which held that where an assessee has filed all required evidences and complied with notices, an addition cannot be made solely on the basis of non-compliance with Section 131 summons, especially if the factual position recorded by the AO was incorrect. The Tribunal also referred to other supporting decisions. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.
The Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeals. The Tribunal noted that as of the search date, the assessment had attained finality, making the impugned year an unabated assessment. Therefore, any addition by the AO could only be based on incriminating materials found and seized during the search. The AO referred to seized document SMA 03 (WhatsApp conversation) as incriminating material but failed to explain how it was incriminating concerning the unexplained loan. The Tribunal observed that the person whose mobile was seized was neither a Director nor a shareholder of the Assessee company, and the conversation had no reference to the Assessee's transactions. The CIT(A) had comprehensively found that no incriminating material relating to the unsecured loan was found during the search. Relying on decisions in CIT Vs. Kabul Chawla, CIT Vs. Continental Warehousing Corporation (Nhava Sheva), and Pr. CIT, Central-3 vs. Abhisar Buildwell Private Limited, the CIT(A) deleted the addition. Furthermore, the CIT(A) had also deleted the addition on merits, noting that the Assessee's request for cross-examination was not provided, and the AO failed to provide the relied-upon statement. The CIT(A) also pointed out that in the Assessee's own case, an assessment under Section 143(3) had accepted these transactions. Consequently, the Tribunal found no reason to interfere with the CIT(A)'s order.
The Tribunal noted that both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] had passed ex parte orders due to the assessee's non-compliance and non-representation. The assessee's representative at the Tribunal argued that the matter should be remanded to the CIT(A) to allow an adequate opportunity of being heard. The Departmental Representative (DR) did not object to a remand. Considering the interest of justice and fair play, and acknowledging the lack of proper compliance before the lower authorities, the Tribunal deemed it appropriate to set aside the order of the CIT(A). The appeal was restored to the CIT(A) for disposal of the grounds of appeal on merits by passing a speaking order. The assessee was to be given a reasonable opportunity of being heard, without seeking unnecessary adjournments, and Rule 46A of the I.T. Rules, 1962, was to be followed. An opportunity of being heard was also to be provided to the AO, if required. The grounds taken by the assessee were partly allowed for statistical purposes. The specific issues regarding the addition of derivative loss (Ground 4), set-off of income under Section 115BBE (Ground 5), and levy of interest (Ground 6) were not adjudicated on merits by the ITAT, as the matter was remanded. The primary decision was to provide the assessee with a proper hearing before the CIT(A).
The Tribunal noted that the impugned order of the Ld. CIT(A) was ex-parte, with the assessee not participating in the proceedings. Furthermore, the Ld. CIT(A) had not decided all grounds of appeal on their merits. The Tribunal also observed that the assessee had not made full compliance even before the Assessing Officer. In the interest of justice, the Tribunal deemed it fit to restore the issue to the file of the Assessing Officer for de-novo assessment. The Assessing Officer was directed to provide an opportunity of being heard to the assessee before passing a fresh assessment order in accordance with law. The assessee was also directed to participate in the assessment proceedings without fail. The appeal was allowed for statistical purposes.
The Tribunal held that the issue of whether the absence of Form 3CL from DSIR disentitles the assessee from weighted deduction under Section 35(2AB) is squarely covered in favour of the assessee by judgments of the Hon'ble Bombay High Court and Hon'ble Delhi High Court, which have been followed by coordinate benches of the Tribunal. The Tribunal noted that the contrary decisions cited by the Revenue were from the Tribunal itself and not from any jurisdictional High Court or the Supreme Court. Following the principle that a favorable judgment should be followed in case of conflicting decisions, the Tribunal directed the Revenue to allow the weighted deduction of 150% of the expenditure incurred by the assessee in respect of Research & Development, which amounted to ₹67,98,13,373/-. Consequently, the disallowance of ₹22,66,04,458/- was deleted. The appeal for AY 2020-21 was decided mutatis mutandis. The Tribunal also noted that an additional ground regarding the format of Notice u/s 143(2) was dismissed based on existing judicial precedents.
The Tribunal condoned the delay of 270 days in filing the appeal, citing the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others, emphasizing a liberal approach to condoning delay when supported by justifiable reasons to ensure substantial justice. Regarding the merits, the Tribunal noted that the Ld. CIT(A)'s order was ex-parte, and the assessee had not participated in the proceedings. Furthermore, the Tribunal observed that the Ld. CIT(A) had not decided all grounds of appeal on their merits. Even before the Assessing Officer, the assessee had not made full compliance. In the interest of justice, the Tribunal restored the issue to the file of the Assessing Officer for de-novo assessment. The Assessing Officer was directed to provide an opportunity of being heard to the assessee and to issue notices and communicate through the assessee's new email ID: 'esskayniwas99@rediffmail.com'. The assessee was also directed to participate in the assessment proceedings without fail. The issue of penalty order passed on 24.03.2026 was not expressly decided.
The Tribunal condoned the delay of 448 days in filing the first appeal before the Ld. CIT(A). The Tribunal referred to the Hon'ble Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji& Others (1987) 167 ITR 471 (SC), which emphasizes a liberal approach to condoning delay when supported by justifiable reasons to ensure substantial justice. The Tribunal found the reasons provided by the assessee for the delay to be bona fide and beyond the assessee's control. However, noting that the assessee had not made compliance even before the Assessing Officer, the Tribunal remanded the matter to the Assessing Officer for a de-novo assessment. The assessee will be provided an opportunity of being heard before the de-novo assessment order is passed. The issue of whether the delay should have been condoned was decided in favor of the assessee, but the ultimate relief was a remand for fresh assessment.
The Tribunal held that the assessee had correctly offered the long-term capital gain proportionately during the impugned assessment year based on the sale proceeds received during the financial year, in accordance with Section 45(2) of the Income Tax Act, 1961. The Tribunal noted that Section 45(2) clearly states that profits or gains arising from the conversion of a capital asset into stock-in-trade are chargeable to income tax in the previous year in which such stock-in-trade is sold or otherwise transferred. The judgment cited the development agreement's Schedule 'B', indicating payments spread over time, and the fact that the stock-in-trade was sold on dates specified therein. The Tribunal found that the AO's action of computing LTCG based on the aggregate consideration for the entire land, when only a portion was sold and accounted for in the relevant year, amounted to double addition. The Tribunal relied on the ratio of the decisions in R. Gopinath (HUF) and Ishoo Narang, which held that capital gains should be taxed proportionately in the previous years when the constructed property was sold. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.
The Tribunal held that the issue of royalty and management fees was to be reversed. The Tribunal noted that the Indian company had deducted tax at source and, following the mercantile system of accounting, the amount ought to have been credited as revenue receipt. The Tribunal found no Board's resolution for waiver of the amount and observed that the agreement's waiver clause stated that failure would not amount to waiver. Therefore, it was held that the amount was not waived in the impugned assessment year. Following the system of accountancy, the amount was liable to be included in income, and any waiver could be claimed as a deduction in the year of waiver. Thus, the finding of the CIT(A) was reversed, and the AO's order was upheld, with liberty to the assessee to claim deduction in the year of waiver upon furnishing evidence. This ground of appeal was allowed. Regarding software expenses, the Tribunal held that the software was supplied by Microsoft, not customized, and provided on a cost-to-cost basis, thus not in the nature of royalty. However, since the assessee could not furnish required evidence for part of the transactions, the difference sustained by the CIT(A) was upheld. The Tribunal set aside the CIT(A)'s order on this issue and remanded it to the AO for verification of back-to-back invoices, allowing deduction to the extent expenses are verified. This ground was partly allowed for statistical purposes. The appeals were partly allowed for statistical purposes.
The Tribunal held that the reopening of assessment is barred by limitation. The notice under Section 148 of the Act was issued on 19.07.2022. The Supreme Court in Union of India vs Rajeev Bansal (supra) and the Delhi High Court in ADM Agro Industries Latur and Vizag Private Limited Vs. ACIT (supra) have clarified the period of limitation for issuing such notices, considering the impact of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and the directions issued in Union of India & Ors. v. Ashish Agarwal. The Tribunal noted that the period of limitation for issuing the notice under Section 148 for AY 2013-14 expired on 19.06.2022, as per the analysis in the Rajeev Bansal judgment. Since the notice was issued on 19.07.2022, it was beyond the prescribed period of limitation. Therefore, the appeal of the assessee is allowed.
The Tribunal held that the additional evidence filed by the assessee, comprising ledger extracts, purchase orders, invoices, sales tax intimation, TDS certificates, and a reconciliation statement, was crucial for a proper and correct adjudication of the issue. Consequently, the Tribunal admitted these evidences. Since the examination of these newly admitted evidences was required at the Assessing Officer's level, the Tribunal restored the issue back to the file of the Assessing Officer for re-adjudication. The assessee was to be given a fair opportunity of hearing. The appeal was allowed for statistical purposes.
The Tribunal allowed both appeals. On the first issue, the Tribunal held that the AO had not disputed the earning of income but had twisted facts to reclassify it. The Tribunal noted that business expenses were not claimed as bogus, fictitious, or excessive, and that similar expenses were allowed in preceding and succeeding years, citing the principle of consistency as per Radhasoami Satsang vs. Commissioner of Income-tax (SC). The AO's denial of business expenses and denial of set-off of business loss against house property income was set aside, and the AO was directed to allow the expenses and the set-off. On the second issue, the Tribunal held that the keyman insurance policy premium loss was a regular claim allowed in earlier years and that the policy was for a key person. Following CIT vs. BN Export (Bom) and Radhasoami Satsang, the deduction was allowed. On the third issue, the Tribunal noted that the interest expense was attributable to housing loans for house property income, and the CIT(A) had allowed the entire interest expense under Section 24(b) but concurred with the AO's disallowance under Section 14A. Given the minimal exempt income and the assessee's own disallowance, the addition under Section 14A was directed to be deleted. Ground 4 was dismissed as not pressed.
The Tribunal held that the reassessment proceedings initiated under Section 147 read with Section 148 of the Income-tax Act, 1961, were null and void. The reasoning was that the proceedings were initiated based on documents seized during a search operation on third parties (Sanwaria and Kasera Group) conducted prior to 01.04.2021. In such circumstances, the assessment proceedings should have been initiated under Section 153C of the Act, which is an exclusive code for such situations and overrides other sections. The Tribunal relied on several judicial precedents, including DCIT vs. Nawal Kumar Kanodia, Sri Dinakara Suvarna vs. DCIT, Shyam Sunder Khandelwal vs. ACIT, Sejal Jewellary vs. Union of India, ACIT vs. Pramod Jain, and its own decision in Maan Steel & Power Limited vs. DCIT. Consequently, the Tribunal quashed the proceedings initiated under Section 148 and the assessment framed as a nullity and invalid. The appeal of the assessee was allowed.
The Tribunal held that the assessee had not established a sustainable legal basis for annulling the assessment order passed under Section 153A read with Section 263, as the revision order had not been set aside. The Tribunal found that the Warrant of Authorization, Panchanama, Tally entries, Annexure III, and corroborative statements provided an evidentiary basis for the addition. The addition of Rs. 19,50,000/- was supported by material found during the search, and the assessment year being unabated did not warrant deletion. The assessee failed to provide a satisfactory explanation for the nature and source of the cash credits and did not establish a nexus between the cash receipts and income considered in settlement proceedings for telescoping. The Tribunal rejected the assessee's reliance on case laws like Abhisar Buildwell and Ajitabh Agro Farms, finding them distinguishable. Consequently, the CIT(A)'s order confirming the addition of Rs. 19,50,000/- under Section 68 was upheld. Both grounds of appeal were dismissed.
The Tribunal held that the assessee had not established a sustainable legal basis for annulling the assessment order passed under Section 153A read with Section 263, as the revision order had not been set aside. The Tribunal found that the Warrant of Authorization, Panchanama, Tally entries, Annexure III, and corroborative statements provided an evidentiary basis for the addition. The addition of Rs. 19,50,000/- was supported by material found during the search, and the assessment year being unabated did not warrant deletion. The assessee failed to provide a satisfactory explanation for the nature and source of the cash credits and did not establish a nexus between the cash receipts and income considered in settlement proceedings for telescoping. The Tribunal rejected the assessee's reliance on case laws like Abhisar Buildwell and Ajitabh Agro Farms, finding them distinguishable. Consequently, the CIT(A)'s order confirming the addition of Rs. 19,50,000/- under Section 68 was upheld. Both grounds of appeal were dismissed.
The Tribunal held that the Assessing Officer (AO) had taken a possible view on the issue after conducting necessary inquiries and verifications, which were documented through notices under Section 142(1) and the assessee's detailed replies. The Tribunal relied on the Supreme Court decision in CIT vs. Max India Ltd. (2007) 295 ITR 0282, stating that jurisdiction under Section 263 is not available to the Principal Commissioner (PCIT) where the AO has taken a possible view, unless that view is unsustainable in law. The Tribunal further analyzed Section 13(1)(c)(ii) read with Section 13(3) of the Act and found that the CIT(E) failed to demonstrate how Medica Hospital Private Limited qualified as a related party or how any benefit was conferred upon persons specified in Section 13(3). The shareholding patterns of Medica Hospital Private Limited and Medica Synergie Private Limited were examined, showing no substantial interest (20% voting power) held by any trustee, author, or founder of the assessee trust in Medica Hospitals Pvt Ltd. Consequently, the transaction was not considered to be in contravention of Section 13(1)(c)(ii). The Tribunal concluded that the CIT(E) had invalidly invoked jurisdiction under Section 263 without proper application of mind, and therefore, the proceedings and order under Section 263 were quashed. The appeal of the assessee was allowed.
The Tribunal held that the return filed in ITR No. 7 was a defective return as per Section 139(9) of the Act, due to the mismatch in the form. The CPC should have noticed this defect. The Tribunal directed the Assessing Officer (AO) to accept the correct return in ITR No. 5. It was also held that a technical glitch regarding the Tax Audit Report in Form No. 10B should not be fatal to the assessee's exemption claim. Regarding the late filing of the return under Section 139(4A)/139(4C), the Tribunal directed the assessee to file an application under Section 119(2)(b) before the prescribed authority. If the delay is condoned, the exemption is to be restored. Furthermore, the Tribunal noted that the assessee had incurred a deficit of Rs. 82,21,859/-. Therefore, even if exemption was not allowed, the CPC should have considered the real accounting surplus/deficit and not taxed the entire gross receipt. The CPC was directed to consider this loss along with the order of delay condonation. The appeal was allowed for statistical purposes, and the delay in filing the appeal before the ITAT was condoned with a cost of Rs. 25,000/- to be deposited with the Tamil Nadu State Legal Service Authority.
The Tribunal held that the AO erred in disallowing business expenses and reclassifying income. The Tribunal noted that the AO did not dispute the earning of income but twisted facts to treat it as 'Income from Other Sources' to deny expenses. The Tribunal found contradictions in the AO's reasoning, particularly regarding the nature of commission income and the requirement for Custom House Agent registration. The Tribunal also observed that similar expenses were allowed in preceding and succeeding years, and the revenue had taken a consistent stand in other years, citing Radhasoami Satsang vs. Commissioner of Income-tax (SC) on the principle of consistency. Therefore, the Tribunal set aside the appellate order and directed the AO to allow the expenses and the set off of business loss against house property income. Regarding the key man insurance policy, the Tribunal noted that the premium was for a key person and had been regularly allowed. Following CBDT Circular No. 762 and the decision in CIT vs BN Export (Bom), and also referring to Radhasoami Satsang, the Tribunal directed the AO to allow the deduction. For the Section 14A addition, the Tribunal found that the interest expense was attributable to housing loans for house property income, and the CIT(A) had allowed the entire interest under Section 24(b) while concurring with the AO's disallowance under Section 14A. Considering the minimal exempt income and self-disallowed expenses, the Tribunal set aside the order and directed the deletion of the addition. One ground was dismissed as not pressed.
The Tribunal allowed the assessee's appeal on the legal issue. It held that the notice under Section 148 of the Act was issued on 25.05.2022, which was beyond the three-year period from the end of AY 2018-19 (which expired on 31.03.2022). In such cases, where more than three years have elapsed, the approval for issuing the notice under Section 148 must be obtained from the PCCIT as per Section 151(ii) of the Act. However, the approval in this case was obtained from the PCIT. The Tribunal found this to be contrary to the provisions of Section 151 of the Act and relied on the decision of the Telangana High Court in Deloitte Consulting India (P) Limited vs. Assessment Unit, Income Tax Department, NFAC, New Delhi, and the Supreme Court's dismissal of SLPs in similar cases (ACIT v. LinkedIn Singapore Pte. Ltd and ACIT Vs Prakash Pandurang Patil). Consequently, the Tribunal quashed the notice issued under Section 148 and the consequential assessment order dated 20.03.2024 as invalid. The Tribunal noted that other grounds raised on merit were not adjudicated at this stage and were left open. The Revenue's appeal was dismissed as infructuous.
The Tribunal held that the AO erred in disallowing business expenses and reclassifying income. The Tribunal noted that the AO did not dispute the earning of income but twisted facts to treat it as 'Income from Other Sources' to deny expenses. The Tribunal found contradictions in the AO's reasoning, particularly regarding the nature of commission income and the requirement for Custom House Agent registration. The Tribunal also observed that similar expenses were allowed in preceding and succeeding years, and the revenue had taken a consistent stand in other years, citing Radhasoami Satsang vs. Commissioner of Income-tax (SC) on the principle of consistency. Therefore, the Tribunal set aside the appellate order and directed the AO to allow the expenses and the set off of business loss against house property income. Regarding the key man insurance policy, the Tribunal noted that the premium was for a key person and had been regularly allowed. Following CBDT Circular No. 762 and the decision in CIT vs BN Export (Bom), and also referring to Radhasoami Satsang, the Tribunal directed the AO to allow the deduction. For the Section 14A addition, the Tribunal found that the interest expense was attributable to housing loans for house property income, and the CIT(A) had allowed the entire interest under Section 24(b) while concurring with the AO's disallowance under Section 14A. Considering the minimal exempt income and self-disallowed expenses, the Tribunal set aside the order and directed the deletion of the addition. One ground was dismissed as not pressed.
The Tribunal held that the assessee had not established a sustainable legal basis for annulling the assessment order passed under Section 153A read with Section 263, as the revision order had not been set aside. The Tribunal found that the Warrant of Authorization, Panchanama, Tally entries, Annexure III, and corroborative statements provided an evidentiary basis for the addition. The addition of Rs. 19,50,000/- was supported by material found during the search, and the assessment year being unabated did not warrant deletion. The assessee failed to provide a satisfactory explanation for the nature and source of the cash credits and did not establish a nexus between the cash receipts and income considered in settlement proceedings for telescoping. The Tribunal rejected the assessee's reliance on case laws like Abhisar Buildwell and Ajitabh Agro Farms, finding them distinguishable. Consequently, the CIT(A)'s order confirming the addition of Rs. 19,50,000/- under Section 68 was upheld. Both grounds of appeal were dismissed.
The Tribunal held that the assessee had not established a sustainable legal basis for annulling the assessment order passed under Section 153A read with Section 263, as the revision order had not been set aside. The Tribunal found that the Warrant of Authorization, Panchanama, Tally entries, Annexure III, and corroborative statements provided an evidentiary basis for the addition. The addition of Rs. 19,50,000/- was supported by material found during the search, and the assessment year being unabated did not warrant deletion. The assessee failed to provide a satisfactory explanation for the nature and source of the cash credits and did not establish a nexus between the cash receipts and income considered in settlement proceedings for telescoping. The Tribunal rejected the assessee's reliance on case laws like Abhisar Buildwell and Ajitabh Agro Farms, finding them distinguishable. Consequently, the CIT(A)'s order confirming the addition of Rs. 19,50,000/- under Section 68 was upheld. Both grounds of appeal were dismissed.
The Tribunal upheld the order of the CIT(A), dismissing the Revenue's appeal. The Tribunal found that the incentives, including electricity duty remission and sales tax incentives, were received for fresh capital investment made for expansion of the project under the West Bengal Incentive Scheme, 2008. The Tribunal relied on the 'purpose test' laid down by the Supreme Court in Sahney Steel & Press Works Ltd. and reiterated in Ponni Sugars & Chemicals Ltd. It was held that if the object of the subsidy is to enable the assessee to set up a new unit or expand an existing one, the receipt is capital in nature. The Tribunal also referred to the jurisdictional Calcutta High Court's decision in Rasoi Ltd., which held that VAT remission under a similar scheme was capital in nature. The Tribunal concluded that the incentives were for assistance on capital account, and therefore, not taxable income. The addition to book profits under Section 115JB was also directed to be deleted as per the CIT(A)'s finding.
The Tribunal upheld the CIT(A)'s order, dismissing the Revenue's appeal. It found that the sales tax incentives and electricity duty remission were received for fresh capital investment made on the expansion of the project under the West Bengal Incentive Scheme, 2008. The Tribunal relied on the 'purpose test' as laid down by the Supreme Court in Sahney Steel & Press Works Ltd. and reiterated in Ponni Sugars and Chemicals Ltd. It held that if the object of the subsidy is to enable the assessee to set up a new unit or expand an existing one, the receipt is capital in nature. The Tribunal noted that the scheme's object was for expansion of capacities, modernization, and improving marketing capabilities, which are for assistance on capital account. The Tribunal also referred to the jurisdictional Calcutta High Court's decision in Rasoi Ltd., which held that VAT remission under the West Bengal Industrial Scheme was capital in nature. Therefore, the incentives were treated as capital receipts and not taxable income. The addition of Rs. 3,43,87,168/- was deleted, and consequently, the adjustment to book profit under Section 115JB was also directed to be deleted.
The Tribunal held that the additional evidence, including ledger extracts, purchase orders, invoices, sales tax intimations, TDS certificates, and reconciliation statements, was necessary for a proper and correct adjudication of the issue. The Tribunal admitted these evidences. Since the examination of these evidences was required at the Assessing Officer's (AO) level, the Tribunal restored the issue back to the file of the AO for re-adjudication after considering all the admitted evidences. The assessee was to be given a fair opportunity of hearing. The Tribunal allowed the appeal for statistical purposes.
The Tribunal noted that the figures of turnover and the liability to get accounts audited under Section 44AB were not under challenge. The sole issue was the applicability of Section 273B, which provides that no penalty shall be imposed for certain failures if the assessee proves a reasonable cause. The Tribunal acknowledged that the law on reasonable cause for waiving/dropping penalties is well-settled, with the onus on the assessee to prove it. Citing decisions from the Jurisdictional High Court in P. Senthil Kumar v. PCIT and Lakshmi Card Clothing Manufacturing Co. (P.) Ltd. v. DCIT, the Tribunal observed that while the assessee's submissions formed a reasonable cause, they were not supported by evidence. Therefore, the matter was restored to the AO for examination under Section 273B, with a direction to provide the assessee an opportunity of being heard under Section 282. The assessee was also directed to be vigilant and cooperative, providing relevant evidence to establish a reasonable cause. The grounds raised by the assessee were allowed for statistical purposes.
The Tribunal held that the assessment order dated March 21, 2022, passed by the National Faceless Assessment Centre (NFAC) was without jurisdiction. This was because Section 151A of the Act, which deals with faceless assessment of income escaping assessment, was notified and made effective from March 29, 2022, vide Notification No. 18/2022. Therefore, any assessment framed prior to this date under this section was invalid. The Tribunal relied on the coordinate bench decision in MD Mahimud SK Vs. ITO. Consequently, Ground No. 4 of the assessee's appeal was allowed, and the assessment order was quashed. Regarding Ground No. 5, the Tribunal found that the new regime for assessment under Sections 147 to 151 came into force from April 1, 2021. Although the notice under Section 148 was dated March 31, 2021, it was served on April 16, 2021. The AO did not treat this notice as a show-cause notice, nor did they call upon the assessee to furnish details, and crucially, no order under Section 148A(d) was passed. The assessment was framed under the old regime. The Tribunal held that the notice and the consequent assessment were invalid as the AO failed to follow the mandatory procedures under the new regime. Therefore, Ground No. 5 was also allowed, and the notice and assessment were quashed. The appeal of the assessee was allowed.
The Tribunal held that the jurisdiction invoked by the CIT(E) under Section 263 was invalid. The Tribunal noted that the AO had conducted inquiries during the assessment proceedings, issuing notices under Section 142(1) and receiving detailed replies concerning foreign donations and expenditure. The AO had taken a possible view on the issue, which is permissible under law, as established in CIT vs. Max India Ltd. (2007) 295 ITR 0282 (SC). The Tribunal found that the CIT(E) failed to demonstrate how Medica Hospital Private Limited qualified as a related party under Section 13(3) of the Act, as the shareholding patterns did not show any substantial interest (20% voting power) held by the assessee's trustees, authors, or founders in Medica Hospitals Pvt Ltd. Furthermore, the CIT(E) did not establish that the funds were utilized for the benefit of persons specified in Section 13(3). Considering Medica's own substantial contribution to the project, the Tribunal concluded that the payment to Medica was unlikely to benefit related parties. Therefore, the proceedings and order under Section 263 were quashed.
The Tribunal allowed the assessee's appeal on the legal issue concerning the validity of the reassessment proceedings. It held that the notice under Section 148 of the Act was issued on 25.05.2022, which was beyond the three-year period from the end of Assessment Year 2018-19 (which expired on 31.03.2022). In such cases, where more than three years have elapsed, the approval for issuing the notice under Section 148 must be obtained from the Principal Chief Commissioner (PCCIT) or Chief Commissioner (CCIT), not the Principal Commissioner (PCIT) or Commissioner (CIT). The Tribunal noted that the approval was obtained from the PCIT. Relying on the decisions of the Telangana High Court in Deloitte Consulting India (P) Limited and the Bombay High Court in Vodafone Idea Limited, as well as the Supreme Court's dismissal of SLPs in similar cases (ACIT v. LinkedIn Singapore Pte. Ltd and ACIT Vs Prakash Pandurang Patil), the Tribunal concluded that the notice issued under Section 148 and the consequential assessment order were invalid and quashed. Consequently, the Revenue's appeal was rendered infructuous and dismissed. The grounds raised on merit were not adjudicated and were left open.
The Tribunal allowed both appeals. On the first issue, the Tribunal held that the AO had not disputed the earning of income but had twisted facts to reclassify it. The Tribunal noted that business expenses were not claimed as bogus, fictitious, or excessive, and that similar expenses were allowed in preceding and succeeding years, citing the principle of consistency as per Radhasoami Satsang vs. Commissioner of Income-tax (SC). The AO's denial of business expenses and denial of set-off of business loss against house property income was set aside, and the AO was directed to allow the expenses and the set-off. On the second issue, the Tribunal held that the keyman insurance policy premium loss was a regular claim allowed in earlier years and that the policy was for a key person. Following CIT vs. BN Export (Bom) and Radhasoami Satsang, the deduction was allowed. On the third issue, the Tribunal noted that the interest expense was attributable to housing loans for house property income, and the CIT(A) had allowed the entire interest expense under Section 24(b) but concurred with the AO's disallowance under Section 14A. Given the minimal exempt income and the assessee's own disallowance, the addition under Section 14A was directed to be deleted. Ground 4 was dismissed as not pressed.
The Tribunal held that the additional ground of appeal, raising a purely legal issue with all facts available on record, was admissible. The Tribunal found that the Assessing Officer's addition of Rs. 51,94,684/- by disallowing the deduction under Section 80P(2)(a)(iv) was not sustainable in law. This was because the basis for reopening the assessment, as stated in the show-cause notice under Section 148A(b) and the subsequent order under Section 148A(d), was cash deposits amounting to Rs. 16,56,183/-. The Assessing Officer did not make any addition in respect of these original grounds for reopening. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the addition. The ratio decidendi is that an addition made on grounds different from those forming the basis of reopening under Section 147/148A is invalid.
The Tribunal noted that after the intimation under Section 143(1) and the subsequent appeal to the Ld. Addl./JCIT(A)-1, the assessee's case was selected for scrutiny under Section 143(2) and 142(1). Subsequently, an assessment order under Section 143(3) read with Section 144B was passed on 27.02.2026. Crucially, this scrutiny assessment order accepted the returned income of the assessee without any disallowance or addition, and the benefit of tax exemption under Section 10(23C)(v) was allowed. The Tribunal observed that the intimation issued under Section 143(1) merged with the subsequent assessment order under Section 143(3) r.w.s. 144B. Since the scrutiny order accepted the assessee's returned income and granted the exemption, the assessee had no grievance. Therefore, the appeal filed by the assessee was dismissed as infructuous, and the grounds raised were also dismissed as they became infructuous in light of the scrutiny order.
The Tribunal held that the appeal filed by the Revenue is dismissed. The Tribunal observed that the order passed under Section 148A(d) clearly stated that the reopening was initiated due to an alleged escapement of income of Rs. 4,20,00,000/- from Sanwaria Vyapaar Pvt. Ltd. However, a perusal of the assessment order revealed that no addition was made on account of these specific reasons. The Tribunal found that the very foundation of the reopening had failed. Citing the principles laid down by the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd., the Tribunal found no reason to interfere with the order of the CIT(Appeals). Therefore, the appeal filed by the Revenue was dismissed.
The Tribunal held that the issuance of a notice under section 143(2) is a mandatory requirement for the Assessing Officer to assume jurisdiction to complete an assessment when a valid return has been filed. In this case, the Assessing Officer issued a notice under section 148, and the assessee filed a return in response. However, the Revenue was unable to controvert the assessee's submission that no notice under section 143(2) was issued before the completion of the assessment. The Tribunal found no material on record to suggest that such a notice was issued, and therefore, section 292BB of the Act could not be invoked to save the assessment. Relying on the judgment in Balbir Singh vs. ACIT and other cited precedents, the Tribunal concluded that the assessment framed without the mandatory notice under section 143(2) was unsustainable and liable to be quashed. Consequently, the appeal of the assessee was allowed, and the assessment order was quashed. Other contentions on the merits of the case were left open.
The Tribunal allowed the appeal on the legal ground concerning the validity of the reassessment proceedings. The Tribunal noted that the words 'income chargeable to tax' in Section 149(1)(b) must be interpreted in terms of 'income' as arising from 'Capital Gains' under Section 48. The entire sale consideration does not constitute 'income'. The AO had not applied their mind to the assessee's reply nor considered the legal position regarding the application of the extended period under Section 149(1)(b). The Tribunal found that the revenue's contention that the entire sale consideration should be taken into account at the premature stage of issuing the notice was not acceptable, as Section 48 clearly defines what constitutes 'income'. The Tribunal respectfully followed the cited judgments, allowing the legal ground raised by the assessee. Consequently, the addition made by the AO was directed to be deleted, and there was no need to adjudicate on the merits of the case.
The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, in the name of a non-existent entity is bad in law and is hereby quashed. Consequently, the assessment framed based on this invalid notice is also invalid and quashed. The Tribunal relied on the decision of the Hon'ble Jurisdictional Calcutta High Court in Principal Commissioner of Income Tax vs GPT Sons Pvt. Ltd. [2024] 168 taxmann.com 593 (Calcutta), which held that reassessment proceedings initiated by issuing notice in the name of a non-existing entity are invalid in law. The Tribunal also referred to the Hon'ble Apex Court's decision in PCIT Vs. Maruti Suzuki India Limited (2019) 416 ITR 613, which held that the amalgamating entity ceasing to exist upon an approved scheme of amalgamation renders the jurisdictional notice issued in its name invalid. The principle is that a defect that goes to the root of jurisdiction cannot be cured, and participation in proceedings by an entity that has ceased to exist cannot operate as an estoppel against law. The appeal of the assessee was allowed.