ITAT Kolkata Judgments — February 2026

The ITAT had previously set aside the CIT(A)'s order regarding the quantum appeal and remitted the matter back to the AO for reassessment. The Tribunal held that since the assessment order, which formed the basis for penalty proceedings, was set aside and reassessment was directed, the penalty proceedings became infructuous.

The Tribunal held that the assessee's appeal was partly allowed for statistical purposes. The CIT(A)'s order was set aside, and the matter was remitted back to the AO for granting summary relief concerning the TDS credit for dividend income. The assessee was to be given a reasonable opportunity to present its case.

The Tribunal noted that the CIT(A) dismissed the appeal solely on the ground of delay without considering the cause. The Tribunal also considered that the AO applied a commission income rate of 5% without proper basis. Following a coordinate bench's decision, the Tribunal applied a net profit rate of 0.5%.

The Tribunal noted that the AO did not doubt the corresponding sales made by the assessee. The Tribunal also observed that the assessee maintained books of accounts and the purchases were accounted for. The mere cancellation of GST registration of the supplier cannot be a ground to treat entire purchases as bogus. The issue was covered by the decision of the Jurisdictional High Court and a coordinate bench.

The Tribunal held that the disallowance made by the CPC under section 143(1) was beyond its scope. The filing of Form 9A within the due date was directive, not mandatory, and since it was available at the time of processing, the deemed application could not be disregarded. The intimation issued under section 143(1) was quashed.

The Tribunal held that the assessment order, framed by the National Faceless Assessment Centre, was without jurisdiction as it was issued prior to the notification conferring jurisdiction for such faceless assessments. The Tribunal found support in various judicial pronouncements that quashed similar assessments based on jurisdictional issues.

The Tribunal held that the reassessment notices issued under Section 148 of the Act were barred by limitation as they were issued beyond the prescribed time limits. The 'Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act' (TOLA) was found not applicable in this case. Therefore, the assessment proceedings were quashed.

The tribunal noted that the reopening notice was issued after a period of three years from the end of the relevant assessment year. Section 151 mandates that for such cases, approval must be obtained from the Principal Chief Commissioner of Income Tax. However, in this case, the approval was granted by the Principal Commissioner of Income Tax, which is not the competent authority as per the law.

The Tribunal held that the reopening of assessment was not permissible as it was based on a change of opinion without new information. The Tribunal also noted that the reasons recorded for reopening contained inaccuracies, and the AO's attempt to correct them later was not permissible. The Tribunal found that the assessee had disclosed all material facts during the original assessment.

The Tribunal found that the authorities below had factually misunderstood the transactions. The assessee recorded job work transactions by treating sundry creditors as debtors for administrative convenience. The additions made by the AO under sections 69C and 68 were found to be misapplied as section 69C is for unexplained expenditure and section 68 is for unexplained cash credits, neither of which applied to outstanding wages payable.

The Tribunal noted that the assessee had provided comprehensive evidence including loan confirmation, PAN details, address, audited balance sheet, and bank statements, and demonstrated the loan's repayment through banking channels. Finding no infirmity in the evidence from the AO, and relying on precedents, the Tribunal ruled that no addition under section 68 was warranted.

The Tribunal noted that the share of Bakra Pratisthan Ltd. was not listed among the 84 penny stocks identified by the investigation wing. The Tribunal found that the case was covered by a coordinate bench's decision in a similar case involving the same shares. Therefore, the Tribunal upheld the CIT(A)'s order, finding that the reopening of assessment was not based on substantive material or application of mind.

The Tribunal noted that neither the AO nor the CIT(A) provided a basis for applying a 5% net profit rate on commission. Given the assessee's actual declared commission income of 0.25% to 0.30% and the lack of justification for the 5% rate, the Tribunal found it reasonable to apply a net profit rate of 0.5%.

The Tribunal found that the issue required verification and thus restored the appeal to the file of the Joint Assessing Officer (JAO). The JAO was directed to verify if the payments were indeed made within the due time and, if so, allow the deduction.

The Tribunal held that for the ends of justice to be served, the appeal should be restored to the Assessing Officer (AO) for a de novo decision. The AO is directed to consider all evidences the assessee may file and afford a reasonable opportunity of hearing before deciding the matter.

The Tribunal held that the mere writing off of debts as bad in the books of account is sufficient for claiming deduction under Section 36(1)(vii) of the Act. The assessee had adequately provided evidence to the AO and CIT(A). The Tribunal referred to the Supreme Court's decision in T.R.F. Ltd. vs. Commissioner of Income-tax and CBDT Circular No. 12/2016, which clarified that proving recovery status is not mandatory.

The Tribunal found that the share of Bakra Pratisthan Ltd. was not in the list of identified penny stocks. The reopening of assessment was based on the investigation wing's report without substantive material or independent inquiry. The Tribunal relied on previous decisions of coordinate benches and High Courts which held that additions cannot be made solely on the basis of price manipulation or alleged entry operators.

For the PF payment issue, the Tribunal found that the payment made within the 5-day grace period, as per EPF regulations and judicial precedent, was allowable, directing the AO to delete the addition. Regarding the SFT penalty, the Tribunal recognized the technical glitches due to bank reorganization and system upgrade as a reasonable cause for the delay, ordering the deletion of the penalty.

The Tribunal found that both the assessment and appellate orders were ex-parte. This was considered a violation of Section 250(6) of the Act. In the interest of justice, the appeal was restored to the AO to decide the matter on merit after providing a reasonable opportunity of hearing to the assessee.

The Tribunal acknowledged the delay in filing the application. However, considering the merits of the case, the Tribunal decided to condone the delay. The issue was restored to the file of the CIT(A) for fresh adjudication after providing the assessee with a reasonable opportunity of being heard.

The Income Tax Appellate Tribunal found the reasons for the 38-day delay to be genuine and bona fide. It condoned the delay and restored the appeal to the file of the CIT(A) with a direction to decide the matter on its merits, after providing the assessee a reasonable opportunity of hearing.

The Income Tax Appellate Tribunal (ITAT) found the reasons for the 3-day delay to be genuine and bona fide. Consequently, the ITAT condoned the delay and restored the appeal to the file of the Learned CIT(A) with a direction to decide the case on merits after providing a reasonable opportunity of hearing to the assessee.

The Tribunal agreed with the assessee, holding that since 60% of the income of a tea company is agricultural (exempt) and 40% is taxable as per Rule 8 of the IT Rules, the disallowance under section 36(1)(va) for delayed PF contributions must also be restricted to 40% of the amount, attributable to the taxable portion of income. The order of the CIT(A) was set aside, and the matter was restored to the AO for assessment in accordance with Rule 8.

For the PF contribution, the tribunal ruled that payment made within the 5-day grace period (considering public holidays) should not be disallowed, setting aside the CIT(A)'s order and directing the AO to delete the addition. For the SFT penalty, the tribunal found a reasonable cause for the delay due to technical glitches from bank reorganization and core banking migration, thus setting aside the CIT(A)'s order and directing the AO to delete the penalty.

The Tribunal set aside the CIT(A)'s order for ITA No. 2748/KOL/2025, remanding the matter to the AO for a de novo assessment to provide the assessee a proper opportunity to justify the cash deposits. Consequently, the penalty orders under Sections 271B (ITA No. 2749/KOL/2025) and 271AAC(1) (ITA No. 2750/KOL/2025) were also set aside, with liberty to the AO to initiate fresh penalty proceedings if warranted after the re-assessment.

The Tribunal noted that the assessment was ex parte and the assessee was not given a proper opportunity to explain the cash deposits. It set aside the CIT(A)'s order and remitted the matter back to the AO for a de novo assessment, allowing the assessee to present evidence to justify the source of deposits as fee collections. Consequently, the penalties levied under Sections 271B and 271AAC(1) were also set aside, contingent on the fresh assessment of quantum additions and the determination of the institution's charitable status.

The Tribunal noted that the appeal was filed with a delay of 17 days, which was condoned. While the lower authorities had dismissed the appeal, the Tribunal found merit in the assessee's arguments and decided to set aside the order and restore the appeal to the Ld. CIT(A) for a fresh disposal.

The Tribunal held that the notices issued under Section 148 of the Act were beyond the period of limitation prescribed by Section 149(1) of the Act, especially considering the period of six years for reopening assessments in certain cases. The Tribunal relied on the Supreme Court's decision in Union of India vs. Rajeev Bansal, which clarified the position on the validity and limitation of such notices.

The Tribunal noted that the assessee provided all necessary documentary evidence for the loan and had repaid it with interest after TDS. Citing various High Court judgments, the Tribunal held that if the assessee establishes the identity, creditworthiness, and genuineness of the transaction, and the loan is repaid, no addition under Section 68 can be made, especially when the AO failed to conduct proper inquiries into the provided evidence. Consequently, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

The Tribunal upheld the CIT(A)'s decision, confirming that the assessee had discharged its initial onus under Section 68 by providing evidence of the identity, creditworthiness, and genuineness of the loan transactions. For Section 41(1), the Tribunal ruled that since the liabilities were continuously reflected in the balance sheet and not remitted, waived off, or written back, they did not amount to cessation of liability. Consequential additions for unexplained expenditure and interest were also deleted.

The Tribunal condoned the delay in filing the appeals after finding bonafide reasons. It held that the disallowance under section 36(1)(va) for delayed PF payments must be restricted to 40% of the total income, which is the taxable portion as per Rule 8 of the Income-tax Rules. Consequently, the order of the CIT(A) was set aside, and the matter was restored to the AO for reassessment in line with Rule 8.

The Tribunal admitted the additional ground as it raised a pure legal issue. It held that the assessment framed by the National Faceless Assessment Centre on 30.03.2022 was without jurisdiction because the provisions of Section 151A of the Act, which enable faceless assessment, were notified and became effective only from 29.03.2022. Consequently, the Tribunal declared the assessment null and void and quashed it, relying on various judicial precedents.

The Tribunal deleted the addition of ₹2,06,12,752/-, ruling that the Central Bank account belonged to the assessee's husband and the BOB/PNB deposits were from declared gold sales. It also deleted the ₹18,448/- interest addition, as the assessee had already declared the interest income in her ITR. Grounds related to reopening were dismissed as not pressed, and consequential grounds required no specific adjudication.

The Tribunal held that surcharge is not applicable to the assessee as its income is below Rs. 50 lacs in each year. Following a co-ordinate bench decision, the order of the Ld. CIT(A) was set aside, and the Ld. AO was directed not to include surcharge in the maximum rate of tax. Consequently, the appeals of the assessee were allowed.

The Income Tax Appellate Tribunal (ITAT) set aside the CIT(A)'s orders for all three appeals. For the addition u/s 69A (ITA No. 2748), the ITAT remitted the matter to the AO for a de novo assessment, granting the assessee an opportunity to justify the cash deposits, as the original assessment was ex parte. Consequently, penalties u/s 271B (ITA No. 2749) and u/s 271AAC(1) (ITA No. 2750) were also set aside, contingent on the fresh assessment of the quantum addition and charitable status.

The ITAT condoned both the 175-day delay in filing the appeal before it and the 6-day delay that the Ld. CIT(A) had failed to condone, finding the delays to be for bonafide reasons. The Tribunal remitted the appeal back to the file of the Ld. CIT(A) for de novo adjudication, ensuring a reasonable opportunity of hearing for the assessee.

The Tribunal found merit in the assessee's explanation that the cash was withdrawn from bank accounts in earlier years (AY 2011-12 to FY 2015-16) and redeposited in FY 2015-16, providing a proper cash flow statement. It noted the CIT(A)'s demonetization observation was erroneous as the period was different and acknowledged the funds were kept for the assessee's ailing wife's treatment. The Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

The Tribunal condoned the Revenue's 49-day delay in filing the appeal. It noted that the issue was squarely covered by a previous Tribunal decision in the assessee's own case for A.Y. 2017-18, which had deleted a similar addition. Following this precedent, the Tribunal upheld the CIT(A)'s order, concluding that the cash receipts from green tea leaves sales and payments to labourers were duly accounted for as exempt agricultural income. The assessee's Cross Objection was dismissed as not pressed.

The Tribunal held that the notice under Section 148, issued on 31.07.2022, was beyond the statutory period of limitation for AY 2015-16. It emphasized that the relaxation provided by TOLA for the period 01.04.2021 to 30.06.2021 does not apply to AY 2015-16, as per the Supreme Court's decision in Rajeev Bansal. Consequently, the reopening of assessment was deemed barred by limitation and the assessment order was quashed.

The Tribunal held that the AO did not point out any defects or discrepancies in the documents filed by the assessee, nor did the CIT(A). The AO also failed to issue notices u/s 133(6) or 131 for independent verification. The addition was made solely on the basis that the assessee had advanced money to the subscriber firm.

The Tribunal observed that the ex-parte orders violated Section 250(6) of the Income Tax Act, as issues were not decided on merit. In the interest of justice, the appeal was restored to the AO for a fresh decision, with the direction that the assessee be given a proper hearing and avoid unnecessary adjournments. The appeal was allowed for statistical purposes.

The Tribunal noted that the assessee's appeal was against an order u/s 250 which did not pertain to the reassessment order u/s 147. The grounds of appeal did not emanate from the impugned order of the CIT(A). Therefore, the appeal was correctly held to be infructuous by the CIT(A).