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 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 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 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 held that surcharge is not applicable to discretionary trusts if their total income is below Rs. 50 lacs. The 'maximum marginal rate' definition in Section 2(29C) refers to the rates prescribed in the Finance Act, and since the income falls below the threshold for surcharge, it is not attracted.

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 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 admitted the additional ground as it involved a pure legal issue with all necessary facts on record. It was held that the NFAC assumed jurisdiction to frame the assessment prior to the effective date of Section 151A of the Act, making the assessment order void ab initio and without jurisdiction.

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 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 observed that the case was decided ex-parte by both lower authorities, which violated Section 250(6) of the Act. In the interest of justice and fair play, the Tribunal restored the appeal to the file of the AO with a direction to decide the same on merit after affording a reasonable opportunity of hearing to the assessee.

The Tribunal noted that the assessment order was ex-parte and the assessee could not properly present its case. Given the assessee's claim that cash deposits were from fee collections and a desire to justify the source, the Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer for a fresh assessment. Penalties under Sections 271B and 271AAC(1) were also set aside pending the fresh assessment.

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 held that for tea growing and manufacturing companies, only 40% of the income is taxable, with 60% being agricultural and exempt income as per Rule 8. Consequently, the disallowance for delayed PF payment should be restricted to 40% of the taxable income.

The Tribunal found that one bank account belonged to the assessee's estranged husband, making the addition unsustainable. For other accounts, the deposits were out of sale of jewelry, which had already been declared as long-term capital gains in the filed return, meaning no fresh addition could be made.

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.

The Tribunal held that investments in shares, previously accepted by the revenue in earlier assessment years, could not be treated as unexplained upon their sale by amalgamating companies. The Tribunal found that the assessee had provided sufficient evidence regarding the buyers and the genuineness of the transactions, and the AO had failed to produce independent evidence to the contrary. The direction to add a 5% profit element was also set aside for lack of basis.

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 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 upheld the CIT(A)'s order, finding that the AO's addition was based on unsubstantiated allegations and retracted statements. The assessee had discharged its onus by providing necessary documentation, and the AO failed to bring any corroborative evidence to prove the loans were non-genuine.

The Tribunal upheld the CIT(A)'s deletion of the addition, finding that the assessee had discharged its onus to prove the identity, creditworthiness, and genuineness of the loan creditors. The tribunal also upheld the deletion of consequential additions regarding unexplained expenditure and interest on loans.

The Tribunal, following coordinate bench decisions and High Court pronouncements, held that the issue of sale of shares was covered by previous rulings where investments were accepted in earlier assessment years. The Tribunal found that the assessee had provided sufficient evidence regarding the identity, creditworthiness, and genuineness of the transactions, and the AO had not brought forth contrary evidence.

The Tribunal held that once the assessee furnished all the requisite details and evidence regarding the unsecured loan, including its repayment with interest and TDS, and the AO did not conduct further inquiries to find defects, no addition under Section 68 could be sustained. The Tribunal relied on pronouncements of the Calcutta and Gujarat High Courts.

The Tribunal found that the assessment order was made ex-parte and the AO had not correctly appreciated the applicable provisions, and the assessee could not present its case properly. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer for a fresh assessment de novo, allowing the assessee an opportunity to justify the source of cash deposits.

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 found that justice would be served by restoring the appeal to the lower authority. The lower authority is directed to decide the matter afresh ('denovo') after considering all evidence and providing the assessee with a reasonable opportunity of being heard.

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 found that the assessment order was made ex-parte and the applicable provisions were not correctly appreciated. Therefore, the Tribunal set aside the orders of the CIT(A) and remanded the matters back to the Assessing Officer for fresh assessment, allowing the assessee an opportunity to present its case and evidence regarding the source of cash deposits and its charitable status. The penalties were also set aside pending the fresh assessment.

The Tribunal condoned the delay in filing the appeal. It held that the 5-day grace period for provident fund deposit was applicable, thus directing the deletion of the disallowance. The penalty for belated SFT filing was also deleted, considering the technical glitches during bank migration as a reasonable cause.

The Tribunal found the reasons for the delay to be genuine and bona fide. Consequently, the delay was condoned, and the appeal was restored to the file of the Learned CIT(A) with a direction to decide the same on merit after affording a reasonable opportunity of hearing.

The Tribunal found the reasons for the delay to be genuine and bona fide. The delay was condoned, and the appeal was restored to the CIT(A) for a decision on merits after providing a reasonable opportunity of hearing.

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 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 held that the notice u/s 148 was issued beyond the period of limitation. The relaxation granted by TOLA from 01.04.2021 to 30.06.2021 is not available for the impugned assessment year, as confirmed by decisions of the Apex Court and High Courts.

The Tribunal condoned the delay in filing the appeals. It held that as per Rule 8 of the Income Tax Rules, 60% of the tea company's income is agricultural and exempt, while only 40% is taxable. Therefore, the disallowance for delayed PF payment should be restricted to 40% of the amount, pertaining to the taxable portion of the income.

The Tribunal held that for private discretionary trusts taxed at the maximum marginal rate, the surcharge is to be computed based on the specific slab rates provided under the 'Surcharge on income-tax' provisions in the Finance Act. As the assessee's income was below Rs. 50 lacs, no surcharge was applicable.

The Tribunal held that the notice for reopening the assessment under section 148 of the Income-tax Act, 1961, issued on 13.04.2022, was barred by limitation. This was based on the Supreme Court's decision in 'Union of India and others Vs. Rajeev Bansal' which held that the benefit of TOLA (Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020) was not available for AY 2015-16 for reopening beyond the prescribed period.

The Tribunal held that once the assessee provides all necessary evidence regarding the loan's genuineness and its repayment through banking channels, and the AO fails to point out any specific infirmity, no addition under Section 68 is warranted.

The Tribunal held that since the subscriber company had settled its tax dues under the VSVS scheme concerning the investment made in the assessee company, the addition in the hands of the assessee was not justified.

The Tribunal found that the CIT(A)'s observation regarding demonetization was incorrect as the deposits occurred prior to that period. The Tribunal accepted the assessee's explanation that the cash was withdrawn and held for the medical treatment of his ailing wife, supported by a cash flow statement. Therefore, the addition made by the AO was set aside.

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 condoned the delay in filing the appeal, citing bonafide reasons. It held that the 5-day grace period for EPF contributions is applicable to employee contributions and directed the AO to delete the addition. For the SFT penalty, the Tribunal found that the bank's re-organization and technical issues constituted reasonable cause, setting aside the penalty.

The ITAT condoned the delay of 175 days in filing the appeal before it and also condoned the 6-day delay in filing the appeal before the CIT(A). The matter was remitted back to the CIT(A) for denovo adjudication with an opportunity of hearing to the assessee.

The Tribunal held that the assessment framed by the National Faceless Assessment Centre was without jurisdiction as the provisions enabling faceless assessment were notified subsequent to the assessment order. Consequently, the assessment was deemed null and void.

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).