ITAT Kolkata Judgments — March 2026

The Tribunal held that the notices issued by the CIT(A) through the ITBA portal were not valid service as per Section 282(1) of the Income Tax Act. Consequently, the principles of natural justice were violated as the assessee was not given a proper opportunity to be heard.

The Tribunal held that the service of notice through the ITBA portal by the CIT(A) was not a valid method as per Section 282(1) of the Income Tax Act, 1961. Consequently, the principles of natural justice were violated as the assessee was not afforded a proper opportunity to be heard.

The Tribunal held that DDT is a charge on distributed profits and not income of the assessee, therefore, the DTAA is not triggered. Furthermore, as the assessee did not file a return of income as required by Section 239(1) of the Income Tax Act for claiming the refund, the claim is not maintainable.

The Tribunal held that DDT is a charge on the profits of the company distributed as dividend, not a tax on the shareholder's income, and therefore, the DTAA is not triggered in this scenario. Furthermore, the assessee had not filed a return of income as required by Section 239 of the Act for claiming the refund.

The Tribunal held that DDT is a charge on the profits of the company distributed as dividend and not a tax on the shareholder, thus the DTAA is not triggered. Furthermore, the assessee failed to file a return of income as required under Section 239(1) of the Income Tax Act for claiming the refund.

The Tribunal partly allowed ITA No. 3173/KOL/2025 by estimating the net profit at 4% of the turnover. The Tribunal allowed ITA No. 3174/KOL/2025 and ITA No. 3175/KOL/2025, cancelling the penalties imposed under Section 271B and Section 271(1)(b) respectively, citing reasonable cause for non-compliance and errors in the penalty proceedings.

The Tribunal partly allowed ITA No. 3173/KOL/2025, revising the estimated net profit rate to 4% from 5%. The Tribunal allowed ITA No. 3174/KOL/2025 and ITA No. 3175/KOL/2025, cancelling the penalties imposed u/s 271B and for non-compliance respectively, citing reasonable cause due to the assessee's circumstances and the consultant's lapse.

The Tribunal upheld the reopening of assessment, stating that issuance of notice under Section 148 within the limitation period is sufficient, irrespective of the service date. However, the Ld. CIT(A)'s order sustaining the addition under Section 68 was set aside, and the matter was remanded to the AO for fresh assessment. The assessee is directed to provide full details of investments, sales, and purchasers to justify the genuineness and creditworthiness of transactions, with failure leading to adverse inference.

The Tribunal held that DDT is a charge levied on distributed profits of a company, not a tax on the income of the assessee, and therefore, the Double Taxation Avoidance Agreement (DTAA) is not applicable. Furthermore, the assessee had not filed a return of income to claim the refund as required by Section 239 of the Income Tax Act.

The ITAT dismissed the appeals, ruling that DDT is a tax on the company's distributed profits, not triggering DTAA. Furthermore, the claim for refund was not maintainable as the assessee failed to file a return of income as required by Section 239(1) of the Act.

The Tribunal held that DDT is a charge on the profits of the company and not a tax on the shareholder, thus the DTAA is not triggered in this scenario. Furthermore, the assessee failed to file a return of income as required by section 239(1) of the Act for claiming the refund.

The Tribunal held that DDT is not a tax on the income of the assessee but a charge levied on distributed profits. It further held that the claim for refund was not maintainable as the assessee had not filed a return of income as required by Section 239(1) of the Act for claiming the refund.

The Tribunal partly allowed the appeal for ITA No. 3173/KOL/2025, adjusting the profit estimation to 4% instead of 5% or 20%. For ITA No. 3174/KOL/2025, the penalty under Section 271B was cancelled due to a reasonable cause for delayed audit report filing and erroneous turnover calculation by the AO. For ITA No. 3175/KOL/2025, the penalty for non-compliance was cancelled, finding reasonable cause in the assessee's circumstances and lack of justification for penal consequences.

The Tribunal held that the CIT(Exemption) had rejected the application due to the non-furnishing of details. In the interest of justice and fair play, the assessee should be granted another opportunity to file proper submissions.

The Tribunal, following its own earlier decision in a similar case for AY 2018-19, set aside the order of the CIT(A) and remanded the matter to the AO. The AO is directed to examine whether the payments were made within the due dates as per the Provident Fund Act/ESI Act and allow the deduction accordingly. Any remaining disallowances are to be confirmed.

The Tribunal held that the assessee had provided all necessary evidence for the unsecured loans, including identities, creditworthiness, and genuineness of the transactions. The lenders also provided all requested details to the AO, and the loans were repaid. The Tribunal noted that the AO made the addition without proper investigation and that the case was covered by judicial precedents where no addition under Section 68 of the Act is permissible if the assessee furnishes all evidence and the loans are repaid.

The Tribunal first addressed the assessee's Rule 27 petition and found that the reasons recorded by the AO for reopening the assessment under section 147 were vague, scanty, and ambiguous, lacking specific details and even containing incorrect amounts. Citing the Delhi High Court's decision in CIT v. Insecticides (India) Ltd., the Tribunal held that such reasons cannot form a valid basis for reopening. Consequently, the assessment framed by the AO was quashed, rendering the Revenue's appeal infructuous.

The Tribunal held that the reopening of assessment under Section 147 was bad in law because the information was derived from a search on a third party, and thus, proceedings should have been initiated under Section 153C of the Act. The Tribunal relied on various High Court and Supreme Court decisions stating that Section 153C is a special provision that overrides Section 147 in such cases.

The Tribunal held that the show cause notice issued with a response period of less than seven days is invalid and a nullity in the eyes of law. This invalidity vitiates the subsequent assessment proceedings.

The Tribunal held that the assessee had provided sufficient evidence to establish the identity, creditworthiness, and genuineness of the loan creditors. The loans were also repaid in the subsequent year. The Tribunal found that the AO had not conducted sufficient independent inquiry and relied heavily on materials from a third-party search.

The Tribunal held that the CIT(A) order was passed ex-parte without affording a reasonable opportunity of hearing. Restoring the appeal to the CIT(A) for fresh adjudication would serve the interest of justice.

The Tribunal held that the income from the sale of green tea leaves, amounting to Rs. 2,74,52,602/-, is purely agricultural income and not part of the profit or loss from the business of growing and manufacturing tea. Therefore, it cannot be subjected to the provisions of the Income Tax Act under Rule 8. The Tribunal cited a Supreme Court decision in support of its view, stating that income from the sale of green tea leaves is agricultural in nature and not taxable under the Income Tax Act.

The Ld. CIT(A) annulled the assessment, holding that since the incriminating material was found during a search on a third party, proceedings should have been initiated under section 153C of the Act, not under sections 147/148.

The Commissioner of Income Tax (Appeals) deleted the addition, holding that the assessee had discharged its initial burden of proving the identity, creditworthiness, and genuineness of the loan creditors. The Tribunal, in appeal, noted that the loans were repaid in subsequent years and relied on various judicial precedents, including the assessee's own case, to uphold the deletion of the addition.

The Tribunal held that the AO made additions without proper inquiry, and even though the CIT(A) enhanced the addition, the assessee had provided all necessary evidence for the unsecured loans, including repayment. The Tribunal noted that the loan creditors had also provided details, and the transactions were genuine business transactions, supported by various High Court decisions.

The Tribunal decided to admit the new evidences and remand the matter back to the CIT(A) for denovo adjudication after providing an opportunity of being heard to the assessee and taking a remand report from the AO.

The Tribunal found the reasons for the delay to be bonafide and genuine, and thus condoned the delay. Subsequently, at the time of hearing, the assessee's Authorized Representative requested to withdraw the appeal.

The Tribunal held that Section 271AAB of the Act is not mandatory but discretionary, as indicated by the use of the word "may" instead of "shall". Additionally, the AO failed to record any satisfaction in the assessment order to initiate penalty proceedings, rendering the penalty unsustainable.

The CIT(A) allowed the assessee's appeal, holding that the Assessing Officer's addition was not sustainable in law. The tribunal noted that the assessee had provided all necessary documents and evidence, and that the subscriber companies had also responded to notices, even though they did not appear personally. The CIT(A)'s order was found to be reasonable and well-reasoned.

The Tribunal held that the issue should be restored to the Assessing Officer for fresh adjudication. The assessee should be given a reasonable opportunity of being heard.

The Tribunal held that for discretionary trusts, income is taxed at the maximum marginal rate. However, the surcharge is to be computed based on the slab rates prescribed in the Finance Act, and the threshold limit for surcharge applicability is Rs. 50 lacs. Since the assessee's income was below Rs. 50 lacs in all relevant assessment years, no surcharge was attracted.

The Tribunal held that the PCIT's approval for reopening under Section 151 was mechanical, thus rendering the notice under Section 148 and the subsequent assessment invalid. Additionally, the Tribunal noted that no notice under Section 143(2) was issued after the assessee complied with the Section 148 notice, which is mandatory for assuming jurisdiction.

The tribunal, following a Special Bench decision, held that surcharge is applicable only if the total income exceeds the threshold specified in the Finance Act's slab rates. Since the assessee's income for all relevant assessment years was below the ₹ 50 lacs threshold, no surcharge was attracted. The tribunal set aside the CIT(A)'s order and directed the AO not to include surcharge in the maximum rate of tax.

The Tribunal noted that Mr. Barik Biswas admitted that the transactions belonged to him and the money was his. Furthermore, Mr. Barik Biswas had disclosed these accounts in his balance sheet and accounted for the transactions, and was assessed to tax on them. Therefore, the addition in the assessee's hands, even on a protective basis, was not justified.

The Tribunal held that for private discretionary trusts, income is taxed at the maximum marginal rate. However, the surcharge is to be computed based on the slab rates prescribed in the Finance Act under the heading 'surcharge on income tax', not necessarily at the highest rate of 37%. Since the assessee's income in all assessment years was below Rs. 50 lacs, no surcharge was attracted.

The Tribunal noted that both the assessee and the alleged broker denied the transactions. A letter from the broker explicitly stated that no such transactions were undertaken with the assessee. Therefore, the Tribunal found no basis for the addition made by the AO and upheld by the CIT(A).

The Tribunal noted that the show cause notice issued under Section 148A(b) provided less than the mandatory seven days for the assessee to respond. Citing various High Court and ITAT judgments, the Tribunal held that such a notice is invalid and vitiates the subsequent assessment proceedings.

The Tribunal held that the AO lacked jurisdiction to make additions not mentioned in the reasons for reopening. It further held that the assessment order passed in the name of a non-existing, amalgamated entity is invalid. The Tribunal relied on various High Court and Supreme Court decisions to support its findings.

The Tribunal held that the CBDT Circular No. 24/2022, dated 07.12.2022, indicates that salary up to Rs. 6,00,000/- results in no tax liability, with a nil tax payable after considering rebate u/s 87A. Since the salary paid to the four employees did not exceed this threshold, no TDS was liable to be deducted.

The Tribunal condoned the delay in filing the appeal after noting sufficient cause. The Tribunal decided to remit the issue back to the AO for de-novo reassessment, granting the assessee a reasonable opportunity to be heard and to present documentary evidence.

The ITAT condoned the delay in the revenue's appeal. Regarding the grounds of appeal, the Tribunal found that the interest payment on delayed TDS was compensatory, not penal, and allowed the deletion of this addition. The Tribunal also upheld the CIT(A)'s deletion of additions related to salary and wages, doctor referral fees, and sales promotion expenses, citing lack of evidence, estimation basis for disallowance, and applicability of certain guidelines.

The Tribunal held that the notice issued under Section 148 of the Act by the ACIT, Circle-29, Kolkata, was invalid as the officer lacked the pecuniary jurisdiction. This was based on the returned income being below the threshold for such jurisdiction for an ACIT/DCIT in a metro city as per CBDT Instruction No. 1/2011. Consequently, the assessment order based on this invalid notice was also quashed.

The Tribunal held that the notice issued under Section 148 was bad in law because the approval was granted by the PCIT-1, Kolkata, whereas Section 151(ii) of the Act mandates approval from the Pr. CCIT for reopening beyond three years. Citing decisions from the Bombay High Court and the Jurisdictional High Court, the Tribunal quashed the notice and the subsequent assessment.