ITAT Kolkata Judgments — October 2026

The Tribunal held that the reassessment proceedings were initiated on the basis of material found during the search on Balaji Sales. Information was passed on to the AO indicating that the assessee was a beneficiary of accommodation entries. The Tribunal found that the very basis of reopening was information discovered during a third-party search. Consequently, proceedings should have been initiated under Section 153C of the Act, as it provides an exclusive code for such assessments with a non-obstante clause excluding other sections. The Tribunal quashed the notices issued under Section 148 and the assessment framed under Section 147/144B/144 as invalid and without jurisdiction. The additional ground raised by the assessee was allowed. The ratio is that if the basis for reopening is incriminating material found during a third-party search, Section 153C is the exclusive provision, overriding Section 147/148. The operative direction was to quash the reassessment proceedings and the assessment framed.

The Tribunal held that the Revenue failed to establish, on a transaction-specific basis, that the loans received from GHPPL, KDPL, and SCPL represented the assessee’s own undisclosed money. The assessee had discharged its primary onus under Section 68 by providing substantial documentary evidence, including corporate and income-tax records, proof of substantial net worth, audited accounts, bank statements, and evidence of interest payment with TDS and subsequent repayment. The Tribunal noted that the movement of funds was through banking channels, and there was no immediate cash deposit in the lenders' accounts preceding the payments. The Tribunal found that the Revenue's case relied primarily on third-party statements (Shri Banwari Lal Agarwal, who lacked authority to depose on behalf of the companies) and general circumstances, which did not link the specific amounts received by the assessee to its alleged undisclosed money. The Tribunal also noted the absence of corroboration from the directors of the lender companies and the lack of an opportunity for the assessee to cross-examine Shri Banwari Lal Agarwal. The Tribunal followed the jurisdictional Calcutta High Court's decisions in CIT v. Dataware Pvt. Ltd. and PCIT v. Sreeleathers Ltd., emphasizing that once identity, banking movement, availability of funds, interest payment, and TDS are established, and repayment is proven, credit entries cannot be disregarded in isolation. The addition of Rs. 65,00,000/- under Section 68 was directed to be deleted. Consequently, the disallowance of interest of Rs. 4,98,410/- (Ground No. 3) and the addition of Rs. 1,62,500/- on account of alleged commission under Section 69C (Ground No. 4) were also directed to be deleted as they were consequential to the unsustainable addition of the principal loan amount. The Tribunal also noted a coordinate bench decision in Bihariji Constructions (India) Ltd. v. ACIT, where similar lender entities were considered.

The Tribunal held that the addition of ₹11,00,000 as unexplained money under section 69A was not sustainable. The assessee had provided necessary documents like PAN, bank statement, and audited financial statements. The AO had relied merely on the report of the Investigation Wing without conducting independent inquiry. The Tribunal noted that a coordinate bench in DCIT, Central Circle 4(4) vs. M/s Evernew Commodeal Pvt. Ltd. had accepted loans from the same party and deleted similar additions. Therefore, ground number 6 was allowed, and the addition was directed to be deleted. Regarding the jurisdiction to make other additions, the Tribunal held that if the primary addition forming the basis of the order under section 148A(d) is deleted, the AO loses jurisdiction to make other additions. The Tribunal found merit in the assessee's contention that the AO had no jurisdiction to make other additions. Consequently, the order of the CIT(A) was set aside, and the AO was directed to delete all other additions. The ratio is that if the foundation for reopening an assessment fails, the AO cannot make further additions beyond the scope of the original reason for reopening. The appeal was allowed.

The Tribunal decided to first address the legal issue raised by the assessee regarding the validity of the assessment proceedings. The Tribunal found merit in the assessee's contention that the proceedings should have been initiated under Section 153C of the Act, rather than Section 147/148, because the basis for reopening was incriminating documents seized during a search on a third party (Sanwaria and Kasera Group). The Tribunal reasoned that Section 153C provides an exclusive code for assessments arising from third-party searches and overrides other provisions. Citing several decisions, including those from the Karnataka High Court, Rajasthan High Court, Bombay High Court, and the Supreme Court, which held that assessments based on third-party search materials must be framed under Section 153C, the Tribunal quashed the reopening of the assessment and the consequential assessment framed by the AO as invalid. Consequently, the addition of ₹2,54,50,000/-, along with consequential additions of interest and commission, was deleted. The ground raised under Rule 27 by the assessee was allowed.

The Tribunal held that the addition of ₹18,98,50,000/- as unexplained cash credit under Section 68 was not justified. The Tribunal noted that while notices under Section 133(6) to the lenders remained uncomplied with, the assessee had furnished all details and evidences regarding these loan creditors. Crucially, the Tribunal observed that the assessee's name, initially appearing in an interim SEBI list concerning malpractices, was deleted in the final SEBI order, with no penalty levied on the assessee, unlike other entities. The Tribunal found that the lower authorities had relied on an interim SEBI order without considering the final order. Furthermore, the Tribunal noted that the unsecured loans were repaid either in the current or subsequent year, and the assessee had provided ledger accounts and bank statements for these transactions. Citing decisions of the Hon'ble Gujarat High Court in 'Ambe Tradecorp (P.) Ltd.' and other High Court decisions, the Tribunal held that where the assessee has filed all evidences regarding loan creditors and the loans have been repaid, the addition under Section 68 cannot be sustained. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.

The Tribunal condoned the delay of 185 days in filing the appeal, finding the reasons provided by the assessee to be good and sufficient. Regarding the substantive issue, the Tribunal noted that the orders of the authorities below were passed ex-parte, with no representation before the NFAC or the AO. The Tribunal held that the ends of justice would be served by restoring the appeal to the file of the Assessing Officer. The AO was directed to decide the matter afresh after affording the assessee a reasonable opportunity of being heard. The appeal was partly allowed for statistical purposes.

The Tribunal held that the Ld. CIT(A) was justified in deleting the addition of Rs. 50,00,000/- on account of unsecured loans. The assessee had furnished comprehensive documentary evidence, including identity proof, financial statements, bank statements, and confirmations of the lenders, and the lenders possessed substantial net worth. The Tribunal noted that similar transactions with the same lenders were accepted in a subsequent assessment year. The Tribunal also upheld the deletion of Rs. 1,09,726/- for interest on unsecured loans, finding no material to suggest the assessee paid cash against banking channel receipts. Regarding the interest expenditure of Rs. 29,65,759/-, the Tribunal found that this issue was examined in the original assessment under section 143(3), where a partial disallowance was made and the balance allowed. Since no fresh adverse material was brought on record in the reassessment proceedings, the Tribunal held that this issue, concluded in the original assessment, could not be reopened. The Tribunal further held that the addition of Rs. 78,00,000/- on account of Long Term Capital Gain was unjustified. The Assessing Officer had taken the cost of acquisition and improvement at Nil without bringing any material to establish that the claimed costs were fictitious or not incurred. The original assessment had accepted the capital loss after due inquiries. The Tribunal found no reason to interfere with the Ld. CIT(A)'s deletion of these amounts.

The Tribunal held that the reasons for the delay of 701 days in filing the appeal before the learned CIT(A) were cogent and bonafide, and therefore, the delay was condoned. The Tribunal also noted that the assessment framed by the AO was ex-parte, as the assessee did not respond to notices. In the interest of natural justice and fair play, the Tribunal decided to restore the appeal back to the file of the AO. The AO was directed to decide the matter afresh after providing the assessee with a reasonable opportunity of hearing. The ratio decidendi is that procedural delays, if sufficiently explained, should not preclude an assessee from getting a decision on merits, and principles of natural justice require an opportunity of hearing to be given.

The Tribunal held that the addition made by the AO and sustained by the CIT(A) was in disregard of the facts on record. The Tribunal observed from the assessee's bank statement that money was advanced to Mega Associates on 27.04.2017, out of FDR maturity proceeds, and was received back on 21st November of the same year in the same bank account. Therefore, the Tribunal concluded that the assessee was not a beneficiary of any transaction from Mega Associates as observed by the lower authorities. The amount received back was not a cash credit but a refund of money advanced by the assessee. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.

The Tribunal held that the Assessing Officer had passed the assessment order due to the assessee's failure to submit documentary evidence. Furthermore, the CIT(A) had dismissed the appeal in limine solely on the point of limitation, without delving into the merits of the case. In the interest of justice, the Tribunal found it imperative to grant the assessee an opportunity to present its case before the Assessing Officer. Consequently, the orders passed by the lower authorities were set aside. The delay in filing the appeal before the CIT(A) was condoned, and the appeal was restored to the file of the AO with a direction to pass a fresh order after affording the assessee an opportunity of being heard. The assessee was directed to cooperate in the remand proceedings. For ITA No. 1585/2026, which related to the penalty arising from the assessment order, the Tribunal also remitted the matter back to the AO with a direction to pass an order after the fresh assessment order is passed. Both appeals were allowed for statistical purposes.

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 held that the addition of Rs. 1,00,00,000/- as unexplained cash credit for AY 2013-14 was unjustified. The Tribunal noted that the cheques for share application monies, totaling Rs. 1,00,00,000/-, were dated 30/31.03.2012, falling within FY 2011-12 (AY 2012-13), and shares were allotted in that year. Although the cheques were encashed in April 2012, the credit was recorded in the books for FY 2011-12. The AO, in his remand report, had categorically found that the transaction related to AY 2012-13 and not AY 2013-14. This finding was supported by the assessment order for AY 2012-13, where the AO's predecessor had already added the same sum as an unexplained cash credit. Furthermore, the AO had examined the details of the share subscribers, including IT acknowledgments, audited financials, MOA & AOA, bank statements, and PAN cards, and found them to be in order. Therefore, the Tribunal directed the AO to delete the addition. The ratio decidendi is that a transaction recorded in a particular financial year, supported by documentary evidence and already taxed in that year, cannot be re-characterized and taxed again in a subsequent assessment year, especially when the genuineness of the transaction and subscribers has been verified.

The Tribunal held that the reassessment proceedings initiated by issuing a notice under Section 148 on 30.06.2022 for Assessment Year 2015-16 are barred by the law of limitation. This decision followed the judgment of the Apex Court in Deepak Steel And Power Limited Vs Central Board Of Direct Taxes, which in turn relied on the concession made by the Revenue in Union of India and Ors. v. Rajeev Bansal. The Apex Court in Rajeev Bansal had 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. Since the notice in the present case was dated 25.06.2021 (as per the Apex Court judgment cited, though the present case states 30.06.2022, the principle applies), it was considered barred. Consequently, the Tribunal set aside the notice and all consequential orders passed pursuant to it.

The Tribunal held that the notice issued under Section 148 for AY 2015-16 is barred by limitation. The reasoning was based on the concession made by the Revenue before the Supreme Court in the case of Union of India and Ors. v. Rajeev Bansal, where it was stated that for AY 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 dated August 31, 2024, as time-barred. Consequently, the notice issued under Section 148 and all consequential orders were quashed and set aside. The operative direction was to quash the notice and set aside the consequential orders.

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, on July 29, 2022, was indeed beyond the period of limitation. The Tribunal noted that the relaxation granted by TOLA from April 1, 2021, to June 30, 2021, is not applicable to the impugned assessment year (2015-16). This conclusion was based on the Supreme Court's decision in Rajeev Bansal (supra), which was subsequently followed by the Delhi High Court in Ibibo Group Pvt. Ltd. (supra) and the Rajasthan High Court in its order dated January 27, 2025. The Tribunal also referred to the ratio laid down in Deepak Steel & Power Ltd. vs. CBDT (supra). Consequently, the Tribunal quashed the reopening of the assessment and the assessment framed thereunder. The appeal of the assessee was allowed.

The Tribunal held that the notice issued under Section 148 of the Act dated 26.07.2022 is invalid as it was issued beyond the permissible limitation period. The Tribunal noted that the first notice under the old regime was issued on 28.06.2021. As per the Supreme Court's order in Rajeev Bansal, the AO had 5 surviving days to issue a notice under the new regime, which expired on 30.06.2021. A notice under Section 148A(b) was issued on 31.05.2022, giving the assessee 14 days to reply, expiring on 14.06.2022. Adding the two surviving days, the financial date for issuing a new notice was 16.06.2022. However, the notice under Section 148 was issued on 26.07.2022, exceeding the limitation by over a month. Therefore, the notice dated 26.07.2022 was quashed, and consequently, all consequential proceedings were also quashed. The appeal was allowed on this legal issue.

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 Ld. CIT(A) was correct in deleting the addition of Rs. 95,00,000/- made under Section 68 of the Act. The Tribunal noted that a key factual premise of the AO, that the assessee failed to furnish documents of the lender (M/s Surichi Distributors Pvt. Ltd.), was not borne out by the material on record before the Ld. CIT(A). The appellate authority had examined the record and proceeded on the basis that the relevant bank statements, balance sheets, and income-tax particulars of the lender had been furnished. The Tribunal also considered the assessee's submissions regarding the lender's identity, prior acceptance of loans from the same entity in earlier assessment years, and subsequent repayment of the loan with interest. The Tribunal found that the mere existence of information about alleged accommodation-entry activities of certain entities, without sufficient material connecting such activities to the specific credit in the assessee's books, could not by itself establish that the amount was the assessee's own undisclosed money. Regarding the second issue, the Tribunal held that Section 250(4) empowers further inquiry only when necessary. The Revenue failed to identify any specific deficiency in the existing record that necessitated further inquiry. The Tribunal found that the Ld. CIT(A) had considered all available material and that the Revenue's objection was essentially to the conclusion reached on evidence rather than the absence of a specific indispensable inquiry. Therefore, the Ld. CIT(A)'s decision to adjudicate on the available material was upheld.

The Tribunal held that for AY 2013-14, the reassessment proceedings were indeed barred by limitation. The search conducted on 21.06.2022 fell within the financial year 2022-23, corresponding to AY 2023-24. Applying the ten-year period prescribed under the earlier statutory framework (as per the first proviso to Section 149(1)(b)), the period extended up to AY 2014-15. AY 2013-14 fell outside this period, and the proviso did not grant unlimited power to reopen assessments already outside the permissible period. Therefore, the CIT(A)'s finding on limitation was upheld, and the reassessment proceedings for AY 2013-14 were quashed. For AY 2020-21, the Tribunal upheld the CIT(A)'s deletion of the addition of ₹3,01,28,896/- on account of alleged unaccounted scrap sale. The Tribunal found that the addition was based on an extrapolation of specific data for a limited period and an estimation that resulted in substantial excess computation, with no specific material for the year under consideration. The Revenue's grounds were dismissed. For AY 2020-21, the disallowance of interest of ₹6,81,534/- was directed to be deleted, allowing the assessee's appeal.

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 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 admitted the additional evidence filed by the assessee, comprising declarations, affidavits, and invoices from individuals who allegedly purchased gold/jewellery from the deceased. The Tribunal noted that the CIT(A) had sustained the addition primarily due to the absence of independent evidence regarding the sale of jewellery. The additional evidence directly addresses this factual aspect. The Tribunal found that the assessee's explanation that the cash belonged to her deceased mother-in-law, accumulated from jewellery sales and entrusted for temple construction as per the Will dated 14.04.2022, was consistent. The genuineness of the Will was not disputed. Therefore, the Tribunal restored the issue of the addition of Rs.36,00,000/- to the file of the Assessing Officer (AO) for fresh consideration. The AO is directed to examine the additional evidence, verify the documents and persons concerned, and decide the issue afresh after providing the assessee with a reasonable opportunity of being heard. Grounds 2, 3, and 4 are allowed for statistical purposes.

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 decided to remit the appeal back to the Assessing Officer (AO) for fresh consideration. The reasoning was that the assessee failed to comply with the notices issued under Section 142(1) and show cause notices during the assessment proceedings, and also failed to furnish documentary evidence to the CIT(A). However, before the Tribunal, the assessee filed numerous documents with a petition to admit them as additional evidence, which were considered essential for a just conclusion of the claim. The Tribunal, in the interest of justice, felt that the assessee should be given an opportunity to present their case before the AO with these additional documents. Therefore, the appeal was allowed for statistical purposes, with a direction to the AO to pass an order after affording an opportunity to the assessee to be heard and after considering the additional documents.

The Tribunal held that the addition made by the CPC under Section 143(1) was invalid. The Tribunal noted that the intimation under Section 143(1) was passed on February 14, 2021, while the Supreme Court's decision in Checkmate Services Pvt. Ltd. Vs. CIT was pronounced on October 12, 2022. Therefore, as on the date of processing, the Supreme Court's decision was not available. The Tribunal found that the assessee's claim was in accordance with the provisions of the Act as applicable at the relevant time. Furthermore, the Tribunal referred to a co-ordinate bench decision in Dozco (India) Pvt. Ltd. Vs. DCIT, which quashed a similar addition made in an intimation under Section 143(1) on the ground that the issue was debatable and such debatable issues are not permissible for adjustment in an intimation. The Tribunal also cited the Chandigarh High Court's decision in Raj Kumar Bothra. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer (AO) to delete the addition of ₹3,55,06,844/-. Ground no. 1 was allowed.

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.

On the issue of diamonds, the Tribunal held that the Ld. CIT(A) had examined the issue based on material on record, including valuation during search, reconciliation, and supporting documents. The diamonds were part of jewellery found, and the Ld. CIT(A)'s conclusion that the addition was not sustainable was supported by documentary evidence. The Revenue failed to provide material to justify interference. Therefore, the Tribunal found no reason to interfere with the Ld. CIT(A)'s order, dismissing the Revenue's grounds related to diamonds. On the issue of unexplained cash, the Tribunal noted that the relief granted by the Ld. CIT(A) was based on specific factual findings after examining material. The opening cash balances were reflected in returns, bank withdrawals were accepted by the AO, rental receipts were accepted by the Ld. CIT(A), and the cash balance of M/s Silver Collections Pvt. Ltd. was accepted by the AO. The Ld. CIT(A) did not allow the entire claim, sustaining Rs. 1,38,00,000/- due to lack of corroborative evidence for the Will-related cash. The Tribunal admitted additional evidence filed by the assessee, comprising declarations, invoices, and affidavits, which were relevant to the issue of sale of jewellery by the deceased. The Tribunal restored the issue of the Rs. 1,38,00,000/- addition to the Assessing Officer for fresh consideration after examining the additional evidence and the Will.

The Tribunal held that the addition of ₹1,60,50,000/- as unexplained cash credit and the disallowance of interest of ₹2,54,318/- were not justified. The Tribunal noted that the assessee had furnished all the requisite details and evidence concerning the unsecured loan, including the lender's identity, address, confirmation, bank statement, audited accounts, and assessment order. Crucially, the loan had been repaid, either in the current year or subsequent assessment years. The Tribunal found that the AO had not pointed out any defect in the evidence provided by the assessee, relying solely on the SEBI report. The Tribunal followed the ratio laid down by the Hon'ble Calcutta High Court in several cases and the Hon'ble Gujarat High Court in the case of Ambe Tradecorp (P.) Ltd. The principle established is that once an assessee provides documentary evidence establishing the identity and creditworthiness of the loan creditor, and the loan is repaid, the credit entries cannot be viewed in isolation to make an addition under Section 68, especially when the repayment is supported by evidence. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the additions.

The Tribunal allowed the appeals for AY 2013-14 and AY 2022-23. It held that the interest earned from investments with the Allahabad Bank, Singur Branch, was from surplus funds generated from the assessee's business activities, and therefore, it is covered under Section 80P(2)(a)(i) of the Act. The Tribunal distinguished the case from Totagars’ Co-operative Sale Society Ltd. (supra) by noting that in the present case, the deposits were made from the assessee's own surplus funds, unlike Totagars where deposits represented amounts payable to members. The addition made by the AO and confirmed by the CIT(A) was set aside. For AY 2016-17, the Tribunal allowed the appeal. It held that the notice under Section 143(2) and the assessment framed by the ACIT, Circle-23(1), Hooghly, were without jurisdiction as the returned income was Nil, and the jurisdiction should have vested with the ITO as per Instruction No. 1/2011. The Tribunal relied on the decision of a co-ordinate bench in Amiya Gopal Dutta vs. DCIT and held that Section 292BB of the Act does not apply when there is a complete absence of a statutory notice from the jurisdictional Assessing Officer. The assessment order was quashed.

The Tribunal held that the ends of justice and fair play would be met by restoring the case to the file of the AO for fresh adjudication. The reasoning was based on the assessee's submission that the Covid-19 pandemic prevented them from furnishing proper evidence and explanations to the AO. The Tribunal set aside the order of the learned CIT(A) and restored the issue to the AO with a direction to decide the matter afresh. The assessee was also directed to furnish relevant details and documents before the AO without seeking unnecessary adjournments. The ratio decidendi is that in exceptional circumstances like a pandemic, where an assessee's ability to present evidence is hampered, the case should be remanded to the AO to ensure a fair opportunity for adjudication.

The Tribunal held that both the order of the Assessing Officer and the order of the Ld. CIT(A) were ex-parte, with the assessee having not participated in the proceedings. Furthermore, the Ld. CIT(A) had not decided all the grounds of appeal on their merits. In the interest of justice, the Tribunal deemed it fit to restore the issue to the file of the Assessing Officer for a de-novo assessment. The Assessing Officer was directed to provide an opportunity of being heard to the assessee before passing the assessment order in accordance with law. The assessee was also directed to participate in the assessment proceedings without fail. The appeal was partly allowed for statistical purposes.

The Tribunal held that the penalty notice issued by the AO under Section 271(1)(c) of the Act was invalid. The Tribunal observed that the notice dated 19.09.2014, placed on record, initiated penalty proceedings for both charges: concealment of income and/or furnishing inaccurate particulars of income. The Tribunal found that the notice was issued without application of mind and in a mechanical manner, as it was in a standard format and did not specify the exact charge on which the penalty was proposed. Consequently, the penalty imposed based on this invalid notice was also deemed invalid. The Tribunal relied on the judgments of the Hon'ble jurisdictional High Court in KPC Medical College and Hospital vs. PCIT (Calcutta) and the Hon'ble Apex Court in CIT(LTU) vs. SBI (SC), which held that penalty imposed based on a defective notice is bad in law and must be quashed. Therefore, the Tribunal quashed the penalty notice as well as the consequent penalty order passed by the AO. The appeal of the assessee was allowed.

The Tribunal condoned the delay of 42 days in filing the first appeal before the CIT(A), referencing the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC), which emphasizes a liberal approach to condoning delays when supported by justifiable reasons to ensure substantial justice. The Tribunal found that the CIT(A) committed a grave error in deciding the first appeal on its merits after dismissing it on the grounds of delay and laches. Considering the facts and circumstances, and noting that the issues involved required adjudication at the Assessing Officer's stage, the Tribunal remanded the matter to the Assessing Officer for a de-novo assessment. The assessee was to be provided with an opportunity of being heard before the de-novo assessment order is passed. The Tribunal did not decide the merits of the original assessment.

The Tribunal held that the disallowance of Rs. 1,19,73,218/- was not justified. The Tribunal noted that the loans taken by the assessee were in earlier years and the interest paid on these loans had been regularly allowed by the Department in previous assessment years, including AY 2015-16 and 2013-14. The ledger account confirmed that the loan was taken in earlier years and interest had been consistently paid and allowed. The Tribunal found no justification for the CIT(A)'s order to confirm the addition when the revenue had accepted the position in earlier years. Applying the principle laid down by the Hon'ble Apex Court in Radhasoami Satsang vs. CIT, the Tribunal held that in the absence of any material change justifying a different view, the Department should not reopen a settled position. The ratio decidendi is that consistency in assessment should be maintained by the revenue across assessment years when there is no change in facts or circumstances, and a settled position should not be disturbed. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.

The Tribunal held that the addition made by the AO and confirmed by the CIT(A) was not justified. The Tribunal noted that the assessee had furnished all the necessary documentary evidence regarding the share subscribers, including their ITRs, bank statements, and audited financial statements. The Tribunal found that the AO had not conducted independent verification of these evidences and had primarily relied on the non-compliance of the subscribers to the Section 131 summons. The Tribunal emphasized that additions cannot be made merely on the ground of non-compliance with summons, especially when the assessee has discharged its initial onus by providing substantial documentary evidence. The Tribunal cited several High Court decisions, including PCIT vs. Omkar Parivahan Finance Pvt Ltd and PCIT vs. Jealous Commercial Private Limited, which held that the creditworthiness of subscribers is established when the net worth is higher than the investment and that mere non-appearance of directors before the AO does not automatically render the explanation unsatisfactory. The Tribunal directed the AO to delete the addition. The issue of penalty under Section 271(1)(c) and interest under Sections 234A and 234B were noted as premature or mandatory, respectively, with a direction for recomputation of interest.

The Tribunal held that the ends of justice would be met by restoring the issue to the file of the learned CIT(A) for fresh adjudication. The reasoning was that the CIT(A) had passed an ex-parte order due to the assessee's failure to respond to notices, and it was deemed necessary to provide the assessee with a sufficient and reasonable opportunity of being heard. The Tribunal directed the assessee to produce relevant details and documents before the CIT(A) as and when required, without seeking unnecessary adjournments. The ratio decidendi is that an ex-parte assessment order passed without affording a proper opportunity of hearing is unsustainable and warrants a remand for fresh consideration. The appeal was allowed for statistical purposes.

The Tribunal upheld the order of the CIT(A) and dismissed the appeal of the revenue. The Tribunal found merit in the assessee's contention that the CIT(A) had rightly deleted the addition. The reasoning was that the case was reopened based on specific reasons concerning receipts from M/s Quest Infrastructure Pvt. Ltd. and M/s Starlight Vintrade Pvt. Ltd. However, the Assessing Officer made an addition of Rs. 2,04,79,500/- in respect of share premium received by the assessee, which was not the subject matter of the original reasons for reopening. The Tribunal relied on the judgments of various High Courts, including CIT vs. Jet Airways (India) Ltd. (Bom.), Ranbaxy Laboratories Ltd. vs. CIT (Del.), and the jurisdictional Calcutta High Court in CIT vs. Infinity Infotech Parks Ltd. The ratio decidendi is that during reassessment proceedings initiated for specific reasons, the Assessing Officer cannot make additions on entirely different grounds or income that were not the basis for the initial reopening, unless such additional income comes to notice and is dealt with in accordance with law. The operative direction was to dismiss the revenue's appeal.

The Tribunal held that the order of the Ld. CIT(A) was passed ex-parte and that the grounds of appeal urged by the assessee were not decided. Consequently, the Tribunal restored the first appeal to the file of the Ld. CIT(A) with a direction to decide the appeal in accordance with the law. This decision was made after providing an opportunity of being heard to the assessee. The Tribunal's reasoning was based on the principle that an assessee must be given a fair hearing before an appeal is decided. The ratio decidendi is that an ex-parte order passed without affording a proper opportunity of hearing is unsustainable. The operative direction is to remand the matter back to the Ld. CIT(A) for a fresh adjudication.

The Tribunal condoned the delay of 539 days in filing the first appeal before the NFAC. The Tribunal reasoned that while it is expected for assessees to file appeals on time, if the cause for delay is bona fide and beyond the assessee's control, it can be construed as a sufficient cause. The Tribunal referred to the Hon'ble Supreme Court's clarification that delay in filing an appeal with sufficient cause should be looked into liberally to ensure substantial justice, citing the landmark decision in Collector, Land & Acquisition vs. Mst. Katiji & Others. Since the issue involved in the appeal required adjudication at the Assessing Officer's stage, the Tribunal remanded the matter to the Assessing Officer for de-novo assessment. The assessee was assured of an opportunity of being heard before the de-novo assessment order is passed. The Tribunal did not decide the merits of the assessment order itself.

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 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 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 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 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 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 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 observed that the appeals were decided ex-parte by the Ld. CIT(A) due to the assessee's failure to respond to notices. Similarly, the Assessing Officer had passed ex-parte assessment orders under Section 147 read with Section 144 of the Act due to the assessee's non-compliance with notices. Considering that the ends of justice would be better served by adjudicating the matters on merits, the Tribunal set aside the impugned orders and restored the appeals to the file of the Assessing Officer. The Assessing Officer was directed to decide the issues afresh after affording a reasonable opportunity of being heard to the assessee. The ratio decidendi is that where an assessee fails to appear before the lower authorities, leading to ex-parte orders, the appellate tribunal may restore the matter to the Assessing Officer for a fresh adjudication on merits, provided a reasonable opportunity of hearing is granted.

The Tribunal held that the AO's rejection of the assessee's books of accounts under Section 145(3) and the subsequent estimation of income were not justified. The Tribunal noted that the AO, while rejecting the books, did not adopt any specific method for computation of income nor did he disclose any valid basis for such addition. The judgment cited the Karnataka High Court's decision in Karnataka State Forest Industries Corporation Vs. CIT, which emphasized that the AO's power under Section 145(1) is not arbitrary and must be exercised judiciously. The Tribunal found that the AO's action was based on general allegations and a comparison with other peers without providing specific details, and that the CIT(A) also failed to provide a comprehensible methodology for quantifying the profit. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition. The appeals of the assessee were allowed.

The Tribunal decided both issues in favour of the assessee. Regarding the first issue, the Tribunal noted that the assessee runs two separate educational institutions, a B.Ed. College and a D.El.Ed. College, with separate accounts maintained and audited. The annual receipts for the B.Ed. College were ₹97,74,884/- and for the D.El.Ed. College were ₹29,61,053/-. Since the receipts of each college were below the ₹1 crore threshold stipulated in Rule 2BC for Section 10(23C)(iiiad), the Tribunal held that the assessee was entitled to claim exemption. The AO was faulted for ignoring this fact and aggregating the receipts. For the second issue, the Tribunal examined the salary payments of ₹93,50,700/-. It noted that the audit report's mention of "Application or use of income or property for the benefit of persons referred to in section 13(3)" was a mistake. The Tribunal perused the salary register and an affidavit from the Trust's President, concluding that the teaching and non-teaching staff did not fall under the definition of specified persons in Section 13(3). Therefore, the disallowance made by the AO under Section 40(ba) was incorrect and unsustainable. The Tribunal directed the AO to delete the addition of ₹93,50,700/-.

The Tribunal held that the delay of 397 days in filing the appeal was not explained. The reasons provided by the assessee in its affidavits for condonation of delay were not supported by any documentary evidence. Consequently, the Tribunal found no merit in condoning the delay. As a result, the appeal filed by the assessee was dismissed solely on the ground of unexplained delay. No decision was made on the merits of the case. The operative direction was the dismissal of the appeal.