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597 tribunal orders from the Lucknow bench in 2026.
Showing 40 of 597 orders. Use the months below for the rest.
The Tribunal considered the facts and arguments. It noted that the FIR was lodged regarding missing stock, and subsequently, the FIR was quashed due to a settlement with the accused. However, prior to this, M/s Macleods Pharma Ltd. had entered into an agreement dated 17.05.2014, acknowledging the missing stock and agreeing to recover Rs. 66,95,852/- from the assessee. The Tribunal observed from the ledger accounts that M/s Macleods Pharma Ltd. was adjusting amounts from the security deposit and dues to the assessee during the relevant Assessment Year. Thus, it appeared that the assessee did incur a loss for which compensation was paid to M/s Macleods Pharma Ltd. However, the extent of payment was not evident, and the agreement dated 17.05.2014 had not been verified by the lower authorities. Therefore, the Tribunal deemed it appropriate to restore the matter to the file of the AO for the limited purpose of verifying this agreement and ascertaining the amount of recovery made by M/s Macleods Pharma Ltd. during the concerned AY, before determining the deductible expenses. The appeal was allowed for statistical purposes.
The Tribunal condoned the delay in filing the appeal, finding sufficient reasons to explain it, attributing it to the conduct of the assessee's erstwhile counsel. The Tribunal noted that the assessee had not been given an adequate hearing by the CIT(A) due to the circumstances surrounding the AR's abandonment of practice. The Tribunal observed that the assessee had submitted some documentary evidence before the AO and claimed to be in a position to produce more. In the interest of justice, the Tribunal restored the matter to the file of the CIT(A) with a direction to allow the assessee an opportunity to furnish additional evidence in support of his claims for cost of improvement, eviction payments, and other expenses. The CIT(A) was also directed to obtain a remand report from the AO on these additional evidences before deciding the issue. The appeal was allowed for statistical purposes, with the CIT(A) to pass a fresh order in accordance with law.
The Tribunal condoned the delay of 50 days in filing the appeal, respectfully following the ratio laid down by the Hon'ble Supreme Court in Collector of Land Acquisition Vs. MST. Katiji & Ors, considering the unfortunate circumstances of the assessee's son's death. Regarding the merits, the Tribunal noted that there was no effective representation on behalf of the assessee before the lower authorities. The assessee claimed that the deposits were from daily sales of dairy products and that he earned only commission. The Tribunal observed that the assessee had provided a certificate and explained that out of Rs. 1.45 crores in sales, Rs. 1,40,87,605.17 was remitted to CP Milk and Food Product Pvt Ltd, with the balance representing commission and reimbursement for expenses. These facts required verification by the AO. Therefore, the Tribunal set aside the impugned orders and restored the assessment to the file of the AO for fresh assessment after giving adequate opportunity to the assessee. The grounds raised were allowed for statistical purposes.
The Tribunal noted that the assessee was issued three notices within a month and sought an adjournment to collect details, which was not granted. Consequently, the CIT(A) passed an ex-parte order. The Tribunal found that the assessee was not granted an adequate opportunity to represent her case before the CIT(A). Therefore, the Tribunal deemed it appropriate to restore the matter to the file of the CIT(A) for fresh consideration of the issues. The CIT(A) is to consider the evidence already furnished and any further evidence that may be provided by the assessee and pass a fresh order in accordance with law. The appeal of the assessee was allowed for statistical purposes.
The Tribunal condoned the delay in filing the appeal due to the assessee's medical condition. Upon reviewing the case, the Tribunal observed that the CIT(A) had not addressed the numerous legal issues raised by the assessee in his order. Furthermore, the CIT(A)'s order appeared to be based on template reasoning rather than the specific facts of the assessment order, referencing issues not present in the original assessment. The Tribunal noted that the core issue of whether the cash deposits represented proceeds of cash sales of Pepsi could have been verified by examining the assessee's bank statement to see if regular payments were made to M/s Pepsi Co. This basic step was not taken. Instead, the CIT(A) demanded confirmations from parties, which would be impossible for cash sales. Given the failure of the assessee to comply with lower authorities and the apparent deficiencies in the CIT(A)'s order, the Tribunal restored the matter to the AO's file. The assessee was directed to produce necessary documents to explain the cash deposits with reference to sales made and justify declared income, with supporting correspondence or documents related to transactions with M/s Pepsi Co. The AO was instructed to pass a fresh order after considering the explanations and documents.
The Tribunal considered the submission by the learned CIT-DR that the present appeal was a duplicate of ITA No. 964/Lkw/2026, which was already filed by the Department for AY 2016-17 against the same order of the learned CIT(A) and was pending adjudication before the same Bench. The Tribunal noted that the current appeal had been filed after the earlier appeal. Therefore, the Tribunal permitted the Department to withdraw the present appeal without prejudice to its right to pursue ITA No. 964/Lkw/2026. The appeal was accordingly dismissed as withdrawn. No decision was made on the merits of the grounds of appeal raised by the Department.
The Tribunal held that the assessee is entitled to claim exemption in respect of the ex-gratia amount of Rs. 14,79,424/- received under the VRS of BSNL. The Tribunal respectfully followed the ratio laid down in the judgment of the Hon'ble Madras High Court in Hindustan Photo Film Workers Welfare Centre (CITU) Vs. Government of India, New Delhi (supra). The Revenue had not brought any contrary material or judicial pronouncement to rebut the facts. Therefore, the Tribunal set aside the impugned order of the Ld. CIT(A) on this issue and directed the AO to allow the claim of exemption as claimed by the assessee in accordance with law. The issue regarding cash equivalent of leave encashment was not explicitly decided, but the overall appeal was allowed based on the ex-gratia amount.
The Tribunal noted that the notice under Section 263 of the Act was issued on 19.03.2026, and the order revising the assessment was passed on 30.03.2026. The assessee contended that she was not provided with adequate opportunity to explain her case. The Tribunal acknowledged that Section 263 mandates providing the assessee an opportunity of being heard, which cannot be a mere formality. Both parties agreed that the matter could be restored to the file of the PCIT for passing an order afresh in accordance with law. Therefore, the Tribunal set aside the impugned order and restored the matter to the file of the PCIT. The PCIT is directed to decide the issue afresh after providing adequate opportunity of being heard to the assessee and duly considering the explanation and supporting material furnished by the assessee, particularly regarding her contention that M/s. Sona Chandi is her proprietorship concern. The grounds raised in the appeal are allowed for statistical purposes.
The Tribunal observed that the CIT(A) had neither adjudicated on the legal issue raised by the assessee nor recorded a finding that these legal grounds were not pressed. Furthermore, the CIT(A) ignored the assessee's submission that fully verified statements regarding transactions with M/s Srinath Ji Textiles, conducted through banking channels, had been furnished. In light of these omissions, the Tribunal deemed it appropriate to restore the matter to the file of the CIT(A). The CIT(A) is directed to obtain the assessee's arguments in support of its grounds of appeal, consider the legal and factual issues, and then pass a speaking order in accordance with the law. The appeal is allowed for statistical purposes.
The Tribunal held that the CIT(A) had extensively examined the disputed issues and recorded detailed findings of fact. The Tribunal found that the employer's contributions to Provident Fund, Pension Fund (EPFO), Gratuity Fund, and Leave Encashment were made to recognized funds (EPFO and LIC) and not directly to employees. The Tribunal noted that the employer's contribution to the Pension Fund (EPFO) is statutory and part of the Employees' Pension Scheme, with the employer liable to deposit 8.33% of basic salary plus DA. It was also observed that contributions to Gratuity and Leave Encashment policies made to LIC were based on actuarial valuation, with no direct payment to employees. Furthermore, employer contributions to the Pension Fund (LIC) under the Superannuation Scheme were considered eligible for deduction under section 80CCD(2) in the hands of the employee, making them not taxable or liable for TDS. The Revenue failed to present any adverse material to rebut these findings or demonstrate that the contributions exceeded prescribed limits. Consequently, the grounds raised by the Revenue were rejected, and the appeal was dismissed.
The Tribunal held that the appeal could not proceed because the sole legal heir who had filed the appeal before the Tribunal had also expired. Consequently, the appeal was dismissed for want of prosecution and for failure to bring the appropriate legal heir(s) on record as per law. The Tribunal noted that the Revenue's representative expressed an inability to make submissions on this procedural issue. The Tribunal explicitly kept all substantive issues, including the validity of assessment proceedings and additions made, undecided. A liberty was granted to any legal heir(s) to seek restoration of the appeal in accordance with law. The registry was directed to place the matter before the Bench if such an application for restoration is filed.
The Tribunal, after hearing both parties and perusing the records, found that the assessee was granted multiple opportunities, with the CIT(A) granting adjournments on two occasions. The assessee contended that the mistake was due to wrong accounting classification/booking by the accountant. Considering the totality of facts and the material, the Tribunal deemed it proper and in the interest of justice to set aside the impugned ex-parte order and restore the matter to the file of the AO for framing the assessment afresh, de novo. The AO is directed to provide a reasonable and effective opportunity to the assessee, verify whether the excess claim was attributable to a bona fide and inadvertent mistake in accounting classification or recording, and consider the relevant books of account, documentary evidence, and explanations. The assessee is directed to cooperate and furnish all requisite details. The grounds raised are allowed for statistical purposes. The appeal is allowed for statistical purposes.
The Tribunal held that the CIT(A) had dismissed the assessee's appeal in limine due to a delay of 154 days. The Tribunal found that the assessee had provided a sufficient cause for the delay, namely, suffering from severe lower back pain, supported by a medical certificate. The Tribunal, referencing Supreme Court judgments in Collector Land Acquisition vs. Mst. Katiji & Ors. and Ram Nath Sao @ Ram Nath Sahu & Others vs Gobardhan Sao and Others, emphasized that the expression 'sufficient cause' should be liberally construed to advance substantial justice. Acceptance of the explanation for delay should be the rule, and refusal an exception, especially when no negligence or want of bona fide can be imputed to the assessee. Therefore, the Tribunal set aside the order of the CIT(A) and restored the appeal to the CIT(A) for deciding the grounds afresh by passing a speaking order, after condoning the delay. The assessee was directed to provide all relevant information. The grounds raised in the appeal were allowed for statistical purposes.
The Tribunal held that the assessee is entitled to claim exemption under Section 10(10B) of the Income Tax Act, 1961, for the ex-gratia amount of Rs. 32,47,169/- received under the VRS of BSNL. The Tribunal respectfully followed the ratio laid down by the Hon'ble Madras High Court in the case of Hindustan Photo Film Workers Welfare Centre (CITU) Vs. Government of India, New Delhi (supra). The Court in that case had held that receipts pursuant to a severance package announced by the Central Government attract the provisions of Section 10(10B) and shall not fall within the definition of income for computing total income. The Tribunal noted that the Revenue had not presented any contrary material or judicial pronouncement. Accordingly, the impugned order of the Ld. CIT(A) was set aside, and the Assessing Officer was directed to allow the claim of exemption.
The Tribunal condoned the delay of 46 days in filing the appeal, following the Supreme Court's judgment in Collector of Land Acquisition Vs. MST. Katiji & Ors, noting that the impugned order was sent to an incorrect email ID, causing the assessee's unawareness. The Tribunal set aside the impugned order and restored the assessment to the file of the Assessing Officer (AO). The AO was directed to consider the assessee's submissions and evidence, verify the claims, and frame the assessment afresh. The assessee was directed not to seek adjournments without reasonable cause. The grounds raised in the appeal were allowed for statistical purposes. The Tribunal found that the CIT(A) passed an ex-parte order without effective representation, and the assessee's contentions regarding jurisdiction, validity of reassessment proceedings under section 151A, and the merits of additions (Rs. 19,99,900/- and Rs. 19,26,600/-) required proper examination. The addition of Rs. 19,99,900/- was based on a third-party Excel sheet, and objections regarding non-supply of statements and denial of cross-examination needed scrutiny. Similarly, the addition of Rs. 19,26,600/- required examination after considering the assessee's explanation and evidence. The Tribunal deemed it necessary to restore the matter to the AO to sub-serve the principle of natural justice.
The Tribunal condoned the delay in filing the appeal before the CIT(A) and set aside the impugned order. The assessment was restored to the file of the Assessing Officer to pass a fresh assessment order. The AO is directed to verify the correctness of the assessee's claim by examining purchase invoices, stock register, customer-wise sales details, PAN information of customers where applicable, and other supporting evidence. The Tribunal noted that the CIT(A) dismissed the appeal on the ground of delay and lack of representation, passing the order in undue haste without considering the material. The Tribunal found that the assessee was not provided adequate opportunity even before the Assessing Authority. Therefore, considering the totality of facts, the delay was condoned, and the matter was restored for fresh adjudication on merits after providing a reasonable opportunity. The grounds raised were allowed for statistical purposes. The addition under section 69A was not adjudicated on merits by the CIT(A).
The Tribunal held that the reopening under Section 147 was justified as the AO had information regarding substantial cash deposits requiring verification. The objection regarding reopening was rejected. On merits, the Tribunal found that while the AO was justified in rejecting the books of account due to the assessee's failure to furnish complete details of parties and non-response from parties to whom notices were issued, the estimation of income at 20% of gross receipts was excessive and unreasonable. The Tribunal noted that the assessee had declared a profit rate of approximately 9.5% in preceding years, with an average profit rate of about 9.10%. The AO did not provide adverse material to justify the 20% rate. Considering the assessee's failure to furnish details and its past profit rates, the Tribunal directed the AO to recompute the income by applying a profit rate of 12.5% to the gross receipts, instead of 20%. The addition was thus restricted to 12.5%. The grounds of appeal were partly allowed.
The Tribunal noted that the case was initially selected for scrutiny regarding loan repayments, but the AO later focused on expenditures. The AO made an estimated disallowance of 30% of expenses without identifying specific disallowable items. The primary reason for disallowance appeared to be the inability to upload all invoices due to portal submission capacity limits, leading the AO to consider expenses unproved. The Tribunal acknowledged the assessee's submission that obtaining tax invoices for every petty expense from non-GST registered vendors in rural areas was practically difficult. It also observed that the assessee's accounts were audited without any reported leakage of expenditure. Furthermore, the AO had not conducted the assessment in the manner required for a charitable society, where the application towards charitable purposes is determined after disallowances. The CIT(A) had failed to consider the detailed statement of facts, taking shelter under the assessee's non-compliance with notices. Therefore, in the interest of justice, the matter was restored to the file of the AO to allow the assessee an opportunity to provide available details, and for the AO to pass a fresh order. The appeal was allowed for statistical purposes.
The Tribunal held that the assessee cannot be treated as an assessee in default under section 201(1) of the Income Tax Act, 1961, for the relevant period. The reasoning was based on the prevailing interim orders of the Madras High Court in Writ Petition No. 11991 of 2014, which were in operation during the financial year 2016-17 (relevant to AY 2017-18). These interim directions restrained the deduction of tax at source on LTC payments, and any deduction contrary to these orders would have exposed the assessee to contempt of court proceedings. The Tribunal noted that the subsequent Supreme Court decision, while settling the issue on merits, could not retrospectively fasten liability under section 201(1) for a period during which the assessee was complying with judicial orders. The Tribunal followed the decisions of the ITAT Ahmedabad Bench in State Bank of India, Bhavnagar Para Branch v. ITO and State Bank of India, Currency Administration Cell, Gandhi Nagar vs. ITO, and the Kerala High Court in State Bank of India, Poovar Branch vs. Commissioner of Income Tax. Consequently, the liability fastened upon the assessee under sections 201(1) and 201(1A) was deleted. The appeal of the assessee was allowed.
The Tribunal held that the CIT(A) was justified in deleting the addition of Rs. 9,75,88,452/-. The Tribunal noted that the AO had failed to conduct meaningful inquiries despite opportunities, including during remand proceedings. The assessee had demonstrated the genuineness of transactions through banking channels, interest payments, and TDS. The Tribunal rejected the Revenue's plea to restore the matter to the AO, stating that assessment proceedings should not become an endless exercise due to the Department's failure to conduct necessary inquiries. The Tribunal confirmed the CIT(A)'s finding that the lenders had the necessary creditworthiness and the transactions were genuine. However, the Tribunal upheld the CIT(A)'s decision to sustain the addition of Rs. 10,00,000/- from Smt. Asha Devi, as the assessee failed to prove the creditworthiness of this lender before the CIT(A) and no fresh material was presented to the Tribunal. Regarding the legal grounds in the cross-objection, the Tribunal found no irregularity in the assessment procedure. It held that a notice under Section 143(2) was issued within time, making a Section 148 notice unnecessary as an assessable return already existed. Approvals for the notice under Section 143(2) and subsequent orders were obtained, negating the assessee's claim of procedural violation. Thus, the assessee's cross-objection on legal grounds was dismissed.
The Tribunal condoned the delay in filing the appeal. Regarding the penalty for claiming deduction under Section 80P on interest from FDRs/SB accounts, the Tribunal held that the assessee's case facts were distinguishable from the Supreme Court's decision in Totgars Cooperative Sale Society Limited. The Tribunal noted that the assessee had judgments in its favor allowing deduction on interest from statutory investments and cited the Supreme Court's decision in CIT vs. Reliance Petro Products, stating that a mere unsustainable claim does not amount to furnishing inaccurate particulars. Therefore, the penalty on this ground was not warranted. Concerning the non-disclosure of interest on refund, the Tribunal observed that given the assessee's high turnover, the omission of Rs. 1,57,302/- (a revised figure from the Rs. 4,59,872/- mentioned earlier) was likely an omission rather than an attempt to evade tax, a technical breach. Relying on Hindustan Steel Limited vs. State of Orissa, the Tribunal held that penalty is not ordinarily imposed for technical or venial breaches or bona fide beliefs. Consequently, the penalty under Section 271(1)(c) was deleted on both charges. Ground nos. 2 & 3 were allowed. Ground no. 4 did not require adjudication as the penalty was deleted.
The Tribunal held that the assessee had a reasonable cause for not deducting tax at source on LTC payments made to employees during the financial year 2015-16, which was the period during which the interim order by the Hon'ble Madras High Court was in operation. The Tribunal noted that the Hon'ble Madras High Court, vide its order dated 16.02.2015, had directed that the interim stay on the bank's instructions (which disallowed overseas travel as part of LTC) would continue until the final disposal of the writ petition. The assessee, in obedience to this interim order, did not deduct TDS. The Tribunal further relied on the Hon'ble Kerala High Court's decision in State Bank of India v. CIT (ITA No. 45 of 2025), which on similar facts, observed that the Hon'ble Madras High Court was of the view that there was no taxable income accruing to the employee so as to deduct tax at source. The Kerala High Court also noted that payments made on the basis of an interim direction would not amount to 'income of the employee', and if the petitions were rejected, it was for the employee to pay tax. The Tribunal concluded that since there was a reasonable cause within the meaning of section 273B of the Income Tax Act, the CIT(A) was not justified in confirming the penalty levied by the JCIT. Accordingly, the penalty was quashed.
The Tribunal held that the penalty of Rs. 14,50,000/- imposed under section 271(1)(c) of the Act is not valid. The AO initiated penalty proceedings by issuing a notice under section 274 r.w.s. 271(1)(c) dated 14.12.2017 specifically for 'concealment of income'. However, the penalty was ultimately levied for 'furnishing of inaccurate particulars of income'. The Tribunal, relying on the judgment of the Hon'ble Karnataka High Court in Kshema Geo Holdings (P.) Ltd. vs. Income Tax Officer, held that penalty proceedings must be confined to the grounds stated in the notice. If the notice is for one offence (concealment), the penalty cannot be imposed for another offence (furnishing inaccurate particulars) without a fresh show-cause notice on that specific ground. The Tribunal also noted that the AO's satisfaction for initiating penalty was recorded for 'furnishing of inaccurate particulars of income' in the assessment order, yet the notice was for 'concealment of particulars of income', creating a mismatch. This discrepancy renders the penalty order invalid and void ab initio. Therefore, the penalty is quashed.
The Tribunal noted that the assessee had submitted that the dispute had been settled under the Vivad se Vishwas Scheme, 2024, and placed on record a letter dated 21.08.2026 along with Form No. 2. This indicated that the assessee had availed the benefits of the scheme, and the declaration had been accepted by the designated authority. Consequently, the substratum of the dispute forming the subject matter of the appeal stood resolved, rendering the grounds of appeal infructuous. The assessee no longer wished to pursue the appeal and respectfully sought leave to withdraw it. The Learned Departmental Representative had no objection to the withdrawal. Therefore, the Tribunal permitted the assessee to withdraw the appeal and dismissed it as withdrawn. A liberty was granted to the assessee to approach the Tribunal for restoration of the appeal in case of failure of the settlement. The specific grounds of appeal were not adjudicated on merits.
The Tribunal found that the Assessing Authority had not given sufficient opportunity to the assessee, and the CIT(A) also failed to address the grounds raised by the assessee. Considering the totality of facts and material, to uphold the principle of natural justice and fairness, the Tribunal deemed it necessary to set aside the impugned order and restore the assessment to the file of the Assessing Officer. The AO is directed to consider the submissions and evidence furnished by the assessee and verify their veracity. The assessee is directed not to seek adjournments without reasonable cause. The grounds raised in the appeal are allowed for statistical purposes. The ratio decidendi is that where principles of natural justice are violated due to lack of adequate opportunity and non-consideration of grounds by lower authorities, the matter should be remanded for a fresh adjudication.
The Tribunal held that the CIT(A) erred in upholding the denial of exemption under Section 10(23C)(iiiab) solely on the ground of belated filing of the return of income. The Tribunal reasoned that the eligibility for exemption under Section 10(23C)(iiiab) is primarily based on the nature and objects of the institution and its funding, not on the procedural aspect of filing the return within the statutory time. The belated filing, while a procedural lapse, does not automatically disqualify an institution from claiming exemption if it otherwise meets the substantive criteria. The Tribunal found that the assessee society is established for educational purposes, is substantially financed by the State Government, and does not operate for profit. Therefore, the denial of exemption was incorrect. The Tribunal directed that the exemption as claimed by the assessee be allowed. No issue was expressly left undecided.
The Tribunal noted that the assessee, Late Shri Prakash Shukla, expired on 19.04.2021. The primary contention raised by the assessee's counsel was that the assessment order was passed against a dead person, rendering it void ab initio. The assessee's counsel submitted that the fact of death was duly intimated to the lower authorities and that Form 35 clearly averred the assessment order to be non est due to being framed in the name of a dead person. The Ld. DR argued that the appeal before the CIT(A) required prosecution by the legal representative after bringing the death to the appellate authority's notice and seeking substitution. The Tribunal, after hearing both sides, acknowledged the death of the assessee. The judgment does not explicitly state the Tribunal's finding on each specific issue raised in the grounds of appeal, but the focus of the discussion and the subsequent order suggests a procedural defect was central. The operative part of the order is not fully provided in the excerpt, but the context implies the Tribunal will address the validity of the assessment proceedings in light of the assessee's death.
The Tribunal noted that the assessee did not appear for the hearing despite multiple opportunities. It was inferred that the assessee was not interested in effectively prosecuting the appeal. The Learned Departmental Representative for the Revenue supported the orders of the lower authorities. The Tribunal, having heard the Ld. DR and perused the record, concluded that there was no representation from the assessee despite repeated opportunities, leading to the presumption that the assessee was not interested in prosecuting the appeal. Consequently, the appeal was dismissed for want of prosecution. The Tribunal clarified that the assessee could approach for recalling the order upon demonstrating sufficient cause for non-appearance. No decision was made on the merits of the grounds raised by the assessee.
The Tribunal held that the assessee persistently failed to remove the defect of unsigned grounds of appeal despite repeated opportunities. Furthermore, the assessee was absent on almost all hearing dates. The Tribunal inferred that the assessee was not interested in prosecuting the appeal. Consequently, the appeal was dismissed as defective. The Tribunal clarified that the assessee could approach the Tribunal for recalling the order upon demonstrating sufficient cause for non-appearance. The issues regarding the delay condonation, addition under section 69A, and deduction under section 80C were not decided on merits due to the dismissal of the appeal as defective.
The Tribunal held that the impugned penalty was imposed for non-compliance with statutory notices. The assessee contended that there was no knowledge of these notices, and therefore, the non-compliance was neither intentional nor deliberate, with a bona fide and reasonable cause. Considering the material placed, the submissions, and case laws, the Tribunal was of the considered view that the non-compliance was not deliberate and there was a bona fide reason. Consequently, the Tribunal directed the Assessing Officer to delete the impugned penalty. The grounds raised in the appeal were allowed. The Tribunal did not expressly leave any issue undecided.
The Tribunal held that the authorities below had not properly considered the material furnished by the assessee. The assessee claimed that sales were duly recorded in the books of account and reflected in VAT returns. The Tribunal found that the AO proceeded on the presumption that cash sales were a means of introducing unaccounted money. It was incumbent upon the AO to examine the genuineness of sales by making appropriate enquiries and bringing cogent adverse material on record, such as stock position, purchases, and VAT returns. The Tribunal noted that no material was brought on record to demonstrate that the VAT returns were false or that VAT authorities had recorded any adverse findings. No independent enquiry was conducted. The Tribunal concluded that an adverse inference cannot be drawn merely on suspicion or presumption when the assessee has furnished the cash book, audited financial statements, VAT returns, and other documentary evidence. In the absence of further enquiry or cogent adverse material, the conclusion that sales were bogus was based on conjectures. Therefore, the AO was directed to delete the impugned additions. The grounds raised were partly allowed. The issue regarding Section 115BBE was not expressly decided.
The Tribunal held that the addition of Rs. 1,72,49,000/- under Section 68 of the Act was not sustainable. The assessee had disclosed the amount as received from sales and accepted it as revenue. To disbelieve sales, there must be insufficient stock or defects in the stock register. The AO himself observed that the assessee had sufficient stock. The AO rejected the explanation regarding cash generated through sales based on an abnormal increase in sales, which, in the Tribunal's view, does not empower the AO to reject books of account without contrary evidence. The Visakhapatnam Bench decision in ACIT vs. Hira Panna Jewellers was followed, stating that purchases, sales, and stock are interlinked. If there are no defects in purchases and sales, and they match stock inflow/outflow, sales should not be disbelieved. The abnormal increase in cash sales and their deposit due to demonetization cannot be the basis for rejecting accounts and making additions under Section 68 without tangible evidence from the Department. Therefore, the order of the CIT(A) was set aside, and the AO was directed to delete the addition.
The Tribunal held that the impugned penalty proceedings were initiated based on an incorrect appreciation of facts, without duly verifying the actual nature and mode of receipt of sale consideration. The assessee had placed documentary evidence, including a certificate from the purchaser (M/s. Manas India Projects Pvt. Ltd.), confirming that Rs. 12,74,100/- remained outstanding and was subsequently paid through banking channels. The Revenue failed to produce any cogent material to rebut this evidence or establish that the amount was indeed received in cash. The AO had accepted that a major portion of the sale consideration was received through banking channels and ought to have inquired about the outstanding sum from the seller, which was not done. Therefore, in the absence of material evidence clearly establishing a cash transaction for the disputed amount, the penalty under section 271D could not be sustained. The Tribunal directed the AO to delete the penalty of Rs. 12,74,100/-. The grounds raised in the appeal were allowed.
The Tribunal condoned the delay of 669 days in filing the appeal, accepting the assessee's submission that it was due to a bona fide and unavoidable heart-related illness and treatment. The Tribunal noted that the assessee had failed to provide any explanation or documentary evidence regarding the cash deposits and insurance commission before the AO and CIT(A). However, considering the assessee's willingness to ensure compliance if the matter was restored to the AO, the Tribunal decided to restore the matter back to the file of the AO for a denovo assessment. The Tribunal directed the assessee to ensure compliance before the AO. The specific findings on the validity of reopening under Section 147, the addition under Section 69A, the charging of interest under Sections 234A, 234B, and 234C, and the initiation of penalty proceedings under Sections 271AAC and 270A were not adjudicated on merits, as the appeal was allowed for statistical purposes with a direction for denovo assessment. The ratio decidendi is that in cases of significant delay, if the assessee shows willingness to comply and the matter can be effectively adjudicated denovo, the Tribunal may restore the case to the AO.
The Tribunal held that the additions made by the AO and sustained by the CIT(A) were not maintainable. The Tribunal noted that the AO primarily relied on perceived variations in trends between assessment years, which at best could raise suspicion but not constitute sufficient reason to deem cash sales prior to demonetization as bogus. The Tribunal referred to a coordinate bench decision in M/s Motor Fab Sales Pvt. Ltd. vs. The DCIT/ACIT, which held that if no defects are found in purchases or stocks, sales made from those stocks cannot be disbelieved, and consequently, cash deposits from such sales cannot be treated as unexplained. The Tribunal further noted that the CIT(A) had satisfied himself that the AO had not found any mistakes in the assessee's accounts justifying the addition and that increased sales had not declined post-demonetization. Regarding the 'Rehan' business, the Tribunal found that the CIT(A) was satisfied that the business existed and that advances were recoverable. The Tribunal concluded that once the assessee showed advances as recovered, this could not be disbelieved solely for failure to file details of some parties. Therefore, the additions sustained by the CIT(A) were deleted, and the orders to the extent of additions deleted by the CIT(A) were sustained.
The Tribunal noted that the assessee's appeal before the CIT(A) was dismissed ex parte. Upon reviewing the record, the Tribunal found that certain submissions made by the assessee were not duly examined and verified by the CIT(A), and the appeal was dismissed without affording adequate and reasonable opportunity to the assessee. The Tribunal observed that on certain occasions, the time afforded to the assessee for responding was less than a week. Therefore, considering the totality of the facts, the Tribunal set aside the impugned order of the CIT(A) and restored the grounds of appeal to the file of the CIT(A). The CIT(A) was directed to decide the grounds afresh after duly considering the submissions and evidences furnished by the assessee. The assessee was also directed to cooperate in the proceedings and not seek adjournments without compelling exigency. The grounds raised in the appeal were allowed for statistical purposes. The principle derived is that an appellate authority must provide a reasonable opportunity of being heard and duly examine the submissions and evidence before dismissing an appeal ex parte.