ITAT Mumbai Judgments — August 2025

The Tribunal held that the reopening of assessment proceedings was bad in law because the transaction was in the nature of a license, not a transfer of possession under Section 53A of the Transfer of Property Act and Section 2(47) of the Income Tax Act. Consequently, no capital gains accrued in the relevant assessment year.

The Tribunal held that the assessee should be given one more opportunity to present their case before the CIT(A). The delay in filing the first appeal was condoned, considering the liberal view taken by various High Courts and the Apex Court. Both appeals were allowed for statistical purposes.

The Tribunal held that substantial justice must be picked against technicalities. Therefore, the quantum appeal was remitted back to the Ld.CIT(A) for necessary verification, and consequently, the penalty appeal was also remitted.

The Tribunal, considering previous year's assessment and various judicial precedents, found that the addition made by the Assessing Officer was justifiable in principle but the rate of commission was excessive. Therefore, the addition was restricted to 1% of the total sales.

The Tribunal condoned the delay in filing the appeals, noting no malafide intention and sufficient cause. The Tribunal held that the lower authorities did not adequately verify the source of investments or the nature of the penny stock. The issue was remitted back to the CIT(A) for verification of the source of investment.

The Tribunal upheld the validity of the proceedings under Sections 147/148, distinguishing the appellant's case from those requiring Section 153C, as only information was passed to the AO, not seized material. It affirmed that the share transactions were sham and merely accommodation entries, thereby confirming the AO's addition as income from other sources, as the Mukesh Choksi group was found to be involved in providing such entries.

The Tribunal held that the source of investment of Rs. 12,97,795/- was established, as the funds were borrowed from ECL Finance Ltd. and invested by them on behalf of the assessee. The amount not invested was refunded. Therefore, the addition retained by the CIT(A) was deleted.

The Tribunal observed that the assessee did not get a proper opportunity of being heard and that the Ld. Commissioner failed to decide the appeal on merit. Therefore, the Tribunal set aside the impugned order.

The Tribunal noted that the AO and CIT(A) did not properly verify the evidence, and the appeals were initially dismissed for non-prosecution due to the authorized representative's health issues. The Tribunal condoned the delay and remitted the issue to the CIT(A) to verify the source of investments.

The Tribunal found that the 100% disallowance of purchases was not justified, especially since the assessee had sold all items and its books of account were not disputed. The Tribunal directed the AO to retain an estimated addition of 12.5% on the impugned purchases, allowing the deduction for gross profit already declared.

The Tribunal found that the Ld. CIT(A) dismissed the appeal ex-parte without examining the merits. The Tribunal restored the matter to the Ld. CIT(A) for fresh adjudication after giving the assessee a proper opportunity.

The Tribunal held that the notice issued under Section 148, dated 22/07/2022, was invalid because the approval was obtained from the Principal Commissioner, whereas, given the time elapsed since the end of the assessment year, the approval should have been obtained from the Principal Chief Commissioner as per Section 151(ii) of the Act. Consequently, the assessment order passed under Section 147 was quashed.

The Tribunal noted that the impugned orders were passed without considering the assessee's evidence due to the representative's ill health. It was also observed that the authorities below did not properly verify the cash flow and investment sources. Therefore, the issue was remitted back to the Ld.CIT(A) for verification of the investment source.

The Tribunal condoned the delay in filing the appeals due to the authorized representative's ill-health. On merits, it held that the lower authorities failed to adequately verify the source of investments and the nature of transactions. Consequently, the matter was remitted back to the Ld. CIT(A) for fresh adjudication after proper verification and providing the assessee with an opportunity to substantiate the source of funds.

The Tribunal held that the reasons provided for the delay were vague and general, and failed to establish sufficient cause for condonation. The Tribunal noted that the company had a history of timely compliance for other tax-related matters, making the explanation for the inordinate delay unconvincing.

The Tribunal noted that the assessee had filed the appeal before the Ld.CIT(A) with defects regarding the section and date of the order appealed against. The Tribunal remitted the issue back to the Ld.CIT(A) to rectify these defects and pass a detailed order on merits.

The Tribunal held that the disallowance under Section 14A r.w.r 8D should only be computed on investments that have actually yielded exempt income, as per pronouncements by the Delhi High Court and a Special Bench of the Tribunal. The AO was directed to recompute the disallowance accordingly.

The Tribunal held that the additions on account of circular trading were not sustainable as there was no evidence of commission payment and the transactions were recorded in the books. The Tribunal also deleted the protective additions related to bogus donations, noting that substantive additions were made in the hands of the director, and no evidence supported the commission payment.

The Tribunal noted that the delay in filing the appeal was substantial and not adequately substantiated for the initial period. However, emphasizing substantive justice over procedural technicalities, the Tribunal decided to remit the issue back to the AO for fresh adjudication.

The Tribunal held that the assessee should be given one more opportunity to present its case before the AO, adhering to principles of natural justice. The issues were remanded to the AO for de novo adjudication.

The Tribunal held that the addition on account of circular trading was not sustainable as there was no concrete evidence of commission payment or actual profit generated. Regarding the bogus donations, the Tribunal found that the CIT(A) correctly deleted the protective addition and commission payment as substantive addition was made in the hands of the director, and no substantive order was passed against him. Consequently, the assessee's appeals were allowed, and the revenue's appeals were dismissed.

The Tribunal held that no addition could be made for commission income on circular trading as there was no evidence of commission payment, and the transactions were duly recorded in the books. The Tribunal relied on previous decisions of coordinate benches in similar cases.

The Tribunal held that the CIT(A) erred in dismissing the appeal without condoning the delay and adjudicating on merits. The Tribunal directed the CIT(A) to condone the delay, considering the liberal view taken by higher courts, and to decide the appeals on merits.

The Tribunal held that corporate guarantee is an international transaction and restricted the ALP to 0.5%, affirming the CIT(A)'s decision. For notional interest, the Tribunal directed it to be determined based on LIBOR plus a spread of 1% (total 2.91%), considering the need for a margin over the base rate. The disallowance under Section 14A was confirmed to be limited to investments yielding exempt income.

The Tribunal noted that the CIT(A) failed to adjudicate the appeal on merits due to the assessee's non-compliance. Considering the assessee's argument that the addition was protective and a substantive assessment was on the directors, and that such protective additions cannot be made mechanically, the Tribunal remanded all issues back to the CIT(A) for fresh adjudication on merits, with a direction for the assessee to strictly comply.

The Tribunal held that the assessee may be given one more opportunity to present his case before the first appellate authority, adhering to the principles of natural justice. The issues were remanded for de novo adjudication.

The Tribunal held that the notices issued under Section 148 for both assessment years were beyond the prescribed time limits under the new regime and also lacked the approval of the specified authority as per Section 151. Consequently, the reassessment orders were deemed void.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when the issue is debatable and two views are possible. This is especially true when the quantum appeal is pending before the High Court on a substantial question of law.

The Tribunal condoned the delay of 295 days, acknowledging the reasonable cause presented by the assessee. The appeals were set aside to the file of the CIT(A) for fresh adjudication.

The ITAT held that the amendment to Section 11(3) by the Finance Act, 2022, is prospective in nature, applying from AY 2023-24 onwards for income accumulated thereafter, and does not retrospectively limit the utilization period for earlier accumulations. Relying on previous tribunal decisions and a Supreme Court judgment, the tribunal concluded that the addition made by the CPC on a debatable issue under Section 143(1) was incorrect and thus deleted the addition.

The Tribunal condoned the delay in filing the appeals, finding sufficient cause. On merits, the Tribunal held that adjustments made by the CPC under Section 143(1) without providing an opportunity of being heard violated the principles of natural justice and the mandate of Section 143(1)(a) of the Act.

The Tribunal held that the disallowance of the section 80P deduction was not justified because the amendment to section 143(1)(a)(v) was effective from April 1, 2021, and therefore not applicable to AY 2019-20. The return was filed within the permissible extended time under section 139(4).

The Tribunal held that there was no material to demonstrate that the loan was bogus. Both the loner and loanee confirmed the transaction with sufficient documentation, establishing its genuineness, creditworthiness, and identity.

The Tribunal held that penalty u/s. 271(1)(c) of the Act cannot be levied on additions made on an estimated basis. Disallowance of purchases on an ad-hoc/estimated basis does not tantamount to furnishing inaccurate particulars of income.

The Tribunal found the reasons for the delay unconvincing but, considering that justice must be served, decided to remand the appeal to the AO. This is subject to the assessee paying a cost of Rs. 30,000/- to the Prime Minister's Relief Fund.

The Tribunal condoned the delay, holding that the Assessee's reasons for delay were genuine and unintentional. On merits, it was observed that the entire consideration for the property was found to be genuine in the husband's assessment, and the difference was also attributed to the husband's investment. Therefore, no addition could be made in the Assessee's hands.

The Tribunal held that there was no evidence that the assessee had paid any commission, and the circular trading was undertaken for other purposes like bank guarantee replacement. Following a coordinate bench decision, the Tribunal deleted the addition on account of commission. The issue of bogus donations was also decided in favor of the assessee.

The Tribunal condoned the delay in filing the appeals, citing sufficient cause and the principles of natural justice. On merits, the Tribunal held that adjustments made by the CPC under Section 143(1) without affording the assessee an opportunity of being heard were unsustainable.

The Tribunal held that while the amendment treating ULIP as a capital asset applied from A.Y. 2021-22, a ULIP policy where the benefit under Section 10(10D) was not taken qualifies as a 'capital asset' under the broad definition of Section 2(14)(a). Therefore, the appellant is entitled to treat the amount received as capital gains/loss, and the appeal was allowed.

The Tribunal clarified that for existing institutions with provisional approval, the application for regular Section 80G registration must be filed at least six months prior to the expiry of the provisional approval. It concluded that the assessee's application, filed on 30.09.2024 while provisional approval was valid until A.Y. 2025-26, was timely. Therefore, the CIT(E)'s rejection on grounds of limitation was set aside, and the CIT(E) was directed to examine the application on its merits.

The Tribunal held that the CPC's adjustment without issuing a notice and providing an opportunity to the assessee violated principles of natural justice and Section 143(1)(a) of the Act. The delay in filing appeals was condoned.

The Tribunal condoned the delay of 295 days, finding a reasonable cause for the belated filing. The Tribunal set aside the ex-parte order of the CIT(A) and remanded the appeals for fresh adjudication after providing an opportunity of hearing to the assessee.

The Tribunal held that the CIT(A) correctly directed the reduction of the penalty amount in line with the reduced quantum addition, as per Section 275(1A) of the Act. No contrary material was found to challenge the CIT(A)'s findings.

The Tribunal held that the mention of utilizing funds outside India in the objects clause of the MOA does not necessarily lead to rejection of registration under section 12AB. It noted that the issue is covered by various High Court and Tribunal decisions, which state that application of income outside India is not a relevant criterion for rejecting registration, and that the exemption under section 11 is restricted to income applied in India. The Tribunal also set aside the rejection of application for registration under section 80G.

The Tribunal noted that no evidence was furnished by the Ld. CIT(A) and, in the interest of justice, remitted the issue back to the Ld. CIT(A) with a direction to pass a detailed order on merits after considering the assessee's evidence. The Tribunal also emphasized the need to grant a proper opportunity of being heard.

The Tribunal condoned the delay in filing the appeal before the CIT(A), finding that the assessee had made out a reasonable cause. The Tribunal relied on Supreme Court judgments emphasizing a liberal approach to condoning delays to ensure substantial justice and that substantive justice must prevail over procedural technicalities.

The Tribunal condoned the delay of 332 days, stating that the Assessee's explanation was bonafide and for substantial justice, subject to a deposit. The Tribunal further held that the CIT(A) does not have the power to dismiss an appeal for non-prosecution and should decide on merits.

The Tribunal condoned the 332-day delay in filing the appeal, subject to a deposit, observing that the Ld. Commissioner should not have dismissed the appeal for non-prosecution. The assessment orders were also found to be ex-parte.