ITAT Mumbai Judgments — October 2025

The Tribunal held that the notice issued under Section 148 was beyond the period of limitation and that the approval for the reassessment notice was obtained from an incorrect authority as per the new regime. Consequently, the notice was deemed void ab initio.

The Tribunal found that the Assessing Officer did not provide sufficient justification for the addition of Rs. 11.00 Lac. The assessee's explanation regarding the Rs. 2.20 Lac deposit appeared reasonable, and the lower authorities' orders lacked proper reasoning.

The Tribunal held that the Assessing Officer relied on third-party information without corroborative material. The assessee had provided sufficient details to establish the identity, genuineness, and creditworthiness of the lender, thereby discharging the onus under Section 68 of the Act.

The Tribunal held that both the AO and CIT(A) failed to provide sufficient opportunity to the assessee. Therefore, the matter was restored to the AO for fresh decision on merits after giving proper opportunity.

The Tribunal held that Section 13(1)(b) was not applicable to the assessee as the trust was formed in 1956, prior to the commencement of the Income Tax Act 1961. Furthermore, the Mahyavanshi Samaj, for whose welfare the trust was established, is a Scheduled Caste, which is exempt from the provisions of Section 13(1)(b) as per Explanation 2 to Section 13(1). Therefore, the CIT(E)'s order was set aside, and the CIT(E) was directed to allow the registration.

The Tribunal condoned the delay in filing the appeal. Considering the assessee's submission that they were not given a proper opportunity to explain the cash and credit entries, the matter was restored to the AO for fresh adjudication.

The CIT(A) affirmed the addition but reduced it to Rs. 6,93,095/-, considering the cash balance on 08.11.2016 and the SBN deposits made during demonetization. The Tribunal agreed with the CIT(A)'s findings after independent verification.

The Tribunal held that the AO was incorrect in enhancing the income in the final assessment order without providing the assessee with an opportunity to respond, especially after accepting the income in the draft assessment order. The CIT(A)'s dismissal of the appeal was also found to be incorrect.

The Tribunal held that the CIT(A) correctly quashed the reassessment order because the approval for issuing the notice under Section 148 was obtained from the Commissioner of Income Tax instead of the Principal Chief Commissioner, as required under the amended Section 151 for reassessments initiated beyond three years from the end of the assessment year.

The Tribunal held that failure to furnish recorded reasons for issuing a reopening notice, when sought by the assessee, renders the reassessment order bad in law. The court emphasized that such procedural compliance is a jurisdictional issue and cannot be implied.

The Tribunal condoned the delay, citing sufficient cause and the principle of natural justice. On merits, the Tribunal found that the lower authorities did not consider the assessee's evidence, and thus remanded the matter to the Assessing Officer for a de novo consideration.

The Tribunal found that the CIT(A) had not provided a speaking order on the documentary evidence submitted by the assessee regarding the obsolescence of stock. Therefore, the Tribunal remanded the issue back to the CIT(A) for de novo adjudication.

The Tribunal held that the AO's order allowing the CSR expenditure as a deduction under Section 80G was not erroneous nor prejudicial to the interest of the revenue. The Tribunal relied on various decisions of coordinate benches supporting the allowability of such deductions.

The Tribunal held that the CIT(A) erred in confirming the addition. It noted that the Tribunal had previously set aside similar orders for a group concern, and the Settlement Commission had accepted some loans as genuine. The Tribunal found no justification for the disallowance.

The Tribunal observed that the CIT(A) had himself re-computed a loss for AY 2018-19. It agreed with the assessee that a correct application of the percentage completion method, factoring in all direct and indirect project costs up to the completion, would result in a loss for both assessment years. The Tribunal concluded that the additions made by the Assessing Officer and partially sustained by the CIT(A) were not justified and should be deleted.

The Tribunal noted that the assessee did not represent before the lower authorities and raised legal contentions for the first time. For assessment years 2010-11 to 2015-16, the Tribunal remitted the appeals to the CIT(A) to decide the issue of incriminating material and other legal propositions. For assessment year 2016-17, the appeal was also remitted for verification.

The Tribunal condoned the delay in filing the appeals, subject to a cost of Rs. 5,000/- to the Maharashtra Legal Aid Cell, noting no malafide intention from the assessee. The issue of disallowance of interest earned from fixed deposits with cooperative societies/banks was then considered on merits.

The Tribunal noted the assessee's explanation for being ex-parte before the CIT(A) and found that there was a reasonable cause due to a communication gap with the tax consultant. Therefore, the Tribunal decided to grant one more opportunity to the assessee.

The Tribunal noted that for unabated assessment years, additions under Section 153A require incriminating material found during search. Since the assessee did not produce evidence before lower authorities, the case is remitted to CIT(A) for verification of evidence and legal issues. For AY 2016-17, the appeal is also remitted for verification.

The Tribunal noted that assessment years 2010-11 to 2015-16 fall within the search period, while 2016-17 is the year of the search. Since the assessee did not appear before the lower authorities, the Tribunal remitted the appeals back to the CIT(A) for verification of the grounds raised, especially regarding incriminating material and other legal contentions.

The Tribunal held that the interest income earned by a cooperative society on its investments held with a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Act. The AO erred in disallowing this deduction, and the assessee's appeals were allowed.

The Tribunal noted that the assessee had not represented themselves before the lower authorities. However, it agreed with the assessee's contention that additions under Section 153A for unabated years require incriminating material found during the search. The Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) for verification of incriminating materials and adjudication of legal issues.

The Tribunal held that the CIT(A) was justified in deleting the disallowance under Section 14A r.w. Rule 8D(2)(ii) based on the principle that the assessee had sufficient interest-free funds. For disallowance under Rule 8D(2)(iii), the CIT(A) correctly restricted it to the actual expenses. The Tribunal also held that for disallowance of interest expenditure under Section 36(1)(iii), there is a legal presumption that interest-free advances are made out of interest-free funds available with the assessee, and the CIT(A) correctly deleted the disallowance.

The Tribunal found that while the assessee claimed to be a joint owner for convenience, she failed to substantiate the source of Rs. 20,00,000/- in her name. However, considering the peculiar facts and the lack of clarity on her husband's case, the Tribunal remanded the issue back to the AO for fresh verification.

The Tribunal held that the reassessment notice for AY 2015-16 was barred by limitation as it was issued after the expiry of the period under the old law and the amended law, including the extended period, could not be applied retrospectively. For AY 2014-15, the Tribunal found that the purchases were substantiated with documentary evidence and upheld the CIT(A)'s decision to tax only the profit element at 2%.

The Tribunal held that the interest income earned by a cooperative society on its investments held with a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Act, following various High Court and ITAT decisions. The AO erred in disallowing the deduction.

The Tribunal held that the filing of Form 10IC is directory and delay in filing is condonable, citing various High Court and Tribunal decisions. The assessee's oversight was not a fault preventing the benefit.

The Tribunal ruled that the Assessing Officer had conducted a thorough inquiry into the ESOP deduction claim. It clarified that the alleged 'recovery' was merely TDS funding, not a reimbursement of ESOP cost. The Tribunal held that the PCIT's revisional order under Section 263 was unsustainable as the original assessment was neither erroneous nor prejudicial to the revenue, affirming that ESOP discount is an allowable business expenditure under Section 37(1).

The Tribunal held that the delay in filing Form 10B was condonable, especially since it was filed before the return of income and in line with various High Court and Tribunal decisions.

The Tribunal held that penalty cannot be levied on an addition made on an estimate basis when the assessee voluntarily disclosed additional income to buy peace. The penalty order was directed to be deleted.

The Tribunal condoned a delay of 13 days in filing the appeal. Considering the assessee's explanation and affidavit regarding unintentional non-submission of supporting documents due to staff oversight, the Tribunal set aside the CIT(A)'s order and restored the issue to the Assessing Officer for fresh adjudication.

The Tribunal held that the Ld. CIT(E) was not justified in rejecting the application. The application of funds within India in Indian Rupees, even if for studies abroad, is considered application in India. The Tribunal relied on judicial precedents that state that the location of expenditure is key, not necessarily where the ultimate beneficiaries study. The assessee's submission and resolution to amend the trust deed to clarify this further were also considered.

The Tribunal held that the application of income for studies abroad by beneficiaries does not amount to application of income outside India by the trust itself, especially when the funds are disbursed in India. The Tribunal noted that the CIT(E) did not record any adverse findings on the genuineness of the trust's activities.

The Tribunal held that the assessee had indeed filed a return of income in response to the notice under Section 148, which was not considered by the AO or the CIT(A). Therefore, the Tribunal found that the CIT(A) erred in dismissing the appeal. The matter was remitted to the AO for fresh adjudication.

The Tribunal held that the PCIT's revisionary order was not justified. It noted that the issue of allowing 80G deduction for donations made as CSR expenses is a settled matter, with various judicial precedents supporting the assessee's claim. The Tribunal found that the Assessing Officer had made proper inquiries and taken a plausible view, fulfilling the requirement of examination.

The Tribunal held that in the absence of incriminating material unearthed during search, additions in unabated assessment years cannot be made. Since the assessee did not represent before the lower authorities, the case was remitted to the CIT(A) for verification of legal issues and merits, with a direction to provide an opportunity of hearing.

The Tribunal held that in the absence of incriminating material found during the search, additions for unabated assessment years cannot be made. The appeals were remitted to the CIT(A) for fresh adjudication, considering the legal issues and verifying the presence of incriminating materials.

The Tribunal noted that the assessee did not represent before the lower authorities, leading to ex-parte orders. The Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) to adjudicate the issue of incriminating material. For assessment year 2016-17, the appeal was also remitted for verification of evidence.

The Tribunal held that the Assessee's application for registration under Section 12A was not belated, considering the timelines of their activities and provisional registration. Consequently, the impugned orders were set aside.

The Tribunal condoned the delay of 1312 days subject to a cost of Rs. 55,000/- to be deposited by the assessee. On merits, the Tribunal found that the issues required further adjudication and therefore, remanded the case back to the Assessing Officer.

The Tribunal noted that the assessee failed to provide necessary documentation to substantiate their claim regarding the interest income and the deduction. The lower authorities also could not properly adjudicate the issue due to lack of evidence.

The Tribunal condoned the delay, observing that substantial justice should be preferred over technicalities, especially when the order was passed against a deceased person without proper opportunity of hearing for the legal representatives. The matter was restored to the file of the CIT(A) for fresh adjudication.