ITAT Mumbai Judgments — February 2026

The Tribunal held that non-furnishing of the challan was a curable procedural defect, not a substantive non-compliance. The CIT(A) had dismissed the appeal on a technicality without adjudicating on merits. The requirement of appeal fee payment was met, but the proof was not attached.

The Tribunal held that the PCIT erred in initiating revisionary proceedings for the first two issues (bad debts and NPA adjustment) as they were adequately examined by the Assessing Officer. However, the third issue (lease rent amortization) was remitted to the Assessing Officer for fresh examination.

The Tribunal held that additions made solely on the basis of uncorroborated third-party statements, without supporting documentary evidence or bank entries, cannot be sustained. The reopening of the assessment for AY 2017-18 was also found to be legally flawed.

The Tribunal held that the CIT(A) was correct in deleting the additions made by the AO. It was an admitted fact that no incriminating material was seized during the search and seizure operation. In the case of an unabated assessment, additions cannot be made without incriminating material. Therefore, the assumption of jurisdiction under section 153A of the Act was vitiated.

The Tribunal held that additions made solely on the basis of uncorroborated third-party statements, without supporting documentary evidence or bank entries, cannot be sustained. The reopening of the assessment for AY 2017-18 was also found to be legally flawed.

The Tribunal admitted the additional grounds of appeal raised by the assessee as they involved a legal issue that goes to the root of the matter without causing prejudice to the Revenue. However, since adjudication required factual verification, the matter was restored to the Assessing Officer.

The Tribunal held that the AO's action of setting off brought forward short-term capital losses against exempt long-term capital gains was incorrect. The Tribunal relied on previous judicial pronouncements where it was held that if a treaty provision is beneficial, the assessee can opt for it, and the question of carrying forward losses does not arise in subsequent years once eligibility is determined. Similar wording in India-Singapore DTAA was also noted.

The Tribunal noted that the CIT(A) had granted multiple opportunities for hearing but the assessee failed to make submissions. The CIT(A) had also stated that there was no reason to differ with the AO's findings without discussing the merits. The Tribunal held that the CIT(A) was obligated to pass a speaking order considering the facts and material on record, as per Section 250(4) & (6) of the Act.

The Tribunal held that while purchases may not be fully verifiable, disallowing the entire amount is not tenable when sales are accepted. Following its own precedent, the Tribunal restricted the addition to 5% of the alleged purchases to represent the profit element.

The Tribunal held that the penalty under section 272A(1)(d) is not automatic and Section 273B allows for deletion of penalty if reasonable cause is proven. Considering the assessee's explanation of personnel changes, email issues, and office relocation, the Tribunal found that the non-compliance was not deliberate or contumacious and constituted a procedural default.

The Tribunal held that the reopening of assessment under Section 148 beyond four years was invalid as there was no failure on the part of the assessee to disclose fully and truly all material facts. Consequently, the reassessment order and the penalty were quashed.

The Tribunal held that while purchases may not be fully verifiable, disallowing the entire amount is not tenable when sales are accepted. Following its own precedent, the Tribunal restricted the addition to 5% of the alleged purchases to represent the profit element.

The Tribunal noted that the CIT(A) dismissed the appeal without granting an opportunity to the assessee to move an application for condonation of delay or to provide reasons for the delay. The Tribunal also observed that the CIT(A) did not grant an opportunity for hearing on merits.

The Tribunal held that the reopening of assessment under Section 148 beyond four years was invalid as there was no failure on the part of the assessee to disclose fully and truly all material facts. Consequently, the reassessment order and the penalty were quashed.

The Tribunal noted that the assessee claimed non-receipt of notices and technical difficulties in responding to the CIT(A). The Revenue did not controvert these submissions and agreed to a restoration of the matter. Therefore, the Tribunal set aside the CIT(A)'s order and restored the case for fresh adjudication.

The Tribunal held that while purchases may not be fully verifiable, disallowing the entire amount is not tenable when sales are accepted. Following its own precedent, the Tribunal restricted the addition to 5% of the alleged purchases to represent the profit element.

The Tribunal held that while purchases may not be fully verifiable, disallowing the entire amount is not tenable when sales are accepted. Following its own precedent, the Tribunal restricted the addition to 5% of the alleged purchases to represent the profit element.

The Tribunal found that the assessee had adequately explained the source of funds used for the property purchase, including the amount routed through his mother. The documentary evidence supported the explanation of the trail of funds, and the relationship between the assessee and his mother was also established.

The Tribunal held that the reassessment notice issued under Section 148 was invalid due to non-compliance with Section 151 of the Act regarding the approval of the appropriate authority. Consequently, the reassessment proceedings were quashed.

The Tribunal held that the issues were covered by previous decisions of coordinate benches where similar issues were decided in favor of the assessee. The additions were deleted as the grounds on merit were allowed.

The Tribunal held that the assessee occupied the flat as an alternate accommodation provided by the developer under a joint development agreement, not as an owner. The developer's confirmation letter and property documents supported this, showing ownership remained with the developer.

The Tribunal held that the issues were covered by previous decisions of coordinate benches where similar issues were decided in favor of the assessee. The additions were deleted as the grounds on merit were allowed.

The Tribunal held that while the assessee was non-compliant before the CIT(A) on 14 occasions, and no reasonable cause was provided for this non-compliance, the crucial observation was that the CIT(A) had not made any adjudication on merits. The Tribunal noted that an adjudication on merits is mandatory as per sections 250(4) and 250(6) of the Act. The Tribunal relied on the decision of the Hon'ble Bombay High Court in CIT vs. Premkumar Arjundas Luthra (HUF), which held that the CIT(A) is obliged to dispose of an appeal on merits and cannot dismiss it for non-prosecution. The powers of the CIT(A) are co-terminus with the AO, and they must apply their mind to all issues arising from the impugned order. Therefore, the Tribunal set aside the impugned order of the CIT(A) and restored the matter back to his file for fresh adjudication. The appeal was allowed for statistical purposes.

The Tribunal held that the issues were covered by previous decisions of coordinate benches where similar issues were decided in favor of the assessee. The additions were deleted as the grounds on merit were allowed.

The Tribunal held that the CIT(A) is obligated to pass a speaking order and consider the merits of the case, citing a jurisdictional High Court decision. The CIT(A) cannot dismiss an appeal for non-prosecution. Consequently, the order of the CIT(A) was set aside.

The Tribunal noted that the assessee is a salaried employee who sold a property, and other income and credits in the bank account were treated as unexplained. Considering the facts, the Tribunal held that the assessee deserves a reasonable opportunity to be heard regarding the additions.

The Tribunal held that rejection solely on the ground of delay, without any adverse findings on the trust's charitable nature or compliance, is not sustainable. Procedural requirements are meant to aid justice, not defeat substantive rights, especially when the delay is satisfactorily explained and supported by evidence.

The Tribunal held that the rejection of the applications without verifying the assessee's explanation of technical impediments violated principles of natural justice. The emphasis on form over substance was inappropriate.

The Tribunal held that rejection solely on the ground of delay, without any adverse findings on the trust's charitable nature or compliance, is not sustainable. Procedural requirements are meant to aid justice, not defeat substantive rights, especially when the delay is satisfactorily explained and supported by evidence.

The assessee requested to withdraw the appeal filed before the Tribunal due to a typographical error in the online submission. The DR raised no objection to the withdrawal application.

The Tribunal held that the delay in filing Form 10-IE was due to technical glitches beyond the assessee's control and that the filing of the form is directory, not mandatory for invalidating the option. Therefore, the assessee should not be penalized for the delay.

The Tribunal noted that in several grounds of appeal, the assessee claimed that income was offered in earlier or subsequent years, or that documentation was submitted but not considered by the AO and CIT(A). The Tribunal found no specific finding from either authority rebutting the documentation.

The Tribunal held that the rejection of the applications without verifying the assessee's explanation of technical impediments violated principles of natural justice. The emphasis on form over substance was inappropriate.

The Tribunal held that the CIT(E) incorrectly applied the limitation provision as the assessee was an existing trust carrying out activities prior to obtaining provisional registration, and the application for final registration was filed before the expiry of the provisional registration.

The Tribunal noted that the assessee is a salaried employee who sold a property, and other income and credits in the bank account were treated as unexplained. Considering the facts, the Tribunal held that the assessee deserves a reasonable opportunity to be heard regarding the additions.

The Tribunal held that the additions were not supported by independent corroborative material and were based on third-party information without proper verification or opportunity for cross-examination. The reverse computation of turnover and profit estimation was also found to be conjectural and legally unsustainable.

The Tribunal noted that the assessee had provided explanations and documents at the assessment stage but failed to do so before the CIT(A), despite opportunities. However, considering the assurance of the assessee's counsel, the Tribunal decided to restore the matter to the CIT(A) for fresh adjudication in the interest of justice.

The Tribunal held that the reassessment proceedings were vitiated because no income had actually escaped assessment, as identical additions were already made in AY 2009-10. Consequently, the reopening of assessment and the reassessment order were quashed.

The Tribunal held that the reassessment proceedings were vitiated because no income had actually escaped assessment, as identical additions were already made in AY 2009-10. Consequently, the reopening of assessment and the reassessment order were quashed.

The Tribunal held that the notice issued under Section 148 was bad in law due to non-compliance with Section 151 regarding the required authority for approval. Consequently, the reassessment proceedings were quashed.

The Tribunal held that the addition for suppressed sales was unsustainable due to lack of evidence and that prior period expenses and sales tax/VAT write-offs were allowable as revenue expenditure. It also allowed the write-off of capital work-in-progress on an abandoned project as revenue expenditure, following jurisdictional High Court precedents.

The Tribunal held that the addition for suppressed sales was unsustainable due to lack of evidence and that prior period expenses and sales tax/VAT write-offs were allowable as revenue expenditure. It also allowed the write-off of capital work-in-progress on an abandoned project as revenue expenditure, following jurisdictional High Court precedents.

The Tribunal acknowledged that the assessee was in the USA for studies when notices were issued and that his father's inability to attend proceedings due to prior commitments resulted in non-compliance. The Tribunal also noted that the penalty was levied for non-compliance with statutory notices.

The Tribunal found substantial merit in the assessee's contention that the income was already declared by the husband and subjecting it to double taxation would be unjust. The CIT(A) had dismissed the appeal solely on limitation without adjudicating the merits.

The Tribunal found that while documentation was submitted by the assessee and noted by the CIT(A), there was no specific finding by the CIT(A) that examined the documentation and how it demonstrated the services rendered and their nexus to the business. The AO also failed to record specific findings. Therefore, the matter was remanded.

The Tribunal held that the rejection of books of accounts and the estimation of profit were arbitrary and lacked proper basis. The CIT(A)'s order deleting the addition was found to be reasoned and based on evidence.

The Tribunal held that the addition for suppressed sales was unsustainable due to lack of evidence and that prior period expenses and sales tax/VAT write-offs were allowable as revenue expenditure. It also allowed the write-off of capital work-in-progress on an abandoned project as revenue expenditure, following jurisdictional High Court precedents.

The Tribunal held that the allotment letters, dated 08.05.2010, should be considered as agreements to sell. Since part payment was made before the date of the allotment letter, the stamp duty value on the date of the allotment letter should be considered for the purpose of section 56(2)(x)(b) of the Act. The addition made by the AO was deleted.

The Tribunal found that the facts were not transparent and required further investigation, particularly regarding the purpose of the loan and the non-receipt of interest from borrowers. The Tribunal set aside the appellate order and remanded the matter to the AO for fresh assessment.

The Tribunal held that the PCIT's revisionary order was unsustainable as the Assessing Officer (AO) had made detailed inquiries and accepted the assessee's claim. Relying on judicial precedents, including a decision in the assessee's own case, the Tribunal ruled that interconnected flats forming a single residential unit qualify for deduction under Section 54F, and the AO's view was plausible.