ITAT Mumbai Judgments — February 2026

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

The CIT(A) partly allowed the appeal, sustaining an addition of Rs. 14,74,000/- and granting relief for the rest. The Tribunal observed that the housing loan of Rs. 42,50,000/- was substantiated, but the balance of Rs. 14,74,000/- claimed from savings was not supported by evidence. However, the Tribunal noted that similar transactions and sources of funds were accepted in the case of the assessee's spouse for the same assessment year.

The Tribunal found that the lower authorities had not rendered specific findings on the assessee's claim for exemption under Section 11 for the disputed income, despite the assessee arguing it was derived from property held under trust. Consequently, the matter was restored to the Assessing Officer for fresh adjudication after examining all relevant documents and providing a hearing opportunity.

The Tribunal found that the lower authorities had not rendered specific findings on the assessee's claim for exemption under Section 11 for the disputed income, despite the assessee arguing it was derived from property held under trust. Consequently, the matter was restored to the Assessing Officer for fresh adjudication after examining all relevant documents and providing a hearing opportunity.

The Tribunal found that the Ld.CIT(A) dismissed the appeal without considering the affidavit for condonation of delay and without providing a proper opportunity to the assessee. Therefore, the Tribunal set aside the impugned order and restored the matter to the Ld.CIT(A) for fresh adjudication.

The Tribunal held that the interest income earned by the cooperative society from its investments in banks is an integral part of its business of providing credit facilities to its members. Such income is incidental and essential for maintaining liquidity and complying with statutory requirements, thus qualifying for deduction under Section 80P(2)(a)(i) of the Act.

The Tribunal found that the assessee was denied a reasonable opportunity to submit documents and explanations during the appellate proceedings. Therefore, the matter was restored to the CIT(A) for de novo adjudication.

The Tribunal held that since the additions made for alleged bogus purchases were purely on an estimated basis, the assessee could not be accused of furnishing inaccurate particulars of income. Therefore, penalty under Section 271(1)(c) was not leviable.

The Tribunal held that since the additions made for alleged bogus purchases were purely on an estimated basis, the assessee could not be accused of furnishing inaccurate particulars of income. Therefore, penalty under Section 271(1)(c) was not leviable.

The Tribunal held that since the additions made for alleged bogus purchases were purely on an estimated basis, the assessee could not be accused of furnishing inaccurate particulars of income. Therefore, penalty under Section 271(1)(c) was not leviable.

The Tribunal acknowledged the assessee's fault in non-compliance but also noted that the request for adjournment was not fully acceded to, leading to confusion. The Tribunal found that the issues were not adjudicated properly and therefore, for substantial justice, remanded the case back to the Commissioner.

The Tribunal held that the assessment orders passed under section 153A of the Income-tax Act, 1961, are invalid in law if no incriminating material is found during the search operation. This principle was established by a coordinate bench of the ITAT in the case of M/s J.S. Infrastructure vs. ACIT, which was relied upon by the assessee. The Tribunal noted that the seized material in the present case, such as ledger accounts, were part of the regular books of account and did not constitute incriminating material. The assessee had discharged the primary onus under section 68 by providing confirmations and bank entries. The Tribunal further observed that additions made without confronting the assessee and providing an effective opportunity of being heard violate the principles of natural justice. In one specific instance (AY 2019-20), an addition of Rs. 1,87,142/- was deleted as it was based on a reconciliation issue without any concrete evidence of undisclosed income. The Tribunal dismissed the revenue's grounds and allowed the assessee's grounds in part for AY 2019-20, while dismissing the appeal for other assessees.

The Tribunal held that the assessment orders passed under section 153A of the Income-tax Act, 1961, are invalid in law if no incriminating material is found during the search operation. This principle was established by a coordinate bench of the ITAT in the case of M/s J.S. Infrastructure vs. ACIT, which was relied upon by the assessee. The Tribunal noted that the seized material in the present case, such as ledger accounts, were part of the regular books of account and did not constitute incriminating material. The assessee had discharged the primary onus under section 68 by providing confirmations and bank entries. The Tribunal further observed that additions made without confronting the assessee and providing an effective opportunity of being heard violate the principles of natural justice. In one specific instance (AY 2019-20), an addition of Rs. 1,87,142/- was deleted as it was based on a reconciliation issue without any concrete evidence of undisclosed income. The Tribunal dismissed the revenue's grounds and allowed the assessee's grounds in part for AY 2019-20, while dismissing the appeal for other assessees.

The Tribunal held that the assessment orders passed under section 153A of the Income-tax Act, 1961, are invalid in law if no incriminating material is found during the search operation. This principle was established by a coordinate bench of the ITAT in the case of M/s J.S. Infrastructure vs. ACIT, which was relied upon by the assessee. The Tribunal noted that the seized material in the present case, such as ledger accounts, were part of the regular books of account and did not constitute incriminating material. The assessee had discharged the primary onus under section 68 by providing confirmations and bank entries. The Tribunal further observed that additions made without confronting the assessee and providing an effective opportunity of being heard violate the principles of natural justice. In one specific instance (AY 2019-20), an addition of Rs. 1,87,142/- was deleted as it was based on a reconciliation issue without any concrete evidence of undisclosed income. The Tribunal dismissed the revenue's grounds and allowed the assessee's grounds in part for AY 2019-20, while dismissing the appeal for other assessees.

The Tribunal held that the assessment orders passed under section 153A of the Income-tax Act, 1961, are invalid in law if no incriminating material is found during the search operation. This principle was established by a coordinate bench of the ITAT in the case of M/s J.S. Infrastructure vs. ACIT, which was relied upon by the assessee. The Tribunal noted that the seized material in the present case, such as ledger accounts, were part of the regular books of account and did not constitute incriminating material. The assessee had discharged the primary onus under section 68 by providing confirmations and bank entries. The Tribunal further observed that additions made without confronting the assessee and providing an effective opportunity of being heard violate the principles of natural justice. In one specific instance (AY 2019-20), an addition of Rs. 1,87,142/- was deleted as it was based on a reconciliation issue without any concrete evidence of undisclosed income. The Tribunal dismissed the revenue's grounds and allowed the assessee's grounds in part for AY 2019-20, while dismissing the appeal for other assessees.

The Tribunal held that the assessment orders passed under section 153A of the Income-tax Act, 1961, are invalid in law if no incriminating material is found during the search operation. This principle was established by a coordinate bench of the ITAT in the case of M/s J.S. Infrastructure vs. ACIT, which was relied upon by the assessee. The Tribunal noted that the seized material in the present case, such as ledger accounts, were part of the regular books of account and did not constitute incriminating material. The assessee had discharged the primary onus under section 68 by providing confirmations and bank entries. The Tribunal further observed that additions made without confronting the assessee and providing an effective opportunity of being heard violate the principles of natural justice. In one specific instance (AY 2019-20), an addition of Rs. 1,87,142/- was deleted as it was based on a reconciliation issue without any concrete evidence of undisclosed income. The Tribunal dismissed the revenue's grounds and allowed the assessee's grounds in part for AY 2019-20, while dismissing the appeal for other assessees.

The Tribunal held that the assessment orders passed under section 153A of the Income-tax Act, 1961, are invalid in law if no incriminating material is found during the search operation. This principle was established by a coordinate bench of the ITAT in the case of M/s J.S. Infrastructure vs. ACIT, which was relied upon by the assessee. The Tribunal noted that the seized material in the present case, such as ledger accounts, were part of the regular books of account and did not constitute incriminating material. The assessee had discharged the primary onus under section 68 by providing confirmations and bank entries. The Tribunal further observed that additions made without confronting the assessee and providing an effective opportunity of being heard violate the principles of natural justice. In one specific instance (AY 2019-20), an addition of Rs. 1,87,142/- was deleted as it was based on a reconciliation issue without any concrete evidence of undisclosed income. The Tribunal dismissed the revenue's grounds and allowed the assessee's grounds in part for AY 2019-20, while dismissing the appeal for other assessees.

The Tribunal condoned the delay in filing the appeal, acknowledging it was minor and not intentional. Observing that the ex-parte order was passed without physical notice and substantial rights of the assessee were at stake, the Tribunal restored the matter to the CIT(A) for a decision on merits, emphasizing the principle of natural justice.

For assessment years 2012-13 to 2016-17, additions were made without any nexus to incriminating material found during the search and were based on re-examination of already disclosed particulars. Therefore, these additions were deleted and appeals were allowed. For assessment years 2017-18 and 2018-19, due to circumstances beyond the assessee's control preventing participation, the matters were restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessee's explanation for the delay constituted a sufficient cause, given his modest educational background, lack of prior experience with the tax portal, and the faceless regime. The Tribunal emphasized that procedural limitations should not defeat substantive rights when the delay is not intentional or mala fide.

The Tribunal held that the assessee's explanation for the delay constituted a sufficient cause, given his modest educational background, lack of prior experience with the tax portal, and the faceless regime. The Tribunal emphasized that procedural limitations should not defeat substantive rights when the delay is not intentional or mala fide.

The Tribunal held that the assessee's explanation for the delay constituted a sufficient cause, given his modest educational background, lack of prior experience with the tax portal, and the faceless regime. The Tribunal emphasized that procedural limitations should not defeat substantive rights when the delay is not intentional or mala fide.

The Tribunal held that reopening beyond four years from the end of the assessment year requires proof of the assessee's failure to disclose material facts, which was not established. Relying on Supreme Court decisions, it was held that an audit party's opinion alone is not sufficient for reopening.

The Tribunal condoned the delay in filing the appeal. It noted that the Assessee claimed to have filed relevant documents which might have been overlooked by the Ld. Commissioner. Considering the need for substantial justice, the Tribunal decided to remand the case for fresh decision.

The Tribunal held that the assessee had discharged the primary onus of proving the genuineness of the transactions by submitting all requisite documentary evidence, which was neither challenged nor discredited by the revenue authorities. The Tribunal noted that the returns generated were not extraordinary or unnatural, and relied on previous decisions involving the same scrip.

The Tribunal held that reopening beyond four years from the end of the assessment year requires proof of the assessee's failure to disclose material facts, which was not established. Relying on Supreme Court decisions, it was held that an audit party's opinion alone is not sufficient for reopening.

The Tribunal held that the addition was unsustainable as no incriminating material directly connected to the assessee was found. The Revenue failed to substantiate its evidence and provide an opportunity for cross-examination of witnesses.

The Tribunal held that the addition was unsustainable as no incriminating material directly connected to the assessee was found, and the revenue failed to provide an opportunity for cross-examination. The Tribunal followed its previous decisions in similar cases.

The Tribunal held that the addition was unsustainable as no incriminating material directly connected to the assessee was found. The Revenue failed to substantiate its evidence and provide an opportunity for cross-examination of witnesses.

The Tribunal held that the addition was unsustainable as no incriminating material directly connected to the assessee was found. The Revenue failed to substantiate its evidence and provide an opportunity for cross-examination of witnesses.

The Tribunal held that additions under Section 153A for unabated assessment years can only be made if based on incriminating material found during search. Since no such material was identified by the AO, the additions were not legally sustainable.

The Tribunal condoned the delay in filing the appeal, subject to a cost of Rs. 11,000, after considering the assessee's explanation and the need for substantial justice. However, due to the assessee's non-compliance before the lower appellate authority, the case was remanded for fresh adjudication.

The tribunal found that the assessee was not granted a proper and effective opportunity to be heard. Therefore, the tribunal set aside the impugned order and remitted the matter back to the Ld.CIT(A) for fresh adjudication.

The Tribunal held that additions under Section 153A for unabated assessment years can only be made if based on incriminating material found during search. Since no such material was identified by the AO, the additions were not legally sustainable.

The Tribunal allowed the appeals, directing the AO to grant interest under Section 244A of the Income-tax Act. The Tribunal respectfully followed the authoritative pronouncements of the Hon'ble Supreme Court in Sandvik Asia Ltd. v. CIT and CIT v. H.E.G. Ltd., and the jurisdictional High Court's decisions. The reasoning was that the interest component partakes of the character of an 'amount due' under Section 244A and becomes an integral part of the refund. The Tribunal found that the decisions relied upon by the Revenue were distinguishable and not applicable to the facts of the present case. The AO was directed to allow interest under Section 244A in accordance with the decision of the Hon'ble Apex Court in H.E.G. Ltd. The common grounds taken by the assessee in all three appeals were allowed. No issue was expressly left undecided.

The Tribunal allowed the appeals, directing the AO to grant interest under Section 244A of the Income-tax Act. The Tribunal respectfully followed the authoritative pronouncements of the Hon'ble Supreme Court in Sandvik Asia Ltd. v. CIT and CIT v. H.E.G. Ltd., and the jurisdictional High Court's decisions. The reasoning was that the interest component partakes of the character of an 'amount due' under Section 244A and becomes an integral part of the refund. The Tribunal found that the decisions relied upon by the Revenue were distinguishable and not applicable to the facts of the present case. The AO was directed to allow interest under Section 244A in accordance with the decision of the Hon'ble Apex Court in H.E.G. Ltd. The common grounds taken by the assessee in all three appeals were allowed. No issue was expressly left undecided.

The Tribunal held that acquiring a property, even at the fag end of the financial year and with full payment, entitles the assessee to include it in the block of assets. Possession and actual use of the asset within the financial year are not pre-conditions for inclusion in the block of assets as per Section 50 of the Act. Various judicial precedents support this view, emphasizing that 'acquisition' is key, not 'utilization'.

The Tribunal held that additions under Section 153A for unabated assessment years can only be made if based on incriminating material found during search. Since no such material was identified by the AO, the additions were not legally sustainable.

The Tribunal held that the assessee is entitled to interest on the delayed refund. It relied on Supreme Court decisions which established that interest components partake of the character of 'amount due' and are eligible for interest under Section 244A.

The Tribunal considered the request made by the assessee for the withdrawal of the appeal. In view of the letter submitted by the assessee's authorized representative seeking withdrawal, the Tribunal permitted the assessee to withdraw the appeal. Consequently, the appeal filed by the assessee was dismissed as withdrawn. The reasoning is based on the assessee's explicit request and the Tribunal's discretion to allow such withdrawals. No specific substantive issues were decided on merits. The operative direction is to dismiss the appeal as withdrawn.

The Tribunal condoned the delay in filing the appeal before it, citing the landmark decision of the Supreme Court in Collector, Land Acquisition v Mst. Katiji And Others. The Tribunal noted that the assessee is moderately educated, not computer literate, and conversant with e-communication and faceless proceedings, suggesting that the lapse in timely filing was not deliberate but due to an unavoidable and sufficient cause. The Tribunal observed that the CIT(A) had dismissed the appeal solely on the ground of delay without adjudicating on the merits. While acknowledging the assessee's non-compliant attitude and lack of diligence, which led to the assessment order being passed ex-parte under Section 144, the Tribunal decided to remand the entire matter back to the file of the CIT(A) for de novo adjudication. This decision was based on the principle that the scales of justice demand the matter be revisited, and the principles of natural justice should be applied, affording the assessee a sufficient opportunity of being heard. The Tribunal also imposed a cost of Rs. 25,000/- on the assessee, to be deposited in the Prime Minister's Relief Fund, due to their non-compliant and non-cooperative attitude and lack of diligence. The appeal was allowed with cost for statistical purposes.

The Tribunal held that once the identity of partners and the fact of capital contribution through banking channels are established, the addition under section 68 cannot be sustained in the hands of the firm. The source of funds in the hands of partners should be examined in their individual assessments.

The Tribunal held that the assessee is entitled to the benefit of the proviso to Section 50C(1) (permissible tolerance range) even after obtaining a DVO report. The mechanism under Section 50C(2) does not override the benefit available under the proviso to Section 50C(1).

The Tribunal held that the reassessment notice issued under the new regime was bad in law 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 audited segmental accounts, forming part of the statutory financial reporting framework, cannot be discarded lightly unless specific defects in allocation methodology, inconsistency in accounting principles, or violation of accounting standards are demonstrated. The orders of the TPO and DRP did not point out any such inconsistencies or deviations. The re-casting of segmental results by the TPO appeared premised on the assumption that the Associated Enterprise (AE) segment should earn a predetermined margin, with residual profits attributed to the non-AE segment, which lacks statutory sanction under Rule 10B. Furthermore, since External TNMM was upheld as the appropriate method and Internal TNMM was found unsustainable, the necessity for re-casting segmental results to facilitate internal comparison disappeared. Consequently, the Tribunal held that the rejection of audited segmental accounts in entirety was not justified. The Tribunal found the action of the TPO and DRP in rejecting External TNMM due to non-availability of comparables to be unsustainable. The rejection of comparables selected by the assessee under External TNMM was also deemed unjustified, and the assessee's benchmarking analysis was accepted. The finding that AE and Non-AE segments are comparable and the consequent adoption of Internal TNMM were set aside. The rejection of audited segmental accounts and the re-casting of segmental results were also set aside. Accordingly, the transfer pricing adjustments made in the second round were deleted, and the international transactions of export of finished goods to AEs were held to be at arm's length under External TNMM. Consequential grounds were directed to be dealt with by the AO. For AY 2016-17, the AO was directed to examine and reconcile a discrepancy in the total income calculation.

The Tribunal found that the revised returns filed by the assessee were accepted by the AO without variation. The Tribunal held that once the revised return is accepted, there is no occasion to deem that the assessee has concealed particulars or furnished inaccurate particulars. Relying on the Supreme Court's decision in Price Waterhouse Coopers (P.) Ltd. vs CIT, the Tribunal stated that acting on a Chartered Accountant's report and then correcting a mistake should not be treated as concealment.

The Tribunal held that there was sufficient cause for the delay in filing the appeal before the CIT(A) due to the pendency of a revision petition. Both parties agreed to set aside the matter to the CIT(A) for fresh adjudication on merit.

The Tribunal held that the rejection of external comparables was unsustainable and the assessee's benchmarking analysis under External TNMM was accepted. The rejection of audited segmental accounts and re-casting of segmental results were also set aside.

The Tribunal held that the assessee had maintained regular books of account, supported by invoices, bank statements, and export documents. The AO made no independent inquiry and relied solely on the investigation report and third-party statements, which is insufficient to disprove the genuineness of the purchases.

The Tribunal condoned the delay in filing the appeal subject to a cost of Rs. 11,000/-. Due to the non-adjudication of the issue on merits, the appeals were remanded to the learned Commissioner for a fresh decision after providing the assessee with a reasonable opportunity of being heard.