ITAT Mumbai Judgments — April 2026

The Tribunal held that the Assessing Officer's additions were based on suspicion rather than cogent material. The assessee had discharged its initial onus by providing identity, genuineness (through banking channels, running accounts with repayments), and prima facie creditworthiness evidence of the creditors, including the creditor's own assessment orders. The Revenue failed to rebut this evidence with definitive material showing the funds were from the assessee's undisclosed sources.

The Tribunal held that the grounds challenging the reopening and limitation were infructuous due to legislative amendments. However, following consistent precedents in earlier years and finding the relevant DTAA articles pari materia, the Tribunal held that the receipts were not royalty or FTS under the Act and respective DTAAs because the 'make available' condition was not met. Therefore, the income was not taxable in India.

The Tribunal held that when sales are accepted, purchases, even if not fully verifiable, cannot be treated as wholly bogus as sales require purchases. The CIT(A)'s approach of restricting the addition to the profit element (15%) was found judicious and reasonable, aligning with judicial precedent.

The Tribunal held that the assessee had discharged its primary onus by providing identity particulars, bank statements, returns, and assessment records of the creditors. The AO's conclusion was based on suspicion derived from the lenders' financial structures rather than cogent material. The Tribunal found no evidence that the funds originated from the assessee's undisclosed income.

The Tribunal held that the reassessment proceedings were vitiated because the actual reasons recorded for reopening the assessment were not supplied to the assessee, violating principles of natural justice and the mandate of the Supreme Court in GKN Driveshafts. Therefore, the assessment order based on these faulty proceedings was quashed.

The Tribunal upheld the CIT(A)'s decision, finding that the reassessment proceedings initiated by the ACIT, Circle-2, Ajmer were void ab initio due to lack of jurisdiction. As the assessment itself was quashed, the additions made on merits were rendered academic.

The Tribunal held that the sanction for issuing the notice under section 148 was obtained from the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT), which is mandatory for reassessment proceedings initiated beyond three years from the end of the assessment year. This defect goes to the root of jurisdiction.

The tribunal held that the grounds relating to the reopening of assessment and limitation became infructuous due to legislative amendments. For the taxability of telecommunication and O&M services, it followed its own previous decisions for the assessee and a coordinate bench's ruling, stating that the provisions of the India-Singapore and India-USA DTAAs were pari materia, and the services did not 'make available' technical knowledge as required for royalty/FTS.

The Tribunal noted that while the strict rule of res judicata does not apply to income tax, the principle of consistency and certainty requires the Revenue to maintain a consistent stand where facts and law remain unchanged. The Tribunal emphasized that RBI guidelines are relevant for understanding the regulatory framework and accounting practices of a bank, even if they are not supreme over the Income-tax Act. Claims made via notes accompanying the return can be considered by appellate authorities if material facts are on record.

The Tribunal held that while the strict rule of res judicata does not apply to income-tax proceedings, the doctrine of consistency and certainty in tax administration requires that the Revenue should not arbitrarily take a contrary stand if the facts and law remain unchanged. The Tribunal emphasized that RBI guidelines, though not supreme over the Act, are relevant in interpreting tax provisions for regulated entities like banks. It also affirmed that appellate authorities can consider claims made by way of notes or otherwise, provided the material facts are on record, even if not explicitly made in the original return.

The Tribunal held that the transfer of jurisdiction under section 127 was valid and that the Assessing Officer in Ajmer lacked the jurisdiction to issue notices and pass orders. Therefore, the reassessment proceedings were void ab initio. Consequently, the additions made by the AO were quashed, rendering the Revenue's appeal infructuous.

The Tribunal held that the additions were made on suspicion and conjecture, relying solely on a third-party statement and seized material without independent corroborative evidence. The assessees had consistently denied making any 'on-money' payments. Therefore, the additions could not be sustained.

The Tribunal held that the assessee had sufficient cash available in his personal balance sheet, as supported by the balance sheet as on 31.03.2020 and the significant income declared by the assessee over the years. Therefore, the addition of Rs. 3,80,560/- under section 68 was unsustainable.

The Tribunal noted that the contractual payments for fund-raising constituted over 20% of the total receipts and questioned their necessity for the trust's objects. Despite the appointment letters, the assessee failed to substantively establish how these expenses were essential for achieving the trust's objectives or how much was raised through these efforts. Consequently, the matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal held that the CIT(A) erred in enhancing the income by reducing WIP as this issue was not considered by the AO, violating the powers under section 251(1) of the Act. The Tribunal also upheld the CIT(A)'s deletion of additions under section 2(22)(e) and on the joint development agreement, relying on the assessee's own case decided by the ITAT and the Bombay High Court.

The Tribunal held that penalty proceedings are consequential and cannot survive if the underlying addition is deleted. Since the CIT(A) had already deleted the entire addition in the quantum appeal after reviewing the assessee's filed return, TDS, and Form 26AS, the basis for the penalty under section 270A ceased to exist. Therefore, the penalty was deleted.

For AY 2010-2011, the Tribunal held that penalty cannot be levied solely on estimated additions, relying on various High Court decisions. For AY 2011-2012, the Tribunal found that the CIT(A) failed to deal with the assessee's submissions and set aside the order, directing a fresh adjudication.

The Tribunal held that the DVO did not follow the prescribed procedure under Section 16A of the Wealth Tax Act, 1957, by failing to serve a proper notice on the assessee before determining the fair market value of the property. Therefore, the issue was restored to the AO for de novo adjudication after obtaining a fresh DVO report in compliance with statutory provisions.

The Tribunal held that the CIT(A) exceeded his jurisdiction by enhancing the income on an issue (capitalization of unexplained expenditure in WIP) that was not considered by the AO during the assessment proceedings. The Tribunal also upheld the CIT(A)'s deletion of additions made under section 2(22)(e) and regarding the joint development agreement, relying on previous decisions in the assessee's own case and jurisdictional High Court rulings.

The Tribunal held that the addition on account of sale of investments was wrongly made as the AO could not have treated the amount received as unexplained cash credit merely because the creditor company's name was struck off later, without pointing out deficiencies in evidence. For the unsecured loans, the Tribunal found that the AO failed to controvert the findings of the first appellate authority, who had accepted the genuineness of the transactions based on the documentary evidence provided by the assessee.

The Tribunal held that the rejection of the application based solely on the absence of an irrevocability clause, especially when the Hon'ble Jurisdictional High Court in a similar case (The Chamber of Tax Consultants Vs. CIT(Exemptions)) had directed not to reject applications on this ground, was incorrect. The Tribunal followed the High Court's order.

The Tribunal held that the legal heirs might not possess complete financial details and require a reasonable opportunity to present their case. Observing that the CIT(A) passed an ex parte order without a final effective opportunity and that the Revenue did not object, the Tribunal decided to restore the matter.

The Tribunal condoned the delay in filing the appeal, considering the assessee is a senior citizen and the delay was unintentional. The Tribunal found a discrepancy between the stamp duty value and a private valuer's report, warranting a valuation by the Departmental Valuation Officer (DVO). Therefore, the matter was remanded to the AO for fresh adjudication.

The Tribunal held that the reassessment proceedings were initiated on the basis of a mere change of opinion by the AO, without any new tangible material. The AO had already examined the issue of the property's acquisition date and treated the gain as long-term capital gain in the original assessment.

The Tribunal held that the AO did not travel beyond the scope of limited scrutiny as issues relating to investment in immovable property encompass capital gains. However, it found that the surrender of tenancy rights and consequent capital gain taxable event occurred only upon possession of the alternative accommodation being handed over in April 2019, which falls in AY 2020-21, not the impugned AY.

The Tribunal noted that the CIT(A) had dismissed the appeal without adjudicating on merits due to the assessee's non-appearance. However, the assessee had sought an adjournment. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the matter for fresh adjudication, granting the assessee another opportunity to present their case on merits.

For AY 2010-2011, the Tribunal held that penalty cannot be levied on estimated additions, following established judicial precedents, and deleted the penalty. For AY 2011-2012, the Tribunal found that the CIT(A) failed to properly adjudicate the appeal and set aside the order, directing fresh adjudication.

The Tribunal, referring to its own previous decisions in similar cases involving Reliance Jio Infocomm Ltd., noted that for the service recipient, the Tribunal had held that payments for bandwidth services did not constitute royalty but business profits in the absence of a Permanent Establishment (PE) in India. The Tribunal allowed the appeal.

The Tribunal held that the additions were made merely on suspicion, conjectures, and surmises rather than cogent evidence. There was no independent enquiry or corroborative evidence to support the seized material, and the assessees had categorically denied any cash payment beyond the declared sale consideration.

The Tribunal held that MPS Ltd. was not a comparable company to the assessee due to significant functional differences, including its involvement in software development, platform solutions, and acquisitions, distinguishing it from the assessee's ITES operations. Therefore, MPS Ltd. was excluded from the set of comparables.

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, dated 30.07.2022, was issued beyond the period of limitation, rendering it invalid. Consequently, all assessment proceedings arising from this invalid notice were vitiated.

The Tribunal held that the notice issued under section 148 of the Act is beyond the prescribed time limit, especially considering the relaxation provisions (TOLA) and amendments to sections 147-151 by the Finance Act, 2021. Relying on precedents, the notice was deemed invalid.

The Tribunal held that the notice under section 148 was not validly served as it was issued to an incorrect address after the assessee's retirement, and service by affixture was also improper. Consequently, the entire reassessment proceedings were invalid and made in violation of natural justice.

The Tribunal held that the impugned order was passed in violation of the principles of natural justice as there was no mention of notice issuance and service on the assessee. The appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal held that a penalty under section 271(1)(c) cannot be levied solely on the basis of an estimated addition, especially when the quantum addition was significantly reduced from the initial estimate. Following High Court precedents, the Tribunal found no infirmity in the CIT(A)'s deletion of the penalty.

The Tribunal held that a delay in filing Form No. 67, as per Rule 128(9), is a procedural lapse that can be condoned and does not preclude the assessee from claiming foreign tax credit. The Tribunal relied on various High Court and Tribunal decisions that treated the filing of Form 67 as directory and not mandatory.

The Tribunal held that the activity of letting out the auditorium, being incidental to the assessee's main charitable objects, did not attract the proviso to Section 2(15). Following a coordinate bench's decision in the assessee's own case, the Tribunal upheld the CIT(A)'s order.

The Tribunal held that the reasons provided by the assessee for the delay were sufficient and fell within the parameters for condonation of delay, prioritizing substantial justice over technicalities. The Tribunal decided to condone the delay.

The Tribunal held that the activity of letting out the auditorium was incidental to the assessee's main charitable objects and did not attract the proviso to Section 2(15). Following a previous decision in the assessee's own case, the Tribunal upheld the CIT(A)'s order.

The Tribunal condoned the delay of 1064 days, finding that the reasons explained through notarized affidavits constituted 'sufficient cause'. The Tribunal emphasized the principles of natural justice, stating that a litigant should not be denied adjudication on merits when reasonable cause is demonstrated.

The Tribunal held that since the Revenue had allowed depreciation on the trademark in the previous assessment year (2016-17) after due verification, and no change in facts occurred, the Revenue could not disallow the claim in subsequent years based on the principle of consistency. The Revenue's appeals were dismissed, and the assessee's cross-objections were allowed.

The Tribunal, following a coordinate bench's order in a similar case for AY 2020-21, decided to provide the assessee one more opportunity to present their case. This was conditional upon the payment of a cost of Rs. 11,000/- to the Income Tax Department within two months.